Mr. KERRY. Mr. President, I want to speak briefly about the Santorum/Lieberman amendment being offered to the Estate Tax bill. This amendment gives the Senate the opportunity to vote on broad economic development policies originally introduced a few weeks ago as S. 2779, the American Community Renewal and New Markets Empowerment Act.

Of the many important and innovative provisions in this legislation, I would like to focus on the community development and venture capital initiative and full funding for Round II of Empowerment Zones. Mr. President, as my colleagues may remember last year I introduced the Community Development and Venture Capital Act. The purpose of community development and venture capital is to stimulate economic development through public-private partnerships that invest venture capital in smaller businesses. Not just any small businesses, but those that are located in impoverished rural and urban areas, known as new markets, or that employ low-income people. We call these areas new markets because of the overlooked business opportunities. According to Michael Porter, a respected professor at Harvard and business analyst who has written extensively on competitiveness, “..... inner cities are the largest underserved market in America, with many tens of billions of dollars of unmet consumer and business demand.”

Both innovative and fiscally sound, my new markets initiative is financially structured similar to Small Business Administration (SBA)'s successful Small Business Investment Company (SBIC) program, and incorporates a technical assistance component similar to that successfully used in SBA's microloan program. However, unlike the SBIC program which focuses solely on small businesses with high-growth potential and claims successes such as Staples and Calaway Golf, the New Markets Venture Capital program will focus on smaller businesses that show promise of financial and social returns, such as jobs--what we call a “double bottomline.”

To get at the complex and deep-rooted economic problems in new market areas, my initiative has three parts: a venture capital program to funnel investment money into our poorest communities, a program to expand the number of venture capital firms that are devoted to investing in such communities, and a mentoring program to link established, successful businesses with businesses and entrepreneurs in stagnant or deteriorating communities in order to facilitate the learning curve.

What I'm trying to do as Ranking Member of the Small Business Committee, and have been working with the SBA to achieve, is expand investment in our neediest communities by building on the economic activity created by loans. I think one of the most effective ways to do that is to spur venture capital investment in our neediest communities.

Building on part of the President's and Speaker Hastert's agreement, this amendment secures full, mandatory funding for Round II empowerment zones. In Massachusetts--specifically Boston--this amounts to a little more than $93 million. Now, I know many of my colleagues are in the same boat because they have empowerment zones in their states--Ohio, South Carolina, Florida, California--but let me just give you the history of why this funding is so important. Funding for Round II empowerment zones started in 1998. So far, however, the money has dribbled in--only $6.6 million of the $100 million authorized over ten years--and made it impossible for Boston, and other empowerment zones, to implement its plan for economic self-sufficiency. In Boston, 80 public and private entities, from universities to technology companies to banks to local government, showed incredible community spirit and committed to matching the EZ money, eight to one. Let me say it another way--these groups agreed to match the $100 million in Federal Empowerment Zone money with $800 million. Yet, and regrettably so, in spite of this incredible alliance, the city of Boston has not been able to tap into that leveraged money and implement the strategic plan because Congress hasn't held its part of the bargain. I am extremely pleased that we were able to find a way to provide full, steady funding to these zones. That money means education, daycare, transportation and basic health care in areas--in Massachusetts that includes 57,000 residents who live in Roxbury, Dorchester and Mattipan--where almost 50 percent of the children are living in poverty and nearly half the residents over 25 don't even have a high school diploma.

Mr. President, this bill goes further than funding empowerment zones and establishing incentives to attract venture capital into distressed communities. It enhances education opportunities, creates individual development accounts to help low-income families save and invest in their future, increases affordable housing, improves access to technology in our classrooms and creates incentives to help communities remediate brownfields.

I thank my colleagues for their work on this legislation.