June 28, 2006 CONGRESSIONAL RECORD — SENATE S6615 people who have ALS, Parkinson’s dis- It was a sad moment for mankind, for receives a message from the House. The ease, Alzheimer’s—we would be closer sanity in our world. Libya ultimately House concurs in S. Con. Res. 103, and to saying hope is there because we are was convicted of providing the re- having received the conference report doing the research and we are going to sources for those terrorists who on H.R. 889 from the House, the con- find the cures. It will not happen un- brought that airplane down. Libya has ference report is agreed to and the mo- less and until we get over that Presi- not paid all of the claims that were tion to reconsider is laid upon the dential proclamation of August 9, 2001. awarded to the families of the victims; table. I yield the floor. Libya has not paid the last installment (The conference report is printed in The PRESIDING OFFICER. The Sen- of compensation due as a condition of the House proceedings of the RECORD ator from New Jersey. being removed from the list of state on April 6, 2006.) Mr. LAUTENBERG. Mr. President, sponsors of terror. That was the agree- f first, I want to say to our friend from ment. That was the understanding. EXECUTIVE SESSION Iowa how much we appreciate his dili- No matter how many years pass, gence in promoting better health in these families will never forget their this country, and more opportunities loss, their grief; neither will anyone NOMINATION OF HENRY M. for all Americans. I think, for instance, who knows these families, who knows PAULSON, JR., TO BE SEC- of his work on the Americans with Dis- the pain visited upon these people RETARY OF THE TREASURY abilities Act. Because of that bill, peo- when they heard that their son or ple who have a disability and weren’t daughter was killed in the downing of The PRESIDING OFFICER. Under able to get around as easily as some that airplane. the previous order, the Senate will now others, now have access to so many If Libya has indeed renounced ter- proceed to executive session to con- more places. We are so grateful to the rorism, that is great news, as is the sider the following nomination, which Senator from Iowa for his work on that fact that Libya, which was thought to the clerk will report. landmark legislation. be engaged in the development of weap- The assistant legislative clerk read the nomination of Henry M. Paulson, f ons of mass destruction, has agreed to Jr., of New York, to be Secretary of the LIBYA stop that pursuit. Still, the Libyan government has an obligation it agreed Treasury. Mr. LAUTENBERG. Mr. President, to meet so that it could rejoin the com- The PRESIDING OFFICER. The Sen- today the Bush administration is tak- munity of nations, to achieve a level of ator from Iowa. ing an action that is almost incompre- acceptance around the world. Their Mr. GRASSLEY. Mr. President, I hensible. Frankly, it is outrageous, past behavior cannot be excused. They hope before the day is out that we are when you think about it. The adminis- murdered Americans and they must be able to help a very good American cit- tration is removing Libya from the held fully accountable. izen by the name of Henry Paulson to State Department’s list of state spon- Today, the Bush administration has be the next Secretary of the Treasury. sors of terror even though Muammar rejected accountability for Libya. Mr. Paulson had his hearing yesterday. Qadhafi has not fulfilled his commit- Today, the administration has put That was before the Finance Com- ments to the American victims of Lib- other interests ahead of the interests mittee that I chair. He was reported yan terror. Even though Qadhafi is not of the American victims of terrorism. out on a unanimous voice vote this keeping his promise to Americans who What are those interests that prevailed very morning in the Finance Com- lost loved ones when agents of his gov- in the end? We will let the investiga- mittee. ernment bombed Pan Am flight 103, the tive journals figure that one out. Since the Treasury Secretary is the administration is going to give Libya But when leaders of our country say top economic policy official in the ad- full diplomatic privileges. ‘‘we must never forget the lessons’’ of ministration, and the Treasury Depart- The President is taking this action acts of terrorism, I think they should ment implements so many of our Na- even though this Senate recently mean it. Libya should fulfill its prom- tion’s laws—be it tax, trade, or com- passed my resolution which said that ise, its commitment to the families of merce—we have a tradition in the Sen- diplomatic credentials should not be the victims of Pan Am 103 and not let ate of moving with all deliberate speed given to Libya until Qadhafi provides that commitment be forgotten because on nominations to fill that post. all of the restitution promised to the part of it has been fulfilled but not all That tradition has held no matter families of the victims of the Pan Am of it. We must not forget that Libya which party controlled the White Flight 103 bombing and other acts of has failed to comply entirely with the House or the Congress. I have moved terror supported by Libya. I know a lot basic promise to those families. aggressively on this nomination, but of those families, families from New We urge the President and the ad- the timeline is consistent with past Jersey and in the area generally, who ministration to hold fast and insist Treasury Secretary nominations. lost loved ones on that flight. Many of that Libya pay its bills. The money Just as an example, everybody re- the victims were young college stu- will never compensate these families members Secretary Rubin in the Clin- dents from Syracuse University. I have for the loss of their child, brother or ton administration. That timeline is a nephew who went there. He was to sister, father or mother—never. But at something like: The Senate receives take that trip but at the last minute least it shows that Libya is serious his nomination January 4, 1995. That had to change his plans. He lost several about honoring it commitments, some- was the first day of the session that very good friends. thing that is essential before it can year. The official ethics-related paper- I have been to Lockerbie, Scotland, achieve anything approximating the work was received on January 5 of 1995. and know too well what happened that status of nations that follow the rule of The Finance Committee staff expedited fateful day when 270 people were killed, law. So we must insist on that. review of the complicated financial de- with the airplane and human remains I yield the floor. tails of Secretary Rubin, also a senior falling onto that beautiful little com- official at Goldman Sachs—Henry f munity, Lockerbie, in Scotland. I have Paulson being the CEO of that same seen the remnants, the souvenirs that CONCLUSION OF MORNING firm. The Finance Committee held a the victims had bought on that trip BUSINESS hearing 5 days later, on January 10, that was during the Christmas period. I The PRESIDING OFFICER. Morning 1995. On that same day, the committee saw Mickey Mouse hats and things business is now closed. reported Secretary Rubin’s nomina- that college kids enjoy. Even bottles of f tion. On that same day, the full Senate wine that survived were then put in a confirmed Mr. Rubin, and he was sworn warehouse of things that were col- COAST GUARD AND MARITIME in as Treasury Secretary. lected on the ground but could not be TRANSPORTATION ACT OF 2006— So we are moving with a similarly assigned to any single family because CONFERENCE REPORT aggressive schedule. I appreciate the they didn’t have any sort of identifica- The PRESIDING OFFICER. Pursuant cooperation of Members on what I will tion attached to them. to the order of June 22, 2006, the Senate acknowledge is relatively short notice.

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.047 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE S6616 CONGRESSIONAL RECORD — SENATE June 28, 2006 I thank the committee tax staff on I know is of concern to some Members. moved this nomination. It is the right both sides, especially the joint com- It is well known that Mr. Paulson is thing to do. I commend him for it. mittee staffer Gray Fontenot, and the active in environmental issues. He is Mr. President, I also support Hank hard work that not only he did, but a an avid bird watcher and is chairman Paulson, this administration’s nominee lot of others, and it took a lot of long of the board of the Nature Conser- for Secretary of the Treasury. hours to process these papers over just vancy. I share the worry that Mr. Throughout its history, the Depart- a period of a few days prior to today. Paulson knows his job is to be Sec- ment of the Treasury has required My staff examined Mr. Paulson’s retary of the Treasury and not head of enormous innovation, vision, and per- complicated financial records, his tax EPA. Mr. Paulson’s response on this severance. Our Nation’s first Treasury return, and the activities of his firm, concern to about three of us on the Secretary, Alexander Hamilton, laid Goldman Sachs. We do this most often committee who brought this up was the foundation principles of America’s in the area of tax planning. We have re- this. He said: public economy, its credit, its indus- ceived very good cooperation. Then, of The President of the United States has trial development, and commercial ac- course, after the review, we have high nominated me to be Secretary of the Treas- tivity. confidence in his qualifications for this ury, he hasn’t nominated me to be Secretary In 1790, Hamilton presented to Con- position. of Interior, he hasn’t nominated me to be gress his plan for public credit, assum- Mr. Paulson brings to the table an head of the Environmental Protection Agen- ing the States’ war debts, imple- enviable set of assets, meaning quali- cy, that really big focus I have is going to be menting import duties and excise taxes dealing with so many of the issues that to repay these debts, and establishing a fications to do a good job as Secretary we’ve been talking about today, the eco- of the Treasury, although I presume he national bank. The next year, he laid nomic issues that are the core of our agenda out a plan for an American manufac- brings a lot of other assets to the table ... as well. Mr. Paulson spent a good turing economy, so far ahead of its Considering his sincerity—and I don’t time that it resonated well into the amount of his youth—would you be- think he is a person capable of mis- lieve it—in the cornfields of Illinois. As 20th century. leading—I think he is very transparent. Henry Morgenthau Jr. steered the a bright young man with excellent aca- I came away with the confidence that Treasury for over a decade in peace and demic credentials, he served in the Mr. Paulson knows where his focus in wartime. He defended the dollar Pentagon and in the White House. needs to be and where his responsibil- against speculation through the 1930s, After Government service, Mr. ities lie. financed the war effort with war bonds, Paulson joined Goldman Sachs and I did kid him the other day. There is and ushered in a new system of inter- rose through the ranks to the highest a superintendent of that building you national financial stability after the position of chief executive officer. call the Treasury Department down When you look at Mr. Paulson’s Second World War. there that is trying to get his favor. So Secretary James Baker embraced story, you come away with a view that they are probably right now building a new challenges, including the Latin this is a guy who gets the best results bird-watching station for him outside American banking crisis and the Plaza at whatever he tackles, and that is just of the Treasury building someplace be- Accords. the sort of a person we need as Sec- cause he is known very much for that. The Asian financial turmoil of the retary of the Treasury because we have But I think he is going to tend to 1990s met the able and wise leadership a very good economy, measured by business and not get over into other of Secretaries Robert Rubin and Law- long-term standard measures of the areas of the Government. rence Summers. They steered the world economy—creating 5.3 million jobs in I also note that Mr. Paulson is here economy through crises. And they the last less than 3 years, having 4.6 at just the right time. He is here to managed our economy’s remarkable percent unemployment, having growth deal with tax reform, China currency, growth and return to fiscal discipline. on average that we had during the and with other major economic issues Today, leadership and vision are as 1990s; lots of measurements of the facing America. imperative as during our Nation’s economy that are very good. I am pleased that Mr. Paulson has founding and in the two centuries I am not picking out things that are answered the call to return to public since. The challenges are different. The never used to measure the economy. I service. world economy is more complex. China am talking about things that have I encourage Members to vote in favor and India are economic powers on the been used to measure the economy over of a highly qualified nominee to be rise. Speculative investments have the last 60 or 70 years. Those measure- Secretary of the Treasury. grown. Twelve European nations are ments say it is good. But if we don’t For the public at large that does not bound by a common currency. Finan- have the right people setting the right quite follow everything every day in cial markets are deeper, more liquid, policy for carrying out those policies Washington, DC, I hope you understand and more integrated than ever before. that Congress might set, it could be in that there are some people in America But global economic growth and inter- jeopardy. who are willing to give up the multi- national trade are fundamentally out That is why we need a person of million dollar salaries as CEOs of Wall of balance. Paulson’s background—a person who Street firms to serve the public good, Faced with these challenges, I wel- comes out on the right end of almost to serve as Secretary of the Treasury come this administration’s nomination everything he tackles—to be the chief and a lot of other positions in Govern- of Henry Paulson to become Secretary economic voice for our country and to ment and make less than $200,000 a of the Treasury. I have known Hank for be the voice for this administration. year compared to the tens of millions many years. I believe that he is an out- But his work is the administration’s of dollars that they make. Most people standing choice for this demanding po- work, his work is the country’s work, who like to make big money like to sition. Hank has demonstrated his and I think he is up to doing the coun- keep on making big money. But there knowledge of financial markets and try’s work. are some people, such as Mr. Paulson, helped guide them through three dec- The impression I have and gave you who are willing to serve the American ades of transformation. He rose to the about Mr. Paulson is reinforced when public, to do what is right for our coun- helm of Goldman Sachs with our you have a personal meeting with him. try and do it willingly and selfishly. former colleague Governor Jon I think it is fair to say that after yes- I urge my colleagues to vote for a Corzine, and as sole CEO, presided over terday’s hearing, Members on both very good citizen, a person who I be- some of the most successful years of sides of the aisle came away very im- lieve will be a very good Secretary of that company. pressed with Mr. Paulson as a thought- the Treasury. Hank is broadly respected by his col- ful and intelligent nominee who appre- I yield the floor. leagues. He has earned a reputation as ciates the concerns raised by Senators The PRESIDING OFFICER. The Sen- a man of boundless energy and a re- and will work with Senators on trying ator from Montana. lentless work ethic. Hank proved him- to solve those concerns. Mr. BAUCUS. Mr. President, I thank self an innovative and prescient think- I will touch briefly on one matter my good friend, Chairman CHUCK er, able to consider economic and fi- that came up at the hearing, and which GRASSLEY, for the way in which he has nancial challenges before they are upon

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.048 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE June 28, 2006 CONGRESSIONAL RECORD — SENATE S6617 us. Today he has nobly answered the advanced placement courses in our The PRESIDING OFFICER (Mr. MAR- call to public service. And he will bring high schools. My education competi- TINEZ). The Senator from Oregon. much-needed credibility to our eco- tiveness legislation would support Mr. WYDEN. Mr. President, I com- nomic message to hard-working Ameri- afterschool and mentoring programs. It mend Chairman GRASSLEY and Senator cans, and to the world. would restore our commitment to Na- BAUCUS for moving quickly to have the Hank Paulson understands that our tive American education. It would di- Senate consider the nomination of economy’s strength is rooted in the en- rect grants to outstanding young sci- Henry Paulson. I am convinced he is trepreneurial spirit and the competi- entists. And it would encourage compa- the right man at the right time. It is tive zeal of the American people. He nies to get involved in making our my intent to strongly support his nom- understands just as well that our schools the world’s finest. ination and vote for him later in the strength is not a given. That we cannot Upon this foundation of education course of this afternoon. take our economic preeminence for must stand strong pillars of a competi- My hope, in particular, as Henry granted. In the Rose Garden last week, tive economy. One such pillar is en- Paulson moves to this vital position, is he rightly declared that ‘‘We must take ergy, which fuels a successful economy. that he will move quickly to set in steps to maintain our competitive edge My energy competitiveness legislation place a strategy for reforming our Tax in the world.’’ would look to the future. It would cre- Code. Suffice it to say, a lot has hap- I welcome Hank’s determination to ate the new Advanced Research pened to our tax system since 1986, the take steps to boost our economic com- Projects Agency—Energy to conduct last time the Tax Code was overhauled. petitiveness. I am convinced that eco- transformative research and create al- For example, since 1986, there have nomic competitiveness is one of the ternative energy solutions. While this been more than 14,000 changes to the greatest challenges facing this admin- research would look for tomorrow’s en- Tax Code. It comes to three changes for istration, this Congress, and our Na- ergy alternative, my legislation would every working day for the last 20 years. tion. also encourage today’s alternative en- There are substantial questions with The competitiveness challenge comes ergies, like coal gasification tech- respect to fairness in the Tax Code. I from a rising China. China has tripled nology, wind, and other alternative am one who feels it is critically impor- its share of global trade in 4 years. fuels. tant that every American have the China has become the world’s top infor- A second pillar of my agenda is the chance to build and accumulate mation technology exporter. And China Research Competitiveness Act, which wealth. That is pretty hard to do, given has drawn much of the world’s invest- boosts what America does best—inno- some of this country’s tax policies. ment. vate. My legislation would simplify For example, this spring, Warren The challenge comes from India. In- and make permanent the research and Buffett, who is the second wealthiest dia’s IT sector has grown 50 percent a experimentation tax credit for person in the United States, told me he year since 1993. India’s universities are innovators looking for tomorrow’s next was going to be paying a lower tax rate top-notch. And India’s research capa- big thing. My legislation would provide than his receptionist. That is not right. bilities attract billions of dollars in in- access to start-up capital for small, re- I am not interested in soaking any- vestment. search-intensive businesses. And my body. I am not interested in any kind The challenge comes from countless legislation would encourage support of of class warfare. But I want middle- smaller economic dynamos in Asia and basic university research. class people to be able to get ahead as Europe. These emerging markets have The trade competitiveness initiative well. transformed their economies to em- is the third pillar of my agenda. Trade For the first time in decades, we have brace globalization. is vital to American ranchers, farmers, seen corporate profits go up. We are Yet our competitiveness challenge and businessmen. But they must have a glad to see that. We have seen produc- also comes from within. America too level global playing field. tivity go up. We are glad to see that. often looks back at what we have Legislation I have introduced would But middle-class people are not seeing achieved. Rather, we should prepare for create a Senate-confirmed trade en- much growth in their wages. They are tomorrow’s challenge. forcement official who would be dedi- living paycheck to paycheck. Our broadband infrastructure ranks cated to guaranteeing that our trading As Hank Paulson goes to the Treas- 16th in the world. Our research and de- partners play by the rules. It would ury Department, I know he is inter- velopment spending ranks behind Swe- also give the Treasury Department the ested in coming up with a fresh ap- den, Finland, Israel, Japan, and South tools to keep countries from unfairly proach to the Tax Code, an approach Korea. Three out of 10 Americans do manipulating their currencies to keep that can allow us to simplify it, get a not graduate high school. One-quarter their exports cheap. fair shake for middle-class folks and all of Americans read below basic levels. A fourth pillar of my agenda is the Americans. I particularly commend our And our national savings are negative. Savings Competitiveness Act. It would ranking minority member, Senator These challenges are at our doorstep. underscore savings as critical to house- BAUCUS, because I think Senator BAU- We must act. That is why I urge Treas- holds and vital to a healthy economy. CUS, in talking about global competi- ury Secretary Paulson, once confirmed, It would make the Saver’s Credit into tiveness and what it is going to take to to lead this administration’s engage- a refundable matching credit. It would create high-skill, high-wage jobs for ment with Congress on economic com- make enrollment in 401(k) plans auto- Americans in the global economy, has petitiveness. As I have said in several matic. It would offer savings plans for done some of the heavy lifting on this dozen statements on competitiveness small business employees. And it would key issue by spending a lot of time over the past months, we can wait no create Young Saver’s Accounts for par- over the last few years looking at these longer to implement a real competi- ents’ contributions to their children’s issues, talking to people on both sides tiveness agenda. We in Congress are savings. of the aisle, with business leaders and ready. Friends warned Alexander Hamilton the like. I commend Senator BAUCUS I have spent much of the past year against accepting a position as Treas- because he has laid some of the key developing a comprehensive economic ury Secretary. They said the position groundwork to discuss tax reform as a competitiveness agenda. This agenda was too difficult, too controversial. He result of his focus on global competi- focuses on education as the foundation replied simply: It is the situation in tiveness. of a successful economy. which I can do the most good. I also thank Chairman GRASSLEY for In the coming weeks I will introduce I believe Hank Paulson can also do his discussions with me and with the legislation that would provide scholar- much good. I hope my colleagues will committee. We have begun to look at ships and create tax incentives for join me in welcoming this nomination. corporate issues in this area. Senator early education, science, math, and en- I hope we can work together to imple- GRASSLEY, as he begins the effort to gineering teachers. It would provide ment a comprehensive agenda to im- look at tax reform, particularly be- matching funds to offer universal early prove America’s economic competitive- cause of the bipartisan way in which he education, lower barriers to higher ness. has led our committee, is a person education, and double the number of I yield the floor. ideally suited to work with Senators

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.045 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE S6618 CONGRESSIONAL RECORD — SENATE June 28, 2006 on both sides of the aisle and the ad- have a 30-line, 1040 form; theirs is six or I urge colleagues today to indicate ministration, for us to build a strategy seven lines longer. Big deal. For pur- their strong support for Henry Paulson, with a new Secretary of the Treasury, poses of Government work, we can find head of the Treasury Department. Mr. Paulson, to get this job done. common ground in a hurry in order to I yield the floor. Suffice it to say there will be some have a simpler Tax Code. That alone Mr. BAUCUS. I suggest the absence very tough issues. Look, for example, would be a real contribution for the of a quorum. at the issue of State and local jurisdic- American people. The PRESIDING OFFICER. The tions and the differing tax treatment On the question of making the Tax clerk will call the roll. we have for these jurisdictions. A State Code flatter, there are six brackets The bill clerk proceeded to call the that may have high taxes, such as New today in our Tax Code as it relates to roll. York, looks at this differently than a the individual side of the code. My pro- Mr. BOND. Mr. President, I ask unan- part of the country that does not have posal involves three brackets. It is a imous consent that the order for the the same dependence on revenues from progressive structure. Essentially, it is quorum call be rescinded. that source. the same one that Ronald Reagan The PRESIDING OFFICER. Without With the leadership of Chairman started with when he looked at tax re- objection, it is so ordered. GRASSLEY and Senator BAUCUS and a form. The President’s advisory com- Mr. BOND. Mr. President, I rise in new Secretary of the Treasury who is mission comes in with four brackets. support of the nomination of Henry M. going to look to bring people together, Once again, big deal. We can find com- Paulson to be Secretary of the Treas- look at how we can modernize the Tax mon ground as it relates to making the ury. If confirmed by the Senate, he Code so we can make the kind of deci- Tax Code flatter. would be the Nation’s 74th Secretary of sions that are necessary to give our There are differences of opinion, cer- the Treasury. citizens a better quality of life in a tainly, in other areas. I have men- From what I know about him from global economy. We are up to it. tioned trying to get a fair shake for reputation, from his work on Wall We do not have a lot of time. The middle-class folks. We all understand Street, and from what I have learned in next 6 months, particularly the time what Henry Ford said about cap- my discussions with him, I believe between now and January, is key. That italism. Henry Ford was an industri- Hank Paulson will bring a kind of is why I have been so pleased Chairman alist. He said he wanted to do well, but strong leadership, unique expertise, GRASSLEY and Senator BAUCUS have for him to do well, his people had to and knowledge of global financial mar- been interested in looking at these have enough money to be able to buy kets and will be fully capable of keep- issues. As a result of their examination cars. ing our country competitive in a global of these topics, we can lay the ground- Middle-class folks are getting ham- economy. work so the administration next Janu- mered in a way today that makes it Mr. Paulson is a strong choice for ary could work with Senators on both hard for them to make a lot of these Treasury Secretary for many reasons. sides of the aisle, work with the other purchases that are essential to them, Most people know of his talents, the in- body and work with the Senate, and we which is why they wrack up so much timate knowledge he has of the finan- can enact comprehensive tax reform. debt. I think both political parties can cial markets, and his ability to handle There will be a host of other issues find common ground on this tax issue. crises. He is considered a hard worker we will have to look at. Obviously, For example, Henry Paulson yester- who is dedicated to his job and who un- health care, the fastest rising expense day talked about the value of low derstands the importance of strong and in the American economy, is dramati- rates. I certainly agree with his inter- capable management to run a large or- cally affected by the Tax Code. I hap- est there. Marginal rates are particu- ganization. pen to think there are some good ideas larly important. It was something Ron- Today I spoke about the SWIFT pro- on both sides of the aisle with respect ald Reagan recognized in 1986. Senators gram, the very important Treasury ter- to tax treatment of health care expend- on our side of the aisle, including Bill rorism finance tracking measure that itures in our economy. We are spending Bradley, said exactly the same thing. was regrettably blown by the news- over $150 billion through the Tax Code We can get the rates down. We can en- papers last week. When I talked to on American health care. I don’t think sure fairness for middle-class folks. him, he obviously did not know about we are getting our money’s worth. In What we are going to need is leader- it. I did not know it was going to be- too many instances, we are subsidizing ship. We are going to need it in a come an item of news. But as he seeks inefficiency. This is certainly going to hurry. Chairman GRASSLEY and Sen- to repair our relations with banks be a controversial area. ator BAUCUS are going to do everything across the world, his experience in Democrats and Republicans, under they can to find common ground on dealing with international financial the leadership of Chairman GRASSLEY this issue. I am very pleased that matters will be a great benefit. and Senator BAUCUS, and the new Sec- Henry Paulson, who could certainly He has a string of very important retary of the Treasury can dig into find other things to do in his life be- challenges facing him. We have the def- that issue. sides public service, is willing to step icit, which is running out of control by The last point I mention, in the Com- up and take on this effort. He will have reason of unsustainable entitlement mission that was set up that was to move very quickly to drive this tax spending. The value of the dollar is chaired by Senator Mack and Senator reform debate. As I pledged to him in falling. How much of a problem is that? Breaux, there are some good ideas the my private meeting and said again yes- How do we deal with it? There is a tax Congress can pick up on, working with terday, I am interested in working gap in the IRS of roughly 15 percent of the administration. Certainly, I don’t with him and the administration in a the money that is owed or some $345 agree with all the Commission has pro- bipartisan way. There is a lot of good billion that is not collected. He needs posed, but let me give a couple of ex- faith and a lot of interest in this issue. to work through the IRS to cure that. amples. It is a key consideration in how we are We have a Tax Code that is so com- In legislation I have authored, the going to create high-skill, high-wage plicated, even professional tax pre- Fair Flat Tax Act, I have made it clear jobs for Americans in the future and parers disagree on what the implica- I want a Tax Code that is simpler, fair- enhance the quality of life for middle- tions of many normal transactions are. er and flatter. If you look at what the class folks. He will have to fight terrorism financ- President’s Commission has come in Henry Paulson is the right person at ing. He is going to have to confront the with, there is some opportunity for the right time. He is going to have a issues of dealing with rogue nations common ground. For example, in my lot to do, and he is going to have to do such as Iran, and others, through eco- Fair Flat Tax Act, there is a 1-page it in a hurry. I intend to work with nomic sanctions and getting others in 1040 form, something a typical person Chairman GRASSLEY and Senator BAU- the world community to join with him. can fill out in about half an hour. The CUS to ensure we have an opportunity, As of yesterday, as the chairman of administration’s version, the one that on a bipartisan basis, to tackle these the appropriations subcommittee that came out with the advisory committee, big economic issues in the right way. handles the Treasury, IRS, and other is probably six, seven lines longer. I Right at the top is tax reform. agencies, I have found that they have

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.050 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE June 28, 2006 CONGRESSIONAL RECORD — SENATE S6619 water in their basement and they have curve here is the average of seven pre- Growth in compensation has lagged be- extremely mundane problems like vious recession recovery cycles. If you hind. Wages have grown more slowly that, to the global issues that face any look back, historically, it is a much than total compensation, but that is Treasury Secretary. I think even the more robust increase over time than not because workers are negotiating media understands that this is a man this lower line, which is the March 2001 better deals from their employers, it is who has experience and whose is held to May 2006 statistics, the recovery in because employers are facing higher in high respect by major world finan- the last several years. In fact, this re- costs for health insurance and are cial leaders, as well as American finan- covery is much less than the recovery squeezing workers’ wages as a result. cial leaders, and he will serve us well. was after the 1990 recession. That re- Increased health care prices, particu- As chairman of the Transportation, covery was called the ‘‘jobless recov- larly in the area of small business, is Treasury, the Judiciary, HUD, and Re- ery’’ because job generation was so causing many businesses to forego in- lated Agencies Appropriations Sub- slow. creases they would like to give to committee, and as a member of the So what you are seeing is that job workers, in terms of wages, just to Senate Intelligence Committee, I look losses continued for much longer in keep up with increased health care forward to working with Mr. Paulson this period of time, 2001 to 2006, than costs. This doesn’t mean a better in meeting these challenges. had been typical. This recovery has health care package for workers, and in Even though he is a sophisticated been much weaker than those in the some cases workers are being dropped, Wall Street financier, I was pleased to past. At this point in the recovery, unfortunately, from health care protec- find out that he is basically a Midwest from the 1990 to 1991 recession, the tion because of the expense. farm boy at heart. We had a very useful economy had created 5 million jobs. What we are seeing is that compensa- and productive discussion about grow- That is this delta right here—5 mil- tion is not keeping up with produc- ing native grasses such as big and little lion more jobs than have been created tivity and, typically, compensation blue stem and Indian grass and how to in this recovery. So the difference be- does keep up with productivity. There burn them in the spring to make sure tween job generation at the same point is another issue, too, with respect to the crops come back without weeds or in March 2001 to 2006, and comparing it the situation for many American work- other non-natives. So he has a strong to the 1990s, is plus 5 million jobs. ers, and that is the fact that pension foot in reality, a Midwest farming This situation is similar with respect arrears have to be made up. Many com- background, but he also has a very to business investment. It took much panies now are putting money into strong background and expertise in fi- longer for the recovery to start with pensions just to make them actuarially nancial matters, and he has respect on respect to business investment, and the sound, where in the past they might Wall Street. level of investment lagged behind what have devoted that to wages. By and I urge my colleagues to support the has been typical in past recoveries. large, the situation, when it looks at nomination of Hank Paulson. This is a Each year of depressed investment the working men and women, is that time when we have many serious means less capacity to produce goods we are not seeing the robust increases issues, and having him confirmed by and services in the future. in wages or compensation that is im- this body will be a great asset to us in Defenders of the President’s eco- portant. These points were made by one of the dealing with everything from inter- nomic record cannot deny that work- witnesses yesterday at the JEC hear- national negotiations, terrorism fi- ers’ wages have not been keeping up ing, chief economist of the Bank of nancing, and the other significant eco- with inflation. Part of that is a result America, Dr. Mickey Levy, who testi- nomic challenges the world presents of many factors but, one, looking back fied that: today. at the investment, it has been a rel- I yield the floor. atively small recovery in terms of busi- Wage and compensation increases have The PRESIDING OFFICER. The Sen- ness investment. Here is the average of been somewhat disappointing. Real wages have been suppressed by higher energy costs ator from Rhode Island is recognized. seven previous recoveries and here is and have not kept pace with labor produc- Mr. REED. Mr. President, as we con- the 1991 recovery business investment tivity gains. . . .Wages may be constrained sider the nomination of Henry Paulson and here is the current recovery. It is by higher employer costs for workers’ health to be Secretary of the Treasury, I not as robust as it has been in previous care, along with the heightened inter- think it is important to bring a reality recoveries. national competition related to low cost pro- check to some of the claims about the As I suggested a moment ago, there duction overseas. . . . current state of the economy—those is another very palpable impact of this Wage and compensation increases claims made by the administration. bad economic news, and that is that have indeed been disappointing, espe- My colleague, Senator BENNETT, wages have not been keeping up with cially for the majority of workers who pointed out that yesterday we had a inflation. This will be, no doubt, no are not getting them. Gains in average hearing in the Joint Economic Com- surprise to working families as they earnings or income do not tell the real mittee, and appearing as a witness was work to get their paychecks each week. story when they hide growing inequal- Edward Lazear, chairman of the Coun- Some have suggested that this is a re- ity. When you look at one level, you cil of Economic Advisers. We had also sult of the fact that wages are held see increases, but when you look at two outside experts who were econo- down but benefits are growing, and how the increases are distributed mists testifying on the state of the that compensation is growing at his- across the working population, it is an- economy. Many of the Bush supporters toric rates. This is not the case. other story altogether. are claiming that the economy is This is a chart that shows produc- The red bars on this chart show that strong and everyone is benefiting, but I tivity, the output per hour, and real workers in the middle and bottom have doubt that many working Americans compensation per hour. What you gen- experienced a decline in real earnings, would see it as strong as they do and erally see is that productivity in- while those at the top have experienced see it as benefiting them as much as it creases will be closely tracking com- gains. This is in sharp contrast to the is claimed by the administration. pensation increases except over the experience of the time from 1995 to It is true that the economy is experi- last several years where productivity is 2000. Here in blue, in the data for gains encing a business cycle recovery after going up at a significant pace, but real in terms of earnings, broken down by the 2001 recession and after going compensation, wages plus benefits, is the lowest 10th percentile, 25th, me- through the most prolonged job slump lagging far behind. This is what the av- dian, 75th, and 90th, at the upper level since the 1930s. The President pointed erage American is confronting today in the 1990s you saw increases, but they out that the economy has done better when they are looking at increased were almost comparable at the very since 2003 than it did in 2001 and 2002, gasoline prices, soaring health care lowest level of income. You saw the but they don’t talk about how this re- prices, and they are not seeing either proverbial picket fence, where there covery has not been particularly strong in their paycheck or, in many cases, were positive gains at every percentile. by the standards of previous recoveries. even benefit packages the same kinds What we are seeing today is quite the This first chart shows the percentage of increases that are so necessary to reverse of that—losses in real terms of change in payroll employment. The keep up with an increase in inflation. earnings at the lowest levels through

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.061 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE S6620 CONGRESSIONAL RECORD — SENATE June 28, 2006 the middle levels, and only at the strong voice in this administration to cago office many years ago and eventu- upper income levels are you seeing real look at the facts and propose realistic ally becoming the CEO of that impor- gains in earnings. solutions that benefit not just the few tant investment bank. I don’t think a So the distribution of the economic who are wealthy but the vast majority person can rise to that high level with- progress that is being made over the of Americans. out understanding how business works last several years is not being shared Mr. President, I yield the floor. and how the economy works. Since fairly. Those at the upper income lev- The PRESIDING OFFICER. The Sen- even a corner grocer knows that an or- els are seeing gains but, frankly, not ator from Illinois. ganization cannot run up endless debt the same robust gains of the nineties. Mr. DURBIN. Mr. President, I thank forever without paying a stiff price, I At the bottom-income and middle-in- my colleague from Rhode Island. Sen- think Mr. Paulson understands that as come level, there is a loss in real earn- ator JACK REED is our voice on the well. I think his business experience ings. Joint Economic Committee. It is a may help to start balancing the books That is not an example of an econ- committee that takes a look at the in the Washington, DC, situation, omy that is working for all Americans. overall economy and reports to our which has been far from balanced for a That is an economy that is working for caucus regularly. Senator REED has long time. It is not a moment too soon the very affluent Americans. The an- brought us economic indicators from for someone with Mr. Paulson’s busi- swer of the Bush administration to time to time that give us at least some ness background to tackle this chal- these economic trends is basically to insight as to how we are doing in most lenge. ignore them, try to gloss over them or general terms in America. Consider these realities Mr. Paulson redefine them or explain them away. Everybody measures the economy by will face when he becomes Secretary of They proposed tax cuts, which will do their own lives, their own family, the Treasury: very little to help this distribution of maybe their own town, but when it This Bush-Cheney administration has earnings. In fact, what it does, essen- comes to the appointment of a Sec- accumulated more foreign-held debt in tially, is protect more of the earnings retary of the Treasury, we take a step the past 6 years they have been in of- at the upper income levels. If we con- back and look at the overall economy fice than all of the 42 Presidents before tinue along the present course, we will in America. President George W. Bush. In other be undermining the economy’s longrun A good Secretary of the Treasury can words, our indebtedness to foreign gov- capacity for growth and undermining make a big difference. When Bob Rubin ernments, such as Japan, China, Korea, future living standards. became Secretary of the Treasury and the OPEC nations, that, in fact, Another aspect here, too, that is not under President Bill Clinton, he faced bankroll the debt of America, hold dwelt upon by the administration is enormous challenges with huge deficits America’s mortgage, has grown in dra- the fact that we are virtually zero in as far as the eye could see and an econ- matic terms over the last 6 years. national savings. Without national sav- omy moving ever so slowly. He put in That is not the policy President Bush inherited from the Clinton administra- ings, there is not the pool of invest- place those policies on an economic, tion, which was generating a surplus. ment capital necessary to provide for fiscal, and monetary basis that made a It is an approach he has taken which, the new technology, new capital of the big difference. future. We are borrowing huge amounts Our Nation went from a deficit in our sadly, has left us deeply in debt. The Bush administration came to office of money overseas to fund our deficit. budget to a surplus. We actually put with a national debt of less than $6 This is investments made in our coun- the indebtedness behind us for the first trillion—$6 trillion—and in just a 6- try. But in terms of national savings of time in decades. The good news is we year period of time, it is almost $9 tril- this country, it is close to zero. In did it while the wealth of America was lion, almost a 50-percent increase in some cases, it is negative. expanding dramatically. That period America’s mortgage, America’s na- These are the real problems that con- during the Clinton years saw people tional debt in the short 6-year period of front this country. These are the real with their own savings accounts grow- questions that Mr. Paulson has to ad- time. ing, more pension plans expanding, During this period, all but for a few dress. How do we create an economy folks buying homes and starting busi- months, the President has had a Con- that performs as well as it did in the nesses. It was a time of great economic gress of his own political party. The 1990s, where earnings gains are shared expansion. Republicans have controlled the House virtually equally across the spectrum No one person deserves the credit or and the Senate, and the President has of income, where low-income Ameri- the blame for our economy, but Sec- yet to veto the first spending bill in cans don’t see a loss of earnings but ac- retary of the Treasury Bob Rubin was the time he has served as President. tually a gain? How do we ensure that the right person at the right time to Not once has he said ‘‘no’’ to a spend- wages and compensation keep up with speak sense to the President about ing bill that has come from Congress, productivity gains? How do we ensure what needed to be done to make Amer- particularly from his Republican Con- essentially and fundamentally that the ica strong for years to come. I have the gress, and in the meantime his tax working families in this country can- same confidence that Henry Paulson is policies and spending policies have not only get by but get ahead? That is going to do that as well, and we need driven us into the highest level of na- the question that Mr. Paulson has to him now more than ever. tional debt in the history of the United answer as Secretary of the Treasury. I come to this with some prejudice States. Our indebtedness is held by I think it begins with looking hard at because Mr. Paulson is a son of Illinois. mortgagers such as China and Japan the deficit and the policies of the ad- He still calls Illinois his home. He who expect in return to have a piece of ministration with respect to taxes. I spent his adult years—at least re- the American economy. don’t subscribe to the theory that our cently—commuting back and forth be- Secretary of Treasury Paulson will, I deficit is caused by runaway entitle- tween Illinois and New York and places am sure, understand this, that as we ment programs. We have an issue with around the world in his capacity as an become more indebted to these foreign entitlement programs, but we also investment banker. nations, it is no wonder they take a have an issue with tax programs that We had a terrific meeting in my of- claim on our economy. Why did we take away revenue and are targeted to fice a week or two ago and talked have to debate a Dubai Ports deal? Be- the wealthiest Americans. We have about his life in Illinois, the experi- cause Dubai happened to hold enough problems with expenditures that we ences he had, about his family, and his American dollars to have clout in our cannot avoid with respect to sup- commitment to our State. I readily economy, and that is the reality. porting our forces in the field. We can- concede I come to this nomination As these foreign entities become not stop providing equipment and ma- with some bias. But I think Mr. Henry more powerful in our economy, sucking teriel for our forces fighting the wars Paulson is the right man for the job of good-paying jobs out of the United today, and we have to take care of Secretary of the Treasury at this mo- States, it is a serious challenge for any them in the future. But there are sig- ment in history. new Secretary of the Treasury. nificant issues with which we have to He came up through the ranks of The President has called for more tax deal. I hope Mr. Paulson will be a Goldman Sachs, starting in their Chi- cuts, which means deeper deficits,

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00030 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.063 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE June 28, 2006 CONGRESSIONAL RECORD — SENATE S6621 more debt. It is estimated now that the should insist on for the good of this Mr. COBURN. Mr. President, I am indebtedness of the United States is a planet we call home is that the coun- going to take a few minutes. I am very burden on every single man, woman, tries engaged in trade with the United happy with the support of the Senator and child in America to the tune of States also have respect for the envi- from Illinois for the nomination of Mr. $30,000 and growing. So in addition to a ronment of the world. Whether it is Paulson, but I challenge what was just home mortgage and a student loan, we global warming or toxic release, we are said. are unfortunately the victims of poli- literally all in this together. There is no question we have deficits. cies in Washington that increase the After we create these good trade There is also no question that on 9/11, indebtedness of future generations. agreements, the Secretary of the we experienced a great economic shock This has to stop. This is a disaster in Treasury has to make sure there is and we had a recession that was big. the making. We have to balance the proper enforcement so we don’t just The tax cuts have led to the highest books and do it quickly. I hope Mr. give our speeches on the Senate floor revenues this Federal Government has Paulson has the vision and the and then ignore the trade agreement ever had. strength to convey that message effec- afterward. On the spending side, I find it some- tively within this administration. I hope Mr. Paulson will fight harder what curious, the Senator from Illinois I hope he will take a very close look than his predecessors to promote trade ranks No. 6 in the most spending voted at our trade policies as well. My col- that is aggressive and fair. I also hope for in the Senate last year. He ranks league, Senator SCHUMER, will speak he will push for a tougher and more No. 8 in the cosponsorship of the most after I finish. He has been one of the proactive stance when it comes to new spending outside the appropria- leaders in the Senate talking about the China. I am sure my colleague will tions bills. You can’t have it both inequities in our trade policy with speak to that further. ways. You can’t complain that we are China. He has traveled to China more than in deficits and we are in debt and never I believe globalization is as inevi- 70 times. He understands the impor- vote to lower the spending, never vote table as gravity. We know we are in a tance of this critical relationship with for amendments that trim wasteful shrinking planet. We do more business this growing giant in the world econ- spending, and then complain that with one another than ever before. But omy. When we spoke in my office, I somebody else made you do it. when we enter into trade agreements asked him specifically to deal with cur- If we look at the voting record on ap- with countries such as China, we say rency manipulation, intellectual prop- propriations bills, there are not very we are establishing rules of conduct, erty rights infringement, and trade many noes coming from that vote. The fair trade. Unfortunately, particularly violations. way we control spending—and we have in the case of China, many countries He also has to be very strong when it proven it on our committee, the Fed- ignore those rules. They violate those comes to China’s labor records and eral management oversight com- rules. their record on the environment and mittee—we identified over $200 billion The Secretary of the Treasury has to human rights. While he did not have worth of waste. If we want to balance be a strong voice to stand up for the any specific suggestions—I didn’t ex- the budget, let’s have everybody on American economy, American busi- pect them—I believe he was responsive, both sides of the aisle voting to trim nesses, and American workers to de- he understands the challenge, and I the waste, fraud, and abuse out of the mand that the countries with which we think he can rise to that challenge. Federal Government, rather than when trade play by the rules. I think free That is why I am supporting his nomi- we go to a conference or a meeting trade is good for the future of our nation. with the President when there is excess world, certainly good for the future of Finally, I hope Mr. Paulson’s sensi- money and demanding more spending, America. We are a land of opportunity. bility about the environment will be- not less. We have risen to every challenge, but come a source of real leadership in this The numbers are fairly revealing. we need to be involved in a fair fight administration. I know Mr. Paulson re- Last year, Senator DURBIN sponsored where both sides play by the rules. iterated at his confirmation hearing $93 billion in new spending—new spend- The Bush administration has not that he is not running to be head of the ing, outside of what we did on appro- fought hard enough for these trade EPA or Interior but Secretary of the priations. He put his name to spend $93 agreements and understandings. When Treasury. Still, Henry Paulson is a billion, and he put his name to trim we create a trade agreement, we need former chairman of the board of the $100 million. That is the problem we to ensure that there are proper labor Nature Conservancy. That is a group have. It is not taxes, it is wasteful protections in place. We are about to with which I have worked in Illinois spending and the idea that the only consider a trade agreement with Oman, that has great respect for our natural way we can accomplish something is to a very small country in the Middle resources and has done a lot to reclaim spend more money. East. There are good reasons for us to them for future generations. I am for the same priorities. We need enter into that trade agreement. But I hope he can push the Bush adminis- to help the people who need help in this when Members of the Senate suggested tration to take a forward look at the country. But we will never be able to to the Bush administration that we put issue of global warming. This is an afford it in the future without stealing a prohibition in the trade agreement issue which is real, and this adminis- from our kids if we don’t do the hard with Oman that they could not use tration must start immediately work- work to get rid of the waste now, and slave labor—slave labor—to produce ing with Congress to move on inter- that means voting against appropria- goods and services sold to the United national agreements that deal with tions bills, not voting for them. The States, the administration said: No, we global warming. Mr. Paulson’s voice at President signed what the Senator are going to remove that, we don’t the Cabinet table could make a dif- from Illinois voted for. think we should go that far. ference, and I am hoping that his deep- I thank the Chair. Slave labor? We should have basic ly held personal beliefs will lead him to The PRESIDING OFFICER. The Sen- understandings of what the labor be that voice. ator from New York. standards will be. We know many coun- I support the nomination of Hank Mr. SCHUMER. Mr. President, I rise tries will underbid us when it comes to Paulson to become Secretary of the to speak in enthusiastic support of the the cost of labor, but there ought to be Treasury. I think he will work as hard nomination of Henry Hank Paulson to fundamental standards. for farmers in the heartland as he does be the 74th Treasury Secretary. The same is true when it comes to for bankers in New York. I look for- I have known Hank Paulson for 15 environmental protections. U.S. busi- ward to working with him to strength- years. I recommend him to my col- nesses operate under laws which re- en America’s economy and put the Fed- leagues wholeheartedly and without strict them in terms of their conduct, eral Government’s finances back in reservation. He is one of those great whether it is a burden or some sort of order. New Yorkers who come from some- a problem with our environment, Mr. President, I yield the floor. where else—in this case, the heartland whether it is water pollution or air pol- The PRESIDING OFFICER. The Sen- of America—come to our city and be- lution or similar things. What we ator from Oklahoma. come part of its life and a vital part of

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00031 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.065 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE S6622 CONGRESSIONAL RECORD — SENATE June 28, 2006 this country and actually this world’s and for the world as we try to integrate China, such as purchase Chinese com- economy. this system. One of the great chal- panies or open up branches in China, Mr. President, Hank is an extraor- lenges we face is we are converging will be lifted. Hank is the perfect per- dinary leader, a great financial think- into one economic system, but we don’t son to monitor China’s progress and, er, a businessman, a father, and, as I have one political system, and the more importantly, to prod the Chinese said, an adopted son of New York. bumps and grinds which that causes to go further than they have already Hank has excelled in every area of are large. promised. life—from the classroom to the football So we need someone who understands In short, Mr. President, Henry field to the boardroom and everywhere markets. We need someone who has Paulson is a thoughtful, dedicated, and in between. great experience traveling the world renowned financial leader. I think this One of the things I like best about and knowing how the rest of the country will greatly benefit from his Hank is he is a straight shooter. He world’s economic system works. Hank leadership. I am not at all shy about gives you direct answers to direct ques- Paulson has all of those qualities. I am criticizing the President’s nominees tions. We sure need somebody like that particularly glad that he knows a when I don’t think they measure up to now. whole lot about China—I think he has the job. I have done that in the judicial He graduated from Dartmouth in 1968 been there over 70 times—because I be- area repeatedly. But when the Presi- and received his MBA from Harvard. He lieve the most important bilateral eco- dent nominates a sterling person, that worked at the Defense Department, the nomic relationship in the next decade person deserves praise and credit and, Nixon White House, and then found his or two will be the American-Chinese in my judgment, unanimous support in true calling at Goldman Sachs where relationship. Hank has the ability to this body, and I believe that Hank he worked for 32 years. He became understand the economies of both Paulson is such a person. chairman and chief executive officer of countries and figure out how we can I will be proud to vote aye when his Goldman in 1999, and should he be con- work together. name is offered on this floor in a few firmed, he will continue a long history, I have been very concerned about hours. a great tradition of leaders from Gold- China playing by the rules. I have been Mr. President, I yield the floor and man serving in the Government, in- very concerned that China doesn’t sim- suggest the absence of a quorum. cluding Bob Rubin, one of the great ply seek the advantages of free trade The PRESIDING OFFICER. The Treasury Secretaries, and Jon Corzine, but not the responsibilities. I have re- clerk will call the roll. our former colleague, now Governor of lated these concerns to Hank Paulson. The legislative clerk proceeded to New Jersey, and John Whitehead, who On currency, Senator GRAHAM and I call the roll. served honorably and well as Deputy have worked closely with his prede- Mr. FRIST. Mr. President, I ask Secretary of State under Ronald cessor, and you, Mr. President, have unanimous consent that the order for Reagan. been involved in those issues as well as the quorum call be dispensed with. But the issue Hank really goes off we traveled to China together. And we The PRESIDING OFFICER. Without the charts about, I say to my col- have worked to push and prod China to objection, it is so ordered. leagues—particularly my colleagues on allow its currency to float based on Mr. THOMAS. Mr. President, I wish this side of the aisle will be happy to international market forces. We have to address the nomination of Henry know—is the environment. Sometimes made some progress, but the progress Paulson to be Secretary of the Treas- he would call me up and I would be since July has been too little, particu- ury. I believe there is no question that sure he was talking to me about swaps larly in light of the fact that the Chi- Mr. Paulson is more than qualified to or banking or some esoteric financial nese assured us they know they have to be Secretary of the Treasury, and it is issue, and he would be talking to me get to a place where their currency to his credit that he is willing to give about an environmental policy. I don’t floats. up the helm of Goldman-Sachs to serve think he ever gets more enthusiastic Hank’s extensive experience in his country in such a significant way. I than when he is talking about some China, his personal relationships with am pleased that we have a nominee of rare bird that he saw on one of his bird- both the Government and business this caliber. watching jaunts. He is an avid environ- side—where, incidentally, there is However, I have raised concerns mentalist and lover of all things in na- quite a dichotomy. Most of the stemming from Mr. Paulson’s well- ture. I hope a few of my colleagues on businesspeople and people even on the known personal views on conservation the other side of the aisle will not hold economic side of Government under- and affiliations with groups such as the that against him. stand the need for free markets. That Nature Conservancy. Representing a He is also one of those unique, good is in China’s interests—not just Amer- State where about half of the land is people who could fill any number of ica’s—that China open up its markets. already federally owned, and much Cabinet posts. For instance, given his But a lot of people on the Government more is otherwise federally restricted environmental proclivities, he would side are afraid of that. They don’t like as to use, private property rights a be a great Secretary of the Interior. change. They don’t like giving up con- very big concern. Similarly, our vast But financial issues and the health of trol. energy resources in the State of Wyo- the global economy are his passions, I think Hank Paulson is the right ming are essential to our country’s na- that is mostly where he is needed, and man at the right place at the right tional energy policy, and we struggle I am glad the President has nominated time to tackle the issue of persuading to maintain a balance between develop- him for this post. China to open up its markets more ment of those resources and the qual- In the world of finance and inter- quickly. I believe that he is going to be ity of life we enjoy in Wyoming. national markets, there is simply no able to show the Chinese that it is not I submitted several written questions equal to Hank. At this critical point in only in our interest but in their inter- to Mr. Paulson after our Committee on our economy’s history, we need Hank’s est as well to allow the yuan to float Finance hearing, and we have had good expertise and experience to lead the freely and to open up China’s vast eco- follow-up discussion on these issues. He way. nomic markets to American financial has assured me that he is a strong ad- The bottom line, Mr. President—you firms. vocate for personal property rights and know it because we traveled to China On financial services liberalization, I has committed to working with me and together—we are at an amazing time know Hank will work closely with Am- the Senate to pursue a sensible policy. economically. The world economy is bassador Schwab, who was just con- I am pleased to be able to lend my becoming integrated, closer and closer firmed, to make sure that China lives support to Mr. Paulson, and I look for- every year. There is almost a one world up to its WTO commitments. This is ward to working with him. labor market. Capital flows freely to going to be very important in the next Mr. DOMENICI. Mr. President, I rise every corner of the world. These cir- few months because on December 11 of today to express my support for the cumstances present tremendous chal- this year, many of the current restric- nomination of Henry M. Paulson, Jr., lenges for our Nation, in our desire to tions faced by American financial to be Secretary of the Department of remain the world’s economic leader, firms that want to do business in the Treasury. Mr. President, American

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.066 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE June 28, 2006 CONGRESSIONAL RECORD — SENATE S6623 economy has changed dramatically in time. Our Federal Government is in a mately $3 billion for gasoline this year. the past decade. International eco- precarious position as it stares down That is over $1.5 billion more than was nomic policy now has a direct effect on the abyss of ever-increasing entitle- spent in our State in 2001. The cost of our domestic economy. The informa- ment obligations that threaten to college tuition in Nevada has increased tion age has transformed America’s swallow more and more Government 2 percent, while Federal student aid economic future. This new economy re- revenue and, along with it, other vi- has failed to keep pace. quires a new kind of Treasury Sec- tally needed programs. As our Nation’s But this is not just a Nevada story. It retary. It requires someone who is ex- baby boomers enter their retirement is an American story. Nationwide, perienced and knowledgeable in both years, we will have fewer people work- since President Bush took office, en- the domestic and the international ing per retiree to support them while ergy prices have increased nearly 100 marketplace. It requires someone who the cost of providing them benefits in- percent, health premiums have in- has demonstrated exemplary leader- exorably increases. It is a trend that creased by 71 percent, college tuition ship in both government and private cannot continue without bankrupting has increased nearly 60 percent, and enterprise. Henry Paulson will bring the country. Despite the highly par- the price of housing has risen dramati- these vital skills to the Department of tisan environment in which we find cally, all while wages have been stag- Treasury. ourselves, it is at precisely this mo- nant despite growing productivity. Mr. Paulson’s outstanding career in ment in history when our economy is Instead of focusing on the needs of both the public and private sectors has strong and Government revenues are middle-class families, the Bush admin- clearly demonstrated his ability to increasing sharply that we need strong istration has ignored their problems. serve as our Nation’s next Treasury leadership both from Congress and the The President argues that the economy Secretary. Prior to joining The Gold- administration. I believe that strong is doing great—he thinks middle-class man Sachs Group Inc., Mr. Paulson leadership and some bipartisan co- families are in fine shape. Meanwhile, served the public as White House do- operation we will be able to success- he is pursuing policies that would only mestic Council staff assistant to the fully address these growing problems make matters worse. President from 1972 to 1973 and as staff and come up with a lasting solution. The twin trade and budget deficits assistant to the Assistant Secretary of Now is also a propitious time to con- accumulated under President Bush Defense at the Pentagon from 1970 to sider how to address the difficult prob- have put the United States in a precar- 1972. In 1974, Henry Paulson decided to lems facing our tax system. We need an ious situation. To fund our record enter the private sector. He joined The Internal Revenue Code that is simpler, trade deficits—which have more than Goldman Sachs Group, Inc., in Chicago. that promotes savings and economic doubled under President Bush—we have Mr. Paulson worked his way up growth, and that allows American busi- had to sell U.S. assets to foreigners. In through the ranks of Goldman Sachs nesses to compete fairly in the global 2005 alone, the United States sold to and is currently serving as chairman marketplace. The Tax Code should foreign governments and investors a and chief executive officer. Clearly, serve the interests of the many, not portion of the U.S. economy that was Henry Paulson has had a very distin- the few, and one that is worthy of this larger than the combined economies of guished 32 year career in the private great Nation. Nevada, Arizona, Ohio, Montana, business sector. Mr. Paulson is uniquely qualified to Rhode Island, Wyoming, and North Da- Our Nation will be fortunate to have address the issues facing our country kota. Take a moment to absorb that a Treasury Secretary with such broad today. I view the expediency by which fact. and varied expertise, and these experi- we have acted on his nomination as a And, the problem is just getting ences will prove vital in leading a pro- confirmation both of Mr. Paulson’s fit- worse. If current trends continue, in 20 gressively diverse economy. I believe ness for the job as well as of the impor- years, we will have sold the entire Henry Paulson will be an exemplary tance of the position of Treasury Sec- wealth of America to foreign countries Treasury Secretary. He has already retary. I urge my colleagues to vote to and foreign investors. It turns out that spoken of his keen appreciation for the confirm him as our next Treasury Sec- when President Bush talks about an role capital markets play in driving retary. ‘‘ownership society’’ he means that growth and efficiency, the Mr. REID. Mr. President, I rise in under his policies, all of our assets will globalization of finance and inter- support of the nomination of Henry eventually be owned by foreigners. dependence of major world economies, Paulson to be the next Secretary of the Our trade deficit has been driven in and ensuring that America’s industries Treasury. I had the pleasure of meeting part by unfair practices overseas, like can compete in the new global econ- with Mr. Paulson, and we talked about currency manipulation in China. A omy. I am confident Henry Paulson a range of issues. number of people have raised concerns will seek to strengthen and advance I was most impressed with his com- about Mr. Paulson’s extensive ties to the competitive edge of our economy. I mitment to protecting our environ- China while working for Goldman am certain his experience and leader- ment and his record as a conserva- Sachs. I hope that those ties will give ship will be great assets in achieving tionist. I believe this administration him the credibility and the negotiating these important goals. needs someone committed to pro- toughness to make much needed Mr. President, it is my great honor tecting our natural resources—even if progress with the Chinese Government. to support Henry Paulson to head the he is at Treasury. The Bush administration has talked a Department of the Treasury. I found Mr. Paulson to be an engag- good game on getting China to end its Mr. HATCH. Mr. President, I wish to ing and thoughtful person. These are unfair currency manipulation, but it express my support for the nomination qualities we need in our next Secretary has not delivered. To date, the Bush of Henry Paulson for Treasury Sec- of the Treasury, because he will have administration’s policy has been rhet- retary. I believe we are quite fortunate his work cut out for him. He faces an oric, not action, and on occasion, its to have someone of Mr. Paulson’s cal- impending crisis not of his making, and excuses for its failures have sounded iber nominated to this vitally impor- for which courage and persistence will like the administration was an apolo- tant position. Mr. Paulson has quite be needed to even begin the process of gist for China’s practice of currency ably served in Government before in righting the ship. manipulation. Mr. Paulson has to fi- several positions before embarking on From the kitchen table to the na- nally get this problem under control. his impressive career on Wall Street, tional debt trade imbalance, our econ- Mr. Paulson will also need to address which culminated in his becoming CEO omy continues to move in the wrong the enormous Federal budget deficits and chairman of Goldman Sachs. I am direction. The middle-class is being and the growing Federal debt. The hard-pressed to think of many others squeezed like never before. Under the Bush administration turned a record in this country who might be more policies of this administration, fami- surplus generated during the Clinton qualified for this position than Mr. lies are forced to work harder and administration into a string of record Paulson. harder to make ends meet. deficits. President Bush inherited a Henry Paulson is joining the Bush In Nevada, families, farmers, and unified budget surplus of $236 billion administration at a very important businesses are on track to pay approxi- from President Clinton, the largest

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 E:\CR\FM\G28JN6.069 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE S6624 CONGRESSIONAL RECORD — SENATE June 28, 2006 surplus in American history. Budget eminently qualified to craft and carry Will the Senate advise and consent to surpluses were expected to continue for out the President’s economic policies. the nomination of Henry M. Paulson, another 10 years when President Bush Former Treasury Secretary Bob Rubin, Jr., of New York, to be Secretary of the took office in January 2001. who was also Hank’s boss at Goldman Treasury? By 2002, however, President Bush’s Sachs, agrees that he is ‘‘smart, he’s The nomination was confirmed. policies had helped return the unified bright, he’s thoughtful, and he’s in- Mr. FRIST. Mr. President, as our col- Federal budget to a deficit of $158 bil- tense. He’s a very good choice.’’ leagues know, there will be no further lion. The budget deficit has since Hank will lead with drive, with pas- votes today and no rollcall votes today. reached historic highs. This year, the sion, and a deep understanding of how We will be in session a bit longer as we budget deficit is expected to exceed Government policies affect the capital finish the business over the course of $300 billion. Of course, after this Presi- markets throughout the world as well the next little bit. When I close, I will dent’s fiscal nightmare, that is not as America’s economic growth. With have more to say about the schedule even a record. President Bush owns his detailed and intimate knowledge of for tomorrow and Friday as well. them all—$412 billion in 2004, $378 bil- global finance and his ability to thrive I suggest the absence of a quorum. lion in 2003 and $319 billion in 2005. under pressure, America’s economic The PRESIDING OFFICER. The Our fiscal problems will only grow leadership will be in very capable clerk will call the roll. worse in coming years as the baby hands. The assistant legislative clerk pro- boom generation retires. Hank Paulson is extraordinarily tal- ceeded to call the roll. In the last 5 years, the gross Federal ented, smart, and hard working. He Mr. FRIST. Mr. President, I ask debt has grown by almost $3 trillion. also happens to be a man of sterling unanimous consent that the order for And it will exceed $11.8 trillion by 2011 character. Known for his candor and the quorum call be dispensed with. if we don’t do something to change his down-to-earth demeanor, Senator The PRESIDING OFFICER. Without course. And more and more of that SCHUMER calls Hank a ‘‘straight shoot- objection, it is so ordered. debt is owed to people outside the er.’’ He has led a life of impeccable in- Mr. FRIST. Mr. President, I ask United States. The United States has tegrity. unanimous consent that the President had to borrow more money from over- He grew up on a farm in Illinois. His be immediately notified of the Senate’s seas during President Bush’s 5 years in high marks led him to Dartmouth, action. office than we borrowed during all pre- where he became a member of Phi Beta f vious Presidents combined. By con- Kappa and a football star. He was trast, during the last 3 years of the named All Ivy, All East, and earned an LEGISLATIVE SESSION Clinton administration, the United honorable-mention All American. After Mr. FRIST. Mr. President, I ask States paid off more than $200 billion earning an MBA from Harvard Business unanimous consent that the Senate re- in debt to foreigners. School, Hank went into public service sume legislative session. History is clear that these rising as a staff assistant to the Secretary of The PRESIDING OFFICER. Without Federal budget deficits will ultimately Defense. In 1974, he joined the Chicago objection, it is so ordered. cause long-term interest rates to in- office of Goldman Sachs, where over f crease. These costs are a hidden tax the next three decades he rose to presi- MORNING BUSINESS and will appear in the form of higher dent and CEO. interest rates on home mortgages, auto Hank understands the macropicture, Mr. FRIST. Mr. President, I ask loans, credit cards, and other types of the global picture, as well as the unanimous consent that there now be a consumer debt. As Mr. Paulson stated micropicture, the more intimate, more period of morning business, with Sen- in his confirmation hearing, the longer defined microlevel. He understands the ators permitted to speak for up to 10 we wait to deal with these fiscal chal- concerns of America’s hard-working minutes each. lenges, the more expensive it will be to families and how big decisions here in The PRESIDING OFFICER. Without solve them. At the end of the day, it is Washington affect individual lives in a objection, it is so ordered. hard-working families and our grand- very personal way and in intimate Mr. FRIST. Mr. President, I suggest children who will pay the price for the ways and affect those individual oppor- the absence of a quorum. Republicans’ fiscal recklessness. tunities. The PRESIDING OFFICER. The Unfortunately, the majority’s fiscal He inherits a thriving economy—as clerk will call the roll. policy, like its policy in Iraq, is more cited again and again, a 5.3-percent The assistant legislative clerk pro- of the same—more of the same tax gross domestic product growth in the ceeded to call the roll. breaks targeted at multimillionaires, first quarter, unemployment at his- Mr. WYDEN. Mr. President, I ask more of the same huge deficits, more of toric lows, 5.3 million new jobs after 33 unanimous consent that the order for the same rising debt. consecutive months of job gains, and the quorum call be rescinded. We can’t just go on this way, placing home ownership at historic highs. The PRESIDING OFFICER. Without greater and greater burdens on our He understands that Americans are objection, it is so ordered. children and grandchildren. I hope that feeling those challenges in their every- f the new Secretary of the Treasury will day lives, those challenges of high gas OBJECTION TO PROCEEDING TO be aggressive in forcing the adminis- prices, of escalating costs that seem to THE TELECOMMUNICATIONS BILL tration to confront these pressing eco- be skyrocketing out of the average per- nomic challenges head on, because son’s reach. Mr. WYDEN. Mr. President, the more of the same just won’t cut it. He shares the Republican Party’s major telecommunications legislation We need a new direction. conviction that we need to continue reported today by the Senate Com- Mr. FRIST. Mr. President, it is my those progrowth, low-tax policies in merce Committee is badly flawed. The great pleasure to come to the Chamber order to continue to create jobs and to bill makes a number of major changes to express my strong support for the foster more innovation. in the country’s telecommunications nomination of my good friend, Hank I am confident that under his leader- law, but there is one provision that is Paulson, someone I admire tremen- ship, America will continue to grow, to nothing more than a license to dis- dously, to lead the Department of thrive, and expand. I look forward to criminate. Without a clear policy pre- Treasury. He is an outstanding choice voting to confirm Hank Paulson in a serving the neutrality of the Internet to be the Nation’s top economic policy few moments as Secretary of the and without tough sanctions against official. Treasury and to working with him to those who would discriminate, the With 32 years of experience in fi- keep America moving forward. Internet will be forever changed for the nance, the last 8 of which he has served At this time, I know of no others who worse. as president and CEO of Goldman desire to speak on the Paulson nomina- This one provision threatens to di- Sachs, which, as we all know, is one of tion, and I urge the Senate to vote. vide the Internet into technology haves the Nation’s largest financial institu- The PRESIDING OFFICER. If there and have-nots. This one provision con- tions in the world, Hank Paulson is is no further debate, the question is, centrates even more power in the

VerDate Aug 31 2005 00:54 Jun 29, 2006 Jkt 049060 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 E:\CR\FM\A28JN6.011 S28JNPT1 bajohnson on PROD1PC68 with HMSENATE