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Public Statements

Making Emergency Supplemental Appropriations for the Fiscal Year Ending September 30, 2006--Continued

Location: Washington, DC




Mr. COBURN. Mr. President, I ask unanimous consent that the pending amendment be set aside and amendment 3641, division IV, be called up.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. COBURN. We are considering a very large supplemental spending bill that now stands about $10 billion larger than what the President has said he will sign. I thought it would be interesting to spend a minute to think about what $1 billion is because we throw that number around so often. We need to consider that $1 billion is a difficult number to comprehend.

A billion seconds ago, it was 1959. A billion minutes, ago Jesus was alive. A billion hours ago, some would say our ancestors were living in the stone age. A billion days ago, no one walked on Earth on two feet. A billion dollars was only 8 hours 20 minutes ago at the rate we are spending money in the Federal Government.

A billion is a hard number to get your arms around. It is an interesting number and $10 billion more than what the President thinks we need. More than what we actually need is a tremendous amount of money.

The second point I make in talking about this amendment is that the money we are going to spend on this emergency supplemental bill we will not ever see anywhere when we come to talk about the deficit because it will not get included in the deficit reported by the Federal Government. What it will get included in is the payments your children and grandchildren will have to pay back 30 years from now, amortized at 6 percent, and that $10 billion is going to come to about $50 billion when they pay it back. We are reaching forward and stealing opportunity from our kids.

This particular amendment deals with an item in the supplemental that is meant to help a very significant contractor in our defense industry. They do a lot of great things for this country in terms of supplying jobs, giving us great equipment, great ships, great tools for our men and women to fight with and defend this country. I understand the damage that has occurred in both Pascagoula and all the shipyards along the coast. We are making plans to do what is right. In the supplemental, we put greater than $1.5 billion toward that.

There is a significant amount of loss that was incurred by Northrop Grumman as the hurricane came on shore and damaged both their facilities and their equipment. They had significant operating losses from that. My problem with the amendment is they have insurance with which to cover this loss. No one knows exactly how much it is going to be. Northrop Grumman says by their own public statements that $500 million was their business interruption cost insurance, so it could be upward of $500 million. It is probably somewhere between $100 and $200 million.

If we allow this amendment to go through, we set significant precedence that we will be hard pressed to ever break.

First of all, this is a private contractor with insurance who is now suing their insurance company for the claims they have made that will not be adjudicated until 2007.

One of the messages we will send if we pass this supplemental with this in it is we will tell the rest of the defense contractors: You do not have to have business interruption insurance. Why would you have to if the Federal Government is going to come in and pick up the tab?

There is an answer that whatever is collected will come back and be paid to the Navy if, in fact, we intercede in the midst of this contract dispute for Northrop Grumman. I hear what the contracting office says, and it is a fairly important point because the contracting officers and the contracting office know the right of legal loss doctrine. Most of our insurance, whether it is homeowners, auto insurance, or business interruption insurance, runs on the doctrine of legal loss. Legal loss in insurance contracting says that if you get paid by someone else, we do not have to pay you.

This amendment is not so much about being against helping Northrop Grumman; it is about not helping their insurance firm which actually owes this money, which will be adjudicated in the future, and not limiting their responsibility and not transferring that responsibility from them to our children and our grandchildren.

September 28, 2005--this is the Contract Management Agency for the Defense Department:

This office believes it would be inappropriate to allow Northrop Grumman to bill for costs potentially recoverable by insurance because payment by the Government may otherwise relieve the carrier from their policy obligation.

If the Government pays the costs, or agrees that the costs are even tentatively or conditionally allowable, there is a risk that insurers will deny coverage on the basis that there has been no loss suffered by Northrop Grumman.

In fact, that is exactly right. If we pay the loss, Northrop Grumman does not have a loss, and therefore the legal loss doctrine will apply to this contract, so there will not be a lawsuit. This is in litigation.

I also make the point that Northrop Grumman, by their CEO's own statements this year, said that it continues to expect sales of $31 billion; earnings per share between 4.25 and 4.40; and cash from operations, free cashflow, between $2.3 and $2.6 billion. If this is $100 million or $200 million, they have all the capability in the world to borrow that money, pay the interest, and collect the interest charges against the insurance company. We are setting a terrible precedent by doing this.

The other thing we are going to do is send a message to every other defense contractor: Don't get business interruption insurance because we will come in and pick up the tab.

I want them to be fully remunerated. I want the shipyards to be up and running. I want every aspect we can deploy that will make things happen, that will resecure the jobs, resecure our production of ships. But I don't want to do that when Factory Mutual Insurance Company really should be on the hook for this, not our children and our grandchildren.

The other point I make is should companies that contract as defense suppliers and make billions each year be put ahead of the others waiting in line for help? Is it going to be our policy by this bill to further subsidize the business interruption insurance of all the rest of the contractors?

Their own litigation filed in California says:

There is no reason to allow Factory to avoid accountability for its wrongful actions.

I agree. And by keeping this in the bill, we will allow Factory Mutual to avoid accountability for its obligations.

Mr. President, I ask unanimous consent to have printed in the RECORD the Defense Contract Management Agency letter, dated September 28, 2005. There has also been the filing of Northrop Grumman Corporation against Factory Mutual Insurance Company in the U.S. District Court for the Central District of California.

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


Mr. COBURN. I also note that Northrop Grumman is the fourth largest defense contractor we have in the country. I also note that Northrop is already the recipient of billions of dollars in Government contracts, including some contracts that otherwise could be considered largess. I will not go into that.

I would make a final note that the House Appropriations Committee, when they passed their bill, put this into the Record:

The Committee believes strongly that funds in this Act and under this heading in prior Acts should not be used to substitute for private insurance benefits. The Committee is aware that some shipyards have business interruption insurance coverage that could potentially overlap with the Navy's budget for increased delay and disruption costs.

I understand the Navy. We have an obligation for delay and disruption costs. There is no question about that.

On March 1, 2006, the Committee received the Navy's certification that there is no overlap between shipyard insurance claims and the Navy's funding plan, and that costs covered by private insurers were not included in supplemental request estimates. Once again in this bill, the Committee directs the Navy not to obligate funds under this heading until the Secretary of the Navy certifies that no such funds will be used for activities or costs that are subject to reimbursement by any third party, including a private insurer.

The final point I would make is the President's message to Congress on why he would be against us funding this. He made some significant points, and I will summarize them. One is they do not think this is necessary. No. 2, it violates clear contracting guidelines. And, No. 3, it sets a terrible precedent for the future, not just on our coast but for any other defense contractor that might have a loss based on a natural catastrophe, that we would now have a precedent that we would supply that.

The American people want to help solve the problems on the gulf coast. We want to create a vigorous business environment. We want to create a vigorous defense industry. This is a step too far. I believe we need to back up and let the private sector take care of its obligations, as it should, to help us meet our obligations and then move forward.

With that, I yield the floor.


Mr. COBURN. Mr. President, I want to raise a few points. First, I have great respect for the Senators from Mississippi and Louisiana. If they will note, my votes have reflected that, when we have sent money for both. The President did request $2.5 billion, $2.7 billion for this. But he also requested that we not do this specific thing, that we not do this. The Senator from Mississippi makes a point they have already collected $125 million--actually they told us $125 million, maybe it is more--from insurance. They did have a big loss.

We had a hurricane down there and everybody will agree, because of the hurricane, the ships are going to cost more, no matter what we do. They are going to cost more because they were delayed. We know that in defense contracting. Is it in Northrop Grumman's interest to recapitalize this shipyard? Yes. There is no question about it. Do they have a positive cashflow of $2.6 billion this year? Yes. The reason we should not do this is because there will be no money coming from the insurance industry. Under the legal loss doctrine, we will obviate all those policies. So by doing this, it is true, any money that comes comes back to the Navy. I agree, that is in here. But the fact is, there will be no money coming back because they will have and utilize in their insurance contracts the legal loss doctrine. That doctrine will obviate any obligation, any liability these insurance companies have to do it. So the question is, should our kids pay for it, our grandkids pay for it, or is it in Northrop Grumman's best interest to put the business interruption insurance, which is in litigation, to borrow that money or take it out of earnings from cashflow from operations right now and then collect the interest on it? Instead, we are going to send it on down the pike 30 years to be paid back, and $125 or $200 million will become $800 million or $1 billion after 30 years.

I would also read into the record part (a), section 2303, ``Amounts appropriated or otherwise made available by this Act.'' Going on down, ``under the heading `Shipbuilding and Conversion, Navy' may be obligated and expended to pay the costs of any business disruption incurred by a ship construction contractor with respect to facilities or businesses located in the Hurricane Katrina Disaster area by reason of Hurricane Katrina.''

We do get all four of them, all four segments intentionally, because if we don't, then we pay. The insurance industry won't pay. Anything that isn't settled at the time this goes through will not be paid for by the insurance industry. So if you want to go out and make some money today, go buy Factory Mutual insurance. Because if this goes through and is a part of it, they made $150 million today with this thing going through. They are not going to pay, and they are going to be upheld in a court of law.

This is an established doctrine of law. And if it is already paid for by the U.S. taxpayers' grandchildren, then Factory Mutual is not going to have to pay for it.

I understand the intent. I believe the Senators from Mississippi are doing what they think is right. I think this is just a step too far that doesn't have to be done to truly get going. There are 11,062 employees in Mississippi right now working for Northrop Grumman. They have employees in 38 States. They are a great company and a vital contractor. But I would make the case that the cost of ships has gone up because we had the hurricane. And it is noble to try to limit that increase. This won't limit the increase; this will just increase the cost to our grandchildren.

I yield the floor.


Mr. COBURN. Mr. President, I wish I would have thought of that amendment. It is a great amendment.

The Senator from South Dakota makes the point, we have to make decisions about priorities. When we have an unproven volunteer program that is more expensive than any other volunteer program, and we are putting an extra $20 million on the basis of emergency versus fulfilling the obligations to those people who have made the ultimate sacrifice and paid the price and served this country and put their lives in danger doing so, it is a no-brainer that we ought to be spending the money on the veterans rather than a program that has not proven to be effective, not proven to match a performance goal, and not proven even to be measuring itself in the 13 years of its existence.

I support the Senator's amendment.


With that, I ask the pending amendment be laid aside and amendment No. 3641, division VIII, be called up.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. COBURN. Mr. President, I do not intend on asking for a vote on this amendment, but I highlight this amendment because of the problems implicit in this request.

In this supplemental is a request for $230 million, an earmark, for three additional Osprey V-22 airplanes. The Pentagon, in 2005, formally approved full rate production of the V-22: 360 for the Marine Corps, 48 for the Navy, and 50 for the Air Force. The Pentagon has ordered 90 as of today.

This plane is not yet proven, one, and I will not go into the debate on that. It cannot even have full testing and cannot be used in the battlefield.

The point is, there is no emergency need to order these planes. This plane is manufactured in Texas and Pennsylvania. The Pentagon did not request this. The President did not request it. What we have is people requesting it.

We have a plane that has not met performance tests yet, has not been battle proven, and we are adding three airplanes for which some would raise a good question as to whether it ought to be done in this way. It ought to be done through an authorization and through the regular process.

I know this is in the mark. I am not sure the chairman is supportive of it, and I will not ask for the vote, but I don't think this is the way we ought to buy airplanes, especially when it is not an emergency.

There are numerous problems. Most of them have been corrected, but there still have been numerous problems. This is the problem with earmarks. We are adding something that is not authorized, a plane that has had tremendous developmental difficulties, that the Pentagon does not want, the President does not want, yet we want. Why do we want it? Because, for some reason, we end up either employing more people on something that may not eventually work to the military's satisfaction or we get benefits from it in terms of political expediency.

I believe it is the wrong way to go. I ask unanimous consent to withdraw the amendment.


Mr. COBURN. Mr. President, I find myself bringing an amendment again against two of my friends who have a significant stake. They are both from Mississippi. They have looked at this issue a great deal.

What I want to do is raise the issues with a debate on the amendment, and then possibly talk about solutions.

During Katrina, the Armed Forces Retirement Home in Gulfport, MS, was damaged. The first floor was damaged significantly. It required and necessitated us moving those veterans to other retirement homes.

We need to remedy that. There are lots of options on the table. I talked with the chairman of the Appropriations Committee, and there are a lot of good ideas coming out on how to solve that problem.

The problem I have is, we allocated $45 million for this in the last year, and $44 million of it remains in the bank and has not been spent. This bill has $176 million, but it does not tell us what we are going to do with it. It just has $176 million.

So that brings us to a quarter of a billion dollars on this retirement home that houses 600 of our best, who have proven they have been our best through their service to our country.

Now, if you divide this out, you come to almost $400,000 per room, if we created a new style. And the plans, the proposals are all in the $480 million and $490 million range that have been offered up on the different options.

Congressman Gene Taylor from Mississippi, in the debate on this issue, says we can fully restore this facility to what it was beforehand for $80 to $90 million. That is what the estimates are. Private industry estimates for a brand-new naval home facility are that it could be built to the desired standards--that means up to date for Americans with disabilities; up to date on size, doors; up to date on the ability to handle people with advanced aging and disease and long-term consequences--for $125 million to $150 million.

So the question I raise with this amendment is not whether we should do it. It is: We have $221 million, after this bill goes through, that is going to be for that, and we are not through, and there is nothing in the report language that would direct us on how we are going to make a decision on spending this money and what it is going to go for.

I will agree with the goal of the chairman that we ought to replace this facility, and those people involved in that area ought to have a lot to say about it. My concern is the cost. If you really take the $589.54 million, which is option No. 1 that is coming out for this, and the estimate that it will take 13 years to get us back to where we were, that is $1 million a room.

I want to contrast that with what we can do for $1 million. If you look at the average price of a new home in Mississippi for a single person to live in, it is less than $80,000 a year. We could buy every veteran who lives in that home a brand-new home and provide nursing care for 10 years--for 10 years--for what is being proposed in replacing this.

So my real question is, what is the plan? Where is the commonsense oversight? How much are we going to spend? And before we send more money in an emergency appropriations, we ought to know what that is, and that ought to be decided before we spend more money, especially since $44 million that has been appropriated has not been spent.

All I am saying is that we should consider that. I would hope we would wait to send additional supplemental money for this until we know exactly where it is going to go or specify exactly where it is going to go.

We do know that to be considered an emergency we need to meet the requirements. I believe we need to meet the requirements for our veterans, especially in this home because we have some of them in Washington, DC, and we have them living all across the country. But the fact is, we don't know where the money is going to go. We don't know how much money we are going to spend. We don't have a plan. Nothing is agreed to. Why not go through the regular process with this? Why not go through the authorization and appropriation process on this since we have not spent the money already and we don't know how this money is going to be spent?

So it is a simple, straightforward question: Wouldn't it make more sense to do it under the regular order since this is definitely not an emergency now? Under their five different plans they have offered up, this would not be an emergency.

I would ask the consideration of the chairman if we could do it in a better, more efficient way that is better for the taxpayer; if, in fact, we could withdraw this money at this time and bring it back through the regular order to accomplish that?

With that, I yield the floor.


Mr. COBURN. Mr. President, I want to see this facility replaced, too, but I have some serious questions. The Senator was not here for the debate. I want him to hear those questions because what he is proposing is cheaper than several of what the retirement board suggested. I agree. Call me cheap. What he is proposing is $370,000 per resident. That is twice what I can build a brand-new hospital for with the latest everything.

I guess my point is, for $221 million, what are our grandchildren going to get because we are doing this under an emergency, and we know we can build a brand-new facility up to code, nice as can be, with the rooms the size the Senator wants, for $150 million total. We know that is possible. So why should we spend $221 million doing it? If it is not a fixed plan now; if we send $221 million out of here, they are going to spend it.

My problem is, I would love for the Senator and maybe the chairman to work with me to get this to a more realistic idea of what the real costs should be so that we accomplish the goal they want, and we do it in a more timely manner. I agree, having a campus style is probably a little bit more expensive, but it isn't 50 percent more expensive than what it should cost.

I made the point earlier that for a new home, for a single or couple living in 1,200 to 1,500 square feet in the State of Mississippi, you can buy one of the nicest places in the world for $81,000 right now, or $72,000. We got a quote yesterday from Mississippi. So that leaves $300,000. If we bought them all a brand-new home and then hired them a caretaker at $30,000 a year for the next 10 years, we would spend less money.

Again, you bet, I am a tightwad when it comes to our grandchildren's money, and I want value for what we spend. That is the purpose of this amendment. I am willing to withdraw this amendment if I can have the assurance that we can moderate this back into a range that would look like something comparable to what we really need to spend.

I wish to make a final point, if the Senator will bear with me. We don't have this money. We don't have it. Anything we don't get good value for today because our kids are paying for it means they are going to get an exaggerated cost when they come to pay it back. That is my purpose.

I want them to have a great home. I want them to be able to come home. I know they have a tremendous camaraderie living there. I want to see that restored for them. They deserve it. Can we not do it in a much cheaper way and still give them what they want? Remember, they fought hard so we would have the money to be able to do it.


Mr. COBURN. Mr. President, I concur with the Senator's desire to reestablish the site there. That is not what this is about. I am told the Senate Armed Services Committee is not for this because it only gets us halfway there, which bothers me greatly because instead of $221 million, we are going to spend $442 million, which ends up being about $800,000 per bed.

The point I make is this: If you throw money out there, they are going to build where they expend the money.

How about us having a plan within a certain amount of money and living with it, rather than saying we are going over or we are not going over? How about taking the average of the last couple that have been built where there have been any facilities similar to it and using that as a guideline? My problem is it is not $176 million; it is $176 million plus $44 million, and other people are going to authorize another $200 million, so we are going to be talking about a half a billion dollars, and that is my problem with it.

I ask unanimous consent at this time to withdraw this amendment. I appreciate the courtesies extended to me during the debate. I know the desire is right. I think the money that is out there is extraordinarily too much, especially when we have documented estimates to repair the present facilities between $50 million and $60 million and to build new ones between $120 million and $150 million. So anything above that is fluff at this time, which we can't afford. We can meet our obligations, but we can't go much beyond that and meet our other obligations. So I ask unanimous consent to withdraw the amendment.

The PRESIDING OFFICER. Without objection, the amendment is withdrawn.


Mr. COBURN. Mr. President, I withdrew amendments for things I still do not agree with that are in this bill. I am not going to spend the time in the Senate now, but I will spend the time before we have the final vote on this bill to discuss what is in this bill that is not emergency, that is not an obligation by the Federal Government, that is not prudent or fiscally wise. I will not spend the time on that at this time.


Mr. COBURN. I ask unanimous consent division XIX be brought up.

The PRESIDING OFFICER (Mr. CHAMBLISS). The measure is pending.

Mr. COBURN. Mr. President, this is an amendment that removes $11.3 million from our Corps of Engineers, Sacramento River Bank Protection Project in California.

I have no lack of understanding of the potential flooding problems occurring in San Francisco and south of there in California and the way the rain patterns have changed. I am not wishing to defeat anything that will make a real difference on that.

This amendment is about a program that is 46 years old that, according to the Corps' own statement, is 95 percent complete, that we have already spent $131 million on, that $10.6 million is being spent this year, as we speak, on this program.

In this supplemental, they are asking for another $11 million for this program. I don't doubt that the $11 million will be needed. But it won't even get there under this emergency supplemental, through the Corps' own admission, until after September when the new year starts.

First of all, it does not meet the definition of ``emergency,'' that it should meet in coming through this bill.

What does this program do? This program solves and prevents levee erosion problems while providing fish and wildlife mitigation. That is what the program does. It has been going since 1960.

We had $6.3 million included in the energy and water appropriations bill last year and an additional $10.96 million. The Corps also stated that $57 million more is needed for the final completion of this project.

This says a lot about the Corps of Engineers and their ability to get things done. Although I might agree we need to eventually spend the money for this project, it certainly ought to be paid for and come out of the energy and water appropriations because the money will not get there to be utilized. They have not even spent the money appropriated on the spend-out this year.

I am not, in substance, against completing this project. It comes back to the same things we have been talking about. Is it an emergency that we do it now? And if, in fact, it is an emergency, will the money get there and make a difference? It won't.

I am asking this go through the regular process, through the energy and water appropriations, that it be authorized to the extent that the Senators from California would like to have it, and that we do it in regular order.

It would be different if we thought this money was really going to make a difference with the problems in California, but it is not. It will not change one thing in terms of how the Corps operates this program this year. By the time the money would get there, it would have to be reprogrammed anyhow.

I have some other problems with this program. Ask yourself: If we have spent $131 million plus $6.3 million, $137 million already, and the Corps says it is 95 percent complete, and then they say they need another $51 million to complete it, how can it be 95 percent complete?

This is not about the need. This is about the inefficiencies within the Corps. This is about whether we can get the money to solve a problem that is deemed an emergency at this time, but I seriously doubt whether that has been the fact.

The Corps has been cited on numerous occasions by the GAO for its inability to predict costs, stay within the forecasted budget. In fact, some of GAO's strong criticisms have come in regard to this very work in the Sacramento area.

I made the point in an earlier amendment with Senator Obama that the Corps made $5 a cubic yard on everything we removed in Katrina. That is over 30 million cubic yards. That is $150 million the Corps took out of the Homeland Security and the emergency appropriations. Why don't we spend that money on this? Why do we borrow more money against our children and grandchildren to accomplish this worthy goal?

When I ask those questions, we do not get any answers. No one answers the question, can we efficiently be good stewards of our children and our grandchildren's money? When is enough enough? If this project is, indeed, an emergency, as we are being told, we need to be asking the tough questions. How long does it take to shore up levees near Sacramento--46 years for the Corps to do this job? I have a real sneaking suspicion 10 years from now the Corps will continue to ask us for money to shore up levees in Sacramento. And if that is the case and they have not completed it, it means they will not have done a good job on the very job we ask them to do, which is something I contend anyway.

These funds may, in fact, be needed. If that is the case, the Corps of Engineers has failed miserably.

I intend, in my oversight committee, to ask for an explanation of every penny the Corps has spent on the river bank protection near Sacramento. Representatives of this city and taxpayers all across the country should be outraged regarding the irresponsibility of the Corps in carrying out this project. Forty years and over $130 million later, we are asked to give the Corps an additional $11 million in emergency appropriations, money we will have to borrow, all because the Corps cannot do its job correctly the first, third, fourth, fifth, up to the 46th time.

Enough is enough. No venture would ever continue to receive such high funding with this track record.

Two other questions I think should be asked. Does the Corps lack the resources to fund the emergency needs? According to the Office of Management and Budget, the Corps of Engineers had $4.5 billion in unobligated balances last year and has an estimate of $5.8 billion in unobligated balances this year. According to the Corps itself, as of March 30, their unobligated scheduled carryover was $1.49 billion. They have the money to do this right now.

The Sacramento Corps office will have unobligated balances by the end of 2006 in excess of $13.5 million.

I ask again: Why are we going to borrow money when we have the money? If, in fact, it is an emergency, the Corps has the money in unobligated balances to accomplish it. All we need is an authorization to do that.

How do we prioritize Federal funds in California? In fiscal year 2006, California has 549 earmarks costing $733 million. In addition, it received $10 million in earmarks for museums alone. That expenditure alone would have been enough to pay for nearly all of this requested work.

Are the following museum earmarks more important than protecting the city of Sacramento: $200,000 for the California State Mining and Mineral Museum; $550,000 for development and construction of Noah's Park at the Skirball Cultural Center; $4.35 million for repairs of Sala Burton Maritime Museum, in San Francisco; $300,000 to the city of San Jacinto for improvements to the museum/Extudillo property; $175,000 for the M.H. de Young Memorial Museum; $500,000 for the construction of a museum also at the San Francisco Fine Arts Museum.

Just the museum earmarks alone would take care of this. So instead, what we are going to do, we are going to borrow money because we do not have the money to pay for this.

Attempting to attach more funds for the project, the project in its 46th year, outside of the regular budget process, is an abuse of taxpayer resources, takes advantage of the emergency appropriations process intended to deal only with the most urgent and immediate needs of the devastated gulf region, and to provide for our soldiers in battle.

Senator Boxer said on May 1, 2005, the war should be paid for in the budget, not in an emergency supplemental. The war is known. The cost of the war was anticipated by some people that this administration fired. The cost of this war is spinning out of control.

The same can be said for this project. This project was authorized in 1960. It has received over $100 million and its future costs are known. This should be addressed in the regular appropriations process, not in an emergency supplemental.

With that, I yield the floor, and I offer time to the opponents of my amendment.


Mr. COBURN. Will the Senator yield for a question?

Mrs. FEINSTEIN. I certainly will.

Mr. COBURN. When you were changing Candlestick Park, you did not borrow money from future generations of Americans to do that? You found it within the budget? I believe that is correct; is it not?

Mrs. FEINSTEIN. Well, it is interesting. City and county budgets have to be balanced. The only budgets that do not have to be balanced are the State budget, at least in California, and the Federal budget. But we had to balance our budget, so, yes, I did have to find the money by taking it from other places. That is true.

Mr. COBURN. Will the Senator yield for an additional question?

Mrs. FEINSTEIN. I will.

Mr. COBURN. I have said I do not deny this work needs to be done. Can you foresee that the environmental impact assessments for all this will be completed in time for this money to be used this fiscal year?

Mrs. FEINSTEIN. Yes. Because I am told the declaration of emergency by the State and the contingent emergency by the President, which he said he would declare this morning, effectively clears that for this particular work on these particular high-priority sites.

Mr. COBURN. Will the Senator yield for one additional question?

Mrs. FEINSTEIN. Yes, I will.

Mr. COBURN. Does it concern you at all that over the 46 years of this project the engineering by the Corps of Engineers for these levees is requiring them to go back now, in 29 places, and fix what they should have done right the first time? Does that concern you at all?

Mrs. FEINSTEIN. Well, of course it does. Of course it concerns me. But we learn in this business. And I think Katrina was a big learning lesson for all of us. And we have not done right by our infrastructure.

One of the problems is, as we have to cut discretionary spending that is nondefense, not entitlements, the only thing we are cutting--we are cutting 18 percent of what we spend every year. These are Federal levees. They are owned by the Federal Government. There is a responsibility to protect the people behind them.

Mr. COBURN. Will the Senator yield for one additional question?

Mrs. FEINSTEIN. Of course.

Mr. COBURN. Would it make sense to you that we could, in a supplemental, change the authorization under the emergency process so that the Sacramento Corps could use their $13.5 million they are going to have in unobligated balances at the end of this year? We could do that just as well as borrow an additional $10.9 million against our children; could we not?

Mrs. FEINSTEIN. Well, I have not looked at this. I was at the Napa River, where we have a big flood project, and there is a problem there. The corps there told me they could not transfer funds above a certain amount. And I believe there was some provision in a prior supplemental to prevent the transferring of that money.


Mr. COBURN. Will the Senator yield for a question?

Mrs. BOXER. Yes.

Mr. COBURN. I question how we are paying for it. We are borrowing the money from future generations to do it rather than make the hard decisions of trimming something else. That is important.

Mrs. BOXER. That is what I just said. I said the Senator doesn't oppose us doing this. He doesn't want it in this bill. That is my understanding of his position. I couldn't disagree with you more. When my friend quoted me and I said Iraq should have been in the budget, that is exactly how I feel, because we knew about it. Frankly, we didn't know about this, that we were going to have the kind of events we have had, the rain and the rain and the rain. I will go into the details of how much rain we have had compared to other years and the fact that anything can happen now.


Mr. COBURN. Mr. President, the arguments that have been made by the Senators from California, in terms of needing to fix things, are probably accurate. But I am sitting here thinking to myself, if it would take only $11 million to take care of this, and to know that the earliest this money is going to be there is 8 weeks, if I were Governor of California, I would find $11 million. I would get that tomorrow. If it is not going to get done tomorrow, we ought to be asking why not, if the threat is that great and it imperils that much of the economy and that many people.

I still raise the same questions. I am not denying this needs to get done. I am denying how we pay for it. We are not making the hard choices to cut something else out of the bill to pay for this because it is a higher priority. No, what we are doing is taking the money from future generations because we refuse to make those hard choices.

That is what it is all about. We could have reprogrammed money within the Corps to get this done. The Governor could ask the legislature for $11 million to get this done starting tomorrow. If there are 29 sites, what we do know about the Corps is it doesn't do anything fast. In this project, we know what they have done over the last 46 years has not been sufficient because they are having these problems. We will finish the debate tomorrow morning. The point is, I don't deny that this needs to get done. If it is the case that has been made by the Senators from California, then why hasn't it already been done? If there is this impending emergency, why hasn't California ponied up to put up the $11 million that is so desperately needed right now to pay for it, rather than asking the rest of the country's children and grandchildren? If this bill had come to the floor paid for, I would not be out here. But it is not paid for. We are going to go write the bills and bonds to pay for this $11 million. Maybe that is what we should do. Maybe that is the priority we should have. But I would think that the rest of the American people ought to say, where are you getting the money?

We are not making hard choices. We are passing it down the line. I agree if something were to happen, the cost would be much greater. I am a physician and I believe in prevention. That is what this debate is all about, preventing America from becoming a second-rate economy because we refuse to make hard decisions here on how we spend money. That is what this is about. I don't deny the desire to address this issue. That doesn't have anything to do with it. But if it is an emergency as described at the present time, why doesn't California fix it? Why hasn't California ponied up the $11 million, which is a small amount there. It is the fifth largest economy in the world. They can come up with $11 million.

Mrs. BOXER. Will the Senator yield?

Mr. COBURN. Yes.

Mrs. BOXER. Does the Senator not know that this is a federally authorized project? Is the Senator unaware of that?

Mr. COBURN. I understand that.

Mrs. BOXER. Cost sharing goes along with this project just as with every other project. So for the Senator to stand up and suggest that we don't pay into this project is simply false.

Mr. COBURN. Reclaiming my time, since it is a question, this isn't about whether you pay your share. It is about whether it is an emergency. If it is an emergency, then why wasn't it done last time? Why are we going back--why isn't a Corps that spent 46 years doing this project going back to repair what they didn't do right in the first place?

I am going back to the main point and then I am through. I will talk again in the morning. Where is the money coming from? Had the money been paid for, I would not be out here. But the money isn't paid for. It is borrowed. So when you take $10.9 million, take your calculator out and put it at 30 years and amortize it at 6 percent, you will come up to about $55 million. That is what we are actually going to pay to do this $10.9 million because we are borrowing the money. That is my point. I am not against doing it, not against getting it done, against prevention. What I am against is borrowing the money against the future of this country because we refuse to make the hard choices.

With that, I yield the floor.

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