INTERNET TAX NONDISCRIMINATION ACT
(Senate - April 29, 2004)

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[Pages S4635-S4670]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   INTERNET TAX NONDISCRIMINATION ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 150, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 150) to make permanent the moratorium on taxes 
     on Internet access and multiple and discriminatory taxes on 
     electronic commerce imposed by the Internet Tax Freedom Act.

  Pending:

       McCain amendment No. 3048, in the nature of a substitute.
       Daschle amendment No. 3050 (to the language of the bill 
     proposed to be stricken by amendment No. 3048), to eliminate 
     methyl tertiary butyl ether from the United States fuel 
     supply, to increase production and use of renewable fuel, and 
     to increase the Nation's energy independence.
       Domenici amendment No. 3051 (to amendment No. 3050), to 
     enhance energy conservation and research and development and 
     to provide for security and diversity in the energy supply 
     for the American people.

  The PRESIDING OFFICER. Under the previous order, there will be up to 
1 hour of debate only equally divided between the two leaders or their 
designees.
  Mr. DOMENICI. Mr. President, I yield myself up to 15 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. DOMENICI. I hope I don't use all that time. Will the Chair advise 
me when I have used 10 minutes?
  The PRESIDING OFFICER. The Chair will do so.


                           Amendment No. 3051

  Mr. DOMENICI. Mr. President, we cut the cost by $6.7 billion. The 
amendment before us is not subject to a point of order and it can 
proceed without any concern in that regard.
  We have been criticized heretofore because we had an MTBE safe harbor 
provision. That provided faulty product liability protection for the 
manufacturers of MTBE. When the conference report was on the Senate 
floor, I spent a great deal of time defending that position which was 
insisted upon by the House. I thought that provision was necessary, but 
because we could not get that provision accepted by the Senate, it is 
not in this legislation.
  I feel very chagrined today to note, while it has not been to my ear 
where I have heard it, I understand the oil companies and their major 
lobbying groups are opposing this bill because of MTBE not being in it. 
I think that is a shortsighted approach. How are they going to get MTBE 
if we don't get a bill? If we don't get a bill, we stay right where we 
are, except we don't have an energy bill for America. What we have is 
no change in the MTBE law, but we do not have an energy bill.
  I urge those who are taking that position to assume the reality of 
things. If they think we are going to change the original bill and get 
two more votes--remember, in a cloture situation on the original bill, 
we got 58 votes. I remind those who think we can go back and fix it 
that it is also subject to seven points of order. Sooner or later, it 
would have been defeated by a point of order.

[[Page S4636]]

  For those who are sitting around thinking that we can get that, they 
just absolutely are talking irrelevant, they are talking things that 
cannot happen. Now let's talk about the bill.
  I hope my friend Larry Craig comes to the Senate floor before we are 
finished because I could not have a better helper than he. He 
understands this bill. I want to suggest to all that this bill, in its 
slimmed-down manner, when coupled with the tax provisions that are in 
the tax bill that will come up in the Senate next week, will put before 
the American people one of the best energy bills we have ever done. The 
American people are watching as gasoline prices soar, and they are 
going to be looking today as Senators vote yes or no on keeping this 
bill alive.
  I know it is tough to get 60 votes. I know that Senators have their 
particular reasons--one little piece of this bill--for voting no. I 
know there are some Senators even on my side who are being told: Wait 
around until we get MTBE. We are not going to get MTBE in the Senate. 
It is an absolute wish that cannot be accomplished. For those who are 
worried about it, they ought to let us get a bill and then see what 
happens.
  Let me move to a few other issues. Senator Bingaman came to the 
Senate floor yesterday with a list of concerns. He does not support the 
hydroelectric relicensing provision, the Indian energy provisions, or 
the electricity title. I understand his perspective, but I contend that 
his views on these issues are the ones that are outside the consensus. 
We need consensus. We do not need what one Senator thinks we need; we 
need consensus. This bill has consensus.
  Take the hydroelectric relicensing which is so important to Senators 
of both parties from the Northwest. We are not trying to build new dams 
or change the standards. All we are trying to do is streamline the 
process. Senator Craig has been active in that issue, and many Senators 
voted for it, even though they are not from that area.

  Let's take the electricity provision about which many experts have 
said the future of America lies in the electric grid of America growing 
and becoming stronger and becoming better, and of all the things we can 
do, this is the most important.
  When I became chairman, I assumed that issue would be an obstacle to 
reaching consensus in light of the great controversy over the Federal 
Energy Regulatory Commission's recent rulings. We worked for months to 
get an agreement, and the final product is, to my amazement, supported 
by almost all the players in the industry across this land. It is by 
far the greatest achievement of this bill that we could reach such an 
agreement in the months since we completed that conference. The 
agreement has held, and it is here. There are parts of this bill that 
some criticize, just as there are parts of this comprehensive 
legislation that, taken alone, I would criticize; however, on balance, 
this package is a middle ground in this Congress.
  We know this bill is before us in an extraordinary way. We know that 
if after this vote the McCain vote succeeds, we are wiped out, we are 
removed from the calendar. We understand that. I guess the probability 
is that we cannot get cloture, but we are not giving up because we 
understand there is some kind of bipartisan support for getting 
cloture.
  This bill also has that most attractive part for many Senators, the 
ethanol provisions, which 31 Republicans voted for when it was 
introduced. Senators can look at that and see if they voted for it or 
not, and if they did, they should vote for the Domenici bill. I hate to 
call it ``mine'' because it is the result of so many Senators working 
on both sides of the aisle. I think I would call it the ``consensus 
bill,'' but maybe people would not like that because they do not think 
it is consensus for them.
  This bill provides great quantities of natural gas from American 
sources over the next 5 to 10 years--from Alaska and from underground 
off our shores without in any way violating the moratorium. It produces 
a modernization which addresses the drilling activities in our country 
so we can get more oil and gas without harming the environment.
  It solves the electric problem. In addition to the grid I talked 
about, believe it or not, this bill provides that when there is 
gridlock, when you cannot proceed any further because you run into 
State lines or you run into somebody else's right-of-way, believe it or 
not, we got a consensus, including Republicans, that after negotiations 
that occur in the States or between the companies that are at 
loggerheads, we have a provision that eminent domain can apply. Nobody 
thought we would get that. That is an extraordinary position to get and 
bring before the Senate.
  I know it does not sound sexy, as some political issues, but it is 
good. This bill is filled with very good things. I hope those who are 
looking at this bill with a microscope, and want to make sure every 
single provision meets with their satisfaction, understand that the 
American people are not looking at this bill with a microscope. They 
are looking at this bill to see if the Senate wants to pass an energy 
bill. This will be a signal of whether we want to put something 
together that will help America in this energy crisis.
  If we do not want to, then we can send a signal that we do not like 
this provision and we do not like that provision, but at some point in 
time the American people are not going to look at that. They are going 
to see where were the Democrats, where were the Republicans, where were 
the leaders in trying to get a bill that will help solve America's 
energy problem.
  I see the minority leader in the Chamber, and I understand his great 
concern on the ethanol front. I suggest that he has been very helpful 
in the past in trying to get a comprehensive bill which would include 
ethanol, and I understand that, but I submit there are an awful lot of 
people who are very shortsighted.
  The PRESIDING OFFICER. The Senator has consumed 10 minutes.
  Mr. DOMENICI. I will use 1 more minute and yield the time.
  I understand the minority leader is in a predicament because of this 
being a bill that the consensus was worked out not by his side, 
although there were some, but predominately by this Senator on this 
side. I believe the American people are going to say on every major 
aspect of America's growing dependence, the price of gasoline, the 
price of natural gas, wiping out of the fertilizer industry in America 
which affects our agriculture, and on and on, they understand we need 
an energy bill.
  We need this bill. This is as good as we will ever get. Having spoken 
as well as I can for as long as is prudent in the Senate where one can 
speak too long--the House does it in 2 or 3 minutes; if they would have 
forced me I guess I could have done that--but as I started out saying, 
as the chairman of this committee, it has been a good week and a few 
good things have happened. There has been some evidence that people 
want to get this bill done.
  I yield the floor.
  The PRESIDING OFFICER. The minority leader.
  Mr. DASCHLE. Mr. President, I did not have the opportunity to hear 
all of what the distinguished chairman of the committee has said, but 
what I did hear him say I find myself in agreement with.
  Let me first talk procedurally for a moment and then I want to talk 
substantively. I hope, procedurally, we can reach an agreement to 
attempt to get to the votes earlier rather than later. I think it would 
be great if we could have the three cloture votes beginning at noon to 
accommodate our policy conference meeting. If that could be done, I 
think it would also accommodate a number of Senators' schedules.
  With regard to the larger procedural question, this is not our first 
choice. This is not the way we ought to approach comprehensive energy 
legislation or targeted energy legislation, as my amendment did with 
ethanol. I have made no secret of my frustration and disappointment 
with regard to the conference process and the way in which Democrats 
again were locked out of the opportunity to express themselves.
  I warned our House colleagues and our leadership on the other side 
with regard to putting MTBE legislation into the conference report. All 
those warnings, all those admonitions, all those concerns about being 
locked out have been expressed on a number of occasions.

[[Page S4637]]

  As I said the other day, I am also very deeply concerned about the 
reported decision to delay any real debate about energy legislation 
until the fall. I think it was reported in the Energy Daily on Tuesday.
  So for all of those procedural concerns, we had no choice but to act 
as we did the other day and to provide at least an opportunity for 
Senators to be heard and for us to vote once again on legislation that 
on a bipartisan basis this Senate has supported over and over.
  The first vote we will cast this morning will be on the renewable 
fuels standard. I hope our colleagues will support cloture on it. Two-
thirds of the Senate has voted for it in the past. All we need, of 
course, is 60 votes so I cannot imagine that anybody would flip their 
vote, having supported it on several occasions, and vote against it as 
we contemplate its consideration today.
  It is the exact same legislation that we have offered. It eliminates 
the reformulated gasoline programs oxygen standard, replaces it with 
the renewable fuel standard, and sets a 10-year schedule for assured 
growth in alternative energy. It contains the same waiver authority 
agreed to in the energy conference report and it strikes all liability 
protection for MTBE and ethanol and bans MTBE within 4 years.
  So this is an amendment that merits the bipartisan support that it 
has received before, and I hope our colleagues could support the 
amendment.
  I hope my colleagues will support cloture on the comprehensive Energy 
bill. Senator Domenici did what he said he was going to do. He took out 
MTBE liability immunity. He has also taken out the provisions having to 
do with many of the tax incentives created originally in the Energy 
bill. This is a much different bill. So those who voted against it 
before I think ought to look very carefully at voting in favor of it 
this time.
  One of the reasons on this side of the aisle that we have always 
opposed cloture is to protect Members' rights to offer amendments. In 
this case, there is no concern for the protection of a Senator's rights 
because they will be protected. We are only bringing cloture on the 
amendment. The bill is open as wide as it is now to any amendment that 
Senators wish to offer on energy or on anything else. So we are not in 
any way excluding or minimizing Senators' opportunities to be heard and 
to offer other legislation.

  I might say the third cloture vote is the critical one. That is the 
cloture motion that I hope will be defeated, because I believe we have 
not had a good enough debate on the Internet tax bill. We have not had 
an opportunity to offer our amendments. We have not really had the kind 
of debate that an issue of this import requires.
  There are very divergent views in the Senate on a bipartisan basis, 
and I think as we consider those divergent views it is critical for us 
to ensure the debate and the opportunity to reach consensus prior to 
the time we invoke cloture or bring this bill to a premature conclusion 
and have the vote that I think can be taken at some point as that 
debate produces the consensus for which we are looking.
  So if we are going to accommodate the schedule that I have just 
suggested, I will not dominate the floor. Let me again reiterate that I 
hope my colleagues will support the cloture vote on ethanol. I hope 
they will support the cloture vote on energy. I hope they will oppose 
the cloture vote on the Internet tax bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. My guess is that most Senators understand the process and 
the procedure we are under, but there is a large body of interest that 
does not understand what we are doing at all. It is called the American 
consumer.
  I can put it this way: The minority is trying to wrestle control of 
the floor away from the majority and set their own agenda. That is one 
way of looking at it. The other way of looking at it is to create an 
environment of false hope for that consumer who went to the gas pump 
today and paid more for gas than he or she has ever paid in their life.
  I question the integrity of Senators who will argue and opine the 
problems of energy but set in motion a procedural event that denies us 
the opportunity to produce for the American consumer a national energy 
policy.
  So go home to your voters and tell them it is no longer big oil's 
fault, that it is no longer the nuclear industry's fault, it is the 
politicians' fault because consistently over the last 5 years Democrats 
and Republicans alike have denied the American consumer a legitimate, 
comprehensive policy for national energy. So we are now held hostage 
for some 60 percent of our consumption by a foreign interest. Or we are 
held hostage by an environmental lawsuit that denies access. Or we are 
held hostage by the bickering of States who cannot agree that a 
transmission line ought to cross their territory.
  Those are the realities of where we are today. We are going to tell 
the American farmers they are going to pay 30 percent more this year 
than they thought for input costs to produce their grains. But who is 
going to pay for it? The farmer can't. He is hardly breaking even. But 
the politician in the Senate has created the environment for that 30-
percent increase in production costs. It is not the chairman of the 
Energy Committee, not this Senator who for 5 years has worked to build 
a comprehensive energy policy, but those who have decided they must 
have a small piece their way, and their way denies the American 
consumer the reality of energy.
  So the average household--if you are wealthy, my goodness, $300 or 
$400 more in costs; 5 percent of your income this year will go to 
energy. But if you are making $29,000 a year, 20 percent of your income 
will go to energy. If you are making $10,000 a year as an American, 40 
percent of your income will go to energy.
  So let's not stand here and debate the small stuff. Let's say to the 
American consumer what is an honest statement, that the Senate has not 
been able to settle on the establishment of a national energy policy 
that would, had it been implemented, begin to hold down costs and bring 
production up and bring conservation up and improve the environment and 
do the very thing that quality energy has always done to the American 
economy and for the American worker: allowed them to be the most 
productive, most competitive of any economy and any workforce in the 
world.
  But today that is less the case. Today, the petrochemical industry 
shuts down and goes offshore because they can't afford to produce in 
this country. Today, in lieu of natural gas we are going to establish 
ports and liquefy somebody else's gas and bring it here on a ship. 
Shame on us for that silly attitude that the American politician has 
developed.
  Does he or she think the American consumer is going to roll over? I 
don't think so. I think that consumer grows angrier by the day; when 
they go to the gas pump, weekly, and all of a sudden it is not $1.50 
for regular, it is $1.65, $1.75, $1.80. Last week it hit an all-time 
high. This week it will hit another all-time high. If you are out in 
California, you pay $2.50. If you are in Idaho, you are paying $2.00 
for regular gas.
  Now let's talk about the House. Let's talk about our inability to get 
out to western gasfields. Let's talk about the unwillingness to bring 
down gas out of Alaska. What have we done? Through the Clean Air Act we 
said the only way you can meet air shed standards is to generate 
electricity by the use of natural gas. We saw those turbines begin to 
go in place over the last good number of years when it was $2.30 a 
million cubic feet. Now it is $5, now it is $6, and those turbines are 
shut down.

  Shame on us, and I do mean Senators. I do mean this procedure. I do 
mean this false process.
  Is there cynicism afoot? You know, there ought to be. The American 
consumer ought to grow progressively cynical--become the cynic, I 
should say, of the process that denies them reasonable high-quality 
energy.
  To the American producer, to the American farmer, to my farmers in 
Idaho--I know they are calling me. I hear them. They are frustrated and 
they are angry. They have a right to be. We will play this political 
game. I must tell you, shame on us because we cannot get it right and 
the vote today on the Daschle amendment will not get it right.
  Tragically enough, the vote today on the alternative that I and 
others have worked on collectively in a bipartisan way will not be 
allowed to get it right.

[[Page S4638]]

  If we fail, and if we go into the fall and gas prices keep ticking up 
and somebody over in the Middle East says, Got them where we want them, 
let's crank, I must say the American consumer has a right to grow angry 
and a right to be frustrated because their political process--and those 
of us who have been invested with the responsibility of making it 
work--have denied them reasonable, high-quality energy of the kind they 
ought to expect. Now they better start demanding it.
  I yield the floor.
  Mr. WYDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I hope we can get cloture in a few minutes.
  The PRESIDING OFFICER. The Senator will yield.
  Mr. DASCHLE. Mr. President, who controls time?
  The PRESIDING OFFICER. The leader controls the time.
  Mr. DASCHLE. That was my understanding. How much time remains?
  The PRESIDING OFFICER. There is 24 minutes 30 seconds on your side, 
11 minutes on the other side.
  Mr. DASCHLE. How much time will the Senator from Oregon require?
  Mr. WYDEN. Five minutes will be plenty, if that is acceptable to the 
leader.
  Mr. DASCHLE. I hope we can yield back as much time as possible to 
accommodate the votes as quickly as possible, but I am happy to yield 
to the Senator from Oregon 5 minutes and the Senator from Delaware 5 
minutes.
  Mr. WYDEN. Mr. President, I will be very brief. We have had 3 full 
days of debate on the Internet tax question. I am hopeful we will be 
able to get cloture on the McCain substitute.
  If the Alexander proposal, the alternative, is accepted, all across 
this country folks who now get a message that says ``You've got mail,'' 
will get a message that says ``You have special taxes.''
  What Senator Allen and I have done over the last 3 days on the floor 
of the Senate is outline, under the Alexander proposal, the scores and 
scores of local jurisdictions that would be able to impose these 
special taxes on electronic commerce.

  Over the last 7 years, we have heard these State and local 
projections by governmental bodies about how revenue would be lost. In 
each instance, colleagues, they have not come to pass. In 1997, for 
example, the National Governors Association said that our Internet tax 
freedom bill would cause the virtual collapse of the State and local 
revenue system. That next year revenue went up $7 billion.
  All we are trying to do in the McCain compromise, and it is, in fact, 
a compromise--Senator Allen and I have sought a permanent ban on 
multiple and discriminatory taxes on electronic commerce. We are 
compromising now so that it is a 4-year proposal. We have made it clear 
to the other side regarding telephone calls made over the Internet, the 
way in which those are handled and taxed would not be changed. So this 
is a compromise proposal.
  We have had 3 days of debate. It doesn't involve sales taxes or 
property taxes or utility taxes or any other kinds of taxes. This is a 
question of whether there ought to be double taxation on something 
folks have already paid for, and that is Internet access. I hope we 
will be able to invoke cloture on the McCain substitute and be able to 
go on with the amendment process. We have had 3 full days of debate. I 
compared it to prolonged root canal work because I know this is not 
inherently the most fascinating subject. I hope today we can invoke 
cloture on the McCain substitute and get about the task of amending and 
passing the bill, and I yield the floor.
  Mr. DASCHLE. Before I yield additional time, I know Senator Carper 
wanted 5 minutes, and I will yield to our distinguished manager, the 
Senator from North Dakota, 5 minutes. But I want to be sure people 
understand there will be three votes, regardless of the outcome of 
these votes. There will be a vote on the Daschle amendment; there will 
be a vote on cloture on the energy amendment offered by the Senator 
from New Mexico; and there will be a vote on McCain, a cloture vote on 
the McCain substitute, the amendment pending. There will be three 
cloture votes.
  I know there was some question as to whether there would be a vote, 
given how the amendments may be resolved. The votes will be cast 
regardless.
  I yield the floor to accommodate the requests made by my colleagues.
  The PRESIDING OFFICER. The Senator from Delaware is recognized for 5 
minutes.
  Mr. CARPER. Mr. President, the question here today is not whether we 
want to tax people's access to the Internet. We don't. None of us want 
to do that. That is not the issue.
  The question is, are we going to say to State and local governments 
that have collected a portion of their taxes for years from 
telecommunications, from telephone services, are we going to take away 
their ability to do that? We are going to reduce their ability to do 
that? We are going to reduce their revenue base but at the same time, 
whatever shortfall they realize, we are not going to make up for it?
  Ever since the time of Alexander Graham Bell, State and local 
governments have been collecting taxes on traditional telephone 
services. What is at issue here is whether we are going to empty the 
State and local treasuries to the tune of as much as $20 billion in the 
years ahead, at a time when they are facing the greatest fiscal crisis 
they have faced since World War II.
  Are we going to empty the treasury of California by another $836 
million? It is already empty. Do we want to empty the treasury of the 
State of Connecticut by some $170 million, or $265 million out of 
Kentucky's treasury, or $110 million out of Louisiana's Treasury, or 
$225 million out of Massachusetts' treasury, or $360 million out of 
Michigan's treasury, or $285 million out of Minnesota's treasury, or 
$600 million out of New Jersey's treasury, or $370 million out of North 
Carolina's treasury, or $358 million out of Tennessee's treasury, or 
$200 million out of Wisconsin's treasury? The list goes on.
  I have said on the Senate floor before and I will say it again: If we 
want to do something good for the telecommunications industry--I do, 
and I am supportive of a number of other initiatives for the industry--
if we are supportive of tax credits or allowing companies to expense 
their investments, we should pay for it as Federal legislators. It is 
wrong for us to say we are going to give a break to the 
telecommunications industry, or any other industry, and say not only 
are we not going to pay for it, but we will tell the State and local 
governments they have to pay for it. In my view, that is wrong. That is 
not treating other people the way we want to be treated, and it is 
something we shouldn't countenance today.
  We are going to vote on cloture in a short while with respect to the 
McCain amendment. Let me say this: There is a reasonable compromise 
between where Senator Alexander and I stand and where Senator McCain 
stands. There is a reasonable compromise. We will get to that 
compromise with a ``no'' vote on cloture. I am convinced that we will 
get it.
  I stood here last week and urged people to vote no on the cloture on 
the Frist bill on asbestos. I said if we do it, we will create a 
dynamic where real compromise and consensus can be built around 
asbestos--a very difficult issue. We voted no on cloture, and as we 
gather here right now, over in SH-216 in Hart there are serious 
meetings going on to get us to a real settlement on asbestos.
  We need real negotiation. A ``no'' vote on cloture on McCain does not 
end prospects for consensus, but it actually creates it. I urge my 
colleagues to vote no.
  The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator 
from North Dakota is recognized.
  Mr. DORGAN. Mr. President, let me make a brief comment in response to 
the comments of my colleague from Idaho.
  He is quite correct. We have an urgent situation with respect to 
energy. We have two subjects at this point. One is the underlying bill, 
the Internet tax bill, and the other represents amendments offered by 
my colleague, Senator Daschle, and an amendment offered by Senator 
Domenici. I intend to support cloture with respect to both of these 
initiatives.
  I want to respond to my colleague from Idaho who says, Shame on us, 
this is false procedure, it is politics, and

[[Page S4639]]

someone is trying to take over the floor of the Senate, and so on.
  If we believe that we have an urgent need to pass an energy bill--
incidentally, I was one of those who supported an energy bill when it 
came to the Senate floor, and it lost by two votes--if there is a time 
and place to do that, we are going to have a cloture vote. I suggest 
with respect to his suggestion about anger, hold your anger for a 
couple of hours until we see how we vote on cloture. If we want to 
debate energy, let us do that. I am in favor of debating energy. I am 
also in favor of concluding the bill dealing with Internet taxation.
  Also, my colleague, Senator Carper, said that he is not in support of 
taxing access to the Internet. I am not, either. I have previously 
supported a moratorium on taxation. I hope before this process is over, 
I will be able to support this. But we are dealing with two different 
subjects.
  My colleague from Idaho just described the subject of energy. My 
point on energy is very simple: There is a way to deal with energy 
sooner rather than later. The way to do that is vote for cloture in the 
next half hour or so, which I intend to do.
  I yield the floor.
  Mr. McCAIN. Mr. President, I intend to yield 3 minutes to the Senator 
from Tennessee and then yield the remainder of my time. I understand 
the Senator from North Dakota is going to yield the remainder of his 
time also; is that correct?
  Mr. DORGAN. Yes.
  Mr. McCAIN. Mr. President, I yield myself 20 seconds before then.
  I commend to my colleagues this morning the Washington Post editorial 
entitled ``Energy Follies.'' I quote:

       It would make far more sense for Senators who are 
     interested in some aspect of this legislation--whether 
     ethanol or electricity regulation or renewable fuels--to 
     design bills around those issues and vote on them separately, 
     judging each by its own merits. But that would be too 
     rational for this Senate, which almost seems to prefer doing 
     things sideways.

  I ask unanimous consent that the editorial be printed in the Record, 
and I yield 3 minutes to the Senator from Tennessee.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, April 29, 2004]

                             Energy Follies

       The Senate's machinations over the energy bill this week 
     seem to prove the existence of a link between overly complex 
     parliamentary procedures and bad law. The original energy 
     bill, as readers will remember, failed to pass last November, 
     and for good reason. Its size, price and expensive perks for 
     industry became too much even for a majority of senators. 
     Since then, Sen. Pete V. Domenici (R-N.M.) and the Senate 
     leadership have been looking for another way to pass it, or 
     at least most of it. They've now found a place: The bill, 
     which in its ``slimmed-down'' version numbers more than 900 
     pages, has been attached as an amendment to a bill on 
     Internet tax law.
       True, the idea of using an Internet tax bill to pass a law 
     on energy was not original to Mr. Domenici. He proposed his 
     ``amendment'' only after the Senator minority leader, Thomas 
     A. Daschle (D-S.D.), proposed another ``amendment''--one 
     promoting the use of ethanol, a piece of pork much beloved by 
     members of Congress representing corn-producing states.
       After Mr. Daschle's proposal, Republicans first condemned 
     the Democratic leader for attaching a ``non-germane'' 
     proposal to the Internet bill--and then decided not to beat 
     him but to join him. There are various other layers of 
     complication, but the probable result will be a messy series 
     of votes today, after which both amendments will fail. If 
     that doesn't happen, and if Mr. Domenici's amendment gets a 
     full vote, the Senate could find itself grappling with a 
     large, complicated piece of law stuck to another piece of 
     law, which would then become tangled further in conference 
     with the House. We can only hope the Senate will be wise 
     enough to avoid such an outcome.
       It would make far more sense for senators who are 
     interested in some aspect of this legislation--whether 
     ethanol or electricity regulation or renewable fuels--to 
     design bills around those issues and vote on them separately, 
     judging each by its own merits. But that would be too 
     rational for this Senate, which seems almost to prefer doing 
     things sideways.

  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I note that the Washington Post is 
recommending support for the Alexander- Carper version of the 
legislation. This is not about taxes. This is not about the Internet. 
This is about Senators and Congressmen coming to Washington, passing an 
expensive idea, and sending the bill home to State and local 
governments.
  I am voting against cloture on the McCain proposal and against 
cutting off debate because this legislation breaks our promise to State 
and local government.
  In 1994, 300 Republicans stood on the Capitol steps and said: No 
money, no mandate; break our promise, throw us out. In 1995, the 
Republican majority passed the Unfunded Mandate Reform Act. There are 
62 Senators serving in this body today who voted for that.
  This legislation breaks our promise in a big way. The Congressional 
Budget Office tells us it is an unfunded mandate. The National League 
of Cities says it is a nightmare. The National Governors Association 
says it can cost States up to $18 billion a year because of language in 
the proposal. The commissioner of revenue from the State of Tennessee 
says in a letter dated yesterday, to put it in dollar terms, Tennessee 
would lose $350 million a year, up to about 5 percent of the States 
budget.
  I ask unanimous consent to have those three documents printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                               State of Tennessee,


                                        Department of Revenue,

                                    Nashville, TN, April 28, 2004.
     Hon. Lamar Alexander,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Alexander: We were asked by your office to 
     evaluate the impact of the ``McCain Compromise'' bill to 
     preempt certain state and local taxes on Internet access and 
     related services. After reviewing the McCain Compromise 
     language, it is our conclusion that the proposed compromise 
     does nothing to mitigate the adverse impact that S. 150 would 
     reap on our state revenue structure. To put this in dollar 
     terms, we believe Tennessee would lose approximately $350 
     million annually in revenue. This loss would increase as 
     additional services migrate to the Internet. Given that 
     Tennessee imposes a broad levy on telecommunications 
     services, we believe that the majority of sales taxes 
     collected on this levy are at stake. This loss does not 
     include services which may be bundled with the sale of 
     Internet access.


            how the mccain compromise reduces state revenues

       First, the proposed language does not do anything to 
     correct the fundamental problems that exist in the definition 
     of Internet access. One aspect of the proposed changes in the 
     McCain Compromise continues to perpetuate the unfunded 
     mandate on states that prevents states from taxing 
     telecommunications ``to the extent such services are 
     purchased, used, or sold by a provider of Internet access to 
     provide Internet access.''
       This has the effect of exempting telecommunication services 
     that makeup the Internet backbone, the ``middle mile'' 
     telecommunications used by Internet Service Providers to 
     provide internet access, and the ``last mile'' 
     telecommunications services used to connect an end user to 
     the Internet. The Alexander-Carper bill provided a much more 
     limited preemption for the ``last mile'' telecommunications 
     services used to connect the consumer to the Internet.
       While the sale of Internet access to the consumer is no 
     longer subject to sales tax in Tennessee, the state does 
     impose tax on all telecommunications services used in 
     connection with providing or receiving Internet access. This 
     tax would be eliminated under S150 or the McCain Compromise.
       Second Tennessee is deeply concerned that the term Internet 
     access is defined to ``include access to proprietary content, 
     information, and other services that are a part of a package 
     of services offered to users.'' As long distance services and 
     other services are increasingly bundled with Internet access, 
     we are concerned that these telecommunications services 
     become subject to the preemption pursuant to this broad 
     language.
       Third, the VOIP exception to the moratorium actually does 
     nothing for the states' abilities to tax that or similar 
     services that may migrate to the Internet. Current Tennessee 
     law allows the state and local governments to tax VOIP as a 
     telecommunications service, as long as there is no federal 
     preemption. The McCain ``exception'' to the federal 
     preemption does not apply to voice services that are a 
     package of services offered with Internet access, and since 
     that is how VOIP services are currently sold and probably 
     will continue to be sold, the exception is the McCain bill in 
     fact provides no protection against states losing revenue as 
     phone services migrates to VOIP.
       To summarize, Tennessee continues to support the provisions 
     of S. 2084 or a straight 2 year extension of the original 
     moratorium.

[[Page S4640]]

       If you have further questions, please do not hesitate to 
     call (615) 741-2461 my office of the Tennessee Department of 
     Revenue.
           Sincerely,
                                                 Loren L. Chumley,
     Commissioner.
                                  ____


   NGA Supports Reasonable Extension of the Internet Tax Freedom Act

       The National Governors Association (NGA) supports extending 
     the federal ban on state and local taxation of Internet 
     access in a manner that is technology neutral and fiscally 
     fair to state and local governments. Unfortunately, two 
     pieces of legislation currently moving through Congress 
     violate these basic principles. The House of Representatives 
     has already passed H.R. 49 and S. 150 is currently under 
     consideration in the Senate. By permanently expanding the 
     definition of tax-free Internet access, both bills rob state 
     and local governments of existing revenues while creating a 
     tax free zone for future communications services.
       The NGA calls upon Congress to adopt S. 2084, the 
     ``Internet Tax Ban Extension and Improvement Act.'' This 
     compromise bill, sponsored by Senators Alexander and Carper, 
     offers a reasonable extension of the moratorium while 
     addressing industry concerns for technological neutrality 
     without unduly burdening state and local governments.


                               background

       Although the U.S. Constitution grants Congress broad 
     authority to regulate interstate commerce, the federal 
     government, historically, has been reluctant to interfere 
     with states' ability to raise and regulate its own revenues. 
     State tax sovereignty is a basic tenet of the federalist 
     system and is fundamental to the inherent political 
     independence and viability of states. Only in the most 
     narrowly defined exceptions has Congress crossed that line.
       The 1998 ``Internet Tax Freedom Act'' (ITFA), which imposed 
     a moratorium on state or local taxation of Internet access, 
     is one exception to this long held practice. The ITFA expired 
     briefly in 2000 but Congress renewed it through November 1, 
     2003. Designed to ``jump start'' the then-fledgling Internet 
     industry, the moratorium included three important 
     restrictions to protect states:
       (1) It applied only to new taxes--existing taxes were 
     grandfathered;
       (2) The definition of Internet access, while broad, 
     excluded telecommunication services; and
       (3) The bill expired after two years to allow Congress, 
     states and industry the opportunity to make adjustments for 
     rapidly developing technologies and markets.


                            the nga position

       Today, over 130 million Americans access the Internet using 
     everything from dial-up modems, high-speed broadband, and 
     Digital Subscriber Line (DSL) offerings to wireless 
     technologies and even satellite and power line connections. 
     The Internet's broad reach and technological promise is also 
     transforming entire industries such as telecommunications, 
     which is rapidly migrating all of its services to Internet 
     based technologies and rolling out new services such as Voice 
     Over Internet Protocol (VOIP).
       As Congress considers legislation to extend the moratorium, 
     NGA encourages members to adhere to the following guidelines 
     to maintain the balance struck by the original moratorium, a 
     balance that encouraged the growth of the Internet but still 
     respected state sovereignty:
       1. Do no harm--Any extension of the moratorium should 
     preserve existing state and local revenues.
       The original moratorium protected existing state revenues 
     by grandfathering tax laws in place before 1998 and 
     prohibiting only new taxes on Internet access. In contrast, 
     H.R. 49 and S. 150 would cost states much needed revenue by 
     repealing the grandfather clause and expanding the law to 
     prohibit taxes on telecommunications ``used to provide 
     Internet access.'' Stating that the proposed bills would 
     trigger a possible point-of-order under the Unfunded Mandates 
     Reform Act, the Congressional Budget Office (CBO) estimates 
     removing the grandfather provision would cost states between 
     $80 and $120 million annually. The effect of the second 
     provision could be even greater. ``[D]epending on how the 
     language altering the definition of what telecommunications 
     services are taxable is interpreted,'' the CBO said, ``that 
     language also could result in substantial revenue losses for 
     states.'' With state and local governments collecting over 
     $18 billion in telecommunications taxes annually, any 
     significant change in the taxability of telecommunications 
     could cost states billions of dollars. At a time when state 
     and local governments are facing large increases in mandatory 
     spending and stagnant revenue growth, Congress should not 
     exacerbate state fiscal problems by interfering with the 
     collection of existing taxes.
       2. Be clear--Definitions matter.
       The original moratorium split the definition of Internet 
     access into two parts: a broad and inclusive description of 
     Internet access and an absolute exclusion of 
     telecommunications services from the moratorium. The 
     definition read: ``Internet access means a service that 
     enables users to access content, information, electronic 
     mail, or other services offered over the Internet, and may 
     also include access to proprietary content, information, and 
     other services as part of a package of services offered to 
     users. Such term does not include telecommunications 
     services.''
       The exclusion of telecommunications services protected 
     states by clarifying that Internet access was a separate, 
     distinct and limited service. It also clearly preserved 
     existing state and local taxes on telecommunications services 
     that amounted to over $18 billion in 1999. The definition, 
     however, allowed some jurisdictions t4o tax the 
     telecommunications component of certain broadband 
     technologies like DSL while others remained tax-free. This 
     perceived inequity led to a push to alter the definition of 
     Internet access in H.R. 49 and S. 150 to make tax free 
     telecommunications services ``used to provide Internet 
     access,'' as a means of making the ITFA technology neutral. 
     This change, however, is too broad. Not only would it 
     prohibit taxes states and localities are collecting on DSL, 
     it would also exempt all telecommunications services used 
     anywhere along the Internet--from the end-user all the way to 
     and including the ``backbone.'' Compared to the original 
     moratorium, which expressly exempted telecommunications from 
     its scope, H.R. 49 and S. 150 could ultimately put at risk 
     most, if not all, state and local telecommunication tax 
     revenue. (See below.)
       H.R. 49 and S. 150 would also intensify a long-standing 
     problem with the original definition: the unlimited ability 
     to bundle together content and ``other services'' into a 
     single offering of tax-free Internet access. Services such as 
     VOIP highlight the risk states face from this broad 
     definition. Unlike traditional telecommunications services, 
     VOIP uses the Internet to transmit voice communications 
     between computers, phones and other communications devices. 
     Industry observers expect 40 percent of all telephone calls 
     in the United Sates to be Internet based within five 
     years. If VOIP is allowed to be bundled with Internet 
     access into a single tax-free offering, and 
     telecommunications used to deliver that offering are also 
     tax free, states could quickly see their 
     telecommunications tax base erode to nothing. Language in 
     S. 150 as amended and S. 2084 that requires service 
     providers to unbundled taxable services from non-taxable 
     Internet access is helpful, but only if the universe of 
     what constitutes Internet access is actually limited.
       3. Stay flexible--A temporary solution is better than 
     permanent confusion.
       Rapid pace innovation in the Internet and 
     telecommunications industries makes it difficult to define 
     accurately these complex and ever-changing services. The 
     original moratorium was made temporary in part for this 
     reason--to provide Congress, industry and state and local 
     governments with the ability to revisit the issue and make 
     adjustments where necessary to accommodate new technologies 
     and market realities. The fact that the courts, the Federal 
     Communications Commission and Congress are all in the process 
     of examining and redefining the core elements of what 
     constitutes telecommunications and Internet access 
     underscores the need for caution. With so much uncertainty, a 
     temporary extension of the moratorium is the best way to 
     avoid unintended consequences from a permanent moratorium.


                               conclusion

       NGA supports S. 2084 because it best reflects a balance 
     between state sovereignty and federal support for the 
     Internet. First, it protects states by drawing a line in the 
     sand to prohibit new taxes on Internet without interfering 
     with existing state taxes. Second, by making the connection 
     from a consumer to their Internet access provider tax free, 
     the Alexander-Carper bill actually levels the playing field 
     for competing technologies without overreaching. Third, it 
     gives Congress, industry and states a chance to revisit the 
     Act by making the moratorium expire after two years. For 
     these reasons NGA supports S. 2084 as a true compromise that 
     is fair to industry, respectful of states, and good for 
     consumers.

 STATE AND LOCAL TELECOMMUNICATIONS TAXES POTENTIALLY AT RISK UNDER H.R.
                                49/S. 150
                        [In millions of dollars]
------------------------------------------------------------------------
                                                            Revenues at
                                            Revenues at    risk under S.
                                            risk under    150 as amended
                                            H.R. 49 \1\         \2\
------------------------------------------------------------------------
Alabama.................................            $213            $115
Alaska..................................              18              13
Arizona.................................             308             146
Arkansas................................             146             101
California..............................           1,495             836
Colorado................................             293             169
Connecticut.............................             276             170
Delaware................................              27              17
District of Columbia....................             120             116
Florida.................................           1,490           1,059
Georgia.................................             344             182
Hawaii..................................              51              48
Idaho...................................              37               3
Illinois................................           1,000             807
Indiana.................................             265             148
Iowa....................................             137              49
Kansas..................................             172              74
Kentucky................................             284             192
Louisiana...............................             207              69
Maine...................................              67              28
Maryland................................             369             222
Massachusetts...........................             411             256
Michigan................................             678             477
Minnesota...............................             226             135
Mississippi.............................             190              90
Missouri................................             334             216
Montana.................................              46               7
Nebraska................................             101              59
Nevada..................................              52              22
New Hampshire...........................              65              56
New Jersey..............................             699             473
New Mexico..............................             125             101
New York................................           1,904           1,418
North Carolina..........................             308             225
North Dakota............................              32              22
Ohio....................................             680             345
Oklahoma................................             258             166
Oregon..................................             113              63
Pennsylvania............................             672             547
Rhode Island............................             100              77

[[Page S4641]]

 
South Carolina..........................             196              90
South Dakota............................              48              25
Tennessee...............................             348             196
Texas...................................           1,724           1,213
Utah....................................             160              89
Vermont.................................              30              17
Virginia................................             329             148
Washington..............................             492             331
West Virginia...........................              73              36
Wisconsin...............................             363             255
Wyoming.................................              22              13
                                         -------------------------------
    Total...............................          18,098          11,732
------------------------------------------------------------------------
\1\ H.R. 49: Figures assume the loss of all state and local
  telecommunications transaction taxes and business taxes as companies
  migrate their telecommunications services to the Internet.
\2\ S. 150: Includes all telecommunications taxes except for 911 fees
  and business taxes such as property taxes, capital stock taxes on net
  worth, or sales and use taxes on business inputs.
 
Source: Special Report/Viewpoint ``Telecommunications Taxes: 50-State
  Estimates of Excess State and Local Tax Burden,'' Robert Cline, State
  Tax Notes, June 3, 2002.

  
                                  ____
      Alexander-Carper Internet Tax Bill Protects Local Authority

       Washington.--The following is an opinion-editorial by the 
     National League of Cities that will appear in the Nation's 
     Cities Weekly Monday April 26:
       This coming week, Congress will consider two vastly 
     different approaches to local revenue authority in the area 
     of Internet taxes. One is an important step forward in the 
     right direction. The other would be a nightmare for America's 
     cities, towns and consumers.
       The stakes in this issue are enormous and far-reaching.
       The step in the right direction is offered by Sen. Lamar 
     Alexander (R-Tenn.) and Sen. Thomas Carper (D-Del.) Their 
     bill, the Internet Access Tax Ban Extension and Improvement 
     Act (S. 2084), would preserve local authority to collect 
     existing, legally due taxes and it would help clarify 
     Internet tax issues. The National League of Cities supports 
     the Alexander-Carper bill.
       The wrong approach is the ``Internet Tax Non-Discrimination 
     Act'' (S. 150), which would strip away local authority to 
     collect vital revenue and would cost America's cities and 
     towns billions of dollars in lost revenue.
       S. 150 would deny local authority to collect a range of 
     legally due taxes and threaten as much as $9 billion in local 
     revenue that funds police officers, teachers and other 
     essential local services and infrastructure in cities and 
     towns across America.
       By redefining ``Internet access,'' this bill would squash 
     local and state authority to collect current gross receipts 
     taxes, right-of-way fees, and other existing taxes on 
     telecommunications services.
       Not only would the bill trample local revenue authority, it 
     dishes out a multi-billion tax break to the 
     telecommunications industry--at the expenses of local and 
     state taxpayers, small businesses and working families.
       The net impact of S. 150? Lost revenues, cuts to services 
     and additional fiscal burdens for local governments.
       The National League of Cities strongly opposes S. 150 and 
     urges you to let your members of Congress know that the bill 
     is bad news. The bill is likely to come up for consideration 
     on the Senate floor for debate early this week.
       The right approach is the Alexander-Carper bill, S. 2084, 
     which will be offered as a substitute for S. 150.
       The Alexander-Carper bill defines Internet access in a way 
     that preserves the ability of local and state governments to 
     continue to collect telecommunications taxes and franchise 
     fees. Their bill would create parity among all types of 
     Internet platforms, whether phone lines, cable modems or 
     digital subscriber lines (DSL).
       Let's be clear. Our position has never been an attempt to 
     tax e-mail or impose new taxes on the Internet. Instead, we 
     are simply insisting that local revenue authority for 
     America's cities and towns not be eroded by an unnecessary 
     law that siphons money out of local coffers and pumps it 
     directly into the telecommunications industry.
       On the important issue of protecting local revenue streams 
     to support essential public services, the Alexander-Carper 
     bill is the best solution for America's cities, towns and 
     consumers.

  Mr. ALEXANDER. Mr. President, this proposal violates the Budget Act. 
It breaks our promise. While it has distinguished support among my 
colleagues, it is a political trick because it means lower taxes here 
and higher taxes there.
  I suggest that my colleagues might go home and ask legislators and 
mayors whether they plan to fire teachers or raise local property 
taxes, whether they plan to raise college tuition or raise their 
State's tax on food, or whether they plan to let prisoners out of jail 
or put in a new State income tax.
  This legislation has the wrong name. It at least has an incomplete 
name. It ought to be called the ``Higher Local Property Tax Act of 
2004'' or the ``Higher State Income Tax Law of 2004'' because that is 
inevitably what would happen. This does not have to happen this way. 
There is a better way.
  I support a 2-year ban on State and local taxation of the Internet. I 
have suggested four ways to fix the McCain substitute. I would take the 
Texas law that President Bush passed in 1999 and make it permanent, 
giving everybody up to a $25 credit on their tax.
  We need to continue this debate. We need a comprehensive review. The 
industry doesn't need a subsidy. My hope is that Congress will continue 
to debate and decide if it intends to give an additional subsidy to the 
high-speed Internet access business that we in Congress pay the bill 
with Federal dollars rather than sending the bill back to State and 
local governments.
  I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. McCAIN. Mr. President, I intend to yield back the remainder of my 
time.
  I ask unanimous consent that there be 2 minutes equally divided prior 
to the second and third votes and that the votes be limited to 10 
minutes each.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. McCAIN. I yield the remainder of my time.
  Mr. REID. I yield the time of the minority.


                             cloture motion

  The PRESIDING OFFICER. Under the previous order and pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will state.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of Rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close the debate on the Daschle 
     amendment No. 3050 to S.150:
         Thomas Daschle, Harry Reid, Jeff Bingaman, Kent Conrad, 
           Byron L. Dorgan, Tom Harkin, Dick Durbin, Max Baucus, 
           Daniel L. Akaka, Evan Bayh, Debbie Stabenow, Mark 
           Dayton, Jay Rockefeller, Ben Nelson, Tim Johnson, Carl 
           Levin.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on 
amendment No. 3050 offered by the Senator from South Dakota shall be 
brought to a close?
  The yeas and nays are required. The clerk will call the roll.
  The bill clerk proceeded to called the roll.
  Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry) 
is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 40, nays 59, as follows:

                      [Rollcall Vote No. 73 Leg.]

                                YEAS--40

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Breaux
     Byrd
     Cantwell
     Carper
     Conrad
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Graham (FL)
     Hagel
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kohl
     Landrieu
     Levin
     Lieberman
     Lincoln
     Lugar
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reid
     Rockefeller
     Sarbanes
     Stabenow

                                NAYS--59

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Boxer
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Cornyn
     Corzine
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Kyl
     Lautenberg
     Leahy
     Lott
     McCain
     McConnell
     Miller
     Murkowski
     Nickles
     Reed
     Roberts
     Santorum
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                             NOT VOTING--1

       
     Kerry
       
  The PRESIDING OFFICER. On this vote, the yeas are 40, the nays are 
59. Three-fifths of the Senators duly chosen and sworn not having voted 
in affirmative, the motion is rejected.
  Mr. CRAIG. Mr. President, I move to reconsider the vote and to lay 
that motion on the table.
  The motion to lay on the table was agreed to.

[[Page S4642]]

                             Change of Vote

  Mr. LAUTENBERG. Mr. President, I have a unanimous consent request 
that on rollcall vote No. 73, I voted ``yea.'' My intent was to vote 
``nay.'' It would not change the outcome. I ask unanimous consent that 
change be made.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The foregoing tally has been changed to reflect the above order.)


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order and pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will state.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the 2nd degree 
     pending amendment to Calendar No. 353, S. 150, a bill to make 
     permanent the moratorium on taxes on Internet access and 
     multiple and discriminatory taxes on electronic commerce 
     imposed by the Internet Tax Freedom Act.
         Bill Frist, John McCain, George Allen, Pete Domenici, 
           Trent Lott, Chuck Hagel, Larry E. Craig, John Ensign, 
           Craig Thomas, Robert F. Bennett, James M. Inhofe, 
           Conrad Burns, Don Nickles, Orrin Hatch, Gordon Smith, 
           Saxby Chambliss, Mitch McConnell.

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided.
  The Senator from Arizona.
  Mr. McCAIN. Mr. President, I urge my colleagues to vote against 
cloture on the Domenici amendment. It has really no business on an 
Internet tax bill. We all know that. I read again from the Washington 
Post of this morning:

       It would make far more sense for Senators who are 
     interested in some aspect of this legislation, whether 
     ethanol or electricity regulation or renewable fuels, to 
     design bills around those issues and vote on them separately, 
     judging each by its own merits. But that would be too 
     rational for this Senate which seems almost to prefer doing 
     things sideways.

  There is no need for this legislation on the bill. It has no place on 
it. I can assure my colleagues it would be dropped in conference if it 
were adopted.
  Mr. DOMENICI. How much time do we have?
  The PRESIDING OFFICER. The Senator from New Mexico has 1 minute.
  Mr. DOMENICI. I yield my time to Senator Craig.
  Mr. CRAIG. Mr. President, the Senator from Arizona is absolutely 
right. Energy should not be on an Internet tax bill. But if you want to 
vote for energy this year, if you want to go home to your consumers and 
say: I voted for a comprehensive energy bill, this may be the last 
chance you will have. The reality is, if you vote for cloture on 
Domenici and then you vote for cloture on McCain, Domenici falls. So 
weigh it out. Weigh the odds. What do you want to go home and tell the 
consumer, who today is paying the highest price for energy in the 
history of this country? The reason they are paying it is because we 
can't produce a bill and change our policies.
  We have an option. It is quite simple. We can vote for energy by 
voting for cloture. Then we can vote for McCain, because he is right, 
it should not be here. Domenici will fall. Then we get to where we 
ought to be today on an Internet tax bill. We didn't do this. Somebody 
else did this and fouled the process. Now let's clear it up. Clean it 
up. Vote for energy, vote for cloture.
  Mr. JEFFORDS. Mr. President, as the ranking member of the Senate 
Environment and Public Works Committee, I want to express my serious 
concern with the content of the amendment offered by Senator Domenici. 
This amendment differs even from the surprise energy bill that was 
introduced on February 12, 2004, and placed directly on the Senate's 
calendar.
  Senators should make no mistake, this legislation is not the product 
of bipartisan consensus in the Senate committees of jurisdiction. In 
most respects, this amendment is the energy bill conference report we 
have already defeated. And most importantly, it is not the right energy 
policy for America.
  I agree with Senator Daschle that we should try to reach consensus on 
targeted pieces of energy legislation. We could pass legislation on 
issues such as renewable motor fuels, as Senator Daschle has proposed 
with his amendment. We could enact fiscally responsible extensions of 
needed energy tax provisions, such as the wind energy tax credit. 
National electricity reliability standards are another area in which 
Senator Cantwell and I believe there could be agreement and we could 
pass a bill.
  But there should be no agreement on the poor environment policy that 
is contained in this amendment. The Senate should reject this 
amendment, and oppose cloture.
  As with the energy bill conference report, nearly a hundred sections 
of this amendment are in the jurisdiction of the Environment and Public 
Works Committee. We were not consulted on any of these provisions, and 
I have repeatedly raised concerns about them on the Senate floor.
  This amendment does not represent the kind of forward-looking 
balanced energy policy that our Nation needs. The Senate should be able 
to ensure that our constituents have reliable electric power without 
polluting their drinking water. Our constituents deserve cleaner 
gasoline without requiring them to breath dirtier air. We should be 
able to promote renewable energy without waiving environmental laws.
  This amendment seriously harms the environment. The supporters have 
said that a waiver of liability for MTBE producers is not contained in 
this amendment. That does not make the motor fuels provisions good or 
workable public policy. Though we know MTBE is environmentally harmful, 
the amendment would allow this product to be used for 10 more years 
before we pull it off of the market. In addition, the amendment allows 
the President to overturn the MTBE ban prior to June 30, 2014, and 
continue its use indefinitely.
  The amendment unravels the ozone designation process in the Clean Air 
Act by delaying compliance with the national health-based air quality 
ozone standards until the air in the dirtiest city is cleaned up. 
Neither the Senate nor the House of Representatives has ever considered 
this damaging provision. It is a leftover from the failed energy bill 
conference report.
  Changing cities' ozone compliance deadlines under the Clean Air Act 
doesn't increase our Nation's energy supplies. Exposing the public to 
continued levels of harmful dangerous air pollution emissions for far 
more time than allowed under existing law guarantees thousands of more 
asthma attacks, more hospital visits and more cases of respiratory 
distress, disease and illness. Recently, the EPA announced that there 
are record numbers of Americans, more than 165 million, who are 
breathing unhealthy air.
  The change is also unfair to States that have worked hard to achieve 
compliance with the Clean Air Act's health-based national standards. 
Why should areas that have done little or nothing to reduce emissions 
be given a free pass from halting local pollution? This amendment also 
provides unprecedented relief for a single region of the country from 
application of the entire Clean Air Act, without a hearing in the 
Environment and Public Works Committee or Senate consideration.
  The amendment continues the administration's drive to greater 
dependency on old technologies and fuel systems. This focus will 
increase greenhouse gas emissions and keep us on the wrong path that 
increases the risks from global warming and climate change.
  This amendment also continues to include language from the failed 
energy bill that exempts oil and gas exploration and production 
activities from the Clean Water Act stormwater program. The Clean Water 
Act requires permits for stormwater discharges associated with 
construction activity. The amendment changes the Act to provide a 
special exemption for oil and gas construction activities from 
stormwater pollution control requirements. The scope of the provision 
is extremely broad. Stormwater runoff typically contains pollutants 
such as oil and grease, chemicals, nutrients, metals, bacteria, and 
particulates.
  I have told colleagues this before but EPA estimates that this change 
would exempt at least 30,000 small oil and gas sites from clean water 
requirements. In addition, every construction site in the oil and gas 
industry larger than 5 acres

[[Page S4643]]

would be exempt as well. The large sites have held permits for 10 years 
or more. That is a terrible rollback of current law. I want Senators to 
imagine trying to explain to constituents why an oil drilling site that 
had to comply with the Clean Water Act for 10 years suddenly no longer 
needs to do so.
  So let's review the contents of this amendment. This amendment 
pollutes our surface and groundwater by exempting oil and gas 
development from provisions of the Clean Water Act. It pollutes our 
drinking water by allowing MTBE to seep into our public and private 
drinking water systems for 10 more years. The amendment pollutes our 
land by accelerating development of energy installations on public 
lands, including parks, wildlife refuges, and sensitive areas. And this 
amendment pollutes our air in many different ways. It extends pollution 
compliance deadlines and continues to avoid serious progress in 
cleaning up our air.
  There are too many serious problems with this amendment. We should 
not invoke cloture on it. The American people do not want energy 
security at the expense of the environmental quality. We should be 
passing the pieces of the energy bill where we can reach agreement to 
do so, like those issues I outlined.
  We should not be rushing to pass legislation with such serious 
consequences. This is an aggressive, overreaching amendment, and it is 
deeply flawed. I will vote against cloture, and other Senators should 
as well.
  Mr. LEVIN. Mr. President, this amendment incorporates a whole energy 
bill. It has many provisions that are deeply flawed. But we are voting 
on whether to end debate on a complicated, flawed energy bill before 
debate has even begun, making it very difficult to correct those flaws.
  The Senate passed a comprehensive and balanced energy bill in July 
2003. Then, after weeks of closed-door meetings with virtually no input 
from Democratic conferees, the Republicans put forward a ``take it or 
leave it'' energy conference report that was drastically different than 
the bill that the Senate passed. I voted against cloture on the 
conference report in November 2003 because it was deeply flawed and had 
been produced by a flawed process. The Domenici amendment, the energy 
bill, which is before the Senate today, suffers from that same problem. 
There are simply too many provisions on the negative side of the ledger 
for me to support it, and because this is a cloture vote, voting yes 
would make it difficult to consider amendments.
  At a time when crude oil prices are at 13-year highs, gasoline prices 
are reaching new record highs daily, diesel prices are breaking 
records, and high jet fuel prices are straining our airline industry, 
the Senate should be considering legislation that would do something to 
lower oil prices. The bill however, would push oil, gasoline, diesel, 
and jet fuel prices even higher by directing the Department of Energy, 
DOE, to ``as expeditiously as practicable acquire petroleum in amounts 
sufficient to fill the Strategic Petroleum Reserve to the [1 billion] 
barrel capacity.'' By directing DOE to take tens of millions of barrels 
of oil off the market at a time when supplies are tight and prices 
high--as they have been for the past 2 years--this bill would tighten 
supplies in the commercial inventories even further, drive oil and 
gasoline prices even higher, and keep private sector inventories from 
building back to normal levels.
  The bill would fill the SPR in a manner that is inconsistent with two 
recent amendments adopted by the Senate. Last fall, the Senate 
unanimously approved an amendment that Senator Collins and I offered to 
the Interior Appropriations bill, directing DOE to develop procedures 
to minimize the cost to the taxpayer and maximize the overall supply of 
oil in the United States when acquiring oil for the SPR. This amendment 
expressed the sense of the Senate that the DOE's current procedures for 
filling the SPR have raised oil prices, are too costly for the 
taxpayers, and have not improved our overall energy security. 
Unfortunately, this amendment was not included in the Interior 
Appropriations conference report, and the administration has continued 
to fill the SPR without regard to the price or supply of oil. This is a 
significant reason oil and gasoline prices are so high today.
  In light of the continuing rise in oil and gasoline prices, and the 
administration's refusal to suspend SPR shipments, the Senate approved 
an amendment that Senator Collins and I offered last month to the 
budget resolution for FY 2005. Our amendment would cancel the planned 
delivery of 50 million barrels of oil to the SPR from now through 
sometime in 2005 that would have completed the filling of the reserve. 
The SPR is 93 percent filled already. Our amendment is being considered 
in the House-Senate conference on the budget resolution.
  By directing the DOE to fill the SPR to 1 billion barrels--300 
million barrels above its current capacity of 700 million barrels--the 
bill before the Senate today would worsen a SPR policy that is 180 
degrees opposite from the direction the Senate just approved in the 
Senate budget resolution.
  By increasing deposits in a government reserve at a time when 
commercial supply is scarce and prices are high, oil companies will 
meet the additional demand for crude oil for the reserve by removing 
oil from their own inventories rather than purchasing high-priced oil 
on the spot market. Since the price of oil is so closely tied to 
inventory levels, filling the SPR under these market conditions both 
depletes private sector inventories and pushes up prices for America's 
consumers.
  Two years ago, the DOE's own staff explained this as follows: 
``Essentially, if the SPR inventory grows, and OPEC does not 
accommodate that growth by exporting more oil, the increase comes at 
the expense of commercial inventories. Most analysts agree that oil 
prices are directly correlated with inventories, and a drop of 20 
million barrels over a 6-month period can substantially increase 
prices.''
  For these reasons, in 2002, DOE SPR staff recommended against buying 
more oil for the SPR in tight markets. The administration chose to 
ignore these warnings. SPR deliveries proceeded. As the DOE staff 
predicted, oil supplies tightened, private inventory levels fell, and 
prices climbed.
  In summary, the direction in the bill to DOE to fill the Strategic 
Petroleum Reserve by another 300 million barrels, to a total level of 1 
billion barrels, is likely to increase the cost of crude oil and crude 
oil products, such as gasoline, home heating oil, and diesel and jet 
fuel, to American consumers and businesses, with no benefits to our 
national security.
  The electricity provisions of the bill before us are also deeply 
flawed. Instead of improving our current situation, I believe they will 
make it worse. The massive power failure of August 2003, on top of the 
massive price manipulation perpetrated by Enron and others, provided 
additional proof--proof that should not have been needed--that the 
United States' deregulated energy markets are not functioning well to 
secure a supply of energy against interruption.
  The bill before us--the Domenici amendment--would repeal the Public 
Utility Holding Company Act of 1934, PUHCA, long-standing consumer and 
investor protection legislation governing energy industry structure and 
consolidation. With the repeal of PUHCA, the resulting provisions of 
the bill before us fail to provide adequate protections to prevent 
industry market manipulation and consumer abuses.
  The Congress needs to enact mandatory reliability legislation, and 
while some provisions of the bill would be an improvement over the 
current voluntary system of reliability standards, other provisions of 
this bill would take us in the wrong direction and could, in fact, make 
things worse. The bill fails to ensure that regional transmission 
organizations, RTOs, will have the authority to enforce electric 
reliability standards in order to prevent, or respond effectively to, 
another blackout. Further, the ``participant funding'' provision of 
this bill shifts the cost of building new electric transmission such 
that transmission construction will be discouraged and utilities will 
be encouraged not to participate in RTOs. There is a strong need for a 
stand-alone electricity reliability bill that sets mandatory standards, 
requires utilities to join RTOs, and establishes consistent rules for 
enforcement of standards. But the bill before us today is not the right 
answer.
  Two provisions of the bill would significantly impede the ability of 
federal

[[Page S4644]]

and state agencies to investigate and prosecute fraud and price 
manipulation in energy markets. If adopted, section 1281 would impede 
state and Federal authority, other than the Commodity Futures Trading 
Commission, to investigate and prosecute wrongdoing in financial and 
commodity markets. It would turn the CFTC into a gatekeeper for all 
other federal and state investigations into matters within CFTC-
regulated markets, which would be an unprecedent intrusion into the 
enforcement of state and federal consumer protection laws.
  Section 1282 would impose a higher, criminal standard, ``knowingly 
and willfully'', for filing false information and for improper phony 
round trip trading than exists under current law. The new round trip 
trading provision is inconsistent with current law and the Cantwell 
amendment that recently passed the Senate, which prohibited market 
manipulation in electricity markets.
  Manipulation is difficult to prove even under current law. By raising 
the burden of proof, this provision will make it nearly impossible to 
prove illegal round trip trading or wash sales. Rather than weakening 
the laws preventing fraud and manipulation in energy markets, the 
Congress should be strengthening these prohibitions.
  Over the past several years, the Permanent Subcommittee on 
Investigations, which I previously chaired and on which I am now the 
ranking minority member, has investigated how Enron, financial 
institutions, and others have manipulated financial energy markets and 
prices. The record we have established is clear and dramatic. 
Strengthened oversight and transparency are critical to the proper 
functioning of our energy and financial markets. The provisions in this 
amendment will weaken our ability to ensure these markets are 
functioning properly.
  There are some provisions of the bill before us that I support. The 
amendment contains two provisions that appear on their face to 
partially address the unfair air quality restrictions placed on a 
number of Michigan counties. These provisions do not go far enough, 
however, to remedy the negative impacts that I have fought against for 
years.
  According to the Michigan Department of Environmental Quality, the 
Environmental Protection Agency, EPA, would not be required to act on 
the results of the demonstrations study that is required by the so-
called Upton language included in this amendment. It also would not 
relieve new major sources from state new source review regulations, and 
it would not release Southwest Michigan from Clean Air Act provisions 
that mandate specific local reductions following completion of the 
study. Finally, it would not prevent Southwest Michigan nonattainment 
areas from classification bump-up if the area is unable to attain the 
standard by the deadline.
  The so-called Barton provisions contained in this amendment would 
help some for two Michigan counties, Cass and Muskegon, those are the 
only two counties subject to transport that have been designated under 
Subpart 2 of Section 181 of the Clean Air Act. However, the help is 
modest because it is workable only if those areas fail to meet the 
standard by the deadline and the EPA decides to ``bump them up'' to a 
higher classification.
  We need to do more to prevent restrictions from being placed on areas 
that are impacted by overwhelming transport. The potential consequences 
of a nonattainment designation are significant. I will continue to work 
with the EPA and the Congress to ensure that the Clean Air Act 
provisions are applied with common sense so that counties are not 
required to take costly actions for problems that are created downwind, 
which would be illogical and unfair.
  The Senate has worked to create a national energy policy for years, 
but the bill before us today is not the right answer. Even if we were 
to pass it today, it will get caught in a logjam between the House and 
Senate on energy policy that is centered on the issue of the fuel 
additive methyltertiarybutylether, MTBE. The energy bill conference 
report that I voted against in November contained a provision that 
would exempt its producers from liability. In Michigan, it has been 
estimated that MTBE has contaminated groundwater around over 700 
leaking underground storage tank sites. There are similar problems in 
many other states.
  The crux of the matter is that the Senate will not pass legislation 
that includes the MTBE provision and the House will not pass 
legislation without it. So we are in a logjam, and I believe that any 
legislation that we pass will eventually come back to this body 
containing the MTBE liability exemption, which would then again be 
rejected.
  We should continue work to complete a long-term, comprehensive energy 
plan that provides consumers with affordable and reliable energy, 
increases domestic energy supplies in a responsible manner, invests in 
energy efficiency and renewable energy sources and protects the 
environment and public health. But the bill before us today, offered to 
legislation on a completely different matter, is not the right answer. 
Nor is voting ``aye'' to end debate on an important bill like energy 
before the debate has begun.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. As I understand it, under the rule we had a minute to 
respond. Let me just say that I am disappointed that we didn't get 
cloture on the Daschle amendment. I am also troubled by the fact that 
we find ourselves in this position to begin with. We should not be on 
the Energy bill as an amendment to the Internet tax, but many of us 
have been asking to have an energy bill scheduled now for some time for 
good, open debate, given our failure to pass the conference report. 
This is our only option. This does not in any way preclude a Senator 
from offering other energy amendments on the Internet tax bill. It 
doesn't in any way undermine a Senator's right to be heard on an energy 
debate.
  If we move to cloture, we bring this bill to an opportunity that 
otherwise we should have had, had the legislation been freestanding. So 
far that has not happened. I hope Senators will support cloture so we 
can move this energy legislation forward.
  I yield the floor.
  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on 
amendment No. 3051, offered by the Senator from New Mexico, Mr. 
Domenici, shall be brought to a close?
  The yeas and nays are mandatory under the rules. The clerk will call 
the roll.
  The legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards) and the Senator from Massachusetts (Mr. Kerry), are 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 55, nays 43, as follows:

                      [Rollcall Vote No. 74 Leg.]

                                YEAS--55

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Breaux
     Bunning
     Burns
     Campbell
     Carper
     Chambliss
     Cochran
     Coleman
     Conrad
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dole
     Domenici
     Dorgan
     Durbin
     Enzi
     Fitzgerald
     Frist
     Grassley
     Hagel
     Harkin
     Hatch
     Hollings
     Inhofe
     Johnson
     Kyl
     Landrieu
     Lincoln
     Lugar
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Pryor
     Reid
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Specter
     Stevens
     Talent
     Thomas
     Voinovich
     Warner

                                NAYS--43

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brownback
     Byrd
     Cantwell
     Chafee
     Clinton
     Collins
     Cornyn
     Corzine
     Dodd
     Ensign
     Feingold
     Feinstein
     Graham (FL)
     Graham (SC)
     Gregg
     Hutchison
     Inouye
     Jeffords
     Kennedy
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Reed
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Stabenow
     Sununu
     Wyden

                             NOT VOTING--2

     Edwards
     Kerry
       
  The PRESIDING OFFICER. On this vote, the yeas are 55 and the nays are 
43. Three-fifths of the Senators duly chosen and sworn, not having 
voted in the affirmative, the motion fails.

[[Page S4645]]

  Under the previous order, there will now be 2 minutes of debate 
equally divided prior to the next vote.
  The Senator from Arizona.
  Mr. McCAIN. I yield my 1 minute to the Senator from Virginia, Mr. 
Allen.
  The PRESIDING OFFICER. The Senator from Virginia is recognized for 1 
minute.
  Mr. ALLEN. Mr. President, on behalf of Senator McCain, Senator Wyden, 
myself, and others who are in favor of Internet tax freedom, I 
respectfully urge my colleagues to vote for cloture on this amendment. 
What is at stake is whether 15- to 18-percent taxes will be imposed 
upon Internet access.
  The Internet is a great invention for the advancement of ideas, of 
information, for commerce, for telemedicine, and for education. This 
country has been a leader in technology, although we are falling 
behind, particularly in broadband. I ask my colleagues to vote for 
cloture.
  There can be germane amendments but allow us to go forward. A vote 
for cloture is a vote for freedom and opportunity for the American 
people. Stand on the side of that principle.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Democratic leader.
  Mr. DASCHLE. I ask unanimous consent to take 1 minute of leader time 
to respond.
  Mr. President, I was 1 of those 74 Senators who voted for the motion 
to proceed. I want to see this bill completed. I would like to find a 
way to resolve the outstanding differences. I think that can happen.
  We have now found ourselves in a position where cloture would deny 
Senators the opportunity to offer relevant amendments. They may not be 
germane but they certainly are relevant. So I would vote against 
cloture in the hope that we can find a way to continue this debate and 
allow for the offering of amendments that are relevant. My hope is that 
at the end of the day we can reach a conclusion procedurally as well as 
substantively.
  The PRESIDING OFFICER. Does the Senator from Tennessee wish to speak?
  Mr. ALEXANDER. Did I not have 1 minute?
  The PRESIDING OFFICER. Is there an objection to the Senator from 
Tennessee speaking for 1 minute?
  Mr. McCAIN. I ask unanimous consent that the Senator from Tennessee 
be allowed 1 minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Tennessee is recognized for 1 minute.
  Mr. ALEXANDER. Mr. President, since that would put two speakers on 
that side, I ask unanimous consent that one other speaker on the other 
side be permitted 1 minute to speak.
  Mr. ALLEN. Objection.
  The PRESIDING OFFICER. The objection is heard.
  The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I am voting against cloture, against 
cutting off debate. The Senator from Arizona and the Senator from 
Virginia have worked hard to make this a good amendment. I and my group 
of colleagues have been working on this issue. We are for a 2-year ban 
on State and local taxation of Internet access but this does much more 
than that. A vote against cloture, against cutting off the debate, is a 
vote to do no harm to State and local governments. It will allow us to 
continue the debate. I urge my colleagues to vote against cloture.
  Mr. KOHL. Mr. President, I rise today to add my voice to the debate 
surrounding the Internet tax moratorium. I believe strongly we can and 
should find a reasonable replacement for the expired 1998 moratorium on 
taxation of internet access, a replacement that balances the fiscal 
needs and rights of the States and the overwhelming national interest 
in fostering and growing the internet economy.
  The McCain substitute is a solid, and I believe well intentioned, 
first step toward such a compromise. Its provision to extend the 
moratorium for 4 years seems a reasonable solution to legislating about 
an industry that is rapidly changing. The McCain amendment's phasing 
out of the current grandfather provisions over 3 years seems a 
reasonable compromise with those who would end the grandfather 
provisions immediately. The McCain amendment's provisions to exempt 
``voice over Internet'' services from the moratorium seem a reasonable 
answer to the States' concerns that their undisputed right to tax the 
telecommunications base be preserved.
  In its general framework, the McCain substitute outlines the 
foundation of a reasonable compromise to the highly contentious issue 
of taxation of internet access. Unfortunately, the Senate has only had 
a few days to consider the highly technical and important details of 
the McCain substitute. And there is legitimate and heated disagreement 
over exactly what the McCain substitute would do. This is exactly the 
sort of instance in which the Senate should take the time to debate, 
consider, and amend where necessary to produce a true compromise that 
is truly workable. Invoking cloture today would cut off that very 
legitimate and necessary process, and therefore I cannot support it.
  But we need to keep working to reach a compromise on the tax 
treatment of Internet access. As we struggle as a nation to address our 
eroding manufacturing base, one answer is to make our Nation more 
attractive to Internet based companies and our companies more willing 
to employ new Internet-based technologies. This can't happen if States 
tax every new form of Internet-access technology.
  That is why I am saddened by having to vote against cloture today. 
This was an extremely difficult decision. I support many aspects of the 
McCain legislation. However, as both sides continue to argue about the 
potential effects of the proposal, the bottom line is that we need more 
time. We need more time to debate the best possible solution, the way 
to balance the needs of innovation versus the needs of the States.
  I remain hopeful that the vote today is not the end, but rather the 
beginning. That it is the beginning of a solution, of a compromise of 
which both sides can be proud. That is not out of reach, and I call on 
the leaders to leave the McCain bill on the floor and let us continue 
to work on a compromise.
  Mr. SMITH. Mr. President, I rise today in support of the managers' 
amendment to S. 150, the Internet Tax Nondiscrimination Act. Although 
the amendment is not perfect, I believe it will sufficiently protect 
consumers from State attempts to embrace the Internet as a new platform 
for taxation. Rather than increasing taxes on consumers, we should all 
work to embrace the Internet for its potential as a critical source of 
information and services and as a tremendous new marketplace for all to 
access, not just those that can afford to pay more taxes.
  Of course, this vote takes place at a time when the economy is 
beginning to rebound as a result of tax relief--not tax increases--and 
the U.S. high-tech sector is getting its second wind, preparing to lead 
the economy once again into a period of increased productivity and job 
growth. Let us not stifle this by giving a green light to taxing 
innovation, to taxing Americans' access to the Internet.
  There is no question that technology boosts U.S. economic output and 
makes U.S. workers more productive, and that the U.S. high-tech sector 
is a leading force driving our recent economic growth. Between 1992 and 
2000, high tech companies created twice as many jobs as non-high 
private employers nationwide in the United States. Not to mention that 
these jobs pay, on average, nearly twice as much as other private 
sector jobs.
  Additionally, the Internet and technology have contributed 
dramatically to our expanding knowledge base, bringing opportunity and 
hope to those who need them most. Distance learning is offered to more 
than 3,300 American schools, providing knowledge and education to 
anyone who can log on, wherever they live. Not to mention, the 
increased access to government services, born by State, local and 
Federal Government reliance on the Internet to provide its citizens 
with valuable government information and services. To realize the full 
potential of the Internet and the digital economy, every person must be 
able to participate fully.
  But today, we are talking about taxing the Internet, the vital core 
of the information technology revolution of the 1990s and the single 
greatest resource for Americans to have increased access to vast 
information resources and government services. About this, there should 
be no question, and no debate. With technology playing such a critical 
role in our economy, society

[[Page S4646]]

and way of life, one would expect political leaders to be supportive of 
its continued growth for all Americans. Taxing Internet access has 
never been good policy, and it isn't today. Whether access is provided 
by traditional phone lines, high-speed Digital Subscriber Lines, DSL, 
or even wireless, the Internet must remain free of taxation.
  To the extent that I have any reservations about the amendment, it 
will likely prolong the different tax regimes for DSL and cable modem 
service. It is my belief that all high speed data connections should be 
treated the same and that the government and this legislation should 
not allow any disparities to continue.
  Nevertheless, let me reiterate my support for this bill and the 
promise that it provides for continued economic growth. I urge my 
colleagues to join me in supporting this vital measure. I remind them 
that the economy is not beginning to rebound as a result of more taxes; 
it is beginning to rebound as a result of less taxes.
  The PRESIDING OFFICER. All time has expired. Under the previous 
order, the cloture motion having been presented under rule XXII, the 
Chair directs the clerk to read the motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate to the pending 
     McCain substitute amendment No. 3048 to Calendar No. 353, S. 
     150, a bill to make permanent the moratorium on taxes on 
     Internet access and multiple and discriminatory taxes on 
     electronic commerce imposed by the Internet Tax Freedom Act.
         Bill Frist, John McCain, Jon Kyl, Norm Coleman, Jim 
           Bunning, Gordon Smith, Mitch McConnell, Pete Domenici, 
           Conrad Burns, Rick Santorum, Olympia J. Snowe, Judd 
           Gregg, Wayne Allard, Thad Cochran, Mike Crapo, Larry E. 
           Craig, Ted Stevens, George Allen.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived. The question is, Is it the sense of the Senate 
that debate on amendment No. 3048 offered by the Senator from Arizona, 
Mr. McCain, shall be brought to a close?
  The yeas and nays are required under the rule. The clerk will call 
the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards) and the Senator from Massachusetts (Mr. Kerry) are necessarily 
absent.
  The PRESIDING OFFICER (Mr. Enzi). Are there any other Senators in the 
Chamber desiring to vote?
  The result was announced--yeas 64, nays 34, as follows:

                      [Rollcall Vote No. 75 Leg.]

                                YEAS--64

     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bond
     Boxer
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Chafee
     Chambliss
     Coleman
     Collins
     Cornyn
     Corzine
     Craig
     Crapo
     Dayton
     DeWine
     Dole
     Domenici
     Ensign
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Hatch
     Inhofe
     Inouye
     Kyl
     Landrieu
     Leahy
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Warner
     Wyden

                                NAYS--34

     Akaka
     Alexander
     Biden
     Bingaman
     Breaux
     Carper
     Clinton
     Cochran
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Hutchison
     Jeffords
     Johnson
     Kennedy
     Kohl
     Lautenberg
     Levin
     Lieberman
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Voinovich

                             NOT VOTING--2

     Edwards
     Kerry
       
  The PRESIDING OFFICER (Mr. Enzi). On this vote, the yeas are 64, the 
nays are 34. Three-fifths of the Senators duly chosen and sworn having 
voted in the affirmative, the motion is agreed to.
  The majority leader.
  Mr. FRIST. Mr. President, I am delighted with the outcome of that 
last cloture vote. It means we can proceed on course to finish this 
bill--a very important bill.
  I congratulate the managers but encourage our colleagues to come 
forward with germane amendments. We will be working through the 
afternoon. We will be voting through the afternoon. We can finish the 
bill this afternoon. We have been debating this bill all week. It is an 
issue that we debated months ago. We are debating it now. Now is the 
time to bring those amendments forward so we can have these final votes 
and complete the bill this afternoon.
  Mr. McCAIN. Mr. President, I raise a point of order that the Daschle 
amendment is not germane and ask for a ruling from the Chair.
  The PRESIDING OFFICER. Point of order is sustained. The amendment 
falls.
  Mr. McCAIN. Mr. President, I thank all of my colleagues for the 
comity that has existed in addressing this bill.
  I thank, of course, Senator Allen, Senator Lott and Senator Sununu, 
and many others who have helped to get this bill to the point where it 
is.
  We are ready to consider amendments. I assured the opponents of this 
bill who have fought tenaciously--Senator Voinovich, Senator Alexander, 
and Senator Carper in particular--that if there is an amendment which 
they have filed which is not technically germane but is associated with 
the Internet tax, I would ask consent that it be considered because 
there was a feeling that they did not have their amendments properly 
considered. I hope we can give them that consideration.
  I hope we can move forward soon with the amendments. As I last 
checked, there are about 30 which were filed. I hope we can move 
forward, debate, and dispose of those amendments. I thank all of my 
colleagues for their cooperation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I ask unanimous consent to speak very 
briefly after the Senator from New Jersey.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WYDEN. Mr. President, having been involved in this issue now for 
8 years, I can say it has never been easy. Certainly what we have seen 
today demonstrates that once more.
  But I think the Senate has made an important statement today; that 
is, as we try to lay out the policies that will say a lot about the 
future of the Internet, it is critically important this exciting 
opportunity for Americans not be subject to more discriminatory taxes.
  We have said once again in the Senate, we want to try to find common 
ground around the principle of technological neutrality, for example. 
If we do not do that, we will be discriminating against the future, 
because if we do not work it out now in the amendment process, 
broadband services delivered through DSL would be taxed and Internet 
access through cable would not be taxed. That is not technological 
neutrality.
  What is going to give Americans the best array of technologies at the 
cheapest prices is true competition where there is a level playing 
field for the various technologies. I have said repeatedly I don't want 
to see the people who now get the message ``You've got mail'' to get a 
message that says ``You've got special taxes.'' My colleagues on the 
other side of the aisle agree with that as well. We have a difference 
of opinion with respect to how we are going to get that done. Now we 
will be able to go to the amendment process.
  I have compared this exercise repeatedly to something resembling root 
canal work. I make it clear to my friend from Tennessee, the Senator 
from Delaware that we are going to do everything possible to make sure 
there is an adequate opportunity for colleagues to offer their 
amendments and discuss them. These are very technical, complicated 
issues. I have spent about as much time on the Senate floor discussing 
these issues over the last 3 days as any Member. I intend to stay at 
this post so we give everybody who wants a chance to discuss these 
issues that kind of opportunity.
  Over the last 7 years, we have seen a lot of reports about dire 
consequences that come about if we pass this legislation. That has not 
come to pass. I see the distinguished Senator from Connecticut.

[[Page S4647]]

  We were told in 1997, if we pass that, we will bring the collapse of 
the revenue system in States and localities, and revenue went up $7 
billion the next year. We have to deal with those issues. In the last 
two iterations of this legislation, I have said repeatedly that no one 
has brought forward an example of a local jurisdiction hurt by their 
inability to discriminate against electronic commerce. That is what 
this bill does; it makes sure you cannot single Internet out for 
special taxes.
  We will use this amendment process now to address the concerns of 
various Senators. A lot of Members did not think we would get to this 
point today, but we have a chance, working with colleagues, to produce 
a bipartisan bill that will be passed overwhelmingly by the Senate. I 
intend to stay and work with the Senator from Tennessee and others to 
make sure they get the discussion on the topics they feel strongly 
about and that it is fair and thorough. That is my pledge.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I see other Senators waiting to speak, 
so I will be brief. I acknowledge and congratulate Senator McCain, 
Senator Allen, Senator Wyden, and others who have worked very hard on 
this issue. Their point of view on the cloture vote is prevailing. I 
congratulate them and thank them also for the discussions we have had, 
trying to assure Members that this legislation, in the end, would do 
the minimum amount of harm to State and local governments. I would like 
to continue to do that.
  There are a number of amendments that have been filed. We need to 
have a few minutes to talk about exactly in what order we would like to 
bring up those amendments. I believe in some cases the Senator from 
Oregon, the Senator from Virginia, and I intend to do the same thing, 
but that our language does a different thing. To the extent there is a 
misunderstanding that produces concerns on my part and among the 
National Governors Association, the mayors, and the county executives 
of the country, perhaps we could work those things out by consensus.
  I congratulate them on moving ahead with this step. I appreciate the 
offer to continue to work together. Within a few minutes, we will have 
an idea of which amendments and in what order we would like to proceed, 
and we will move along.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. I yield to my colleague from Delaware. I know he has a 
comment he wants to make.
  Mr. CARPER. I thank my colleague for yielding. I join Senator 
Alexander in congratulating Senator Wyden, Senator Allen, and Senator 
McCain for the vote on the cloture. All week I had a different point of 
view on how we wanted to approach this matter. Now that is behind us. 
We want to approach this in the spirit of comity and see if we cannot 
find a consensus.
  I said yesterday and I reiterate again today, there are four areas of 
contention, as I see them. We are discussing going from a very narrow 
moratorium to a very broad moratorium and the issue of what is defined 
as exempt under the moratorium. It is a good deal broader than what we 
faced in recent years. That is a matter of concern. Going well beyond 
access fees and discriminatory taxes is a matter of second concern.
  I appreciate Senator McCain's offer to go from a permanent moratorium 
down to 4 years. We were interested in 2 years. I don't know if there 
is a similar area there for compromise. I think there is a number 
between 2 and 4 that might work. That would be consistent with the 
third area of contention where the duration of the grandfather clause 
for State and local governments is 3 years. They are protected for 3 
years, and the length of the moratorium is 4. If we could put those two 
together, 3 and 3--3 years for the moratorium and stick with the 3 
years for the grandfather clause--I think that actually addresses that 
concern.
  In conversation with Senator Wyden, Senator Allen, Senator McCain, 
Senator Voinovich, and Senator Alexander, everyone says nobody wants to 
deny State and local governments the opportunity to collect taxes from 
telephone services that they have collected for decades. I have not 
talked to anybody who wants to deny State and local governments that 
have been collecting taxes on telephone services almost since the day 
Alexander Graham Bell invented the telephone. Everyone says they do not 
want to deny the ability to collect that for State and local 
governments. The concern is, as telephone service and commerce 
communication migrate to the Internet, we want to make sure that as 
that happens State and local governments do not see those they 
traditionally rely on cut out.

  Those are four areas, and I think there is middle ground--at least on 
three of them. I don't know if we can ever agree on the breadth and 
depth of the definition. We will approach it in a good spirit.
  I thank Senator Dodd for yielding.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. I propound a unanimous consent request regarding time. My 
colleague from Arkansas wishes to speak for 10 minutes on a subject 
unrelated to the matter before the Senate. I would like to follow her, 
if I might accommodate my Senator from Arkansas, on a subject matter 
unrelated to the matter before the Senate. I clearly know the priority 
is to get amendments up here. If I may, I make such a request, that the 
Senator from Arkansas be recognized for 10 minutes, and following her 
remarks I be recognized for 15 minutes to speak on a matter unrelated 
to the subject matter before the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Arkansas.


                       Honoring our Armed Forces

  Mrs. LINCOLN. Mr. President, I rise today with a heavy heart but with 
a great sense of Arkansas pride as well to pay tribute to five members 
of the Arkansas 39th Infantry Brigade who lost their lives fighting for 
our country in Iraq this past weekend.
  According to recent reports, Saturday was one of the deadliest days 
for the Arkansas service members since 1950 in the Korean War. On 
Saturday, four soldiers from the Arkansas 39th were killed in a mortar 
attack, and 27 hours later a fifth Arkansan was killed by a roadside 
bomb as he patroled the neighborhoods of Baghdad.
  I think back to last fall when I had the honor of attending a sendoff 
ceremony for the 39th Infantry Brigade in Little Rock, AR. That 
ceremony brought together soldiers, families, friends, and loved ones 
to commemorate the occasion and wish them the best in their mission, to 
join together in prayer and send them off with the idea that we would 
be back soon to welcome them home safely.
  The sendoff was not a celebration. In fact, it was a sobering 
occasion. After all, no one relishes the prospect of traveling halfway 
around the world, far from family and friends and home, to take on a 
dangerous mission. But even at such a somber occasion something special 
happens. Differences begin to fade away. The soldiers that were 
standing before me were no longer from big cities or small cities, they 
were no longer Black or White, and they were no longer male or female. 
Their differences did not exist. Those brave soldiers were Americans, 
and for the defense of this Nation, they become one of mind and one of 
mission.
  The oneness of purpose that the 39th exhibited that day should serve 
as a lesson to those of us they leave behind. They are sacrificing 
their lives not just for their kind and kin but for every American who 
enjoys liberty and peace.
  When a member of the 39th patrols Baghdad, he does not just patrol it 
for the sake and safety of Lewisville, AR, or Little Rock, AR, or Hazen 
or Humnoke or Batesville, AR; he patrols Baghdad for the sake and the 
safety of all Americans and the values and the ideals that we, as 
Americans, believe in and support. When a member of the 39th Infantry 
pays the ultimate price in battle, he does it not just for the sake of 
his children but also for the sake of my children and your children as 
well. In the end, these courageous souls are not only protecting our 
liberty, they are also teaching us what it means to be a part of one 
American family--one American family.
  In this time, when so many Americans are willing to lay their lives 
on

[[Page S4648]]

the line, we in this body--we in this Nation--must become one America. 
We must understand what it takes to be one with the sacrifices that we, 
too, must undertake.
  Unfortunately, carrying out the duty of a nation requires sacrifices, 
and some of those are sacrifices we would rather not take. This 
weekend, we were once again reminded of the sacrifices that are 
required to protect our Nation. We, too, as leaders in this body--all 
Americans--must make sacrifices, too--to govern, to protect, to get 
along, and to make this Nation strong. Our sacrifices are not even 
worthy to be compared to what these brave Americans have done and the 
sacrifices they have made, but our sacrifices, too, are all too 
important, that the sacrifices they have made will not have been done 
in vain, that our Nation can remain as strong as it has ever been, and 
that each of us--from big cities and small, men and women, Black and 
White, Republican and Democrat--must become one America.
  Over the course of those 2 days, the State of Arkansas lost five 
brave soldiers who made the ultimate sacrifice to make the world a 
better place. I know that my colleagues in the Senate join me in paying 
tribute to CPT Arthur ``Bo'' Felder, 36 years old, of Lewisville, AR; 
CWO Patrick W. Kordsmeier, 49 years old, of North Little Rock, AR; SSG 
Stacey C. Brandon, 35 years old, of Hazen, AR; SSG Billy Joe Orton, 41 
years old, of Humnoke, AR; and SP Kenneth A. Melton, 30 years old, of 
Batesville, AR.
  Captain Felder served as a youth director at Saint Luke Missionary 
Baptist Church in North Little Rock. He was known as someone who felt 
at ease with children, who loved them, cared for them, and wanted to 
help prepare them for the future. It was reported in the Arkansas 
Democrat Gazette that Captain Felder was remembered by his friends as a 
person of faith and prayer.

  Chief Warrant Officer Kordsmeier was killed as he rushed to the aid 
of his fellow soldiers. His selfless act illustrates the kind of 
courage which is necessary to keep this Nation strong and free.
  According to the Arkansas Democrat Gazette, Sergeant Stacey Brandon 
was a prison guard for the State Department of Correction and later 
worked at the Federal prison in Forrest City, AR.
  His friends said of him:

       He was a very outstanding young man whose loss will affect 
     a lot of people. He was one of the young people you could 
     admire.

  Sergeant Orton was loved by his family and friends. It is reported 
that when they learned of his death over 100 people gathered around his 
home to stand vigil and to support his family. It was noted by those 
there that Billy had given his life for the cause of freedom.
  Many of Specialist Melton's fellow soldiers from Bravo Company were 
especially affected by his death. He had known and worked with many of 
them for years. It is reported that upon the announcement of Specialist 
Melton's death, his comrades did not think of the dangers of their 
mission but of comforting Specialist Melton's wife and children.
  Saturday's deadly attack on Camp Cooke, the base camp for Arkansas' 
39th Infantry, occurred at 5 a.m. Captain Felder, Chief Warrant Officer 
Kordsmeier, Sergeant Brandon, and Sergeant Orton were killed in the 
final moments of the attack when they took a direct mortar hit as they 
emerged from the bunker where they had been taking cover. On Sunday, 
Specialist Melton was killed by a roadside bomb as he manned a machine 
gun atop his Humvee.
  These five brave men are a shining example of the citizen soldiers 
who are fighting in the deserts of the Middle East. Those serving in 
Iraq today are not only military men, but they are also doctors, 
lawyers, police officers, firemen, teachers, factory workers, business 
owners, and elected officials. Most importantly, they are husbands and 
wives, they are mothers and fathers.
  In short, they are our American family. They are the leaders of their 
respective communities. Their loss will not only be felt on the 
battlefield but also by their families, friends, and communities who 
will miss their love and leadership.
  When their Nation called, these brave men answered. They did so 
without regard to politics or party. They did so without regard to the 
many small differences we allow to divide us as a nation.
  I am sure the entire Senate body will join with me as we send our 
condolences and sympathy to the families and friends of these brave 
Americans, to send our thanks for the courageous way they have served 
their country. They left their homes as family members, co-workers, and 
friends, and they return as heroes.
  I am honored and humbled to pay tribute to their sacrifice. It is 
hard to find the words that you might think could match those 
sacrifices because there are no words. But we try. I challenge my 
colleagues today, let us not just use words. Let us use actions. Let 
our work be an example of the sacrifices we are willing to take by 
saying to one another, we will be one America.
  Thank you, Mr. President.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Cornyn). The Senator from Connecticut.
  Mr. DODD. Mr. President, before I begin my remarks, may I also make a 
unanimous consent request that at the conclusion of my remarks, the 
distinguished Senator from West Virginia, Mr. Byrd, be recognized for 
20 minutes.
  The PRESIDING OFFICER. Is there objection?
  Mr. DODD. My remarks will be off the subject matter of the bill.
  The PRESIDING OFFICER. Is there objection?
  Mr. ALLEN. Reserving the right to object, will the Senator from 
Connecticut restate what his request is?
  Mr. DODD. At the conclusion of my remarks, which are about 15 minutes 
off the subject matter of the bill, Senator Byrd of West Virginia be 
recognized for 20 minutes.
  Mr. ALLEN. I ask the Senator from Connecticut, is the subject of 
Senator Byrd's remarks the Internet tax issue?
  Mr. DODD. I do not know. I have not asked the Senator.
  No, it is not. It is a tribute to a constituent.

  Mr. ALLEN. Mr. President, I understand the nature of Senator Byrd's 
remarks. We all want to get to the amendments that might be proposed on 
the Internet tax issue, but knowing the subject matter of Senator 
Byrd's remarks, there is no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. I thank the distinguished Senator.
  The PRESIDING OFFICER. The Senator from Connecticut.


                                  Iraq

  Mr. DODD. Mr. President, I commend my colleague from Arkansas for her 
very eloquent remarks. While she addressed them to four specific 
individuals from her State, she could have been speaking for any one of 
our States in talking about any one of the several hundred young men 
and women who have lost their lives in Iraq over the last year. I thank 
her for the eloquence of her remarks, the sense of passion and 
commitment she brought to them. I know she is joined by all of us--
certainly this Senator--in expressing deep sorrow for the loss of these 
Arkansans. We will certainly keep them in our thoughts and prayers.
  My remarks follow on a little bit with the remarks of my colleague 
from Arkansas. Later today or tomorrow, this body will be asked to vote 
on the confirmation of the first Ambassador to be sent to post-Saddam 
Hussein Iraq, John Negroponte. Presently, he is our Ambassador to the 
United Nations. Ambassador Negroponte has a very distinguished 
diplomatic career and is well suited to undertake what is surely going 
to be an extremely difficult and complex assignment, likely the most 
difficult one of his career, and certainly one of the most difficult in 
the history of the diplomatic corps, going back over the more than 200-
year history of our Nation.
  While we have had our differences from time to time, I happen to 
believe John Negroponte is eminently qualified to take on this post. I 
thank him for his willingness to assume this responsibility, if he is 
confirmed, and I believe he will be. I also thank his family for their 
willingness and understanding that our country needs John Negroponte's 
service at this critical hour.
  During his nomination hearing before the Foreign Relations Committee, 
I stressed to Ambassador Negroponte

[[Page S4649]]

that it would be terribly important for him to be candid with this 
Congress and the American people about what is happening in Iraq and 
what is not occurring. As we send our sons and daughters, mothers and 
fathers, brothers and sisters in harm's way, as we have just heard our 
colleague from Arkansas so eloquently describe, the American people 
have every right to expect and demand that U.S. officials are telling 
them the truth about what is happening in Iraq because if they lose 
faith in what our government is telling them, the United States will 
not be able to sustain the long and difficult task we have undertaken 
in this faraway country. Ambassador Negroponte acknowledged his 
obligation to keep us informed. I am very confident he will do so.
  While I intend to support Ambassador Negroponte's nomination when the 
Senate votes on this matter, I would not want that vote of support for 
him to be interpreted as an endorsement of the U.S. policy in Iraq, as 
it is presently being conducted. I am deeply troubled about the pace 
and direction of our policy in that country. The situation in Iraq 
could not be more volatile. Yet the Bush administration seems hell-bent 
to stick to the planned date of June 30 for the transfer of sovereignty 
to the Iraqi Government. Given the recent upsurge in violence in places 
such as Falluja and Najaf, given the absence of an effective Iraqi 
security force to deal with such acts, and given the inadequate numbers 
of U.S. and foreign troops in that country to restore and maintain 
stability, I wonder--and I assume others do as well--whether we are 
setting ourselves up for a catastrophic failure by rigidly adhering to 
this deadline of June 30.

  This coming Saturday, May 1, will be the 1-year anniversary of 
President Bush's declaration of mission accomplished in Iraq. Recent 
events make it painfully obvious that nothing could be further from the 
truth; rather, our mission may be just beginning. Certainly the return 
of sovereignty to Iraq is a laudable goal which I support, as I assume 
most all of my colleagues do. It should and must be our end game. But a 
transfer of authority will not in and of itself be a panacea for all 
the problems Iraq faces. Moreover, if we do it prematurely, it could 
put our whole mission and the future of Iraq at risk.
  This has been obvious to many of us for some time. But the Bush 
administration continues to plunge forward with the hope and prayer 
that everything somehow will work out after June 30. It does so without 
any clear sign that Iraq is ready for us to turn over authority or its 
institutions are at all capable at this juncture of successfully taking 
on this incredible responsibility. In fact, I would argue that all the 
evidence before us suggests that Iraq is not ready and will not be 
ready in the coming 62 days. Ironically, in light of recent events, 
with each step closer to June 30 we seem to be taking a step back in 
terms of our readiness to hand over control to the interim transitional 
Iraqi Government.
  Last week, the Senate Foreign Relations Committee held three 
consecutive hearings on the situation in Iraq. I commend Senator Lugar 
and Senator Biden for holding the hearings. On Tuesday, the committee 
considered the nomination of Ambassador John Negroponte to be the first 
Ambassador to post-Saddam Hussein Iraq. Many questions were explored in 
the course of those hearings. Frankly, with respect to many of those 
questions, there were no or very few clear answers. However, we did 
receive some very excellent testimony from expert witnesses with very 
different backgrounds--from the U.S. military, from academia, from 
policing experience, and counterterrorism.
  Despite their different expertise, all of the witnesses were in 
agreement on one thing: that is, a major course correction with respect 
to U.S. efforts in Iraq is badly needed, and needed immediately. I have 
come to a very similar conclusion. Let me be clear. This need for a 
correction in our policy is not because our men and women in uniform 
have somehow failed to do their jobs. Quite the contrary, these men and 
women have performed every task that has been asked of them with the 
highest degree of professionalism, patriotism, and heroism. Let there 
be no doubt about that in the mind of any single American. But it is 
now more than 1 year after the end of major combat, and arguably the 
dangers to our troops have never been greater 1 year later.
  Why then are our troops in so much danger? I believe the answer, 
unfortunately, is quite simple. We have failed to craft and implement 
an effective stabilization plan for the nation of Iraq. This is not the 
fault of those in uniform; rather, it is the responsibility of top 
civilian officials in the Department of Defense and the White House who 
from the very beginning ignored--in fact, scoffed at and thwarted--
recommendations from leading uniformed officers, including GEN Eric 
Shinseki, that several hundred thousand troops would be needed to 
complete our mission in Iraq. In retrospect, it certainly seems that 
General Shinseki's judgment was right on the mark. More recently, 
military experts have concluded that we are likely, at least in the 
short term, to need an additional 50,000 U.S. troops if we are going to 
be able to secure the peace in that country.

  We are also going to need a similar number from our European allies 
in NATO, and we need these reinforcements soon before events spin even 
further out of control than they already have.
  Indeed, I wonder if last March we had sent a larger number of troops 
to Iraq--and had broad international participation--whether we would 
now be facing the same unacceptable lack of security throughout that 
country. I also wonder what effect increased security in Iraq would 
have had with respect to Iraqis' tolerance of a U.S. military presence 
in their country.
  Unfortunately, this lack of security has been evident from the 
earliest days of the conflict, when it first became apparent that the 
administration had not paid sufficient attention to the security needs 
of Iraq. Museums were looted. Ordinary civilians took up arms to guard 
their neighborhoods. Lawlessness prevailed throughout much of the 
country. Most importantly, in that short period of time, we lost the 
confidence of the Iraqi people.
  This isn't simply my observation. I was told very directly by an 
Iraqi during my trip to the nation back in December, well before the 
recent flareup in violence over the last several weeks--this Iraqi 
citizen is a Shiite, a moderate, a forward-looking individual. He very 
frankly told me that the lawlessness which followed the war negatively 
impacted Iraqis' confidence as to the intentions, preparedness, and 
capabilities of coalition forces to create a safe and secure Iraq.
  His contention was reinforced by Hasan Zirkani, who in November 2003 
listed the lack of law and order, rampant unemployment, and the lack of 
basic services as sources of Shiite unrest. I would note that Mr. 
Zirkani is a Shiite cleric who supports Moqtada al-Sadr, the radical 
leader who commands the loyalty of the group responsible for much of 
the recent violence and unrest in Iraq.
  I also point to a February 2004 nationwide poll in Iraq, which showed 
that 64 percent of the Iraqi people consider regaining public security 
as their ``first priority'' over the next 12 months.
  Disturbingly, the Bush administration has attempted to make up for 
its lack of security preparation in the same reactive and hasty manner 
as much of the planning for post-war Iraq was carried out. One example 
of this has been the assembling of the various Iraqi security forces, a 
process which most experts agree was done far too quickly, with little 
or no training, and with inadequate vetting. We all witnessed the 
consequences of these rushed activities during the recent upsurge in 
violence, when Iraqi forces collapsed in the face of armed resistance.
  Insecurity in Iraq has also affected the ability of U.S. and foreign 
NGOs to perform the necessary humanitarian and reconstruction duties 
that would help them turn around the mood in the Iraqi streets. 
Unfortunately, due to the lack of security, many are unwilling or 
unable to operate in that country. In many places, reconstruction 
activities have come to a screeching halt. Contractors sit in hotel 
lobbies in Kuwait and Jordan, waiting for order to be restored so they 
can return to their projects.

[[Page S4650]]

  The administration says we are on course for June 30. I ask: What is 
that course? Where is all this leading?
  One thing is clear: From the very beginning, the Bush administration 
has done an inadequate job of preparing for the peace in Iraq. It has 
attempted to fix problems in shortsighted, often haphazard ways. It has 
only begrudgingly moved to adapt to the resulting strategic realities 
on the ground.
  That is why I believe it is fair and responsible to question the 
administration's plans as they relate to the upcoming June 30 deadline. 
How much more complex will this situation be if we try to stand up an 
Iraqi authority prematurely--if we stubbornly adhere to this date? What 
happens if that authority crumbles?
  I don't underestimate the problem of delaying the turnover. Clearly, 
if U.N. Special Envoy Brahimi were to announce that the turnover on 
June 30 is impossible, that would make our choice much easier. But we 
must recognize that the situation in Iraq is incredibly fragile. If 
this effort to build a stable and democratic Iraq is to succeed, it is 
going to need enormous international support. That support will not be 
forthcoming if the interim government in Iraq is not perceived as 
legitimate--both by the Iraqi people and the international community.
  I emphasize again that I understand there will be a cost by delaying 
the June 30 date. My point is that whatever that cost is, the cost of 
adhering to that date, sticking to it prematurely I think would be far 
more precarious than whatever damage may be associated with delaying 
the date beyond the June 30 date. Indeed, for all the difficulties in 
delaying the turnover of authority in Iraq, they pale in comparison, in 
my view, to going forward and seeing the situation irreversibly spiral 
downward.
  Equally troubling is that the administration is now saying that our 
handover of sovereignty to the Iraqis on June 30 will be ``limited.'' 
Mr. President, I don't quite understand what that means. I suspect the 
Iraqi people don't either. The law of administration for the state of 
Iraq, the so-called transitional law, which was drafted and approved 
earlier this year, calls for the establishment of a ``fully sovereign 
Iraqi interim government.''

  Now it would appear that a yet-to-be-negotiated annex to that 
transitional law is going to spell out the limits of Iraq's sovereignty 
after June 30. Of course, nobody yet knows what that annex is going to 
look like--what concessions the administration will have to make to get 
the various Iraqi factions to sign off on the individuals who will make 
up the interim government, or whether those concessions, made in haste, 
in the long run will undermine our goal of a fully independent and 
democratic Iraq.
  I don't pretend to have all the answers with respect to what needs to 
be done before sovereignty is handed back to the Iraqi people. But I 
will say that the rapidly deteriorating security situation, combined 
with the lack of legitimacy for the U.S. presence in Iraq, has created 
conflicting pressures on the administration with respect to the June 30 
deadline.
  Administration officials assert if we hand over authority to the 
Iraqis on schedule, the U.S. presence in that country will become less 
controversial. I disagree. The way to enhance U.S. legitimacy is to get 
the security situation turned around. That isn't going to happen by 
simply declaring Iraq a sovereign nation on July 1; it is only going to 
happen with a carefully planned and implemented stabilization program.
  That stabilization program will require more troops on the ground--
our troops and troops from other nations sanctioned by a clear U.N. 
mandate. Whether that can be accomplished by June 30 remains to be 
seen. I think it is very unlikely.
  As I mentioned earlier, we are only 62 days away from the turnover 
date. Yet, we still don't know who we are turning that authority over 
to. We don't know whether the individuals to be chosen by a U.N. 
special envoy will be acceptable to the Iraqi people.
  What we do know is that virtually every day more Americans and more 
Iraqis are dying. Recent events have forced the Bush administration to 
acknowledge some of these realities. I do not think we should dismiss 
out of hand that a course correction may be called for that makes the 
primary focus of our efforts security; or that we put off, for a time, 
the standing up of an unelected interim government.
  That would also give us additional time to make sure that when 
authority is transferred, it is transferred to a body that has 
legitimacy in the eyes of the international community and the Iraqi 
people. To help do this, we need to go to the U.N. and NATO before 
turning over authority, not after. The U.N. and NATO would be 
invaluable partners in tackling a task never before attempted from the 
outside: converting dictatorship into democracy. It would infuse our 
efforts with much-needed legitimacy.
  There are roughly 9 weeks left before June 30. In the interim, a lot 
could be accomplished in Iraq that might make the turnover of 
sovereignty possible on the timetable the administration has laid out. 
We could have achieved, before that date, a clear and concrete U.N. 
mandate for nation building in Iraq. We could have a secured commitment 
for a significant NATO troop deployment in that nation. We could have 
deployed additional troops to address the security challenges of a 
growing insurgency movement--including troops from governments in the 
region. But we have not achieved any of those things yet. We need to be 
honest about that.

  Mr. President, now is the time for a careful, informed debate in 
America about U.S. policy in Iraq, especially about the wisdom of our 
set deadlines--the pros and cons of moving forward as planned. After 
that debate, as June 30 draws nearer, we may in fact determine that 
sufficient progress has been made to go ahead as planned with the 
turnover of sovereignty. That may in fact be the right thing to do. But 
if on balance we conclude it is not, we in Congress need to say so 
publicly and on a bipartisan basis. The Bush administration needs to do 
so as well. Then we need to act accordingly.
  Former U.S. Ambassador to Saudi Arabia, Chas Freeman, recently sent 
an e-mail to some of his friends concerning the situation in Iraq. It 
was printed in the Washington Post about 2 weeks ago. He concluded with 
these comments:

       Military triumph does not necessarily equate to a political 
     victory. Wars end only when the defeated accept defeat, not 
     when the victor declares victory. A victory that does not 
     produce peace can be much more costly than protracted 
     confrontation that accomplishes deterrence. Arrogant 
     daydreams that inspire military actions can become 
     humiliating nightmares that produce political debacles.

  Before our daydreams for a free and democratic Iraq become our 
nightmares of a bottomless quagmire, let us do the sensible thing and 
at least honestly take a hard look at our decision to turn back 
authority to the Iraqi people on June 30--before we are sure that 
``victory is going to produce peace.'' Once we have allowed the Iraqi 
people to govern themselves, it is going to be virtually impossible to 
take that sovereignty back without enormous loss of the blood and 
treasure of both of our peoples.
  That is something no one wants to see happen. I urge the 
administration to think about the wisdom of moving forward on the June 
30 date.
  Mr. REID. Mr. President, I know the order is that the distinguished 
senior Senator from West Virginia gets the floor. I ask unanimous 
consent that I be able to ask, under my time postcloture, some 
questions of the Senator from Connecticut.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Is that OK with the Senator from West Virginia?
  Mr. BYRD. It is.
  Mr. REID. Mr. President, I have been fascinated with the statement of 
the Senator from Connecticut. What triggered my mind was the statements 
he made about General Shinseki who said we would need a couple hundred 
thousand troops over there. I ask the Senator from Connecticut, what 
happened to him? He is gone.
  Mr. DODD. He is gone. He retired. He was not fired.
  Clearly, the message was quite clear that he had stepped out of line 
by saying what he thought from a military standpoint--he had a 
distinguished career of many years in military service--that in order 
to be successful, that number of troops was necessary. He was, in a 
sense, penalized, at the very

[[Page S4651]]

least rhetorically for suggesting as such.
  Mr. REID. I ask the Senator, does he remember a man named Larry 
Lindsey? I suggest he was on the Board of Governors working with Alan 
Greenspan. He also was the chief economic adviser to President Bush. 
Does the Senator from Connecticut remember a time just a short time ago 
after the war started that he said he thought the war could cost as 
much as $200 billion?
  Mr. DODD. I recall that.
  Mr. REID. He was even more lenient than that. The news article I have 
says it would be between $100 billion to $200 billion. The Senator 
recognizes that he was also given his walking papers; is that true?
  Mr. DODD. That is exactly what happened. He was also highly condemned 
for suggesting a number that now looks small in comparison to what the 
real pricetag is going to be.
  Mr. REID. Before asking my final question, I ask the Senator from 
Connecticut, I am confident he is aware of the last press conference 
that the President held; is that true? Does the Senator remember the 
question that was asked in that press conference where the President 
said, when asked the question about having made mistakes, he couldn't 
remember any? I ask the Senator from Connecticut if he thinks this is a 
mistake made by the President: No. 1, going on the aircraft carrier and 
having a banner above it saying ``Mission Accomplished''? The Senator 
is aware that since that time, about 700 American soldiers have been 
killed; is that true?
  Mr. DODD. That number I think is roughly correct. Most of those, by 
the way, have died since May 1 of last year.
  Mr. REID. So it is fair, is it not, that could have been a mistake?
  Mr. DODD. I think by anyone's estimation to declare that the mission 
was accomplished was a mistake.
  Mr. REID. Does the Senator from Connecticut also think it was a 
mistake for the President to say--when asked about whether there would 
be any people who would cause trouble there, does the Senator from 
Connecticut remember him saying, ``Bring 'em on''?

  Mr. DODD. I do recall that statement he made.
  Mr. REID. I suggest to the President's people that they should advise 
him the next time he is asked that question, he could at least relate 
to those two things--No. 1, ``Mission Accomplished,'' and No. 2, 
``Bring 'em on.'' Since the time of ``Bring 'em on,'' hundreds of 
soldiers have been killed and thousands maimed for life and injured in 
other ways.
  I appreciate very much that statement of the distinguished Senator 
from Connecticut.
  Mr. DODD. Mr. President, if I may take 1 additional minute, my point 
is, I voted in favor of the authority. I believe it was the right thing 
to do. My concern is the June 30 date. I am concerned, and I realize 
there is a cost in changing it. We need to evaluate whether turning 
sovereignty over at that date is going to serve our interests. That was 
the sum and substance of my remarks.
  I appreciate the questions my colleague from Nevada raised. I made 
comments regarding holding rigidly to a date that could turn out to be 
a mistake.
  Mr. REID. I say to my friend, I also voted for the resolution. I 
think it is extremely important that we who support the effort in Iraq, 
protecting the men and women who are representing our country over 
there, have the ability to speak out freely on this issue and not be 
criticized as having been unpatriotic for having done so.
  The Senator from West Virginia was originally almost a lone voice 
speaking out against this event. Time has shown perhaps his vision was 
more meaningful than people realized at the time. I appreciate the 
Senator responding to my questions.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
West Virginia is recognized.
  Mr. McCAIN. Will the Senator from West Virginia yield to me 30 
seconds for a comment?
  Mr. BYRD. Absolutely.
  Mr. McCAIN. I thank the Senator from West Virginia.
  It is the intention of all to finish this legislation tonight. I hope 
those with amendments will come over during the period that Senator 
Byrd makes his remarks so we can proceed with amending this 
legislation. I regret it, but I will object to further extraneous 
conversation or dialog until we finish consideration of this bill 
because I do not want to inconvenience Members by keeping them in late 
tonight. We have some 31 relevant amendments. We need to get about 
addressing them.
  I thank the Senator from West Virginia for allowing me to comment.
  Mr. REID. If I can, as a matter of trying to lay out what is ahead of 
us, Senator Wyden spoke with me and one other Senator indicating they 
worked to get cloture on this amendment that the Senator from Arizona 
filed. There has been an agreement--I have not been part of those 
agreements--that Senator Wyden, Senator Carper, and others would have 
an opportunity to offer amendments. The Senator from Arizona has 
indicated that he will do everything within his power to make sure 
those amendments are offered and debated in an orderly time.
  My only statement to the Senator from Arizona is, I think it may be 
difficult to finish this bill today because he talked about extraneous 
matters. The Senator from West Virginia has a right to speak for 1 hour 
on this matter, as do I and others. No one is attempting to stall this 
legislation. The Senator from Arizona had a very important vote, but I 
hope this matter is not, in effect, going to be jammed through. This is 
an important piece of legislation. We will work with the majority as 
much as we can, but based on my experience in the Senate--the Senator 
from Arizona and I came on the very same day, so one does not have more 
experience than the other--I think it will be difficult to finish 
tonight. If we can, we will work with you. I think it is extremely 
difficult to finish tonight.
  Mr. McCAIN. If the Senator will yield for one additional comment, I 
appreciate what the Senator from Nevada said. He is very experienced at 
floor procedures. I point out we have been on this bill all week. I 
would hope we could finish it tonight. I see no reason why we cannot.
  I understand his skepticism. In no way did I mean to criticise the 
very important statements being made on the vital issue of national 
security.
  I thank the Senator from West Virginia for his indulgence. I yield 
the floor.
  The PRESIDING OFFICER. The Senator from West Virginia.


                         SGM Michael Boyd Stack

  Mr. BYRD. Mr. President, on Easter Sunday, April 11, 2004, this 
Nation lost a fine soldier, a good man, a loving father and husband, 
and a faithful Christian when SGM Michael Boyd Stack of C Company, 2nd 
Battalion, 5th Special Forces Group Airborne, was killed in an ambush 
in Iraq.
  SGM Stack is 1 of more than 700 men and women who have given their 
lives in this conflict and 1 of the more than 100 who were killed in 
the month of April alone. Each is mourned. Each is honored. Each is 
sorely missed.
  These men and women knew the meaning of duty, honor, and courage. 
They and their comrades in arms still serving are most emphatically not 
the summer soldier and the sunshine patriot whom Thomas Paine warned 
against, who shrink from the service of their country in times of 
crisis.
  SGM Stack and his fallen comrades wore the uniform of the United 
States proudly and bravely. When told to go to Iraq and Afghanistan, 
they saluted and prepared to go. They said their farewells to their 
loving and fearful families and set off. From spare bivouacs, they 
patrolled dusty streets and lonely highways. They faced rocket-
propelled grenades, improvised landmines, sniper fire, and ambush. They 
looked out for one another with humor and grace and caring. They gave 
their very best. In the end, they gave their all.

     Soldier, rest!
     Thy warfare oer,
     Sleep the sleep that knows not breaking,
     Dream of battled fields no more,
     Days of danger, nights of waking.

  So said Sir Walter Scott in the Lady of the Lake.
  These fallen heroes made the ultimate sacrifice, bravely and 
unshirking. When all is said and done, all policy laid aside, out there 
at the sharp end of the spear, these men and women did what good 
soldiers do. They stood

[[Page S4652]]

shoulder to shoulder and did not flinch. In the heat of battle, in the 
threat of danger, in the face of death, they did not flinch.
  SGM Stack had faced such dangers before. His 27-year Army career 
spanned the cold war, the first Gulf war, and the conflict in the 
Balkans. His experience and his cool head in tense situations made him 
a valued member of his company and his battalion. He volunteered for 
Airborne School and service in the 82d Airborne Division upon his 
enlistment in 1977. He joined the Special Forces in 1988, serving 16 
years with the 3d, 5th, and 10th Special Forces Groups, and as an 
instructor in the 1st Special Warfare Training Group. Much of what he 
did will never be made public, but he earned the unqualified respect 
and admiration of his fellow soldiers. The high standard of 
professionalism, ability, teamwork, and fairness that SGM Stack 
exemplified and taught to new generations of Green Berets will be his 
legacy to the Army, as well as in the Armed Forces of other nations 
that he helped to train.

  Even as a young platoon sergeant, he was known as ``No Slack Billy 
Jack Stack,'' in recognition of the high standards he expected, and 
required, of the men he led. He cared deeply for his men and died among 
them, manning a .50-caliber machine gun in the heat of battle, keeping 
them safe and striving, as always, to achieve the mission goals.
  SGM Stack was a professional soldier, hard-eyed and competent, the 
very picture of a happy warrior, who might have inspired these words by 
the poet William Wordsworth:

     Who is the happy Warrior? Who is he
     That every man in arms should wish to be?
     It is the generous Spirit, who, when brought
     Among the tasks of real life, hath wrought
     Upon the plan that pleased his boyish thought:
     Whose high endeavors are an inward light
     That makes the path before him always bright:
     Who, with a natural instinct to discern
     What knowledge can perform, is diligent to learn;
     Who, doomed to go in company with Pain,
     And Fear, and Bloodshed, miserable train!
     Turns his necessity to glorious gain;
     In face of these doth exercise a power
     Which is our human nature's highest dower:
     Controls them and subdues, transmutes, bereaves
     Of their bad influence, and their good receives:
     Whose powers shed round him in the common strife,
     Or mild concerns of ordinary life,
     A constant influence, a peculiar grace;
     But who if he be called upon to face
     Some awful moment to which Heaven has joined
     Great issues, good or bad for human kind,
     Is happy as a Lover; and attired
     With sudden brightness, like a Man inspired;
     And, through the heat of conflict, keeps the law
     In calmness made, and sees what he foresaw.

  In and out of uniform, SGM Stack set high standards for himself. He 
earned his college degree while serving in the Army. He was active in 
his church. He kept a Holy Bible in his desk at work, by his chair at 
home, and in the pocket of his battle dress uniform. He had the quiet 
confidence of a man who keeps the Lord close to his heart. Before 
leaving on his final patrol, SGM Stack asked the unit chaplain to say a 
prayer over his men.
  He kept his family close as well. He went home to lunch most days. He 
lavished love on his young children and took great pride in the 
accomplishments of his older children. In his wife, Suzanne, he had a 
soulmate with whom he was planning a long and happy retirement, a 
retirement which never came. He relished quiet hours spent with family 
and friends, and he took justified pride in his cooking abilities at 
such times. He was slow to anger and quick to forgive. He left behind 
him a full measure of That best portion of a good man's life, His 
little, nameless, unremembered acts of kindness and of love.
  SGM Stack is survived by his wife, Victoria Suzanne Stack; his 
children Milissa, Virginia, Jillian, David, and William; step-son 
Bryan, and grandchildren Jakob, Tylor, and Jesse. His father, Cecil, 
and mother, Antoinette Stack, also mourn him, as do his brother, Cecil 
Stack, Jr., and sisters Tammy, Kimberly, and Christina.
  Military service was a tradition in the Stack family that stretches 
across generations. SGM Stack's father, brother, and nephew all serve 
or served in the Army. SGM Stack's father-in-law retired from the Air 
Force. The Nation owes a deep debt of gratitude to such families, who 
have answered the call to arms so often and so willingly in our 
history.
  Today, as SGM Michael Stack is laid to rest at Arlington Cemetery, 
joining the quiet ranks of fallen heroes there, no words can truly 
comfort hearts that loved him and that are grieving. But at this Easter 
season, especially, we are reminded that death is not the end, but only 
a parting for a little while. Michael's faith gave him comfort as he 
stepped in front of danger; may that same faith sustain his family that 
they will surely be together again.
  Once again, I reach for the words of William Wordsworth, from his 
Ode, Intimations of Immortality:

     Though nothing can bring back the hour
     Of splendor in the grass, of glory in the flower;
     We will grieve not, rather find
     Strength in what remains behind;
     In the primal sympathy
     Which having been must ever be;
     In the soothing thoughts that spring
     Out of human suffering;
     In the faith that looks through death,
     In years that bring the philosophic mind.

  I offer the thanks of a grateful Nation to SGM Stack, who served his 
country in the Army, who served his country with great honor and 
distinction. To his family, I offer my sincere condolence for their 
loss. I pray that the Lord gives them strength to bear this sad burden 
until, in the fullness of time, they are all united again.
  Mr. President, I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, before the leader yields, I thank the 
leader. This was a very gracious thing to do. We don't do it often 
enough. I commend the Democratic leader for taking out a few minutes to 
recognize people who make such a difference here every single day. The 
leader does this repeatedly, and I commend him for it.
  I associate myself with his remarks, and I wish to express our deep 
gratitude to Tom and his family for remarkable service to this country. 
I hope the people out there realize with all that happens within the 
view of a television camera, there are literally hundreds of people who 
make this government of ours, in spite of all of its inefficiencies, 
function remarkably well, and Tom certainly falls within that category. 
I thank the leader for taking a few minutes out to recognize him.
  Mr. DASCHLE. I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BURNS. 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. BURNS. Mr. President, I ask unanimous consent that I may proceed 
as in morning business for the next 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                                  Iraq

  Mr. BURNS. Mr. President, I have heard my colleagues come to the 
Senate today criticizing the President about the handling of Iraq and 
the war on terrorism. I hate for it just to lie there and somebody not 
explain to the American people that we are at a war. This is a war that 
is as big as World War II or World War I. It is global in its size, but 
it is with a different enemy than we have ever known before in the 
history of this country or any other country. It is terrorism. It is 
performed by people who do not wear uniforms, who operate in the 
shadows and are faceless, are indiscriminate in whose life they take--
whether they be combatants or noncombatants, men or women, young or 
old--and a respecter of no nationality. That is the enemy.
  Some would actually question the decision to move against Iraq or 
Afghanistan. Let me remind my fellow Americans and also my colleagues, 
we could go back as far as Beirut when a building was bombed there and 
over 200 marines lost their lives. It was a car

[[Page S4653]]

bombing. We had never experienced that before. It gave us a pattern of 
what was to come in later years.
  We have heard the crying of the Iraqi people. I believe the spirit of 
freedom lives in their breast as it does in ours. But let's look at the 
track record, how we got to where we are today.

  Do you recall the World Trade Center, the first time it was hit, 
February 26, 1993? Six people died. Cyanide gas and other chemicals 
were found in that building. Next, we move to June 25, 1996, when 19 
Americans were killed and 372 were wounded at a place called Khobar 
Towers in Saudi Arabia. Nothing was done about either one of those 
attacks.
  Then came August 7, 1998. Two embassies were bombed; one in Tanzania, 
one in Kenya, eastern Africa.
  Then came October 12, 2000. The USS Cole was attacked in Yemen. 
Seventeen American sailors died.
  Then we come to September of 2001--September 11; 9/11--and the World 
Trade Center, New York City. Two airplanes were flown into the two 
towers. Over 2,500 people were killed on that fateful day that most of 
us remember. There was another attack in Washington, DC, at the 
Pentagon on that same day. On that day some 3,000 people died. We did 
not even lose that many at Pearl Harbor when Japan attacked our forces, 
the U.S. Navy.
  We could go on about Santiago, on September 27, 2001; the U.S. 
housing compound in Saudi Arabia--all of those terrorist attacks on 
American citizens.
  Because we did nothing to answer any of those attacks, was that 
basically a green light to go ahead? How long do we have to apologize 
and say, Well, we are trying to find a way to take care of this cancer 
that has invaded our world?
  So the decision was to say, after 9/11: Let's go after the cancer. 
And we did that. And al-Qaida, even though it operates, I will tell 
you, it does not operate as freely as it did.
  The American people, have they forgotten we have not been hit by 
another terrorist act in this country since we made the decision to 
tear the heart out of the dragon?
  And then the idea of Iraq and weapons of mass destruction, he had 
them. He used them. He manufactured them. People were even trained.
  I do not think we need to apologize to anybody anymore for the 
actions we are taking. Enough is enough, for the protection of our 
country and for the protection of the people who live here, who work 
here, and long to be free.
  Just ask the young men. For everybody who would say, Well, this thing 
is falling apart, do you realize our recruitments are up? People who 
are reenlisting in the service--those numbers are up. If you talk to 
our young people there in Iraq, who are doing those patrols--and I have 
done that; I have been there--they know what the mission is. They know 
the risk involved. They willingly accept it because they have a great 
heritage of generations before them. When called upon to make the 
sacrifice for national security, Americans have always answered the 
call--even in light of those who would be apologists.
  So we as, say, the political arm also have an obligation to make sure 
they inherit the world they think they are getting. They are willing to 
die for it. We should support them because they understand the next 
generation will. If you wanted to take a poll on how many people wanted 
to be on Normandy Beach on June 6, 1944, I doubt you would get a 
majority of people who would like to have been there. But we went. We 
answered the call. That is what is important. We cannot lose our will 
as a people or a society or as our military forces. That is what I am 
hearing is our will. They understand what is at stake for the next 
generation. That is what has made this country great. We always think 
about the next generation. It is not about our own generation. It is 
about our kids. That is what this is all about.
  If we keep backing and shrinking away, then our enemy will take 
whatever we give them, and we will pay an even higher price than we 
have already paid--Americans killed, innocently, going about their own 
business in their own way in a free country.
  We have men and women who have answered the call and a Commander in 
Chief who is doing his level best to not only end it in an honorable 
way but to also secure the freedom and the safety of people in a part 
of the world where that has been done very few times. He is to be 
commended for it.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Crapo). The Senator from California.
  Mrs. BOXER. Mr. President, I ask unanimous consent that I may speak 
for up to 20 minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Honoring Our Armed Forces

  Mrs. BOXER. Mr. President, today I rise to pay tribute to 59 young 
Americans who have been killed in Iraq from March 22 to April 26. All 
of them to whom I am going to pay tribute were from California or were 
based in California.
  I have previously read the names of all the others connected to 
California who have died. Sadly, these numbers are going up. I was 
shocked to just hear on the radio that 11--11--of our troops have been 
killed today in Iraq.
  So I am going to read the names of those who are connected to 
California. And this, again, is from March 22 until Monday of this 
week.
  LCpl Jeffrey C. Burgess, age 20, died March 25, due to enemy action 
near Fallujah. He was assigned to Marine Wing Support Squadron 373, 
Marine Wing Support Group 37, 3rd Marine Aircraft Wing, I Marine 
Expeditionary Force, Marine Corps Air Station, Miramar, CA.
  LCpl James A. Casper, age 20, died March 25, due to a noncombat-
related incident at Al Asad. He was assigned to 2nd Battalion, 11th 
Marines, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA.
  MSgt Timothy Toney, age 37, died March 27, due to a noncombat-related 
incident at Camp Wolverine, Kuwait. He was assigned to Headquarters 
Battalion, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA.
  PFC Leroy Sandoval, age 21, died March 26 due to hostile fire in the 
Al Anbar Province. He was assigned to 2nd Battalion, 1st Marine 
Regiment, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA.

  LCpl William J. Wiscowiche died March 30 due to enemy action in Al 
Anbar Province, age 20. He was assigned to 1st Combat Engineering 
Battalion, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA. He was from Victorville.
  PFC Dustin Sekula, age 18, died April 1 due to injuries sustained 
from enemy fire in Al Anbar Province. Assigned to 2nd Battalion, 7th 
Marines, 1st Marine Division, I Marine Expeditionary Force, Twentynine 
Palms, CA.
  PFC Geoffrey Morris, 19. Private Morris died April 4 due to injuries 
received from hostile fire in Al Anbar Province. Assigned to 2nd 
Battalion, 4th Marines, 1st Marine Division, I Marine Expeditionary 
Force, Camp Pendleton, CA.
  LCpl Aric Barr, age 22, died April 4 due to injuries received from 
enemy action in Al Anbar Province. Assigned to Twentynine Palms, CA, 
the same battalion, the same division, the same force.
  Cpl Tyler Fey, age 22. Corporal Fey died April 4 due to injuries 
received from enemy action in Al Anbar Province. He was assigned to the 
same battalion, the same division, the same force, Twentynine Palms, 
CA.
  We have been hurting in California.
  LCpl Matthew Serio, age 21, died April 5 due to injuries received 
from hostile fire in Al Anbar Province; also from Camp Pendleton, the 
same battalion, the same division, the same force.
  Sgt Michael W. Mitchell, age 25, died April 4 in Baghdad when his 
unit was attacked with rocket-propelled grenades and small arms fire. 
He was assigned to the Army's 2nd Battalion, 37th Armor Regiment, 1st 
Brigade, 1st Armored Division, Ray Barracks, Friedberg, Germany. 
Sergeant Mitchell was from Porterville, CA.
  SP Casey Sheehan, age 24, died April 4 in Baghdad when his unit was 
attacked with rocket-propelled grenades and small arms fire. He was 
assigned to the Army's 1st Battalion, 82nd Field Artillery Regiment, 
1st Calvary Division, Fort Hood, TX. Specialist Sheehan was from 
Vacaville, CA.
  Cpl Jesse Thiry, age 23, died April 5 due to injuries received from 
hostile fire in Al Anbar Province. Assigned to

[[Page S4654]]

1st Battalion, 5th Marines, 1st Marine Division, I Marine Expeditionary 
Force, Camp Pendleton, CA.
  PFC Christopher Ramos, age 26. Private First Class Ramos died April 5 
due to injuries received from hostile fire in Al Anbar Province; the 
same battalion, same Marine division, same force, Camp Pendleton, CA.
  Another from the same battalion, the same force at Camp Pendleton, is 
PFC Derrick Hallal, age 24, died April 6 due to hostile fire in Al 
Anbar Province.
  PFC Christopher Cobb, age 19, died April 6 due to hostile fire in Al 
Anbar Province; also from Camp Pendleton, CA.
  PFC Ryan Jerabek, age 18, died April 16 due to hostile fire in Al 
Anbar Province; also from Camp Pendleton, CA.
  PFC Moises Langhorst, age 19, died April 5 due to hostile fire in Al 
Anbar; same battalion, from Camp Pendleton, CA.
  LCpl Travis Layfield, age 19, assigned to 2nd Battalion, 4th Marines, 
1st Marine Division, same force, Camp Pendleton, CA. He was from 
Freemont, CA.
  LCpl Anthony Roberts died April 6 due to hostile fire in Al Anbar 
Province; the same group of marines from Camp Pendleton.
  SSgt Allan Walker died April 6 as a result of a gunshot wound while 
conducting combat operations in the Al Anbar Province. He was from the 
same battalion, division, force at Camp Pendleton. He was from 
Palmdale, CA.
  LCpl Kyl Crowley died April 6 as a result of a gunshot wound while 
conducting combat operations in the Al Anbar Province. He was from the 
same battalion, same division, same force, Camp Pendleton, CA. He was 
from San Ramon, CA.
  PFC Benjamin Carman, age 20, died April 6 due to hostile fire in Al 
Anbar Province. He was assigned to the same group as the others, Camp 
Pendleton, CA.
  LCpl Marcus M. Cherry, age 18. He died as a result of a gunshot wound 
while conducting combat operations in Al Anbar Province. He was from 
the same battalion, same division, same force, Camp Pendleton. Lance 
Corporal Cherry was from Imperial, CA.
  LCpl Shane Goldman died April 5 due to injuries received from hostile 
fire in Al Anbar Province. He was from the same battalion, same 
division, same force, Camp Pendleton, CA.
  2LT John Wroblewski. Second Lieutenant Wroblewski died April 6 due to 
injuries received from hostile fire in Al Anbar Province. He was 
assigned to the same group at Camp Pendleton.
  CPT Brent Morel, age 27, died from hostile fire in Al Anbar Province 
on April 7. He was assigned to the same group, Camp Pendleton.
  Petty Officer Third Class Fernando Mendezaceves, age 27, killed April 
6 in Iraq while conducting combat operations in the Al Anbar Province. 
He was assigned to the Naval Medical Center in San Diego, 1st Marine 
Division Detachment, San Diego.
  PFC Christopher D. Mabry, 19, died April 7 due to injuries received 
from hostile fire in Al Anbar Province. He was part of the same group 
from Pendleton, CA.
  SSgt William Harrell, age 30, died April 8 of a gunshot wound while 
conducting combat operations in Al Anbar Province. He was from 
Placentia, CA. He was part of the same marine group, Camp Pendleton.
  1LT Joshua Palmer died April 8 of wounds received from small arms 
fire while conducting combat operations in the Al Anbar Province. He 
was assigned to the same group of marines, Camp Pendleton, CA. He was 
from Banning, CA.
  LCpl Michael Wafford, 20, died April 8 due to injuries received from 
hostile fire in Al Anbar Province. He is from the same Marine regiment, 
division, force at Camp Pendleton, CA.
  Cpl Nicholas J. Dieruf, age 21. Corporal Dieruf died April 8 due to 
injuries received from enemy action in Al Anbar Province. He was 
assigned to 1st Light Armored Reconnaissance Battalion, 1st Marine 
Division, I Marine Expeditionary Force, Camp Pendleton, CA.
  LCpl Christopher B. Wasser, age 21. Lance Corporal Wasser died April 
8 due to injuries received from enemy action in Al Anbar Province. He 
was assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine 
Division, I Marine Expeditionary Force, at Twentynine Palms, CA.
  LCpl Levi T. Angell, age 20. Lance Corporal Angell died April 8 due 
to injuries received from hostile fire in Al Anbar Province. He was 
assigned to Combat Service Support Group 11, 1st Force Service Support 
Group, I Marine Expeditionary Force, Camp Pendleton, CA.
  Cpl Matthew E. Matula, age 20. Corporal Matula died April 9 form 
hostile fire in Iraq. He was assigned to 2nd Battalion, 1st Marines, 
1st Marine Division, I Marine Expeditionary Force, Camp Pendleton, CA.
  LCpl Elias Torrez, III, age 21. Lance Corporal Torrez died April 9 
from hostile fire in Iraq. He was assigned to 3rd Battalion, 7th 
Marines, 1st Marine Division, I Marine Expeditionary Force, Twentynine 
Palms, Ca.
  PFC Eric A. Ayon, age 26. Private First Class Ayon died April 9 as a 
result of shrapnel wounds from an explosion while conducting combat 
operations in the Al Anbar Province. He was assigned to 2nd Battalion, 
4th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Camp Pendleton, Ca. Private First Class Ayon was from Arleta, CA.
  PFC Chance R. Phelps, age 19. Private First Class Phelps died April 9 
form hostile fire in Al Anbar Province. He was assigned to 3rd 
Battalion, 11th Marine Regiment, 1st Marine Division, I Marine 
Expeditionary Force, Camp Pendleton, CA.
  LC John T. Sims, Jr., age 21. Lance Corporal Sims died April 10 from 
hostile fire in Al Anbar Province. He was assigned to 2nd Battalion, 
4th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Camp Pendleton, CA.
  1LT Oscar Jimenez, age 34. First Lieutenant Jimenez died April 11 due 
to a gunshot wound to the head and thigh received in Al Anbar Province. 
He was assigned to 3rd Battalion, 4th Marine Regiment, 1st Marine 
Division, I Marine Expeditionary Force, Camp Pendleton, CA. He was from 
San Diego, CA.
  PFC George D. Torres, age 23. Private First Class Torres died April 
11 after sustaining a gunshot wound to the head while conducting combat 
operations in the Al Anbar Province. He was assigned to 1st Battalion, 
5th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Camp Pendleton, CA. He was from Long Beach, CA.
  LC Phillip E. Frank, age 20. Lance Corporal Frank died April 8 from 
hostile fire in Al Anbar province. He was assigned to 2nd Battalion, 
1st Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Camp Pendleton, CA.
  Cpl Daniel R. Amaya, age 22. Corporal Amaya died April 11 from 
hostile fire in Al Anbar Province. He was assigned to 3rd Battalion, 
4th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Twentynine Palms, CA.
  LCpl Torrey L. Gray, Age 19. Lance Corporal Gray died April 11 from 
hostile fire in Al Anbar Province. He was assigned to 3rd Battalion, 
4th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force, 
Twentynine Palms, CA.
  PVT Noah L. Boye, age 21. Private Boye died April 13 from hostile 
fire in Al Anbar Province. He was assigned to 1st Battalion, 5th Marine 
Regiment, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA.
  LCpl Robert P. Zurheide, Jr., Age 20. Lance Corporal Zurheide died 
April 12 from hostile fire in Al Anbar Province. He was assigned to 2nd 
Battalion, 1st Marine Regiment, 1st Marine Division, I Marine 
Expeditionary Force, Camp Pendleton, CA
  LCpl Brad S. Shuder, Age 21. Lance Corporal Shuder was killed in 
action April 12 while conducting combat operations in the Al Anbar 
Province. He was assigned to 2nd Battalion, 1st Marine Regiment, 1st 
Marine Division, I Marine Expeditionary Force, Camp Pendleton, CA.
  Cpl Kevin T. Kolm, Age 23. Corporal Kolm died April 13 from hostile 
fire in Al Anbar Province. He was assigned to 3rd Assault Amphibian 
Battalion, 1st Marine Division, I Marine Expeditionary Force, Camp 
Pendleton, CA.
  SSG Victor A. Rosaleslomeli, Age 29. Staff Sergeant Rosaleslomeli 
died April 13 in Iraq when an improvised explosive device exploded near 
his escort vehicle. He was assigned to the 2nd Battalion, 2nd Infantry 
Regiment, 1st

[[Page S4655]]

Infantry Division, Vilseck, Germany. He was from Westminster, CA.
  SGT Brian M. Wood, Age 21. Sergerant Wood died April 16 in Tikrit 
when his military vehicle pulled off the road and apparently hit a mine 
while on patrol. He was assigned to the Army's 9th Engineer Battalion, 
2nd Brigade Combat Team, 1st Infantry Division, Schweinfurt, Germany. 
Sergeant Wood was from Torrance, CA.
  SSG Jimmy J. Arroyave, Age 30. Staff Sergeant Arroyave died April 15 
due to a non-combat related vehicle accident northeast of Ar Ramadi, 
Iraq. He was assigned to Combat Service Support Battalion 1, Combat 
Service Support Group 11, 1st Force Service Support Group, I Marine 
Expeditionary Force, Camp Pendleton, CA. He was from Woodland, CA.
  LCpl Gary F. VanLeuven, age 20. Lance Corporal VanLeuven died April 
17 due to injuries received from enemy action in Al Anbar Province. He 
was assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine 
Division, I Marine Expeditionary Force, at Twentynine Palms, CA.
  LCpl Ruben Valdez, Jr., age 21. Lance Corporal Valdez died April 17 
due to injuries received from enemy action in Al Anbar Province. He was 
assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine Division, I 
Marine Expeditionary Force, at Twentynine Palms, CA.
  LCpl Michael J. Smith, Jr., age 21. Lance Corporal Smith died April 
17 due to injuries received from enemy action in Al Anbar Province. He 
was assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine 
Division, I Marine Expeditionary Force, at Twentynine Palms, CA.
  CPT Richard J. Gannon, II, age 31. Captain Gannon died April 17 from 
an explosion while conducting combat operations in the Al Anbar 
Province. He was assigned to 3rd Battalion, 7th Marine Regiment, 1st 
Marine Division, I Marine Expeditionary Force, at Twentynine Palms, CA. 
Captain Gannon was from Escondido, CA.
  PFC Leroy Harris-Kelly, age 20. Private First Class Harris-Kelly died 
April 20 north of Tallil, Iraq, when his truck went off the road and 
rolled over because of limited visibility and dangerous driving 
conditions. He was assigned to the 596th Maintenance Company, 3rd Corps 
Support Command, V Corps, Darmstadt, Germany. He was from Azusa, CA.
  Cpl Christopher A. Gibson, age 23. Corporal Gibson died April 18 due 
to injuries received from enemy action in Al Anbar Province. He was 
assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine Division, I 
Marine Expeditionary Force, at Twentynine Palms, CA. He was from Simi 
Valley, CA.
  Cpl Jason L. Dunham, age 22. Corporal Dunham died April 22 due to 
injuries received from enemy action in Al Anbar Province. He was 
assigned to 3rd Battalion, 7th Marine Regiment, 1st Marine Division, I 
Marine Expeditionary Force, at Twentynine Palms, CA.
  Sadly, since this list was compiled, we have suffered more and more 
losses. Today alone, I understand from radio reports, we have lost 11 
soldiers. So this list that I read pays tribute to those lost between 
March 22 and Monday of this week. It took me too long, Mr. President, 
and I had to ask for more time because, sadly, we have lost more than 
700 people, and the numbers are escalating.
  I say to the families not only of these brave servicemen--and I don't 
think there was a woman in this particular list--I say to the parents 
who have lost a child here, and I say to the wives or the husbands who 
have lost a spouse here, and I say to the children who have lost a dad 
here, or the siblings who have lost a brother or sister here, you 
should be very proud of your family member; that love of country takes 
many forms, and one form is being willing to carry a weapon on to the 
field of battle where you face death, and that is what these brave men 
and women are doing right now.

  As a Senator, I owe you a plan, I owe you a clear mission, I owe you 
a clear exit strategy. Working on the Foreign Relations Committee with 
my colleagues on both sides of the aisle--Senators Lugar, Biden, Kerry, 
Dodd, Sarbanes, Chafee, and all the Members on both sides of the aisle, 
we owe it to the people to come together now and figure this out.
  My friend from Montana said this is a war against terrorism. I want 
to bring us back for a moment to September 11 when the whole world was 
with us against Osama bin Laden, and I gave the President full 
authority to go get the people who did this to us.
  After September 11, as each of us were trying to find out what 
happened, I asked the State Department about al-Qaida and where al-
Qaida operated.
  I have a booklet that was printed after September 11 from the Bush 
administration's State Department. Al-Qaida operated at that date in 45 
countries, including our own. Iraq was not on the list. And somehow 
because we did not have a plan and we lost the support of most of the 
world for this, we find ourselves alone in this matter.
  For every name that I read, there is a family grieving with tears 
that we can only imagine. We owe it to them now, because we are where 
we are, not to come to the floor and snipe at each other, but to find a 
plan so we can make sure the world is with us and make sure the Iraqi 
people are with us.
  Yes, we are going to have those elements--the Baathists and the 
extremists--but if we can win the hearts and minds of the Iraqi people, 
as we have been saying on the Foreign Relations Committee for so long, 
we can turn this around. But we need to do it with the world behind us, 
and that takes leadership.
  For me to come to the floor and talk about all these deaths and then 
have to ask for additional time because there are so many deaths that I 
ran out of time--this is not what the American people were told. We 
need a plan. We need more support. We need an exit strategy that makes 
sense that gives us pride, that gives the people of Iraq pride, that 
gives them at least the limited sovereignty they have been promised.
  This is a very hard time. I support our men and women in Iraq. I am 
going to work overtime in a bipartisan way to make sure the tone around 
here can change, and we can come together.
  Yes, we differed on the way in. I differed with how we went in and 
with whom we went in, but we are where we are, and now is a time to 
figure out a way to get us out of there in a way that makes the world 
safer, makes us safer, and once more puts America in the front of the 
world as the country that will, in fact, be able to bring democracy in 
a way that makes sense for the people of the world.
  I am going to give back my time because I am very anxious to get this 
bill passed with my colleagues, Senators McCain, Wyden, Allen, and 
others.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I thank the Senator from California for 
her courtesy.
  I would like to report that after a very productive meeting amongst 
the principals who have been involved in this legislation, I might add, 
I was reminded, for about 8 years now, and thanks to the good offices 
of Senators Dorgan, Voinovich, Allen, Lott, Alexander, and Carper, I 
think we have the outline of an agreement that I hope can lead to a 
successful conclusion within the next hour or so.
  We have refined the issues basically down to two. One of them is the 
issue of a moratorium. We expect Senator Lautenberg to come to the 
floor with an amendment on the issue of moratorium, the numbers of 
years of a moratorium for different protocols, and also one on the 
definition of the backbone. It is not clear whether the second issue 
will require a recorded vote.
  We also reached an agreement on an amendment I will propose on behalf 
of all of us in a few minutes that has to do with the voice over 
Internet protocol issue, a definition to which we have agreed.
  I inform my colleagues, I think it is very possible that we could 
have one or two more votes and then vote on final passage. At least I 
am hopeful of that outcome. I again thank my colleagues for their 
progress.
  I will also mention that there are a couple of Senators who are being 
checked in who had amendments to make sure their concerns are being 
addressed in the amendments that may be proposed.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.

[[Page S4656]]

  Mr. DORGAN. Mr. President, I thank Senator McCain for his leadership. 
We did just conclude a meeting and, as a result of that meeting, it 
appears to me we should be able to complete this legislation likely 
this afternoon. We dealt with the question of the voice over Internet 
protocol, VOIP. I think Senator McCain will offer an amendment that 
reflects an agreement on all sides of that issue. That is one of the 
issues resolved.
  There still remains some issues dealing with the grandfather issue. I 
believe Senator Lautenberg will offer an amendment on that issue. 
Senator Lott has an amendment. I am not certain whether they need 
votes. In any event, they will be working on those.
  The other issue is the definition as to what extent this legislation 
applies to certain activities with respect to taxation of telephone and 
telecommunications issues and the Internet.
  The underlying bill is a Federal preemption of taxation with respect 
to the Internet. The point of the legislation, as introduced, is to 
effectively prevent taxing the connection to the Internet, believing 
that the buildout of broadband services in this country is good for the 
country and will expand the economy and create jobs.
  Almost all of us previously voted for a moratorium on taxes on the 
Internet. I voted for it, and so has most of my colleagues. This 
iteration of that moratorium has become increasingly complicated 
because since the moratorium, new technologies have developed, and it 
has caused more difficulties in negotiating. Even though we do not have 
agreement on every feature, my expectation is that in the next couple 
of hours the likelihood is this legislation could be completed in the 
Senate.
  Again, I appreciate the leadership of Senator McCain. A group of us 
have been active in trying to see if we can find common definitions and 
common intent with respect to this important legislation.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I share the view of the chairman of the 
Commerce Committee and Senator Dorgan. I think the end is now in sight. 
I see the distinguished Senator from Virginia on the floor right now, 
and I commend him for all the effort and the relentless pursuit of a 
cause that he and I have shared for many years, going back to when he 
was Governor and when I was the original Senate sponsor.
  We have held steadfast to the proposition that the Internet, this 
extraordinary national and global treasure, should not be subject to 
multiple and discriminatory taxes. I think the earlier Senate vote 
indicates that a majority of the Senate is prepared to support policies 
which will ensure that the Internet is healthy and vibrant for the 
future.
  I see the chairman of the Commerce Committee on the floor. People 
felt strongly about the question of telephone calls over the Internet. 
The chairman of the Commerce Committee came, had a very constructive 
definition which made clear or clearer what Senator Allen and I have 
felt all along, and that is that there should not be a change in the 
status quo. That is very constructive.
  My guess is that the big challenge over the course of the afternoon 
will be on the issue of definitions. Certainly there are definitions 
with respect to how what is called the backbone of the system, the 
architecture, is handled. Depending on how it is written, that 
definition could provide for taxes on BlackBerrys and e-mails and the 
kind of thing that the Senator from Virginia and I have opposed 
strongly. We will have to oppose that once again, but I want to make it 
clear, as I did earlier in the afternoon, that we are anxious to deal 
with the remaining issues in a collegial fashion with the Senator from 
Tennessee. The Senator from Tennessee has made it clear he wants to 
move this bill along.
  I join my colleagues in saying that after 8 years of being at this, 
literally since the time I came to the Senate early in 1996, I suspect 
in a few hours the Senate will have acted once more in a bipartisan 
fashion.
  I want to wrap up by commending the Senator from Virginia. He has 
been willing to compromise with respect to issues but he has never 
compromised on principle, and I appreciate that.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, we await the arrival of Senator Lautenberg 
so we can move forward with his amendment. Then I am informed that at 
least Senators Alexander, Carper, and Voinovich do not intend to offer 
their amendment on definition, but there are other Senators who also 
have an interest in this issue. So it is not for sure that we are not 
going to have an amendment on that issue.
  As I mentioned, moratorium and the grandfather issues need to be 
addressed, and Senator Lautenberg's amendment addresses the issue of 
grandfathering. So we await his arrival in hopes that we can get that 
disposed of, and then the Lott amendment and then we would be ready to 
move to final passage.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Chafee). Without objection, it is so 
ordered.
  Mr. REID. Mr. President, this morning we came to the floor and were 
confronted with a situation where we tried to get an extension of a 
highway bill. That was objected to by the senior Senator from the State 
of Missouri. We talked a little bit at that time, and what we talked 
about is, basically, if there is no extension given--which has been 
cleared on our side, by the way--there will be some 5,000 Federal 
employees of the U.S. Department of Transportation laid off. They may 
be able to wait until Monday, but certainly they will be able to wait 
no longer.
  What does this mean? It means new highway and bridge projects will be 
shelved. It will stop reimbursement payments to the States for projects 
already incurred. It will halt safety grants to the States. It will 
stop work on transit construction in the Nation's cities and towns. It 
will interrupt enforcement of motor carrier safety regulations. It will 
disrupt inspection efforts at our Nation's borders. All we are asking 
is a temporary extension.
  I said this morning, and I say tonight, Senator Inhofe has been a 
real soldier. He has been with us every step of the way to get a 
highway bill that is meaningful. No one can question the conservative 
credentials of Jim Inhofe from Oklahoma. The Senator from Oklahoma is 
noted for being a person who watches where the money is spent. But he 
recognizes the bill we reported and passed in the Senate, a bill that 
was some $318 billion, is legislation that is important for the 
country. It is important for the State of Oklahoma. It is important for 
the State of Nevada. It is important for the State of Rhode Island. It 
is important for the State of Virginia, and every other State I see 
represented on this Senate floor--which is no other State at this time.
  This is something we have to do. I think it would be a terrible 
shame, and I can't imagine the reason that my friend, the distinguished 
senior Senator from Missouri, has used for wanting to object to this 
extension.
  He says: I want a conference appointed.
  Mr. President, we have said there are other ways of arriving at this. 
There are other ways of having legislation approved by the body, by the 
House, and sent to the President.
  I have in my hand bills enacted into law without using conferencing. 
This is an effort to negotiate differences in language between the 
House and the Senate. We have, just in the 108th Congress, 21 different 
measures, important measures: TANF, military family relief, Tax Relief 
Act, veterans' benefits, and many other pieces of legislation--18 
others, to be specific.
  I think it is a tightrope I would not want to go to Nevada on, saying 
that I objected to the highway bill and I am closing the Department of 
Transportation because the minority won't agree to a conference. I 
don't think that is very good reasoning. I think the people of the 
country would also think it is not good reasoning.

[[Page S4657]]

  We have worked, in a bipartisan manner, to produce a highway bill in 
the Senate. That legislation achieved 76 votes. We received a letter 
from 20 Republican Senators, dated today, supporting the Senate funding 
levels. These are Republican Senators, 20 Senators. These are Senators, 
any one of which----

  Mr. McCAIN. Parliamentary inquiry.
  The PRESIDING OFFICER. Does the Senator yield for the parliamentary 
inquiry?
  Mr. REID. I am happy to.
  Mr. McCAIN. At what time does the Pastore rule apply?
  The PRESIDING OFFICER. It does not apply postcloture.
  Mr. REID. Three hours. Pastore works 3 hours after we take up a 
measure. So that wouldn't apply here.
  I appreciate my friend's interest.
  Mr. McCAIN. I thank the chairman.
  The PRESIDING OFFICER. But we are postcloture and germane debate is 
required.
  Mr. REID. Certainly, I understand that totally. Mr. President, the 
reason I understand that is the legislation that is before this body, 
this Internet legislation, has so many ramifications that are important 
to what is going on in the country today. One of the things going on in 
the country today is how we have improved the way we work on 
transportation generally. But for the high-tech industry we couldn't do 
many of the things that are done today. There are many different things 
we do today that we didn't do 5 years ago, or even 10 years ago as a 
result of computerization.
  The vehicles on the roads now, with some exceptions in the State of 
Nevada, Department of Transportation vehicles, have computers in them. 
So I have no qualms, using my hour's time on this legislation, talking 
about the importance of the highway bill and, of course, the fact is, 
with the highway bill there are many high-tech propositions that would 
be affected by this underlying legislation.
  Mr. President, I have a letter. I would read all the names, but, 
frankly, I can't read them because I can't read some of the signatures. 
But I do see one signature that jumps out at me: Elizabeth Dole. She 
has been Cabinet Secretary two or three times, but one of those times 
she was a Secretary. In one of our President's Cabinets she was 
Secretary of Transportation.
  Elizabeth Dole is one of those supporting the $318 billion bill. 
Virtually every Senator on the Democratic side supports it. That is 69 
votes right there.
  I hope what we are doing today is only for a short time. We need in 
the worst way to find out a way of getting Senator Bond to agree to 
this extension. This Nation expects nothing less.
  The Republican leadership is going to meet today or tomorrow and talk 
about what they think should be the size of this bill. The vast 
majority--far more than 67 Senators, the veto-proof number of 
Senators--believe we should have a higher number.
  It is very clear. If a bill came to the Senate or the House with $318 
billion for highway transit, we would override any veto of the 
President. Why? Because this bill does not raise the debt. It is paid 
for out of trust fund money, and revenue streams are already in place.
  Not only do we have a lot of people supporting this legislation, as I 
indicated earlier today--and it is now in the Record--but we have 
hundreds of organizations that support this legislation: U.S. Chamber 
of Commerce; Laborers International Union of North America; Associated 
General Contractors--they are not together very often on anything--
American Road & Transportation Builders Association; International 
Union of Operating Engineers; American Public Transportation 
Association; National Asphalt Pavement Association; National Stone, 
Sand & Gravel Association; Association of Equipment Manufacturers; 
American Waterways Operators; Air Transport Association; and Waterways 
Work.
  These are only a few of the hundreds of organizations that want us to 
proceed.
  I hope we can do this. It would be a shame to lay off 5,000 people. 
The impact it would have on their immediate families is important. But 
the impact it would have on this country--we are just beginning to come 
out of a recession, so I am told. We are really fighting for jobs. One 
way to work to have more jobs is to keep the highway program going.
  This legislation that is before the Senate is about as high tech as 
you can get. We know for every $1 billion spent in infrastructure 
development, 47,500 jobs are generated. That is important. That is only 
for direct jobs, and thousands of other jobs are spun off from that.
  I hope we can move forward. I understand the importance of consumer-
friendly legislation. Let us please not have an objection to this 
legislation.
  I am not going to ask unanimous consent until Senator Bond has some 
knowledge that I will do that. But I will do that later in the day.
  I appreciate everyone's courtesy. I know they stretched the rule a 
little bit for me. I am very grateful. Even though the highway bill is 
high tech, I am not sure it is that high tech.
  Mr. McCAIN. Mr. President, I would never, ever believe that my friend 
from Nevada would stretch any of the Senate rules. Of course, I 
appreciate his real knowledge of the rules of the Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi.


                Amendment No. 3082 to Amendment No. 3048

  Mr. LOTT. Mr. President, I call up amendment No. 3082, which is my 
amendment to the McCain underlying amendment.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Mississippi [Mr. Lott] proposes an 
     amendment numbered 3082 to amendment No. 3048.

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

   (Purpose: To extend the 1998 grandfather from 3 years to 4 years)

       On page 5, line 2, strike ``2006'' and insert ``2007''

  Mr. LOTT. Mr. President, in order to explain exactly what is 
involved, it is quite simple. The amendment would extend the 1998 
grandfather coverage in the bill from 3 years to 4 years. I support 
ending this grandfather provision for States that had already enacted 
some Internet tax by 1998. I support phasing that out.
  I would like to have this issue dealt with in a broad, comprehensive 
way. I hope the Commerce Committee will do that in the next year or 
two. I felt that 3 years was enough of an extension of that grandfather 
clause. But I have talked to a number of Senators on both sides of the 
aisle who say that in the interest of fairness you have the grandfather 
clause phased out in 3 years, and this bill is for 4 years. Wouldn't it 
be fairer, and we would be more supportive of it, if we could get these 
two provisions in the same position?
  For that reason, I filed an amendment yesterday just before 1 
o'clock. I have discussed this with Senator Stevens, Senator McCain, 
and Senator Wyden. Members on both sides are aware of what this 
amendment is. Senator Sununu had some reservations about it but 
understands what we have done.
  We are prepared to go forward with this amendment now. I am willing 
to do it because I think it is so important that we have Senators who 
feel good about this legislation and believe it is fair so we can get a 
bill, get it now, and deal with this moratorium after these many months 
of laboring to do the right thing.
  That is basically what this is all about. I hope my colleagues will 
support it and it can be accepted, hopefully, on a voice vote.
  Mr. McCAIN. Mr. President, I thank the Senator from Mississippi for 
his very adroit, as always, capable work on this issue and moving this 
legislation along.
  I thank my colleague from New Hampshire, Mr. Sununu, who feels very 
strongly about this issue. I know we will be revisiting this issue 
again.
  I thank my colleagues. I strongly recommend that we agree to the 
amendment by voice vote.
  I yield the floor.
  Mr. DORGAN. Mr. President, I have no objections to the amendment that 
is being offered by my colleague from Mississippi. We discussed the 
amendment earlier today. It is an amendment

[[Page S4658]]

I support. I hope we can agree to it without a recorded vote. I think 
that makes sense.
  I might say while addressing this at the moment that I am trying to 
get in touch with Senator Feinstein to determine whether she intends to 
offer an amendment on this subject. I believe that is perhaps the last 
amendment on our side of which we need to try to determine the 
disposition. As soon as we determine what that is, I will let Senator 
McCain know.
  Once again, I do not object at all to the amendment offered by 
Senator Lott. I think a voice vote is in order.
  I yield the floor.
  Mr. McCAIN. Mr. President, there is no further debate on the 
amendment.
  The PRESIDING OFFICER. If there is no further debate on the 
amendment, the question is on agreeing to the amendment.
  The amendment (No. 3082) was agreed to.
  Mr. LOTT. Mr. President, if the Senator will yield, this appears to 
be a moment where we are waiting for other Senators to be contacted to 
further work on amendments that may or may not be offered. I want to 
take this opportunity to say something positive about this institution 
which has been having difficulties lately.
  This bill shows what you can do when Senators will work together on a 
very difficult issue. Senators prefer not to vote on this issue. We 
have friends on both sides--all of us. We have heard from our 
Governors, mayors, and from the industry. We have heard from all 
different points of view. But with the tenacity and persistence of 
Senator Allen, Senator Wyden, the chairman of the committee, and the 
manager on the Democratic side--they have some feel for what this 
institution can do and should do. I think they all deserve a lot of 
credit. We may actually get something done. This is something that 
needs to be done and something of which we can all be proud.
  I was talking to Senator Daschle earlier today repeating my oft-
stated opinion that when you govern and when you produce results, 
everybody wins regardless of party. That is what we are really here 
for.
  I say to those who are on the other side of this issue--former 
Governors, of course, led by Senator Alexander, Senator Carper, and 
Senator Voinovich--they have been eloquent in their presentations. They 
have made us all uncomfortable with the points they made while 
submitting their arguments. They have been dogged, but they have also 
been reasonable.
  If we get this bill completed today, the people on all sides can feel 
good about how it was done. I commend all concerned. It makes me feel 
good for a change about what we are doing.
  I yield the floor.


                Amendment No. 3104 to Amendment No. 3048

  Mr. McCAIN. I have submitted an amendment to the desk on behalf of 
Senator Lautenberg, and I ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain] for Mr. Lautenberg, 
     proposes an amendment numbered 3104 to amendment No. 3048.

  The amendment is as follows:

(Purpose: To require the Comptroller General to study the impact of the 
    Internet Tax Freedom Act on State and local governments and on 
                         broadband development)

       At the appropriate place, insert the following:

     SEC. __. GAO STUDY OF EFFECTS OF INTERNET TAX MORATORIUM ON 
                   STATE AND LOCAL GOVERNMENTS AND ON BROADBAND 
                   DEPLOYMENT.

       The Comptroller General shall conduct a study of the impact 
     of the Internet tax moratorium, including its effects on the 
     revenues of State and local governments and on the deployment 
     and adoption of broadband technologies for Internet access 
     throughout the United States, including the impact of the 
     Internet Tax Freedom Act (47 U.S.C. 151 note) on build-out of 
     broadband technology resources in rural under served areas of 
     the country. The study shall compare deployment and adoption 
     rates in States that tax broadband Internet access service 
     with States that do not tax such service, and take into 
     account other factors to determine whether the Internet Tax 
     Freedom Act has had an impact on the deployment or adoption 
     of broadband Internet access services. The Comptroller 
     General shall report the findings, conclusions, and any 
     recommendations from the study to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Energy and Commerce no later 
     than November 1, 2005.

  Mr. LAUTENBERG. Mr. President, I offer an amendment, No. 3104, to the 
McCain substitute amendment to S. 150, the Internet Access Tax 
Moratorium bill. My amendment, if adopted, would require the General 
Accounting Office, GAO, to conduct a study on the impact of the 
moratorium and report its findings back to Congress by November 1, 
2005.
  GAO would be tasked with analyzing the revenue impact of the Internet 
tax moratorium on State and local governments. GAO would also be tasked 
with analyzing the effect of the moratorium on the deployment and 
adoption of broadband technologies for Internet access throughout the 
United States.
  The amendment directs GAO to compare deployment and adoption rates in 
States that tax broadband Internet access service with States that do 
not tax such service, and to take into account other factors to 
determine whether the Internet Tax Freedom Act has had a positive 
impact on the deployment and adoption of broadband Internet access 
services.
  Having GAO conduct such a study is important because we simply don't 
know what the real impact of this legislation will be on the tax 
revenues of State and local government. The way Internet ``access'' is 
defined in the bill, it could be a giant loophole ripe for exploitation 
by telecommunications companies, especially with regard to the emerging 
market of Internet telephony, which is commonly referred to as ``Voice 
over Internet Protocol'', VoIP. Tax and public utility officials I have 
spoken with in New Jersey are very worried that S. 150 could cost the 
State and jurisdictions within the State hundreds of millions of 
dollars annually. This is revenue they desperately need to provide 
essential services.
  Furthermore, we simply don't know what the real impact of this 
legislation will be on the telecommunications industry and on future 
broadband deployment, both of which are so important to our economy. 
Supporters of the bill claim that the moratorium is essential. But I 
would note that three economists at the University of Tennessee 
compared Internet access rates in jurisdictions with Internet taxes and 
jurisdictions without any such taxes. The access rates were the same. 
In other words, the moratorium may not be having any beneficial effect. 
That is something we need to find out.
  Mr. President, I understand that my amendment will be adopted and I 
appreciate Chairman McCain's support for it. I think it is an eminently 
reasonable amendment, and I hope that it can be protected in the 
Conference Committee deliberations on this bill.
  Mr. McCAIN. Senator Lautenberg's amendment calls for a GAO study on 
broadband for the effects of tax moratorium on State and local 
economies and other impacts of this Internet tax moratorium. I find it 
a very valuable amendment. It would be very helpful because this is a 
moratorium, not a permanent ban. It would be very helpful as we debate 
this issue, which I imagine will start again in a year or so.
  The Lautenberg amendment is a good amendment. Senator Lautenberg is a 
conferee, and I know Senator Dorgan will agree we will fight to make 
sure this GAO study is included.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I support the Lautenberg amendment. His 
suggestion makes a great deal of sense. I hope we can voice vote the 
Lautenberg amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3104) was agreed to.
  Mr. McCAIN. As far as I know--and Senator Dorgan is more aware than I 
am--we have one more amendment we agreed to which I hope to propose 
within a couple of minutes. Senator Feinstein may or may not be 
proposing an amendment. We will find out shortly. Then we would be 
prepared to go to final passage.
  I yield the floor.
  Mr. DORGAN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.

[[Page S4659]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, while we are awaiting the amendment and 
the presence or decision on Senator Feinstein's amendment, I wish to 
make a couple of comments about individuals. I specifically speak of 
Senator Alexander, Senator Voinovich, and Senator Carper, who fought 
very hard and valiantly on this issue. We have honest differences of 
opinion on this issue.
  It is very likely we will pass this legislation, but Senator 
Alexander, Senator Voinovich, Senator Carper, and Senator Dorgan have 
had an enormous impact. We have gone from a permanent ban to a 4-year 
moratorium. We are changing the definition of voice over Internet 
protocol. We have made significant changes to this legislation thanks 
to their efforts.
  Throughout, our debate has been characterized by mutual respect and 
understanding that we just have fundamental differences of opinion. I 
congratulate them on a battle well fought. Although they may have lost 
in passage of the legislation, they improved it dramatically, and I say 
that from a position on both sides of the issue. They brought into play 
their backgrounds as Governors of their respective States and bring a 
much needed perspective to this body. I congratulate them for their 
very outstanding work, particularly over the long period of time we 
have been involved in this issue.
  If we pass this bill shortly--and we may not--there are two 
individuals who deserve the credit: Senators Allen and Wyden, who took 
up this legislation years ago, and followed it. They have been 
relentless, dedicated advocates, and have brought their debate and 
discussion all over America. They have done an outstanding job. They 
are the ones who, I believe, deserve the credit on all of it for the 
magnificent work they have done on an issue that is of great importance 
and profound importance to small and large businesses all over America. 
I thank them for their valued efforts.

  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Before the Senator leaves the floor, I don't want to turn 
this into a bouquet-tossing contest, but I came to the Senate in the 
winter of 1996 as a new member of the Commerce Committee. The chairman 
of the committee was exceptionally helpful in terms of working on the 
legislation then. We have gone through two iterations already.
  Senator Dorgan and I have spent untold numbers of hours talking about 
this vastly important bill, more than either of us would have wanted. 
The Senator from Virginia is here as well, and the fact that he has 
been involved so extensively has been an enormous help. The Senator 
from Virginia has consistently talked about standing up for freedom. He 
is absolutely right.
  There is a reason the Gray Panthers, for example, are for this 
legislation. They and millions of other consumers understand how 
important it is that we not hammer Internet access.
  We will have other debates with respect to the future of the 
Internet. Certainly the Senator from North Dakota has talked 
passionately, for example, about a project the Governors were talking 
about, the streamlined sales tax concept. So we will have these other 
debates.
  But the chairman of the Commerce Committee, who was so gracious to me 
and the Senator from Virginia, helped us consistently through this 8-
year-long battle. I want the chairman of the Commerce Committee to know 
I am very appreciative of all of the help and support he has given us 
in this cause.
  We are going to be wrapping up the work of the Senate in just a few 
minutes, and a lot of people who have said it just was not in the 
cards, it just was not to be, the Senate was gridlocked--suffice it to 
say there will be further debates as we discuss this with the other 
body.
  This is a very significant step forward. Every Member of the Senate, 
in my view--and I have talked to almost every Member about this on a 
personal basis--every Member understands the value to the opportunity 
of a healthy and vibrant Internet. What we had over the last few days 
is a debate about the best set of policies to attain that objective. 
This will not be the last debate. For example, even in an area where we 
have come to an agreement with respect to the taxation of telephone 
calls made over the Internet, this is not the last word. As the Senator 
from Tennessee and I have discussed, we still have the Federal 
Communications Commission in a position to take a more comprehensive 
look, for example, on how phone calls made over the Internet are going 
to be regulated and dealt with by the various jurisdictions.
  This debate is sure to continue for many days ahead, but this is a 
banner day. This is a day when the Senate has made some judgments that 
will help keep the Internet healthy and vibrant in the days ahead. That 
is a great success. I commend my colleagues for being patient enough to 
deal with the subject.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Missouri.


                  Unanimous Consent Request--H.R. 3550

  Mr. BOND. Mr. President, a few moments ago, my good friend from 
Nevada talked about how the highway transportation system in Nevada 
depends upon the Internet and all the technology there. And I agree 
with him. We are very proud of the technology, the intelligence 
transportation systems, and other things we have in our Missouri 
Department of Transportation, our highway entity.
  I was very pleased he read off a list of people who support the 
measure we passed in the Senate. That just reinforces what I have said 
for a long time. We had an overwhelming vote to get the number of $255 
billion for highways. We had an overwhelming vote to get a bill to the 
floor. We had an overwhelming vote of 76 to 21 to pass a good 6-year 
highway bill.
  My good friend from Nevada worked very closely with us. I tell you, 
as long as I have been in the Senate, I do not know if we ever had 
better bipartisan cooperation than Senator Inhofe and I on the 
Republican side have had with Senator Jeffords and Senator Reid on the 
Democratic side.
  Mr. President, 11 weeks ago, we passed this wonderful highway bill. 
This, what I hold in my hand, is the highway bill. It passed 
overwhelmingly. It is a 6-year, $318 billion bill for all of 
transportation. Do you know what? It is still sitting at the desk. I 
was on this floor raising Cain with our House colleagues because they 
would not move. I believe my friend from Nevada joined with us.
  Well, they moved. It will be 4 weeks tomorrow that they moved. Now, 
something that maybe a lot of people don't understand is, when you pass 
a bill like this, it doesn't go into the President's hands; it doesn't 
become law. You have to take some procedural steps to move it out of 
here. You have to substitute this bill for the House bill. You have to 
insist on a conference. You have to name conferees and send it back to 
the House--procedural items.
  For most of the time I have been here, it happens automatically. Once 
you have a conference, then the Republican and Democratic conferees 
from the House sit down with the Republican and Democratic conferees 
from the Senate, and you can move forward.
  But do you know what. We are stuck. We are stymied. Senator Reid 
wants to know what we can do. I say, very simply, what we need to do is 
to stop blocking the transfer of this bill back into conference with 
the House. What part of ``yes'' don't you understand? This is a simple 
matter. Now we have kicked the can down the road. We have had 
extensions and extensions, and we can't sit down and talk with our 
House colleagues.
  And I said: Wait a minute. We have intelligence transportation 
systems in Missouri and every other State in the Nation. We have a need 
for good highways, roads, and bridges, to promote our homeland 
security, to create jobs, to relieve congestion, to promote long-term 
economic growth, and for safety. At least a third of the 43,000 people 
killed on highways every year in the Nation are killed because of 
unsafe highways.
  So my good friend from Nevada wants to know what he can do to get an 
extension; and I said so this morning. I said: It is very easy. Let us 
move forward on the bill. We have tough issues to work out with the 
White House. We cannot work on those issues until we can sit down with 
the House and move forward. We have been

[[Page S4660]]

blocked by the actions of the other side.

  I asked unanimous consent this morning to move forward, and the 
distinguished minority whip on the other side had another unanimous 
consent request. I said I would be happy to accept his if he accepts 
this one. Let's move the process forward. This is not rocket science. 
This is a necessary procedural step.
  I am going home to Missouri this weekend. And do you know what. 
People are going to ask me: Why haven't you passed a highway bill? I 
would not be surprised if at least 90 percent of the Members of this 
body are asked the same question: Why haven't you passed a highway 
bill? One simple answer: 76 Members of this body voted for it, but now 
the other side objects to the procedural steps we need to take to move 
this into conference.
  Nothing is going to happen until we move this bill into conference. 
This is not some strange procedure. Up until this year, this has been 
the normal procedure. Maybe if my colleague is sufficiently concerned 
about the extension, maybe if I renewed my request, he would be willing 
to move the bill forward.
  Therefore, Mr. President, I ask unanimous consent that the Senate 
proceed to the consideration of the House-passed highway bill, H.R. 
3550; provided further that all after the enacting clause be stricken 
and the text of S. 1072, as passed, be inserted in lieu thereof; the 
bill then be read a third time and passed; further that the Senate then 
insist on its amendment, request a conference with the House, and the 
Chair then be authorized to appoint conferees on the part of the 
Senate, with a ratio of 11 to 10.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Mr. President, reserving the right to object, we have a 
bill that is about to be completed, and I do not want to interfere. I 
have a statement that will take a few minutes. But I want the Record 
spread with the fact that after I do object, sometime before the day is 
out I will renew my request for the 2-month extension together with a 
statement.
  So at this time, I say to the two managers of the bill, do you want 
to do something on this bill that is now before the Senate? I ask, 
through the Chair, the distinguished chairman of the Commerce 
Committee, are you ready to do something right now on the bill? 
Otherwise, I will give my statement.
  As I said to the Chair, I do not want to take away from moving this 
bill forward if people are ready to do something. But we are waiting 
for Senator Feinstein, I understand.
  Mr. McCAIN. That is correct. Please proceed.
  Mr. DORGAN. Mr. President, if I might respond, Senator Feinstein has 
actually left her office and is on her way.
  Mr. REID. Mr. President, I will speak very briefly. When she shows 
up, I will finish within a couple minutes.
  The PRESIDING OFFICER. The Senator from Missouri has the floor.
  Mr. REID. I object.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Missouri.
  Mr. BOND. Mr. President, I am sorry there continues to be an 
objection. I do not want to hold up this bill any longer. I want to see 
the Internet tax moratorium bill pass. I want to see us move forward on 
highways and transportation. I felt it was necessary to come down to 
clarify, based on what my good friend from Nevada said, that I am 
trying to move the process along. And when he asks his unanimous 
consent, I would ask that my unanimous consent be added to it so we can 
move forward. That is all we are doing.

  This is very simple, standard procedure. I appreciate the time of the 
managers and everybody else. But there are an awful lot of people in 
this country who are waiting for a good 6-year Transportation bill, one 
like we passed in this Senate.
  I appreciate my colleagues' time. I thank the Chair and yield the 
floor.
  The PRESIDING OFFICER. The Democratic whip.
  Mr. REID. Mr. President, this will be the third extension of this 
very important legislation. The first extension was the 5-month 
extension. We did that because we could not get our act together: 
Senator Inhofe, Senator Jeffords, Senator Bond, and this Senator. As a 
result of that, we got a commitment from the majority leader and the 
minority leader we could take up this bill at a specified time in 
February. Everyone lived up to that agreement, and we did that. Within 
almost a record period of time, we passed this very important 
legislation. So that was the reason for the first extension.
  The second extension was necessary because the House had not yet done 
their legislating. We asked for a 2-month extension on this matter on 
February 27.
  At that time Senators McCain and Lieberman objected to that extension 
because they had some problems with the 9/11 Commission. As a result of 
that, a number of us came to the floor and said: How could Senator 
McCain and Senator Lieberman do such a thing? And in the process, 
statements were made, some of which were by the distinguished Senator 
from Missouri.
  I quote from the Congressional Record of that date. I will not read 
the whole statement. I will read that which is pertinent. This is a 
quote from the distinguished Senator from Missouri:

       What the Senators from Arizona and Connecticut are doing is 
     seeking to hold hostage the whole highway program in the 
     United States.

  I agree. That is what is happening now.
  The Senator further went on to say:

       This extension expires on Sunday.

  Just as it does now.

       If we fail to extend this, there will be a shutdown of any 
     further contract authority for Federal aid highway projects 
     and a shutdown of payments for work already contracted for by 
     the States and performed by contractors. This means no 
     further projects can be approved or awarded. It also means 
     that not only the Federal Highway Administration but also the 
     National Highway Traffic Safety Administration, the Federal 
     Motor Carrier Administration, as well as the Bureau of 
     Transportation Statistics, will cease operation.

  Skipping:

       Not only are we talking about people's livelihoods, we are 
     shutting down the Federal agencies, which will have an 
     adverse consequence for our Nation's highways, motor carrier 
     safety, and consequentially for the condition and operation 
     of our Nation's surface transportation system.

  Skipping down two more paragraphs:

       Jobs will be lost in the private sector. An extension is 
     bad enough, but a complete disruption of the program when 
     there are crucial job needs across the country will have an 
     economic impact on the families directly, and on the economy.

  Next paragraph:

       We need the extension to stop playing politics with 
     people's jobs in this most important legislation.

  Mr. BOND. Mr. President, will my colleague yield for a question?
  Mr. REID. I will shortly.
  I could not have said it better myself. That is what we are facing 
right now. We are facing a shutdown of jobs. We will furlough 5,000 
people in the agencies that were referred to on February 27 by my 
friend.
  The people of this country should understand there are different ways 
of getting a bill to the President's desk. It is not necessarily with a 
conference. I have told Senator Inhofe and Senator Frist that does not 
mean we are not going to go to conference.
  I say to my friends, anyone within the sound of my voice, if 
conferees were appointed right now, immediately, the first thing we 
would do is say: OK, staff, majority staff, minority staff, majority 
and minority staff from the House, get together and work on this. See 
what you can come up with. Bring it back to us. That would take a 
couple of weeks to do that.

  Then we would work through whatever they couldn't work through 
themselves. Finally, the Members would agree on certain things. Then if 
there were things we could not agree on, we would take it to the full 
conference.
  We are weeks and weeks away from that if we appoint a conference 
right now. The point is, we are not appointing conferences right now 
because, as I said before, we have on many occasions, more than 20 
times already in this year's Congress, passed legislation by what we 
call preconferencing it. It does not matter what you call it.
  I have the same goal as the Senator from Missouri. We want a highway 
bill. I appreciate and admire and respect his energy in helping arrive 
at this bill where we now have a bill that is good

[[Page S4661]]

for the American people, a 6-year bill, $318 billion that is good for 
roads and transit.
  I hope the Senator has made his point, but I do believe we need to 
get this short 2-month extension done and then if there is something 
that comes up in 2 months that the Senator thinks we are not making 
progress on the legislation, then he may want to try something such as 
this again.
  I yield to my friend who said he had a question.
  Mr. BOND. Mr. President, I express my appreciation to the Senator 
from Nevada for reciting the deathless prose that I shared with this 
body the last time we were trying to get an extension. I made those 
statements because the highway bill is so important.
  I ask my friend if he understands my message today--I know what the 
process is like; we go through this process of appointing conferees, 
and it takes a long time to get it done--if he understands that the way 
to move forward is to stop objecting to the simple procedural process 
of substituting this bill for the House bill, reading it a third time, 
passing it, naming conferees, sending it to the House and asking for a 
conference, all he has to do is to say yes to the unanimous consent 
request. I will say yes to his request and we can get on with the 
business. This is absolutely an unnecessary procedural delay. Every day 
we fail to appoint conferees, we are further down the road.
  Did I make myself clear to my friend from Nevada? If he will agree to 
take the procedural steps, I will be happy to remove my objection to 
the extension.
  Mr. REID. Mr. President, in answer to the Senator from Missouri's 
question, I certainly understand the point he is making. I simply do 
not agree.
  I, therefore, at a subsequent time before we adjourn this evening, 
will ask unanimous consent that the Senate pass a 2-month extension, 
something the House has already done.
  At this time Senator Feinstein has arrived and I would only end by 
saying that I personally would not want to return to Nevada, 
recognizing that I would not agree to a 2-month extension. In Nevada, 
it would wreak havoc with the growth of the State there.
  The fact is, even where there is not rapid growth, as in Nevada, 
there are repairs that must be done. The construction season is upon 
us. Some of these projects will never go forward.


                Amendment No. 3105 to Amendment No. 3048

  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I have an amendment at the desk, and I ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain], for himself, Mr. 
     Allen, Mr. Voinovich, Mr. Alexander, Mr. Dorgan, Mr. Carper, 
     and Mr. Wyden, proposes an amendment numbered 3105 to 
     amendment No. 3048.

  The amendment is as follows:

       On page 8 strike lines 1 through 9 and insert the 
     following:

     ``SEC. 1108. EXCEPTION FOR VOICE SERVICES OVER THE INTERNET.

       ``Nothing in this Act shall be construed to effect the 
     imposition of tax on a charge for voice or similar service 
     utilizing Internet Protocol or any successor protocol. This 
     section shall not apply to any services that are incidental 
     to Internet access, such as voice-capable e-mail or instant 
     messaging.

  Mr. McCAIN. Mr. President, I submit the amendment on behalf of 
myself, Senator Allen, Senator Voinovich, Senator Alexander, Senator 
Dorgan, Senator Carper, and Senator Wyden. It refines the language 
concerning the voice over Internet protocol. It is a product of an 
agreement of language between all of us. I ask for its consideration.
  Before I do that, I believe Senator Feinstein has an amendment she 
wants to propose. I hope we can get an agreement, say, 40 minutes 
equally divided, if that would be agreeable.
  Mrs. FEINSTEIN. That would be fine.
  Mr. McCAIN. Forty minutes equally divided, followed by a recorded 
vote, which would then be followed by final passage. I ask unanimous 
consent that after disposal of the pending amendment, no more 
amendments be in order, that there be 40 minutes equally divided 
between myself and Senator Feinstein, a vote on the amendment, followed 
immediately by a final passage recorded vote.
  Mr. REID. Reserving the right to object, I direct this question to 
the manager of the bill, Senator Dorgan. Is that correct, that all 
amendments have been offered?
  Mr. DORGAN. Mr. President, to my knowledge, all of the amendments 
that have been previously noticed would not be offered. We have tried 
to check with the authors. A number of them would not be in order 
postcloture. We have checked with the authors of the amendments that 
were noticed. My understanding is that there are no amendments on this 
side other than Senator Feinstein. At least we have not been notified 
that there is an amendment out there other than Senator Feinstein.
  Mr. REID. I would say also to the two managers of the bill, then we 
should be advised there will be at least two more votes, perhaps on 
Feinstein and final passage.
  Mr. McCAIN. That is correct.
  Mr. REID. I would say also to my two friends, I always like to have 
the trains run on time. This is excellent work. I appreciate this. I 
thought it couldn't be done today. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is agreeing to amendment No. 3105.
  The Senator from Tennessee.
  Mr. ALEXANDER. Is it appropriate for me to make a few remarks on the 
McCain amendment?
  The PRESIDING OFFICER. It is.
  Mr. ALEXANDER. I won't take many minutes, but I wanted to do this 
while the chairman of the committee and Senators Wyden and Allen and 
Dorgan are all here. I intend to vote for this legislation tonight. 
This is a good result.
  Senator Lott made some comments a few minutes ago about how the 
Senate can sometimes come to a good conclusion. Before I came to the 
Senate, I spent a year and a half teaching a course in American 
character at the Kennedy School of Government at Harvard. What we 
talked about there was what distinguishes our country is that we agree 
on a few principles. Professor Samuel Huntington pointed out that our 
politics is a conflict between those principles. We had a conflict here 
between laissez-faire free market principles and federalism, and they 
are both very important.
  We have been working hard to come to agreement, and we got a good 
result. Senator Allen and Senator Wyden should feel very good about 
what they have been able to accomplish, and this has been a fashion of 
theirs for a long time. I feel good about the fact that Senators 
Carper, Voinovich, Graham, Feinstein, and others have been able to 
remind us of the importance of a strong Federal system as we debate our 
issues, and that we promise as a Congress to do our best to minimize 
harm to State and local governments as we take important actions here.
  So what pleases me about the result is what Senator McCain talked 
about--moving from a permanent ban to 4 years. I think that is good. 
Far and away, the most important result is the clarification that 
Senator McCain has been able to achieve on the question of whether we 
are trying to decide what to do about telephone calls made over the 
Internet. That is not what we are trying to do with this legislation. 
We had that in our mind on both sides, but we have not been able to 
agree on that. That is far and away the biggest issue for State and 
local governments, because they collect up to $18 billion a year in 
taxes on telephone services. That may change as time goes on, but we 
did not want ambiguous language, or a misunderstanding, or to run the 
risk during the period of this moratorium--which we prefer to call a 
temporary timeout--that anyone would think we were trying to decide the 
issue of what to do about telephone calls made over the Internet.
  Senator McCain's amendment makes that clear and it speaks for itself. 
Also, he has been able, through his final suggestion, to leave some 
grandfather extensions in the bill. I would like to see more. We will 
have a chance to vote on more in a minute.
  The area where we did not go as far as we would like on our side was 
in the definition. It expands the tax exempt coverage to what we call 
the backbone and a number of other Internet activities. But this is a 
good result. It should be a wake-up call to Members of the Congress 
that this is the fastest-growing new technology in America. It is

[[Page S4662]]

going to change the way we live, and it should be a wake-up call to us 
who care about federalism--all of us, and Governors and mayors 
everywhere--that we are going to have to do careful, creative, 
constructive thinking about what the impact of this is on our Federal 
system. What does it do to Governors, mayors, and county commissioners?
  We are making a temporary decision here, but the Commerce Committees 
of this Congress have already said they are going to take the issue up 
in November. So from where we started in December, to where we are 
today, I feel very good about it.
  I especially thank the chairman of the Commerce Committee, who has, 
from the beginning, in terms of allowing me to testify before the 
committee--I am not a member of the Commerce Committee; this is not an 
area in which I am usually involved--he respected my effort, and that 
of others, to push the issue of federalism forward. I thank him for 
helping us create a very good result.
  So while I intend to be a cosponsor of Senator Feinstein's bill, I 
believe that what we have achieved so far goes a long way in minimizing 
the effect of this legislation on doing harm to State and local 
governments. It taught all of us that this is an issue we need to learn 
more about to make sure we deal with it intelligently.
  I thank you for the time. I thank the Senator from Arizona for his 
leadership. Also, Senator Allen and Senator Wyden have been congenial 
as well as effective in their work. I am grateful for that as well. I 
have enjoyed working with them.
  The PRESIDING OFFICER. Is there further debate on the McCain 
amendment?
  Mr. DORGAN. Mr. President, Senator McCain has offered this amendment 
with agreement from all of us who have participated earlier today in a 
meeting to discuss areas of disagreement. This was one of the areas of 
disagreement. It is called VOIP, voice over Internet protocol. We had 
concern about the section of the McCain substitute that dealt with this 
topic.
  After a meeting, we were able to reach agreement on the language. So 
what Senator McCain is now offering is an amendment to his substitute 
which actually deals with this issue in a manner that is consistent 
with the intent of everyone who has participated in the meeting. I am 
pleased to support it. I think it improves this bill and adds to the 
bill language that reflects the intent of all of us who have worked 
together on it.
  So I fully support the amendment offered by Senator McCain. There is 
no objection to passing it by a voice vote.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  Mr. McCAIN. The Senator from Delaware would like to make a comment.
  The PRESIDING OFFICER. The Senator from Delaware is recognized.
  Mr. CARPER. Mr. President, I have listened, and I understand we are 
debating--actually embracing--the McCain amendment to modify the 
language that would ensure States which have traditionally been able to 
derive revenue from telephone communications would continue to be able 
to do that. As we go forward in time--and those communications are 
expected to migrate to the Internet--we want to make sure we don't 
undercut the ability of States to continue to derive some revenues from 
this.
  We had a good exchange an hour or so ago among Senators Alexander, 
Voinovich, myself, and our friends who have different views on the 
overall bill. I am pleased we were able to come to an agreement, not 
just in spirit but in letter as well. We all said we were interested in 
the same thing. We don't want to undercut the bill. The language in the 
original amendment did not appear to do that--at least to us. We would 
rather not have ambiguity going forward.
  At a future date, if there is a court hearing and a judge is looking 
at the language, trying to figure out what we meant, we want the judge 
to understand very clearly that this body, the Congress, has no 
interest in taking away the ability of States to raise revenue from a 
longstanding traditional source--some say it goes back to the time when 
Alexander Graham Bell invented the telephone. I don't know if the tax 
has been around that long, but I think this preserves that for the 
States, and that is important, as telephone communications migrate to 
the Internet.
  I thank my colleagues, Senators McCain, Allen, and Wyden, for working 
with us. In fact, our staffs helped thread the needle in a very 
constructive and tough way.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  If not, the question is on agreeing to the amendment.
  The amendment (No. 3105) was agreed to.
  Mr. McCAIN. Mr. President, I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
California is recognized to offer an amendment.


         Amendment No. 3052, As Modified, to Amendment No. 3048

  Mrs. FEINSTEIN. Mr. President, I have sent a modification to the desk 
to amendment No. 3052.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from California [Mrs. Feinstein] proposes an 
     amendment numbered 3052, as modified, to amendment No. 3048.

  The amendment is as follows:

  (Purpose: To extend the grandfathers for the term of the moratorium 
                               extension)

       On page 5, line 20, strike ``2005.'' and insert ``2007.''.

  Mrs. FEINSTEIN. Mr. President, essentially, this is a one-line 
amendment. It takes page 5 of the bill and strikes the date 2005 and 
inserts 2007.
  Essentially, this amendment makes both grandfather clauses in the 
bill 4-years in duration. This would mean no new taxes for the industry 
that is concerned, and the cities and counties would not lose the 
revenue they currently receive, for at least 4 years.
  I want to say again--I said this yesterday--not one single California 
company that supports this bill has contacted me, but I have heard from 
representatives of 478 cities in the State saying: Please, don't do 
this. It may well be because in California, local jurisdictions have 
very limited revenue sources. It is either the property tax or a small 
amount of sales tax or if they have a hotel tax, but there are not many 
tax vehicles. So utility user taxes, as well as telephone taxes, have 
for many cities been a critical part of their budget, for some up to 15 
percent. That is just a fact. California may be an anomaly. Maybe I 
know this because I have been a mayor for 9 years and a county 
supervisor for 9 years.
  This would affect telecommunications services, taxes that have been 
in place since the old moratorium was enacted, particularly local 
exchange.
  For the city of Los Angeles, whose chief administrative officer, 
William Fujioka, has said his city could lose $40 million a year if 
local exchange service is not protected. So this grandfather clause to 
the largest city in my State is worth $40 million a year of taxes that 
have been levied, of revenues that are counted upon to balance the 
budget.
  Senator Inouye joins me in cosponsoring this amendment, as do Senator 
Carper, Senator Alexander, Senator Voinovich, and Senator Hollings.
  It seems to me that it is not unreasonable to say to hard-pressed 
cities and counties that you have 4 years to find other revenue sources 
or make the necessary cuts. This does not have to be done immediately. 
None of the companies who benefit from this bill are suffering. As a 
matter of fact, most of them are doing very well. It is the cities that 
have the hard time funding police officers, funding firefighters, and 
it is not easy. Nearly every city in the State of California has a 
deficit and is losing revenues. I cannot just stand here on the floor 
of the Senate and let this happen because I have news for everybody: 
Where people want their services is on the local level.
  Some say: Oh, no, this will not happen. But when you ask the 
technical analysts and the attorneys of these communities whether it 
will happen, they say yes.
  I very much appreciate the change that was made in the Voice Over 
Internet Protocol language of the bill. This goes a long way. I very 
much appreciate the 4-year grandfather clause given for Internet 
access. That goes a further distance.

[[Page S4663]]

  There is this 2-year grandfather for those who use DSL or these local 
exchanges--and I do not understand why one is 4 years and the other is 
2 years. I do not understand why these companies cannot wait 4 years 
before they are going to end up socking it to the cities. It may be 
that in some States this is not the case. I know it is the case in my 
State.
  Again, I am very pleased to be joined by Senators Inouye, Alexander, 
Carper, Voinovich, and Hollings as cosponsors of this amendment. It 
seems to me to make sense. It seems a compromise which for the 
proponents should be relatively easy to make. I think it will make a 
big difference to the cities of California.
  I yield the floor and reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time? Who yields time to the 
Senator from Oregon?
  Mr. WYDEN. Mr. President, I believe we have an agreement to share the 
time. I am allocated 10 minutes to speak on this amendment. I am not 
going to take 10 minutes, but it will come from the allocation under 
the agreement worked out by the chairman of the committee and the 
manager of the bill, Senator Dorgan.
  The PRESIDING OFFICER. This is off the chairman's time?
  Mrs. FEINSTEIN. This would come off Senator McCain's time.

  Mr. WYDEN. Yes, that will be fine. I will not take 10 minutes.
  Mr. President, the Senator from California knows how much respect I 
have for her, but I must profoundly disagree with this amendment. This 
amendment would essentially reward bad behavior. What we have is a 
number of jurisdictions doing what clearly is in violation of the law. 
We do not even think they are in California, but in jurisdictions 
around the country people are taxing DSL. We are convinced that is 
clearly against the law. It certainly promotes technological inequality 
because we have a situation where cable gets a free ride, and then they 
end up taxing DSL.
  The Feinstein amendment would make the 2-year DSL grandfather 4 
years. Some of these grandfathers in this bill are going to live longer 
than Methuselah. It certainly does not make sensible public policy, and 
it does not make sensible public policy when we would be discriminating 
against the future. The future is broadband, high-speed Internet access 
through DSL. This would allow folks to keep taxing DSL, which has 
certainly been contrary to the spirit of everything we have done over 
the last 7 years. It, in effect, would be rewarding bad behavior. It 
would certainly discriminate against DSL relative to cable.
  I think this would be a significant mistake. Certainly, there are 
different technology platforms for Internet access, but for 8 years, 
the central proposition I tried to advance on this legislation is that 
there ought to be technological equality; that we ought not to treat 
all technologies differently. We had a number of jurisdictions violate 
that. They have gone out and stuck it to DSL. So DSL gets taxed, and 
cable does not get taxed. We don't think it happens in California, but 
it certainly has happened around the country.
  I do not think we ought to let these grandfathers outlive us all. 
That is essentially where we are going on this issue. We just keep 
extending the life of these grandfathers. It is going to do great 
damage to the country's future by particularly discouraging broadband 
development through DSL.
  I hope the Senate will oppose the amendment. I cannot say there is 
anybody I would rather not oppose than the Senator from California. I 
agree with her on virtually everything under the Sun with respect to 
public policy.
  But, Mr. President, I say to the Senate, if they vote for the 
Feinstein amendment, they are rewarding bad behavior. They are 
encouraging technological inequality. We have already taken steps to 
let some of these grandfathers live longer than I certainly would. We 
are now saying that some of them are going to make Methuselah look 
young. I think it is a mistake. I urge my colleagues to oppose the 
amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I would like to be sure the record is 
correct. I appreciate the comments of the Senator from Oregon. He knows 
I respect him and enjoy working with him. There is no problem there.
  Let me make sure the record is correct. California's cities do not 
tax DSL. We are not one of the 27 states.
  Mr. WYDEN. We agree.
  Mrs. FEINSTEIN. That is not the issue. The issue is the local 
exchange and because of the particular ``proposition 13'' situation 
where local revenues are so restricted, property taxes are so 
restricted, it is extraordinarily difficult. So utility user taxes, 
local exchange taxes actually play a substantial role in some smaller 
cities' budgets. That is just a fact.
  Los Angeles, the biggest city, a city with a lot of problems, a city 
with a big gang population, needs a lot of police. Some of that police 
force is actually funded from this local exchange money, which totals 
$40 million a year.
  I yield time to the distinguished Senator from Tennessee. May I ask 
how much time he would like.
  Mr. ALEXANDER. Three minutes.
  Mrs. FEINSTEIN. I yield 3 minutes of my time to Senator Alexander.
  Mr. ALEXANDER. I thank the Senator from California for her leadership 
on this issue. From the beginning, because of her background as mayor 
of San Francisco, she has had a clear understanding of the effect of 
this debate on the ability of cities and States to do what they are 
expected to do, and the importance of our Federal system of government.
  Now, Senators should consider on both sides of the aisle what this 
means. It means we have largely come to a consensus, at least from my 
point of view, about what we want to do. We have decided that for the 
States that were already taxing Internet access in 1998, they should 
have 4 years more as we have a 4-year moratorium on new taxes.
  What the Senator from California is saying is, then the States that 
are taxing Internet access that is delivered in other kinds of ways 
should also have the same 4 years. I believe she is right. Senator 
Feinstein's position says no new taxes, no new harm, and treat all 
States the same. That is a fair result that fits with the consensus 
that we have developed for the rest of this legislation, and I will 
support it, vote for it, and cosponsor it. I hope our colleagues will 
do the same.
  The PRESIDING OFFICER. Who yields time?
  Mr. McCAIN. I yield to the Senator from Virginia such time as he may 
consume.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ALLEN. Mr. President, the Senator from California mentioned 
waiting for 4 years while this bill ends. The reality is that those who 
are paying taxes right now because some States and localities have 
started taxing DSL in the last several years, that means consumers, 
with the amendment that was approved in the McCain amendment, that the 
consumers are going to be taxed for 2 more years. The design of this 
bill, as amended, is to protect taxpayers. It is to protect consumers. 
It is to expand opportunity, jobs, and commerce to people all across 
this country.
  The grandfather clause that Senator McCain put in his amendments, 
particularly on the DSL, is different than what we passed out of the 
committee, which was to stop these DSL taxes immediately because what 
has happened in the last few years is some of these localities and 
States have figured out ways around the intent of the original Internet 
tax moratorium and, indeed, are taxing the backbone. Having a 4-year 
grandfather on DSL taxes, on the backbone, on high-speed broadband, 
rewards those who have been the most aggressive in looking at loopholes 
to tax. It is going to cause probably more litigation as well because 
it can always be argued over.
  The reality of taxes is that they want to put them on DSL. They want 
telecommunications taxes. Telecommunications taxes on average across 
this country are about 15 to 17 percent. Some places it is worse than 
others. Richmond, VA, is about the worst in the whole country. About 27 
percent is the local tax. These are the kinds of taxes that are going 
to be imposed on DSL bills, whether from the telephone, wireless, 
BlackBerrys or Y5.
  The issue is this is the way that our Internet access bills should 
look, without DSL taxes on it. Here is the cost,

[[Page S4664]]

$23.90, $25, $37, whatever it may be, no taxes, clear, simple, 
understandable, and more affordable. If taxes are put on, the Internet 
service bill will look like what a telephone bill looks like right now, 
and this is just one page of it, but all the local taxes, all the State 
taxes, all the Federal taxes, again, on average in this country are 
about 17 percent. This is what we are trying to prevent.
  The Feinstein-Alexander amendment, though, would allow this sort of 
taxation onto the Internet service access bill. One of the problems we 
have, and Senator Wyden brought it up, is how do we ever get rid of 
taxes? Guess what. Part of this tax was put in as a luxury tax on 
telephone service to finance the Spanish American War in 1898. 
Everybody is still paying that tax. That war has been fought and won 
over 100 years ago. That is how difficult it is, nearly impossible, to 
ever get rid of taxes.

  The McCain compromise allows those who are taxing DSL to wean 
themselves off of that tax over 2 years. The reality is if the 
grandfather is allowed to go on 4 years, which is the duration of the 
entire measure on the moratorium, they will never take off those taxes. 
So I say to my colleagues, the time to act is now because this is how 
it will impact across the country.
  Say someone wanted to e-mail from Washington, DC, to Los Angeles, CA. 
That is going to be routed to Chicago, which has a hub, another big hub 
in Austin, across all the way to the Bay area of San Francisco that has 
a hub, and then to Los Angeles. That is the way it would go. All of 
these jurisdictions in between that 3,000 miles are going to be able to 
put on these DSL taxes. This is what we are trying to stop.
  The ones that have been doing it--and it is unclear how many States 
are doing it at this point. Some say 8, some say 12, some say 20. The 
point is, there is going to be 3,000 miles of taxes from localities, 
States, and jurisdictions in between.
  The States will have enough time with the McCain compromise, which 
is, I think, very generous to those who are advocates of allowing 
taxation on the Internet, to have 2 more years to wean themselves off 
of it.
  The big issue on the fiscal impact that one would hear all the time 
was voice over IP, worrying about telephone service migrating to the 
Internet. That has been resolved. The junior Senator from Tennessee, 
Mr. Alexander, and I debated and discussed it. All of us worked on it, 
and finally, this afternoon we were able to get language that everyone 
could agree upon.
  So when folks say it is going to have such a big hit, a big cost on 
States and localities, the voice over amendment, which we all adopted 
unanimously, will take away those fiscal impacts.
  What we are now talking about, though, is whether there is going to 
be 3,000 miles of taxation and subjecting Internet traffic to that sort 
of taxation. This is clearly undesirable, particularly when we are 
trying to get high-speed broadband built out to rural and small town 
communities. If we start increasing taxes on DSL and broadband, it is 
going to make it very difficult to get companies to invest, but most 
importantly it will mean more people will be unable to afford DSL or 
high-speed broadband services.
  So I ask my colleagues to make sure we avoid this sort of taxation. 
Do not let all those States in America put on taxes like the ones we 
see on our telephone bill. Let us make sure we act on this amendment to 
defeat it. The defeat of this amendment will be a protection to 
consumers, and it also will be a vote to expand economic opportunity 
and prosperity for all Americans everywhere in our country.
  I respectfully urge my colleagues to defeat or vote no on the 
Feinstein-Alexander amendment because it is contrary to the 
desirability of economic opportunity for Americans. Adding more taxes, 
or allowing these taxes to continue for 4 years, is not the policy to 
make this country more competitive, individuals more free, with greater 
opportunities.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Alexander). Who yields time?
  Mrs. FEINSTEIN. How much time do I have remaining?
  The PRESIDING OFFICER. Twelve minutes.
  Mrs. FEINSTEIN. I yield 4 minutes to the Senator from Ohio, Mr. 
Voinovich.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, perhaps I have been in local and State 
government too long. I really do care about my brothers and sisters in 
State government and in local government.
  I was not going to speak on the Feinstein amendment, but I have some 
statistics about the fiscal stress on the States that would lose the 
DSL after they sunset the exemption in the next 2 years. I am here to 
urge my colleagues to support the 4-year extension for those States 
that have used DSL.
  The reason for it is this: The States are under one of the worst 
fiscal constraints they have been in since the Second World War. 
Alabama, projected deficit next year, $620 million; Alaska, $475 
million; Arizona, the State of the Senator McCain, sponsor of the 
underlying compromise, $1.1 billion; California, $15 billion; 
Connecticut, $200 million; Illinois, $2 billion; Indiana, $595 million; 
Kentucky, $200 million; Louisiana $500 million; Minnesota, $185 
million; Mississippi, $709 million--a small State, lots of money; 
Missouri, $600 million; New Jersey, $5 billion; New York, $5.1 billion; 
North Carolina, $400 million; Rhode Island, $188 million; South 
Carolina, $300 million.
  The States are in trouble. If we give them an extra 2 years so they 
can make the adjustment in terms of losing these dollars, I think it 
will help them segue into a situation where they can get themselves 
back on track.
  The last thing I would say is that the way this is going, I think it 
could end up being the largest unfunded mandate on the States. We 
should at least give these States a break.
  I urge my colleagues to include passing the Feinstein amendment.
  The PRESIDING OFFICER. Who yields time? The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I thank the Senator from Ohio for his 
comments and for his leadership.
  I yield 5 minutes to the Senator from Delaware, Mr. Carper.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. I thank Senator Feinstein for yielding time and 
particularly for offering this amendment. I would say to my colleagues, 
I believe we have made pretty good progress, not just today but over 
the last several weeks, maybe the last several months, in terms of 
narrowing our differences. I am encouraged by that. I hope others of us 
are as well.
  One of the great concerns some of us had was a moratorium on the 
ability of State and local governments to collect certain kinds of 
revenues that lasted forever. I am pleased that is not the case 
anymore. We have a moratorium of a finite duration, and the duration of 
the moratorium will be 4 years. I am encouraged that we entered into a 
healthy negotiation on just how can we make sure State and local 
governments which traditionally derive revenue from telephone 
operations continue to do that. We had a good-faith negotiation, and 
that led to an amendment offered by Senator McCain that was accepted 
unanimously. That was a very important provision.
  There is one more issue I believe needs to be addressed. It is 
addressed in the Feinstein amendment. If somehow the Feinstein 
amendment could be adopted, I believe we would have a bill--in fact, we 
would have a bill I would vote for. I know the Presiding Officer, 
Senator Alexander, with whom I have worked very hard on these issues, 
indicated he would very likely do the same thing. For us to come from 
sort of how far apart we were to the point where we could actually vote 
for this bill were this change enacted is no small amount of progress.
  Some of my colleagues have said to me that this is a complex issue. 
It is. Some have said to me I don't really understand most of these 
issues. I have studied hard. I confess there is still a good deal I 
don't know. But I would share with my colleagues, whether you 
understand the intricacies of the backbone of the Internet and what DSL 
means, I think we understand this and I hope we could agree on this: If 
we are going to say that on the one hand we are going to extend the 
moratorium for 4 years, and we are going to say to State and local 
governments there are

[[Page S4665]]

certain things you can't do during those 4 years, I think there is a 
great virtue in saying to those States that are legally collecting 
revenues that they can continue to do that. They have not violated the 
law. In fact, the old moratorium enacted in 1998 explicitly said the 
moratorium did not apply to telecommunications services. That is what 
it said.
  DSL has a telecom component in it. As such, States are not prohibited 
from taxing DSL. Around 17 States currently do. All we are asking in 
this amendment is that the grandfather clause, both for dial-up and for 
DSL, run coterminously with the term in the McCain compromise, and that 
is 4 years.
  If we have a 4-year moratorium, why shouldn't we have a 4-year 
grandfather in States that are not doing anything illegal but, frankly, 
exercising their rights as sovereign States? I like that symmetry and 
balance. What I like maybe even more is it enables those of us who 
fought very hard over these issues in recent weeks and months to 
actually come together in the end and vote for this package.
  So I say to my colleagues, if you voted earlier today, maybe, for 
cloture, and you thought in voting for cloture you were voting for a 4-
year grandfather for State and local governments, you did not. What you 
thought you were voting for and what you thought you were getting, you 
did not get. You have the opportunity now to make amends for that, and 
I hope you will do that by voting for the Feinstein amendment: 4-year 
moratorium, 4-year grandfather. It is a good symmetry, and, frankly, it 
is a very good compromise and one that will enable us to go ahead and 
proceed on this bill and pass it and ultimately to enact it.
  I yield the remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I want to comment for a couple of 
minutes on the discussion that was had with Senator McCain, Senator 
Dorgan, and Senator Wyden and the concern here of the 
telecommunications taxes which have been exempted from the bill--in 
other words, those that have always been a legitimate source of revenue 
raising. I have an Ernst & Young study going back to 1999 that shows, 
for example, in the taxes collected by California in the year 1999, on 
telecommunications transaction taxes, the amount was $802 million. It 
doesn't say which precise taxes those are. This is the depth of this 
problem. This is not a small problem. What bothers me is we are moving 
on without really knowing. The finance officers of the larger cities of 
California tell me one thing. The Senator from Arizona believes that is 
not correct and says the intention of the bill is not, in fact, to make 
these non-DSL telecommunications services tax-exempt.
  I would like to ask the Senator from Arizona.
  Mr. WYDEN. Will the Senator yield briefly? Because I have been 
following this, along with the Senator from Arizona, and we may be able 
to have a colloquy to work this out.
  California does not tax DSL now.
  Mrs. FEINSTEIN. Correct.
  Mr. WYDEN. That is good. California does not tax the backbone of the 
communications system now. California does, based on these analyses 
that have been given you, tax various telecommunications services. I 
think it would be fair to all of us to say it is our desire to keep the 
status quo in California.
  In other words, various services are paying telecommunications taxes 
now. The reading of our proposal indicates there is nothing which would 
prevent California from being able to continue to impose those taxes.
  Would it be acceptable to the Senator from California to have a 
colloquy which would allow us to include some report language 
stipulating in those areas where communications services are being 
taxed now that there is nothing in the McCain proposal which would 
change that? If that would be acceptable to the Senator from 
California, we might be able to work out with the chairman of the 
committee and the Senator from Virginia report language and withdraw 
her amendment. That would protect the status quo in California. It 
would, however, make sure we are not rewarding bad behavior in other 
States around the country that tax DSL.
  If the Feinstein amendment is offered in its current form, I will 
oppose it very strongly. The Feinstein amendment, if it is offered, and 
if we can't agree on a colloquy, would promote technological 
inequality. It would nail DSL and give cable a free ride.
  I will urge the Senate to oppose the Feinstein amendment, but I would 
be open to report language with my colleague from California to make 
sure it is the intent of the Senate to keep the status quo in 
California where DSL isn't taxed and the backbone isn't taxed where the 
Senator has been concerned.
  Mrs. FEINSTEIN. If I might respond to that question through the 
Chair, we have worked with a group--the Senator from Delaware, the 
Senator from Ohio, the Senator from Tennessee--all along on this. I 
don't know the particular situation of their States. I don't know 
whether they tax DSL. I do know that the bill exempts 
telecommunications, and telecommunications has been a legitimate source 
of revenue which is now affected by this grandfather clause. Obviously, 
if I could get half a loaf for my State, I do not want to sell out 
those whom I have been working with over the last week.
  The PRESIDING OFFICER. The time of the Senator from California has 
expired.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the Senator 
from California be given 2 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, I would like an opportunity to talk 
with the Senator from Tennessee, the Senator from Ohio, and the Senator 
from Delaware to see if we can work something out that might meet the 
concern of the Senator from Oregon.
  Mr. McCAIN. Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. Nine minutes.
  Mr. McCAIN. Maybe the Senator could do that in the next few minutes 
while I make a couple of comments, if that is agreeable.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I would like to be clear that a tax on DSL 
services is a tax on Internet access. Seventeen States have cleverly 
found a way to get around the Internet tax moratorium. Right now, 17 
States have gotten around at least the spirit if not the letter of the 
Internet tax moratorium by taxing DSL service.
  The heart of this compromise to the original legislation had no 
grandfathering whatsoever--none, zero. So we put in a compromise that 
would have called for 3 years of non-DSL taxation, 2 years 
grandfathering in for non-DSL taxes. This would have given the DSL 
taxing States 2 years to adjust their budgets. Then we went from 3 
years to 4 years' moratorium, lifting the moratorium for those who are 
taxing non-DSL taxes.
  If we do this, we are gutting the compromise. It is unfair to DSL 
consumers. Why should consumers in one-third of all States be treated 
differently from the rest of the country?
  I strongly oppose the amendment. I would like to work out the 
compromise as discussed between Senator Feinstein, Senator Wyden, and 
Senator Allen. I hope we can agree to it.
  In the meantime, I ask unanimous consent to send an amendment to the 
desk on behalf of myself and Senator Hutchison which would then allow 
the State of Texas to have their ``access line fee'' included in the 
voice over IP compromise language.
  The PRESIDING OFFICER. Is there objection?
  Mr. DORGAN. Mr. President, I didn't understand exactly what was 
agreed to.
  The PRESIDING OFFICER. Is there objection to consideration of the 
amendment?
  Mr. DORGAN. I reserve the right to object so I can understand what is 
happening.
  Mr. McCAIN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S4666]]

  Mr. McCAIN. Mr. President, I have an amendment at the desk, and I ask 
unanimous consent for its consideration on behalf of Senator Hutchison.
  If there is an objection, just object and let us move on.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Objection.
  The PRESIDING OFFICER. Objection is heard.
  Mr. McCAIN. What is the parliamentary situation, Mr. President?
  The PRESIDING OFFICER. The Feinstein amendment is pending.
  The PRESIDING OFFICER. There are 2 minutes 15 seconds for the Senator 
from Arizona, and 1 minute 42 seconds for Senator Feinstein.
  Mr. McCAIN. Mr. President, we have compromised. We have been working 
on this issue for a long period of time. This is a compromise that is 
not widely regarded, and Senator Allen and Senator Wyden accepted this 
grandfathering clause with great reluctance. Now the whole 
grandfathering clause would be made moot. I don't think consumers in 
one-third of all States should be treated differently than the rest of 
the country. I urge my colleagues to reject this amendment.
  I yield back the remainder of my time.
  PRESIDING OFFICER. The Senator from California has a minute 42 
seconds.
  Mrs. FEINSTEIN. Mr. President, I thank my colleagues for the 
discussion. The discussion shows how rapidly we are doing something 
about all the ramifications we may not know. This concerns me greatly.
  This amendment is a simple amendment. It simply extends the 
grandfather clause and secures the telecommunications areas for those 
cities and States that have been using this methodology for revenue 
raising for years. In California, in 1999, the amount was $802 million 
that came from this area. For Los Angeles, in 1 year it is $40 million.
  I hope Members of this body would be willing to move the 2-year 
grandfather clause to 4 years. This gives an opportunity for this to be 
sorted out. There is a Ninth Circuit Court opinion affecting DSL and 
cable. No one knows how that will sort itself out because it just came 
out a few weeks ago. The legislation may well be affected by it.
  All I am asking is, make the grandfather clauses in both areas even. 
Raise the 2-year in this one--which affects the local exchange of 
telecommunications--to 4 years.
  I yield the floor.
  The PRESIDING OFFICER. All time has expired.
  Mr. McCAIN. I move to table the Feinstein amendment and I ask for the 
yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second. The question is on agreeing to the motion. The clerk 
will call the roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Utah (Mr. Bennett) 
and the Senator from Kentucky (Mr. Bunning) are necessarily absent.
  I further announce that if present and voting the Senator from 
Kentucky (Mr. Bunning) would vote ``yes.''
  Mr. REID. I announce that the Senator from Louisiana (Mr. Breaux), 
the Senator from Massachusetts (Mr. Kerry), are necessarily absent.
  The PRESIDING OFFICER (Mr. Talent). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 59, nays 37, as follows:

                      [Rollcall Vote No. 76 Leg.]

                                YEAS--59

     Allard
     Allen
     Baucus
     Bond
     Boxer
     Brownback
     Burns
     Campbell
     Cantwell
     Chambliss
     Cochran
     Coleman
     Collins
     Cornyn
     Corzine
     Craig
     Crapo
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Ensign
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Kohl
     Kyl
     Landrieu
     Leahy
     Lieberman
     Lincoln
     Lott
     McCain
     McConnell
     Miller
     Murkowski
     Murray
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Sununu
     Talent
     Thomas
     Warner
     Wyden

                                NAYS--37

     Akaka
     Alexander
     Bayh
     Biden
     Bingaman
     Byrd
     Carper
     Chafee
     Clinton
     Conrad
     Daschle
     Dorgan
     Durbin
     Edwards
     Enzi
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Lautenberg
     Levin
     Lugar
     Mikulski
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Stabenow
     Stevens
     Voinovich

                             NOT VOTING--4

     Bennett
     Breaux
     Bunning
     Kerry
  The motion was agreed to.
  Mr. KENNEDY. Mr. President, much of Massachusetts' economy is now 
based on technology and innovation. The high-tech industry tripled in 
Massachusetts over the past decade and drove our region's economy. The 
Massachusetts telecommunications sector employs over 110,000 workers in 
the State. We need to support their continued growth. We need to make 
broadband a priority since the technology can add $300 billion a year 
to the U.S. economy and generate more than 1.2 million jobs. That is 
why this legislation is so important.
  The issue on final passage of the McCain compromise amendment is 
whether the Nation continues to have a moratorium preventing taxation 
on access to the Internet. I have always supported the moratorium in 
the past, and I will do so again today.
  I opposed cloture earlier today because I thought there was room for 
improvement, and I wanted the Senate to take the time to get it right. 
I am pleased with the improvements that have been made during the 
course of today's debate.
  Congress should not jeopardize the continued advance of information 
technology by allowing the tax moratorium to disappear, subjecting the 
Internet to ``multiple and discriminatory taxes.'' We clearly need to 
reinstate the moratorium. Now is the time to pass this legislation.


                           Amendment No. 3048

  The PRESIDING OFFICER. The question is on agreeing to the McCain 
substitute, amendment No. 3048, as amended.
  The amendment (No. 3048), as amended, was agreed to.
  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.


                             dial-up access

  Mr. DAYTON. Mr. President I have some concerns about the impact of S. 
150 that I wish to address to the gentleman from Oregon, the author of 
the Internet Tax Freedom Act. It is my understanding that S. 150 
provides that Internet access services do not include 
telecommunications services purchased by customers to obtain dial-up 
access to the Internet. I also understand that S. 150 provides that 
only telecommunications services purchased or used by the provider of 
Internet access in providing Internet access are included within the 
moratorium.
  Further, I understand that the Internet access moratorium does not 
apply to the sale or use of telecommunications services that are 
carried or ``routed'' over the internet that are not purchased or used 
to provide internet access, for example, services that are comparable 
to today's circuit switched voice but which are provided over internet 
protocol. This is often called ``Voice Over Internet Protocol,'' or 
VOIP. Finally, to the extent that a telecommunications carrier sells 
both internet access services and telecommunications services, I 
understand that the charges for internet access are covered by the 
moratorium subject to the accounting rule covering aggregated charges 
for internet access and telecommunications services. Am I correct in my 
analysis of S. 150?
  Mr. WYDEN. I appreciate the question from the Senator from Minnesota, 
who is distinguishing himself for his keen interest in technology 
issues. He is correct in his understanding of those matters and in his 
reading of the legislation. As the author of the original Internet Tax 
Freedom Act, it is my intent that when it comes to services that are 
comparable to today's circuit switched voice but which are provided 
over internet protocol, what some call VOIP, the legislation's 
moratorium would not apply. In other words, the internet access 
moratorium would not apply to the sale of telecommunications services 
that are carried or routed over the Internet that are comparable to 
circuit switched voice services.

[[Page S4667]]

  Mr. BAUCUS. Mr. President, I support the Internet Tax Freedom Act. 
This bill represents a reasonable compromise. We should enact it.
  A tremendous amount of work went into this bill. I commend the 
Commerce Committee for its effort to resolve some of these complex 
issues. In particular, I commend Chairman McCain and Senator Hollings 
for working to bring parties together and develop a common-sense bill.
  Last fall, the Senate entered an order recognizing that the Commerce 
and Finance Committees share jurisdiction over this bill. That order 
granted sequential referral of this bill to the Finance Committee after 
the Commerce Committee acted. We inherited a host of unresolved issues. 
And, after thorough examination--and in consultation with members of 
the Finance Committee--we decided to allow the bill to be discharged 
without a markup.
  Let me briefly explain what this compromise bill does. Importantly, 
the bill extends the moratorium for 4 years. Some argue that this is 
too long, and others believe that the tax moratorium should be 
permanent. Four years represents a reasonable compromise. Four years 
will allow us to revisit unresolved issues in the future.
  Next, the bill allows States to continue tax telecommunications if 
they decide they want to. The bill makes clear that when phone lines 
are carried over the Internet in the future using Voice Over Internet 
Protocol technology, States will still be able to assess 
telecommunications taxes on that service. I know several Senators had 
concerns about protecting their States' ability to tax phone service, 
and this bill meets their concerns.
  Finally, the bill provides a soft landing for States that have been 
grandfathered under the 1998 act. The 1998 act allows certain States, 
who taxed Internet access prior to 1998, to continue to do so. It is 
time to make the Internet Tax Freedom Act national policy. The Internet 
is a national treasure, and a pillar of interstate commerce. In future 
legislation we should phase out the grandfather clause and allow us to 
move this national policy forward, without leaving any State behind.
  This does not mean that I believe the bill is perfect. But it is a 
good bill. And it should move forward.
  But before I agreed to support this bill, I made sure of two things: 
One, this bill would not harm Montana's businesses and citizens; and 
two, this bill would bring jobs and economic growth to Montana.
  First, this bill will not harm Montana. It accommodates Montana's 
special needs in Universal Service and emergency 911 services.
  This bill does not jeopardize the Universal Service program. 
Universal Service helps Montana rural telephone companies to provide 
telephone access to rural areas. Universal Service is extremely 
important to Montana.
  Rural America stands on the edge of a digital revolution. Technology 
will move us to places about which we can only dream. But we must 
preserve the networks that will provide us that opportunity.
  The telecommunications network in Montana is among the best in the 
country. Over 140 communities have DSL. We have 95 videoconferencing 
sites spread throughout the state. The Universal Service Fund helped 
build this network.
  In addition, this bill would not harm Montana because it helps 
maintain emergency communications through the federal enhanced 911 
program, or E-911.
  E-911 allows police, fire, and emergency workers automatically to 
locate those who call 911. In Montana, where open space can go on for 
miles, this technology can mean the difference between life and death.
  Many State and local governments have diverted 911 funds to other 
uses--away from development of an 911 network. This bill ensures that 
those providers that use the 911 network continue to pay for it.
  We need to ensure funding of this extremely important program. I 
appreciate the efforts of Chairman McCain and Senator Hollings to 
ensure that 911 is protected.
  Second, this bill will bring good jobs to Montana. Companies like 
Internet Montana--an Internet service provider headquartered in 
Bozeman--provide Internet access to thousands of subscribers in Montana 
and neighboring States.
  Keeping Internet access tax-free helps businesses like these grow. 
Keeping Internet access tax-free breaks down costly barriers. This 
keeps jobs in Montana.
  The next 5 years will bring change in the technology and the market 
for Internet access. Technological advances will blur the very 
definitions of Internet service and use. These changes will affect how 
we access the Internet, and how much we pay for doing so. These changes 
pose challenges for writing legislation.
  This bill represents an attempt to balance the interests of those who 
want to make sure that the Internet remains taxfree, with those who are 
concerned that if we try to define Internet access, we may erode State 
and local tax coffers.
  As technology changes, we will need to watch this delicate balance. I 
look forward to working with my colleagues to ensure that this 
legislation lives up to its promise.
  Mr. LEAHY. Mr. President, I am pleased to cosponsor and strongly 
support the Internet Tax Nondiscrimination Act, S. 150. I thank Senator 
Wyden, Senator Allen, Senator McCain and others for their leadership on 
this legislation.
  I also support Senator McCain's compromise amendment to extend for 4 
years the moratorium on taxes on Internet access and multiple and 
discriminatory taxes on electronic commerce. In addition, the McCain 
amendment would safeguard fees for universal service and 9-1-1 or e-9-
1-1 services and does not affect the emerging technology of Voice Over 
Internet Protocol, VOIP.
  I urge the Senate to support electronic commerce by keeping it free 
from discriminatory and multiple State and local taxes and from 
Internet access taxes.
  The Internet has changed the way we do business. Today businesses can 
sell their goods and services all over the world in the blink of an 
eye. E-commerce has created new markets, new efficiencies and new 
products.
  The growth of electronic commerce is everywhere, including my home 
State of Vermont. For example, the Vermont Teddy Bear Company, which 
employs more than 300 Vermonters, sells online 60 percent of its bears 
during its two busiest times of the year--for Valentine's Day and 
Mother's Day. That is 60 percent of all Vermont teddy bears sold online 
during this busy time.
  Hundreds of Vermont businesses are selling online, ranging from Al's 
Snowmobile Parts Warehouse to Ben & Jerry's Homemade Ice Cream. These 
Vermont cybersellers are of all sizes and customer bases, from Main 
Street merchants to boutique entrepreneurs to a couple of famous ex-
hippies who make great ice cream.
  What Vermont online sellers have in common is that Internet commerce 
allows them to erase the geographic barriers that historically limited 
our access to major markets. With the power of the Internet, Vermonters 
can sell their products and services anywhere, anytime.
  Although electronic commerce is beginning to blossom, it is still in 
its infancy. Stability is the key to reaching its full potential, and 
creating out new tax categories for the Internet is exactly the wrong 
thing to do.
  E-commerce should not be subject to new taxes that do not apply to 
other commerce. Indeed, without the current moratorium, there are 
30,000 different jurisdictions around the country that could levy 
discriminatory or multiple Internet taxes on E-commerce.
  Let's not allow the future of electronic commerce--with its great 
potential to expand the markets of Main Street businesses--to be 
crushed by the weight of discriminatory or multiple taxes.
  I also believe that extending the bar on Internet access taxes will 
help Vermonters end the digital divide and help Vermonters compete for 
better jobs. Recently, the University of Vermont released a study that 
found only 39 percent of Vermonters who earning less than $20,000 a 
year have a personal computer, while 67 percent of Vermonters who earn 
more than $35,000 a year own a personal computer. And 92 percent of 
Vermonters who do own a computer are connected to the Internet. We have 
to close this digital divide

[[Page S4668]]

for Vermonters to have the skills for the good-paying jobs of the 21st 
century.
  We need to bar Internet access taxes and multiple or discriminatory 
taxes on goods and services sold over the Internet to provide the 
stability necessary for electronic commerce to flourish, and to close 
the digital divide for all Americans.
  Mr. ENZI. Mr. President, we are about to vote on final passage of the 
Internet access tax moratorium. After months of negotiations, I believe 
the amended version before us represents a fair and reasonable 
compromise. It addresses, although not entirely, most of the concerns I 
raised when we debated this bill in November. I plan to vote for it 
today.
  I do not support taxing the Internet. I never have. I stood before 
you 2 years ago and proposed an amendment that would have put in place 
a ``permanent'' moratorium. But my colleagues, at the time, presented a 
very compelling argument as to why a ban on taxing the Internet should 
not be made permanent. They said we should simply extend the moratorium 
for 2 years rather than put in place a permanent mandate on 
technological development.
  The major point of contention, they said, was the way in which we 
defined ``Internet access.'' They said we needed to let technology 
develop before defining what could and could not be taxed 10 years down 
the road. In retrospect, I agree with my colleagues, and I agree with 
my colleagues now. The moratorium needs to be extended for 4 years, as 
is done in this compromise. We need to put in place a moratorium for 4 
years because it is extremely difficult to write a definition today 
that will protect and promote technology even 5 years down the road. 
Technology is simply changing too fast for us to make those kinds of 
decisions with any certainty.
  For example, in my home State of Wyoming, we have a small telephone 
company in the northwestern part of the State that serves about 7,000 
people. Two years ago, in this small community, the company was working 
to update their plain old telephone system so they could handle the 
capacity needed for dial-up networking.
  Today, after 2 years of upgrades and investments, the company now 
offers to every single customer a package of high-speed Internet 
access, digital cable service, multiple telephone lines, and voice over 
the Internet in some areas. Talk about rapidly changing technology. 
This company is making things happen. However, at the same time, the 
company's progress highlights the difficulty we face in determining 
what is and what is not Internet service.
  For instance, most of us don't know exactly when a local telephone 
call ceases to be a telephone call and becomes a dial-up Internet 
service. We don't understand how to decipher a digital packet of voice 
information from a digital packet of Internet service information. And 
we certainly don't know exactly how the digital data in our BlackBerrys 
connects to our desktop computers at home, to our laptop computers in 
the car, or to our mobile phones in our pockets. But, we do know when 
we are trying to make a phone call and when we are typing with our 
fingers.
  Voice telecommunications are treated differently than other broadband 
Internet services, and that is a fact. It is not fair and it is not 
right, but it is a fact. The compromise before us recognizes this 
problem. That is why it carves out VOIP or voice over the Internet. I 
am pleased my colleagues were able to craft language this afternoon 
that improved the original VOIP provision included in the McCain 
substitute. The new language makes it more clear and easier for our 
States, cities, businesses, and judicial system to interpret.
  I am glad my colleagues were able to reach an agreement on the issue 
of VOIP. Unfortunately, we weren't as lucky on the definition of 
``internet access service.'' The Allen-Wyden, Alexander-Carper and 
McCain proposals all contained different definitions that would 
restrict the ability of States and locals to tax telecommunications 
services. What troubled me was that each definition would have cost our 
States millions of dollars, but nobody could tell me exactly how much 
it would have cost them. That is the problem.
  CBO was unable to estimate how much our States and locals would lose 
under the Allen-Wyden or McCain definitions, but clearly stated that 
the loss could be ``substantial.'' The most concrete numbers from CBO 
were provided in a letter dated November 5, 2003. In that letter, CBO 
estimated that revenue losses could range from $80 to $120 million per 
year to State and local governments that are already taxing Internet 
access and were covered by the ``grandfather clause.''
  Additionally, CBO states that ``other states are currently imposing 
taxes on charges for the portions of DSL services they do not consider 
Internet access.'' Those States would lose between $40 and $75 million 
per year. As you will recall, under the Allen-Wyden and McCain 
definition, taxation of all DSL services would be preempted.
  The Multistate Tax Commission estimates that the loss could be as 
much as $4 billion to $8 billion under the Allen-Wyden and McCain 
definitions. Given these two examples, there is clearly a lot of 
discrepancy between the agencies that are supposed to know the most.
  Of course, the Alexander-Carper definition wasn't perfect either. It 
would have also cost our States millions of dollars over time, but it 
would have been far less significant. It would have prevented States 
from collecting new revenue from consumers who are paying for the last 
mile of their DSL services. However, once again, nobody could tell me--
including CBO--how much the Alexander-Carper definition would have 
cost. With over $20 billion being collected from taxes on 
telecommunications services every year, this imprecise data made it 
difficult for me to support any definitions. That is why we had to 
include other provisions--like the grandfather provisions and the VOIP 
language--that would help cushion the impact this bill will have on our 
States and locals.
  The grandfather provisions are important because they ensure that 
States and locals that are currently taxing do not lose millions of 
dollars over the next couple of years. I had hoped all of the 
grandfather clauses would expire at the same time, but we were beat 
fair and square. The problem is that extending the grandfather for some 
States for only 2 years still creates an unfunded mandate.

  As many of you know, this is an issue I have followed closely for 
years. Questions about unfunded mandates have always been the issues 
that cause me, especially when I served in the Wyoming State 
legislature, to sit up and take notice. Whenever Congress takes up an 
issue that could have an effect on State revenues, every State Governor 
and legislature stops what they are doing to see what we are up to--and 
how it may affect them--or more to the point--what it is going to cost 
them.
  So now, after months of hearings, meetings and negotiations, we are 
getting ready to pass a bill that could create an unfunded mandate for 
a couple of years but doesn't do it permanently, which I am pleased 
about. The original Allen-Wyden bill proposed a ``permanent'' 
moratorium on access taxes and ``permanent'' definition of internet 
access. My question was whether or not we should lock any type of 
technology in a glass box labeled ``permanent'' when that technology is 
changing shape and size at the speed of light. The problem with the 
word ``permanent'' was that it didn't allow for a lot of wiggle room. 
The changing shape of technology would break the glass box whether we 
like it or not, so I am pleased that we crafted a bill that will keep 
the latch open to allow for expansion and future growth. That way we 
can check on the progress of technology in 4 years, and then decide 
whether we should lock it up tighter or change its design to allow for 
more expansion and development.
  The key words here are time and change. By signing on to something 
that was supposed to be ``permanent'' we would have been committing 
ourselves to something that might not have survived the test of time. 
Things are moving quickly and changing fast and we are trying to make 
decisions about what lies down the road based on what we have just 
driven past--or the scenery that surrounds us right now. It might work. 
But it might not. It might not because no other product of technology 
has seen such growth and

[[Page S4669]]

change in the past few years as the Internet and information 
technology. That is what has made it a difficult issue to track and to 
address in terms of what its future may hold. The bill we have before 
us is an effort to allow some of these issues to ripen, while 
protecting internet users from future taxation.
  That being said, I think we might benefit from taking a look at the 
past history of the issue before we try to form an opinion on its 
future. Two years ago, I stood before you and offered an amendment that 
would have--like this bill--made the moratorium on Internet access 
permanent. At the time, I believed we were taking a fair and equitable 
approach to a prohibition on taxing the Internet.
  My amendment, which was cosponsored by my good friend and colleague 
from North Dakota, Senator Dorgan, would have made the ban on taxing 
the Internet permanent, and it would have simplified the extremely 
cumbersome network of State sales and use taxes. My amendment failed, 
in part because most Senators did not want to put in place a 
``permanent'' moratorium.

  The other reason my amendment failed was because it addressed a 
complex issue that most Senators did not understand. It was the issue 
of streamlined sales and use tax. I introduced the Streamlined Sales 
and Use Tax Act in 2001 and again last year because it would greatly 
reduce the complexity of our system of sales and use taxes.
  This year, Senator Dorgan and I have been joined by 18 bipartisan 
cosponsors in introducing S. 1736. Like our bill in the 107th Congress, 
S. 1736 would make it easier for American consumers and businesses to 
conduct sales from remote locations and help States begin to recover 
from years of budgetary shortfalls. It would authorize States that have 
signed the Streamlined Sales and Use Tax Agreement and have passed 
legislation simplifying their tax system to require all sellers to 
collect and remit sales taxes.
  S. 1736 is a critical piece of legislation that many of my colleagues 
are learning more about and recognizing its growing importance as 
Internet usage explodes. Two years ago the revenue loss attributed to 
the Internet sales tax loophole was fairly minimal. Today, the revenue 
loss has ballooned as online and other remote sales have increased. The 
States have responded to this budget crisis by signing the Streamlined 
Sales and Use Tax Agreement and implementing legislation that 
drastically simplifies their sales and use tax systems. In fact, 20 
States have already signed into law the necessary implementing 
legislation, while 9 others are currently in the process of doing so.
  Two years ago, my colleagues said the States hadn't come far enough 
in the process to warrant congressional action. I think the opposite 
can be said today. The States have taken the bull by the horns and are 
poised to act. Now, Congress needs to step up and do the same.
  The sales and use tax bill has been referred to the Finance Committee 
and I hope to work with Chairman Grassley and others to bring it up in 
committee some time this year. But, that is not what we are talking 
about here today.
  Let me be clear--we are not talking about sales and use taxes today 
as part of the internet access tax moratorium. These are two completely 
separate issues. Today we are talking about the Internet access tax 
moratorium.
  The compromise before us doesn't address every concern raised by the 
States and locals, but it doesn't address every concern raised by 
industry either. But, isn't that the sign of a true compromise? Both 
sides have to give a little in order to come up with the best product.
  I have worked with my colleagues on both sides of the issue to find 
middle ground that would protect consumers and ensure that States and 
localities don't lose billions in tax revenue. I think we have found 
the middle ground. I have talked to both Republicans and Democrats and 
this is the bipartisan solution.
  I urge my colleagues to vote for this bill, so we can allow the use 
of the Internet to continue to prosper and grow. It is a valuable 
resource because it provides access on demand. In addition, it is 
estimated that the growth of online businesses will create millions of 
new jobs nationwide in the coming years. I hope you will vote with me 
in favor of both.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill, as amended, pass?
  Mr. McCAIN. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Utah (Mr. Bennett) 
and the Senator from Kentucky (Mr. Bunning) are necessarily absent.
  I further announce that if present and voting the Senator from 
Kentucky (Mr. Bunning) would vote ``yes.''
  Mr. REID. I announce that the Senator from Louisiana (Mr. Breaux) and 
the Senator from Massachusetts (Mr. Kerry) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 93, nays 3, as follows:

                      [Rollcall Vote No. 77 Leg.]

                                YEAS--93

     Akaka
     Alexander
     Allard
     Allen
     Baucus
     Bayh
     Biden
     Bond
     Boxer
     Brownback
     Burns
     Byrd
     Campbell
     Cantwell
     Carper
     Chafee
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--3

     Bingaman
     Graham (FL)
     Lautenberg

                             NOT VOTING--4

     Bennett
     Breaux
     Bunning
     Kerry
  The bill (S. 150), as amended, was passed, as follows:

                                 S. 150

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Internet Tax 
     Nondiscrimination Act''.

     SEC. 2. FOUR-YEAR EXTENSION OF INTERNET TAX MORATORIUM.

       (a) In General.--Subsection (a) of section 1101 of the 
     Internet Tax Freedom Act (47 U.S.C. 151 note) is amended to 
     read as follows:
       ``(a) Moratorium.--No State or political subdivision 
     thereof may impose any of the following taxes during the 
     period beginning November 1, 2003, and ending November 1, 
     2007:
       ``(1) Taxes on Internet access.
       ``(2) Multiple or discriminatory taxes on electronic 
     commerce.''.
       (b) Conforming Amendments.--(1) Section 1101 of the 
     Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by 
     striking subsection (d) and redesignating subsections (e) and 
     (f) as subsections (d) and (e), respectively.
       (2) Section 1104(10) of the Internet Tax Freedom Act (47 
     U.S.C. 151 note) is amended to read as follows:
       ``(10) Tax on internet access.--
       ``(A) In general.--The term `tax on Internet access' means 
     a tax on Internet access, regardless of whether such tax is 
     imposed on a provider of Internet access or a buyer of 
     Internet access and regardless of the terminology used to 
     describe the tax.
       ``(B) General exception.--The term `tax on Internet access' 
     does not include a tax levied upon or measured by net income, 
     capital stock, net worth, or property value.''.
       (3) Section 1104(2)(B)(i) of the Internet Tax Freedom Act 
     (47 U.S.C. 151 note) is amended by striking ``except with 
     respect to a tax (on Internet access) that was generally 
     imposed and actually enforced prior to October 1, 1998,''.
       (c) Internet Access Service; Internet Access.--
       (1) Internet access service.--Paragraph (3)(D) of section 
     1101(d) (as redesignated by subsection (b)(1) of this 
     section) of the Internet Tax Freedom Act (47 U.S.C. 151 note) 
     is amended by striking the second sentence and inserting 
     ``The term `Internet access service' does not include 
     telecommunications services, except to the extent such 
     services are

[[Page S4670]]

     purchased, used, or sold by a provider of Internet access to 
     provide Internet access.''.
       (2) Internet access.--Section 1104(5) of that Act is 
     amended by striking the second sentence and inserting ``The 
     term `Internet access' does not include telecommunications 
     services, except to the extent such services are purchased, 
     used, or sold by a provider of Internet access to provide 
     Internet access.''.

     SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.

       The Internet Tax Freedom Act (47 U.S.C. 151 note) is 
     amended--
       (1) by redesignating section 1104 as section 1105; and
       (2) by inserting after section 1103 the following:

     ``SEC. 1104. GRANDFATHERING OF STATES THAT TAX INTERNET 
                   ACCESS.

       ``(a) Pre-October 1998 Taxes.--
       ``(1) In general.--Section 1101(a) does not apply to a tax 
     on Internet access that was generally imposed and actually 
     enforced prior to October 1, 1998, if, before that date, the 
     tax was authorized by statute and either--
       ``(A) a provider of Internet access services had a 
     reasonable opportunity to know, by virtue of a rule or other 
     public proclamation made by the appropriate administrative 
     agency of the State or political subdivision thereof, that 
     such agency has interpreted and applied such tax to Internet 
     access services; or
       ``(B) a State or political subdivision thereof generally 
     collected such tax on charges for Internet access.
       ``(2) Termination.--This subsection shall not apply after 
     November 1, 2007.
       ``(b) Pre-November 2003 Taxes.--
       ``(1) In general.--Section 1101(a) does not apply to a tax 
     on Internet access that was generally imposed and actually 
     enforced as of November 1, 2003, if, as of that date, the tax 
     was authorized by statute and--
       ``(A) a provider of Internet access services had a 
     reasonable opportunity to know by virtue of a public rule or 
     other public proclamation made by the appropriate 
     administrative agency of the State or political subdivision 
     thereof, that such agency has interpreted and applied such 
     tax to Internet access services; and
       ``(B) a State or political subdivision thereof generally 
     collected such tax on charges for Internet access.
       ``(2) Termination.--This subsection shall not apply after 
     November 1, 2005.''.

     SEC. 4. ACCOUNTING RULE.

       The Internet Tax Freedom Act (47 U.S.C. 151 note) is 
     amended by adding at the end the following:

     ``SEC. 1106. ACCOUNTING RULE.

       ``(a) In General.--If charges for Internet access are 
     aggregated with and not separately stated from charges for 
     telecommunications services or other charges that are subject 
     to taxation, then the charges for Internet access may be 
     subject to taxation unless the Internet access provider can 
     reasonably identify the charges for Internet access from its 
     books and records kept in the regular course of business.
       ``(b) Definitions.--In this section:
       ``(1) Charges for internet access.--The term `charges for 
     Internet access' means all charges for Internet access as 
     defined in section 1105(5).
       ``(2) Charges for telecommunications services.--The term 
     `charges for telecommunications services' means all charges 
     for telecommunications services, except to the extent such 
     services are purchased, used, or sold by a provider of 
     Internet access to provide Internet access.''.

     SEC. 5. EFFECT ON OTHER LAWS.

       The Internet Tax Freedom Act (47 U.S.C. 151 note), as 
     amended by section 4, is amended by adding at the end the 
     following:

     ``SEC. 1107. EFFECT ON OTHER LAWS.

       ``(a) Universal Service.--Nothing in this Act shall prevent 
     the imposition or collection of any fees or charges used to 
     preserve and advance Federal universal service or similar 
     State programs--
       ``(1) authorized by section 254 of the Communications Act 
     of 1934 (47 U.S.C. 254); or
       ``(2) in effect on February 8, 1996.
       ``(b) 911 and E-911 Services.--Nothing in this Act shall 
     prevent the imposition or collection, on a service used for 
     access to 911 or E-911 services, of any fee or charge 
     specifically designated or presented as dedicated by a State 
     or political subdivision thereof for the support of 911 or E-
     911 services if no portion of the revenue derived from such 
     fee or charge is obligated or expended for any purpose other 
     than support of 911 or E-911 services.
       ``(c) Non-tax Regulatory Proceedings.--Nothing in this Act 
     shall be construed to affect any Federal or State regulatory 
     proceeding that is not related to taxation.''.

     SEC. 6. EXCEPTION FOR VOICE AND OTHER SERVICES OVER THE 
                   INTERNET.

       The Internet Tax Freedom Act (47 U.S.C. 151 note), as 
     amended by section 5, is amended by adding at the end the 
     following:

     ``SEC. 1108. EXCEPTION FOR VOICE SERVICES OVER THE INTERNET.

       ``Nothing in this Act shall be construed to affect the 
     imposition of tax on a charge for voice or similar service 
     utilizing Internet Protocol or any successor protocol. This 
     section shall not apply to any services that are incidental 
     to Internet access, such as voice-capable e-mail or instant 
     messaging.''.

     SEC. 7. GAO STUDY OF EFFECTS OF INTERNET TAX MORATORIUM ON 
                   STATE AND LOCAL GOVERNMENTS AND ON BROADBAND 
                   DEPLOYMENT.

       The Comptroller General shall conduct a study of the impact 
     of the Internet tax moratorium, including its effects on the 
     revenues of State and local governments and on the deployment 
     and adoption of broadband technologies for Internet access 
     throughout the United States, including the impact of the 
     Internet Tax Freedom Act (47 U.S.C. 151 note) on build-out of 
     broadband technology resources in rural under served areas of 
     the country. The study shall compare deployment and adoption 
     rates in States that tax broadband Internet access service 
     with States that do not tax such service, and take into 
     account other factors to determine whether the Internet Tax 
     Freedom Act has had an impact on the deployment or adoption 
     of broadband Internet access services. The Comptroller 
     General shall report the findings, conclusions, and any 
     recommendations from the study to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Energy and Commerce no later 
     than November 1, 2005.

     SEC. 8. EFFECTIVE DATE.

       The amendments made by this Act take effect on November 1, 
     2003.
  Mr. ALLEN. Mr. President, I move to reconsider the vote.
  Mr. WYDEN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. FRIST. Mr. President, I congratulate the two managers and all the 
many Senators on both sides of the aisle who helped bring this bill to 
conclusion. It has been a tough road, a difficult road. There has been 
tremendous debate. It wasn't both sides of the aisle but in the Chamber 
itself.
  There are going to be no further votes this evening. The Senate will 
reconvene on Monday. At that time we will resume consideration of the 
JOBS bill, the FSC/ETI bill. The chairman and ranking member of the 
Finance Committee have lined up Senators to offer amendments on Monday 
and therefore we will make progress on the bill on Monday. Any votes 
ordered on amendments during Monday's session will be delayed until 
Tuesday.

                          ____________________