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Mr. Baucus: Mr. President, the pending emergency supplemental appropriations bill includes a number of items within the jurisdiction of the Finance Committee. I would have preferred that the Senate had considered these matters on legislation that the Finance Committee had reported. I believe in the committee process. In the future, I will try to minimize the occasions on which Finance Committee legislation travels on legislation reported by other committees.

But the House of Representatives included the minimum wage and small business tax provisions in the House-passed version of this supplemental appropriations bill. So it was only appropriate that the full Senate respond. The Senate Appropriations Committee added matters related to health care, so it was only appropriate that the conference committee on this supplemental appropriations bill address those issues, as well.

I appreciate that the conference committee on this supplemental appropriations bill deferred to members of the Finance Committee in the formulation of these Finance Committee tax and health matters in the conference report on this bill. I particularly thank Chairman Byrd for his assistance in this regard.

Some have been concerned that an increase in the minimum wage would burden small businesses. Small businesses are a vital source of job creation, economic opportunity, and technological innovation.

There are about 23 million small businesses in America. Businesses with fewer than 500 employees represent more than 99 percent of all businesses in America. They pay more than 45 percent of American private payroll. They have generated 60 to 80 percent of net new jobs annually over the last decade. They employ 41 percent of high-tech workers.

Small business is particularly important in my home State of Montana. Small businesses are the backbone of our communities.

We have the opportunity to help small businesses through tax incentives that stimulate their rates of formation and growth. That is why Chairman Rangel and I worked together to combine the House and Senate small business tax packages to achieve a comprehensive small business tax package.

This is a responsible package that will help small businesses in the context of an increase in the Federal minimum wage.

The nonpartisan Joint Committee on Taxation has made available to the public a technical explanation of the bill. The technical explanation expresses the committee's understanding and legislative intent behind this important legislation.

The small business tax package provided a more than 3-year extension of the work opportunity tax credit, or WOTC. WOTC allows employers a tax credit for wages that they pay to economically disadvantaged employees. The final small business tax package also expands WOTC to allow the credit for employers who hire disabled veterans, a proposal that was part of both the Senate and House packages. The package includes the Senate's proposed expansion to allow the credit for employers who hire employees in a county that has suffered significant population loss.

The small business tax package also includes a 1-year extension of section 179 expensing. Section 179 allows small business owners to purchase and write off more equipment each year for use in their trade or business. Section 179 expensing was included in both the Senate and House small business tax packages. The final small business tax package also increases the amount allowed to be expensed in 2007 from $112,000 to $125,000, a proposal in the House version.

Enhancement of the tip credit, family business tax simplification, and waiver of limitations under the alternative minimum tax on WOTC and tip credits are three other House proposals included in the final small business tax package.

Enhancement of the tip credit for certain small businesses will prevent a decrease in the amount of business tax credit that restaurant and other service-oriented business owners may claim for the Social Security taxes that they pay on their employee's tips despite an increase in the Federal minimum wage.

The family business tax simplification proposal ensures that when a married couple jointly owns a small business, both spouses will receive credit for paying Social Security and Medicare taxes.

The waiver of individual and corporate AMT limitations on WOTC and tip credits would allow business owners to take the WOTC and tip credits under AMT.

The Senate's S corporation package is also included in the final small business tax package. The S corporation package includes several simplifications and modifications to rules governing community banks and other small businesses that operate as S corporations.

The small business tax package includes several tax incentives included in both the Senate and House small business tax packages to help recovery of small business and low-income housing in areas hit by Hurricanes Katrina, Rita, and Wilma.

The small business tax package is a responsible package that is completely offset. The package includes offsets that were included in both the Senate and the House small business tax packages, such as modification to the interest suspension rules for IRS and a proposal to discourage the practice of transferring investments to one's child for the purpose of avoiding higher tax rates.

The package also includes modifications to the collection due process for employment taxes, an expansion of preparer penalties, and a new penalty on erroneous refund claims. These offsets were part of the administration's fiscal year 2008 budget proposal to improve tax compliance.

The small business tax package does not include the Senate's 15-year depreciation proposal for improvements made to leaseholds, retailer- owned businesses, and restaurants. Nor does this final package include the Senate's proposal to expand availability of the cash method of accounting.

These proposals both have merit. They were included in the chairman's mark when the Finance Committee wrote the Senate's small business tax package. These proposals enjoy the support of many Senators, including Senators Kerry and Snowe. But there simply was not enough room in a $4.8 billion conference package to include the 15-year depreciation and cash method of accounting proposals, as they have a combined estimated pricetag of nearly $7.4 billion. But this will not be the last bill in which the Senate can address these important proposals.

If and when the President vetoes this bill, and it comes back again, we need to preserve the integrity of this balanced compromise. Congress should not litigate this tax package over again. I urge my colleagues to support this package.

This bill also accomplishes key urgent health priorities.

The bill includes emergency funding for the State Children's Health Insurance Program, or CHIP. This fiscal year, 14 States will run short in their Federal CHIP funds by a total of about $624 million. The Congressional Budget Office estimates that 700,000 children will lose CHIP coverage unless Congress acts.

This bill fills the gap in Federal CHIP funds. It ensures that all States can meet the demand for CHIP coverage for all those now eligible for coverage this year.

I thank Chairman Byrd and Chairman Harkin for their help on this provision. Keeping children from losing their health coverage is a critical national priority. I will work with my colleagues to ensure that the final supplemental bill includes this provision.

Another provision originally offered by Senator Durbin puts a 1-year hold on rulemaking relating to Medicaid payment rates for public hospitals and nursing homes. In January, the Secretary of Health and Human Services proposed a rule that would make sweeping changes to reimbursement rates for public facilities. The rule also proposed major changes to how States can define which governmental facilities can pay a State's Medicaid share.

The Nation's Governors have weighed in against the Medicaid rule, as have many hospitals and nursing homes. They are concerned that this rule would do immediate harm to our Nation's safety net by cutting Medicaid reimbursement for publicly owned facilities that serve our most vulnerable citizens.

I am concerned this rule goes too far in implementing new policy, making changes that are better made by Congress.

It is Congress's job to make major changes to the law. A 1-year moratorium will give the Finance Committee enough time to study this issue and determine the right approach in legislation to limit opportunities for fraud and abuse of Medicaid, while protecting the vulnerable individuals and vital safety net providers who rely on Medicaid payments.

Some have raised concerns about the original Durbin amendment moratorium. They said that it should not have been included in an appropriations bill and that it could undermine oversight of Medicaid at the Department of Health and Human Services. I agree that we should keep Finance Committee issues within the committee. In this case, however, the Department is poised to act before July of this year. We need to take action now, before it is too late.

I also agree that protecting against fraud and abuse in Medicaid is a priority. Not one taxpayer dollar should be misspent. That is why the revised version of this amendment clarifies that the moratorium has no affect on all other Medicaid integrity enforcement activity at the Department of Health and Human Services.

This final version also removes the increase in the Medicaid prescription drug rebate that was used to offset the cost and replaces it with other Medicaid policies that will save Federal dollars. The new version includes provisions that will lower the incidence of fraud in Medicaid drug prescribing and preserve access to affordable prescriptions for 100,000 seniors covered by Wisconsin's Pharmacy Plus program.

I think this is the right approach. It provides a shorter moratorium that allows the Finance Committee to act and preserves oversight on fraud and abuse at the Department of Health and Human Services.

I will work with Senator Durbin and members of the Appropriations Committee to ensure that this version stays in the final bill.

Once again, I thank Chairman Byrd for his help in reaching this good outcome. And I urge my colleagues to support this legislation.

Retail Improvements

Mr. Kerry: Mr. President, I would like to followup on the comments Chairman Baucus made about the depreciation of retail improvements and engage in a colloquy with Senators Snowe and Baucus. Under current law, improvements made to rented retail property are depreciated over 15 years. Improvements made to owned property are depreciated over 39 years. The current tax treatment of improvements to retail property results in an inequity. There is no justification to treat these improvements differently for tax purposes based on whether the property is owned or rented. Unfortunately, this provision was not included in the small business tax package.

Ms. Snowe: I join Senator Kerry in my disappointment that this provision that would benefit retail operations like Greenacres Kennel Shop in Bangor, ME, was not included in the conference agreement of the supplemental appropriations bill. The provision originated from legislation, S. 271, that I introduced with Senators Lincoln, Hutchison, and Kerry to provide relief and equity to our Nation's 1.5 million retail establishments, most of which have less than five employees. This bill will simply conform the Tax Code to the realities that retailers on Main Street face. Despite the fact that small businesses are the real job-creators in our Nation's economy, the current tax system is placing an entirely unreasonable burden on them when trying to satisfy their tax obligations. What is most troubling is that companies that employ fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs, an amount that is nearly 67 percent more than larger firms. As a result, I was most pleased when the chairman and ranking member included this modest proposal as part of the small business tax relief package. Unfortunately, the provision did not survive conference negotiations with the House.

Mr. Kerry: I agree with the comments made by Senator Snowe, and we have heard first hand how important this provision is to small businesses. During the January Finance Committee hearing on small business tax issues, Mr. Dave Ratner, owner of Dave's Soda and Pet City of western Massachusetts, testified about the need for retail owners to be able to depreciate improvements over 15 years instead of 39 years. He eloquently explained why owners and renters should be treated in the same manner and how difficult it is for small businesses to compete with large retail chains. Senator Snowe and I would like to work with you to address this inequity.

Mr. Baucus: Mr. President, I understand and share the concerns expressed by Senator Kerry and Senator Snowe. I agree that owners and renters should receive the same tax treatment for improvements.

There are many small businesses in Montana in which the owners would like to make improvements. And this provision would be extremely helpful.

Just this week, I received an e-mail message from Scott Brown, the owner of The Base Camp in Helena, MT. Scott told me how this provision would help him and other Montana retailers to be more competitive.

I will continue to work with my colleagues to find additional opportunities to address this important provision.

Mr. Kerry: I look forward to continuing to work with you on this important provision which helps small businesses. We need to provide equal tax treatment for depreciated property regardless of whether it is owned or rented.

Ms. Snowe: I concur with Senator Kerry and appreciate his support for this proposal that simply would bring equity between retail operations. Frankly, this provision should have been included when Congress first extended accelerated depreciation for leasehold improvements. This is not a new provision but, rather, it simply perfects current law. Though disappointed by the absence of the provision in the conference agreement, I appreciate the chairman's commitment to this issue and hope he will continue to work with Senator Kerry and me, as well as the other cosponsors of S. 271, to see that the provision receives full and fair consideration as the process to finally enact small business relief continues to move forward

I yield the floor.

Mrs. Murray: Mr. President, I ask unanimous consent in the order that has already been placed, following Senator Kennedy, Senator Isakson be recognized, and then the following Senators be recognized on our side, alternating with Republicans, for 4 minutes each Senator: Cardin, Menendez, Webb, Schumer, Feinstein, Jack Reed, and Senator Inouye.

Mr. Inhofe: Parliamentary inquiry, please: I ask the Senator from Washington, that takes place after the Senator from Illinois and I are recognized, is that correct?

Mrs. Murray: That is correct.

The Presiding Officer: Without objection, it is so ordered.

The assistant majority leader is recognized.

Mr. Durbin: Mr. President, this is a war which never should have started and on this President's watch may never end. But the face of this war is not the face of President George W. Bush, nor is it the face of any Member of Congress. The face of this war can be found in the grief of children, wives, mothers, in 3,333 homes across America where a folded American flag and fading photograph are daily reminders of a fallen soldier.

The face of this war can be found in a hospital room in the Midwest where a 22-year-old soldier sits in a wheelchair. When you walk in the room he notices you and watches you, but he cannot speak. He is a victim of traumatic brain injury, the signature injury of this war. His powers of communication are very limited. We hope that will change, but it may not.

Seated next to this 22-year-old soldier in the hospital room is a 21- year-old wife, holding the picture of a 2-year-old daughter. For 10-- 20--30--or 40 years, this may be his life and her life. The face of this war can be found in hundreds of counseling sessions that are now treating thousands of soldiers who returned, haunted by the demons of this war or fighting post-traumatic stress disorder. The face of this war can be found in the wives and mothers at home, anxiously awaiting the return of their soldier, paying the bills, caring for the kids, hoping their marriage will survive.

Today we send the President a chance to change the course of this war, a chance to finally demand accountability from the Iraqis, and a chance to honor our great men and women in uniform by bringing them home in an orderly, sensible, safe way.

When the President receives this bill early next week, I hope he will ask himself some basic questions. How many lives? How many wounds? How many soldiers must America sacrifice, waiting for the Iraqis to accept their responsibility?

Time and again the Iraqis have failed to shoulder the burden of leadership. They have set their own timetables and deadlines to finally bring political order to their country, and have failed time and time and time again. Instead of being held to the task of governing their own country, some in this Government make excuses and say let's send in some more soldiers and buy them some more time. As the Iraqis fail, brave Americans fall--victims of IEDs, victims of car bombs, victims of a civil war that has its roots in an Islamic battle that has gone on for 14 centuries; victims of Iraqi politicians who delay making the hard political decisions which might bring stability to their country.

The law we send the President will give him a chance to start anew, an opportunity to finally accept change--a moment in history where he can accept the reality of this grim and deteriorating war in Iraq.

The President has already predicted he is going to take this bill and veto it. But we hope there will be 1 moment--1 moment of prayerful reflection before he puts that pen to paper. In that moment, if he closes his eyes in prayer, I hope he sees the faces I have spoken of, of these fallen soldiers, of these battered warriors, of these men and women and families who have given more than we can ever ask of anyone in this country, and I hope he will realize, with that pen in his hand, he can honor them, honor this country, and bring this war to an end.

I reserve the remainder of my time and yield the floor.

The Presiding Officer: The Senator from Oklahoma is recognized.

Mr. Inhofe: Mr. President, it is very difficult for me to believe some of the things I am actually hearing right now. In fact, I don't believe them after General Petraeus has made such a fine presentation to us. There are a few things in the closed session that we cannot talk about, but I have taken those out. The things we can talk about--in answer to a question, you said: Can you talk about some of the positive things that have happened?

He is talking about Anbar. I am now quoting: Anbar has gone from being assessed as being lost to a situation that now is quite heartening because of the decision by a number of Sunni Arab tribes to join the fight against al-Qaida; the reduction of sectarian murders in Baghdad, that is down by approximately a third; progress in Anbar is almost something that is breathtaking--the killing of the security Amir of al-Qaida in eastern Anbar Province; the detention of the Khazali network; we have picked up the Shabani network head in Iraq. That is the explosively-formed projectile element in Iraq that gets them from others in Iraq, these are the explosively-formed projectiles.

It goes on and on. He talks about the progress in Ramadi.

My only wish is that so many of those who are detractors would have had the opportunity and had taken the opportunity to go and spend the time in the area of operations, in the whole area out there. But I can recall so many things that people just are not aware of here.

I remember being in Tikrit. Tikrit is where they had the Iraqi security forces building that was blown up. Forty of them were either-- these are Iraqi security trainees--40 either were killed or were injured so that they would not be able to go back to the fields. You know, the families--you do not hear about this--of all 40 of these supplied the one who had died with another member of the family. In other words, they have this commitment that is so strong.

I asked the general yesterday, I said: Are you still getting the family support that I witnessed when I was over there?

He said: It is even stronger now. They are lined up and talking about it.

The Iraqi security forces in Fallujah--now, that was a great experience that I had, having the honor of being there during two of their elections. The Iraqi security forces go out and vote the day before the rest of the public votes for two reasons: one, so they can provide security for the public when they vote, and the second reason is that they go out there knowing that is the risky time. They are willing to risk their lives, and several of them in the Fallujah area died just in the process of voting.

I remember sitting down with the general--his name is General Mahdi-- and he was one, I have to say--he was the brigade commander for Saddam Hussein. He hated Americans. He was the one who said--when they came in there after the fall of Saddam Hussein--he was still the brigade commander for the Iraqis until the marines came to Fallujah and started training with the Iraqi security forces. He made the statement--he said: We became so close to the marines--this is the general who had been Saddam Hussein's brigade commander. He said: We became so close to the marines that when they rotated out, we got together and we all cried.

We went from there on up, flew in a Black Hawk, and the easiest way to get around there is to fly low and fast over the Triangle, only to see the little kids down there waving American flags. I just wonder, if something like this is passed and we are telling all of those kids down there and we are telling the Iraqi security forces that are doing so well right now in their advanced training, that they are now on the point of these invasions that are taking place, the defenses that are taking place all throughout Iraq, that we are saying that we are the cut-and-run guys, we built up your hopes, we now see an improved Iraq, we see hospitals are opened, we see manufacturers that are making clothing, we see girls who are going to school when this has never happened in the history of Iraq, we have seen all of this progress, but we are going to dump on you now.

So I just hope that we can stand back from the politics and do the right thing and get a good resolution--defeat this bill, get it vetoed, get a good resolution so we can finish what we started and give General Petraeus a chance to finish what he has started so successfully.

I yield the floor.

The Presiding Officer: The Senator from Massachusetts is recognized.

Mr. Kennedy: Mr. President, will the Chair notify me when I have 15 seconds remaining?

The Presiding Officer: The Chair will notify the Senator.

Mr. Kennedy: Mr. President, first of all, I wish to congratulate our Democratic leader for his bold and decisive leadership and his determination to bring our troops home from Iraq in an orderly, responsible, and safe way. Those who are disparaging him are engaged in nothing more than a ploy to change the focus of the debate.

Harry Reid is an effective and capable leader. What the American people and our soldiers in Iraq need is new leadership from the White House and a new policy in Iraq that requires the Iraqis to take responsibilities and our troops to begin to come home.

A timeline for the withdrawal of combat troops is the only realistic way to encourage the Iraqis to take responsibility for their future. The Bush administration supported deadlines for three Iraqi elections and for writing of the Constitution as part of its strategy to ensure that Iraqis would make essential decisions. Yet the administration remains emphatically opposed to any timeline for the withdrawal of our military. The administration should follow the logic of its past action and embrace, rather than reject, a timeline. It should stop defying the will of the American people who want to bring our troops home to the heroes' welcome they have earned.

The President is wrong to threaten to veto this legislation, he was wrong to get us into this war, wrong to conduct it so poorly, wrong to ignore the views of the American people, and wrong to accuse those of us who are working to change course as harming our troops. Now he is wrong to threaten to veto this bill, delaying funds and keeping our troops in a civil war with no end in sight to our commitment. Instead, President Bush should be listening to the American people and working with Congress to bring this tragic war to an end.

Instead of continuing to defy the will of the American people and Congress by threatening to veto the legislation, he should be putting the Iraqis on notice. He must make it clear to the Iraqi Government that it is time for them to take responsibility for their country and resolve their political differences. The American military will not police Iraq's civil war indefinitely. It is time to end the loss of American lives and to begin to bring our soldiers home. For the sake of our troops, we cannot repeat the mistakes of Vietnam and allow this to drag on long after the American people know it is a mistake.

We have Presidents who make mistakes. President Johnson was wrong in escalating in Vietnam. President Nixon was wrong to continue that escalation, and we saw the loss of 58,000 American lives. Presidents make mistakes.

This President has made this mistake. The American people were right in Vietnam and brought that war to an end, and the American people are right now. No one in the administration can tell the American people in good faith and in good conscience that we are making progress in Iraq. Iraq is sliding deeper into civil war, and our military cannot solve their problems. It is time the President listen to the Iraq Study Group, the Congress, and the American people and work with us to bring our troops home.

Mr. President, yesterday the United Nations issued a progress report on the progress of violence in Iraq. I ask unanimous consent that sections of that report be printed at the appropriate place in the Record.

There being no objection, the material was ordered to be printed in the Record, as follows:

Mr. Kennedy: Mr. President, I am very pleased that this conference report includes the minimum wage bill. After 10 long years, we will finally be able to send a minimum wage increase to the President. It's long overdue, and it's yet another reason why the President should sign this important bill.

The minimum wage bill passed the House and Senate by overwhelming margins in January and February of this year. Under it, minimum wage workers will get a raise of $2.10 per hour. Those who work full time will earn an additional $4,400 a year.

That's enough to pay for utilities that might otherwise be shut off, to put gas in the car so you can get to work, or to pay for after- school care for a son or daughter who might otherwise be left home alone.

In many ways, including the minimum wage increase in this bill on Iraq couldn't be more appropriate. The minimum wage represents the values our troops are fighting for--basic fairness. It's about what we stand for as a Nation.

Americans believe that hard work should help you build a better life for your family. They believe that a job should keep you out of poverty, not force you to live in poverty.

Our troops are away fighting to provide a better future for the people of Iraq. We'd like to think that our men and women in uniform don't have to worry about the economic security of their families here at home. But many of our fighting forces have husbands or wives back at home who are struggling to make ends meet.

Ten percent of military spouses earn between $5.15 and $7.25 per hour. 50,000 military families will benefit from an increase in the minimum wage to $7.25 per hour. Our troops are overseas putting their lives on the line for their country, and we should provide fair opportunities for their spouses who are working hard here at home.

I hope we can provide these families--and all other struggling families across the country--with the fair wages they deserve as soon as possible. I hope the President will do the right thing for our troops and for America's minimum wage workers by signing this important bill.

The Presiding Officer: The Senator from Georgia is recognized for 5 minutes.

Mr. Isakson: Mr. President, at the beginning of my remarks, I wish to associate my remarks with the Senator from Connecticut, Mr. Lieberman. I think his point-by-point rebuttals to previous declarations were appropriate and were right on point.

I will not talk long, but I rise to explain precisely why I will vote against this supplemental. In fact, there are a number of reasons I will vote against it--140,000 reasons are the men and women deployed right now on behalf of the United States of America and the civilized world.

It is right for the Senate to debate this war. It is right for us to ask questions. But it is wrong to hold hostage the money that supports those troops. We should separate the money from the debate. We should never hold hostage the money for our troops who are, on order of the President of the United States, defending our country and what we stand for.

There are almost 3,300 reasons I will vote no; that is, the sacrifices that have already been made on behalf of the United States of America, those troops who have fought and those who have given the ultimate sacrifice, troops like Diego Rincon, the first soldier from Georgia to die in Iraq, and LT Noah Harris, a famous Georgian who sacrificed his life as well. I have known those families. I have gone to those services. I understand the sacrifice, and I know how they feel of the pride of their sons who fought on behalf of this noble cause.

There are six additional reasons--my grandchildren. This is the ultimate war between good and evil. This is but one battle in a war that will determine the future security of the world. Make no mistake, there have been mistakes made, but it would be a horrible mistake to not confront terror or the agents of terror, because if we do, they have won.

Unlike any other war ever fought by the United States, we are fighting a group of people who don't want what we have, they don't want us to have what we have: the Bill of Rights; the right for me to express myself and Senator Kennedy to do the same without fear or without cowering; the right for the press to call it as they see it; the right to worship as you see fit; the right to bear arms. The 10 basic rights of the Bill of Rights are precisely what they want to take away, not only from us but from the rest of the world.

Terrorists want us to cower in fear and want to run the world based on that principle. To pass a supplemental appropriations bill that couches the support of our troops based on arbitrary deadlines that only serve to benefit the very people we fight is just plain wrong.

I relish debate of this war every day on the floor and hope we will continue. The way you avoid making mistakes in the future is debating those things which have happened in the past. But it would be the worst of mistakes to withhold funding from our troops or condition it upon arbitrary deadlines and circumstances in another country, at another time, at another place.

Mr. President, I end my remarks by thanking those brave men and women who have sacrificed and those who are sacrificing now and the families of those troops, many of them families who live in my State of Georgia. I will vote for the supplemental appropriations of our troops unconditionally and separate our debate of other issues to another document. But I will not support holding hostage our troops or their money.

I yield the floor.

The Presiding Officer: The Senator from Maryland is recognized for 4 minutes.

Mr. Cardin: Mr. President, 2½hours ago, along with Senator Mikulski, I attended a mobilization ceremony for members of the Maryland National Guard who are being deployed to Iraq. All Marylanders are proud of the service of our members of the National Guard who have been called up and have served in Iraq and Afghanistan and are now being called up. It was an emotional morning as these soldiers said goodbye to their families.

I can tell you, they are ready. They are ready to serve our country. They will serve with great distinction. I told our soldiers and their families I would do everything I could as a Senator to make sure they had all of the resources so they can carry out the mission that has been assigned to them as safely and as effectively as possible. That is one reason I will vote for this conference report. I told their families I would do everything I could to help support their needs and to support the needs of military families around this Nation and to support the needs of veterans around this Nation, to take care of their support services, including their health care needs. That is another reason I will be voting for this conference report.

We need a change in our mission in Iraq so our soldiers can achieve a mission that is in the best interest of this country. That is another reason I am supporting this conference report. It spells out a mission that is in the best interest of this Nation and can be achieved. We need to change our role in Iraq. We need to get our soldiers out of the middle of a civil war, to focus on the war against terror, to help the Iraqi people take care of their own needs, to bring our troops home. That is another reason I will be supporting this conference report.

We need measurable and achievable benchmarks for the Iraqi Government so they can secure their own country to undertake political reconciliation and to provide basic needs for ordinary Iraqi citizens, another reason I will be supporting this conference report.

We need a political framework to include all the Iraqi stakeholders in order to provide a political answer to the problems of that country, another reason I support this conference report.

The President of the United States has threatened a veto. That would only delay the delivery of much needed funds to our forces, delay a change in direction in Iraq, and undermine the need for political reform in Iraq itself. We have our responsibility. Our first responsibility is to act and to pass this supplemental appropriations bill.

I urge colleagues to support this appropriation. It is in the best interest of the country.

I yield the floor.

The Presiding Officer: The Senator from New Jersey is recognized for 4 minutes.

Mr. Menendez: Mr. President, a lot has been said about this bill. Let's get the facts straight before we cast a vote. This administration has said: If you vote for this bill, you don't support the troops. Nothing could be further from the truth. This bill is the ultimate definition of supporting the troops. The truth is, a "yes" vote ensures our troops are equipped and prepared to defend themselves, moves them out of another country's civil war, and provides health care that has been lacking for those who return home injured. This is not about surrender, this is about our best chance for success.

A vote against this $124 billion spending bill is a vote against the $100 billion for our troops in Iraq and Afghanistan. A vote against this bill is a vote against a billion-dollar increase to get desperately needed equipment to our National Guard and Reserve who fight abroad and protect us at home. A vote against this bill is a vote against $3 billion for the purchase of 8,500 mine-resistant, ambush- protected vehicles to protect our soldiers from deadly roadside bombs. A vote against this bill is a vote against nearly $3 billion to help reform an overburdened veterans health system struggling to take care of our returning wounded. A vote against this bill is a vote against $900 million to research and treat posttraumatic stress disorder and traumatic brain injuries, two of the most critical issues facing wounded soldiers. A vote against this bill is a vote against more than $650 million in emergency funding for children's health care coverage. Without this funding, we are closing our doctors' doors to our Nation's children. A vote against this bill is a vote against $6.9 billion for the victims of Hurricanes Katrina and Rita who are still struggling to rebuild their homes and their lives more than a year after the storms hit.

A vote against this bill is a vote against allowing States to have stronger standards to protect chemical security plants. A vote against this bill is a vote against over $2 billion in homeland security initiatives, including mass transit, port security, and other measures that passed in the 9/11 bill in the Senate.

Quite frankly, I don't have faith in President Bush's escalation, a plan with benchmarks but no real consequences. I have said again and again, benchmarks without consequences are just aspirations. We have seen countless misguided plans from this administration, but the Iraqis have never been held accountable.

We were told that by the end of 2006 a provincial election law would be approved. That benchmark has not been met. We were told the Iraqis would approve a law for debaathification, but that benchmark has not been met. We were told the Iraqis would create a law to help restrain sectarian militias. That benchmark has not been met. We were told that Iraqis would establish a law to regulate the oil industry and share revenues, but that benchmark has not been met. We were told that by March the Iraqi Government was supposed to hold a referendum on constitutional amendments, but that benchmark has not been met.

Time and time again, the Iraqi Government has fallen short, and time and again this administration has looked the other way, basing their plans on the hope that the Iraqi Government will step up.

Continuing this failed policy in Iraq based on the mere hope that things will improve is not good enough. The broken promises must stop.

Some on the other side of the aisle point out that the President is the Commander in Chief. I remind my friends that the Constitution puts the Congress in charge of appropriating funds. Congress has the power, the right, and the obligation to make sure we spend the taxpayers' money wisely. What we are saying today with this bill is no more blank check for the Iraq war.

This bill sends a strong message to the Iraqis that it is their responsibility to take control of their own country and that our involvement in Iraq is not indefinite. As Thomas Friedman has written: It is time to decide "we will no longer play host to a war where we are everyone's protector and target."

We must put in motion a plan to bring a responsible end to this war. I urge all colleagues to vote for the supplemental, a vote that takes care of our troops, a vote to responsibly bring our troops home, and a vote for a new direction in Iraq and here at home.

The Presiding Officer: The Senator from Iowa is recognized for 5 minutes.

Mr. Grassley: Mr. President, the title of this bill, "The U.S. Troop Readiness, Veterans' Health, and Iraq Accountability Act," doesn't say much for the contents of this legislation because it has gone way beyond that with a lot of material that has nothing to do with the title. The Finance Committee matters definitely don't fit into this bill.

As the distinguished chairman of the Appropriations Committee, Senator Byrd has said on so many occasions the Founding Fathers vested the great power of the purse in the Congress. Likewise, the other great power, the power to raise taxes, is vested in Congress. The power of the purse, appropriations, is our power. We are directly accountable to our constituents for our spending actions. In that vein, I deeply respect the deep traditions of the Appropriations Committee.

As former chairman and now ranking member of the Finance Committee, I also deeply respect the division of power. The power to tax is our power as a committee, and we are directly accountable to our constituents for our taxing actions. We should mix the jurisdiction of the two great money committees--Finance and Appropriations--rarely, if at all. It should only occur if at all when the senior members of the tax writing and appropriations committees agree. Mixing tax writing and appropriations jurisdiction should not occur. As a leadership power play, those kinds of actions demean the committees.

Fortunately, the leadership respected this division of jurisdiction between the tax writers and appropriators over the last 6 years. Unfortunately, early on in the tenure of this new Democratic majority and their leadership, we have seen a dramatically different course of action for purely partisan reasons.

The Democratic leadership inserted into this sensitive supplemental appropriations bill two major matters that involve Finance Committee jurisdiction. So the first lesson we have learned is that the line between the tax writing committee jurisdiction and appropriations jurisdiction will not be observed. That will only undermine each committee and break down the committee process. The second lesson is the "I told you so." Shortly after the Senate acted on the minimum wage and small business tax relief bill, I said I had learned something from the Democratic leadership, as they were in the minority over the last 6 years. It was a lesson the Democrats taught us while they were in the minority. That lesson is, get a preconference agreement. Put another way, if you are in the Senate minority, as we are now, don't agree to a conference unless you secure an agreement for fair treatment in advance. That is something that worked well for the Democrats while they were in the minority, something we ought to have learned, and we have learned.

Now let me say I appreciate all the consultation and courtesy that Chairman Baucus has given me. He worked with me and I worked with him to get the minimum wage, small business tax relief bill through the committee. But the composition of the final package that is before us is heavily weighted toward an extension and modification of the work opportunity tax credit--and I support that credit--and the benefits of that policy are delayed. Small businesses need tax relief to be in sync with the time of the minimum wage kicking in. Both of these outcomes do not reflect a proportionate agreement between the House and Senate bills. The arbitrary ceiling on the amount of tax relief was not a fair balance. This agreement confirms that a preconference process--learning that from the Democratic minority of the last 4 years--is necessary to ensure that a conference agreement will reflect the priorities of both bodies. I will reiterate my point to the Republican leadership again on that. This process proves that we need a preconference agreement before agreeing to go to conference in the first place.

Now I will return to the substance of the deal, Mr. President. I am hearing from a lot of small business folks who are going to be paying the minimum wage. They want to retain their current workforces, hey have to look to the bottome line. They are very disappointed that the arbitrary $5 billion limit meant that important tax relief measures were tossed out. I am referring to a simplification of the cash method of accounting. That proposal would cut down on a lot of paperwork small businesses currently have to do. I'm also referring to faster depreciation rules for new restaurant buildings, and I am referring to faster depreciation rules for retailers and owner-financed building improvements. All of these proposals would help with the coming cash crunch that these small businesses will be facing.

I am not hearing from a lot of the big business folks who were targeted by the loophole closers and antitax shelter measures. Because of House opposition and fealty to the $5 billion number, those reasonable revenue raisers were tossed out the window.

This was a missed opportunity. It was a missed opportunity for a Congress that started with a supposed reform mission to send a message to K Street in DC and Wall Street in New York City. That message would've been simple. Don't engage in tax shelters like the so-called "SILO" transactions. Don't move your company headquarters offshore to minimize your American tax responsibilities like the so-called "inversion" transactions. For high-paid CEOS, don't rely too much on non-qualified deferred compensation arrangements. Nope, you can kiss that opportunity goodbye.

When it came to the small business tax relief package, K Street and Wall Street big business won and Main Street small business lost. Not a good outcome. Hopefully, once this bill is vetoed and we return to the minimum wage/small business tax relief package, Main Street small business will come out on top.

Now I am going to turn to the other Finance Committee material in this time-sensitive appropriations bill. I am referring to Medicaid proposals in the conference agreement. There is a provision in the conference agreement that would prevent CMS from implementing the cost- limitation rule.

Certainly, a one-year moratorium is an improvement over the two-year moratorium that was in the bill as passed by the Senate, but the language in the bill still encourages states to push the envelope on payment schemes.

If CMS gets a waiver or state plan amendment that has authority to do with the rule, I don't think CMS has the authority to turn it down. Neither does CMS.

And after trying to work it out with the sponsors of the provision for the last couple of weeks, I don't think they want CMS to have any authority either.

Why? This is a provision written for the benefit of a special interests so they can avoid real scrutiny of their financing arrangements.

This provision will encourage states to offer payment schemes that CMS has previously disallowed as being inappropriate.

It will encourage litigation if CMS tries to assert that they do still maintain jurisdiction.

This is just bad public policy.

The inspector general has investigated and reported to congress on why there are problems in the areas the rule addresses.

We have not had the first hearing on why the rule doesn't work and must be stopped.

This is a tremendous mistake and should not be in the bill.

The way that this provision is paid for is equally noxious.

The extension of the Wisconsin pharmacy plus waiver is an unnecessary earmark. Every State but Wisconsin has changed their pharmacy assistance program as the MMA required.

But why hasn't Wisconsin? It's very simple. They want the Federal dollars that Medicaid provides and the rebates they get from drug companies.

That it is an earmark is bad. But the way the language is written is really offensive. The language is written in a way that games Medicaid's budget neutrality test. It's written to guarantee that it appears to save money.

The reality is that Wisconsin will be providing many poor seniors with less of a benefit than they could get through part d. Wisconsin charges greater cost-sharing than Medicare for low income seniors.

It truly is another missed opportunity. They could have paid for this with a provision we would have gladly supported.

But again, the special interest won out. We could have struck a provision that the House Rules Committee stuck in the tax bill in the middle of the night last December that creates an unfair advantage for certain private fee-for-service Medicare Advantage plans.

Senator Baucus and I thought this was terrible policy, we said so on the floor, and have wanted to change it. Plans based in Illinois and Nevada are among the plans it advantages most. So for some reason, striking the provision didn't make it into the bill. It's a corporate giveaway that should be eliminated.

Legislating to prevent CMS from cleaning up intergovernmental transfers scams on this appropriation bill sets a bad precedent. That is clear. It's legislation on Medicaid and, that is a basic part of the jurisdiction of the Finance Committee.

If the Senate proceeds in this manner, then nothing then would prevent the Senate legislating changes on other Medicaid and Medicare issues on appropriation bills without the benefit of hearings or committee action on those subjects.

Invading the Medicaid and Medicare jurisdiction of the Finance Committee is a mistake.

It is almost impossible to cope with Medicaid and Medicare legislation on appropriation bills. These are complex issues that are best dealt with by the committee of jurisdiction.

This bill is going to be vetoed. The Appropriations Committee will return to its work to fund the troops in the field. We ought to focus on that. On minimum wage/small business tax relief, we need to go to regular order. Let's arrive at a pre-conference agreement on the House and Senate bills and go to conference and hash it out with a real conference. Unlike this situation, the chairmen and ranking members of both tax writing committees should be conferees. In that setting, we can arrive at a bipartisan agreement that passes the House, Senate, and be signed by the President. On the Medicaid provision, it ought to be crafted by the committees of jurisdiction and incorporated in a vehicle controlled by those committees.

After the veto, let's get this right. I would ask the leadership to get out of the way of the tax writing committees and let us do our work on our schedule in line with our committees' objectives.

I yield the floor.

The Presiding Officer: The Senator from Virginia is recognized for 4 minutes.

Mr. Webb: Mr. President, there is a lot of emotion in the Congress today, as there is in the country, on this issue. There is a lot of rhetoric flying back and forth. Some of it is inaccurate. The first thing we need to say is that this is not an issue of the Congress denying anything to the people of the Armed Forces. We are exercising our constitutional power to appropriate. We are sending the President a $100 billion check. If he chooses not to cash that check, it is up to him to come up with the reasons why, not us.

There is also a lot of rhetoric going around over the past couple of days about defeatism and surrender and accusations of betraying the troops. We need to calm down a bit. There is no one in this Congress who wants anything more than to support those people who have been put into harm's way. I believe people should be very careful on this floor to discuss political motivations of our military which reflect very closely the political views of the country at large. Poll after poll shows that.

In respect to accusations about defeatism and surrender, the question becomes: Defeat by whom and surrender to whom? We won this war 4 years ago. The question is, When do we end the occupation? Iraq has been in turmoil for thousands of years. It will be in turmoil of one kind or another long after we leave. The U.S. military is not going to change the societal makeup of Iraq. The Maliki government is not going to bring peace among Iraq's competing factions without the strong, over diplomatic cooperation of other countries in the region. Despite the rhetoric to the contrary, these other countries, all of them, do have an incentive in seeing a stable Iraq.

This administration claims that our deciding to withdraw from the internal problems of Iraq will embolden the enemy. Then the question becomes: Just which enemy? Do they mean the enemy that attacked us on 9/11? We all know that was Osama bin Laden. He not only was not in Iraq, but he was opposed to the continuation of Saddam Hussein's regime because it was a secular government.

Do they mean Saddam Hussein, whose ouster was their justification for beginning this war? Do they mean the remnants of the old regime, which was their catch phrase when the occupation began? Do they mean al- Qaida? Let's remember, there were no al-Qaida operations in Iraq before we invaded, and there will be very little motivation for al-Qaida to continue in Iraq once we have left. Not only that, but the Iraqis themselves are quite capable of standing up to al-Qaida without our help. They do not want al-Qaida in Iraq. That is why they are cooperating with our forces in Anbar Province right now. And they kept al-Qaida out of Iraq before we got there. Or do they mean what this administration continually calls the insurgency, as if there were a monolithic group of defeatable guerrilla forces? We keep hearing about this insurgency. Well, which one? The Sunnis? The Shia? Ask yourselves again, against whom are the insurgents operating? Some are operating against us. Why? Because we are there and they want us to leave, as a vast majority of the Iraqis say in poll after poll. Some are operating against other ethnic factions in Iraq. But to what extent is that the responsibility of the United States military, to try to end ethnic rivalries that go back hundreds of years? Or perhaps, as defined by this administration, we are talking about the factions within the factions that are busily trying to kill each other, just as the factions in Lebanon were trying to kill each other more than 20 years ago, when we put the marines in the middle of that violence.

Some say our withdrawal from Iraq would create chaos in the region. I have long advocated a withdrawal that should be accomplished under the umbrella of a strong diplomatic effort that involves regional cooperation. But I must regrettably say, for those of us who warned against invading Iraq and decapitating that existing Government, the chaos the administration is now predicting is exactly the chaos their invasion has brought us in the first place--instability in the region, a loss of American prestige, a rise in the influence of Iran, an increase in terrorist activity.

The Presiding Officer: The Senator's time has expired.

Mr. Webb: Mr. President, I ask unanimous consent for 30 more seconds.

The Presiding Officer: Without objection, it is so ordered.

Mr. Webb: Mr. President, I wish to say I am very disappointed in some of the provisions in this report. I must say that candidly. At the same time, I believe, very strongly, the reservations I have pale in comparison with my disappointment in the failure of leadership that has brought us into Iraq in the first place--a leadership that refuses to find a suitable turning point which will bring us out.

This administration must be confronted. It must understand the American people have grown tired of this disastrous, one-dimensional approach to a crisis that demands innovative answers. It is for that reason I support this measure.

The Presiding Officer: The Senator's time has expired.

The Senator from Utah is recognized for 8 minutes.

Mr. Hatch: Mr. President, today I rise to speak on a question that continues to weigh rather heavily on my heart. I am reluctant to ask it since such a question would never have been asked, or even contemplated, by previous generations of Americans. But it is a question that now must be asked since it is central to our future: Do we, as Americans, have the resolve to see our commitments through? It is a question we must confront in a number of policy arenas that will directly affect the way we, our children, and our grandchildren will live in this new century. Do we have the resolve and the courage to meet our commitments and confront the looming crisis of Social Security?

Do we have the resolve to balance our Nation's budget? Do we have the resolve to endow our children with a proper education so they can master and push the limits of science, thereby providing our Nation the means to compete in an increasingly competitive world economy?

However, at this point in our Nation's history, the crucial question concerning our resolve as a nation does not relate to matters of domestic policy. It relates to our commitments beyond our borders. It is the central and critical component in determining who will prevail in the global war on terrorism. Will we, our coalition allies, the people of Iraq and their elected Government, emerge victorious? Or will we renounce and abdicate our commitments and responsibilities to the Iraqi people--leaving them to a fate controlled by terrorists and leaving our future security as a nation in peril?

Generations ago that, unto itself, would be a stain on the honor of this country; but these are different times.

Turning our back now will only provide our enemies with a new base of operations, and unlike Afghanistan, this base contains vast oil wealth. Imagine al-Qaida with billions of dollars to do with as Osama bin Laden wishes. I wonder what they will buy with all that money. Remember, shortly after the liberation of Kabul, there were numerous media reports that al-Qaida was working on chemical weapons.

So, with that in mind, I again ask: Do we have the resolve to see our commitments through?

As we seek to answer this question, I am reminded of events that occurred during the summer of 1940. The Nazi armies, seemingly invincible, had conquered Western Europe. France, the Netherlands, Poland, Denmark, Norway, and Belgium had all fallen.

The British Army, after its rescue from Dunkirk, no longer possessed sufficient numbers of artillery and tanks to defend against the blitzkrieg. All that stood between Hitler and complete victory was the English Channel and 650 fighters of the Royal Air Force.

Then Hitler offered a deal. In exchange for a "free hand in Europe," the Nazis would provide "guarantees" that they would not invade Great Britain.

Despite the fact that the British Army lacked sufficient equipment to effectively repulse an invasion, Prime Minister Churchill resolved to keep his nation's commitment to the people of Europe. He would not abandon them.

His words, which I will paraphrase, still echo today:

The Battle of France is over . . . the Battle of Britain is about to begin. Upon this battle depends the survival of . . . Western civilization. . . .The whole fury and might of the enemy must very soon be turned on us. Hitler knows that he will have to break us . . . or lose the war. If we can stand up to him, all Europe may be free. . . . But if we fail, then the whole world, including the United States . . . and all that we have known and cared for, will sink into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science. Let us, therefore, brace ourselves to our duties and so bear ourselves that . . . men will say--This Was Their Finest Hour.

This is the lesson that history teaches us: that resolution to see your commitments through is what great statesmen and nations are made of--that peace and justice can only be restored through bold action.

So what do my colleagues on the other side of the aisle offer, knowing full well this lesson of history? In a word: defeat. In his own words, the Democratic leader said on the floor of the Senate, on April 19, the "war is lost." To be fair, the leader did attempt to temper his words by saying:

As long as we follow the President's path, the war is lost. But there is still a chance to change course and we must change course. No one wants us to succeed in the Middle East more than I do. But there must be a change of course.

So what plan, or new course, does the Democratic leader or other Democrats offer? How can we, in his words, "succeed in the Middle East"?

His answer can be found in the conference report to this bill. But I warn anyone who attempts to read this legislation, first you must wade through billions in spending allocated to projects and programs that have nothing to do with the war before you learn how our Democratic colleagues plan to "succeed in the Middle East."

What is their plan for victory? Well, their legislation states that no matter what happens, the bulk of our forces will begin to withdraw after July 1, or if the President makes certain certifications, after October 1.

So what is their strategy? I believe Winston Churchill would have characterized the Democratic strategy as: guaranteed defeat.

Is this resolve?

Is this determination to see our commitments through?

No.

This is the worst case of capitulation to appeasement since Neville Chamberlain spoke the words "peace in our time."

What is needed now is leadership. Now, at this critical moment in history, great nations need to follow Churchill's advice, yet the Democrats offer us only Chamberlain's.

The Democratic leaders previously stated, in 2005:

[A]s far as setting a timeline . . . that's not a wise decision because it only empowers those who don't want us there, and it doesn't work well to do it.

Wise and sound words. That was real leadership. Unfortunately, that was when the polls supported their position to stand firm. Now the Democratic leaders have reversed themselves because the polls have told them that is what they should do.

Two days ago, during an interview on CNN, the Senator from Nevada was asked if he would believe the words of our new commander General Petraeus "that there is progress going on in Iraq, that the so-called surge is working. Will you believe him when he says that?"

What was his response? "No, I don't believe him, because it's not happening."

Now, I find this to be an incredible remark. Less than 3 months ago, the majority leader had joined a unanimous Senate and voted in favor of General Petraeus. But this was more than just another confirmation vote. The major subject of his confirmation hearing and the subsequent debate on the Senate floor was the new strategy the general had outlined.

So what is the new strategy? Simply put, General Petraeus is executing one of the tenets of a classic counterinsurgency strategy by providing and maintaining security to the local population and neighborhoods in Baghdad. Only when this is achieved will the Iraqi Government be able to continually offer basic services such as clean water and electricity, which are the backbone of any modern society.

This, in turn, creates conditions where the Iraqi people can begin to develop a growing economy and where families feel safe to send their kids to school. As these goals are achieved, more and more of the population will desire even greater stability and will support and work toward creating Iraqi Government institutions and security services that maintain and enhance this new, secure environment.

How is this different from the past? Previously, U.S. forces would clear an area of insurgents, but, unfortunately, soon thereafter, our forces would leave and the insurgents would return. Now, under General Petraeus's plan, American and Iraqi security forces will maintain security in the cleared neighborhoods of Baghdad. To date, over 50 security force units, based in what are called garrisons, can be found in the neighborhoods of the city, and even more are planned.

That is why the additional forces that we are sending to Iraq are vital. It is not more for more's sake, but to maintain a secure environment for the Iraqi people and to help them stand up for themselves.

Based upon the briefing that the Senate received yesterday from General Petraeus, and information I have examined as a member of the Senate Intelligence Committee, I can report that we are seeing signs of progress.

Frankly, I believe the changes that have been made in the last 3 months are remarkable and need our full support, and it is readily apparent we do not yet have all the promised forces deployed and in Iraq.

So let us return to the question that I asked when I began my remarks: Do we, as Americans, have the resolve to see our commitments through? Or will we falter?

That is what the vote on this conference report will demonstrate. Will we stand with firm resolve behind our commitments and see our new strategy through? Or do we adopt a policy of appeasement and hope that al-Qaida, and those who wish us harm and seek to destroy the values that we hold so dear, do not follow us home to our country?

What side of history do you wish to be on? Based on America's history and our resolve that has seen us through so many difficulties in the past, I believe the American people do not want retreat, they want success and security.

The Presiding Officer: The Senator's time has expired.