To express the sense of the Senate that protecting middle-class families from the alternative minimum tax should be a higher priority for Congress in 2006 than extending a tax cut that does not expire until the end of 2008.

TAX RELIEF EXTENSION RECONCILIATION ACT OF 2005

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of H.R. 4297, which the clerk will
report.
The legislative clerk read as follows:

A bill (H.R. 4297) to provide for reconciliation pursuant
to section 201(b) of the concurrent resolution on the budget
for fiscal year 2006.

The ACTING PRESIDENT pro tempore. The Senator from Montana.
Mr. BAUCUS. Madam President, we have a few hours left on this side. I
believe the Senator from California, Mrs. Boxer, is on her way to the
Chamber and will be here momentarily. Until that moment arrives, I
suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BYRD. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. BYRD. Madam President, I ask unanimous consent that I may yield
to the distinguished Senator from Michigan such time as she may require
and that I may be recognized at the close of her remarks.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from Michigan.
Ms. STABENOW. Madam President, I thank the distinguished Senator from
West Virginia for his kindness this morning.
I rise in support of Senator Baucus's amendment. At a time when
middle-class families are struggling to pay their bills, the House tax
bill would actually increase taxes by more than $30 billion on those
families--$30 billion.
This is a very difficult time for Michigan families. Every day we
hear news about another plant closing or a company entering into
bankruptcy. Michigan has lost 111,000 manufacturing jobs, and that
doesn't include the recent announcement by Ford to cut another 30,000
jobs.
Michigan families are worried about their jobs. They are also worried
about losing the pension that they have worked hard for and paid into
for the 30 years that they have worked. They see their health care
premiums continue to skyrocket, and they are struggling to fill gas
tanks and pay home heating bills. The average price of gasoline in
Michigan last month was $2.35 a gallon. Now middle-class families are
facing home heating bills that are as much as 35 percent more expensive
than last year. And their salaries and their pay stubs don't show a 35-
percent increase. If anything, they are going down in terms of income.
What does the House bill propose to do to help middle-class families?
Raise their taxes. This was quite stunning to me when I reviewed the
bill that came over from the House of Representatives. We are talking
about a bill that actually raises taxes on middle-income families. That
is not acceptable. We can do better than that. Our middle-class way of
life is in danger. I believe very strongly that in Michigan and places
all across this country we are fighting for a way of life. Will we have
the standard of living that we have had? Will we have the ability to
send our kids to college and be able to buy a home and be able to dream
the American dream and be successful? At every turn, we are seeing
action taken here that takes our way of life and our opportunities
away. Before Christmas, it was a bill that is part of this whole
package, cutting over $12 billion in opportunities for people to go to
college, by cutting student loans.
So this is another one of those cases where people are working hard,
expecting us to do the right thing and, in fact, the House bill would
raise taxes on middle-income people, while lowering taxes for those who
are already very blessed, earning millions of dollars a year. We need
to be passing legislation that lowers health care costs, which is
hurting American manufacturers. We need legislation that will protect
people's pensions. This ought to be a basic premise and principle that
we abide by in this country. When you work hard all your life and you
pay into a pension, you should know that that will be there for you and
your family.
We must also enforce our trade laws and insist that countries such as
China and Japan play by the rules and stop manipulating their currency
and that we don't see counterfeit products coming into this country
illegally, or other countries stealing our ideas and patents.
That is the debate we should be having. These are actions we should
be taking. I was deeply concerned the other night to hear the President
talk about those of us who want to enforce trade laws, essentially
saying we are

[[Page S467]]

protectionists if we don't stand back and say that in a global economy,
whatever happens happens, that those of us who care about the rules and
want trade to be fair are somehow protectionists. I profoundly disagree
with that.
It is our job to fight for American businesses and American workers.
That is what I do every day, and I know that many colleagues feel the
same way. The debate we need to be having on the floor of the Senate is
how to save our middle class, save our way of life. But at a minimum,
we should not be passing a tax increase on middle-class families.
Michigan is the heart and soul of the middle class. There are 52,000
families in jeopardy of facing a tax increase if we do not address the
alternative minimum tax. The alternative minimum tax ceiling needs to
be raised, as we know. Fundamentally, while there has been agreement in
this Chamber to do that, if that does not come out of conference
committee between the House and the Senate, we will see 19 million
families getting a tax increase as a result of actions of the Congress.
For instance, a family with five children would be hit with this
ceiling if their income exceeds $54,000. They would, under the current
system, pay more taxes. But without children, their income could exceed
$76,000 before they pay more taxes. Think about that. Why is that fair?
If you have five children, five mouths to feed, five children to buy
clothes for, five children whom you are worried about going to college,
you are going to pay higher taxes than somebody without children. That
makes no sense. That is a $20,000 difference, a $20,000 penalty for
having children. That makes absolutely no sense. What is American about
that?
Sadly, under the current system on taxes with the AMT, the larger
your family, the larger taxes you pay. To add insult to injury, the
House bill extends the capital gains and dividend tax rates to provide
$50 billion in tax breaks to our wealthiest Americans--$50 billion in
tax breaks to our wealthy Americans--while a family with five children,
earning $54,000 a year, will pay more taxes.
The majority of Americans are looking at this and asking, what is
going on here? Where are our priorities, our values? This is backward.
Even more egregious is the fact that these tax breaks that are given
under the House bill are not set to expire until 2008. So the current
tax cuts being given to the wealthiest Americans don't even expire
until 2008, but the current problem for middle-income families happens
right away; the current tax increase happens right away.
This bill is money to ensure that the wealthiest 3 percent of
Americans are given tax breaks way out until 2010. Meanwhile, right
now, middle- and low-income families are facing lower wages, mounting
health care costs, trying to pay the gas bill, trying to pay the home
heating bill, trying to send the kids to college, while we cut student
loans. I did not support that. And now we are going to say,
potentially, if the House bill were to become reality, by the way, you
are going to pay more in taxes. This makes absolutely no sense.
I commend my colleague, Senator Baucus, and I commend the chairman of
the Finance Committee, as well, for working together to fix this,
getting the Senate to work together to fix this. We need to fix this--
and not only in the Senate because we have agreed that is not right--
this needs to be fixed when the bill ends up going to the President's
desk. That is when we will know whether 19 million American families
will have a tax increase. My vote is ``no'' on that one, and it is
``yes'' on making sure we fight for that which will keep our way of
life in this country.
Madam President, I yield the floor, and I thank the Senator from West
Virginia again for allowing me to use this time.
The ACTING PRESIDENT pro tempore. The Senator from Montana is
recognized.
Mr. BAUCUS. Madam President, several on our side wish to make
statements before we get to offer amendments and vote. It is my
understanding that it will begin at about 2:15. There will be a series
of amendments then offered which, obviously, we will vote on. There are
a good number on this side and a few on the other side of the aisle. I
encourage Senators to quickly firm up those amendments so we can line
things up as expeditiously as we possibly can.
In the meantime, I remind the Senate where we are. We are on the
House deficit reduction bill. Later today, I expect that the majority
leader will offer a substitute amendment. That will be the Senate
amendment; that is a Senate-passed bill to the House bill. The Senate-
passed bill will include a perfecting amendment. The perfecting
amendment will modify the Senate-passed bill that previously passed in
the Senate by extending the so-called tax extenders, R&D tax credit,
the WOTC tax credit, tuition reduction, and savers' credit, for an
additional year. Those provisions expired at the end of 2005. The
Senate bill extended all those provisions, so-called extenders, for 1
more year, until the end of 2006.
The perfecting amendment that will be offered will then add another
year to all those, so that those provisions, if that amendment passes,
will not expire; they will have 2 more years of life. That is the major
change that will be in the perfecting amendment to the Senate
substitute, which the majority leader, I assume fairly quickly, will
offer.
To remind Senators, the main difference between the House and Senate
bill is this: The House bill includes the extension of the lower
taxes--the dividend tax and capital gains taxes--for 2 more years.
Currently, taxation on dividends and income taxation on capital gains
enjoys a lower rate that was put into effect several years ago. That
provision or lower rate is in current law and will extend under current
law for 2 more years, until the end of 2008, December 31. The House-
passed bill extends that provision 2 more years, so it would be in
effect for not only 2006, 2007, and 2008, but the House bill would be
2009 and 2010, the full calendar years.
The House-passed bill doesn't, however, include any relief for
alternative minimum taxes, which about 17 million Americans will have
to pay this year, 2006. Actually, it is about 20 million because 3
million taxpayers had to pay for 2005, and 17 million more taxpayers
will have to pay an additional tax under the so-called stealth tax, the
alternative minimum tax in 2006. So the House bill extends provisions
that need not be extended because the law doesn't change, but it does
not reduce taxes for people who are going to pay more for taxes in
2006. Contrast that with the Senate-passed bill, which would be the
substitute for the House bill. If it passes, it will send that back
over to the House. They, presumably, will disagree with the Senate and
ask for a conference. We will appoint conferees and begin a conference
on the two separate bills. That will happen next week probably.
Again, the Senate bill doesn't extend dividend reduction, capital
gains taxation reduction, for 2 more years. It maintains current law,
which provides the current low rate in existence for not only this year
but also next year and also the following year, through December 31,
2008. We did, however, in the Senate bill, say, OK, those 17 million
people--Americans who are going to have to pay AMT--that is additional
tax for 2006--should not have to pay that additional tax. We, in the
Senate bill, said we are going to extend the provisions, the so-called
AMT patch, so those Americans will not have to pay additional tax under
the alternative minimum tax.
That is a major difference between the House and Senate bill. I hope
that we in Senate can do what I think most Americans want. Most
Americans would say, OK, 17 million Americans--let's not raise their
taxes; let's make sure those taxes are not raised. And then we will
worry about 2009 and 2010, when we may or may not want to extend more
favorable tax treatment on capital gains income and on dividend
income. We can cross that bridge when we get there. Because the budget
resolution says we cannot lower taxes by more than $7 billion over 5
years, we just can't do it all. We have to make choices. If you add up
all the provisions that people want--the tax extenders and other
extensions of tax breaks--it is forcing us in the Congress to begin to
make a choice as to what is more important: prevent the additional

[[Page S468]]

taxes people have to pay next year under the AMT, or is it more
important that they should pay those taxes but, more for the sake of
principle than anything else, extend that dividend and capital gains
preferential treatment for years 2009 and 2010.

Again, the House bill only addresses 2009 and 2010. Why? Because
under current law, capital gains income and dividend income enjoy
favorable tax treatment.
That is the basic posture we are in here. It should not take too
long. After various amendments are brought up and Senators vote on
them, we will send the bill over to the House. The House will probably
disagree and request a conference. We will have a conference when we
come back next week and finally work out passage of this bill.
I see the Senator from West Virginia is on the floor. I turn to the
Senator from West Virginia and yield to him whatever time he desires.
Mr. BYRD. Madam President, I thank my distinguished friend. He can go
ahead with whatever remarks he has. I would love to wait 2 or 3 more
minutes.
Mr. BAUCUS. Madam President, if I may ask the Senator from
California, how much time does she desire?
Mrs. BOXER. If I can have 20 minutes following Senator Byrd, which we
think will be used by other Senators on the same topic.
Mr. BAUCUS. I will do this. Why don't I yield to the Senator from
Michigan 5 minutes and then the Senator from West Virginia. Is that all
right with the Senator from California?
Mrs. BOXER. If I can be in that line.
Mr. BAUCUS. Yes. I think the Senator from West Virginia would like to
defer to the Senator from Michigan at this point.
Mr. BYRD. I thank the Senator.
Mr. BAUCUS. I appreciate the Senator speaking on short notice. Madam
President, I yield 5 minutes to the Senator from Michigan.
The ACTING PRESIDENT pro tempore. The Senator from Michigan.

Detroit and Super Bowl XL

Ms. STABENOW. Madam President, after speaking in support of the Boxer
amendment, which I think is extremely important, I wanted to take a
moment in the middle of this very important debate, a very important
bill, and rise to speak to another important event that is occurring
this weekend.
I rise today to cheer not for the Pittsburgh Steelers or the Seattle
Seahawks but for the city of Detroit and the State of Michigan, which
is the host of the Super Bowl XL this weekend. We are very excited
about this important event. It is a spotlight shining on Detroit, MI,
and I am confident the city and my home State are ready for their
closeup this weekend.
The State of Michigan and the city of Detroit are honored to play
host to the most watched sporting event in our country. I am sure
Detroit will shine, as it has before when it has hosted the Stanley Cup
finals, the World Series, and the Major League Baseball All-Star Game,
which was just held this last summer.
Ford Field is a beautiful stadium which will be an ideal setting for
the Seahawks and Steelers, and Cobo Hall will play host to the NFL
Experience, a football ``theme park'' where children and their parents
can enjoy over 50 interactive football theme games and displays.
We are expecting over 100,000 visitors to downtown Detroit. I was
there last week and saw that a lot of people have gotten there early to
enjoy what our city offers. We are so pleased to welcome them. Not only
will visitors have a chance to experience Detroit's restaurants and
nightlife, but they can go to the Henry Ford Museum and see the bus on
which Rosa Parks made her historic stand and visit the African-American
Museum. This weekend's visitors will see all the wonderful things
Detroit and the State of Michigan have to offer.
I must say that we have over 10,000 volunteers who are ready and are
working to make sure everyone enjoys every minute of their stay, and I
thank those volunteers for their hard work in being a part of helping
Detroit shine.
Detroit is the home of Motown, and I am thrilled that Stevie Wonder
will perform before the game and that Aretha Franklin will sing the
National Anthem. On Saturday, Motown's music heritage will be on
display when the Four Tops, the Miracles, the Contours, the Dramatics,
the former ladies of the Supremes, Freda Payne, Brenda Holloway, Martha
Reeves and the Vandellas, the Velvelettes, and Paul Hill play at the
Masonic Temple. That will be an amazing event to participate in and
listen to.
On Friday and Saturday night, Kid Rock plays at the Joe Lewis Arena
before a sold-out house, proving that Detroit is the Rock City.
This weekend, Detroit will welcome home two of its native sons--
Jerome Bettis and Larry Foote, both members of the Pittsburgh Steelers.
Larry Foote, a graduate of Pershing High, is at the beginning of a
promising NFL career, while Jerome Bettis is near the end of a Hall of
Fame career where he has displayed the character and toughness of a
Detroit native. Bettis graduated from MacKenzie High in the late
eighties, entered the NFL in 1993, and has since been mowing down
defenses on his way to ranking fifth on the NFL's alltime rushing list.

The Super Bowl will give Detroit and the State of Michigan and the
region an economic boost, but it will also provide a more important
opportunity for the people I represent to shine, as I know they will. I
am proud of Michigan's history and excited about our future. I am sure
that on Sunday night, those who have visited Detroit, those who have
watched the game will be excited as well. We say welcome to all of
them.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from West Virginia.
Mr. BYRD. I thank the very distinguished occupant of the chair, who
presides over this august Chamber with a dignity that is so rare as a
day in June and a loveliness that permeates the Chamber. I thank the
Chair.

Mine Safety

Madam President, yesterday, two more coal miners died in West
Virginia--two more, two more coal miners died yesterday in West
Virginia--one at Long Branch Energy's No. 18 tunnel mine in Boone
County and the other at the Black Castle Surface Mine, which is also in
Boone County, WV. That is a total of 16 coal miner deaths this year,
and the year is only 33 days old. This situation is deplorable--ghastly
deplorable.
The Governor of West Virginia, the Honorable Joseph Manchin,
announced last night that he has asked the coal operators of West
Virginia to cease production immediately and to go into a mine safety
standdown. He has asked that miners be removed from mines in order to
review safety procedures and asked that each new shift also review
safety procedures before entering the mine.
The Governor has called for expedited inspections of the State's
mines, and he has asked that the U.S. Labor Department send additional
Federal inspectors and personnel to the State.
The Mine Safety and Health Administration of the U.S. Department of
Labor announced last night that it would expand the mine safety
standdown to mines across the Nation on Monday, February 6.
This is a very noble action on the part of our Governor, Joe Manchin.
I have talked with Governor Manchin, and I compliment him.
I have to say that shutting down the mines for 1 hour is not a
serious solution. It may be a timeout for safety, but it is not time
enough for meaningful safety. Mine safety officials are displaying
increasing concern about this rash of mining fatalities.
Those who consider the tragedies at the Sago and Alma mines to be
random occurrences are now taking a second look. They are asking this
morning: When will these mine tragedies stop? When? The answer to that
question is unsettling, isn't it? It is possible that these accidents
are not going to stop. God only knows. Life and death are in God's
hands.
It is possible that mine safety protections have eroded so much in
recent years that these actions are going to continue. Who would have
thought that these mine deaths would occur as they have and in one
State? It is possible that these accidents are going to continue to
happen again and again unless new action--dramatic action--is taken by
the Federal Government to curb these mining hazards.
The danger to our coal miners is real--very real. Yes, very, very
real.

[[Page S469]]

The dangers to our miners is very real. There are too many needs, from
emergency communications and breathing equipment to a rapid
notification and response system to penalizing the reckless disregard
of Federal safety standards. Real. Too many needs, I say, are not being
addressed by the Labor Department and the Mine Safety and Health
Administration and require swift action by the Congress.

The longer we wait to act in Congress, the more likely another
fatality and then another fatality and then another may occur. The
longer we wait to act, the greater the threat to our energy
infrastructure. If these tragedies continue, mines could be closed and
coal and energy production could falter. The consequences could ripple
throughout the national economy. We cannot delay. We cannot delay in
responding.
I spoke with the distinguished majority leader yesterday. Of course,
I have already spoken with our distinguished minority leader, who has
joined in supporting the need for action on the bill that I have
introduced, along with Senator Rockefeller and along with the
delegation in the House, a bipartisan delegation. I spoke with the
majority leader yesterday, and I have asked mine safety legislation be
considered quickly, and I publicly renew that request.
I have come to the Senate floor hoping to see the majority leader
again this morning, but he is needed elsewhere, and for good reason, at
the moment. But I publicly renew that request, and upon his arrival I
shall discuss this matter with him. I have discussed it already with
the assistant leader, Mr. McConnell. I urge that this legislation be
scheduled as soon as possible, that there be scheduled time as soon as
possible on mine safety legislation.
The bill the West Virginia delegation introduced yesterday will help
to protect the lives of our miners. It will help to keep West Virginia
mines open. It will help to keep the coal coming. It will help to keep
the coal fueling the energy demands of our national economy. But we
must act quickly. We must ensure the safety of our coal miners.
Hear me. Listen. We must ensure the safety of our coal miners in
order to ensure the security of the Nation. The security of the Nation
depends on the safety of our coal miners. We have delayed too long
already, and every additional day we wait puts another miner's life at
risk.

O Death, where is thy sting?
O grave, where is thy victory?

Senators, listen: For whom does the bell toll? Who knows who will be
next?
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Montana.
Mr. BAUCUS. Madam President, I yield 20 minutes to the Senator from
California.
Mrs. BOXER. I ask my colleague to make sure Senator Lautenberg knows
my colleagues are willing to yield him 10 minutes upon my completion;
is that correct?
Mr. BAUCUS. I will then subsequently yield to the Senator from New
Jersey.
Mr. BYRD. Madam President, will the distinguished Senator from
California yield?
Mrs. BOXER. Yes.
Mr. BYRD. I ask so that I might thank her again for delaying her
speech until I could make these few remarks. I thank her from the
bottom of my heart. She is so considerate always, so courteous: ``And
what is so rare as a day in June?'' The beauty of the Senator from
California.
Mrs. BOXER. Oh, that is so nice.
The ACTING PRESIDENT pro tempore. The Senator from California.
Mrs. BOXER. I thank my friend and colleague, and really, in so many
ways, our leader in the Senate, and say to him before he leaves the
floor how much we stand with him on these mine safety questions.
We Americans are just facing so many tragedies. My colleague reports
on yet more deaths in the mines, deaths that are preventable if we do
the right thing by our workers. We are mourning together today five
more American soldiers killed in Iraq. We had an incident, a workplace
killing in Santa Barbara where five or six people lay dead. It is tough
times. But I want my good friend to know that we will stand with him on
this mine safety question.
Mr. BYRD. Madam President, if I might just take 1 minute, I deeply
thank--as they say in the other body--the gentlelady from California,
for her noble comments and for her support. The West Virginia
delegation in the House and the Senate is pleased at her expressions of
support. We are glad to have that support. West Virginia is proud of
the California delegation, the delegation that stands with us in this
hour of sorrow.
I thank the Senator from California for yielding and for her support.
Mrs. BOXER. Madam President, I rise now to discuss an amendment on
behalf of myself and Senators Kerry and Lautenberg, which expresses the
sense of the Senate that the White House should provide the public with
a thorough account of the meetings that the President, his staff, and
senior executive branch officials held with Jack Abramoff. The public's
confidence in the Government has been rocked, rocked by the widespread
reports of public corruption involving Jack Abramoff.
On January 3, Mr. Abramoff pleaded guilty to conspiracy, fraud, tax
evasion charges, charges that carry up to a 30-year sentence. He agreed
to cooperate with prosecutors in their investigation of a number of
public officials, and we don't know where all this will lead. I urge
the Justice Department to continue its investigation into any bribery
and corruption.
The damage to the public trust from the Abramoff scandal, combined
with the recent prosecution of Congressman Randy Cunningham, and the
indictment of Congressman Tom Delay is massive. The investigation by
the Department of Justice has really just begun. But right now, sadly,
there is a very low opinion of politicians, and trust must be restored
with the American people. We cannot govern effectively without the
support and confidence of the people. We are supposed to be their
representatives. We owe them everything, and we must start with
honesty, with ethics, so we can regain their trust.
If the people have lost confidence, we have to win it back. Every
Senator I know has searched his or her records for contributions from
Jack Abramoff, from his associates and the tribes he represented. Each
of us has responded in our own way. But to my knowledge, we have all
made our actions public. We have told our constituents what the
situation is and whether we plan to do something about it.
In the State of the Union Address the President said:

Each of us has made a pledge to be worthy of public
responsibility--and that is a pledge we must never forget,
never dismiss, and never betray.

Those are noble sentiments, very noble sentiments, and I challenge
the President to live up to them. Where there is an appearance of
impropriety, it is the responsibility of public officials to be open
with the public and to clear up any questions that might exist. I know
in my long career in elected life, and it is now more than 30 years of
elected life, I have had to return contributions from time to time. I
have tried to avoid the appearance of a conflict of interest. I have
even recused myself on three occasions because I believed that was the
right thing to do. But no matter what each of us does there will still
be those who doubt us. It is the system. It is a system that is based
on private financing, so it is very difficult, with that system, to
gain the trust of the people.
But it starts with openness. It starts with transparency. We should
each try to be as open as we can and make sure that, whatever we decide
to do, the public is informed. It doesn't help to be secretive. It
doesn't help to say: I don't have to do this; it is my right not to
tell the public anything. It may be your right, but it does not make it
right.
According to the press secretary of the President, Scott McClellan,
the President does not know and doesn't remember ever meeting Jack
Abramoff, and despite repeated requests the White House has failed to
provide details of meetings between Jack Abramoff and the President and
his staff. The problem is, more and more details keep coming out about
the relationship between Mr. Abramoff and the President.
Starting in 1997, Mr. Abramoff claimed credit for procuring a letter

[[Page S470]]

from then-Governor Bush that praised the then-Northern Marianas Island
Education Plan. In 2000, Jack Abramoff joined the Bush-Cheney
transition team. Several colleagues of Mr. Abramoff ended up being
appointed to key positions in the Department of Interior, the agency
that regulates Indian gaming issues, central to Mr. Abramoff's lobbying
business.
According to the Associated Press, Jack Abramoff and his lobbying
team had nearly 200 contacts with the Bush administration in the first
10 months they were in office--200 contacts in less than a year, and
nobody remembers anything? I mean it doesn't pass the smell test, to be
crude about it.
By 2001, Mr. Abramoff appears to have been selling his clients access
to the President. On May 9, 2001, the White House arranged an event on
behalf of the group Americans for Tax Reform. That group is a very
strong ally of President Bush. The event was attended by the President
and a number of legislators. There is a trail of documents that shows
that Mr. Abramoff asked some of his clients for $25,000 to go to that
event, with the funds going to this Americans for Tax Reform.
I want to show you some e-mails because I think that tells the story
better than anything. So here is what Mr. Abramoff asked in an e-mail
to a representative of one of his tribal clients. These are Mr.
Abramoff's words from an e-mail.

Americans for Tax Reform is bringing together the speakers
of all Republican-led legislatures for a meeting with Bush
and the congressional leadership. They have requested
sponsorship ($25 K) from only four groups. Two of them will
be major corporations and one will be Choctaw. Chief Martin
will be coming to the event I expect. I told them that I
would ask you guys to participate. The exposure would be
incredible and would be very helpful. One of the things we
need to do is get the leaders of the tribe (ideally the
chief) in front of the President as much as possible. Please
let me know as soon as you can. Thanks.

That is Mr. Abramoff to the representative of one of the tribes.
Let us see what that particular individual wrote to her tribe after
she received Mr. Abramoff's e-mail. She wrote:

Attached is an e-mail from Jack Abramoff with the firm of
Greenberg & Traurig. The chairman has agreed for the tribe to
be one of the four sponsors of and participate in a White
House event on behalf of the Americans for Tax Reform which
is being held on May, 9, 2001 in D.C. Please immediately
prepare a check made payable to Americans for Tax Reform in
the amount of $25,000 and forward it to my office by Federal
Express. Then Fed/Ex the check to Mr. Abramoff.

Just to finish this story, here we have a copy of the check Mr.
Abramoff received from the Coushatta Tribe of Louisiana in the amount
of $25,000--selling the President of the United States and using
Federal property.
The meeting was held in the Old Executive Office Building. In all, it
appears that four or more of Abramoff's clients attended the event, and
at least two claimed they paid the $25,000 requested. They paid that to
get close to the President on Federal property. Jack Abramoff, as I
said, delivered the President of the United States in exchange for his
clients' contribution to the President's supporters. How many more
Abramoff clients attended is not clear, and who paid money to attend
the White House event is not clear. The White House claims it has no
record of Mr. Abramoff attending, but Time magazine claims there is a
photo of the President standing with Abramoff and one of Abramoff's
clients.
This event alone warrants the President providing full disclosure of
meetings with White House officials and Jack Abramoff.
But this was not a one-time event. The following year, Mr. Abramoff
solicited money from his clients for another White House event in
behalf of Americans for Tax Reform.
The public has more and more questions about the relationship between
Jack Abramoff, the President, and his staff, but no answers are
forthcoming. The President's refusal to provide additional information
about these meetings has increased the public's distrust in the
administration and our Government at large.
The President said some very noble words at the State of the Union
Address. He said it was important for us to bring trust back. Yet we
see no movement for transparency and openness.
The public has a right to know whom Mr. Abramoff met with, what they
discussed, and whether improprieties existed. According to a Washington
Post/ABC News poll, 76 percent said Bush should disclose his contacts
with his aides and Mr. Abramoff. Two of three Republicans favored
disclosure. Let me say that again. In the poll, two of three
Republicans favored disclosure.
In fact, members of the President's own party in the Senate and in
the House have urged the President to provide information to the public
about this administration's dealings with Mr. Abramoff. I agree with
them. All Government officials who serve the public must take all steps
necessary to maintain their trust and confidence.
I hope my colleagues will support this important amendment which I
plan to offer on behalf of Senator Kerry and Senator Lautenberg. It
simply calls on the White House to immediately and publicly disclose
each visit and meeting between Jack Abramoff and the President, White
House staff, or senior executive branch officials.
Much is made about how Senators get an opportunity to fight for funds
for their State. Senator McCain has derided this action. Senator McCain
said earmarks right on their face are wrong. If you look at the number
of earmarks Members of the Senate are involved in for our States--I
know my colleague and I sit on the Public Works Committee. I don't need
any lobbyist to tell me that I need a road in my urban area when one is
broken down. I don't need a lobbyist to tell me that I need an HOV lane
or a new water system or a new sewer system or a new school or a new
senior center. It is my job to know that. Senator McCain thinks that is
all terrible. But the bottom line is the number of earmarks pales in
comparison with the amount of funds that are distributed by this
administration and any subsequent or prior administration. They
distribute most of the funds.
It is very important, as we all look at our campaign contributions,
to sort out in any of them which are in any way tainted by Mr. Abramoff
and that the White House comes to the table and is as open as we have
been. I believe it is very important. This isn't a partisan issue.
Republicans have been calling for the White House to come clean on
this, and Democrats are doing the same.
If we are going to restore confidence in our Government, it starts
with simple openness, not saying: Oh, this is privileged, this is
secret. I will tell you right now, we all learned it from our moms and
dads. When somebody says, this is secret, watch out. Our Government is
supposed to be open, not secret.
I hope there will be strong support for this particular amendment. I
believe its timing is crucial. We can't let any more time elapse.
There are calls for--and I am joining them--a special prosecutor in
this particular case. But even before that debate begins, let us have
everyone come clean on these meetings, contributions, and the like.
I thank my colleague from Montana, the ranking member of the Finance
Committee, for his generosity of spirit in allowing me to discuss this
issue. Technically, of course, it isn't a matter of the Finance
Committee jurisdiction, but I believe the timing is so important that
we should have a vote on this.
Thank you very much. I yield back whatever time remains.
Mr. BAUCUS. Madam President, I very much thank the Senator from
California for her terrific service to her State and to the Nation.
I yield 10 minutes to the Senator from New Jersey.
The ACTING PRESIDENT pro tempore. The Senator from New Jersey is
recognized.
Mr. LAUTENBERG. Madam President, I thank my colleague from Montana. I
also congratulate our colleague, the Senator from California, for her
diligence in pursuing this issue. Senator Boxer has an interest in
fairness and equity at all times, and open government. I am so pleased
that we can rely on her and her staff to research this matter and to
bring it to the public's attention.
Everyone knows there is a cloud over Washington these days. It is a
cloud of corruption that challenges the fundamental concept of
democracy in our

[[Page S471]]

great country, one that says the President, under the guise of an act
of patriotism, can spy on people, innocent people, invade their privacy
totally, and yet withhold records that are vital to the public's
confidence in government, withhold data that is required in this
scandal we are now witnessing which hangs over Washington.
This deep-seated corruption was exposed as part of an investigation
into the activities of the lobbyist Jack Abramoff. We now know that he
committed despicable acts against his own clients and that he conspired
at the same time with certain Members of Congress. His contacts with
the White House and his friends are still very much a mystery. Imagine
that--contacts with the President of the United States hidden from the
public. It is incomprehensible. President Bush refuses to disclose his
contacts with Mr. Abramoff for reasons that are unclear. If there is no
wrongdoing, there should be nothing to hide.
I wish to quote President Bush from a statement he made when running
for President in 2000. He said, and I quote him:

Americans are tired of investigations, scandals, and the
best way to get rid of them is to elect a new President--

We are talking about 2000.

--who will bring a new administration, who will restore honor
and dignity to the White House.

What an empty statement that has proven to be. President Bush pledged
to run an ethical White House. Now, as we see, those words seem almost
hypocritical. At the very least, in order to keep this pledge,
President Bush must release information on contacts between him, his
staff, and Mr. Abramoff. What is he ashamed of? Whether he is ashamed
of it or not, he ought to release it to clear the air. The public wants
these contacts disclosed. The President needs to help the truth come
out, the whole truth, and nothing but the truth. And he should be
assisting us in this investigation.
White House Press Secretary Scott McClellan says President Bush does
not know Mr. Abramoff. But there is stark evidence to the contrary.
According to Washingtonian magazine, Abramoff said that not only did he
know the President but that the President knew the names of Abramoff's
children and asked about them during their meeting.
There appears to be a long trail of contacts between Mr. Abramoff and
the Bush White House. For starters, President Bush put Mr. Abramoff on
his 2000 Presidential transition team--a pretty important job. Mr.
Abramoff was then able to get his allies appointed to key positions at
the Department of the Interior. Why the Department of the Interior?
Because it regulates Indian gaming issues that were central to Mr.
Abramoff's lobbying business.
He was also one of President Bush's top campaign fundraisers, a so-
called Pioneer. He raised over $100,000 for President Bush's 2004
reelection campaign. That was the definition of ``Pioneer''--big-time
money.
According to Time and Newsweek magazines, Mr. Abramoff also sold
access to the White House through payments sent to Grover Norquist's
front organization, Americans for Tax Reform. Senator Boxer displayed a
check which was made out to Indian tribes which paid upwards of $25,000
to Norquist for access to President Bush and his top adviser, Karl
Rove. Mr. Abramoff bragged to one his clients, Tyco, that he talked to
Karl Rove about their issues. And David Safavian, a White House
official now under indictment, funneled confidential information to
Abramoff to help Tyco.
Mr. Abramoff's own billing records show that his office had almost
200 contacts with the Bush administration in only its first 10 months.
The officials listed as contacts included the then-Attorney General
John Ashcroft and Vice President Cheney's top advisers.
As far back as 1997, there is evidence of contacts between then-
Governor Bush and Mr. Abramoff. Abramoff charged his client at the
time, the Northern Mariana Islands, to get Governor George W. Bush to
write a letter praising the island's education plan. Governor Bush did
write such a letter to the island government on July 18, 1997, with a
``cc'' to one of Mr. Abramoff's deputies.
The bottom line is that this amendment--once again, I salute my
colleague from California for bringing this up, and I intend to support
it vigorously--the bottom line is that this amendment urges the
President to clear the air. The American people want to know whether
the Bush White House was complicit with Mr. Abramoff's schemes. Maybe
Mr. Abramoff was exaggerating his contacts with the White House. That
is possible. But there is only one way to find out--release the
records. We are seeing withholding of information by the White House. I
sit on the Committee on Government Accountability. The Republican
chairman, Susan Collins, has asked the White House for information
related to the Federal Government's response to Hurricane Katrina. We
cannot get that. There has been a public display of the requests for
that information.

Does this suggest this White House is committed to keeping the
information--information that belongs to the public--private, within
their confines so they can do anything they want and not be challenged
with their conduct related to this issue? It looks like a constant
pattern.
I urge my colleagues to support honest and open government and to
vote for the Boxer amendment.
I yield the floor and suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BAUCUS. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. DeMint). Without objection, it is so
ordered.
Mr. BAUCUS. Mr. President, I am pleased that later today we will be
offering a modification to the Senate amendment to provide a 2-year
extension and enhancement to the research and development tax credit.
Of course, I have filed legislation with my friend, Senator Hatch, to
make a permanent commitment to research-intensive businesses in the
United States.
This legislation is bipartisan and bicameral. But 2-years is
certainly much better than the usual yearly extender. I am already
starting to hear from business taxpayers how important a commitment to
longer term research projects are, and I agree with them.
I am hopeful that we can prevail upon our House conferees to retain
this 2-year incentive.
You know, just the other night, the President spoke of the importance
of the R&D credit to maintaining America's competitive edge. He is
right, and that is why I have been a strong supporter of legislation to
make the credit permanent for the last few Congresses.
Every morning we hear news of some new product or discovery that
promises to make our jobs easier or our lives better. Many of these
innovations started with a business decision to hire needed researchers
and finance the expensive and long process of research and
experimentation.
Since 1981, when the R&D tax credit was first enacted, the Federal
Government was a partner in that business endeavor because of the
potential spillover benefits to society overall from additional
research spending.
But the credit has been hobbled over the years because of its
temporary nature. As stated in an analysis last year by the Joint
Committee on Taxation, ``Perhaps the greatest criticism of the R&D
credit among taxpayers regards its temporary nature.''
Joint Tax went on to say, ``A credit of longer duration may more
successfully induce additional research than would a temporary credit,
even if the temporary credit is periodically renewed.''
I think we should heed the advice of the experts at Joint Tax and
renew this credit for as long as we can. That is why I will support a
modified Senate proposal later today for a 2-year extension.
Research has shown that a tax credit is a cost-effective way to
promote R&D. The General Accounting Office, the Bureau of Labor
Statistics, the National Bureau of Economic Research, and others have
all found significant evidence that a tax credit stimulates additional
domestic R&D spending by U.S. companies.
A report by the Congressional Research Service, CRS, indicates that

[[Page S472]]

economists generally agree that, without Government support, firm
investment in R&D would fall short of the socially optimal amount, and
thus  CRS advocates Government policies to boost private sector R&D.
R&D is linked to broader economic and labor benefits. R&D lays the
foundation for technological innovation, which, in turn, is an
important driving force in long-term economic growth--mainly through
its impact on the productivity of capital and labor. We have many times
heard testimony from economists, including Federal Reserve Board
Chairman Alan Greenspan, that the reason our economy grew at such
breakneck speed during the 1990s stemmed from the productivity growth
we realized thanks to technological innovations.
There has been a belief that companies would continue to increase
their research spending and that the benefits of these investments on
the economy and labor markets would continue without end.
Unfortunately, that is not the case.
According to Battelle's 2005 funding forecast, industrial R&D
spending will increase only 1.9 percent above last year, to an
estimated $191 billion, which is less than the expected rate of
inflation of 2.5 percent. For the fifth year in a row, industrial R&D
spending growth has been essentially flat.
It is also important to recognize that many of our foreign
competitors are offering permanent and generous incentives to firms
that attract research dollars to those countries.
A 2001 study by the Organization of Economic Cooperation and
Development, OECD, ranked the United States ninth behind other nations
in terms of its incentives for business R&D spending. Countries that
provide more generous R&D incentives include Spain, Canada, Portugal,
Austria, Australia, Netherlands, France, and Korea.
The United Kingdom was added to this list in 2002 when it further
expanded its existing R&D incentives program. The continued absence of
a long-term U.S. Government R&D policy that encourages U.S.-based R&D
will undermine the ability of American companies to remain competitive
in U.S. and foreign markets. This disparity could limit U.S.
competitiveness relative to its trading partners in the long run.
Also, U.S. workers who are engaged in R&D activities currently
benefit from some of the most intellectually stimulating, high-paying,
high-skilled jobs in the economy.
My own State of Montana is an excellent example of this economic
activity. During the 1990s, about 400 establishments provided high-
technology services, at an average wage of about $35,000 per year.
These jobs paid nearly 80 percent more than the average private sector
wage of less than $20,000 per year during the same year.
Many of these jobs would never have been created without the
assistance of the R&D credit.
While there may not be an immediate rush to move all projects and
jobs offshore, there has been movement at the margins on those projects
that are most cost-sensitive. Once those projects and jobs are gone, it
will be many years before companies will have any incentive to bring
them back to the United States.
We continue to grapple with the need to stimulate economic growth and
advance policies that represent solid long-term investments that will
reap benefits for many years to come. I repeatedly have pointed to the
R&D tax credit as a measure that gives us a good ``bang for our buck.''
I hope my colleagues will join me in supporting a 2-year extension. It
is good for American businesses and workers, and we need it to maintain
our global competitive edge.
Mr. President, I take a few moments to talk about the schedule for
the rest of the day. The majority leader will be coming to the floor
momentarily. Obviously, he will give a better idea of the schedule.
I expect sometime before 11 o'clock this morning the majority leader
will come to the floor to offer the Senate substitute in a Grassley-
Baucus perfecting amendment. I understand the majority then will fill
the amendment tree--that is, offer amendments to fill up the tree--
preventing the offering of amendments this morning. However, Senators
on this side of the aisle will be able to offer their amendments. It is
just a question of when they can offer amendments.
Later in the day Members can offer amendments. It is the managers'
expectation Senators will have used or yielded all time back on the
bill at 2:15 and we will begin a series of votes that regularly follow
debate time on the reconciliation bill; that is, the so-called vote-
arama. Roughly at 2:15 we begin the vote-arama. As Senators offer the
amendments, at that point we will vote on the amendments. I am hopeful
we will have a couple minutes' time for an explanation as to what the
amendments actually are. That is the procedure.
I discussed the order of amendments to be offered with the Democrat
leader, and I have discussed the order with the chairman of the
Committee on Finance. Shortly, I will announce the plans for the first
10 amendments the Democrat Senators will offer.
Those first 10 amendments in this order are as follows: an amendment
by Senator Bingaman on prescription drug implementation; next is an
amendment by Senator Menendez, AMT dividends and capital gains, which
is germane; third, a Rockefeller amendment on mine safety; fourth, an
amendment by Senator Conrad, he will offer the substitute amendment
which is fully offset; fifth, an amendment by Senator Kennedy which
essentially is the R&D extension for 3 years, and that will be germane;
sixth, an amendment by Senator Obama with respect to Katrina child tax
credit; next, seventh, an amendment by Senator Cantwell dealing with
energy taxes; and No. 8, an amendment by Senator Schumer which is a
sense of the Senate on AMT; ninth, an amendment by Senator Harkin with
respect to so-called PEP and Pease provisions and dependent care
credit; and tenth is an amendment by Senator Landrieu for expansion of
the low-income housing tax credit. She wants to expand the tax credit.
There will be other amendments later. I am hopeful the additional
Democrat amendments can be 10, 12, 14, but I am not sure. I don't want
to prejudge that. These are the first 10. We will indicate what the
others will be.
This is our intention of how to proceed. My expectation is the other
side of the aisle will offer amendments. We will work with the chairman
of the committee and go back and forth at the appropriate time.
That is the general procedure we have in mind. It is not locked in,
but that is the general procedure in consultation with the chairman of
the committee that we would like to work out. Senators from the other
side of the aisle will want to offer their amendments. It will be the
managers' intention to alternate between both sides of the aisle. We
will seek to obtain copies of amendments and announce information on
them as soon as possible.
Obviously, if Senators get information on the amendments to us
quickly, the more likely we get the amendments up earlier rather than
later.
With those caveats, those are the first 10 amendments we expect to be
offered. Pending that, the majority leader is in the Senate. I am sure
he wants to make a statement.
I yield the floor.
The PRESIDING OFFICER. The Senate majority leader is recognized.
Mr. FRIST. Mr. President, I have been talking to the ranking member
before coming to the floor. I think he explained generally what will
take place. I will comment on it after completion of procedural
requests.

Amendment No. 2707

(Purpose: To provide a substitute amendment)

Mr. President, I send a substitute amendment to the desk, and I ask
for its consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist], for Mr. Grassley
and Mr. Baucus, proposes an amendment numbered 2707.

(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. FRIST. I ask for the yeas and nays on the amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. FRIST. I now ask that notwithstanding the Budget Act, it be in
order

[[Page S473]]

for me to send additional amendments and motions to the desk with all
the statutory debate time on each amendment or motion still reserved.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 2708 to Amendment No. 2707

(Purpose: To provide a substitute amendment)

Mr. FRIST. I send a first-degree amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist], for Mr. Grassley
and Mr. Baucus, proposes an amendment numbered 2708 to
amendment No. 2707.

(The amendment is printed in Today's Record under ``Text of
Amendments.'')
Mr. FRIST. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.

Amendment No. 2709 to Amendment No. 2708

Mr. FRIST. I now send a second-degree amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist] proposes an
amendment numbered 2709 to amendment No. 2708.

The amendment is as follows:

At the end of the amendment add the following:
``This section shall become effective 1 day after
enactment.''

Motion to Commit

Mr. FRIST. I move to commit the pending bill, and I send the motion
to the desk.
The PRESIDING OFFICER. The clerk will report the motion.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist] moves to commit the
pending bill to the Committee on Finance, with instructions
to report back forthwith, with an amendment.

Mr. FRIST. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.

Amendment No. 2710

(Purpose: To provide a substitute amendment)

Mr. FRIST. I send an amendment to the instructions to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist], for Mr. Grassley
and Mr. Baucus, proposes an amendment numbered 2710 to the
instructions on the motion to commit.

(The amendment is printed in today's Record under ``Text of
Amendments.''
Mr. FRIST. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.

Amendment No. 2711 to Amendment No. 2710

Mr. FRIST. Mr. President, I send a second-degree amendment to the
desk for its consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Tennessee [Mr. Frist], for Mr. Talent,
proposes an amendment numbered 2711 to amendment No. 2710.

The amendment is as follows:

(Purpose: To repeal the sunset of the provisions in EGTRRA relating to
the child tax credit)

At the end of the amendment add the following:

SEC. ___. PERMANENT EXTENSION OF EGTRRA PROVISIONS RELATING
TO CHILD TAX CREDIT.

Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset provisions)
shall not apply to the amendments made by section 201 of such
Act.

Mr. FRIST. Mr. President, as a continuation of the explanation, it
has not been my preference to file these amendments, but we have tried
over the last couple of days to bring a semblance of order so we can
complete the activity that is in the Senate. It was November when we
first passed this bill. The House passed a bill. Under the usual
circumstances, with unanimous consent, we marry the two bills and it
goes to conference.
We are spending these 20 hours, and we have had good debate over the
course of yesterday and this morning. But we have been unable to get
unanimous consent to have a list of these amendments with language
which would allow our chairman and ranking member to begin voting on
those amendments. Thus, what will happen today is, as the ranking
member explained, time will expire sometime around 2:15 today. I don't
know the exact time. After that, there will be a series of rollcall
votes. The rollcall votes begin with the Talent amendment, which is the
pending amendment. After that, others will have the opportunity to
offer amendments, and they would be voted on accordingly.
I do encourage all of our colleagues to work with the chairman and
ranking member, the managers of the bill, so we can have an orderly
process and we can stick with amendments that are pertinent and
relative to the underlying bill. It means if we work aggressively but
work collaboratively over the course of the day we will start voting
early this afternoon. We will be voting until we finish this particular
bill.
The PRESIDING OFFICER. The minority leader is recognized.
Mr. REID. Mr. President, I am sorry to have been late. Are we going
to finish these votes today, tonight?
Mr. FRIST. Mr. President, through the Chair, in response, I certainly
hope so. I believe we are in a position to do so, but it depends on how
many amendments we have. Once we start voting, we will keep the
amendments very tight. Both the Democrat leader and I said we hoped it
would not come to this point to have a vote-arama, but that is what it
will be. I believe we can finish it tonight. The only hesitation is how
much cooperation we get from our side of the aisle and your side of the
aisle. If we do not finish tonight, we will continue tomorrow until we
complete the legislation.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, if it is helpful to all Senators,
especially the Senator from Tennessee and the Senator from Nevada, we
have a total of about 20 amendments on this side. I don't know how many
are on the other side, but I guess maybe we could finish by around 7
o'clock or 8 o'clock tonight. That is a rough estimate. Maybe earlier.
The PRESIDING OFFICER. The minority leader.
Mr. REID. Mr. President, I appreciate the positive tone of voice of
my distinguished friend from Montana, but if we have 20 votes--and that
is on our side--and there are second-degree amendments to those, and
amendments offered on the other side, we are talking about a long
night. The best we can do, no matter how hard we try, is three, three
and a half amendments an hour. So we are talking about, if we start at
2 o'clock, a lot of hours.
I appreciate everyone being confident we will do this. And we will
certainly cooperate any way we can. And, as happens, there may be
Members who decide not to offer their amendments. That is always a
possibility. We will do the best we can. It may be necessary to alert
Senators that there may be work tomorrow. The distinguished majority
leader is in the Senate, but it is very likely we may not be able to
finish all these votes--well, maybe not ``very likely''--but it is
certainly possible we may not be able to finish the votes tonight.
Mr. FRIST. Mr. President, I have made it clear from the outset we
need to finish this legislation this week. Friday is a working day, as
we all know. If we have to be here, we will do that. On the other hand,
once people understand where we are and that we do not actually have to
be doing this, people will step back and be reasonable in terms of the
number of amendments, making sure they are amendments relative to the
underlying bill.
The managers will do this later, but Members need to be clear these
are 10-minute votes, as well.
I yield the floor.
Mr. BAUCUS. Mr. President, I don't see any Member wishing to speak at
this moment.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.

[[Page S474]]

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. Mr. President, I rise to make an opposite point of view
and critical comments on a statement that was made yesterday by the
Senator from North Dakota, Mr. Dorgan. Once again, he made a very
impassioned case, and everybody who hears him knows he presents his
case very well. He made an impassioned case for American workers whose
jobs have been lost when plants move overseas.
We have all witnessed this heart-wrenching event. I know even in my
home State of Iowa we have had plant closings for that reason. Some of
those operations have been moved out of the United States. But as far
as Iowans are concerned, let me remind you this has been a phenomenon
of plants moving from Iowa to other places for a long time, before we
ever heard the word ``outsourcing.''
I remind my colleagues I was a member of the International
Association of Machinists at a sheet metal factory, the Waterloo
Register in the town of Cedar Falls, IA. We made furnace registers. I
started working there in 1961, when I was a young member of the Iowa
Legislature, to supplement the income of a citizen legislator, and also
to supplement the income of a young farmer getting started at that time
because I was only farming 80 acres at that time. Even in 1961, you
could not make a living farming 80 areas. You could not make a living
getting $3,000 every other year being an Iowa legislator. So I became a
factory worker.
At about 1971, the people who owned our company decided people in
Texas would work for less money than people in Waterloo, IA, so they
moved the plant to Texas. Our job was shut down. Our job was lost. The
outsourcing was not to China, it was to Texas. I presume that 25 years
later there were jobs that moved from Iowa to Texas that eventually
moved to Mexico, and then it was not long Mexico was losing jobs from
Mexico to China. Now we hear about jobs moving from China to someplace
else, where somebody is going to work someplace else for a lower wage.
I guess when you have a planet of 6.5 billion people, and people want
to eat, they want jobs, somebody is going to seek that work and do it.
So I believe I have been a victim of outsourcing not to China but to
Texas. But it is still a problem today, and it is one for which we have
to have sympathy.
Senator Dorgan, obviously, presents a great case for those people.
But I want people to know I have lived through that and know what it is
like when I am commenting because I do not want people to think I am
unsympathetic to outsourcing. But I think we have to recognize the
economic facts of life, whether it is my job at the Waterloo Register
in Cedar Falls, IA, or whether it was 250 years ago when manufacturing
jobs left Great Britain to come to the Colonies in the United States of
America.
Now, I want to say, unfortunately, Senator Dorgan's amendment--if it
is the same one we saw in 2004. And you can tell from the debate that
we just had that we do not have the language on these amendments, and
we are begging for them. Anybody who believes in transparency of
Government ought to get these amendments out here. There is no reason
to be secretive about the people's business because everybody is
watching us right here on television. We are not trying to hide
anything. So we need to see those amendments.
But the point is, if it is like the amendment in 2004, that amendment
will not do one thing to bring jobs back to America. In fact, it could
very well cost even more U.S. jobs. I would like to explain, then, why
I come to this conclusion.
This amendment, if it is similar, repeals deferral for property
imported into the United States by a foreign subsidiary of a U.S.
company, without regard to whether that property was ever previously
produced, manufactured, or grown in the United States.
This means the amendment by Senator Dorgan fails to focus on their
primary complaint that U.S. companies are shutting their plants, moving
production offshore, and selling back into the United States. The bill
does not focus on this scenario. Instead, it overshoots the mark by
hitting all goods sold into America by U.S. companies, even if it is
impossible for those goods to be produced in America.
For example, if a produce company sets up a banana farm in Costa Rica
to import bananas into the United States and around the world, the
income from sales to the United States is not eligible for deferral. I
may be mistaken on this point, but I am not aware of too many banana
farms in Texas or Florida, so I do not see how allowing a banana farm
in Costa Rica is going to cost U.S. jobs.
Similarly, if a U.S. company wanted to start a mining operation in
some faraway land to extract a new and exotic mineral that is not found
at home, they could see that anywhere in the world, but they cannot
import that back into the United States without triggering the impact
of this amendment.

Or let's look at coffee. We have a lot of coffee shops on our streets
these days. If they set up their own coffee plantation in Brazil, they
would be hit by the Dorgan amendment. I think we only raise coffee in
one State in the United States, and maybe they do not do that in Hawaii
anymore. But there is not much coffee raised in the United States. We
sure do not raise it in my State of Iowa.
Our friends from New York and New Jersey ought to consider the
effects of this amendment on Puerto Rican residents who work in plants
owned by subsidiaries of U.S. companies. Many of the U.S.
multinationals have manufacturing subsidiaries in Puerto Rico that
import products into the U.S. market. Since our Tax Code treats Puerto
Rican corporations like foreign corporations, this amendment would hit
those companies very hard. But it would not hit their foreign-owned
competitors who sell into the United States.
It seems Senator Dorgan's amendment would allow a U.S. company to
sell a foreign-produced good to anyone in the world except Americans,
but it would allow a foreign-based company to sell those same goods to
Americans. When you stop to think about looking out for the benefit of
Americans, this does not make any sense.
I have described how the bill would operate, but I do not think this
is the intent of the legislation. What I believe is intended is that
deferral should be denied if a company closes a U.S. plant, produces
the goods offshore, and then imports the goods back into the United
States.
This does not actually happen very often. We have had this debate
before. The last time I spoke on this issue was when we were debating
the JOBS bill back in 2004. I do not think much has changed since then.
At that time, the latest Department of Commerce data on U.S.
multinationals showed that only 7 percent of foreign subsidiary sales
were into the United States--only 7 percent.
Nevertheless, this amendment insists that the rule of ``deferral'' in
our tax law is somehow a ``tax benefit'' that moves jobs offshore and
allows you to not pay taxes on foreign income. This is not true, of
course. Deferral has nothing to do with moving jobs, and it never
forgives taxes that are owed on foreign profits of U.S. companies.
Many U.S. companies, however, choose to reinvest their foreign
earnings in foreign markets, and so the U.S. tax on those earnings is,
then, indefinitely deferred.
As Senator Dorgan noted, the JOBS bill, that we call the American
Jobs Creation Act of 2004, did contain a provision that provided U.S.
multinationals a temporary ability to receive dividends from their
foreign subsidiaries at a reduced tax rate. Now, it is important to
note that companies could only avail themselves of this reduced rate on
an amount of earnings they identified in SEC filings as ``permanently
reinvested.'' That is a legal term, which means they had no intention
of bringing that money back to the United States.
Senator Dorgan's characterization of that provision is misleading,
and I would say in two ways. First, Senator Dorgan calls the
repatriation provision a tax cut of over $100 billion. To arrive at
that huge number, the Senator's calculation must assume these companies
would have brought close to $340 billion of their foreign earnings home
in the absence of the repatriation provision of the JOBS bill.

[[Page S475]]

Now, the fact is--and I get this from scoring by the nonpartisan
Joint Committee on Taxation--this provision has a cost to the Treasury
of not $100 billion but $1.9 billion over 5 years and $3.3 billion over
10 years; and it actually scored as a revenue raiser in the first year
of $2.8 billion.
Now, I plan on looking at the actual results of this repatriation
provision when all the facts are in, after the fact. You are kind of
guessing before you pass a bill. But after it has operated for a couple
years, then you get a chance to get a real look at it. So we are going
to look at this repatriation provision. But the Joint Committee on
Taxation must have scored this provision as a raiser in year 1, and a
relatively small cost over 5 and 10 years, because 5.25 percent of a
large amount that was repatriated is a lot more than 35 percent of a
much smaller amount that would have been repatriated otherwise.
In other words, it is not as much money coming back into this
country, and if it does not come back here, it is not taxed.
I am not here to defend the repatriation provision or those companies
that laid off workers or took advantage of the repatriation provision.
I am just as troubled by those announcements as Senator Dorgan. I am
simply pointing out that Senator Dorgan's characterization of that
provision as a $100 billion tax cut is extremely misleading.
Second, Senator Dorgan talks as if the repatriation provision was the
cornerstone of the American Jobs Creation Act, and it was kind of an
appendage. In fact, the repatriation provision was a very small part of
the bill. One of the key pieces of the JOBS bill was the manufacturing
deduction which does actually give a tax break for companies that
manufacture, leaving jobs here or creating jobs here. The Joint
Committee on Taxation scored this provision as a cost to the Treasury
of $76 billion over a 10-year period. That is, in fact, a tax cut, and
it is a tax cut that will maintain jobs in America and will create jobs
because one of the problems for American corporations compared to
international competition is the high tax rate that we have on
corporations compared to a lot of other countries. Those other
countries are waking up. Just look at Ireland, look at Europe, what we
are talking about doing now--sometimes through the European Union,
sometimes through individual countries. They are seeing great advantage
by reducing the corporate tax rate in their respective countries.
Two years ago, we thought we had moved ahead of them. Now they are
following suit. We may have to go back and look at our corporate tax to
find out if we are going to continue to be noncompetitive.
I would like to go back to the deferral issue. The rule of deferral
exists to keep U.S. companies competitive in the global marketplace.
Deferral is not something new. It has been in our tax laws since 1918.
We have debated the rule of deferral on several occasions, and we will
no doubt continue to do so when we debate tax reform proposals.
Opponents of deferral too often make wild accusations about how this
rule, which has been in place since 1918, spells doom for the American
worker. Of course, none of this is true. In fact, just the opposite is
true because we must always be vigilant about enhancing international
competitiveness for our U.S. companies. Hence, deferral ensures an
ever-growing base of opportunity for U.S. companies and, more
importantly, their employees at home and abroad.
U.S. multinationals are a critical component of our economy. These
companies operate in virtually every industry and, the last time I
checked, have investments of more than $13 trillion in facilities
located within the United States. As employers, they provided 23.5
million jobs for Americans in the year 2001. That was nearly 18 percent
of the payroll jobs in the United States. They had a payroll of $1.1
trillion. When you go back to this debate we had in the year 2004, I
noted at that time that the U.S. multinationals created more than 53
percent of the manufacturing jobs in America and employed more than two
U.S. employees for every foreign worker. Those were the latest years
for which I had figures, but I have no reason to believe it is
different today.
During the 10 years from 1991 to 2001, U.S. multinationals increased
domestic employment at a faster rate than the overall economy. A recent
study confirms that U.S. multinationals are significant job creators,
and those jobs are not created through ``exporting'' jobs to foreign
nations with low-labor and low-tax costs, as Senator Dorgan contends.
The Department of Commerce data shows that the bulk of the U.S.
investment abroad occurs in high-income, high-wage countries.
Again, referring to the year 2001, 79 percent of foreign assets and
67 percent of foreign employment of U.S. multinationals were located in
high-income, developed nations such as Australia, Canada, Hong Kong,
Japan, New Zealand, Singapore, South Africa, and the countries of the
European Union. We have to remember a very simple maxim for why
companies go into foreign markets: 4 percent of the people in the world
live in the United States. If you want to create jobs in America and
you just want to sell to that 4 percent, you are going to have a very
limited market. Whether you are in agriculture, like I and my son and
grandson are, selling corn and soybeans overseas, or whether you are
manufacturing John Deere tractors, whatever you are manufacturing, if
you want prosperity, you go where the market is. That is the 96 percent
of the people who don't live in the United States.
Again, referring to that debate on the JOBS bill in 2004, fully 95
percent of the world's population and 80 percent of its purchasing
power--so the only new thing I am giving is not that 96 percent of the
people live outside of the United States, but 80 percent of its
purchasing power--is located outside the United States. Foreign sales
growth has outstripped domestic sales growth. So our companies are
taking advantage of selling to the rest of the world. This increased
growth requires increased employment wherever you can find it. The good
news is that foreign growth also results in U.S. job growth.
A recent study confirmed that during the 10 years from 1991 through
2001, for every one job that U.S. multinationals created abroad, they
created nearly two U.S. jobs in their parent corporations. That is why
it is critical to our economy that U.S. companies remain competitive in
the international marketplace.

I would like to review a more rational explanation of deferral and
how it works to keep our U.S. companies competitive. The United States
taxes all of the worldwide income of its citizens and corporations. The
U.S. income tax applies to all domestic and foreign earnings of U.S.
companies. The United States fully taxes income earned overseas by
foreign subsidiaries of U.S. companies. However, many foreign countries
tax their companies on a territorial basis, meaning that they only tax
income earned within their country's borders and don't impose tax on
the earnings of foreign subsidiaries. Major countries using this
territorial system of corporate taxation are Australia, Belgium,
Canada, Denmark, Finland, France, Germany, Italy, Luxembourg,
Netherlands, Sweden, and Switzerland. A company from one of these
countries that uses the territorial tax system has great advantage over
U.S. companies.
For example, a U.S. company with a Singapore subsidiary will pay U.S.
tax and Singapore tax on the subsidiary's income. A French company with
a Singapore subsidiary will pay Singapore tax but no French tax. This
means that a U.S. company in Singapore has a higher tax burden than a
French company in Singapore. Two basic tax rules answer this problem
and seek to put U.S. companies on a level playing field with foreign
competitors from territorial countries. The first rule says that when
foreign income is brought home, the U.S. allows a reduction against
U.S. tax for any foreign taxes paid on that income. The foreign tax
credit prevents the U.S. from double-taxing foreign earnings which
would make our companies noncompetitive in the international
marketplace. And like deferral, this has been in the tax law since
1918.
The foreign tax credit, however, is limited. It may only offset the
U.S. tax on that income which is currently imposed at a 35-percent
rate. If the foreign tax rate is higher, the credit stops at 35
percent. If the credit is lower, say 10 percent, then additional U.S.
taxes

[[Page S476]]

will be owed up to the full 35 percent. In this example, an additional
25 percent of the taxes would be owed to the United States, which is
the difference between the 10 percent and 35 percent of the U.S. rate.
The second basic tax rule is that U.S. companies are allowed to defer
U.S. tax on income from the active business operation of a foreign
subsidiary until that income is brought back into this country, usually
in the form of dividends paid to the U.S. parent. This is referred to
as the rule of deferral, meaning that the U.S. tax is deferred until
the earnings are brought back. This is the rule the Dorgan amendment
attacks.
It is important to note that deferral is not the forgiveness of tax.
It simply means that we impose the full U.S. tax when foreign earnings
are repatriated to the United States instead of doing it the very day
of earning. The reason that we defer tax on active business operations
is so that U.S. companies can remain competitive with foreign companies
that have a different system of taxation than what we have. I am
referring to what I called the territorial tax. We don't defer tax on
passive activities like setting up an offshore bank account or other
passive investments. We tax passive activities yearly. But active
operations are subject to competitive disadvantage.
For example, if we impose U.S. tax today on the profits of a
Singapore subsidiary, then the U.S. company will pay a 35-percent tax
in the United States, net of any Singapore taxes, but that French
competitor located right next door in Singapore will pay only the
Singapore tax. If the Singapore tax rate is less than 35 percent, which
is the U.S. tax rate, then the French competitor will have a tax
advantage. Who wants to give any advantage to a French competitor? This
is because the United States allows a foreign tax credit to offset the
U.S. income tax imposed on those foreign earnings but only up to the 35
percent U.S. corporate rate.
If the foreign rate is less than the U.S. 35 percent rate, then
residual U.S. taxes are owed on the difference between the U.S. tax
rate and the foreign rate. For example, if a Singapore tax is 15
percent and the U.S. tax is 35 percent, then the United States will
impose an additional 20 percent on those Singapore earnings. The French
company, however, would only pay the 15 percent Singapore tax. If we
did not allow deferral on that additional 20 percent of tax, then the
U.S. company today would have a 20-percent tax disadvantage compared to
the French company.
The question on repealing deferral is whether we want to hand over
the world market to companies from France and Germany and other
countries that have a different system of taxation than we have, called
the territorial system. Repealing deferral means that we export our
high U.S. tax rates to U.S. corporations around the globe. The United
States has one of the highest corporate tax rates in the world. There
are few countries with rates higher than the United States. This means
that without deferral, U.S. companies will be at a continual worldwide
disadvantage compared to their foreign competitors.
That is why we defer U.S. tax on active business operations, so that
U.S. companies can be competitive in the global marketplace.
Some Senators have proposed repealing deferral or cutting back on it,
as Senator Dorgan's amendment would do. These proposals would export
the high U.S. tax rate to U.S. operations around the world. That would
be fine if all companies around the world were paying the high U.S. tax
rate, but, as I have said so many times, they are not. We have one of
the highest corporate tax rates in the world. Companies of foreign
countries are not subject to our tax laws and are usually taxed at
lower rates. This all brings us back to the implications of Senator
Dorgan's proposal. It would enhance the competitive advantage of
foreign-owned multinationals over U.S. multinationals.
Our focus in considering this amendment must be on the ability of
American companies to compete within the United States as well as in
foreign markets if we want to maintain and create jobs in America. The
issue is not whether we tax foreign earnings currently but whether we
cede the U.S. market to foreign competition.
The Dorgan amendment will increase taxes on U.S. companies, but their
foreign competitors in the U.S. will not face a similar tax increase.
This can lead to a loss of domestic market share, or even if market
share is maintained, losses may be incurred on domestic sales because
of pricing pressures and uncompetitive margins created by the
additional tax burden.
No one is happy when companies move abroad to a tax haven to avoid
U.S. tax. But let me tell you another side effect of the proposal to
eliminate and cut back on deferrals. In the American Jobs Creation Act
of 2004--that bill I always referred to as the JOBS bill--we enacted a
provision that prevents corporate inversion, where a company would
pretend to move its corporate headquarters to Bermuda, to a simple post
office box there, and do it not because they are going to do anything
productive there but for the sole purpose of avoiding U.S. taxes. Many
U.S. multinationals complained that inversions were necessitated by an
inability to compete with foreign-owned multinationals that aren't
subject to the higher U.S. tax rate.
We should be proud, then, that we shut down those inversions, those
shell corporations, those postal box corporations which do nothing over
there except go there to avoid tax and then make the situation even
worse for honest corporate taxpayers in America that are paying the tax
into the Federal Treasury. But in the process of doing that, we didn't
do it at the expense of repealing deferral. Now that we have shut down
inversions, if we repeal deferrals, or significantly cut back on them,
the only other alternative that would be available to U.S.
multinationals would be to sell themselves to foreign companies or to
be taken over by a foreign company in a possible hostile takeover. If
we prevent U.S. companies from deferring their foreign profits, we will
see more and more U.S. multinationals being bought out by foreign-owned
multinationals. Tax changes have consequences.
Increasing taxes on U.S. multinationals will not bring jobs back to
America. You only pay taxes if the company is profitable, and you only
stay profitable as long as you remain competitive. But in the United
States, taxes are 35 percent cost-to-profit, and that is where a
competitiveness disadvantage can occur when a U.S. company is competing
against foreign companies that will not incur this tax increase.
Senator Baucus and I held hearings a couple years ago regarding the
effects of the international competition within the United States, so
we as leaders of the Finance Committee are very familiar with the
effects of these kinds of rate differentials.
I think a quote by Joseph Guttentag, international tax counsel of the
Clinton administration, during testimony before the Finance Committee
in July of 1995 is a very good place to end this debate. So I end with
this quote:

Current U.S. tax policy generally strikes a reasonable
balance between deferral and current taxation in order to
ensure that our tax laws do not interfere with the ability of
our companies to be competitive with their foreign-based
counterparts.

Now, if that position just expressed by Joseph Guttentag,
international tax counsel in the Clinton administration, the last
Democratic administration, testifying before a Republican Congress,
isn't good enough evidence that the route Senator Dorgan wants to go is
the wrong route and a route contrary to previous leaders of his own
party, then I don't know what will be evidence that this position is
going to make American companies uncompetitive, not go to the
marketplace of the other 96 percent of the consumers around the world
outside the United States, and consequently creating jobs in the United
States, and I don't know what it takes to convince him that position is
a wrong position for the United States and is so different than what we
have traditionally had for the Tax Code since 1918. When I say 1918,
that goes back almost to the beginning of the income tax in the United
States.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Pennsylvania is recognized.
Mr. SANTORUM. Mr. President, it is sort of with mixed emotions that I
am

[[Page S477]]

here on the floor to talk about this tax bill. In one sense, I am very
happy we are moving forward with the Tax Increase Protection Act. At
the same time, I am at somewhat of a loss as to why we are spending 2,
3, and maybe more days of the Senate's time for something that is
traditionally done when there is comity and cooperativeness in the
Senate by unanimous consent, putting in a substitute Senate-passed bill
for the House bill and go to conference. That is something we do
routinely here, almost daily. We have disagreements with the House, and
we simply go through the procedure of moving to conference and having
those differences worked out.
Unfortunately, we are at a time here where even routine things become
weeklong labors to accomplish them. That does not reflect well on the
Senate. I don't believe it accomplishes anything other than to delay
other matters that are to come before the Senate.
We have a very important bill dealing with an issue that is of vital
importance to my State--many manufacturing jobs in my State--and that
is the asbestos debacle going on throughout the courts in this country
where over half of the money paid out by corporations in asbestos
claims has gone to lawyers. There are many people in the Commonwealth
of Pennsylvania who are literally getting pennies--people who are sick
and some are dying and some have died, and they have received literally
pennies for their exposure to asbestos and their subsequent disease
because of the horrific environment of litigation on asbestos, where
lawyers are profiting and patients--those who are sick or are survivors
of those who have gotten ill and died--get virtually nothing. This is
something we have to address.
Instead of addressing that, which is what we should be doing right
now, we are holding up the Senate on a procedural matter. It is truly
sad that we can no longer just cooperate on the normal business.
Everything is obstruction and slowdown and political potshots and
making points. I think that is unfortunate for this body. It sets a
very dangerous precedent that we are going to conduct business like
this in the future. Whether it is in the next election or elections in
the future, at some point in time, the tables will turn. I believe what
we are establishing today is not something that will be beneficial for
the long term in our ability to get things done in the Senate.
While the chairman is still on the Senate floor, I thank him again. I
am repeating this because we are doing the same bill. I thank him for
all the hard work he has put into this bill. The fact that he was able
to get a bipartisan bill through the Senate is a testament to him, and
I know it is very difficult and trying, negotiating within our own
conference as well as negotiating with Members on the other side of the
aisle. He was able to, as he has done on many occasions, cut through
all of the difficulty and partisanship and the angst some Members have
about various provisions and find a good middle ground, and well over
60 Members of the Senate supported the Senate bill that passed in
November. I thank him for his good work and for the work he has done
with me, in particular, on the issue of helping the nonprofit sector in
our society meet the needs of those.
We were at the prayer breakfast this morning, and Senator Grassley
was there. We heard Bono and the President talk about taking care of
the least of our brothers and sisters. The President says it so well. I
have been advocating so long that nobody really does it better than our
faith-based communities and our community nonprofits. They are the ones
on the front line. We talked about it at the prayer breakfast--whether
it is responding to a natural disaster or, more often and less
prominently, responding to a person in need in our communities across
America, rich as well as poor, people in need who are suffering.
It is important that we recognize that portion of this bill has to be
a net plus for our charitable community. There are provisions in there
that I have expressed concerns about which would do damage to those
nonprofits' ability to be able to provide the needed services and to do
the good works in our communities that make America stronger.
We have some good charitable-giving incentives, which are a big plus,
but we also have charitable reforms on which I worked with the
chairman. I think that maybe we are 90 percent of the way there, making
sure we weed out some bad practices and making sure there isn't abuse
within the charitable field, but at the same time not saddling our
charities with a Sarbanes-Oxley type of oversight and regulations that
would drive a lot of our small volunteer-oriented nonprofits out of
existence and leave a big hole in our communities across America.
I am hopeful that when we get to the House and into conference,
Chairman Thomas will work with us and we will be able to get a bill
that will be not only a net plus but a big plus for the armies of
compassion, the foot soldiers across America who are helping men and
women in need and children in need in our society.
A big part of this bill, obviously, is the tax relief. It is not
exactly what I had hoped for. It is one of those compromises we had to
make along the way. I thought the House bill actually had some better
provisions when it comes to some of the tax provisions. It continues on
a policy that has resulted in a lot of positive economic news over the
past several years since 2003. We have seen that by these changes in
the Tax Code and reducing marginal rates and capital gains taxes and
dividends, it has incentivized the entrepreneurial spirit and
incentivized business investment; it has created an explosion of growth
in this country, which has also resulted in millions of people getting
jobs--net new jobs across America.
I have a chart that shows, since the Jobs and Growth Act of May of
2003, and looking at the real GDP growth in America, there is a
dramatic tilting upward since these provisions were passed. That has
resulted in a dramatic increase, as we have seen on some other charts,
in Federal revenues.
There is a constant complaint, a drumbeat on the other side of the
aisle, and from a few on this side of the aisle, that somehow we cannot
afford these tax reductions.
It is interesting; if you think of tax reductions, that leaves the
question, What is a tax reduction? What is a tax reduction? Is a tax
reduction a reduction in the taxes paid; or is it a reduction in the
rate of the tax paid? What is a tax reduction?
Depending on how you view a tax reduction--and the answer is
different based on what we did--if you look at, Did we reduce taxes,
the answer is, with respect to rates, yes, we reduced taxes; we reduced
the capital gains dividend rates, the marginal tax rates. We reduced
the rates on the taxation of married couples and in several other
areas. So, yes, we reduced the rate of tax.
The question is, Did we reduce the collection of taxes? What should
Congress be more concerned about? Should we be more concerned about the
rates of taxes or should we be more concerned about the collection of
tax revenues?
I would think most people, when we have cut taxes, would say we
reduced the collection of taxes in America. That is not what happened.
When we reduced the rate of taxes, when we cut taxes, we actually
didn't cut taxes. We actually increased the flow of revenue to the
Federal Government.
So if we are looking at it from the standpoint of the budgeteers, the
folks who are responsible for managing the receipts and distributions
of Government, then the actions taken by the Congress in 2001 and 2003
resulted in increased taxes paid to the Federal Government through a
policy that believes in the innovation and the energy of the people,
that if you unshackle them from higher tax rates, they will produce
more, they will create more jobs--and job growth has been terrific,
over 2 million jobs, and the unemployment rate has been under 5
percent--and we end up with a better quality of life, more revenue to
the Federal Government, and higher growth rates overall in our economy.
That is a pretty good picture. So why the complaints? Why are people
so upset that we actually put a program in place that has resulted in
more revenues coming to the Federal Government? Why the complaints? Why
the gnashing of teeth that somehow this is a policy that is harmful to
the budget deficit? Revenues were up 14 percent last year. How is that
harmful to the budget deficit?

[[Page S478]]

They say: That would have happened; in fact, we would have gotten
more money had we not reduced taxes. Is that true? Let's look at the
capital gains issue.
The Congressional Budget Office estimated in 2003 that we would
collect roughly $125 billion in the year 2004 and 2005 in capital gains
taxes. We went ahead and reduced the capital gains tax rate. Many of us
stood on the floor and said, by reducing that rate, we will actually
get more revenues. The Congressional Budget Office said ``no,''
everybody on the other side said ``no,'' and, in fact, everybody on the
other side still said ``no'' and still says we shouldn't keep those
rates low, we have to increase those rates because we need the money.
How did it work out? What happened when we reduced those rates? Did
we get, as the Congressional Budget Office suggested, $26 billion less
money? And that is what they projected. They projected in 2004 and 2005
that the amount of money coming into the Treasury in capital gains
taxes paid would go down by $26 billion. What happened? Now we know.
The amount of revenue collected in capital gains taxes went up $27
billion.
I was talking to a reporter the other day. I said: Lo and behold, I
voted for a tax increase and didn't even know it. I voted for a
provision that actually increased taxes to the Federal Government, and
the folks who paid those taxes were very happy to pay them, by the way,
because they were investing in America and America's values were
increasing. Stock in America, real estate in America, the things that
made wealth in America were increasing because of a growing economy
because of what we did on the floor of the Senate, and they were very
happy to have paid those taxes. And we got more Federal revenues.
What does the other side want to do? They want to have that rate go
back up. One might suggest that if the rate goes back up, revenues
could do down. What could be their motivation? What is the motivation
of trying to increase a tax to get less revenue? Think about it. What
could be the possible motivation of coming to the floor of the Senate
and saying we need to increase taxes, even though by doing so we are
going to get less money. Why would you do that? From a public policy
perspective, why would you want to do that?
I can tell you that the argument is given that we need it to balance
the budget. Wait a minute. We are going to get less money, so why would
you do it? Could it be something of the whole politics of envy, the
politics of pointing the finger at those who are successful, get a
paycheck, and invest in America and say we need to tax them more; that
is the fairness issue? We hear that a lot on the floor of the Senate:
It is about fairness. That is what it is about? Stick it to those who
succeeded, invested, purchased real estate, purchased stocks and bonds;
we are going to take a bigger chunk of their money because that is
fair. We may get less revenue, we may get slower economic growth, fewer
jobs will be created, but we will feel better.

That is not sound public policy. That is not in the best interest of
the American people. We did not get in the Senate bill a reduction of
capital gains tax rate extension for 2 more years, but I will tell you
that we will work very hard in the conference to make sure that
happens. It is important for the economic growth of our country, for
the job creation in our country, and for Federal revenues that we get
that extension in law.
There are a lot of games being played on the floor of the Senate when
it comes to tax policy and the politics of envy. What we should be
focused on is how does this Senate, how does this Government create the
best environment for growth opportunity and job creation and how do we
do it in a way that is fiscally responsible. Those are the two things
on which we should be focusing.
I would make the argument that the bill before us, which prevents an
increase in taxes--these are tax policies that are in place right now;
there is no new policy or, I should say, very minor, little new policy
changes, such as the charitable giving incentives, but very small
policy changes, a very small percentage of the money. The overall bill
deals with provisions such as the alternative minimum tax, which is
vitally important and the small saver's credit, which is important.
About a quarter of a million people in my State strongly support that
provision, in fact, would strongly support increased incentives for
low-income individuals to save and, in fact, put forth a bill with
former Senator Corzine to do that. So I am looking for another new
cosponsor if anybody wants to join. It is called a kid's account to
give every child in America a nest egg to begin to save at their birth.
I am big on giving people the opportunity to save, invest, build
wealth, and feel connected to the economy of this country. We need to
do more of that. But we have a little piece of that here, which is
important to the people in my State. Mr. President, 150,000 families
and students in my State will lose their deduction for college tuition
if we don't extend that provision. With regard to the teacher tax
credit provision Senator Collins championed, 142,000 teachers in
Pennsylvania will not be able to deduct that. We can go on and on.
These are preventions of tax increases, a tax reduction that caused
the kind of economic growth we have seen. It is important for us to
have these provisions stay in law.
Finally, I want to talk about an issue that has been brought up--and
it is an important issue--and that is the issue of mine safety. I know
Senator Rockefeller has put forth an idea that I think deserves some
consideration because it has merit. It provides mining companies with
incentives to make available newer technology that will enhance safety.
We have seen over the last month in West Virginia and we saw, I
guess, 3 years ago in Pennsylvania, mine disasters occur where human
life was lost, in the cases of West Virginia, and certainly a major
disaster was diverted in Quecreek in Pennsylvania.
This is a serious issue, one I care deeply about. My grandfather was
a coal miner in a deep mine for 30 years, so this is very close to home
for me. This is one issue we need to do something about, to improve the
safety for those who literally risk their lives every day to provide
for their families, to build strong communities, and to provide energy
for all of us so these lights will work in the Chamber. We need to do
all we can to improve enforcement as well as to create incentives for
the mining community to improve safety at the workplace.
There is another provision in the Rockefeller bill that has to do
with training for rescue teams. Because of the way it is written, I
have some concerns about it. I heard from a lot of our small mining
operations, family-run operations, that this provision would not
benefit them at all.
As we know, a large percentage--at least in my State--a large
percentage of the mine operations in my State are not big corporate
mining operations. They are small, in some cases small corporations,
family-run operations. So while I certainly strongly support the first
provision and support the concept behind the second provision, I have
serious concerns about the way that provision will tilt to the benefit
of the larger mining operations.
While I support it and will support this amendment, I hope it is
included and that we can work on something in conference to include
improvement of mine safety, I am putting my marker down here that we
will do so not to discriminate against small mines versus larger mining
operations. If anything--if anything--we should be concerned about, as
we do on a lot of issues in the Senate, helping the little guy, as
opposed to helping the big guy because the big guys already have the
resources to spend to provide for a safer workplace.
What we should be doing is focusing on how we can make smaller mining
operations safer. That is not what this amendment that Senator
Rockefeller puts forward does. As a result of that, while I support it
and will support the provision to be included in the conference, I put
the marker down that we are going to work diligently to make sure it
uniformly impacts across the industry and, if anything, it benefits the
smaller mine operator as opposed to the bigger one. That is not the way
it is currently drafted.
I completely understand. I don't think Senator Rockefeller--at least
I

[[Page S479]]

hope he didn't go in there with the idea that we are going to favor one
segment of the mining industry over the other. I hope that is not his
intention. Whether it is his intention, I will certainly work with him
to make sure it is a much more balanced provision when it comes out of
conference.
With that, Mr. President, I thank the chairman for yielding the time
to speak on this important bill. I yield the floor, and I suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DORGAN. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. My friend from Iowa came to the floor to speak a bit this
morning on a couple of subjects I spoke about yesterday. Let me again
say I have very high regard for Senator Grassley. We worked together on
a good number of issues. I enjoy working with him. But there are times
when you have disagreements on policy, and we certainly have that on an
issue I am going to talk about. It is an issue he talked about this
morning as well. Actually, there are a couple of tax issues.
Before I do, however, I want to just make a slight correction to the
remarks that were made by the Senator from Pennsylvania a few minutes
ago. I heard him say the Democrats were holding up this bill on, I
guess--I think he said a technicality. I think he said it was a
technicality. I think that was the impression he intended to leave,
obstruct or holding this up on a technicality.
I guess the technicality is our interest in offering amendments. I
know to some that is not a pleasant thing around here, to have people
offer amendments and actually debate them and vote on them, but that is
the way the system works. The reason there are not amendments offered--
and I would try to offer one right now, but I would be unable to offer
one--is because the majority party has done something that is called
filling the tree. It is a parliamentary procedure to make sure every
branch of this legislative tree is filled so that no one is allowed to
offer an amendment.
For example, while this bill is on the floor, under the rules of the
Senate, I should be able to offer an amendment. The majority party
decided to fill the tree, as it is called, so no one on this side may
offer an amendment. So when my colleague from Pennsylvania said the
Democratic side of the aisle is using a technicality--whatever, I
forget his term exactly--to hold this up, I am sorry that is not what
is happening at all.
He made a point that I share. I think it would be great to work
together. I think there ought to be less rancid partisanship and we
ought to find ways to work together to do the Nation's business. We,
after all, represent the same interests. We represent the interests of
this country. I hope we represent the interests of the American people.
I would like to find areas where we can work together.
In this case, however, let me just say there is no obstruction going
on here. The only obstruction is we are obstructed from being able to
offer an amendment which in ordinary circumstances the rules of the
Senate would permit. I regret that. I wish the majority party would
have allowed me. I would have offered the amendment yesterday, in fact,
and I would offer it right now. I have an amendment to offer. I guess
we will vote on it later because you will have to have a circumstance
where we can offer the amendment. I suppose the purpose is to allow
amendments to be offered when all time is expired so there is no debate
that is allowed. I guess that is probably the purpose. But I did want
to disabuse anyone of the notion left by my colleague from Pennsylvania
that somehow it is this side that is hanging all of this up.
It may be inconvenient to have people offer amendments in the Senate,
but there are a couple of hundred years of tradition of this
inconvenience. The inconvenience is to be able to offer ideas, debate
the ideas in the form of an amendment, and then have a vote, and the
vote determines whether the idea that is offered represents public
policy that the full Senate will accept.
Let me just respond to a couple of things my distinguished colleague
from Iowa has said. Yesterday, I gave a presentation talking about
something called deferral. I know most of these things sound like
foreign language around here. Deferral of income tax obligations is
what it is. If a company does business overseas, an American company
does business overseas and earns income overseas, at some point when it
brings those profits, that income back to our country, they will be
required to pay an income tax to our country for the income they have
earned. They will get a credit, actually, against taxes they paid to a
foreign country so they will not be double-taxed. But when they
repatriate that income, as it is called, they have to pay a tax.
My colleagues in the Congress, a sufficient number of colleagues who
represent the majority, decided that they wanted to have a kind of
little sweetheart deal for companies that would repatriate their
earnings because many companies park their earnings for a long while
overseas and don't bring them back. When they bring them back they have
to pay the full tax rate. My colleagues said: Let's create new jobs in
America by allowing these companies to bring their income back, and we
will give them a special superdeal.
You have heard of blue light specials; this is the blue light special
of all specials. It says you bring that money back from overseas, you
get to pay not 35 percent, not 30 percent, not 25 percent, not 15
percent or 10 percent--which is the lowest income tax rate that is paid
by the lowest income earner who has to pay income taxes--you get to pay
a 5.25-income-tax rate. Who is the ``you''? The biggest companies in
our country: Ford Motor, for one thing. I mention that because when
they announced they are going to lay off 30,000, they also said: By the
way, we picked up a quarter of a billion dollars of tax refunds under
the Jobs Creation Act. Isn't that interesting? Ford Motor said in the
same press release: We are going to lay off 30,000 workers in this
country and, by the way, we were able to get a quarter of a billion
dollars, a $250 million benefit from the jobs creation tax rate special
benefit of 5.25 percent.

The whole purpose was to create jobs in our country and, at least in
the most recent job announcement of 30,000 jobs lost, the very company
that announces 30,000 jobs gone points out they got a quarter of
billion dollars under this provision.
My colleagues seem to suggest the provision really does work, it is
helpful. No, it doesn't work. It didn't work. By my calculation, the
income that was parked overseas and at some point would have had to
have been repatriated to this country, that income would have borne a
tax that is about $104 billion more than what was paid under the 5.25
percent.
Is anybody going to have to answer to that? I don't know. Maybe not.
Maybe nobody cares--$104 billion. You could reduce the Federal debt,
reduce the annual budget deficit. You could probably provide some
health care to people who do not have it, perhaps help some kids who
are hungry, perhaps provide health care for kids who are sick, improve
some classrooms in schools that need improvement--maybe there is a lot
of things you could do. But $104 billion, that is a tax break given to
the biggest corporations in this country who brought income back to our
country and would have had to pay normal income tax rates but were told
by this Congress that we are going to give you a superspecial deal that
no other American taxpayer has: 5.25 income tax rate.
Wouldn't every American love to pay a 5.25 income tax rate? But they
can't. That deal is just reserved by the Congress for some bigger
interests.
I didn't vote for that. I didn't support it. I strongly opposed it.
My colleague who sat in this chair right here, Senator Fritz Hollings,
who is now retired, offered the amendment to strip that out, but we
were not successful. So this blue light special, 5.25 percent special
income tax rate for big interests who were bringing money back from
overseas--it got done and $104 billion, as I calculate it, was saved by
those who otherwise would have had to pay regular income tax rates.
I wanted to respond to that because I still think that was one of the
goofiest ideas in the world for this Congress to embrace, saying let's
provide a 5.25 tax rate because we think it will create jobs. The
evidence is all around us. It didn't create jobs. In fact, I have
charts saying the largest companies that got some of the biggest
benefits--one company got a $14.5 million benefit and laid off 14,500
people--almost complete

[[Page S480]]

and perfect symmetry, wasn't it? Except they were supposed to have
hired people if they got this kind of special tax rate. They just
forgot and laid them off, I guess.
Let me go to the other point which is what persuaded my colleague to
come to the floor and engage on this issue, and that was the point I
made yesterday. We have a provision in our Tax Code that says to
someone in Iowa or North Dakota or Colorado or Pennsylvania, if you
have a manufacturing plant and you are across the street from your
competitor and your competitor has a manufacturing plant and you
produce exactly the same products but you do something different, you
move your jobs to China and manufacture your widgets in China, your
competitor across the street stays home and manufactures them here in
this country--one thing has happened as a result of that move. We have
embedded in this Tax Code a perverse incentive that says: By the way,
we will give you a break. You move those jobs to China, close your
plant door, get rid of your workers, produce in China, and we will give
you a tax break. You are not going to pay as much in income taxes as
your competitor across the street who stayed in this country.
I think that is wrong. Going all the way back to 1961 with John F.
Kennedy, proposals have existed to change it. Going back to 1987, the
House actually passed legislation to change it. But we can't change it
any longer because now, of course, the big economic interests that
benefit a lot from that--and we have a lot of companies getting rid of
American workers, padlocking their doors and shipping the jobs to
China. I have spoken about many of them on the floor of the Senate. We
have a lot of companies that like this tax break. Why? They like to
hire people for 33 cents an hour, produce the product in China, sell it
in Cincinnati or Toledo or Pittsburgh, and then run their income
through the Grand Cayman Islands, through the Ugland House on Church
Street on the island of Grand Cayman, that houses 12,748. It is just an
address, of course, but the purpose is to reduce the tax burden.
My point is on four occasions when I offered amendments on the floor
of the Senate so we ought to at least decide as a country that we will
not provide financial incentives in the Tax Code for those who decide
to move their jobs overseas--that ought to be the least we ought to do.
That ought to be the baby step in the right direction--but four times
we have voted and on four occasions those big interests that really
like this and have benefits from it have been able to persuade a
majority of the Senate to oppose closing that loophole.
I indicated yesterday I would once again offer that legislation. I
would offer it right this moment except I am prevented because the
majority has done what is called filled the tree and prevented anybody
from offering any amendments. My colleague from Iowa came down this
morning and offered what I believe is called the Banana defense. That
is what he called it the last time he offered it. It had to do
something with bananas.
I don't know, maybe we could debate apricots or tailpipes or bananas.
It doesn't matter to me what the product is. We could have a long
debate about it. I will just call this the banana debate then. But
whatever the product or circumstances, the question remains: Do you
believe that our Tax Code ought to provide financial benefits and
rewards to companies that have decided to move their jobs overseas?
Should Huffy bicycle have gotten a reward for firing all their workers
and producing Huffy bicycles in China? Should Radio Flyer little red
wagon have gotten a benefit from moving all their jobs overseas? Fruit
of the Loom, should they have gotten the benefit?
I could go on at some length. Fig Newton cookies, when they went to
Monterrey, Mexico, should they get a benefit? If you think yes, then
good for you, and I suppose the benefit will continue to exist in our
Tax Code, but we are going to continue to vote on it. I am not
deterred. As far as I am concerned we can vote 10 times on it. At some
point there will be enough people filling the seats in this Chamber to
understand that at a time that we have a crisis, and it is a crisis
with substantial numbers of jobs moving outside of this country in
search of lower labor costs to produce products to ship back into this
country, at a time when we have that kind of crisis and the American
people are facing downward pressure on wages, they are facing the
stripping away of their pensions, the loss of their health care--at a
time when we have that kind of crisis, the question is: Will there be
enough people filling the seats in this Chamber to stand up and say
let's take the first baby step in addressing it?
The first baby step is to say: Let's not provide incentives in the
Tax Code for companies to move those jobs overseas. If we can't do
that, we can't solve this problem. But we will have plenty of chances.
We will have one more chance now. We had four chances previously.
I respect everybody's ability and interest to vote however they
choose in this Chamber. I don't demean their reputation nor diminish
their capability. I only say that I feel very strongly that if they
support this provision, they are wrong. They are wrong for this
country. The right public policy position is at least to have some
basic neutrality on the question of whether we want to export jobs and
whether we want to have the financial incentives for exporting jobs in
our Tax Code.
I regret that we don't have a back and forth. I would love to have a
real debate about this because I know there are those who benefit
handsomely from this who want to continue it and want it to remain in
the Tax Code. But I feel strongly that this provision that is known as
deferral--and, incidentally, my repeal of deferral does not go to the
John F. Kennedy proposal on repealing deferral. My repeal on deferral
is rather narrow. It is those companies that leave this country and
ship back into this country.
I think it is a perfectly appropriate thing, especially now given the
crisis we face with jobs and opportunities in this country, for us to
do that.
I have a right, under the procedures of the Senate, to offer this
amendment. I should have the right to offer it at the moment but I am
not because there is--I guess the word ``obstruction'' is to be used--
obstruction at the moment is the tree is filled so that no one can
offer an amendment. So we are going into some process that is a vote-
arama, and I will offer the amendment, and we will have a vote.
Let me finally say it again.
There is not one Member of the Senate that puts on a dark suit every
morning and comes to work here that has ever been threatened to have
their job outsourced--not one. There is not a person here that is ever
going to have their job outsourced. Maybe they do not think much about
it. I don't know. We have all of these people in blue suits who come
here every day and we talk and we talk, and mostly we talk. We are good
at talking.
But the question for most Americans who worry about their jobs and
who see their neighbors' jobs moved overseas is, Will their jobs be
moved? The question for them is, Will Congress do something about it?
I mentioned a few moments ago the Ugland House in the Grand Cayman
Islands, which is a slightly different approach than the Tax Code I
have been describing.
I wanted to mention that there is a man from Bloomberg News named
David Evans who has done some reporting on this Ugland House. The
Ugland House is a house on Church Street in the Cayman Islands. It was,
according to news reports, dug out by David Evans, who has done the
research. This is a five-story white building that houses 12,748
companies. It doesn't really house 12,748 companies--it is an address.
This is a five-story white house address on Church Street in the Cayman
Islands. Why would 12,000 companies congregate to have an address in
this five-story building? There is only one reason. And, by the way,
every one of them are represented by the same law firm. Why? So they
don't have to pay taxes, that is why.
They want to access cheap labor in Asia, sell in America, and run it
through the Cayman Islands so they don't pay taxes.
That is what this is all about.
Because we have a tax bill on the floor of the Senate, I have another
amendment that I will not be offering now for those companies that want
to congregate at an address in a tax-haven country, the Cayman Islands.
But if you are creating an address to

[[Page S481]]

have a tax haven and avoid taxes, you shall be treated for tax purposes
as if you have never left our country. You don't get to claim that you
now have an address in the Ugland House, and, therefore, you are
running your income through that house. My legislation would say you
are going to be treated as if you never left for business purposes.
We can shut that down like that, if Members of Congress have the
interest and the will.
Does anybody believe this is anything other than a huge scam, by
having a little five-story house with 12,000 businesses congregate
there under the umbrella of a law firm that runs their mail through
that place in order to avoid paying U.S. taxes?
Thanks to David Evans for the work he has done. But in many ways, I
think this is the tip of the iceberg. There is substantial tax
avoidance going on. Some of it is legal. The first description I made
today was the description of the avoidance of what I think is about
$104 billion in taxes under the 5.25-percent special tax deal.
The other one I mentioned, deferral for those who move their jobs
overseas, that is in law. I am not criticizing companies for following
the law. I am criticizing the Congress for not changing the law and
doing what we should do--stand up for American jobs.
I was thinking I had actually done plenty yesterday to either aid or
injure my cause, however one views these issues. But when I heard my
colleague from Iowa come to the floor today, I at least wanted to
respond to that. As I was coming over, I heard my colleague from
Pennsylvania say someone else was obstructing, I guess, the work of the
Congress over what I think is a technicality, and the technicality was
we wanted to offer amendments.
I say to my colleague, there is never a technicality when someone
wants to offer an amendment. If the rules allow us to offer amendments,
just have the amendments, have a little debate, vote regular order, and
let it go. When it is done and the dust is settled, we decide what we
decide, and everybody is responsible for the vote they cast.
My colleague from Pennsylvania said he wished we would be a little
less partisan. So do I. I think we need to find ways to make this a
little less partisan. A good step in that direction would be, for
example, for somebody to right now come out and say: We have a bill on
the floor, let us have regular order. If amendments are, by the way,
allowed, let us go ahead and offer them. Will you give us a time
agreement? Sure. Vote, act the way legislators should act, and at the
end of the day, we will all feel better about that.
That is what the Senate ought to be about when we call this the
greatest deliberative body in the world. It has slipped a bit. We can
regain that status if we only decide amendments are good and not bad
things. Debate is good--not bad. The noise of democracy coming from the
Senate is welcome noise for the American people, if we are engaged in
constructive debate about issues that matter.
I yield the floor. I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Graham). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I rise today, in recognition of the
beginning of Black History Month, in support of a bill to posthumously
award a congressional gold medal to Constance Baker Motley, an American
hero who, sadly, passed away on September 28, 2005, after having lived
an extraordinary and exemplary life. I am pleased to introduce this
bill along with my colleague from New York, Senator Clinton.
Constance Baker Motley was the first African-American woman, and only
the fifth woman, to serve on the Federal judiciary. Before becoming a
judge, she was a renowned civil rights lawyer, public servant, and
trailblazer. Her remarkable career reads like a civil rights history
book.
After earning her bachelor of arts degree in Economics from New York
University and her law degree from Columbia University, Judge Motley
joined Thurgood Marshall at the NAACP Legal Defense and Educational
Fund. For two decades, Judge Motley worked closely with Marshall and
other leading civil rights lawyers to dismantle desegregation
throughout the country.
As a Black woman practicing law in the South, Judge Motley endured
gawking and physical threats. But she was not deterred.
She won cases that ended segregation in Memphis restaurants and at
Whites-only lunch counters in Birmingham, AL. She fought for Dr. Martin
Luther King, Jr.'s right to march in Albany, GA, and visited him in
jail whenever he was arrested.
Judge Motley was the only woman on the legal team that won the
landmark desegregation case, Brown v. Board of Education. She went on
to argue 10 major civil rights cases before the Supreme Court, winning
all but one of them, including James Meredith's fight to gain admission
to the University of Mississippi.
Before she died, Judge Motley would grin when she told people that
she actually won 20 years later the only Supreme Court case that she
lost, when the Court eventually agreed with her position and adopted
her reasoning in holding that it was a violation of equal protection
for prosecutors to use their peremptory challenges to strike Blacks
from a jury because of their race.
In 1964, Judge Motley became the first African-American woman elected
to the New York State Senate, and in 1965, she became the first
African-American woman, and first woman, to serve as a city borough
president. During this time, Judge Motley worked tirelessly to
revitalize the inner city and improve urban housing and public schools.
In 1966, President Lyndon B. Johnson appointed Judge Motley to the
Southern District of New York. She was confirmed 9 months later, over
the strong opposition of Southern Senators. As a judge, Motley
continued her commitment to social justice.
She rose to the position of Chief Judge in 1982, and assumed senior
status 4 years later. Judge Motley served with distinction for nearly
four decades, until she passed away last fall, at the age of 84. At
that time, I was pleased to introduce a Senate resolution, which passed
by unanimous consent with 27 Democrat and Republican cosponsors, to
honor her life and achievements.
Since then, our country has lost two other great civil rights heroes,
Rosa Parks and Coretta Scott King. Both of these remarkable women were
awarded congressional gold medals for their leadership and
contributions to American society while they were alive. I deeply
regret that Judge Motley was not. But it is not too late for us to show
our national appreciation to her friends and family. Congressional gold
medals are reserved expressly for that purpose, and Judge Motley's
lifelong commitment to the advancement of civil rights and social
justice, and her lengthy career in public service, is worthy of just
that.
The Senate Banking Committee requires 67 cosponsors before it will
consider legislation to award a congressional gold medal. I am pleased
to introduce this bill with 16 other original cosponsors from both
sides of the aisle. I now call on all of my Senate colleagues to join
us this Black History Month to give thanks on behalf of the country to
one of our greatest civil rights leaders and public servants, Judge
Constance Baker Motley.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. Mr. President, I yield myself such time as I might
consume.
I will make some additional points on the Dorgan tax haven included
in the Conrad substitute. I share Senator Conrad's concerns about the
ability of large corporations to manipulate the Tax Code, to shift
large amounts of profit offshore, but this provision is not the right
way to address those concerns. It is very overbroad and inadequate. It
is overbroad because it harms the competitiveness of United States
multinationals, repealing deferral for holding company structures

[[Page S482]]

that allow them to efficiently allocate active foreign generated
resources among their foreign operations without incurring U.S. tax on
entirely foreign transactions.
It is inadequate because it applies only to the subsidiaries in
black-listed countries. Companies that use tax savings for abusive
purposes could easily avoid this rule by locating in a low-tax country
that is not on the list.
Ireland would be a perfect example of that, where we read press
reports that companies such as Microsoft are shifting huge profits.
Treasury would have authority to add countries to the list, but does
anyone think Ireland, with whom we already have a tax treaty, would be
added to that black list? The way to deal with those cases is through
effective transfer pricing policy and enforcement, not by curtailing
deferrals.
Another issue that is going to be soon before us is the Democratic
substitute of revenue raisers that are in our bill. I am flattered by
the tax relief side of Senator Conrad's substitute amendment since it
includes extension of the same widely applicable tax relief provisions
in the underlying bill.
I should also be flattered, and I am, by some of the pay-fors in that
amendment--in particular, the provisions regarding the so-called SILO
transactions. It is a fact that we shut down the abusive tax shelters
that involve U.S. corporations claiming tax benefits on foreign subways
and sewer systems in 2004. So these deals can no longer be done. The
underlying bill would repeal a generous grandfather provision for
certain domestic deals and would deny benefits for foreign deals
entered into before the effective date of the JOBS Creation Act of
2004.
We have introduced a fully offset tax relief bill in the past. Most
recently, that act of 2004 produced $82 billion of tax relief that was
completely offset. The underlying bill, in fact, contains almost $20
billion of offsets while providing $90 billion in broad-based tax
relief. We do not need any more offsets to pay for the lost AMT revenue
that we never intended to collect and for other provisions, such as the
R&D credit, for example, that are broadly supported as good for the
economy.
We all know tax receipts are on the rise. In 2005, we had $274
billion more coming in over the taxes that came in in 2004 under the
same tax policy, and we exceeded the CBO baseline by--can you believe
it--$97 billion. It is a very vibrant economy which produces that kind
of revenue. That amount, whether it is the $274 billion in 2005 over
2004 or the $97 billion above the CBO baseline, that amount exceeds the
$70 billion of reconciled tax relief over 5 years provided in the
budget resolution.
So I hope we will be able to take these points I have just made about
the inadequacies of the amendments we are going to be dealing with when
we vote on these amendments.
I would now, Mr. President, speak on the issue of an amendment I am
going to place before the Senate this afternoon. In fact, I will submit
this amendment at this point.
I wish to take just a few minutes, in offering this amendment, to
speak about amendments that are also offered by Senator Bingaman and
Senator Nelson regarding the Medicare prescription drug program. I
thank the Senators for their amendments. I know their intentions are
good and their hearts are in the right place. But having said that, I
am forced to oppose the amendments, and my reasons follow.
Opponents of the benefit are trying to make it look as if Republicans
are indifferent to the problems of the implementing part of the
Medicare program. Such is not the case because everyone has to be
concerned about the issues faced by some beneficiaries in getting their
prescription drugs, even if that might be a very small percentage of
the people who are involved. Whoever needs these prescriptions, we have
to do everything we can to get them to them.
Like everybody else, I am concerned about the drug benefit
implementation issues. It is not acceptable that some of the most
vulnerable and frail seniors are experiencing problems. But my
opposition to the amendments is rooted in the goal of not just taking
some action, but that we need to take the right action when we act.
There is no question that Congress meddling could just make things
worse.
With that in mind, I want to share with you the following quote as to
another new program that was getting underway:

As the program gets under way the danger is that the
strains on it will generate pressures for unsound change.
They will come from those who will be disappointed because
they have been led to expect too much as well as from those
who see failure in every shortcoming. Changes will come in
time, but they should be made on the basis of the program's
own experience. This program must be given ample time to get
over its growing pains.

Now, that is not about the prescription drug bill that is just now
going into effect. That is a quote from the July 1, 1966, edition of
the New York Times, and it is about the implementation of the original
underlying Medicare Program passed by Congress a year before this July
1 edition of the New York Times.

Now, when I read that quote of 1966 just now, it said ``the program''
instead of ``Medicare'' because I did not want to give it away. The
point of this editorial is that those words are extremely relevant
today.
I am not trying to make excuses or minimize the difficulties some are
having. Those problems need to be fixed, and fixed fast. By all
accounts, everyone is working hard to get them resolved. But in my
opinion--echoed by the New York Times nearly 40 years ago--rushing to
``fix'' things through legislation could do more harm than good.
Just last week, the Finance Committee, in a bipartisan setting--with
almost every member of the Finance Committee there--had a meeting with
Secretary Leavitt and CMS Administrator Mark McClellan. We had a candid
discussion about the unfortunate glitches, and we heard about steps
taken by the agency to address them. We had a very constructive dialog.
That dialog covered a range of issues the Agency had identified and the
administration's actions already taken to address them.
It is clear to me legislation is not needed at this time. Secretary
Leavitt has the authority. Current law allows him to have a smooth
transition. And administrative actions will work faster than if we pass
this legislation. That is because changes in law have to be followed by
more administrative actions. This is very much going to slow things
down. That is not what we want. We want, need, and will get quick
action.
The issues that have surfaced do not lend themselves to legislative
fixes. For example, we talked about problems in the data files. The
data files have not always identified the plan where a dual eligible is
enrolled. Obviously, that is a problem. But can Congress write a law to
dictate exactly how to fix computer system data files? That is not
something I would want to do. There is an opportunity for getting
something wrong, if I ever saw an opportunity for Congress to do
something wrong.
But more importantly, these amendments are unnecessary. Senator
Bingaman's amendment gets at issues that have already been addressed
administratively. CMS has the authority to address these that way. And
it will get fixed faster than if we pass additional legislation.
So I am going to offer a sense-of-the-Senate resolution. That
resolution expresses our concerns about these problems, and it
expresses the Senate's support for the Agency's efforts to fix them.
For example, prescription drug plans must have a first-fill policy.
The first-fill policy already requires at least 30 days of coverage for
the first prescriptions filled, even if the drugs are not on the plan's
formulary. And just yesterday, Secretary Leavitt announced that the
first-fill policy is being extended further. It is now going to be in
place for 60 or 90 days as a first-fill policy. The Bingaman amendment
requires only a 30-day policy. So it is already out of date. The
administrative actions are much faster. Changes in law are not needed
to address the issue.
Now, here is another one. The Bingaman amendment says that dual-
eligible beneficiaries, whom we call dual eligibles, should be
presumptively eligible. But the dual eligibles are already
automatically eligible under the law, and they are automatically
assigned to a plan. So again, no change in law is required.
Another example. The Bingaman amendment says it would require plans
to reimburse enrollees for cost-sharing

[[Page S483]]

problems. Here again, plans are already responsible for the costs to
cover drugs. They are responsible for reimbursing beneficiaries for any
cost-sharing charged in error. No change in law is required.
Let me give you another one. Some States have stepped up to fill
claims during the transition. The Bingaman amendment requires States to
be reimbursed for their costs. This is already happening. Last week,
Secretary Leavitt announced that the Federal Government will reimburse
States for costs they have incurred during the transition period. We
were told that that day we met with Secretary Leavitt. I do not know
exactly when Senator Bingaman was there, but he was there for that
meeting. Not every Senator stayed for every minute of the meeting, but
Secretary Leavitt made this very clear. So again, legislation is not
needed because administrative action is being taken, with the legal
authority of the Secretary to do it. So no additional legislation is
needed.
Senator Nelson's amendment would extend the enrollment period through
the end of the year and permit beneficiaries to change once before the
end of the year. We have discussed this amendment before. The Senate
has already voted twice, and we voted it down twice. And changing the
enrollment period does nothing to address any of the issues experienced
by beneficiaries just this last month.
We are well into the enrollment period. Enrollment is exceeding
expectations. Twenty-four million beneficiaries out of 44 million,
potentially, have prescription drug coverage. Every day, nearly 90,000
beneficiaries are enrolling in the program, and about 1 million
prescriptions are being filled daily. So again, legislation is not
needed.
There are a number of resources for beneficiaries to help them choose
a plan. There is the Medicare call center. It is available 24 hours a
day, and the Medicare Web site. Every State has counselors available to
assist beneficiaries through the State Health Insurance Information
Program. That is the whole point of that program--the SHIIP program, it
is called for short--to help beneficiaries understand their Medicare
benefits. The prescription drug plans based their proposals to serve
Medicare beneficiaries on the enrollment period specified in the law.
In addition, there are already rules in place under which a
beneficiary can change their enrollment outside of the open enrollment
period. A beneficiary can seek what is called a special election period
if that is needed for that individual--for example, if a plan fails to
provide a beneficiary with information about the plan's benefits on a
timely basis, or if it fails to provide benefits in line with quality
standards, or if the plan, its agent, or plan provider materially
misrepresents the plan in marketing that plan. So in all of these
instances, there can be a special enrollment period or an opportunity
to change.
So again, we do not need legislation. These are issues already
covered in the law today.
I want to make another point about what is going on with these
amendments. There was a time when opponents of this benefit were
concerned that there wouldn't be enough choice. Now their concern is
that there is too much choice. When we were in conference with the
House on this 2 years ago, we were fearful there might not be a choice
for people. So we provided if there wasn't a choice, the Secretary set
up a subsidized choice so that every individual could at least choose
from two. We wanted people to have choice. We followed the Federal
Employees Health Benefit Plan where people have the choice of many
plans to choose from, and they get to change once a year. We wanted to
make sure we didn't cram anything down any senior citizen's throat. If
they didn't want to participate, if they were satisfied with Medicare
the way it was, they didn't have to. But if they wanted to participate,
they elected.
You don't write one plan for 44 million seniors because everybody has
different benefits. And one-third of the people already had some
prescription drug coverage. We didn't want to screw up their plans. So
we subsidized those plans so that those people who had something they
wanted would be able to keep it. I don't know when you satisfy people.
I didn't think there would be enough choice. Now we are hearing
complaints about too many choices. There are 44 million Americans;
there are 44 million different personal needs of those people. We,
sitting on the floor of the Senate, are not going to figure out what
those 44 million needs are and pass a one-size-fits-all plan that is
going to satisfy the needs of everybody.
The point is, the opponents of this new benefit will complain and
fight it no matter what happens. I hope everyone remembers that. I also
find it ironic that folks think that legislation is the answer. These
are the same people who are concerned about confusion. Now they are
proposing legislative changes in a bill that has only been in operation
for 1 month, on top of administrative actions that the agency has
already taken. They want to screw that up with legislation on the floor
of the Senate with changes that will have no impact on any of the
problems encountered this last month, legislation that would have to be
followed by yet more administrative action, a snowball rolling down the
hill, just getting more complicated as it rolls on.
I ask whether this is going to help these perceived problems. Well,
not just perceived problems; I admitted there are problems out there. I
admitted when you put something like this into place, there are growing
pains, just like I quoted that New York Times article from 1966 about
the growing pains that we were going to have with Medicare when it was
first put in place. Do you think these things are going to smooth the
transition? I don't think so. Talk about opportunity for confusion
among beneficiaries, pharmacists, and plans. This is not going to
reduce the confusion.
Passing legislation now runs the very real risk of undermining and
complicating things. It can undermine the progress already made. It
will interrupt actions taken by the administration. It will create more
problems, not fewer problems. I, for one, have a steadfast commitment
to gaining a full understanding of the problems and pursuing the most
appropriate and timely course of action.
When the Secretary came before my committee and everybody turned out
to make their complaints known, and the Secretary announced at that
time seven problems and he announced at that time seven solutions to
those problems and took full responsibility for them, I had a feeling
people left that meeting fairly satisfied that nobody was going to
blame somebody else and they had a grasp of the problems and solving
problems, with some accountability that some changes had already taken
place for the better.
So then when you come out of an environment of a committee meeting
like that, you wonder what planet they have been on when these
amendments are being offered--amendments that, if they were passed,
would not get to the President for another 30 days--to solve problems
that were evident 30 days ago that the Secretary has already identified
and taken action to overcome.
Senator Baucus and I are working together to get to the bottom of
this issue. That is how we do it in our committee. We do it in a
bipartisan way so that we are going to also be able to work together if
it turns out that legislation is needed. But I asked the Secretary at
that very committee meeting: Do you need any legislative changes to
take care of these problems that we have all identified, particularly
the seven that he identified? He said: No, he had ample legislative
authority to do it.
An important part of Senator Baucus's and my work in this regard is
going to be brought up at next week's Finance Committee hearing, an
open hearing. We will hear from Dr. McClellan. We will hear from
representatives of the plans. We will hear from pharmacies. We are,
most importantly, going to hear from the people involved in educating
and enrolling beneficiaries into the plan. More than once I have heard
Members take issue with attempts to bypass the committee process. The
amendments before us are just that.
Senator Bingaman's amendment has not gone through the Finance
Committee. It is clear that this amendment falls within the
jurisdiction of the Finance Committee, and the Senator from New Mexico
is a member of that committee. I ask him to work within

[[Page S484]]

the committee. If the Senate proceeds on legislation that the full
committee has not considered, then nothing would prevent the Senate
from legislating on other Finance Committee issues without the benefit
of hearings or committee action.
Next week's hearing is very important. We need to gather more
information about what is happening. This is needed to inform all of us
of any necessary response. In the absence of such information
gathering, it is dangerously premature to consider any amendments
related to the prescription drug program. We all know that this whole
issue of Medicare prescription drug coverage has long been a political
issue. With the amendments offered today, I can't help but think that
is very unfortunate. It is also unfortunate that is probably not going
to change during the 109th Congress.
On the other hand, I hope that is not the case. But here we are, just
1 month into the prescription drug program, already we see a lineup of
amendments to perhaps the most inappropriate vehicle there could ever
possibly be to deal with Medicare. In other words, these amendments are
on a tax bill. But more importantly than just the process, these
amendments are unnecessary because of administrative actions taken to
date or to be taken tomorrow, if a new problem comes up.
When these amendments that I have discussed--the Bingaman and Nelson
amendments--come up for a vote, I hope my colleagues will trust what we
learned in the committee: that the Secretary of HHS doesn't need any
new legislative authority, consequently bringing any more uncertainty
into this process by voting for these amendments. Vote them down.
I said that I had an amendment I wanted to have considered when we
vote this afternoon. I send the amendment to the desk and ask for it to
be printed.
I yield the floor. And since nobody else is desiring to speak, I
suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Martinez). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. MURRAY. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. MURRAY. Mr. President, I came to the floor this afternoon to
spend a few minutes speaking in support of the Bingaman-Rockefeller-
Murray Medicare drug REPAIR amendment that we will be seeing this
afternoon. I came to the floor to urge my colleagues to support this
amendment so we can address the immediate crisis facing our most
vulnerable citizens.
I wish we were here debating a real fix to the Medicare Modernization
Act, but unfortunately the Senate leadership has placed a lot higher
priority on tax cuts than on providing reliable access to prescription
drugs for low-income seniors and the disabled, so we are here today
debating that. I know the chairman of the Finance Committee was on the
floor earlier talking about the relevance of this amendment, the
Bingaman-Rockefeller-Murray Medicare drug REPAIR amendment, but this is
the first piece of legislation that we have had on the floor since the
rollout of the Medicare prescription drug bill. Offering this amendment
on this tax bill is our only option.
What this amendment does is ensure that our low-income seniors and
our disabled--who are often technically referred to as duals--are at
least ensured of a 30-day supply of lifesaving drugs, regardless of any
communication or data exchange problem. It simply ensures that States
and pharmacies and beneficiaries who have had to provide coverage to
those who have fallen through the cracks in this rolling out of the
Medicare prescription drug bill receive just and fair reimbursement.
Finally, it will end the confusion facing any of our duals. And for
any of my colleagues who have not been out in their States since
January 1, I will tell you there is tremendous confusion and conflict
and people are falling through the cracks and we need to end that
confusion so they know whether, in fact, they qualify for assistance.
Because of the tremendous data and outreach problems, many of these
so-called duals have been told they have to meet a $250 deductible
before their plan is going to cover their prescription drugs. If they
are eligible today for Medicare and Medicaid, they are assumed eligible
at the drugstore.
I have listened to Secretary Leavitt and CMS Administrator McClellan
reassure all of us that they are acting to fix these problems. I am
here today to applaud their attention and their commitment and their
recognition of the tremendous challenges out there, particularly for
our duals, as this prescription drug rollout bill is occurring. I only
wish they had listened last November when I offered an amendment to
provide a 6-month transition and predicted the dire straits that we are
now in before this was rolled out.
I will say they have been responsive since January 1. But all of the
steps that have been implemented are worthless if there is no education
of our pharmacists and our seniors, or if there is no aggressive
oversight and enforcement. Saying that they are just going to work to
ensure the plans honor their commitment is not the same as saying plans
will be required by law to honor that commitment. It doesn't do a
senior any good to be told we are going to hold plans accountable, and
they still do not have any access.
There are a number of problems with this flawed structure, but I
think it is critical that we address the immediate crisis for those
people who have very few options. If anyone on this floor today thinks
this is fixed, or these problems are going to go away, I want them to
know they are sadly mistaken. I have traveled around my home State of
Washington since August. I am not hearing that things are getting any
better. I have people come to forums that I am holding where I try to
give them information, and every forum I have had, time after time,
there are new problems, new challenges: pharmacists are falling through
the cracks, doctors who don't know how to deal with their patients,
long-term care facilities that are at their wits' end, and certainly
the mental health advocates who are telling us we have people who could
be in serious crisis very soon if we don't address these problems.

There is a lot of frustration. There is a tremendous amount of panic
for these dual eligibles that they are being denied access to
lifesaving drugs, and to low-income seniors, especially those in group
homes, who can't afford the added burden of copayments. It is wrong for
us to sit here and say this is going to get worked out. I think it is
our responsibility to stand up today, at our very first opportunity,
and make sure we fix this Medicare prescription drug plan.
This week, my Governor, as many Governors who have been facing this
at home on the ground, joined with me in urging the Federal Government
to fix this mess. I want to quote her. She said:

All we are asking is don't make these people worse off than
they were.

Our Governor's office, as many Governors' offices, has been flooded
with calls about this prescription drug plan. She says some of these
people are telling her they would rather take their own life than deal
with the situation.
I have sat in forums in my State where people have said that to me,
to my face, as well. These are people with mental health problems, they
are elderly, they are having trouble working through the system. It is
too much for them. They cannot deal with the copayments for the first
time--and that is not what our country should be about. It does not
sound to me like things are getting better and the kinks are getting
worked out.
Congress promised in 2005, they promised to people in this country
access to affordable prescription drug coverage. It is clear they are
not getting that today. We know these problems cannot be fixed through
some kind of administrative action alone. We here in Congress have an
obligation to act and not follow CMS.
I urge my colleagues to support this amendment and send a message to
those who are living, literally, in fear today that Congress is not
going to wait and we are going to do the right thing.
I do not agree that this is not the bill to deal with this issue. I
wish we had another bill in front of us. I wish we had an actual fix in
front of us. But we cannot wait to work through the next several weeks
and then the budget

[[Page S485]]

process and everything else coming down the pike to deal with this
issue. We are talking about real individuals in real communities who
are not getting access to their prescription drugs because of the
challenges that CMS is facing as this plan is rolled out, and we have
an obligation to act.
I urge my colleagues to support the Bingaman-Rockefeller-Murray drug
REPAIR amendment and get a fix in place so people's lives are not in
crisis. We have an obligation to do this, and I urge my colleagues to
vote for this amendment.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Alexander). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. TALENT. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. TALENT. Mr. President, I rise for a moment to speak in favor of
amendment No. 2711, which is at the desk. It is my amendment regarding
the child tax credit offered by the majority leader. I will discuss
briefly that amendment.
I originally hoped I could offer an amendment making the child tax
credit permanent, which would help millions of workers and families
around the country. I wanted to offer a straight-out extension. The
Senate rules preclude that from being offered today. Instead, I will
put the Senate on record that this Senator supports a permanent
extension of the child tax credit.
In 2001, the Congress set in motion legislation which extended that
credit to $1,000 per child, but in 2011, unless Congress acts
beforehand, the clock will turn back and taxes will go up effectively
50 percent on the workers and families who qualified for the child tax
credit. This additional money has made a big difference to families
around the country and in Missouri. People like Beth Davis, who is a
hairdresser in Kansas City, a single mother of three children, use this
money to help pay for necessities for their children.
The most recent Treasury Department data shows that 543,000 married
couples and single parents in Missouri benefit from the child tax
credit enacted in 2001. I believe this child tax credit is supported
very strongly in the Senate. I expect the sense-of-the-Senate will be
approved. I certainly hope it will so that, at the minimum, we can go
on record to support making this projob, progrowth, prochild tax credit
permanent.
I yield the floor.
The PRESIDING OFFICER. The Democratic leader.
Mr. REID. Mr. President, we had a meeting and thought the votes would
start immediately, and Members were advised that.
It is my understanding, Senator Baucus, the voting will not start for
at least a half hour. Everyone should understand the votes will not
start now but within the next half hour, 45 minutes probably.
Mr. BAUCUS. It is my understanding we could start early if Senators
have amendments. We do not have to wait a full half hour.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, we have half an hour remaining. If there are
Senators who wish to speak on their amendments, they should get over
here immediately. If they do not come within a reasonable period of
time, I am confident Senator Baucus will yield back the time on this
side, as he should. If there is no one here who desires to speak, we
can move to the votes more quickly. That is left up to Senator Baucus.
If Members want to talk, now is the time.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BIDEN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BIDEN. Mr. President, I will speak up to 5 minutes on an
amendment that is not in the first package of amendments we will vote
on, but since we will have no opportunity in the second and third
package of amendments, I will speak to it now.
I have an amendment that is fashioned to deal with the 9/11
Commission Report that came out less than 2 months ago, on December 5,
2005. It was the so-called report card where this prestigious
bipartisan Commission, led by former Republican Governor Tom Kean and
former Democratic Congressman Lee Hamilton, took a look at what we have
done based on what they recommended in the 9/11 Report. It tells how
little we have learned and how little we have done to actually make the
homeland safer.
Most Americans, at least in my State, believe at least the most
obvious steps have been taken to close the gaps in our homeland
defense. They believe, at the very least, we have a plan, that we have
set priorities, and we know what the next step will be.
Let me quote from the Commission's report, which is only 6 or 7 weeks
old, on what we have done to assess the risks and vulnerabilities of
our critical infrastructure--transportation, communications, industrial
assets. Here is what they say:

No risk and vulnerability assessments actually made; no
national priorities established; no recommendations have been
made on allocation of scarce resources. All key decisions [on
homeland security] are at least a year away.

We all remember September 11 when we discovered that local police,
fire, and rescue units could not communicate with each other, could not
communicate with Federal agencies. There was no way to coordinate the
action, no way to share information. Things are no better today.
It gets worse. Airline passenger screening, the one place most
Americans think we have done pretty well, the 9/11 Commission gives
that effort a grade of ``F.''
Regarding airline baggage screening, to check for explosives, from
the report on December 5, 2005:

Improvements have not been made a priority by Congress or
the Administration.

This is unacceptable. This administration tries to fill in the most
obvious gaps in our homeland defense, but they have not done it. We
have not done it. We simply have not done it.
This amendment is designed to fill in the most obvious gaps. It
begins with those areas where the Commission graded us and the
President as ``F'' and ``D'' in the Commission Report. It addresses
other issues such as the utter lack of a systematic program for rail
security, passenger freight, stations, tunnels, rail yards, bridges.
Every dime in this amendment is fully paid for by closing corporate
tax loopholes. Frankly, this is a modest list. There is much more to be
done. We will need more resources to make us safer. Wiretapping, even
if it is legal, is not the sole homeland defense. This amendment
focuses on the most glaring and dangerous shortcomings in our homeland
defense. By closing these loopholes, this amendment actually returns
$23 billion to the Treasury to improve our fiscal security and reduce
our dependence on borrowing from other countries.
I have been joined in this amendment--and I did not have time to
notify her because I did not know until 2 minutes ago--by Senator
Stabenow of the State of Michigan, who has worked tirelessly on dealing
with this issue.
It is pretty basic. We have done nothing much to deal with the
problems most Americans know relate to homeland security. We are safer
but not nearly safe enough.
The bipartisan commission that got great grades from everybody in the
Nation felt compelled on their own dime, with their own money, their
own resources, not funded by the Government, to continue to issue
reports and to hold hearings. And they issued a report on December 5
that is, quite frankly, embarrassing and dangerous.
So our amendment is designed to fill some of the loopholes, not all
of them, that, in fact, have been left by the President's failure to
secure our national interest, our homeland defense, as well as by our
failure as a Congress to step to the ball.

[[Page S486]]

We can and we have to marshal all our country's resources in this
struggle. I will bet you $100, if you asked anybody in the public, from
corporate CEOs to the average American out there, Would you rather us
spend this money on securing our ports, our nuclear plants, our
railroads, our cities, or would you rather us give it back in a tax
break, I think it is just like the COPS bill years ago, given the
choice, the American people said let's make our streets safer. I am
confident they think we should make the country safer.
This amendment will be voted on not in this first tranche of
amendments but the second, but I am not going to get a chance to speak
to it at the later date. There was a little opening in time, and I
thank the staff for letting me know this time was available.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Mr. President, I rise, as we are waiting for the votes
as well, to join with Senator Biden and to thank him for his continued
leadership. We have come to this floor on numerous occasions to speak
about this issue over and over again, ever since 9/11, and we still do
not have this fixed.
So I am pleased to be joining with Senator Biden to offer this
amendment. It is time we act. It is past time. As Senator Biden said,
it should be an embarrassment to all of us, the failing grades we
received from the 9/11 Commission, a bipartisan commission, whose sole
focus is on giving us information about whether we are safe today and
what it will take to keep us safe, what it will take in the future to
make sure Americans are safe.
We received, collectively--the administration, the Congress--failing
grades in area after area. One of my main focuses has been on whether
the radios work; it is stunning to me we are still talking about this.
It is very unfortunate that after 9/11--because we did not connect all
of the radios to be able to work to communicate with each other--that
we saw the same kinds of failings that had firefighters and police
officers running into buildings in New York instead of running out, as
they should have been, because they did not know what was happening--
that the same kinds of things, then, happened in the gulf, in New
Orleans.
I will never forget, going down right after the hurricanes with the
bipartisan leadership, sitting outside of the New Orleans Convention
Center with someone from Michigan who was with the Army National Guard,
someone from the Michigan Coast Guard, talking with these folks who had
not slept for several days, who were down doing their part, trying to
save lives, getting people off of rooftops, doing what was necessary.
I asked the gentleman from the Army National Guard: ``Do you have
radios?'' ``Yeah.'' I asked the individual from the Coast Guard: ``Do
you have radios?'' ``Yeah, of course.'' Then I asked: ``Can you talk to
each other?'' ``No.'' I asked: ``Well, how are you talking to each
other?'' ``Well, when we're out in the boats, we use hand signals.''
This was, at the time, 2005 in the United States of America, and they
are using hand signals to tell whether they have found somebody,
whether they are OK, and so on, because the radios did not work.
When are we going to get this right? People expect us to get this
right. They do not understand why this has not already happened. This
amendment basically puts our priorities in place by saying it does not
matter what your income level is, if there is another attack, you are
going to want the radios to work. It does not matter where you live in
America. It does not matter if you are a CEO or if you are a person
going in and punching a timeclock every day or if your kids are playing
in a school yard. You expect that your Government is doing everything
humanly possible to keep you safe.
We have heard from the 9/11 Commission. They have overwhelmingly told
us that is currently not true. So I hope and pray we take action, that
we would create the priorities that Americans are asking us to create,
which is by starting with security, starting with security, making sure
we are putting that at the top of the list, that we are providing
police officers and firefighters with what they need in dealing with
ports and nuclear plants and chemical plants and all of the other
issues, such as with Amtrak, making sure people are safe as they
travel, as well as airlines.
We can do that by setting the right priorities. And that is what this
amendment does. I urge my colleagues to join us in adopting this
amendment.
Thank you, Mr. President.
Mr. BAUCUS. Mr. President, I support the pending substitute
amendment. I encourage my colleagues to support it as well.
I almost need a flow chart to explain how we got here. But because of
several events, there is now more room for tax cuts. Yes, you heard
right: more tax cuts.
We should tread carefully, though, rather than dive in. We have an
opportunity to show responsibility. And I think that this substitute
does just that.
Let me first explain how we got here. As my colleagues will recall,
the tax reconciliation bill that we passed last November included much-
needed relief for the Gulf States affected by Hurricane Katrina.
Congress passed and enacted those incentives separately in December.
Further, our tax bill allocation was limited by the fact that the
spending reconciliation bill had not been enacted. The House is
expected to pass that bill today, clearing it for the President.
The bottom line is that this bill can accommodate $18 billion more in
tax cuts.
We have an opportunity here to show some responsibility. And the
responsible thing to do is to pass another year of extenders.
Otherwise, we will be right back here in a few months to pass those
extenders. Or since it is an election year, we will be back during a
lame duck session considering the same set of expiring provisions.
These are very popular, bipartisan tax cuts we extend year after
year. But we never have the resources in any given year to make them
permanent.
This list of annual extenders includes several proven tax incentives.
Businesses are encouraged to do more U.S.-based research and create
high-paying jobs. Long-term welfare recipients and others who are hard
to employ are given job opportunities through an employer credit. And
teachers who reach into their pockets to pay for classroom supplies can
get a small deduction for their expenses.
These tax incentives were all part of the original Senate
reconciliation bill. But in that bill, they were limited to one year.
Now, Chairman Grassley and I are pleased to offer this amended version
today to extend these provisions through the end of next year. We will
thus provide certainty to businesses, workers, and teachers.
We know we will all vote to extend these provisions, if pressed at
the end of the year to do so. We should take this opportunity now to
provide these tax incentives through the end of 2007. It is the
responsible thing to do. Individual and business taxpayers will be
thankful.
Mr. President, before us now are a series of amendments. I have a
list of 21 Democratic amendments. I have a list of eight Republican
amendments, with promises of more amendments on that side of the aisle,
depending upon the course we take today.
Pending a few moments ago, first was an amendment by the majority
leader to permanently extend the child tax credit. That is a very
popular amendment. I support--I think most of my colleagues do--
extending the child tax credit. I daresay that most Senators on both
sides of the aisle would probably strongly support extension of the
child tax credit. Senator Talent, the author, however, has expressed
his will to convert his amendment to a sense of the Senate. The
majority promises to offer the full version later.
Because of the Nation's record on budget deficits, I would prefer
that we paid for the pending amendment. But because of the procedural
posture in which we find ourselves, we will not have that choice. So we
will be faced with an unattractive choice of voting for an appealing
tax cut without paying for it or voting against an appealing tax cut.
After this amendment from the other side, we have been promised
similar votes on measures to extend marriage penalty relief, estate tax
relief, Social Security tax relief, 10 percent tax bracket relief, and
so on. At the end of

[[Page S487]]

the day, this could become a fiscally very irresponsible exercise.
I wish to propose a different path. I propose that we address a
limited number of amendments--just six--and then go to third reading. I
propose that these six amendments be Senator Talent's sense of the
Senate on the child tax credit, Senator Bingaman's prescription drug
benefit, a Republican alternative to the prescription drug amendment, a
modified Schumer-Menendez-Grassley sense of the Senate on AMT relief, a
modified Rockefeller-Santorum mine safety amendment, and a paid-for
substitute by Senator Conrad, and then go to third reading.
The Republican manager has conveyed to me that he would find this
procedure acceptable. This procedure would require, obviously, many
Senators to forgo their opportunity to offer amendments. That is clear.
It would have that consequence. But this procedure would also do the
most to maintain fiscal responsibility. This procedure would also allow
Senators to get back to their States and their constituents in much
shorter order.
I implore my colleagues, let us choose the path of reason. Let us
choose the path of moderation. Let us end this bill this afternoon.
I have given deep thought to this issue. I know there are many on
both sides of the aisle who have conflicting emotions and views on this
basic prospect we find ourselves facing. It is my considered judgment
that the path I am outlining is probably the best course for the Senate
and, more importantly, the best course for the Nation. After all, we
are here representing our constituents. We should go the extra mile to
do whatever we possibly can to represent the people back in our home
States as well as we possibly can.
The PRESIDING OFFICER (Mr. ISAKSON). The Senator from North Dakota.
Mr. CONRAD. Mr. President, we are here at a moment that people have
to think very soberly about what the possible consequences of our
actions might be. The Senator from Montana has outlined one possible
scenario. Far be it for me to judge which amendments would be in order
and which would not. Let me just say what consequences could flow from
a failure to reach agreement.
I have just had a consultation with the Parliamentarian. He informs
me that if we were to waive on any one of the amendments that have been
talked about on the other side, if we were to waive all budget points
of order through conference committee, that would open up to the
conference committee the opportunity to come back with legislation that
would cost far in excess of the $70 billion limit we currently face as
a result of the budget resolution.
I know this is complicated, but I urge my colleagues to think very
carefully about the potential consequences. Let me give four.
If all points of order were waived through conference committee on
the child credit, that could open up the conference committee to $185
billion of additional tax cuts, not offset. If the estate and gift tax
changes that have been proposed by some were adopted and all points of
order waived through the conference committee, that could add $358
billion that the conference committee could come back with with no
points of order prevailing or possible.
On the expanded 10 percent bracket, that would open up an additional
$262 billion for the conference committee to come back to this Chamber
with no points of order pending. An income tax raise of 25, 28, 33, and
35 percent, if all points of order were waived through the conference
committee, we could come back here and open up this Chamber to an
additional $385 billion of tax reduction with no point of order
pending.
I do not pretend to know what the package is that could be agreed on
to resolve this. I do know that the Senator from Montana has made an
impassioned plea to our colleagues to think twice before we get into
this destruction derby. Believe me, the potential is, at the end of the
day, we would find ourselves in the circumstance very easily in which
you could have a trillion dollars of additional tax cuts pending on the
floor of the Senate, with no point of order available.
I notice the leader is in the Chamber. I yield the floor.
Mr. REID. Mr. President, I think what we have here is a case being
made for how bad this reconciliation plan is that we have. We have a
number of amendments that Senators in good faith have tried to offer.
There will be votes on these amendments. Ours doesn't break the bank,
as indicated by the Senator from North Dakota. All the amendments he is
talking about that are going to cost all this money come from the other
side. With rare exception, our amendments are offset. We don't expect
to ask to waive points of order through conference on our amendments.
That is why Members should not vote to waive through conference.
Also, I hope the country is watching what is going on here today.
First of all, as I said earlier today, we are working on something that
has been named by the majority the ``Deficit Reduction Act of 2005.''
Using the numbers given us by the majority, it increases the deficit by
$50 billion. Today, as I was walking to lunch, a reporter says: Are you
aware that we are going to get a supplemental next week for $90
billion? The budget gimmicks of this administration are unbelievable.
Everyone knows the cost of the war is ongoing. We are in our fourth
year of war. The President doesn't include it in his budget because it
would show the American people how deeply in the red we are. Rather
than do that, he comes back later with all these supplementals. But I
understand, having managed a few bills in my day, how the distinguished
Senator from Montana and I will feel about it.
We want to get the bill out of here and move on to other things with
as little damage as possible. But, Mr. President, damage has been done
by having this reconciliation bill in the manner that we got it in the
first place. Having been given this bill, we are $50 billion in the
hole to begin with, using the numbers of the majority.
Now, people in good faith on our side offered amendments, or soon
will offer them. Some have been debated. Our amendments take, for
example, the amendment of the Senator from New York. She wants to have
this Senate on record as to whether the Senate will stand for an
independent bipartisan commission to study what went wrong with
Katrina. We have been stymied every step of the way to do that. Rather
than have a 9/11-type commission to find out what went wrong in the
most significant natural disaster in the history of this country, we
are being stonewalled. That is an amendment the majority doesn't want
to vote on.
I wish there were an easy way out of this, but there is not. I say to
my friends who are offering this amendment on the child tax credit, if
it is offered, a lot of Senators over here on this side are going to
vote for it. Someday maybe this administration will recognize what they
have done to this country economically. We are going to be asked in a
few days to increase the debt ceiling from $8.2 trillion to whatever
the majority wants--$8.2 trillion is not enough. So my suggestion is,
let's just start voting.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. FRIST. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Cornyn). Without objection, it is so
ordered.
Mr. FRIST. I ask unanimous consent that the motion to commit be
withdrawn. I further ask consent that amendment No. 2709 be withdrawn
and further that the yeas and nays be vitiated on amendment No. 2708;
further, that the amendment be agreed to; provided further that the
only remaining amendments in order be the following, and further, when
a motion to waive occurs, it be in order for each leader to offer up to
two amendments to each motion to waive.
The amendments are:
Talent, child tax credit; Nelson, prescription drugs; Republican
alternative to Nelson, relevant; Byrd-Rockefeller-Santorum, mine
safety; Conrad, substitute; Dodd, veterans health; Republican
alternative to Dodd, relevant; Reed, America's military; Republican

[[Page S488]]

alternative to Reed, relevant; Clinton, Katrina commission; Republican
alternative to Clinton, relevant; Menendez, AMT; Grassley, AMT; Reid,
relevant to any amendment on the list; Frist, relevant to any amendment
on the list.
I further ask consent that at the conclusion of this unanimous
consent, all time be yielded back and the Senate proceed to votes in
relation to the following amendments; that all votes in the sequence be
limited to 10 minutes each; that following the reporting of each
amendment, the amendment be considered as read and there be 2 minutes
equally divided prior to the vote in relation to the amendment;
finally, that following disposition of amendments, the substitute be
agreed to, the bill be read the third time, and the Senate proceed to a
vote on passage of the bill, with no intervening action or debate. The
amendments will be considered in the order sent to the desk.
The PRESIDING OFFICER (Mr. Chafee). Is there objection? Without
objection, it is so ordered.

Amendment No. 2727

Mr. FRIST. Mr. President, on behalf of Senator Talent, I would like
to call up his amendment.
The PRESIDING OFFICER. The clerk will report.
The assistant journal clerk read as follows:

The Senator from Tennessee [Mr. Frist], for Mr. Talent,
proposes an amendment numbered 2727.

The amendment is as follows:

(Purpose: To express the sense of the Senate regarding the permanent
extension of the amendments to the child tax credit made by the
Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs
and Growth Tax Relief Reconciliation Act of 2003)

At the appropriate place insert the following:

SEC. ___. SENSE OF THE SENATE REGARDING THE PERMANENT
EXTENSION OF EGTRRA AND JGTRRA PROVISIONS
RELATING TO CHILD TAX CREDIT.

It is the sense of the Senate that the conferees for the
Tax Relief Act of 2006 should strive to permanently extend
the amendments to the child tax credit under section 24 of
the Internal Revenue Code of 1986 made by the Economic Growth
and Tax Relief Reconciliation Act of 2001 and the Jobs and
Growth Tax Relief Reconciliation Act of 2003.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 2727) was agreed to.
The PRESIDING OFFICER. The Senator from Montana is recognized.

Amendment No. 2728 to Amendment No. 2707

Mr. BAUCUS. On behalf of Senators Byrd, Rockefeller, and Santorum, I
send an amendment to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant journal clerk read as follows:

The Senator from Montana [Mr. Baucus], for Mr. Byrd, for
himself, Mr. Rockefeller, and Mr. Santorum, proposes an
amendment numbered 2728 to amendment No. 2707.

The amendment is as follows:

(Purpose: To provide tax incentives for the purchase of advanced mine
safety equipment and the training of mine rescue teams, and for other
purposes)

At the appropriate place insert the following:

SEC. __. PARTIAL EXPENSING FOR ADVANCED MINE SAFETY
EQUIPMENT.

(a) In General.--Part VI of subchapter B of chapter 1 is
amended by inserting after section 179D the following new
section:

``SEC. 179E. ELECTION TO EXPENSE ADVANCED MINE SAFETY
EQUIPMENT.

``(a) Treatment as Expenses.--A taxpayer may elect to treat
50 percent of the cost of any qualified advanced mine safety
equipment property as an expense which is not chargeable to
capital account. Any cost so treated shall be allowed as a
deduction for the taxable year in which the qualified
advanced mine safety equipment property is placed in service.
``(b) Election.--
``(1) In general.--An election under this section for any
taxable year shall be made on the taxpayer's return of the
tax imposed by this chapter for the taxable year. Such
election shall specify the advanced mine safety equipment
property to which the election applies and shall be made in
such manner as the Secretary may by regulations prescribe.
``(2) Election irrevocable.--Any election made under this
section may not be revoked except with the consent of the
Secretary.
``(c) Qualified Advanced Mine Safety Equipment Property.--
For purposes of this section, the term `qualified advanced
mine safety equipment property' means any advanced mine
safety equipment property for use in any underground mine
located in the United States--
``(1) the original use of which commences with the
taxpayer, and
``(2) which is placed in service by the taxpayer after the
date of the enactment of this section.
``(d) Advanced Mine Safety Equipment Property.--For
purposes of this section, the term `advanced mine safety
equipment property' means any of the following:
``(1) Emergency communication technology or device which is
used to allow a miner to maintain constant communication with
an individual who is not in the mine.
``(2) Electronic identification and location device which
allows an individual who is not in the mine to track at all
times the movements and location of miners working in or at
the mine.
``(3) Emergency oxygen-generating, self-rescue device which
provides oxygen for at least 90 minutes.
``(4) Pre-positioned supplies of oxygen which (in
combination with self-rescue devices) can be used to provide
each miner on a shift, in the event of an accident or other
event which traps the miner in the mine or otherwise
necessitates the use of such a self-rescue device, the
ability to survive for at least 48 hours.
``(5) Comprehensive atmospheric monitoring system which
monitors the levels of carbon monoxide, methane, and oxygen
that are present in all areas of the mine and which can
detect smoke in the case of a fire in a mine.
``(e) Special Rules.--
``(1) Coordination with section 179.--No expenditures shall
be taken into account under subsection (a) with respect to
the portion of the cost of any property specified in an
election under section 179.
``(2) Basis reduction.--For purposes of this title, the
basis of any property shall be reduced by the portion of the
cost of such property taken into account under subsection
(a).
``(f) Reporting.--No deduction shall be allowed under
subsection (a) to any taxpayer for any taxable year unless
such taxpayer files with the Secretary a report containing
such information with respect to the operation of the mines
of the taxpayer as the Secretary shall require.
``(g) Termination.--This section shall not apply to
property placed in service after the date which is 3 years
after the date of the enactment of this section.''.
(b) Conforming Amendments.--
(1) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (J), by striking the period at the end of
subparagraph (K) and inserting ``, or'', and by inserting
after subparagraph (K) the following new subparagraph:
``(L) expenditures for which a deduction is allowed under
section 179E.''.
(2) Section 312(k)(3)(B) is amended by striking ``or 179D''
each place it appears in the heading and text thereof and
inserting ``179D, or 179E''.
(3) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (36), by striking the period at the end of
paragraph (37) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(38) to the extent provided in section 179E(e)(2).''.
(4) Section 1245(a)(2)(C) is amended by inserting ``179E,''
after ``179D,''.
(5) The table of sections for part VI of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 179D the following new item:

``Sec. 179E. Election to expense advanced mine safety equipment.''.

(c) Effective Date.--The amendments made by this section
shall apply to costs paid or incurred after the date of the
enactment of this Act.

SEC. __. MINE RESCUE TEAM TRAINING TAX CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by adding at the end the following new section:

``SEC. 45N. MINE RESCUE TEAM TRAINING CREDIT.

``(a) Amount of Credit.--For purposes of section 38, the
mine rescue team training credit determined under this
section with respect to any eligible employer for any taxable
year is an amount equal to the lesser of--
``(1) 20 percent of the amount paid or incurred by the
taxpayer during the taxable year with respect to the training
program costs of each qualified mine rescue team employee
(including wages of such employee while attending such
program), or
``(2) $10,000.
``(b) Qualified Mine Rescue Team Employee.--For purposes of
this section, the term `qualified mine rescue team employee'
means with respect to any taxable year any full-time employee
of the taxpayer who is--
``(1) a miner eligible for more than 6 months of such
taxable year to serve as a mine rescue team member as a
result of completing, at a minimum, an initial 20-hour course
of instruction as prescribed by the Mine Safety and Health
Administration's Office of Educational Policy and
Development, or
``(2) a miner eligible for more than 6 months of such
taxable year to serve as a mine rescue team member by virtue
of receiving at least 40 hours of refresher training in such
instruction.
``(c) Eligible Employer.--For purposes of this section, the
term `eligible employer' means any taxpayer which employs
individuals as miners in underground mines in the United
States.

[[Page S489]]

``(d) Wages.--For purposes of this section, the term
`wages' has the meaning given to such term by subsection (b)
of section 3306 (determined without regard to any dollar
limitation contained in such section).
``(e) Termination.--This section shall not apply to taxable
years beginning after December 31, 2008.''.
(b) Credit Made Part of General Business Credit.--Section
38(b) is amended by striking ``and'' at the end of paragraph
(25), by striking the period at the end of paragraph (26) and
inserting ``, and'', and by adding at the end the following
new paragraph:
``(27) the mine rescue team training credit determined
under section 45N(a).''.
(c) No Double Benefit.--Section 280C is amended by adding
at the end the following new subsection:
``(e) Mine Rescue Team Training Credit.--No deduction shall
be allowed for that portion of the expenses otherwise
allowable as a deduction for the taxable year which is equal
to the amount of the credit determined for the taxable year
under section 45N(a).''.
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:

``Sec. 45N. Mine rescue team training credit.''.

(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2005.
Mr. BAUCUS. Mr. President, I believe we have 1 minute each. I yield 1
minute to the Senator from West Virginia.
Mr. ROCKEFELLER. Mr. President, I simply want to thank the chairman
of the Finance Committee, and I thank the ranking member for working
this out and having everybody in it together. I welcome working with
Senator Santorum. It is a good thing to do. It is dark days in
Appalachia now, and this will help a lot. Thank you.
Mr. FRIST. Mr. Presient, on behalf of Senator Santorum, we yield back
the remainder of our time.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 2728) was agreed to.
Mr. BAUCUS. Mr. President, the next amendment on the list is to be
offered by the Senator from North Dakota, Mr. Conrad. He should be here
at any moment now. Until he is here, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant journal clerk proceeded to call the roll.
Mr. CONRAD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CONRAD. Mr. President, is this an appropriate time to offer my
amendment?
The PRESIDING OFFICER. Yes.
Mr. BAUCUS. It is.

Amendment No. 2729 to Amendment No. 2707

Mr. CONRAD. Mr. President, I send my amendment to the desk, and I ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant journal clerk read as follows:

The Senator from North Dakota [Mr. Conrad], for himself and
Mr. Bingaman, proposes an amendment numbered 2729 to
amendment 2707.

Mr. CONRAD. Mr. President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. CONRAD. Mr. President, the chairman and ranking member have done
an excellent job in putting together this package that is in the
interest of the American people. I have all of the same tax relief
provisions that are in their package. The only difference is that I
have paid for it over the 10 years. I have done it by adopting the same
offsets as in the managers' package: closing the tax gap by shutting
down abusive tax shelters and other reforms, raising some $34 billion,
including revoking tax benefits for leasing foreign subway and sewer
systems; second, ending a loophole for big oil that lets them avoid
taxes on foreign operations, raising $9 billion; requiring tax
withholding on Government payments to contractors such as Halliburton,
raising $7 billion; renewing the Superfund tax so that polluting
companies pay for cleaning up toxic waste sites, raising $17 billion;
and closing additional loopholes, raising $22 billion.
This is the package that has all of the tax relief in the managers'
package. It just has additional pay-fors, so we cover the costs. We
have exploding deficits, exploding debt. Let's pay for these tax cuts
we are offering.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. Mr. President, I disagree with the proposal in two
important parts.
First, the proposal does not extend to 2009 several provisions that
are very important to both sides, bipartisan--specifically, the section
179 expensing, which encourages the growth of small business in our
country, and the college tuition deduction, which will give parents
more certainty in the planning of their children's education, and the
low-income savers' credit, which assists families who make less than
$50,000 in saving for their retirement.
The second point I have----
Mr. CONRAD. Mr. President, would the Senator yield on this point?
Mr. GRASSLEY. I only have 1 minute.
Mr. CONRAD. Can I grant you some additional time?
Mr. GRASSLEY. We don't have that time.
Mr. CONRAD. Mr. President, I ask unanimous consent for 30 seconds on
this point, if I could.
Mr. GRASSLEY. Then I will take 30 seconds, too.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CONRAD. That is more than fair.
I say to my colleague that the statement he made is just not true. I
have precisely the same tax relief in my package as in yours. Every one
of the items the chairman just mentioned is in my package for exactly
the same period of time as is in yours.
Mr. GRASSLEY. All I can say in my 30 seconds on my point is that the
Senator may be entirely correct, but that is one of the things that
happens when we have 2 days of debate and these amendments are not put
before the Senate to study until the last minute.
The second concern I have about the proposal is the inclusion of
offsets which we have not had an opportunity to fully consider or with
respect to which we have some policy concerns. An example of that is
the revival of the environmental excise tax offered, referred to as the
``Superfund tax.'' As you might expect, I believe the bill passed by a
bipartisan majority with 64 votes in the Senate in November, which we
are not going through again, represents a more balanced bill, one that
provides longer-term benefits, including increased certainty and
reduced complexity for planning.
In addition, I raise a point of order that the budget does not meet
reconciliation instructions to the Senate. It is an issue of
germaneness, Mr. President.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, pursuant to section 904 of the
Congressional Budget Act, I move to waive the applicable sections of
the act for the purposes of the pending amendment, and I ask for the
yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The assistant journal clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici), the Senator from Oklahoma (Mr.
Inhofe), and the Senator from Wyoming (Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER (Mr. Allen). Are there any other Senators in
the Chamber desiring to vote?
The yeas and nays resulted--yeas 44, nays 52, as follows:

[Rollcall Vote No. 3 Leg.]

YEAS--44

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Chafee
Clinton
Conrad
Dayton
Dodd
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray

[[Page S490]]

Nelson (FL)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Stabenow
Wyden

NAYS--52

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Burr
Chambliss
Coburn
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeMint
DeWine
Dole
Ensign
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Nelson (NE)
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thune
Vitter
Voinovich
Warner

NOT VOTING--4

Bingaman
Domenici
Inhofe
Thomas
The PRESIDING OFFICER. On this vote, the yeas are 44, the nays are
52. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected. The point of order is
sustained and the amendment falls.
Mr. GRASSLEY. Mr. President, I move to reconsider the vote.
Mr. BAUCUS. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, we are making a lot of progress. I think
if we just keep operating in the sense of comity we can do quite well.
In that spirit, I ask unanimous consent the Grassley AMT amendment and
the Mendendez AMT amendment be moved down the amendment list in the
time of offering.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BAUCUS. That means the next amendment is the amendment of Senator
Grassley on the Medicare prescription drug program.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Mr. President, tonight it has taken a long time to get
where we are. We are going to have 10-minute rollcall votes, so
everybody needs to stay in the Chamber. We are going to cut everybody
off. We have agreed to 10 minutes. It has been a long day already. We
know what we are going to be doing the rest of the night. We have the
amendments laid out, but it means everybody has to stay here. It will
be 10-minute votes. Everybody stay here.
Second, we have a request from the other side of the aisle that after
this series of amendments there be a rollcall vote on the extension of
the PATRIOT Act. We will run through the series of amendments as
outlined and then, in discussion with the other side of the aisle, they
are requesting a rollcall vote on the extension of the PATRIOT Act
following these stacked votes on the amendments.
I yield the floor.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, what is the regular order?
The PRESIDING OFFICER. The next amendment is the Grassley amendment.
The Senator from Iowa is recognized.

Amendment No. 2731 to Amendment No. 2707

Mr. GRASSLEY. Mr. President, the amendment expresses the sense of the
Senate about the concerns regarding the problems encountered in
implementing the new drug benefit. It expresses the Senate's support
for the administration's efforts to fix them. These efforts have proven
to be much speedier in getting the problems fixed, and fixed fast, than
any legislation can do. To that point, one amendment offered yesterday
has provisions that are completely unnecessary because administrative
actions have already taken care of it. I see no point in legislating
for the sake of legislating.

Moreover, legislative action on top of administration action will
undermine and complicate progress to date.
I urge my colleagues to support this sense-of-the-Senate amendment.
The PRESIDING OFFICER. The Senator from Iowa will please send the
amendment to the desk.

Amendment No. 2731 to Amendment No. 2707

Mr. GRASSLEY. I call up amendment No. 2731.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Iowa [Mr. Grassley] proposes an amendment
numbered 2731 to amendment No. 2707.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To express the sense of the Senate regarding the Medicare
part D prescription drug program)

At the appropriate place, insert the following:

SEC. __. SENSE OF THE SENATE REGARDING THE MEDICARE PART D
PRESCRIPTION DRUG PROGRAM.

(a) Findings.--The Senate finds the following:
(1) It is not acceptable that startup issues under the new
Medicare prescription drug program have resulted in some of
our Nation's most vulnerable citizens having difficulties
getting their prescription drugs covered under the program,
and these issues must be addressed and resolved.
(2) The Department of Health and Human Services and the
Centers for Medicare & Medicaid Services are working
tirelessly to address these startup issues and have taken
numerous steps to smooth the transition process.
(3) All prescription drug plans under part D of title XVIII
of the Social Security Act and MA-PD plans under part C of
such title (in this section referred to as ``Medicare
prescription drug plans'') already have a ``first fill''
policy in place that provides a new enrollee with coverage
for prescription drugs during at least the first 30 days of
enrollment regardless of whether the particular prescription
drug is on the plan's formulary, and the Centers for Medicare
& Medicaid Services is enforcing this requirement.
(4) Under current law, full-benefit dual eligible
individuals (as defined in section 1935(c)(6) of the Social
Security Act (42 U.S.C. 1395u-5(c)(6)) are already
automatically enrolled into Medicare prescription drug
coverage so no change in law is necessary.
(5) Medicare prescription drug plans are already
responsible for covering the cost of covered prescriptions
filled for enrollees, including short term transition
prescriptions.
(6) Medicare prescription drug plans are already
responsible for reimbursing any enrollee, including full-
benefit dual eligible individuals, for any out-of-pocket
costs incurred by the enrollee that should have been covered
by the plan.
(7) The Centers for Medicare & Medicaid Services is already
reimbursing States for the reasonable administrative costs
incurred by States that have temporarily covered some claims
for prescription drug coverage during the transition period.
(8) Enrollment is exceeding projections, with at least
24,000,000 Medicare beneficiaries who now have drug coverage
and another 90,000 are enrolling each day in the Medicare
prescription drug program;
(9) In addition, the Secretary of Health and Human Services
has taken many other actions to smooth the implementation of
the Medicare prescription drug program, including the
following:
(A) Establishing processes to ensure that full-benefit dual
eligible individuals are not overcharged for their
prescriptions and to require Medicare prescription drug plans
to refund overcharges to such individuals.
(B) Establishing a reconciliation process to ensure that
Medicare prescription drug plans reimburse pharmacies for
costs incurred by pharmacies that are payable by such plans.
(C) Conducting extensive and continuing outreach to
pharmacies and pharmacy associations on the implementation of
the Medicare prescription drug benefit, particularly with
respect to full-benefit dual eligible individuals, as well as
establishing a special pharmacy telephone help line.
(D) Requiring Medicare prescription drug plans to have
comprehensive formularies and procedures for enrollees to
rapidly secure an exception to the limitation of coverage of
a prescription drug when medical necessity is demonstrated.
(E) Permitting full-benefit dual eligible individuals to
switch Medicare prescription drug plan under the Medicare
prescription drug benefit at any time, for any reason, and
improving data flows and communication with plans to ensure
that plan switches by such individuals become fully effective
as quickly as possible.
(F) Partnering with national, State, and local groups that
work with full-benefit dual eligible individuals to educate
such individuals about the Medicare prescription drug
program, and assisting in their transition to, and enrollment
under, such program.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) the Secretary of Health and Human Services is making
significant progress in smoothing the implementation of the
new Medicare prescription drug program, legislation changing
the program is not needed at this time, and legislation at
this time would also likely complicate implementation of the
program and confuse beneficiaries;
(2) each of the implementation problems identified under
the Medicare prescription drug program will be resolved more
quickly through administrative actions, which the

[[Page S491]]

Secretary of Health and Human Services already has the
authority to take under current law, rather than through
Congressional action followed by administrative action;
(3) the Senate fully supports the efforts of the Secretary
of Health and Human Services, Medicare prescription drug
plans, pharmacists, and others to implement the Medicare
prescription drug program and to resolve problems that have
occurred during the implementation of the program; and
(4) the pace of enrollment in the Medicare prescription
drug benefit indicates that extending the six-month
enrollment period is not warranted at this time, and, by
contrast, such an action could exacerbate implementation
issues under the program.
Mr. BAUCUS. Mr. President, I yield 1 minute allocated to my side to
the Senator from Florida.
Mr. NELSON of Florida. Mr. President, Senators had better look at
this sense-of-the-Senate amendment because it indicates that
``extending the 6-month enrollment period is not warranted.''
That is a direct quote. You know what you have been hearing from your
senior citizens and how confused they are. This sense of the Senate
says it shouldn't be extended.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Mr. NELSON of Florida. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second, and the clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from North Carolina (Mr. Burr), the Senator from New Mexico
(Mr. Domenici), and the Senator from Wyoming (Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 42, nays 54, as follows:

[Rollcall Vote No. 4 Leg.]

YEAS--42

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Coburn
Cochran
Collins
Cornyn
Craig
Crapo
DeMint
Dole
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Roberts
Santorum
Sessions
Shelby
Smith
Stevens
Sununu
Talent
Thune
Vitter

NAYS--54

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Chafee
Chambliss
Clinton
Coleman
Conrad
Dayton
DeWine
Dodd
Dorgan
Durbin
Ensign
Feingold
Feinstein
Harkin
Hutchison
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Snowe
Specter
Stabenow
Voinovich
Warner
Wyden

NOT VOTING--4

Bingaman
Burr
Domenici
Thomas
The amendment (No. 2731) was rejected.

=========================== NOTE ===========================

On page S491, February 2, 2006, the following sentence appeared:
The amendment (No. 2713) was rejected.

The online version has been corrected to read: The amendment
(No. 2731) was rejected.

========================= END NOTE =========================

Amendment No. 2730 to Amendment No. 2707

(Purpose: To provide for necessary beneficiary protections in order to
ensure access to coverage under the Medicare Part D prescription drug
program)

Mr. NELSON of Florida. Mr. President, I call up amendment No. 2730.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Florida [Mr. Nelson], for himself and Mr.
Bingaman, proposes an amendment numbered 2730.

Mr. NELSON of Florida. I ask unanimous consent the reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. NELSON of Florida. On the vote Members just rejected, the thought
was that extending the 6-month enrollment period was not warranted
because, in fact, you have been hearing from your senior citizens. So
we will give you an opportunity now.
This amendment expands the 6-month enrollment period for the entire
year of 2006 and allows beneficiaries, one time, to change plans in
that year when they make a mistake. We are also going to make all those
folks, those seniors who are out of pocket, the pharmacies that are out
of pocket, the States that are out of pocket because of the Federal
bungling, we will reimburse them in the implementation where individual
senior citizens have had to eat the cost when they find their drugs
that are essential to their health, that they cannot get them because
they are not eligible under the new plan under Medicare.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I object to this amendment. Remember,
all but two of our members of the Committee on Finance, Republican and
Democrat, joined with Secretary Leavitt to go over the problems 2 weeks
ago that this program is having. Secretary Leavitt took responsibility
for those problems. He laid out seven problems. He laid out seven
solutions to those problems that he has already inputted.
I asked him if he needed additional legislative authority to solve
these problems. He did not need any additional legislative authority.
He had plenty. We are going to pass legislation now that not only will
take a while to get passed, but we will also have a period of time
afterwards of having regulations to administer that legislation.
The problem goes on and on. The problem is being solved by the
Secretary right now. Let's not screw up what the Secretary is trying to
do, something that is working very well. There are problems, yes, but
those problems are identified, and they can work.
I raise a point of germaneness on this amendment. I raise a point of
order under section 310 of the Budget Act, and I ask for the yeas and
nays.
Mr. NELSON of Florida. Pursuant to 904 of the Congressional Budget
Act, I move to waive the applicable sections of that act for
consideration of this amendment. I ask for the yeas and nays on my
motion.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is opn agreeing to the motion.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 52, nays 45, as follows:

[Rollcall Vote No. 5 Leg.]

YEAS--52

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Chafee
Clinton
Coleman
Collins
Conrad
Dayton
DeWine
Dodd
Dorgan
Durbin
Feingold
Feinstein
Harkin
Hutchison
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Snowe
Specter
Stabenow
Warner
Wyden

NAYS--45

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Burr
Chambliss
Coburn
Cochran
Cornyn
Craig
Crapo
DeMint
Dole
Ensign
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Roberts
Santorum
Sessions
Shelby
Smith
Stevens
Sununu
Talent
Thune
Vitter
Voinovich

NOT VOTING--3

Bingaman
Domenici
Thomas
The PRESIDING OFFICER. On this vote, the yeas are 52, the nays are
45. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected. The point of order is
sustained and the amendment falls.

[[Page S492]]

Mr. GRASSLEY. I move to reconsider the vote.
Mr. BENNETT. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from New York.

Amendment No. 2716 to Amendment No. 2707

(Purpose: To establish a congressional commission to examine the
Federal, State, and local response to the devastation wrought by
Hurricane Katrina in the Gulf Region of the United States especially in
the States of Louisiana, Mississippi, Alabama, and other areas impacted
in the aftermath and make immediate corrective measures to improve such
responses in the future)

Mrs. CLINTON. Mr. President, I call up amendment No. 2716 and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will please report.
The legislative clerk read as follows:

The Senator from New York [Mrs. Clinton], for herself, Ms.
Mikulski, Mr. Harkin, Mr. Lautenberg, Mr. Reed, Mr. Salazar,
Mr. Obama, Mrs. Boxer, Ms. Stabenow, Mr. Schumer, Mr. Durbin,
Mrs. Feinstein, Mr. Feingold, Mr. Carper, Mr. Johnson, Mr.
Leahy, and Mr. Jeffords, proposes an amendment numbered 2716.

Mrs. CLINTON. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mrs. CLINTON. Mr. President, this amendment would establish a Katrina
commission modeled after the 9/11 Commission, made up of experts on a
bipartisan basis.
We are seeing the administration withholding documents, testimony,
and information from the ongoing investigations by the House and
Senate.
I commend our colleagues, Senator Collins and Senator Lieberman, for
their efforts to obtain the information that is needed. But we must
establish this commission to get at what the truth is about what
actually happened in order to take steps that will fix the problems so
they do not happen anywhere else in our country.
A vote against this commission is a vote for continued stonewalling,
sweeping problems under the rug, and ignoring the problems that we know
exist today. That is a dangerous precedent for the people of this
Nation.
I urge my colleagues to vote for the Katrina commission.
The PRESIDING OFFICER. Who yields time in opposition? The Senator
from Maine.
Ms. COLLINS. Mr. President, the Homeland Security Committee of the
Senate has been conducting a thoroughly comprehensive, bipartisan, and
thorough investigation into the preparation for and response to
Hurricane Katrina. We have held 15 hearings, the latest of which was
today. We have interviewed 270 witnesses. We have reviewed 800,000--
800,000--pages of documents. We have a completely bipartisan staff of
investigators, attorneys, and other experts.
We are working together. We are making great progress. We will finish
in March. We will produce a report and legislation. And, most
important, we will finish our work before the next hurricane season is
here.
I urge opposition to the amendment, and I raise a point of order that
the pending amendment is not germane to the measure now before the
Senate. I raise a point of order under section 305(b) of the Budget
Act.
The PRESIDING OFFICER. The Senator from New York.
Mrs. CLINTON. Mr. President, I move to waive the applicable sections
of the Budget Act for purposes of the pending amendment, and I ask for
the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion to waive.
The clerk will please call the roll.
The bill clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 44, nays 53, as follows:

[Rollcall Vote No. 6 Leg.]

YEAS--44

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Clinton
Conrad
Dayton
Dodd
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Stabenow
Wyden

NAYS--53

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Burr
Chafee
Chambliss
Coburn
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeMint
DeWine
Dole
Ensign
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thune
Vitter
Voinovich
Warner

NOT VOTING--3

Bingaman
Domenici
Thomas
The PRESIDING OFFICER. On this vote, the yeas are 44, the nays are
53. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected. The point of order is
sustained and the amendment falls.
Mr. GRASSLEY. I move to reconsider the vote.
Mr. CRAIG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Iowa.

Amendment No. 2732

Mr. GRASSLEY. Mr. President, I call up amendment No. 2732.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Iowa [Mr. Grassley] proposes an amendment
numbered 2732.

The amendment is as follows:

(Purpose: To support the health needs of our veterans and military
personnel)

At the appropriate place, insert the following:

SEC. __. FUNDING FOR VETERANS HEALTH CARE AND DISABILITY
COMPENSATION AND HOSPITAL INFRASTRUCTURE FOR
VETERANS.

(a) Funding for Medical Services.--
(1) Authorization of appropriations.--There is hereby
authorized to be appropriated for the Department of Veterans
Affairs for the Veterans Health Administration for Medical
Care amounts as follows:
(A) $900,000,000 for fiscal year 2006.
(B) $1,300,000,000 for fiscal year 2007.
(C) $1,500,000,000 for fiscal year 2008.
(D) $1,600,000,000 for fiscal year 2009.
(E) $1,600,000,000 for fiscal year 2010.
(2) Supplement not supplant.--The amounts authorized to be
appropriated by this subsection are in addition to any other
amounts authorized to be appropriated for the Veterans Health
Administration for Medical Care under any other provisions of
law.
(b) Funding for Disability Compensation Benefits.--
(1) Authorization of appropriations.--There is hereby
authorized to be appropriated for the Department of Veterans
Affairs for the Veterans Benefits Administration for
Compensation and Pensions amounts as follows:
(A) $2,300,000,000 for fiscal year 2006.
(B) $2,700,000,000 for fiscal year 2007.
(C) $3,000,000,000 for fiscal year 2008.
(D) $3,000,000,000 for fiscal year 2009.
(E) $3,000,000,000 for fiscal year 2010.
(2) Supplement not supplant.--The amounts authorized to be
appropriated by this subsection are in addition to any other
amounts authorized to be appropriated for the Veterans
Benefits Administration for Compensation and Pensions under
any other provisions of law.
(c) Funding for Infrastructure Improvements for Hospitals
Providing Health Care and Services to Veterans.--
(1) Establishment of fund.--There is hereby established on
the books of the Treasury an account to be known as the
``Veterans Hospital Improvement Fund'' (in this subsection
referred to as the ``Fund'').
(2) Elements.--The Fund shall consist of the following:
(A) $1,000,000,000, which shall be deposited in the Fund
upon the enactment of this subsection.
(B) Any other amounts authorized for transfer to or deposit
in the Fund by law.
(3) Administration.--The Funds shall be administered by the
Secretary of Veterans Affairs.

[[Page S493]]

(4) Use of funds.--
(A) In general.--Amounts in the Fund shall be available
expenditures for improvements of health facilities treating
veterans, including military medical treatment facilities,
medical centers and other facilities administered by the
Secretary of Veterans Affairs for the provision of medical
care and services to veterans, and other State, local, and
private facilities providing medical care and services to
veterans.
(B) Application for funds.--A non-Federal health facility
seeking amounts from the Fund shall submit to the Secretary
of Veterans Affairs an application therefor setting forth
such information as the Secretary shall require.
(C) Availability.--Amounts in the Fund shall remain
available until expended.

Mr. GRASSLEY. Mr. President, the problem with the Dodd amendment is
that it doesn't even do what the author says it does. He says it is
paid for by using capital gains, but capital gains offsets don't even
come into play until the year 2009. The author is leading us to believe
that the military assistance is coming now. But it is not, if it is
tied to an offset that won't come due until 2009. Our alternative now
before the Senate will do the same thing as the Dodd amendment, but we
don't tie it up with an offset that is way down the road 3 years. That
is not truth in budgeting. I urge support for my amendment.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I yield the 1 minute allocated to our side
to the Senator from Connecticut.
Mr. DODD. Mr. President, with all due respect to my good friend from
Iowa, for the Dodd amendment, the offsets begin next year, 2007, on the
capital gains and dividends tax breaks. The Grassley amendment I will
support. I hope the Senator from Iowa will support my amendment. The
distinction between the two amendments is whether you pay for it. I am
grateful that the Senator from Iowa has taken my language on veterans
resources going to veterans hospitals, things such as the Intrepid
Fallen Heroes Fund facility at Fort Sam Houston in Texas, and others,
so that we can provide for the 103,000 veterans who come out of Iraq
and Afghanistan, where there is a shortfall today. If you take my
amendment, we actually pay for it by asking one-fifth of 1 percent of
those people who in the year 2007 and 2008 would be beneficiaries as a
result of capital gains and dividends tax reductions; 99.8 percent of
all the beneficiaries under the capital gains and dividends tax
reductions would not be touched by the Dodd amendment.
This is a simple distinction here. If you think we ought to do
something on behalf of our veterans, then we ought to have the courage
to pay for it. You have to make choices. A modest reduction in the
capital gains and dividends tax reduction for 2 years, coming from less
than one-fifth of 1 percent of the population making over $1 million a
year is very little to ask for.
I ask for the adoption of the Grassley amendment. I also urge you to
adopt our amendment. I don't want to see this amendment drop before it
gets to the Ohio clock, and I know that is what is going to happen if
we don't pay for the amendment.
Mr. GRASSLEY. Mr. President, I raise a budget point of order on my
amendment, and I also move to waive all provisions of the Budget Act
and budget resolution necessary for the consideration of the pending
amendment to this bill and for the inclusion of the language of the
pending amendment in the consideration of amendments between the House
and conference report on the bill.
Mr. DODD. Mr. President, in a bizarre situation, pursuant to section
904 the Congressional Budget Act----
Mr. GRASSLEY. I ask unanimous consent that the motion be agreed to.
The PRESIDING OFFICER. Is there objection?
Mr. CONRAD. Reserving the right to object, I ask for a quorum call.
Mr. LEAHY. I suggest the absence of a quorum.
The PRESIDING OFFICER. The Senator from Iowa has not relinquished the
floor. Does the Senator from Iowa consent or dissent to a quorum call?
Mr. GRASSLEY. I have asked for unanimous consent.
Mr. CONRAD. I object.
Mr. REID. I object.
The PRESIDING OFFICER. Objection is heard.
The Democratic leader is recognized.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I ask unanimous consent to waive all
provisions of the Budget Act and budget resolutions necessary for the
consideration of the pending amendment to this bill, and for the
inclusion of the language of the pending amendment in the consideration
of an amendment between Houses.
The PRESIDING OFFICER. Is there objection?
Mr. CONRAD. Mr. President, reserving the right to object, and I will
not object.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, this just makes clear that we would not be
doing something tonight the Senate has never done before: allow direct
spending on a bill such as this without the chance of it being
considered in conference and coming back here without any points of
order prevailing.
I apologize to colleagues for taking this time, but we cannot be
engaging in a process never before done in the Senate to spend tens of
billions of dollars without the ability to review it when it comes back
from conference. I will not object.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on agreeing to amendment No. 2732.
The amendment (No. 2732) was agreed to.
Mr. DODD. I move to reconsider the vote.
Mr. BAUCUS. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Connecticut.

Amendment No. 2735 to amendment No. 2707

Mr. DODD. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Connecticut [Mr. Dodd], for himself, Mr.
Kennedy, Mr. Kerry, Mr. Lautenberg, Mrs. Boxer, Ms. Mikulski,
Mr. Akaka, and Mr. Reed, proposes an amendment numbered 2735.

Mr. DODD. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To support the health needs of our veterans and military
personnel and reduce the deficit by making tax rates fairer for all
Americans)

At the appropriate place, insert the following:

SEC. __. FUNDING FOR VETERANS HEALTH CARE AND DISABILITY
COMPENSATION AND HOSPITAL INFRASTRUCTURE FOR
VETERANS.

(a) Funding for Medical Services.--
(1) Authorization of appropriations.--There is hereby
authorized to be appropriated for the Department of Veterans
Affairs for the Veterans Health Administration for Medical
Care amounts as follows:
(A) $900,000,000 for fiscal year 2006.
(B) $1,300,000,000 for fiscal year 2007.
(C) $1,500,000,000 for fiscal year 2008.
(D) $1,600,000,000 for fiscal year 2009.
(E) $1,600,000,000 for fiscal year 2010.
(2) Supplement not supplant.--The amounts authorized to be
appropriated by this subsection are in addition to any other
amounts authorized to be appropriated for the Veterans Health
Administration for Medical Care under any other provisions of
law.
(b) Funding for Disability Compensation Benefits.--
(1) Authorization of appropriations.--There is hereby
authorized to be appropriated for the Department of Veterans
Affairs for the Veterans Benefits Administration for
Compensation and Pensions amounts as follows:
(A) $2,300,000,000 for fiscal year 2006.
(B) $2,700,000,000 for fiscal year 2007.
(C) $3,000,000,000 for fiscal year 2008.
(D) $3,000,000,000 for fiscal year 2009.
(E) $3,000,000,000 for fiscal year 2010.
(2) Supplement not supplant.--The amounts authorized to be
appropriated by this subsection are in addition to any other
amounts authorized to be appropriated for the Veterans
Benefits Administration for Compensation and Pensions under
any other provisions of law.

[[Page S494]]

(c) Funding for Infrastructure Improvements for Hospitals
Providing Health Care and Services to Veterans.--
(1) Establishment of fund.--There is hereby established on
the books of the Treasury an account to be known as the
``Veterans Hospital Improvement Fund'' (in this subsection
referred to as the ``Fund'').
(2) Elements.--The Fund shall consist of the following:
(A) $1,000,000,000, which shall be deposited in the Fund
upon the enactment of this subsection.
(B) Any other amounts authorized for transfer to or deposit
in the Fund by law.
(3) Administration.--The Funds shall be administered by the
Secretary of Veterans Affairs.
(4) Use of funds.--
(A) In general.--Amounts in the Fund shall be available
expenditures for improvements of health facilities treating
veterans, including military medical treatment facilities,
medical centers and other facilities administered by the
Secretary of Veterans Affairs for the provision of medical
care and services to veterans, and other State, local, and
private facilities providing medical care and services to
veterans.
(B) Application for funds.--A non-Federal health facility
seeking amounts from the Fund shall submit to the Secretary
of Veterans Affairs an application therefor setting forth
such information as the Secretary shall require.
(C) Availability.--Amounts in the Fund shall remain
available until expended.
(d) Offset Through Modification of Tax Rates on Capital
Gains and Dividends for Individuals With $1,000,000 or More
of Taxable Income.--
(1) In general.--Section 1(h) is amended by adding at the
end the following new paragraph:
``(12) Modified rates for individuals with $1,000,000 or
more of taxable income.--If a taxpayer has taxable income of
$1,000,000 or more for any taxable year--
``(A) paragraph (11) (relating to dividends taxed as
capital gain) shall not apply to any qualified dividend
income of the taxpayer for the taxable year, and
``(B) paragraph (1)(C) shall be applied by substituting `20
percent' for `15 percent' with respect to the adjusted net
capital gain of the taxpayer for the taxable year, determined
by only taking into account gain or loss properly allocable
to the portion of the taxable year after December 31, 2006.''
(2) Application to minimum tax.--Section 55(b)(3) is
amended by adding at the end the following new sentence: ``In
the case of a taxpayer with alternative minimum taxable
income of $1,000,000 or more for any taxable year, the rules
of section 1(h)(12) shall apply for purposes of this
paragraph.''
(3) Effective dates.--
(A) Capital gains.--Section 1(h)(12)(B) of the Internal
Revenue Code of 1986 (as added by paragraph (1)) shall apply
to taxable years beginning after December 31, 2006.
(B) Dividend rates.--Section 1(h)(12)(A) of such Code (as
added by paragraph (1)) shall apply to dividends received
after December 31, 2006.
(4) Application of jgtrra sunset.--The amendments made by
this subsection shall be subject to section 303 of the Jobs
and Growth Tax Relief Reconciliation Act of 2003 to the same
extent and in the same manner as the provision of such Act to
which such amendment relates.
Mr. DODD. Mr. President, I offer this amendment on behalf of a number
of colleagues: Senators Kennedy, Kerry, Lautenberg, Boxer, Mikulski,
Akaka, and Reed.
First, I thank the American Legion. I ask unanimous consent that a
letter from the American Legion endorsing the Dodd amendment be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

The American Legion,

Washington, DC, February 2, 2006.
Hon. Christopher J. Dodd,
Hon. Edward M. Kennedy,
U.S. Senate,
Washington, DC.
Dear Gentlemen: On behalf of the 2.8 million members of The
American Legion, I would like to offer our support of the
proposed amendment to the Tax Relief Extension Reconciliation
Act of 2005 that would provide for the unbudgeted costs of
health care for veterans returning from Iraq and Afghanistan.
The amounts offered by this amendment would be in addition
to any other amounts provided for medical care under other
statutory provisions and would help to avoid funding
shortfalls, such as what took place last year, or other
problems that arise due to the discretionary funding model
currently in place for VA health care. This amendment would
also establish a ``Veterans Hospital Improvement Fund'' to
provide for improvements in health care facilities treating
veterans, including military medical treatment facilities, VA
facilities and other facilities (state, local and private)
that provide medical care and services to veterans.
Again, we appreciate your efforts on behalf of our nation's
veterans. Your amendment acknowledges the need for adequate
funding to ensure our nation's veterans receive the
healthcare and other benefits to which they are entitled.
Sincerely,
Steven Robertson,
Director, National Legislative Commission.

Mr. DODD. Mr. President, the distinction between this amendment and
what we just voted on is, of course, paying for this. This amendment
would provide at least around $18 billion, $19 billion in needed funds
to serve returning veterans from theater of conflict.
We know last year that over 100,000 Iraqi veterans returned home. Yet
the administration's fiscal year 2006 budget for the VA was only
prepared to handle 23,000 veterans. There are shortfalls in every State
across the country. There are shortfalls in private facilities as well
as public ones. This amendment is for us finally to say let's do
something for these people.
Last year, we were promised it would be accommodated in the
appropriations process. It had to be done as almost an afterthought. I
don't like offering this amendment on this bill. I understand the
problems associated with it. But if we don't finally do something,
these veterans will lose the support they deserve. That is why the
American Legion is so strongly supporting this amendment.
I urge my colleagues to join me in seeing to it we have the resources
to pay for this. If we don't pay for it, this amendment will not make
it past the Ohio Clock. It will be dropped, and, once again, veterans
will suffer. I urge adoption of the amendment.
Mr. AKAKA. Mr. President, I rise today with my friends, Senators
Kennedy and Dodd, to offer an amendment to address the costs of
providing health care and improved benefits to troops serving in Iraq
and Afghanistan.
This amendment we offer today allows VA to provide care for returning
troops--without displacing those veterans currently using the system.
Let us never forget the budget disaster last year. Early in the year,
we knew VA was not making ends meet. The administration, however, took
months to come to that realization. And just last week, the President
signed a declaration of emergency funding for $1.2 billion for fiscal
year 2006.
We cannot repeat last year's budget scenario. This amendment provides
more cushion for this fiscal year and future years.
Early warnings are that this will not be enough to cover expected
shortfalls for this fiscal year. And VA will surely not have enough
funding to open the system up to all veterans. In 2003, this
administration closed the doors to all middle-income veterans who had
not enrolled prior to that time. To date, more than 250,000 veterans
who have tried to enroll for VA health care have been rejected. In
Hawaii alone, 710 veterans were turned away at the door. We have no
idea how many middle-income veterans never even try to enroll.
This amendment also sends a message that the Senate wishes to ensure
that our veterans are appropriately compensated. For many of our
severely injured veterans, disability compensation is their only
income--the only way for them to provide for their families. This
amendment ensures that our wounded warriors receive the compensation
they have earned.
This amendment establishes a fund for infrastructure improvements.
VA's infrastructure has suffered greatly over the past 5 years. Major
construction projects were held up for some time while we waited for
VA's own construction study. And while that process still awaits
conclusion, VA has been trying to catch up with the projects that have
been stuck in the queue for years. At the same time, the Department has
faced consistent funding shortfalls that have paralyzed its ability to
carry out these projects. Its no secret that when the health care
account is strained, funds are then diverted from ``nonessential''
areas--such as maintenance and construction--to be spent on direct
health care costs.
Meanwhile, smaller scale projects are put in jeopardy. In my home
State of Hawaii, we have a need for $6.9 million to build a new VA
mental health facility in Honolulu.
The costs of the war we are fighting today will continue to add up
long after the final shot is fired, mainly in the form of veterans
health care and benefits.
I urge my colleagues to join us in this effort to see that they are
provided the care they are currently earning.
The PRESIDING OFFICER. The Senator from Iowa.

[[Page S495]]

Mr. GRASSLEY. Mr. President, first, since we adopted the previous
amendment, we obviously don't need this amendment. But even if we
consider this amendment, I raise a budget point of order on the
amendment.
Mr. DODD. Mr. President, I move to waive all provisions of the Budget
Act and budget resolutions necessary for consideration of the pending
amendment to this bill, and for inclusion of the language of the
pending amendment in the consideration of an amendment between the
Houses.
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 44, nays 53, as follows:

[Rollcall Vote No. 7 Leg.]

YEAS--44

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Chafee
Clinton
Conrad
Dayton
Dodd
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Stabenow
Wyden

NAYS--53

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Burr
Chambliss
Coburn
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeMint
DeWine
Dole
Ensign
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Nelson (NE)
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thune
Vitter
Voinovich
Warner

NOT VOTING--3

Bingaman
Domenici
Thomas
The PRESIDING OFFICER. On this vote, the yeas are 44, the nays are
53. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected. The point of order is
sustained and the amendment falls.
The Senator from Iowa.
Mr. GRASSLEY. Just not to confuse anybody, we are kind of going
through the same thing we did on the previous two amendments, so be
alerted.
Mr. BAUCUS. Mr. President, the Senate is not in order.
The PRESIDING OFFICER. The Senator is correct. The Senate will please
come to order.

Amendment No. 2736

Mr. GRASSLEY. I call up amendment No. 2736.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Iowa [Mr. Grassley], proposes an amendment
numbered 2736.

The amendment is as follows:

(Purpose: To strengthen America's military and for other purposes)

TITLE IV--STRENGTHENING AMERICA'S MILITARY

SEC. 401. SHORT TITLE.

This title may be cited as the ``Strengthening America's
Military Act''.

Subtitle A--Military Funding

SEC. 402. FUNDING FOR MILITARY OPERATIONS.

There is appropriated, out of any money in the Treasury
which is not otherwise appropriated, for the fiscal years
2006 through 2010, the following amounts, to be used for
resetting and recapitalizing equipment being used in theaters
of operations:
(1) $16,900,000,000 for operations and maintenance of the
Army.
(2) $1,800,000,000 for aircraft for the Army.
(3) $6,300,000,000 for other Army procurement.
(4) $10,000,000,000 for wheeled and tracked combat vehicles
for the Army.
(5) $467,000,000 for the Army working capital fund.
(6) $6,000,000 for missiles for the Department of Defense.
(7) $100,000,000 for defense wide procurement for the
Department of Defense.
(8) $4,500,000,000 for Marine Corps procurement.
(9) $4,500,000,000 for operations and maintenance of the
Marine Corps.
(10) $2,700,000,000 for Navy aircraft procurement.

Mr. GRASSLEY. The same arguments that I made on the previous
amendments apply here as well. My amendment will do the same as the
Reed amendment but doesn't raise taxes to pay for it, so it will
provide more equipment for our troops without increasing taxes. I urge
support of my amendment.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. I yield 1 minute to the Senator from Rhode Island.
Mr. REED. Mr. President, the amendment proposed by the Senator from
Iowa is my amendment. It would meet the supreme need of the military to
reset, recapitalize, and rehabilitate $43 billion or more of equipment.
The one big difference is that my amendment will pay for it. It will
take the responsible step of actually paying to help our military. What
I will use is dividend offsets. I will offer that later. But we have
the responsibility to be responsible, not only give the troops what
they need but pay for it so we do not increase the deficit. I hope we
respond by supporting my amendment which takes care of the troops but
does so in a responsible way by providing the resources to pay for this
necessary equipment.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, again I raise a budget point of order. I
ask unanimous consent it be exactly the same as the previous one on the
last two bills. I ask unanimous consent to waive all provisions of the
Budget Act and budget resolutions necessary for the consideration of
the pending amendment to this bill and for the inclusion of the
language of the pending amendment in the consideration of one amendment
between the Houses--an amendment.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
The question is on agreeing to the amendment.
The amendment (No. 2736) was agreed to.

Amendment No. 2737

(Purpose: To strengthen America's military, to repeal the extension of
tax rates for capital gains and dividends, to reduce the deficit, and
for other purposes)

The PRESIDING OFFICER. The Senator from Rhode Island and the
Providence Plantation.
Mr. REED. Mr. President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Rhode Island [Mr. Reed], for himself, Ms.
Stabenow, Mr. Lautenberg, Mrs. Clinton, and Mr. Kerry,
proposes an amendment numbered 2737.

(The amendment is printed in today's Record under ``Text of
amendments.'')
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. REED. Mr. President, our Army and Marines face a critical
problem: $47 billion worth of equipment which they have used in Iraq
and Afghanistan needs to be repaired and reconditioned. They call it
reset recapitalization. We have to do this. This equipment is not new
equipment, it is not transformational, it is the equipment they need. I
commanded a paratrooper company in the 82nd Airborne Division. I can
tell you the worst thing for morale is to have soldiers with poor and
inadequate equipment. We owe it to them.
My amendment would be the responsible way to do it, pay for it, by
taking capital gains cuts that are proposed, dividend cuts and others
that are proposed, and other loopholes. It is essentially very simple.
Are we going to give a dividend to the wealthiest citizens or are we
going to give a dividend to our troops, our soldiers, and marines? And
that dividend is equipment that will work, not only today but in the
future.
This is particularly important for the National Guard. Every one of
your National Guard units has equipment they have left overseas or has
been run into the ground. If we do not act responsibly--not just act
but act responsibly, then we will not be able to assure our soldiers
and marines that the equipment they have is the best equipment, that it
works, and it will be reconditioned and refit and work in the future.

[[Page S496]]

I urge passage of this amendment.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Again, I raise a budget point of order on this
amendment.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. REED. I move to waive all provisions of the Budget Act and budget
resolutions necessary for the consideration of the pending amendment to
this bill and for the inclusion of the language of the pending
amendment in the consideration of an amendment between the Houses.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. GREGG. Mr. President, I ask unanimous consent to speak to this
issue for 2 minutes.
The PRESIDING OFFICER. Is there objection?
Mr. REED. Reserving my right to object, if the Senator has 2 minutes,
can I have an additional 2 minutes?
Mr. GREGG. I just want to explain the parliamentary situation for the
record.
Mr. President, these last two amendments are totally outside the
traditional process of reconciliation. But the practical effects of the
motion to waive, which the Senator from Iowa has made on his
amendments, is that neither amendment can survive conference. I think
it is important to understand that reconciliation cannot include
spending under this bill, and that we would be doing fundamental damage
to the process were either of these amendments to survive conference.
And, therefore, I support the motion on this point of order and hope we
proceed the same way we have with the other points of order.
Mr. REED. I ask unanimous consent for 1 minute.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered. The Senator from Rhode Island and the Providence Plantation
is accorded the floor.
Mr. REED. I have great respect for the procedures and rules of the
Senate, but we have come too many times to issues--I can recall back
when we were talking about armored humvees when the objection was made
this is not the right legislative vehicle to do this. I think we have
an obligation to our soldiers and marines to help them now and pay for
it now. This might be the only occasion we can do both.
I urge passage.
The PRESIDING OFFICER. Is there objection to the request to waive the
Budget Act?
Mr. REED. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The legislative clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 44, nays 53, as follows:

[Rollcall Vote No. 8 Leg.]

YEAS--44

Akaka
Baucus
Bayh
Biden
Boxer
Byrd
Cantwell
Carper
Chafee
Clinton
Conrad
Dayton
Dodd
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Menendez
Mikulski
Murray
Nelson (FL)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sarbanes
Schumer
Stabenow
Wyden

NAYS--53

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Burr
Chambliss
Coburn
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeMint
DeWine
Dole
Ensign
Enzi
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Kyl
Lott
Lugar
Martinez
McCain
McConnell
Murkowski
Nelson (NE)
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thune
Vitter
Voinovich
Warner

NOT VOTING--3

Bingaman
Domenici
Thomas
The PRESIDING OFFICER (Mr. Thune). On this vote, the yeas are 44, the
nays are 53. Three-fifths of the Senators duly chosen and sworn not
having voted in the affirmative, the motion is rejected. The point of
order is sustained and the amendment falls.
Mr. GRASSLEY. Mr. President, I hope we just have one more rollcall
vote--on final passage. It is my understanding that the Menendez
amendment has been changed to a sense of the Senate, so that means the
amendment I was going to offer on AMT will not be offered.
Consequently, I am hoping we can get this amendment agreed to on a
voice vote.
Mr. REID. Mr. President, Senator Menendez told Members he wants a
rollcall vote.

Amendment No. 2705

Mr. MENENDEZ. Mr. President, I call up amendment numbered 2705.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from New Jersey [Mr. Menendez], for himself,
Mr. Schumer, Mr. Kerry, Mrs. Feinstein, Mrs. Clinton, Mr.
Lautenberg, and Ms. Stabenow, proposes an amendment numbered
2705.

The amendment is as follows:

(Purpose: To express the sense of the Senate that protecting middle-
class families from the alternative minimum tax should be a higher
priority for Congress in 2006 than extending a tax cut that does not
expire until the end of 2008)

At the appropriate place, insert the following:

SEC. __. SENSE OF THE SENATE REGARDING PROTECTING MIDDLE-
CLASS FAMILIES FROM THE ALTERNATIVE MINIMUM
TAX.

(a) Findings.--The Senate finds that--
(1) the alternative minimum tax was originally enacted in
1969 as a supplemental tax on wealthy tax evaders, but has
evolved into a tax on millions of middle-class working
families, particularly families in which both parents work,
and families with 2 or more children;
(2) by the end of the decade, the alternative minimum tax
will ensnare more than 30,000,000 taxpayers, the majority of
which will have adjusted gross incomes below $100,000, and
the National Taxpayer Advocate has thus identified it as the
most serious problem facing individual taxpayers;
(3) the alternative minimum tax is often portrayed as a tax
that is most problematic for residents of States such as New
York, California, Massachusetts, and New Jersey, but the
truth is that many other States have a significant percentage
of taxpayers affected by the alternative minimum tax,
including Oregon, Maryland, Virginia, Minnesota, Ohio, Maine,
Georgia, North Carolina, and Pennsylvania, so the problem is
of national importance;
(4) a family with 2 children will become subject to the
alternative minimum tax at about $67,500 of income in 2006,
and a family with 5 children will start owing the alternative
minimum tax at about $54,000 of income, if Congress fails to
act;
(5) the year 2006 is the ``tipping point'' for the
alternative minimum tax, as the number of taxpayers affected
nationally will explode from 3,600,000 to 19,000,000 if
Congress fails to act;
(6) in 2004, only 6.2 percent of families earning $100,000
to $200,000 a year were subject to the alternative minimum
tax, and that number will explode to nearly 50 percent if
Congress fails to act;
(7) if alternative minimum tax relief is extended through
2006, about two-thirds of the benefits will be realized by
families earning under $200,000, with more than half of the
total benefits going to families with incomes between
$100,000 and $200,000;
(8) starting in 2008, the average married couple with 2
children earning $75,000 or more will find that more than
half of the tax cuts they have been expecting from the
various laws passed since 2001 will be ``taken back'' via the
alternative minimum tax; and
(9) the temporary relief from the alternative minimum tax
(provided in 2001 and extended twice in 2003 and 2004)
expired at the end of 2005, but the tax reductions on
dividends and capital gains do not expire until the end of
2008, making immediate action on those provisions a less
urgent matter.
(b) Sense of the Senate.--It is the sense of the Senate
that protecting middle-class families from the alternative
minimum tax should be a higher priority for Congress in 2006
than extending a tax cut that does not expire until the end
of 2008.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, this amendment, which is a sense of the
Senate, which I am offering with Senators Schumer, Kerry, Feinstein,
Clinton, Lautenberg, and Stabenow, is simply a sense of the Senate to
try

[[Page S497]]

to ensure that 17 million middle-class families do not see a tax
increase next year through the alternative minimum tax. This tax was
never intended to raise the taxes of average Americans but, in fact, it
has--millions of Americans.
Some think this is more problematic for residents of States such as
New York, California, or my home State of New Jersey. But the truth is
a whole host of other States have a significant percentage of tax
failures affected by the alternative minimum tax, including Oregon,
Maryland, Virginia, Minnesota, Ohio, Maine, Georgia, North Carolina,
and Pennsylvania. It is a problem of national importance. This is a
question of whether the Senate values work and the work of honest and
hard-working families who are going to be subjected to a tax not
because they made more income but simply because of the way the tax is
structured.
Ultimately, I urge my colleagues to support the sense of the Senate.
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. I dispute the presumption we have to choose between AMT
hold harmless and not extending capital gains and dividends. We can do
both. The presumption in this bill is that we can and we are going to
be able to do that in the conference committee.
Since the amendment reflects the position of what we in the Senate
previously had anticipated doing anyway, Members ought to vote for the
amendment. I will vote for it.
Yesterday afternoon, I took time to respond to Senator Harkin's
statement that we have an AMT problem to a significant degree because
of what the Finance Committee did in the 2001 tax bill. Importantly, he
fails to recognize that we have addressed the problem for 2001 to 2005.
And, now, we are trying to do the same thing for 2006--to make sure
that the AMT problem is not worsened.
To the extent that Senator Harkin suggests, like others who have
looked at this issue, that the Bush tax cuts are responsible for the
AMT problem, I respond in this way. Most who have reached that
conclusion have done so by misusing data provided by the Joint
Committee on Taxation, JCT, to distort the record on this issue.
Additional analysis will demonstrate that conclusion to be erroneous.
To the contrary, the analysis suggests an alternative explanation for
the AMT problem--Congress's failure to index the AMT for inflation over
the past 35 years.
Senator Harkin suggests that the Bush tax cuts are responsible for
the AMT problem. The conclusion is reached in error because it is based
on faulty logic. Those who have done similar analyses have based their
conclusions on the mistaken assumption that a reduction in Federal
receipts should be interpreted as percentage causation of the AMT
problem. JCT was asked to project Federal AMT revenue if the Bush tax
cuts were extended, but the current-law hold-harmless provision was not
extended--$1.139 trillion--and Federal AMT revenue if neither the Bush
tax cuts nor the hold-harmless provision is extended--$400 billion.
From that data, some erroneously concluded and publicly represented
that the Bush tax cuts are responsible for 65 percent of the AMT
problem--$1.139 trillion minus $400 billion divided by $1.139
trillion--and conversely, that the Bush tax cuts tripled the size of
the AMT problem--$1.139 trillion divided by $400 billion.
The logic used to reach that conclusion is flawed. That is because
the many variables affecting the AMT have overlapping results, and the
order in which one analyzes those overlapping variables will directly
impact the outcome of the analysis.
In that way, we can use the same JCT data in the analysis above to
suggest that failure to index is actually the dominant cause of the AMT
problem. If one were to first index the current tax system for
inflation by permanently extending an indexed version of the current
hold-harmless provision, Federal AMT revenue would be reduced from
$1.139 trillion to $472 billion over the 10-year period. Thus,
extending and indexing the current hold-harmless provision for future
inflation would reduce AMT revenues by 59 percent over the same period,
referred to in a JCT letter dated October 3, 2005, as ``percentage of
AMT effect attributable to failure to extend and index hold-harmless
provision''. A copy of the entire letter is attached. If we then assume
that the Bush tax cuts are repealed, AMT revenue falls by an additional
$302.3 billion, from $472 billion to $169.7 billion. That second drop,
attributable to the repeal of the Bush tax cuts, reduces Federal
revenues by only 27 percent. Thus, one could argue that failure to
index is the greater cause of the AMT problem--59 percent vs. 27
percent. Using logic similar to that undertaken above would also cause
us to conclude that failure to index is responsible for 59 percent of
the AMT problem--$1.139 trillion minus $472 billion divided by $1.139
trillion--or alternatively, that failure to index also nearly tripled
the size of the AMT problem, $1.139 trillion divided by $472 billion.
But simple logic suggests that the Bush tax cuts cannot be
responsible for 65 percent of the AMT problem and failure to index
responsible for 59 percent of the problem. The anomaly arises because
there is overlap between the variables being analyzed. Although the
analysis fairly demonstrates the amount of AMT revenue saved by making
a particular change to the Federal tax system, it is inappropriate to
represent that such analysis accurately isolates causation of the AMT.
Because there is overlap in the variables being analyzed--in these
examples, indexing and the Bush tax cuts--the order of analysis of
those variables is crucial to the outcome. JCT acknowledges this point
to us in a letter dated October 3, stating: ``There is, however,
interaction between these two contributing factors to the AMT effect.
In order to avoid double counting of interactions, a stacking order is
imposed. The apportionment of effects to each contributing factor will
vary depending on the stacking order, even though the total effect
remains constant.''
To this point in time, I have not seen anything that accurately
suggests that the 2001 tax cuts have worsened the AMT problem to date.
It is my intention to ensure that we continue to honor that commitment
and that is an important part of this tax reconciliation legislation.
I ask unanimous consent that a memorandum be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

To: Mark Prater and Christy Mistr
From: George Yin
Subject: AMT Effects
This memorandum responds to your request of September 29,
2005, for an analysis of the portion of the AMT effect (AMT
liability plus credits lost due to the AMT) which can be
attributed to the failure to adjust the AMT exemption amount
to inflation, assuming alternatively that the EGTRRA and
JGTRRA tax cuts (``tax cuts'') are either permanently
extended or repealed. We also explain how this information
compares to information previously provided to you on August
31, 2005 and September 16, 2005.
For the purpose of this analysis, we have first assumed
that the tax cuts are repealed. The first set of figures in
Table 1 compares the AMT effect under this assumption if,
alternatively, (1) the AMT exemption amount hold-harmless
provision is not extended beyond 2005; (2) such provision is
extended permanently; and (3) such provision is extended
permanently and indexed after 2005, The second set of figures
presents the same comparison under the assumption that the
tax cuts are permanently extended. All of the information
provided in this table was previously provided to you in our
September 16, 2005 memo, except in a different format.
____

To: Mark Prater and Christy Mistr
Subject: AMT Effects

TABLE 1.
------------------------------------------------------------------------
AMT effect
Item                             (billions of
dollars)
------------------------------------------------------------------------
Tax Cuts Repealed:
(1) Hold-harmless provision not extended..............         399.9
(2) Hold-harmless provision extended permanently......         212.0
(3) Percentage of AMT effect attributable to failure             47%
to extend hold-harmless provision (((1)-(2))/(1))....
(4) Hold-harmless provision extended permanently and           169.7
indexed..............................................
(5) Percentage of AMT effect attributable to failure             58%
to extend and index hold-harmless provision (((1)-
(4))/(1))............................................
Tax Cuts Extended Permanently:
(6) Hold-harmless provision not extended..............       1,139.1
(7) Hold-harmless provision extended permanently......         628.5
(8) Percentage of AMT effect attributable to failure             45%
to extend hold-harmless provision (((6)-(7))/(6))....
(9) Hold-harmless provision extended permanently and           472.0
indexed..............................................

[[Page S498]]

(10) Percentage of AMT effect attributable to failure            59%
to extend and index hold-harmless provision (((6)-
(9))/(6))............................................
------------------------------------------------------------------------

____
To: Mark Prater and Christy Mistr
Subject: AMT Effects
In the information provided to you on August 31, 2005 and
September 16, 2005, we analyzed the portion of the AMT effect
attributable to the tax cuts. In the analysis described
above, we identify the portion of the AMT effect attributable
to failure to adjust the AMT exemption amount to inflation.
There is, however, interaction between these two contributing
factors to the AMT effect. In order to avoid double counting
of interactions, a stacking order is imposed. The
apportionment of effects to each contributing factor will
vary depending on the stacking order, even though the total
effect remains constant.
This phenomenon is illustrated by Tables 2 and 3 below. The
first two columns of Table 2 show the portion of the AMT
effect attributable to the tax cuts, consistent with the
information provided on August 31, 2005 and September 16,
2005. The second two columns of Table 2 show the portion of
the AMT effect attributable to the failure to extend and
index the hold-harmless provision, consistent with the
information provided in Table 1 above. Note that if these two
contributing factors were completely independent of one
another, the information in Table 2 would suggest that the
two factors together contribute to more than 100 percent of
the AMT effect. In fact, as shown in Table 3, the two factors
together contribute to only 85 percent of the AMT effect.
Thus, there is substantial overlap between these two factors.

TABLE 2.
----------------------------------------------------------------------------------------------------------------
AMT Effect                                        AMT Effect
Item                        (billions of                 Item                 (billions of
dollars)                                          dollars)
----------------------------------------------------------------------------------------------------------------
Baseline........................................       1,139.1  Baseline..........................       1,139.1
Repeal tax cuts.................................         399.9  Extend and index AMT hold-harmless         472.0
provision.
Difference......................................         739.2  Difference........................         667.1
Percentage of baseline..........................           65%  Percentage of baseline............           59%
----------------------------------------------------------------------------------------------------------------

____
To: Mark Prater and Christy Mistr
Subject: AMT Effects

TABLE 3.
------------------------------------------------------------------------
AMT Effect
Item                             (billions of
dollars)
------------------------------------------------------------------------
Baseline..................................................       1,139.1
Repeal tax cuts and extend and index AMT hold-harmless             169.7
provision................................................
Difference................................................         969.4
Percentage of baseline....................................           85%
------------------------------------------------------------------------

The PRESIDING OFFICER. The question is on agreeing to the amendment.
The yeas and nays have been ordered.
The clerk will call the roll.
The assistant bill clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 73, nays 24, as follows:

[Rollcall Vote No. 9 Leg.]

YEAS--73

Akaka
Allard
Baucus
Bayh
Bennett
Biden
Bond
Boxer
Bunning
Burns
Byrd
Cantwell
Carper
Chafee
Clinton
Cochran
Coleman
Collins
Conrad
Dayton
DeWine
Dodd
Dorgan
Durbin
Feingold
Feinstein
Graham
Grassley
Hagel
Harkin
Hatch
Hutchison
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
Martinez
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Santorum
Sarbanes
Schumer
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Talent
Voinovich
Warner
Wyden

NAYS--24

Alexander
Allen
Brownback
Burr
Chambliss
Coburn
Cornyn
Craig
Crapo
DeMint
Dole
Ensign
Enzi
Frist
Gregg
Inhofe
Isakson
Kyl
McCain
Roberts
Sessions
Sununu
Thune
Vitter

NOT VOTING--3

Bingaman
Domenici
Thomas
The amendment (No. 2705) was agreed to.
Mr. FRIST. I move to reconsider the vote.
Mr. CRAIG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The majority leader.

Unanimous Consent Agreement--H.R. 4659

Mr. FRIST. Mr. President, I will have a few announcements to make,
but, first, I ask unanimous consent that following the vote on passage
of H.R. 4297, the Senate proceed to the immediate consideration of H.R.
4659, the PATRIOT Act extension. I further ask consent that there then
be 10 minutes of debate, equally divided, and that following the use or
yielding back of time, the bill be read a third time and the Senate
proceed to a vote on passage, with no intervening action or debate.
The PRESIDING OFFICER. Is there objection?
Mr. LEAHY. Mr. President, reserving the right to object, and I
apologize, were you referring to 10 minutes for debate on the PATRIOT
Act?
Mr. FRIST. That is correct.
Mr. LEAHY. I will not object.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. FRIST. Mr. President, for the information of colleagues, we do
have two remaining votes this evening. The next vote will be on passage
of the Tax Relief Act. And following that vote, we will have 10 minutes
of debate and a vote on passage of the PATRIOT Act extension. That will
be the last vote. So, Mr. President, two more votes.
We will be in session tomorrow, but there will be no votes tomorrow.
The next piece of legislation we will be considering is the asbestos
legislation, and it will be necessary to file cloture on the motion to
proceed to that bill.
The PRESIDING OFFICER. The Democratic leader.
Mr. REID. Mr. President, what we would be willing to do, if we are
not in session tomorrow, we would be willing to allow the----
Mr. FRIST. If there are no votes tomorrow.
Mr. REID. Either no votes or not in session.
Mr. FRIST. All right.
Mr. REID. We would be willing to agree procedurally on a motion to
proceed to the asbestos bill. You could file whatever papers necessary
tonight to do that so we could have a Tuesday cloture vote.
Mr. FRIST. All right. Mr. President, we will work out on filing the
motion to proceed here, and I will have an announcement. We will have
no votes tomorrow. By the end of tonight, we will have Tuesday worked
out. We will be debating the asbestos bill on Monday. The next vote
will be on that cloture motion, and we will talk about when that would
occur Tuesday. In all likelihood, if we have a vote Tuesday, it would
be around 6 o'clock at night. There are a number of Members who will
want to attend the funeral of Coretta Scott King, and, as I understand
it, that will be at noon on Tuesday. Therefore, the next vote that we
will have will be at approximately 6 o'clock on Tuesday night.

Conflict of Interest

Mr. SPECTER. Mr. President, I would like to call the chairman's
attention to a serious situation facing a Federal district judge in my
State of Pennsylvania, who recently contacted me on this matter. He has
an immediate problem that could be solved with an amendment to this
bill. This judge was assigned as the transferee judge responsible for
handling all pretrial matters in very large multidistrict litigation
involving antitrust claims in the

[[Page S499]]

corrugated paper industry from all around the United States. He has
been working on the case since 1999.
Late in this last year, a company in which the judge inherited stock
over 30 years ago merged into another company which happens to be one
of the plaintiffs in the case. Because of the judge's stock holdings in
this company, the judge may now have to recuse himself from the case.
Most of the parties would like the judge to remain on the case because
of his years of experience and expertise on this case. In order to
remain as the transferee judge, this judge would have to sell his
holdings, which would give him a capital gain this year well into six
figures.
Last March and again this past November, Ralph Mecham, as Secretary
of the Judicial Conference of the United States, transmitted on behalf
of the Conference a legislative proposal to you and to Senator Baucus
that would resolve this judge's problem and similar problems for
countless other Federal judges throughout the United States. It would
permit a judge who must sell financial holdings in order to avoid a
conflict of interest to reinvest that money in another holding and
defer paying the capital gains tax until the substitute financial
interest is liquidated. The taxes are not forgiven, but deferred and
payable at the later date, as I just said.
This same solution to conflicts of interest is already available to
executive branch officials. The proposal by the Judicial conference
would simply extend it to Federal judges, as well, bringing parity to
these two branches of the Federal Government.
I understand that it is too late at this time to offer the Judicial
Conference proposal as an amendment. However, I would like to know if
the chairman would consider taking this matter up during the conference
with the House on this bill.
Mr. GRASSLEY. Mr. President, I appreciate the Senator bringing this
matter to my attention and regret that it is too late to amend the bill
today on the floor. I will agree with the Senator, however, to review
this proposal further with the intent of taking it up in conference.
Mr. KENNEDY. Mr. President, budget reconciliation is a process
adopted by Congress nearly three decades ago to facilitate the passage
of legislation to reduce the deficit and to help bring the Federal
budget into balance. But in recent years, under the Republican
majority, that process has been repeatedly abused to enact more and
more tax cuts for the wealthy that make the budget deficit even larger.
Now, they are trying to do it again, in spite of the urgent problems
facing the Nation, from the ongoing war in Iraq to the devastating
hurricane damage along the gulf coast. The Republicans have brought
before the Senate two reconciliation bills, one now passed, that would
produce a net increase in the budget deficit by billions of dollars
over the next 5 years.
It sounds like deficit reduction, until you look at the tax
reconciliation bill, which will cut taxes by far more than the savings
in spending--$70 billion. The net result will be a substantial increase
in the budget deficit--exactly the opposite of what the reconciliation
process is supposed to accomplish. Billions of dollars will go from
programs that assist low income families and senior citizens into the
pockets of the already wealthy. It takes from the least and gives to
the most. It is a breathtaking Republican scam on the Nation that can
only further discredit this Congress in the eyes of the people.
From day one, the Republican plan has been to use this reconciliation
process to push through a cut in the tax rate on capital gains and
dividend income. These are tax cuts that overwhelmingly benefit the
richest Americans. Over half the tax benefits will go to millionaires.
These tax breaks were in the original mark proposed by Chairman
Grassley, and they are in the bill already passed by the Republican
majority in the House of Representatives. While they are not in the
current Senate bill, we all know these capital gains and dividend tax
cuts will reappear in the conference report. Leading Republicans have
made that clear. The GOP is intent on delivering those tax breaks to
their wealthy supporters. They will be included in the final bill.
What is the real cost of these capital gains and dividend tax cuts?
The Republicans claim the cost of these provisions is $20 billion, the
real cost of extending the lower rates for another 2 years is $50
billion. This tax break is particularly unfair, because over 75 percent
of the tax benefits will go to taxpayers with incomes over $200,000 a
year. Over half the benefits--53 percent--will go to taxpayers with
incomes over $1 million a year. The average millionaire will save over
$35,000 a year from these tax breaks for capital gains and dividends.
As a result of this shameful Republican let-them-eat-cake proposal,
millions of working families would pay a substantially higher tax rate
on their wages than wealthy taxpayers pay on their investment income.
What could be more unfair? Republicans are penalizing hard work, not
rewarding it. They are giving a preference to unearned income over
earned income.
The Republicans cynically claim that capital gains and dividend
income deserve special treatment because they will stimulate
investment. The facts do not substantiate that claim. The stock market
grew much more rapidly in the early and mid-1990s when investors'
income was taxed at the same rate as employers' wages than since the
rates on capital gains and dividend income were cut. The overall health
of the economy has much more to do with financial stability than
special tax breaks for the rich. More tax cuts that America cannot
afford will hurt the economy, not help it.
There are some provisions in the Senate bill that we do need to
address. The alternative minimum tax was never intended to apply to
middle-class families, and they deserve tax relief. In a truly
outrageous move, the House Republicans took AMT relief for the middle
class out of their reconciliation bill so they could fit in more tax
breaks for the rich. The research and development tax credit is
important to our international competitiveness and should be retained.
However, those worthwhile tax cuts should be paid for by rolling back
some of the extravagant tax breaks that this Republican Congress has
already given to the Nation's wealthiest taxpayers. We simply cannot
afford more tax cuts at a time when we are facing record deficits.
The financial mismanagement of the Bush administration has weakened
our economy and placed our children's financial well-being in peril.
The national debt has risen to an all time high of $8 trillion. Under
President Bush, our country has borrowed more from foreign governments
and foreign financial institutions than in the prior 200 years
combined. We are losing control of our Nation's future, and all the
Republicans offer is more of the same. More and more tax breaks further
enriching the already wealthy, while working families are left to
struggle on their own in an increasingly harsh economy.
If we are honest about reducing the deficit and strengthening the
economy, we need to stop lavishing tax breaks on the rich and start
investing in the health and well-being of all families. These families
are being squeezed unmercifully between stagnant wages and ever-
increasing costs for the basic necessities of life. The cost of health
insurance is up 59 percent in the last 5 years. Gasoline is up 74
percent. College tuition is up 45 percent. Housing is up 44 percent.
The list goes on and on, up and up--and paychecks are buying less each
year. The dollars that go to pay for more tax breaks for the rich are
dollars that could be used to help these families. Instead, this
Republican budget plan turns a blind eye to their problems.
The economic trends are very disturbing for any who are willing to
look at them objectively. The gap between rich and poor has been
widening in recent years. Thirty-seven million Americans now live in
poverty, up 19 percent during the Bush administration. One in five
American children lives in poverty. Fourteen million children go to bed
hungry each night. Wages remain stagnant while inflation drags more and
more families below the poverty line. Two-point-eight million
manufacturing jobs have been lost. Long-term unemployment is at
historic highs.
In his second inaugural address, President Lincoln reminded us of the
solemn obligation that we have to those who fight our Nation's wars. He
said ``let us strive on to finish the work we are in, to bind up the
Nation's

[[Page S500]]

wounds, to care for him who shall have borne the battle [and for his
widow and his orphan.]''
Over 550,000 brave men and women have served in Iraq and Afghanistan.
A majority of them have served multiple tours fighting under dangerous
conditions, and battling an unseen foe. We owe it to them to care for
their injuries incurred in service of our Nation.
As of today, over 16,000 of our troops have been injured in battle.
Of those, over 7,500 were so seriously injured that they could not
return to duty. We have seen the ravages of war in the wards of Walter
Reed and Bethesda. While body armor saves lives, many soldiers and
Marines have lost their limbs.
Others will survive with major injuries to their spine or brain
damage. This summer, the Surgeon General of the Army reported that 30
percent of U.S. troops have developed mental health problems within a
few months of their return from Iraq. Twenty percent of the troops
injured in Iraq have suffered head and brain injuries that require a
lifetime of continual care that could cost as much as $5 million.
A recent study by the New England Journal of Medicine found that 15
to 17 percent of Iraqi vets showed signs of ``major depression,
generalized anxiety, or [Post Traumatic Stress Disorder].'' But of
those, only 23 to 40 percent are seeking help. Many of them will wind
up homeless with no other options for their health care than the VA.
After their service to our country, we should not leave them out on the
street.
The increased use of the Guard and Reserve in this conflict has
created an entirely new category of people who may now make use of the
VA. The Guard and Reserve make up approximately 40 percent of the
troops on the ground, and approximately 90,000 have sought care at VA
hospitals.
Unfortunately, our current budgets do not reflect this reality. A
recent study by Nobel Prize-winning economist Joseph Stiglitz and
Harvard professor Linda Bilmes found that the costs of paying for the
injured from these wars has not yet been budgeted. To our dismay, we
learned that the Veterans' Administration needed an additional $2.7
billion for this fiscal year to care for the veterans returning from
the war.
Stiglitz and Bilmes found that, ``the military values the cost of
those injured by what their medical treatment cost and disability pay;
and current accounting only reflects current payments in disability''
not future payments.
Based on their calculations, it could cost as much as $24.1 billion
to pay for these costs over the next 5 years. Of this amount, $9.4
billion for medical care and $14.7 billion for increased disability
payments.
This amendment Senator Dodd and I have introduced would rectify that
shortfall and keep faith with our men and women in uniform. It would be
paid for by elimination of the capital gains and dividends tax breaks
for taxpayers with over $1 million in annual income.
We owe it to soldiers like Sergeant Peter Damon, a son of
Massachusetts who lost his arms in Iraq.
I also express my support for the amendment offered by Senator
Rockefeller that would provide strong tax incentives for mining
companies to adopt safer practices and up-to-date safety equipment.
The recent tragedies at Sago Mine and Alma Mine in West Virginia
remind us that the safety of the Nation's workers is paramount. This
year, 21 miners have already been killed on the job. In early January,
12 miners died when they were trapped after an explosion at the Sago
Mine. Just 2\1/2\ weeks later, two more miners died in a mine fire at
the Alma mine. And tragically, yesterday, there were three more mine
accidents in West Virginia, killing two more men. One miner died in an
underground mine in Boone County when a wall support came loose. A
second miner died when a bulldozer struck a gas line, causing a deadly
fire. Miners have also died this year in Kentucky and Utah.
Our entire Nation joins the families and the communities in mourning
these fallen miners. We have a continuing obligation to do everything
we can to protect the safety of America's workers. It is obvious that
we are not meeting that obligation.
Two weeks ago, I traveled with Senator Rockefeller, Health,
Education, Labor and Pensions Committee Chairman Enzi, and Subcommittee
Chairman Isakson to meet with the family members of the miners who were
killed at Sago Mine, and with coalminers, company representatives, and
health and safety experts. Each of us committed to improving the
Nation's mine safety laws.
A critical part of that commitment is to ensure that all of our
Nation's miners have the best safety equipment available. This
amendment will encourage companies to adopt up-to-date mine safety
equipment by providing accelerated deductions for companies that invest
in these technologies.
It encourages mines to adopt emergency communications technology and
tracking devices to locate miners underground. It will also encourage
coal mines to ensure that workers have access to additional stores of
emergency oxygen, which will give them extra time to exit a mine or to
wait for rescue. Finally, the amendment acknowledges the vital need for
experienced mine rescuers who are familiar with the underground
geography of a mine. By providing a tax credit to encourage the
formation of mine rescue teams, we hope to ensure that mines have well-
trained rescuers onsite, saving precious minutes in any rescue attempt.
These are all safety measures that could have made a difference in
the terrible tragedies that occurred this year at Sago and Alma Mines.
By passing this amendment, we take the first step toward preventing
future such tragedies from occurring.
I have joined separately in sponsoring legislation introduced by
Senator Byrd and Senator Rockefeller to require the Mine Safety and
Health Administration to quickly adopt needed safety standards. Both of
these measures are critical to improving safety conditions in America's
mines. Our Nation's miners deserve no less, and I urge my colleagues to
support this amendment and the Federal Mine Safety and Health Act of
2006.
Instead of helping hard-pressed families, the budget reconciliation
process is being misused to cut the programs and eliminate the services
that these families need most, while granting the wealthy even more tax
breaks. It is yet another opportunity squandered--another chance that
this Republican Congress had to make things better. But once again,
this Congress has chosen to make them worse instead. The American
people deserve better.
Mr. HATCH. Mr. President, I rise to express my support for the tax
reconciliation bill being debated today. I have listened to the
comments of my colleagues on both sides of the aisle with much
interest. Because we have heard a great deal about the wisdom or folly
of extending the lower tax rate on dividends and capital gains, I would
like to take this opportunity to offer a few words in defense of the
extension.
It is interesting to me that so many of my colleagues have juxtaposed
the capital gains and dividends provision against the provision to
relieve temporarily the individual alternative minimum tax. Listening
to some of my colleagues, it seems they believe that we either must
include the alternative minimum tax fix or extend the capital gains and
dividends provision, but not both. My strong belief is that we can--and
must--do both.
The reduced rate of tax on dividends and capital gains has been
attacked repeatedly as being a costly sop to the rich and not much
else, with little recognition given to its beneficial impact on the
economy. The simple fact is that the data and basic economics tell us
the cost of the lower tax rates on dividends and capital gains has been
minor, and the benefits immense.
There is ample evidence that clearly shows the lower tax rates on
capital income have stimulated saving. Alicia Munnell, an economist at
Boston College and a former official in the Clinton Treasury
Department, finds that working age households saved significantly more
in 2003, the year the tax reductions on capital gains and dividends
passed the Congress, than they did in 2002. Incidentally, Munnell's
work also shows that the recently announced savings rate of zero is
misleading--she reports that working families, and by that I mean
families with breadwinners who have yet to reach retirement age, are
indeed putting

[[Page S501]]

money aside. However, looking at our broad, economy-wide measure of net
saving, the dissaving done by retired households obscures this fact.
There are other benefits from a lower tax rate on investment income
besides increased saving. With lower tax rates, capital becomes more
fluid, making it easier for it to flow to projects with higher rates of
return. Families lock in much less capital for fear of the taxman. The
Government gets a lower percentage of each sale of stock, but it gets
more opportunities to tax the money.
And, Uncle Sam is getting more cracks at it. The amount of capital
gains realized in 2005 was twice that in 2002. The stock market's value
has not doubled since then, and we are not twice as wealthy as we were
then--people are just responding to incentives and they are holding
their assets for a bit less time. There is nothing necessarily wrong
with that. If capital is used more wisely, this ultimately benefits not
just the investors but also the workers, who see their productivity
increase. When productivity goes up, wages must follow.
The amount of revenue collected from taxes on capital gains and
dividends has increased significantly since the reduction in tax rates
passed. In 2005, capital gains tax revenues amounted to $80 billion, 60
percent higher than in 2002.
Now, I am not about to claim that this or any other tax cut ``pays
for itself,'' but the revenue lost from the lower rates on capital
gains and dividends is relatively minor precisely because of the
increased economic activity the lower taxes generate. The jump in
revenues collected from the two taxes is manifest proof of this.
The beneficiaries of lower taxes on investment income are not just
those who own stocks and bonds either, and I would like to point out
that it is not just the rich who have investments. I hear from retired
Utahns who are living modestly on a Social Security check, a small
pension, and their savings. They might not have a lot of money
invested, and their dividends are not going to buy them a new car or
luxury condominium, but every little bit helps, they tell me.
In reality, everyone benefits from lower taxes on dividends and
capital gains--even those with little or no savings. The primary reason
for lower tax rates on investment income is that it stimulates the
economy. This is not a radical idea by any means--Nobel Prize-winning
economists Robert Lucas and Ed Prescott have argued vehemently in favor
of this. The logic is simple: Low taxes on the income we receive from
our savings means we will save more. That ends up making more capital
available for firms to invest in new plant and equipment, increasing
productivity as well as wages.
The strong economic conditions of the 1990s are owed to a number of
factors, but the most important factor was undoubtedly the resumption
of high productivity growth in the middle of the decade. It was in the
latter years of the expansion, when unemployment dropped below 5
percent, that we finally saw the elusive gains in income of low-skilled
workers. I believe that the low tax rate on capital gains and dividends
is an essential ingredient in creating more new jobs and maintaining
healthy economic growth.
Some of my colleagues may say they agree that the benefits of lower
rates are real and ought to be continued, but they do not see the need
to renew a provision that does not expire until 2008. The simple answer
is that we need to create some degree of certainty and stability for
investors. Investors in 2006 care about what the tax rate on a long-
term investment is going to be in 3 years. If they believe that
Congress will allow tax rates on dividends and capital gains to
increase to their previously higher rates, they will be less inclined
to make those investments. That money will go instead to less
productive, shorter term investments or will simply not be saved at
all. The end result is that we'll have less capital available and lower
economic growth.
We must acknowledge that the budget deficit is a problem--it is
obvious we need to get our economic house in order soon. The baby boom
generation is starting to retire and making our budget mess a lot
worse. However, increasing the taxes on dividends and capital gains is
not the answer to our budget morass, either in the short or the long
run. We need every single bit of economic growth we can get for the
next decade to help fund our obligations, and allowing the tax rates on
dividends and capital gains to go back up would be a tax increase that
would reduce growth.
When we seek to raise revenue by taxing the accumulation of wealth,
we are essentially punishing a virtuous activity, namely saving. We
should be doing all we can to encourage families to set aside money, to
invest, to patiently prepare for the future. Allowing the low tax rate
on dividends and capital gains to expire would do more than reduce
productivity and economic growth; it would send a signal that we do not
value savings in this country. At this point in time, we can afford
neither.
Some of my colleagues believe that low tax rates on dividends and
capital gains benefit solely the rich and no one else and feel that
they cannot countenance a continuation of the low rates at the expense
of programs more targeted to low-income households. I do not fault my
colleagues for their concern, but I believe that the lower rates helps
everyone in our country. It costs us relatively little in terms of lost
tax revenue, since the lower rates have resulted in higher dividends,
higher stock prices, and more sales of stock, with more revenue created
by each activity. At the same time, every single working family in this
country benefits from the higher savings engendered by the lower tax
rates via the improved productivity, wages, economic growth, and the
number of jobs available. High growth and economic prosperity are not
the cure to every problem that ails the country, but it can make any
solution much more attainable. Supporting low tax rates on dividends
and capital gains is the right thing to do.
The PRESIDING OFFICER. Are there further amendments to the first-
degree amendment?
If not, without objection, the first-degree amendment, as amended, is
agreed to.
The amendment (No. 2707), as amended, was agreed to.
The amendment was ordered to be engrossed and the bill to be read a
third time.
The bill was read the third time.
Mr. FRIST. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The bill having been read the third time, the question is, Shall the
bill pass? The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the
Senator from New Mexico (Mr. Domenici) and the Senator from Wyoming
(Mr. Thomas).
Mr. DURBIN. I announce that the Senator from New Mexico (Mr.
Bingaman) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 66, nays 31, as follows:

[Rollcall Vote No. 10 Leg.]

YEAS--66

Alexander
Allard
Allen
Baucus
Bennett
Bond
Brownback
Bunning
Burns
Cantwell
Carper
Chambliss
Clinton
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
Dayton
DeMint
DeWine
Dole
Ensign
Enzi
Feinstein
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Isakson
Johnson
Kyl
Landrieu
Lincoln
Lott
Lugar
Martinez
McCain
McConnell
Menendez
Murkowski
Nelson (FL)
Nelson (NE)
Pryor
Roberts
Rockefeller
Salazar
Santorum
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Talent
Thune
Vitter
Warner

NAYS--31

Akaka
Bayh
Biden
Boxer
Burr
Byrd
Chafee
Coburn
Conrad
Dodd
Dorgan
Durbin
Feingold
Harkin
Inouye
Jeffords
Kennedy
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Murray
Obama
Reed
Reid
Sarbanes
Voinovich
Wyden

[[Page S502]]

NOT VOTING--3

Bingaman
Domenici
Thomas
The bill (H.R. 4297), as amended, was passed, as follows:
(The bill will be printed in a future edition of the Record.)

____________________