February 16th, 2006 - Mr. President, the National Governors Association meeting will be held in Washington during the week we return from recess. That brings back some fond memories for me because I remember the 8 years I served as Governor. Each time we came here, and the highlight of it every year, was a dinner in the White House with the Chief Executive of the United States and the chief executive of each of our States.
While the Governors are in town, or as they are coming to town, I want to take the opportunity to wave the lantern of federalism on a few issues under discussion here in the Senate that will affect strong State and local governments. I know the Presiding Officer cares deeply about the same issues because his service as mayor made him aware of those issues, just as I was as Governor.
During the year after I came to the Senate, when we were debating the Internet tax issue, someone said in exasperation that I had appeared not to have gotten over being a Governor. I hope that can be said on the day I leave here, because most of our politics here in the Senate is about how we resolve conflicts of principles. One of the most important principles upon which our country is founded is the principle of federalism, the idea that we are a big, diverse, complex country and that we need strong States and strong cities and strong counties and strong communities to absorb all of our differences. We are not a small, homogeneous nation and our federalism is absolutely key to our success as a country.
I have not gotten over being Governor. It causes me especially to remember how the Republican majority came to power in 1994, a majority of which I am proud to be a part. There was a Contract with America. I wasn't part of the Congress at that time, but I remember it very well. I remember one of the most important aspects of the Contract With America was: no more unfunded Federal mandates. I remember also that a large number of Republicans, along with Leader Gingrich, stood on the Capitol steps and said: If we break our promise, throw us out.
Since I wish to make sure our majority doesn't get thrown out, I want to remind all of us, including many who serve in the Senate, who voted in 1995 to stop unfunded Federal mandates, this still is an important part of our responsibilities here. I have three examples of that in our discussions.
The Senate recently reaffirmed its commitment to the idea of avoiding unfunded Federal mandates. I suppose I should stop for a moment and explain what I mean by "unfunded Federal mandate." That is a Washington phrase we throw around. Here is the way I understand it. Nothing used to make me madder as Governor -- and I daresay it might also be true of the Presiding Officer, who was a mayor -- than for some Senator or Congressman to come up with a big idea in Washington, pass it into law, hold a press conference and take credit for it, and send the bill to me to pay at the State capitol. Then the next thing you know, that same politician would be back somewhere in Tennessee making a big speech about local control. That is an unfunded Federal mandate - when the big idea is here and the law is passed here and then the bill is sent down to the county commissioner or to the mayor or to the legislature or to the Governor and it is said: It was our idea but you pay for it.
Ten years ago when Bob Dole was the majority leader, the first thing the new Republican Congress did -- it was called S. 1 at that time -- was to pass the Unfunded Mandates Reform Act. It created a new point of order that could be raised against legislation imposing unfunded Federal mandates on State and local governments. Everyone felt pretty good about that because they said this new law will create a so-called penalty flag that can be thrown when some Federal official came up with a good idea, passed it into law, and sent the bill back to us in the States. However, until recently that penalty flag has never been thrown, not in the first 10 years of its existence. However, last year, in our Budget Act, that point of order was given some more teeth. In the budget resolution under which we operate today, an unfunded mandate point of order raised in the Senate requires 60 votes in order to be waived instead of the simple majority required under the Unfunded Mandates Reform Act.
In October of last year, 2005, this 60-vote point of order was raised for the first time in the Senate against two amendments to an appropriations bill that would have raised the minimum wage. That would have been an unfunded Federal mandate. This new provision was put into the Budget Act by Senator Gregg, who had been the Governor of New Hampshire. It had my support as well as that of a number of other Senators. So I would like to call to the attention of my colleagues, and the Governors as they are coming to town, three issues that are currently under discussion here that raise the specter of unfunded Federal mandates.
No. 1 is the taxation of Internet access issue. State and local governments and members of the telecommunications industry, I believe, need to come up with a solution to that question before the current moratorium expires in 2007.
No. 2, the Federal Government needs to fully fund the implementation of the so-called REAL ID Act, which we passed last year and which has to do with border security.
No. 3, the Federal Communications Commission needs to exempt colleges and universities from expensive new requirements that will require colleges to modify their computer networks to facilitate surveillance, which will have the effect of adding about $450 to every tuition bill across this country.
Let's take those one by one. First is the Internet access tax moratorium. My colleagues will remember that after we had a spirited debate that went on for about a year and a half, President Bush signed into law the Internet Tax Nondiscrimination Act. There was a lot of discussion, a lot of compromise, a lot of negotiation. What we were arguing about was, on one hand we wanted to increase the availability of high-speed Internet access to all Americans -- that is a national goal -- but at the same time we didn't want to do harm to State and local governments by taking away from them, as a part of our act, billions of dollars upon which they relied for paying for schools, paying for colleges, paying for other local services.
The bill we came out with at the end of 2004 was a good compromise for several reasons. First, it was temporary, not permanent. It called for a 4-year extension of the Internet access tax moratorium that was already in place, so this one will expire in a year and a half.
Second, our agreement allowed States already collecting taxes on Internet access to continue to do so. That was a part of the "do no harm" theory that many of us championed.
Finally, it made clear that State and local governments could continue to collect taxes on telephone services even if telephone calls are made over the Internet, which they increasingly are.
In January of this year, the General Accounting Office released a report interpreting the Internet Tax Nondiscrimination Act. The GAO interpreted the moratorium in a more limited way than what I, and I am sure many of the other Senators, intended when we were drafting the bill.
While the interpretation may suit me fine because it goes in the direction I was arguing, the GAO interpretation may demonstrate very clearly how important it is to deal with this complex issue in some other way. That is why it needs to be resolved by representatives of industry and by mayors and Governors working together to suggest to us a path for the future. I understand the National Governors Association has convened meetings with representatives of the telecommunications industry and State and local governments. I hope all the parties will take those negotiations seriously, reinvigorate those efforts, and present us with a workable compromise we can then consider and enact.
Let me suggest again the principles that I believe should guide this discussion. No. 1, separate the issue of taxation and legislation. Both are very complex issues that can have serious implications for industry and State and local governments and consumers, but they are not the same effects. The goal should be simplicity. Regulations surely ought to be streamlined to allow new technology to flourish. Voice over Internet protocol or, in plain English, making telephone calls over the Internet, is very different than plain old telephone service, and our regulatory structure needs to recognize that and be welcoming to this change. The goal in taxing the industry should also be simplicity and certainty. For example, a company that operates in almost 11,000 State and local jurisdictions, all of whom might tax telecommunications, might have to file more than 55,000 tax returns a year. No one wants to see that happen and that is far too big a burden for a large company, much less a small startup company. But in searching for a solution, we do not want to do harm to State and local governments.
The Senator from California, the Senator from Delaware, the Senator from Ohio -- many Senators pointed out that State and local governments rely heavily today on telecommunications taxes as a part of their tax base.
In our State of Tennessee, our Governor said it is a matter of $300 million or $400 million in State revenues. That would be as much money as we would raise from instituting an income tax. It is a lot of money. So we should not take an action in Washington, even for a good purpose, that has the effect of undercutting State and local decisionmaking. My point very simply is, deregulate voice over Internet protocol? Yes. We absolutely should do it. But we must find a way to do it that doesn't force States and local governments to provide subsidies to the telephone companies. If the Federal Government wants to provide a subsidy to the telephone companies, the Federal Government ought to pay for it and not create an unfunded Federal mandate.
The second example of the possibility of an unfunded Federal mandate came with the passage of the REAL ID legislation. We are about to enter into a debate about immigration. We hear about it all the time. It is a serious problem. We have 10 million to 15 million people living in our country who are illegally here. That is not right for a country that honors the rule of law, and we have to fix it. One way some have suggested to fix it was the so-called REAL ID law. But the effect of that was basically to turn driver's license examiners in Tennessee and every other State into CIA agents by making State driver's licenses national ID cards, and then forcing the States to pay for it.
I don't want to talk today about whether it is a good idea or a bad idea to turn State driver's license employees into CIA agents, or whether we should have a national ID card. The fact is the law says that is what they are going to do and that is what we are going to have. What I want to talk about today is how do we pay for that.
REAL ID, according to the National Conference of State Legislators, will cost States $500 million over 5 years to implement. That is $100 million a year. This is not technically an unfunded mandate because the law actually gives States a choice, but here is the choice: In Minnesota or Tennessee or any other State, either upgrade your driver's licenses according to the Federal rules, or your residents will not have the ability to collect their Social Security check or board an airplane. So that is not much of a choice.
All across the country, because of the REAL ID law, this is a new responsibility for States and it is going to cost a half billion dollars. Yet in fiscal year 2006, only $38 million was appropriated for States to cover the cost of REAL ID. In fiscal year 2007, the President's budget contains no funding for REAL ID, even though $33.1 billion is to be spent on homeland security.
I intend to work this year to see that REAL ID does not become an unfunded mandate. If the Federal Government wants to create a national ID card and they want to force the States to do it, then the Federal Government ought to pay for it.
My final example: the Federal Communications Commission needs to make sure that compliance with the Communications Assistance for Law Enforcement Act, called CALEA, does not become an unfunded Federal mandate on colleges and universities.
This CALEA law is a law that communications systems have to be engineered in such a way as to make it easy for Federal agents to subject phone calls to surveillance. In August of last year, the Federal Communications Commission, recognizing that more and more telephone calls are being made over the Internet, extended the requirements of this law to colleges and university computer networks. Implementing this order, according to technology experts, could cost $5 billion to $6 billion, a figure that translates into a $450 increase in annual tuition at most American universities.
The pages here who are listening to this are already looking forward to tuition increases when they go to college that are high enough, and they don't need another $450 on top of it.
Over the last several years, tuition college costs have increased faster than inflation. Public school tuition jumped 10 percent in 1 year -- in 2004. Even though Federal funding for colleges and university has gone up, State funding has been fairly flat. So we have seen a big increase in tuition, and this is another $450.
Given these concerns, even though the FCC might have a laudable objective in making it easier to overhear or keep track of phone calls in computer networks on college campuses, if the Federal Government wants to order that, the Federal Government ought to pay for it.
I have written to the FCC urging it to exempt colleges and universities from the requirement of August 2005 in order to allow time for the development of an alternative to this $450 tuition increase.
I ask unanimous consent that my letter to the FCC on this issue be printed in the Record.
Mr. President, these are some of the big ideas in Washington, all of which may be laudable. The idea of freeing high-speed Internet from overregulation and subsidizing it, the idea of national ID cards administered when you get your driver's license so that we can do a better job of protecting our borders, and the idea of reengineering computer systems on college campuses so that it will be easier for us to fight the war against terrorists -- all three may be wonderful ideas, but all three amount to unfunded Federal mandates, if they are done the wrong way.
I began my remarks by reminding all my colleagues -- and especially our colleagues on this side of the aisle, those in the majority -- that the Republican Party came to a majority in 1994 on a platform of no more unfunded mandates. Republican leaders said: If we break our promise, throw us out. I don't want us thrown out any more than I want any more unfunded Federal mandates.
So my purpose today, as the Governors begin to come to town, is to wave the lantern of federalism a little bit and raise a red flag to remind my colleagues that there is now a 60-vote point of order for any unfunded Federal mandates going through here and that I and others will be watching carefully to make sure that we keep our promise.
This is a body in which we debate principles, and one of the most important principles that we assert is the principle of federalism. It does not always trump every other principle that comes up, but my feeling is it has been too far down. I want to raise it up higher, and I intend to use that 60-vote point of order to assert the principle of federalism when unfunded Federal mandates appear on this floor.
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