STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
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Mr. KERRY. Mr. President, today Senator Smith and I are introducing ``The Fallen Heroes Family Savings Act'' that will help military families that have suffered a tragic loss. In recent years, the Congress has generously raised the amount of the military death gratuity to $100,000 and expanded eligibility to all in uniform.
Our current tax laws do not allow the recipients of this payment to use it to make contributions to tax-preferred accounts that help with saving for retirement, health care, or the cost of education. Our legislation would allow families who already have given so much to contribute the death gratuity to certain tax-preferred accounts. These contributions would be treated as qualified rollovers. The contribution limits of these accounts will not be applied to these contributions.
This legislation will not ease the pain of military families that suffer the loss of a loved one, but it can help families put their lives back together. It will enable military families to save more for retirement, education, and health care by being able to put the death gratuity payment in an account in which the earnings will accumulate tax-free.
These changes to our tax laws will help military families with some of their financial burdens. It can not repay the sacrifices that they have made for us, but it hopefully demonstrates the gratitude of a Nation that will not forget the families of the fallen.
By Mr. KERRY:
S. 2586. A bill to establish a 2-year pilot program to develop a curriculum at historically Black colleges and universities, Tribal Colleges, and Hispanic serving institutions to foster entrepreneurship and business development in underserved minority communities; to the Committee on Small Business and Entrepreneurship.
Mr. KERRY. Mr. President, I rise today to introduce the Minority Entrepreneurship and Innovation Pilot Program, legislation aimed at addressing this Nation's growing economic disparities through entrepreneurship and business development. It is the spirit of entrepreneurship that has made America's economy the best in the world. And it is through the energy and vitality of the small business sector that we will help all sectors of American society benefit from our robust economy.
Exactly one year ago, the National Urban League released a report on the State of Black America, which discussed the growing economic gap between African Americans and their white counterparts. The report states that the median net worth of an African American family is $6,100 compared with $67,000 for a white family. The report makes clear that closing the racial wealth gap needs to be at the forefront of the civil rights agenda moving into the twenty-first century.
Disproportionate unemployment figures for minorities versus their white counterparts have also been a persistent problem. Even as the administration has been touting the current low nationwide unemployment rate, the African American unemployment rate was 9.5 percent, the Hispanic unemployment rate was 6 percent, while the unemployment rate for whites averaged 4.1 percent.
As the Ranking Member on the Senate Committee on Small Business and Entrepreneurship, I have received firsthand testimony and countless reports documenting the positive economic impact that occurs when we foster entrepreneurship in underserved communities. There are signs of significant economic returns when minority businesses are created and are able to grow in size and capacity. Between 1987 and 1997, revenue from minority owned firms rose by 22.5 percent, an increase equivalent to an annual growth rate of 10 percent and employment opportunities within minority owned firms increased by 23 percent during that same period. There is a clear correlation between the growth of minority owned firms and the economic viability of the minority community.
We have come a long way, but we still have a long way to go if this country is going to keep the promise made to all its citizens of the American dream. In 2005, African Americans accounted for 12.3 percent of the population and only 4 percent of all U.S. businesses. Hispanics Americans represent 12.5 percent of the U.S. population and approximately 6 percent of all U.S. businesses. Native Americans account for approximately 1 percent of the population and .9 percent of all U.S. businesses. We can, and should do something to address what is essentially an inequality of opportunity.
I have long argued that there is a compelling interest for the Federal Government to create opportunities for business and economic development in all communities--throughout this Nation. It is appropriate for the Federal Government to lead the efforts and find innovative solutions to the racial disparities that exist in this country, whether they are in healthcare, education, or economics.
Economic disparities in this country are a very complex issue, particularly when racial demographics are involved. I am well aware that there is no one-size-fits-all solution and there is no single piece of legislation that will level the playing field. However, I strongly believe that education and entrepreneurship can help to close the gap in business ownership and the wealth gap that exists in this country. Many minorities are already turning to entrepreneurship as a means of realizing the American dream. According to U.S. Census data, Hispanics are opening businesses 3 times faster than the national average. Business development and entrepreneurship have played a significant role in the expansion of the black middle class in this country for over a century.
The Minority Entrepreneurship and Innovation Pilot Program offers a competitive grant to Historically Black Colleges and Universities, Tribal Colleges, and HispanicServing Institutions to create an entrepreneurship curriculum at these institutions and to open Small Business Development Centers on campus to serve local businesses. The colleges and universities that participate in this program will foster entrepreneurship among their students, the best and brightest of the minority community, and develop a pool of talented entrepreneurs that are essential to innovation, job creation, and closing the wealth gap. The bill would make 24 grants, for $1 million each, available to institutions that include entrepreneurship and innovation as a part of their organizational mission and open a business-counseling center for those graduates that start their own businesses as well as the surrounding community of existing business owners.
The goal of this program is to target students who have skills in highly skilled fields such as engineering, manufacturing, science and technology, and guide them towards entrepreneurship as a career option. Minority-owned businesses already participate in a wide variety of industries, but are disproportionately represented in traditionally lowgrowth and low-opportunity service sectors. Promoting entrepreneurial education to undergraduate students at colleges and universities expands the pool of potential business owners to technology, financial services, legal services, and other non-traditional areas in which the overall development of minority firms has been slow. Growing the size and capacity of existing minority firms and promoting entrepreneurship among minority students already committed to higher education will have a direct relationship on the employment rate, income levels and wealth creation of minorities throughout the nation.
The funds are also to be used to open a Small Business Development Center (SBDC) on the campus of the institution to assist in capacity building, innovation and market niche development, and to offer traditional business counseling, similar to other SBDCs. The one-to-one counseling offered by the business specialists at these centers has proven to be the most effective model available for making entrepreneurs run more effective, more efficient, and more successful businesses. By placing the centers on campus, the institutions will be able to leverage the $1 million grant for greater returns and coordinate efforts with the school's academic departments to maximize the efficacy of the program.
While the funding in this bill is modest relative to the multi-billion dollar budgets we discuss on a daily basis, these funds can go a long way and be leveraged to create economic growth in the most needed areas of this country. With this legislation, we will help foster long-term innovation and competitiveness in the small business sector. Mr. President, this bill is a small investment in the future of this country that I am sure will do much to foster economic growth in our minority communities and beyond. I urge my colleagues to join me as cosponsors of this important piece of legislation.
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By Mr. KERRY (for himself, Mr. PRYOR, and Ms. LANDRIEU):
S. 2594. A bill to amend the Small Business Act to reauthorize the loan guarantee program under section 7(a) of that Act, and for other purposes; to the Committee on Small Business and Entrepreneurship.
Mr. KERRY. Mr. President, every three years, our Committee reviews the majority of the Small Business Administration's (SBA) programs to see what's working, what's broken, and what can be improved. As ranking member of the Small Business and Entrepreneurship Committee currently, and a member for more than 20 years, I have worked on many reauthorizations. I can tell you that the SBA reauthorization process is a great opportunity to examine programs, to work with the small business groups and SBA's partners--those who use these programs on a day-to-day basis--and the SBA, to ensure that they serve their intended purpose and make the dream of a small business a reality to those who might not be eligible for business loans through conventional lending, don't have an MBA but need some management counseling, or need help cutting through red tape to get government contracts.
Today I am focusing on the SBA's largest small business programs. Specifically, I am introducing legislation to reauthorize the 7(a) Loan Guaranty Program for three years. This bill, the ``7(a) Loan Program Reauthorization Act of 2006,'' authorizes the SBA to back more than a combined $58 billion in 7(a) loans to small businesses, gives borrowers more options when choosing SBA financing, reduces program fees on borrowers and lenders if the government charges excess fees or has excess funding, creates an Office of Minority Small Business Development within SBA to increase the availability of capital to minorities, and creates a National Preferred Lenders program to streamline the application process for exemplary lenders to operate on a national basis and reach more borrowers.
7(a) loans are the most basic and widely used loan of the SBA business loan programs. These loans help qualified, small businesses obtain financing which is guaranteed for working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing, under special conditions. The loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. A key concept of the 7(a) guaranty loan program is that the loan actually comes from a commercial lender, not the government.
This excellent private/public partnership has made this program one of the agency's most popular, with over 400,000 approved loans in the past six years. Last year alone, almost 96,000 small businesses received $15 billion in 7(a) loans, creating or retaining an estimated 460,000 jobs. To ensure that we continue to have enough authorization levels to manage the increasing demand, my bill reauthorizes the 7(a) Loan Program for three additional years at $18,500,000,000 fiscal year 07, $19,500,000,000 fiscal year 08 and $20,500,000,000 fiscal year 09. These authorization levels ensure that program levels are sufficiently high to enable the SBA to back the maximum amount of loans as possible and avoid credit rationing or shutdowns.
Providing appropriate authorization levels to adequately address the capital needs of small businesses is as important as ensuring that eligible borrowers have access to both fixed asset financing and working capital to address all of their small business needs. Currently, borrowers who need working capital under the 7(a) program and fixed asset financing through the 504 loan program are not able to utilize both SBA loan guaranty programs to their maximum amount and are therefore forced to choose between the two programs. To prevent a situation where a borrower is forced to choose between getting a much-needed facility or getting working capital, my bill specifies that the borrower can have financing under both loan programs at the maximum level, given they qualify for both programs. In previous years, both 7(a) and 504 loans were subsidized by appropriated funds to pay losses. It was therefore appropriate to restrict small businesses to choose between the two programs. However, both of these programs are now self-supporting, and it makes no sense to continue this restriction on borrowers.
One of our jobs on the Committee is to make sure that SBA-backed financing remains affordable to the small business community. As I just referenced, the 7(a) program is now self-funding. The Administration insisted on eliminating all funding for the loans, shifting the cost to borrowers and lenders, by imposing higher fees on them. The administration spins this as a ``savings'' of $100 million to taxpayers while the small business community considers this a ``tax.'' In addition to this ``tax,'' the President's budget shows that borrowers and lenders already pay too much in fees, generating more than $800 million in overpayments since 1992 because the government routinely over-estimates the amount of fees needed to cover the cost
of the program. This is part of the reason that many of us in Congress, on both sides of the aisle, opposed eliminating funding for the program. This legislation seeks to address overpayments by requiring the SBA to lower fees if borrowers and lenders pay more than is necessary to cover the program costs or if the Congress happens to appropriate money for the program and combined with fees there is excess funding to cover the cost of the program. The Senate adopted this provision, offered by me and Senator Landrieu last year, to the fiscal year 2006 Commerce Justice State Appropriations bill.
In this reauthorization process, as I mentioned previously, I think it is important to look at specific programs and examine whether or not they are meeting their goals and intended mission. Part of the agency's mission is to fill the financing gap left by the private sector. According to a recent study by the U.S. Chamber of Commerce and Business Loan Express, availability of capital remains a priority for all small businesses, but for Hispanics and African Americans, it is one of their top three concerns. They are still more likely to use credit cards to finance their businesses, and they fear denial from lenders. Knowing of this need, I was deeply disappointed to see that although SBA's loan programs have increased lending overall, the figures surrounding the percentage of small business loans going to African-Americans, Hispanics, Asian Americans and women have not changed much since 2001. The administration will tell you that SBA has been ``highly successful'' in making business loans to minority groups facing competitive opportunity challenges. They claim that in fiscal year 2005, almost 30 percent of 7(a) loans and about 25 percent of 504 loans were made to minority groups. However, according to the SBA's own data, since 2001, while numbers of 7(a) loans have gone up for African Americans, the dollars have remained at 3 percent of all money loaned. In the 504 program, loans to women have decreased from 19 percent in number to 15 percent, and dropped from 16 percent to 14 percent in dollars. In the Microloan program, African Americans received 28 percent of the total number of microloans made in 2001 as compared to only 21 percent of the total number of loans made in 2005. Their microloan dollars have also decreased from $7.1 million to $5.7 million in 2005. Native Americans went from 2 percent of the total number of microloans made in 2001 to less than one percent--a mere .93 percent--in 2005.
These statistics are of great concern and demonstrate that the SBA has not been highly successful in playing an active role in fostering and encouraging robust entrepreneurial activity and small business ownership amongst these minority groups. The stagnant percentage of small business loans in these communities represents a failure of this Administration to provide an alternative means of obtaining capital to our underserved communities where funding has not been available throughout conventional lending methods.
To break this trend and increase the proportion of small business loans to minorities, and the percentage of loans to African Americans, Hispanics, and Asians relative to their share of the population, my bill creates an Office of Minority Small Business Development at the SBA, similar to offices devoted to business development of veterans and women and rural areas. In charge of the office will be the Associate Administrator for Minority Small Business and Capital Ownership Development with expanded authority and an annual budget to carry out its mission.
Currently this position is limited to carrying out the policies and programs of SBA's contracting programs required under sections 7(j) and 8(a) of the Small Business Act. To make sure that minorities are getting a great share of loan dollars, venture capital investments, counseling, and contracting, this bill expands its authority and duties to work with and monitor the outcomes for programs under Capital Access, Entrepreneurial Development, and Government Contracting. It also requires the head of the Office to work with SBA's partners, trade associations, and business groups to identify more effective ways to market to minority business owners, and to work with the head of Field Operations to ensure that district offices have staff and resources to market to minorities. The latter is important because when SBA implemented its extensive workforce transformation plans several years ago, it eliminated lending-related jobs with a partial justification that remaining staff would be trained to do outreach and marketing to the community. However, district offices are not provided with sufficient funds or resources to do the job.
In addition to setting sufficient program levels, giving our borrowers maximum loan options, reaching the underrepresented, and lowering fees to our borrowers, my bill makes great improvements in our lender operations. Lenders are key to providing these loans to small business borrowers throughout our nation. An exceptional lender in the 7(a) program will often become a ``preferred lender,'' with the authority to approve, close, service and liquidate loans without the lender obtaining the prior specific approval of the agency. SBA requires that lenders request preferred lender status in each of the 70 districts it desires to operate. There are many problems with this system, and this bill streamlines and makes uniform the process, an advantage to borrowers, lenders and the SBA.
This preferred lender problem is not a new issue. During our last reauthorization in 2003, lenders complained that applying for lending autonomy in each of the 70 district office and branches is administratively burdensome, both for them and for the Agency staff, and that some district offices have taken advantage of the power to approve or disapprove lenders when they apply for this special lending status. I was very disappointed that this issue was not resolved in our last reauthorization. My bill attempts to alleviate this administrative burden on lenders and SBA staff who must process the application. My bill creates a National Preferred Lenders Program to allow lenders that have already demonstrated proficiency as a preferred lender the authority to operate in any state where it desires to make loans. To ensure that national preferred lenders are proficient and experienced, this bill requires the Administrator, no later than 60 days after enactment, to establish eligibility criteria for national preferred lenders but suggests that the criteria established include several things--consideration of whether the lender has experience as a preferred lender in not fewer than 5 district offices of the Administration for a minimum of 3 years in each territory, uniform written policies on the 7(a) loan program, including centralized loan approval, servicing, and liquidation functions and processes that are satisfactory to the administration.
If a national preferred lender fails to meet the eligibility requirements established by the Administrator, the lender shall be notified of this deficiency and allowed a reasonable time for correction. Failure to correct the deficiency may result in suspension or revocation as a national preferred lender.
Last, my legislation directs the SBA to establish a simple and straightforward alternative size standard for business loan applicants under section 7(a), similar to what is already available for borrowers in the 504 loan program, which utilizes maximum tangible net worth and average net income as an alternative to the use of industry standards. Currently, in order to be eligible for an SBA business loan, the borrower must meet the definition of small businesses. Pursuant to the Small Business Act, SBA has promulgated size standards by industry utilizing the North American Industry Classification System. The SBA table based on this system is over 20 pages, single-spaced, which has made this size standard very complicated for lenders to utilize.
In closing, I want to commend the community of 7(a) lenders for the tens of thousands of borrowers they reach every year, and for working with us to understand how to improve the program to attract more lenders and reach more borrowers. I hope that the Committee will act on this bill and other similar reauthorization bills before the current laws governing the 7(a) loan program expire on September 30, 2006. I ask unanimous consent that my remarks be printed in the RECORD.
By Mr. KERRY (for himself and Mr. PRYOR):
S. 2595. A bill to amend the Small Business Investment Act of 1958 to modernize the treatment of development companies; to the Committee on Small Business and Entrepreneurship.
Mr. KERRY. Mr. President, today, as Ranking Democrat on the Committee on Small Business and Entrepreneurship, I am introducing a reauthorization bill for the Small Business Administration's (SBA) 504 Loan Guaranty Program. This legislation goes beyond simply reauthorizing the 504 loan program. Not only does this bill provide adequate authorization levels in the 504 loan program, but it also takes on important oversight and accountability issues pertaining to the operation of Certified Development Companies (CDC). The issues that I will present in detail below are well overdue and failure on Congress's behalf to deal with them before the end of the fiscal year when the program expires will shortchange our borrowers, and ultimately our communities who reap the benefits of the local economic development that the 504 loan program is intended to provide.
For more than 20 years, the 504 loan program has provided long-term financing for growing businesses with long-term (up to 20 years), fixed-rate financing for major fixed assets, such as purchasing land and making improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment. The 504 loan is made through a collaboration between the Certified Development Company (which provides 40 percent of the financing), a private sector lender (covering up to 50 percent of the financing) and a contribution of at least 10 percent from the small business being helped. This program is a national leader in federal economic development finance programs and demonstrates it through, creating or retaining over 1.4 million jobs, backing more than $25 billion in loans, and leveraging over $30 billion in private investment.
These incredible returns to our community could not be possible without the solid mission of the program that drives the types of projects and borrowers it serves. This program was not established to simply make loans--it was established to promote local economic development and to create jobs. I cannot think of another federal economic development program that has created over 605,000 jobs, as the 504 program has done. Last year alone, the 504 program created over 145,000 jobs. As the demand for 504 loans continues to grow, it is more important than ever to reaffirm the mission of the 504 program and to ensure that the 504 program is reauthorized at adequate levels to meet this growth.
To address this issue, my bill reauthorizes the 504 Loan Program for three additional years at $8,500,000,000, fiscal year 07, $9,500,000,000 fiscal year 08, and $10,500,000,000, fiscal year 09. These levels are based on the current pace of program growth to ensure that there is more than adequate authorization. The fiscal year 06 504 demand is projected to exceed $7 billion, and the last 3 years have shown growth rates of 28 percent, 26 percent, and 26 percent. A low authorization level would either force the SBA to shut down the program or to ration credit throughout the year to avoid a shut-down.
As I mentioned previously, this bill goes beyond simply reauthorizing the 504 loan program for an additional three years. It makes some much-needed changes to the structure of our CDCs, which are responsible for the delivery of this program and which are essential to the success of the 504 loan program.
Year after year, I have heard about the dangers that structural changes pose to the CDC industry and the 504 loan program in maintaining the mission of economic development. One of the major changes experienced by CDCs includes the centralization of all 504 loan processing, loan servicing and liquidation functions from 70 SBA district offices to one or two centers in the country. This has resulted in a huge backlog, estimated at 900 loans waiting to be liquidated. This backlog results in a loss of revenue through delaying or completely writing off defaulted loans. This has the potential to drive up subsidy costs of the program and therefore fees on borrowers, CDCs and lenders. This bill puts forward a solution to this issue by decentralizing liquidation functions and allowing CDCs, if they choose, to foreclose and liquidate defaulted loans or to contract with a qualified third-party to perform foreclosure and liquidation of defaulted loans in its portfolio. However, CDCs are not required to liquidate until SBA has come up with a program to compensate and reimburse them for all expenses pertaining to foreclosure and liquidation. The expenses would be approved in advance by the Administrator or on an emergency basis.
The biggest structural change that has had a tremendous impact on our not-for-profit CDCs is the ability to expand operations into multiple states. This structural change, in conjunction with the growing demand for 504 loans and CDC operations in providing these loans to small businesses, requires Congress to set a statutory course that preserves the local economic development intent and mission of the program through accountability measures. The 504 program was not created for CDCs to expand operations and simply create revenue from one state to another. CDCs are more than lenders and should not act like for-profit banks. My bill ensures that local communities continue to be the main focus of CDCs by requiring that the 25 members of their board and board of directors be residents of the area of operations. In addition, CDCs will be required to annually submit to the SBA a report on the use of all excess funds and local economic development activities in each state of operation. This ensures that the members engage, invest, and are held accountable to the communities they serve.
In addition to preserving and growing the 504 loan program, I think it is very important to ensure that low-income communities have access to 504 loans. As you may know, in 2000 Congress enacted the New Markets Tax Credit program to facilitate private sector investment in low-income communities.
Theoretically, the program was designed to encourage private investors who may never have considered investing in low-income communities to do so, thereby attracting new sources of private capital for a variety of projects, including retail, childcare and primary healthcare centers, which in turn attracts jobs, services and additional opportunities to areas that have historically had a difficult time sustaining economic development. My bill creates a new public policy goal for the ``expansion of businesses in low-income communities'' and defines low-income areas as those areas which would be eligible for new market tax credits. Under public policy goals, a borrower can get a higher loan than the standard limit of $1.5 million. For example, a borrower could receive a 504 loan of up to $2 million if the proceeds will be directed toward this new public policy goal, or any of the currently established eight public policy goals. It is my hope that this incentive will increase the number of 504 loans in low-income communities and therefore build wealth, economic security, and employment opportunities which benefit the entire surrounding community.
I want to thank Senator Pryor for his sponsorship of this legislation, and thank the many members of the 504 community for working with us to identify ways to make this program better than ever. I look forward to working with them to enact this legislation before the fiscal year expires on September 30, 2006, and ask unanimous consent that my statement be included in the RECORD.
By Mr. KERRY:
S.J. Res. 33. A joint resolution to provide for a strategy for successfully empowering a new unity government in Iraq; to the Committee on Foreign Relations.
Mr. KERRY. Mr. President, 39 years ago this week Dr. Martin Luther King gave a speech at the Riverside Church in New York about the war in Vietnam. He began with these words:
I come to this magnificent house of worship tonight because my conscience leaves me no other choice.
His message was clear. Despite the difficulty of opposing the government's policy during time of war, he said, ``We must speak with all the humility that is appropriate to our limited vision, but we must speak.''
I am here today to speak about Iraq. There should be humility enough to go around for a Congress that shares responsibility for this war. I believe the time has come again when, as Dr. King said, we must move past indecision to action.
I have many times visited the Vietnam Memorial Wall, as many Vietnam veterans have. When you walk down the path of either side of that wall, east and west of the panels, you walk down to the center of the wall where it comes together in a V. That V represents both the beginning of the war and the end of the war because the names start at that V and go all the way up one end, east, and then they come back from the west.
I remember standing there once after reading ``A Bright Shining Lie,'' by Neil Sheehan, Robert McNamara's memoirs, and many other histories of that war. One cannot help but feel the enormity of the loss, of the immorality that our leaders knew that the strategy was wrong and that almost half the names were added to that wall after the time that people knew our strategy would not work. It was immoral then and it would be immoral now to engage in the same delusion with respect to our policy in Iraq.
Obviously, every single one of us would prefer to see democracy in Iraq. We want democracy in the whole Middle East. The simple reality is, Iraqis must want it as much as we do, and Iraqis must embrace it. If the Iraqi leadership is not ready to make the changes and the compromises that democracy requires, our soldiers, no matter how valiant--and they have been valiant--can't get from a humvee or a helicopter.
The fact is, our soldiers have done a stunning job. I was recently in Iraq with Senator Warner and Senator Stevens. I have been there previously. No one can travel there and talk to our soldiers and not be impressed by their commitment to the mission, by their sacrifice, by their desire to have something good come out of this, and by the remarkable contribution they have made to give Iraqis the opportunity to create a democratic future for their country. Our soldiers have done their job. It is time for the newly elected Iraqi leadership to do theirs. It is time for America's political leaders to do theirs.
President Bush says we can't lose our nerve in Iraq. It takes more nerve to respond to mistakes and to adjust a policy that is going wrong than it does to stubbornly continue down the wrong path.
Last week, Secretary Rice acknowledged ``thousands'' of mistakes in Iraq. Amazingly, nobody has been held accountable for those mistakes. But our troops have paid the price, and our troops pay the price every single day. Yet the President continues to insist on a vague and counterproductive strategy that will keep U.S. forces in Iraq indefinitely.
I accept my share of responsibility for the war in Iraq. As I said in 2004, knowing what we know now, I would not have gone to war, and I certainly wouldn't have done it the way the President did. My frustration is that many of us all along the way have offered alternatives to the President. Countless numbers of Senators, Republican and Democrat alike, have publicly offered alternative ways of trying to achieve our goals in Iraq.
I have listened to my colleagues, Senator Feingold, Senator Biden, Senator Hagel, the Presiding Officer, and others all talk about ways in which we could do better. But all of these, almost all of them without exception, have been left by the wayside without any real discussion, without any real dialog, without any real effort to see if we could find a common ground. My frustration is that we keep offering alternatives.
In 2003, in 2004, 2005, 2006, year after year, we put them on the table, but they get ignored and then we get further in the hole, the situation gets worse, and we are left responding, trying to come back to a worse situation than the one we were responding to in the first place. And we keep putting out possibilities, and the possibilities keep being left on the sidelines.
Time after time, this administration has ignored the best advice of the best experts of the country, whether they be our military experts or former civilian leaders of other administrations or our most experienced voices on the Committee on Armed Services and Foreign Relations Committee of the U.S. House and Senate.
The administration is fond of saying that we shouldn't look back, that recrimination only helps our enemies, that we have to deal with the situation on the ground now. Well, we do have to deal with the situation on the ground now, but we have to deal with it in a way that honors the suggestions and ideas of a lot of other people who have concerns about our forces on the ground and our families at home and our budget and our reputation in the world and our need to respond to Afghanistan, North Korea, and Iran.
Frankly, accountability and learning from past mistakes is the only way to improve both policies and institutions. Let me, for the moment, go along with this idea, the administration's idea. Let me focus on the here and now and let's face that reality honestly and let's act accordingly.
You have to live in a fantasy world to believe we are on the brink of domestic peace and a pluralistic democracy in Iraq. One has to be blind to the facts to argue that the prospects for success are so great they outweigh the terrible costs of the President's approach. And you have to be incapable of admitting failure not to be able to face up to the need to change course now. Yes, change course now.
Our soldiers on the ground have learned a lot of terrible lessons in Iraq. All you have to do is talk to some of the soldiers who have returned, as many of us have. It is time those of us responsible for the policies of our country learn those lessons. It is clear the administration's litany of mistakes has reduced what we can reasonably hope to accomplish. Any reasonable, honest observer--and there are many in the Senate who have gone over to Iraq and have come back with these views--knows that the entire definition of this mission has changed and the expectations of what we can get out of this mission have changed.
I, for one, will not sit idly by and watch while American soldiers give their lives for a policy that is not working. Let me say it plainly. Withdrawing U.S. troops from Iraq over the course of the year in a timely schedule is actually necessary to give democracy the best chance to succeed, and it is vital to America's national security interests.
Five months ago, I went to Georgetown University. I gave a speech where I said that we were then entering the make-or-break period, a make-or-break 5-month, 6-month period in Iraq. I said the President must change course and hold Iraqis accountable or Congress should insist on a change in policy. And I set a goal then, back in November, that we should try to reduce American combat forces and withdraw them by the end of this year.
The situation on the ground has now changed for the worse since then. In fact, we are now in the third war in Iraq in as many years. The first war was against Saddam Hussein and his alleged weapons of mass destruction. The second war was against Jihadist terrorists whom the administration said it was better to fight over there than over here. And now we find our troops in the middle of a low-grade civil war that could explode into a full civil war at any time.
While the events in Iraq have changed for the worse, the President has not changed course for the better. It is time for those of us in Congress who share responsibilities constitutionally for our policy to stand up and change that course. We have a constitutional responsibility, and we have a moral responsibility not to sit on the sidelines while young Americans are in harm's way.
That is why today I am introducing legislation that will hold the Iraqis accountable and make the goal of withdrawing the most American forces a reality. I personally believe that most of those forces could be and should be out of Iraq by the end of the year. This war, in the words of our own generals, cannot be won militarily. It can only be won politically.
General Casey said, of our large military presence, it ``feeds the notion of occupation'' and it ``extends the amount of time that it will take for Iraqi security forces to become self-reliant.''
That is General Casey saying that the large force of American presence in Iraq contributes to the occupation and extends the amount of time. Zbigniew Brzezinski put it:
The U.S. umbrella, which is in effect designed to stifle these wars but it is so poor that it perpetuates them, in a sense keeps these wars alive ..... and [is] probably unintentionally actually intensifying them.
Richard Nixon's Secretary of Defense, Melvin Laird, breaking a 30-year silence, summed it up simply:
Our presence is what feeds the insurgency.
The bottom line is that as long as American forces remain in large numbers, enforcing the status quo, Americans will be killed and maimed in a crossfire of vicious conflict that they are powerless to end. We pay for the President's reluctance to face reality in both American dollars and in too many lives. American families pay in the loss of limb and the loss of loved ones.
I don't think we should tolerate what is happening in Iraq today. We can no longer tolerate the political games currently being played by Iraqi politicians in a war-torn Baghdad. No American soldier, not one American soldier, should be sacrificed for the unwillingness of Iraqi politicians to compromise and form a unity government.
We are now almost 5 months since the election. What is happening is the daily game being played by Iraqis who listen to the President say we will be here to the end. There is no sense of urgency, there is no sense of impending need to make a decision. The result is they just go on bickering and they go on playing for advantage while our troops drive by the next IED and the next soldier returns to Walter Reed or to Bethesda without arms and limbs.
Given the recent increase in deadly sectarian strife, Iraq urgently needs a strong unity government to prevent a full-fledged civil war from breaking out and becoming the failed state that all of us have wanted to avoid. I believe the current situation is actually allowing them to go down the road toward that sectarian strife rather than stopping them.
Thus far, step by step, Iraqis have only responded to deadlines. It took a deadline to transfer authority to the provisional government. It took a deadline for the first election to take place. It took a deadline for the referendum on the Constitution. It took a deadline for the most recent election. It is time for another deadline, and that deadline is to say to them that they have to come together and pull together and put together a government or our troops are going to withdraw. And under circumstances over a period of time, we will withdraw in order to put Iraq up on its own two feet.
Iraqi politicians should be told in unmistakable language: You have until May 15 to put together an effective unity government or we will immediately withdraw our military.
I know some colleagues and other people listening will say: Wait a minute. You mean we are going to automatically withdraw our military if they don't pull it together?
The answer is: You bet we ought to do that. Because there isn't one American soldier who ought to be giving up life or limb for the procrastination and unwillingness of Iraqis who have been given an extraordinary opportunity by those soldiers to take hold of democracy and who are ignoring it and playing for advantage. We all know that after the last elections, the momentum was lost by squabbling interim leaders. Everybody sat around and said, coming up to this election, the one thing we can't do is allow the momentum to be lost. Guess what. It has been lost. It has been squandered, again. We are sitting there with occasional visits, occasional speeches but without the kind of sustained diplomacy necessary to provide a resolution. It has gone on for too long, again.
If Iraqis aren't willing to build a unity government in 5 months, then how long does it take and what does it take? If they are not willing to do it, they are not willing to do it. It is that simple. The civil war will only get worse. And if they are not willing to do it, it is because there is such a fundamental intransigence that we haven't broken, that civil war, in fact, becomes inevitable, and our troops will be forced to leave anyway.
The fact is, we have no choice but to get tough and to ratchet up the pressure. We should immediately accelerate the redeployment of American forces to rear guard, garrisoned status for security backup, training, and emergency response. Special operations against al-Qaida in Iraq should be initiated on hard intelligence leads only.
If the Iraqi leaders finally do their job, which I believe you have a better chance of getting them to do if you give them a timetable, then we have to agree on a schedule for leaving, withdrawing American combat forces by the end of the year. The only troops that remain should be those critical to finishing the job of standing up Iraqi security forces.
Such an agreement will have positive benefits in Iraq. It will empower and legitimize the new leadership and the Iraqi people. It will expedite the process of getting the Iraqis to assume a larger role of running their own country. And it will undermine support for the insurgency among the now 80 percent of Iraqis who want U.S. troops to leave. In short, it will give the new Iraqi Government the best chance to succeed in holding the country together while democratic institutions can evolve.
This deadline makes sense when you look at the responsibilities that Iraqis should have assumed by then. Formation of a unity government would constitute a major milestone in the transfer of political responsibility to the Iraqis. Even the President has said that responsibility for security in the majority of the country should be able to be transferred to the Iraqis by this time. If the President believes that it should be able to be transferred to the Iraqis by this time, why not push that eventuality and make it a reality? By the end of the year, our troops will have done as much as they possibly can to give Iraqis the chance to build a democracy. I again remind my colleagues, we are still going to have the ability to have over-the-horizon response for emergency, as well as over-the-horizon response to al-Qaida. And we will have the ability to continue to train those last forces to make sure they are in a position to stand up for Iraq.
The key to this transition is a long overdue engagement in serious and sustained diplomacy. I want to say a word about this. I am not offering this plan in a vacuum. Critical to the achievement of all of our goals in Iraq is real diplomacy. Starting with the leadup to the war, our diplomatic efforts in Iraq have ranged from the indifferent to the indefensible. History shows that effective diplomacy requires persistent hands-on engagement from the highest levels of America's leadership. Top officials in the first Bush administration worked directly and tirelessly to put together a real coalition before the first Gulf War, and President Clinton himself took personal responsibility at Camp David for bringing the Israelis and Palestinians together and leading the comprehensive effort to resolve the conflict in the Middle East. This type of major diplomatic initiative has proven successful in many places in American history.
Most recently, in 1995, there was a brutal civil war in Bosnia involving Serbs, Croats, and Muslims. Faced with a seemingly intractable stalemate in the midst of horrific ethnic cleansing, the Clinton administration took action--direct, personal, engaged action. Led by Richard Holbrooke, they brought leaders of the Bosnian parties together in Dayton, OH, with representatives from the European Union, Russia, and Britain to hammer out a peace agreement. NATO and the United Nations were given a prominent role in implementing what became known as the Dayton Accords.
In contrast, this President Bush has done little more than deliver political speeches, while his cronies in the White House and outside blame the news media for the mess the administration has created in Iraq. We keep hearing: They are not telling the full story. They are not telling the story.
Secretary of State Rice's brief surprise visit to Iraq a few days ago pales in comparison to the real shuttle diplomacy that was practiced by predecessors such as James Baker and Henry Kissinger. Given what is at stake, it is long since time to engage in that. I can remember Henry Kissinger going from one capital to the next capital, back and forth, engaged, pulling people together. Jim Baker did the same thing. There was a genuine and real effort to leverage the full prestige and full power of the United States behind a goal. That is absent here.
Ambassador Khalilzad is a good man, and he has done a terrific job, almost by himself, left almost to his own devices. That is not the way to succeed. Given what is at stake, it is past time to engage in diplomacy that matches the effort of our soldiers on the ground. We should immediately bring the leaders of the Iraqi factions together at a Dayton-like summit that includes our allies, Iraq's neighbors, members of the Arab League, and the United Nations. The fact is, a true national compact is needed to bring about a political solution to the insurgency. That is how you end the sectarian violence. Our soldiers going on patrol in a striker or a humvee, walking through communities will not end this violence. Our generals have told us, it can only be ended politically. Yet where is the kind of political effort that our Nation has seen in history now, trying to effect what our soldiers have created an opportunity to effect through their sacrifice?
Iraqis have to reach a comprehensive agreement that includes security guarantees, disbanding the militias, and ultimately, though not necessarily at this conference, confronting some of the questions of the Constitution. All of the parties must reach agreement on a process for reviving reconstruction efforts and securing Iraq's borders. Our troops cannot be left hanging out there without that kind of effort to protect them.
At this summit, Shiite religious leaders must agree to rein in their militias and to commit to disbanding them. They also have to work with Iraqi political leaders to ensure that the leadership of the Interior Ministry and the police force under its control is nonsectarian. Shiite and Kurdish leaders must make concessions necessary to address Sunni concerns about federalism and equitable distribution of oil revenues. There is no way the Sunnis are going to suddenly disband or stop the insurgency without some kind of adequate guarantee of their security and their participation in the process. That was obvious months ago. It is even more obvious today. It still remains an open question.
The Sunnis have to accept the reality that they will no longer dominate Iraq. Until a sufficient compromise is hammered out, a Sunni base cannot be created that isolates the hard-core Baathists and jihadists and defuses the insurgency itself. We must work with Iraqis at the summit to convince Iraq's neighbors that they can no longer stand on the sidelines while Iraq teeters on the edge of a civil war that could bring chaos to the entire region. Where they can help the process of forming a government, they need to step up. And for my colleagues who suggest that somehow withdrawing American forces will put that region at greater risk, I say ``no.'' I say that an over-the-horizon deployment, a deployment in Kuwait and elsewhere, diffusing the insurgency, and an adequate effort to diplomatically pull together this kind of summit is the only way to diffuse the insurgency and ultimately strengthen the region.
The administration must also work with Iraqi leaders in seeking a multinational force to help protect Iraq's borders until finally a national army of Iraq has developed the capacity to do that itself. Frankly, such a force, if sanctioned by the United Nations Security Council, could attract participation by Iraq's neighbors, countries such as India and others, that would be a critical step in stemming the tide of insurgents and of encouraging capital to flow into Iraq.
To be credible with the Iraqi people, the new government must deliver goods and services at all levels. It is absolutely stunning--I don't know how many Americans are even aware of the fact--that today, several years later, electricity production is below where it was before the war. It is at 4,000 megawatts compared to the 4,500 before the war. Crude oil production has declined from a prewar level of 2.5 million barrels per day to 1.9 million barrels per day. We were told that oil was going to pay for this war. That has to change. Countries that have promised money for reconstruction, particularly of Sunni areas, haven't paid up yet. The money is not on the table.
We can also do our part on the ground. Our own early reconstruction efforts were--now known to everybody--poorly planned and grossly mismanaged. But as I saw on a recent trip to Iraq, the efforts of our civilian military provisional reconstruction teams, which have the skills and capacity to strengthen governance and institution building around the country, are beginning to take hold. We need to stand up more of those teams as fast as possible. If we do that in the same context as we find the political resolution, then you have a chance.
We must also continue to turn the job of policing the streets and providing security over to Iraqi forces. That means giving our generals the tools they need to finish training an Iraqi police force that is trusted and respected on the street by the end of the year. It also means finishing the training of Iraqi security forces with U.S. troops acting only on the basis of hard intelligence to combat terrorist threats.
The withdrawal of American forces from Iraq is necessary not only to give democracy in Iraq the best chance to succeed, it is also vital to our own national security interests.
We need to pay more attention to our own vital national security interests. We will never be as safe as we ought to be if Iraq continues to distract us from the most important war we need to win--the war on Osama bin Laden, al-Qaida, and the terrorists who are resurfacing even in Afghanistan.
To make it clear, despite everything this administration has said, today, al-Qaida, and the Taliban, even, are more dangerous in northwest Pakistan and northeast Afghanistan than Iraq is to us at this moment in time. There is a greater threat from al-Qaida, which has dispersed cells and through its training and abilities to organize, in Afghanistan than in the place that is consuming most of America's forces and money.
The way to defeat al-Qaida is not by serving as their best recruitment tool. Even Brent Scowcroft, George H. W. Bush's National Security Adviser, has joined the many experts who agree that the war in Iraq actually feeds terrorism and increases the potential for terrorist attacks against the United States. The results speak for themselves: The number of significant terrorist attacks around the world increased from 175 in 2003 to 651 in 2004, and it has continued to increase in 2005.
The President keeps talking about al-Qaida's intent to take over Iraq. I have not met anybody in Iraq--none of the leaders on either side, not Kurds, the Shia, or Sunni--who believes a few thousand, at most--and by many estimates, less than a thousand--foreign jihadists are a genuine threat to forcibly take over a country of 25 million people. And while mistake after mistake by this administration has actually turned Iraq into the breeding ground for al-Qaida that it was not before the war, large numbers of United States troops are not the key to crushing these terrorists.
In fact, Iraqis have begun to make clear their own unwillingness to tolerate foreign jihadists. Every Iraqi I talked to said to me: When we get control and start moving forward, we will deal with the jihadists. They don't want them on Iraqi soil, and they have increasingly turned on these brutal foreign killers who are trying to foment a civil war among Iraqis. This process will only be complete when Iraqis have taken full responsibility for their own future, and resistance to a perceived occupation no longer provides them any common cause with jihadists.
As General Anthony Zinni said on Sunday, building up intelligence-gathering capability from Iraqis is essential to defeating the insurgency. He said:
We're not fighting the Waffen S.S. here. They can be policed up if the people turn against them. We haven't won the hearts and minds yet.
Once again, I remind my colleagues, the hearts and minds of the Iraqis will be more susceptible to being won when American forces are not there in the way they are now, in a way that can be used as the recruitment tool that it has been, when 80 percent of the Iraqi people suggest that American forces ought to leave.
After the bulk of U.S. forces have been withdrawn, I believe it is essential to keep a rapid reaction force over the horizon. That force can be over the horizon within the desert itself, or it can be in Kuwait, and that can be used to act against terrorist enclaves. Our air power--the air power we used to police two-thirds of the no-fly zone in Iraq before the war--will always ensure our ability to bring overwhelming force to bear to protect the U.S. interests in the region. The bottom line is that working together with Iraqis from inside and outside Iraq, we can prosecute the war against al-Qaida in Iraq more effectively than we are today.
Withdrawing U.S. troops will also enable us to more effectively combat threats around the world. But winning the war on terror requires more than the killing we have seen from 3 years of combat. The fact is that just taking out terrorists, as our troops have been doing, is not going to end the flow of terrorists who are recruited, for all of the reasons that we understand. The cooperation critical to lasting victory in the region is going to be enhanced when Abu Ghraib, Guantanamo, civil chaos, and mistake after mistake in Iraq no longer deplete America's moral authority within the region.
This is also key to allowing us to repair the damage that flag officers fear has been done to our Armed Forces. I know my colleagues on the other side of the aisle--members of the Armed Services Committee and Intelligence Committee--have heard from flag officers in private about what is happening to the Armed Forces of our country. We know it will take billions of dollars to reset the equipment that has been lost, damaged, or worn out from 3 years of combat. In the National Guard alone, units across the country have only 34 percent of their authorized equipment, including just 14 percent of the chemical decontamination equipment they need. That is a chilling prospect if they are ever asked to respond to a terrorist incident involving weapons of mass destruction.
The fact is the Army is stretched too thin. Soldiers and brigades are being deployed more frequently and longer than the Army believes is best in order to continue to attract the best recruits. Recruiting standards have been changed and recruitment is suffering. The Army fell 6,700 recruits short of their needs in 2005--the largest shortfall since 1979. Recruitment is suffering today. Not only are American troops not getting leadership equal to their sacrifice on the civilian side, but our generals are not getting enough troops to accomplish their mission of keeping the country safe.
The fact is that in the specialties--special forces, translators, intelligence officers, for the Marines, for the Army, for the National Guard--our recruitments are below the levels they ought to be.
Withdrawing from Iraq will also enable us to strengthen our efforts to prevent the proliferation of weapons of mass destruction. Iran, the world's leading state sponsor of terrorism, is absolutely delighted with our presence in Iraq. Why? Because it advances their goals, keeping us otherwise occupied, and it allows them to make mischief in Iraq itself at their choice. Their President is so emboldened that he has openly called for the destruction of Israel, while defying the international community's demands to stop developing its nuclear weapons capability. Could that have happened prior to our being bogged down the way we are?
North Korea has felt at liberty to ignore the six-party talks, while it continues to stockpile more nuclear weapons material.
Any effort to be stronger in dealing with the nuclear threat from Iran and North Korea is incomplete without an exit from Iraq. It will also enable us to more effectively promote democracy in places such as Russia, which is more than content to see us bogged down while President Putin steadily rolls back democratic reforms.
China benefits from us throwing hundreds of billions of dollars into Iraq instead of into economic competition and job creation here at home. Our long-term security requires putting the necessary resources into building our economy and a workforce that can compete and win in the age of globalization. We cannot do as much as we need to--not nearly as much as we need to--while the war in Iraq is draining our treasury.
Finally, we have not provided anywhere near the resources necessary to keep our homeland safe. Katrina showed us in the most graphic way possible that 5 years after 9/11, we are woefully unprepared to handle a natural disaster that we know is coming a week in advance, let alone a catastrophic terrorist attack we have no notice of. Removing the financial strain of Iraq will free up funds for America's homeland defense.
The time has come for the administration to acknowledge the realities that the American people are increasingly coming to understand--the realities in Iraq and the requirements of America's national security. Stop telling us that terrible things will happen if we get tough with the Iraqis, when terrible things happen every single day because we are not tough enough. If we don't change course and hold the Iraqis accountable now, I guarantee you it will get worse.
Ignoring all of the warnings, and ignoring history itself, in a flourish of ideological excess, this administration has managed to make the ancient cradle of civilization look a lot like Vietnam. But there is a path forward if we start making the right decisions.
As Dr. King said so many years ago:
The choice is ours, and though we might prefer it otherwise, we must choose in this crucial moment of human history.
Now is the moment of choice for Iraq, for America, and for this Congress.