Health Care Access and Rural Equity Act of 2003

Mr. President, I rise to speak to the critical issue of State fiscal relief, which I believe adds tremendous value to this economic growth package. As I have discussed on numerous occasions, I believe that one of the best stimulants for the economy is providing assistance to our State and local governments, which is why I have fought for its inclusion in this package.

Since December, when I first identified elements that I believed would stimulate the economy, I insisted on a State and local fiscal relief component. Today, I am pleased that the Senate is taking action through this floor amendment to further refine both the agreement and language that Senator Smith and I insisted must be included in the growth package as passed by the Senate Finance Committee.

The growth package that the Senate Finance Committee reported establishes a $20 billion trust fund in S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003, to provide critical, flexible relief for both State and local governments. Also, I would like to thank Chairman Grassley for his willingness to work with me to identify appropriate offsets that ensured this proposal would not increase the net cost of the growth package, and also that the relief provided was not only flexible, but helped to meet the challenges faced by our communities.

By securing support to include a $20 billion fiscal relief trust fund in this package, I was able to ensure that States and localities received the help they need in balancing their fiscal year 2004 budgets. Fiscal relief to State and local governments is vitally important to the health and strength of our economy, which is why I fought to ensure that half of the $20 billion would be modeled after my bill, S. 201, and would be flexible and divided between State and local governments with 40 percent going to localities and 60 percent to States.

The floor amendment under consideration will provide $20 billion in State and local aid to be distributed in fiscal years 2003 and 2004. Ten billion dollars in flexible funding will be distributed between state and local governments, with the remaining $10 billion provided to States through a temporary increase to the Federal Medical Assistance Percentage, known as FMAP, to help alleviate the short-term spike in Medicaid costs.

Because I thought it was important, we are providing $4 billion in flexible funding to local governments. While I know a number of my colleagues have questioned the necessity and importance of providing relief to local governments, I strongly believe that local governments have all the more pivotal and increasing responsibilities at a time such as this, when they face decreasing revenues. And a large percentage of this increased burden has come from unfunded federal mandates related to education, homeland security and election reform. By including $10 billion in flexible funding, distributed between state and local governments, we will ensure that essential government functions are performed.

As we all know, our states and local communities are struggling. For the past 3 years, while the economy has been in a downturn, they have worked to meet the needs of residents, while 49 out of 50 States including Maine are also required to balance their budgets. In fact, the National Conference of State Legislatures reports that since fiscal year 2001, the combined budget shortfall in states has totaled more than $200 billion. And the outlook for fiscal year 2004 is not proving different. In January, 36 states reported budget gaps totaling more than $68 billion for this year alone. In Maine, the Governor and Legislature were forced to trim $1.2 billion from their biennial budget in the wake of a $150 million shortfall in fiscal year 2003.

Some argue State budget shortfalls result from overspending--yet a report issued by the National Governors Association shows that State spending from 1995 to 2001 increased 6.5 percent per year, a rate identical to spending from

1979 to 2003. Rather, it has been a drop in the stock market and the economy concurrent with increased costs associated with necessities like elementary and secondary education, programs under the Individuals with Disabilities Education Act, or IDEA, homeland security, and Medicaid--that has been the real culprit in burdening State and local budgets.

The National Conference of State Legislatures has reported a substantial decline in projected revenue, including drops in income, sales and property tax receipts, and user fees. Indeed, data suggest that over three-fourths of the combined State budget shortfall is due to declines in State revenues. Again, unlike the Federal Government, States don't have the option of running deficits--and after 3 years, most practical belt-tightening measures have already taken effect.

On the spending side, the NCSL estimates that unfunded mandates for the policy areas I just mentioned account for up to $82 billion in increased expenses. And States rightly argue that the vast majority of their increased cost burden comes from the growing unfunded Federal mandate for providing care to the elderly and disabled. Medicaid provides access to health care for almost 43 million of America's poor, elderly and disabled citizens and it alone is a program for which costs have grown by 11.1 percent from 1990 to 2000.

Because of benefit shortfalls in the Medicare program--such as a prescription drug benefit--Medicaid ends up providing more vital services. Indeed, while seniors and the disabled represent only one- quarter of the Medicaid population, they account for almost three- fourths of all Medicaid expenses. For example, in fiscal year 2002 States provided $6.9 billion in prescription drug assistance to Medicare beneficiaries, and another $5.5 billion in copayment and premium assistance.

That is why providing fiscal relief is so critical--because while there is no question this population needs to be served, there should also be no doubt we can't leave States to be the last line of defense in footing the bill.

It is the same with issues like education--and that is why I also support providing flexible funding for States and localities to use as they see fit. In California 20,000 teachers are at risk of being laid off, in New York local districts are raising property taxes to offset the expected 4 percent cut in State education aid, and in Nebraska officials have told 1,000 students that their academic scholarships to state universities are being canceled and 431 college positions were eliminated. We are making such great advances in education--and we all know that education is the key to our future economic success. By providing fiscal relief, the Federal Government is continuing its commitment.

Of course, the level of assistance that Congress is providing would not eliminate any State or local governments' total budget shortfall. But it will provide vitally important assistance and has the support of the largest State and local associations that represent our country's local elected representatives and leaders. Moreover, providing this State and local fiscal assistance within the tax package is entirely in keeping with our efforts to stimulate the economy.

According to a recent Wall Street Journal article, ``Analysts at Goldman Sachs figure State and local belt-tightening will shave as much as a half-point from the economy's growth so that overall fiscal policy will be no more than neutral next year.'' After all, dollars spent on education, health care and transportation have an economic value today and tomorrow.

In fact, the U.S. Chamber of Commerce reports that for every $1 billion invested in transportation, 47,500 new jobs are created. And let us not forget that State and local governments account for more than 15 million jobs nationwide. As we take steps to put more money into the hands of consumers, we must also make sure that those who are employed by a State or local government, either directly or through a government service contract, are able to stay employed.

Providing short-term fiscal relief to help State and local governments balance their budgets is vitally important to the long-term viability of our economy. I thank Chairman Grassley for his leadership on this issue, and I urge my colleagues to support this amendment.

Mr. President, I rise today to speak regarding the jobs and growth package that was reported by the Senate Finance Committee and that has been considered on the Senate floor. It was a long and often arduous journey that brought the bill here for consideration, and I especially thank the majority leader and Finance Chairman Grassley for their extraordinary and tireless efforts in ensuring we were able to pass a package in committee and consider this economic stimulus bill in the full Senate.

Let us remember, this debate began when the President rightfully and forcefully made the case that we have an obligation to help jump-start an economy that was already in the doldrums even before the tragedy of September 11. Over the past few months--as we worked to pass a budget for the first time in 2 years and as the tax cut package moved through the respective House and Senate committees--some said the reductions should be smaller--some said larger--and others even believe that no cuts were warranted. Last week, the House passed a very different tax bill than the one the Senate is considering today, further reflecting the diversity of deeply held beliefs as to our appropriate course of action in Congress.

I have believed since last fall that the American people must know we are serious about creating jobs with a plan that can be effective now. We have lost 2.3 million jobs since March 2001, and with 48,000 jobs lost in April alone, we have reached the highest level of unemployment in 8 years at 6 percent. In the last quarter of 2002, the economy was growing at a languid 1.4 percent annual rate, and the Commerce Department's latest report showed the economy was still at a weak growth rate of 1.6 percent. Consumer spending has increased more slowly than at any time since the 2001 recession, and capacity at the Nation's factories is at a low of 72 percent--meaning that demand can and must be increased.

So the President is absolutely right to make passage of a robust growth package central to his agenda, and I applaud his unflagging leadership in rejuvenating our economy. At the same time, I have also held throughout this debate that to deficit-finance too high

a level of tax cuts would be to risk condemning future generations to the corrosive economic effects of unsustainable deficits--and tying hands of future Congresses in addressing our most pressing domestic challenges.

With a net $350 billion for stimulus, the package reported by the Finance Committee is consistent with these principles, and those that are embodied in a letter I signed along with Senators Voinovich, Baucus, and Breaux before consideration of the budget resolution. In that letter, we stated our belief that ``our nation would benefit from an economic growth package that would effectively and immediately create jobs and encourage investment.'' But we also expressed our belief that ``any growth package that is enacted through reconciliation this year must be limited to $350 billion in deficit financing over 10 years and any tax cuts beyond this level must be offset.''

So how did I arrive at 350? It was not by simply splitting the difference. It was by making a clear, bright-line distinction as to which measures were truly effective, short-term stimulus and which were not. The $350 billion package approved by the Finance Committee provides for all of the President's proposals that can truly have the immediate, stimulative effect our economy requires in their entirety. Indeed, as economist William Gale of the Brookings Institute has said, within that $350 billion figure, we would likely get most of the short- term job boost.

To pay for dividend tax cuts that could create long-term growth, the Finance Committee package employs genuine offsets. With all the provisions of the committee plan in effect for the full 10 years-- accelerating policy that was already passed by the Congress in 2001--it creates the kind of continuity and stability for both markets and consumers that is critical in making investment and spending strategies.

While some undoubtedly believe we should pass a significantly larger tax cut, let us remember that $350 billion in net tax cuts is by no means inconsequential. In fact, if enacted it may be the third largest tax cut in history--and is being considered just 2 years following the largest tax cut in history. Moreover, the Finance Committee bill is a responsible bill that recognizes the lessons learned from past debates on economic stimulus--that boosting both consumer purchasing power and business investment is vitally important to economic growth.

For example, the package would cut the marginal tax rates across the board--impacting workers' paychecks by increasing their take-home pay this year. The bill also accelerates tax relief for families with children, including a provision not in either the President's plan or the House bill to accelerate the increase in the amount of the child tax credit that is refundable for working families with low incomes-- building on my inclusion of refundability in the 2001 tax package. Married couples would also receive tax relief from the unfair marriage penalty through the expansion of the standard deduction and the 15 percent tax bracket.

To spur investment, the Finance Committee bill triples the amount a small business can write off for investments in new business assets-- and with small businesses representing 99 percent of all employers-- contributing to 51 percent of private-sector output--and providing about 75 percent of net new jobs, that is exactly the kind of policy that can help create jobs soon. It would also provide needed capital to small businesses by expanding the ability of pension plans and other tax-exempt entities to invest in the securities of Small Business Investment Companies. This provision alone is expected to create an additional 16,000 jobs due to the additional investment capital available for small businesses.

Furthermore, the State fiscal relief provision in the Finance Committee plan can provide additional economic stimulus. With States facing combined shortfalls of more than $68 billion in fiscal year 04, I thank Chairman Grassley for working to include a ``trust fund'' in the package of $20 billion in relief for the States and local governments to use as they see fit to address increasing Medicaid costs, transportation needs, homeland security infrastructure, education, and other critical functions.

I know some have argued State budget shortfalls result from overspending. Yet, as a report issued by the National Governors Association shows, State spending from 1995 to 2001 increased 6.5 percent per year, a rate identical to spending from 1979 to 2003, and I would like unanimous consent to print that report in the Record.

I also have here a letter from the heads of the Conference of State Legislators, the Council of State Governments, the U.S. Conference of Mayors, the National Association of Counties, the National League of Cities and the International City/County Management Association documenting that States and localities are experiencing their worst fiscal conditions since World War II. I ask unanimous consent this letter also be printed in the Record along with my statement.

Moreover, according to a recent Wall Street Journal article, ``Analysts at Goldman Sachs figure state and local belt-tightening (in their budgets) will shave as much as a half-point from the economy's growth. . .'' By providing State fiscal relief, we have the opportunity to return that half-point of growth to our economy. And let us remember, dollars spent on education, health care, and transportation have an economic value today and tomorrow.,

Indeed, should State decide to use a portion of the assistance on transportation, it is worth nothing that, according to the U.S. Chamber of Commerce, for every $1 billion invested in transportation, 47,500 new jobs are created. And let us not forget that State and local governments account for more than 15 million jobs nationwide. As we take steps to put more money into the hands of consumers, we must also make sure that those who are employed by a State or local government, either directly or through a government service contract, are able to remain employed.

On that note, I am pleased an amendment was included here on the floor to further refine the agreement and language that Senator Smith and I included in the growth package reported by the Senate Finance Committee.

After working to generate strong bipartisan support for this issue, the Senate Finance committee established a $20 billion trust fund in S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003, to provide critical, flexible relief for both State and local governments. I also want to thank Chairman Grassley again for his willingness to work with me to identify appropriate offsets that enured this proposal would not increase the net cost of the growth package.

By securing support in committee to include a $20 billion fiscal relief trust fund, I was able to ensure that States and localities receive the help they need in balancing their fiscal year 2004 budgets. The subsequent amendment we passed on the floor, with my support included my proposal which requires half of the $20 billion to be distributed between State and local governments--with States receiving $6 billion and localities receiving $4 billion. The remaining $10 billion goes to States through a temporary increase to the Federal Medical Assistance Percentage, known as FMAP, to help alleviate the short-term spike in Medicaid costs. The assistance would be distributed in fiscal years 2003 and 2004.

So, again, the Finance Committee bill fully provides for the appropriate range of short-term stimulus measures. At the same time, for me--as I have stated--the net $350 billion cost of that package strikes a balance in keeping with the requirements imposed by my allegiance to the principles of fiscal responsibility. Because I came to this debate as one deeply rooted in the idea that perhaps the issue that best demonstrates our commitment to the generation of tomorrow is balancing the Federal budget. I have said time and again that there is not goal more critical to the economic future of our Nation--and that is not just my view.

As Chairman Greenspan recently testified, ``(The deficit) does affect long-term interest rates, and it does have an impact on the economy.'' And he has also warned that, ``If . . . you get significant increases in deficits which induce a rise in long-term interest rates, you will be significantly undercutting the benefits'' of tax cuts. If you consider that the two sectors that are keeping the economy afloat right

now--housing and automobiles--are also two of the most interest rate sensitive--just imagine where we would be in the future with high unemployment and high interest rates.

And it is not just our future economy at stake--if that by itself isn't reason enough for fiscal prudence. I will recall the years we fought to arrive at balanced budgets and surpluses--and reaching that fiscal ``holy grail'' in the late 1990s was supposed to open a window of opportunity to address the domestic challenges of the coming decade--most significantly, strengthening Social Security and Medicare.

Yes, even then, many of us were mindful that projections of future surpluses were just that--projections. That is why even as I supported the tax cuts in 2001--to provide, in Chairman Greenspan's words--an ``insurance policy'' against the effects of a recession, and to provide relief at a time when Americans were suffering under the highest tax burden since World War II--I proposed and I championed a trigger linking the level of spending and taxes to the level of surpluses actually realized.

Of course, none of us could have foreseen that so many challenges would soon arrive, as the President has said, ``In a single season.'' September 11, the war on terrorism, and the necessity of disarming the Iraqi regime, the costs of bolstering our homeland security--all those shook an already fragile economy and sparked a return to deficits. In fact, CBO attributes fully 68 percent of the evaporated $5.6 trillion in surpluses to the recession and economic downturn.

So here we are, with CBO having projected just this month that the deficit will be $300 billion--which is 22 percent higher than their projection from only 3 months ago and about 92 percent more than last year! Keep in mind that is without accounting for the approval of additional tax cuts or additional costs of pressing national priorities like the war in Iraq, homeland security costs, and passing a Medicare prescription drug benefit. And Citigroup economic forecasters have recently predicted that the 2003 deficit could be as high as $500 billion.

Even optimist projections that assume higher-then-expected productivity growth anticipate substantial long-term deficits. And if growth remains just ``average'', the Nation will fact unsustainable budget deficits. Just this month, economists with Goldman Sachs expressed alarm about projections that Federal debate will grow from 33 to 49 percent of gross domestic product--a circumstance they say will undermine the economy, instead of spurring economic growth. And as we face a true cumulative deficit through 2013 projected to be nearly $4.5 trillion--not counting the $2.7 trillion in surpluses from Social Security that are currently being sued to mask the size of the deficit--we cannot tolerate the confluence of burgeoning deficits in perpetuity with the retirement of 77 million baby boomers beginning in 2013.

That is why it was critical that--in establishing a policy on the taxation of dividends that could be built on as we assess the reaction of, and overall impact on, the financial and business sectors--the Finance Committee package pays for it with offsets. As Chairman Greenspan has said, cutting taxes on dividends will ``bolster the economy's long-term ability to grow''--but they should also be paid for.

As reported by the Finance Committee, the bill includes real offsets, scored by the Joint Committee on Taxation, to fully compensate the approximately $80 billion cost of the provision. Moreover, in providing a capped exclusion of $500 for the taxation of dividends, with an additional exclusion for dividend amounts above $500 that goes from 10 percent to 20 percent over 10 years, the proposal would benefit all taxpayers who receive dividends, eliminating the tax entirely for 84.7 percent of all taxpayers.

One of the arguments that proponents of eliminating the tax on dividends use to tout the proposal's benefits is that it will reduce the cost of capital for business over the long term. I agree. However, cutting taxes on dividends affects the financial markets as well.

I am concerned that enacting a shorter term provision with a sunset would have negative consequences and potentially harm the economy. Kevin Hassett, a scholar at the American Enterprise Institute, has commented on such a dividend plan, saying that, ``Since the eliminate of dividend taxes is only temporary, investors must evaluate the risk that dividend taxes will come back. If they do, then the cash flows to investors from owing stock will plummet, as will the value of shares. Under such circumstances, it is undeniable that government policy significantly increases the fundamental risk of stocks. It would be hard to imaging that this would be good for the stock market or the economy.''

Moreover, the benefits of cutting taxes on dividends cannot be viewed in isolation--the effect on the budget must be factored in the analysis. A key point is that, as the Federal budget goes further in the red, the associated mounting Federal debt will ``crowd out'' private capital in the marketplace--having a damaging impact on the economy. This will become more and more evident as we approach the end of this decade, with the pressures of the very large increase in baby boomer retirements.

The bottom line is that, while deficits have supplanted surpluses due to war costs and the lingering effects of recession, we have a fundamental responsibility to ensure they are a temporary phenomenon-- not a perpetual cycle ``as far as the eye can see.'' The years of balanced budgets in the late 1990s should be no brief fiscal interlude, but rather the rule--so lowering taxes and containing deficits until we return to balanced budgets must not be mutually exclusive goals.

Again, the tax bill that was reported out by the Finance Committee provides the right balance of tax relief that would stimulate both consumption and investment. The fiscally responsible growth policies contained in that package meet the dual, critical challenges of immediate, stimulative economic growth without further inflating budget deficits and returning to a perpetuity of red ink. And, as I have said, the dividend plan in the Finance bill is a long-term policy that takes an important, but incremental step to eliminating that ax on dividends.

Regrettably, however, the temporary dividend proposals in the final bill, I believe, is not good long-term tax policy. If we assume a future Congress will extend this provision permanently, then the true cost would be over $300 billion--adding further to ballooning deficits well above the $350 billion net cost of the Finance Committee bill. On the other hand, if Congress does not extend the policy, it could have dire implications on the financial markets and companies.

Finally, it must be noted the way in which this provision is paid for dilutes the important benefits of the section 179 expensing by sunsetting its expansion and cutting short marriage penalty relief proposed by the President. Therefore, for the reasons I have just detailed, I regret I am unable to support the final package, as amended.

Mr. President, I ask unanimous consent that the letter I referred to earlier be printed in the Record.

Mr. President, I rise today to reflect on the recently passed Prescription Drug and Medicare Improvement Act of 2003, S.1. I am pleased to support this bipartisan effort both in the Senate Finance Committee and here on the floor. I believe this bill represents a positive compromise and a good start for America's senior citizens and individuals with disabilities who have relied on the Medicare Program for generations. I hope that the conferees act deliberately and fairly in the coming weeks to embrace what is good about this bill and to retain its bipartisan spirit. This process has been a long road for many of us who have worked on this issue for years but it has been an even longer road for America's seniors, who have watched drug prices escalate while Washington failed to act. Like all legislative products, this bill is not perfect. I have worked to improve this bill for Arkansas seniors in many ways, and I am committed to correcting any problems with it as it is implemented.

Despite its shortcomings, which I will detail later, S. 1 is much better for Arkansans than the plan President Bush proposed earlier this year. First and foremost, S. 1 gives all Medicare beneficiaries access to a prescription drug benefit. Under President Bush's

proposal, Arkansas seniors who wanted a drug benefit would have been forced to drop out of traditional Medicare and enroll in a private HMO instead, even though such a plan may not have been available in their area. Under the President's plan, seniors who remained in traditional Medicare would have received nominal discounts on prescriptions and a limited catastrophic benefit if they had extremely high drug expenses. I have said all along that it is simply unfair to deny a prescription drug benefit to beneficiaries in traditional Medicare. All 442,000 Medicare beneficiaries in Arkansas are currently enrolled in traditional Medicare with no access to Medicare + Choice because private insurance companies found the profit margin of health care insurance in rural areas to be too small. That is why Medicare needs to be there as a safety net. That is why prescription drug coverage must be a part of traditional Medicare. That is why the guarantee in S. 1 that traditional Medicare will pick up the slack where private insurers decline to operate needs to remain in the final version of this new policy.

Second, I helped ensure that S. 1 provides special assistance to our State's most vulnerable seniors--those with low incomes. Over 40 percent of Medicare beneficiaries in Arkansas have incomes below 160 percent of the Federal Poverty Level--in 2003, $14,368 for a single and $19,392 for a couple--and simply cannot afford to fill their prescriptions. These are the seniors who struggle to pay for food, heat, and other necessities in order to afford their lifesaving drugs, and I hear from them often. I fought in the Senate Finance Committee to ensure that seniors under 160 percent of poverty would get special assistance with their premiums, deductibles, and cost-sharing. Those with very low incomes who also qualify for an assets test would receive more generous help. I helped improve the low-income provisions even more on the Senate floor by working with Senators Bingaman and Domenici to increase the asset test levels from $4,000 to $10,000, adjust these levels yearly for inflation, and reduce the paperwork burden for eligible seniors. Because this amendment passed, many more seniors in Arkansas will receive help with the cost-sharing imposed under this bill. Today, lower income seniors only fill about 20 prescriptions per year, compared to an average of 32 for those with prescription drug insurance. These provisions will help ensure that lower-income beneficiaries will be able to afford to fill their prescriptions, keeping them healthier and helping them live longer.

I succeeded in including in S. 1 a number of other provisions that will improve the Medicare Program for Arkansans for many years to come. Two such provisions are based on legislation I introduced earlier this year, the Geriatric Care Act, S. 387. My first provision would provide for a 3-year demonstration project in Arkansas and five other sites on complex, chronic care management. Once this demonstration project is completed, S. 1 allows the Secretary of Health and Human Services, HHS, to use its findings to add this service as a part of traditional Medicare from 2009 to 2013 as long as it costs no more than $6 billion.

More than 80 percent of Medicare dollars are spent on Medicare beneficiaries with three or more chronic conditions like Alzheimer's disease, cancer, or diabetes. Better care management for these seniors should improve patients' overall quality of life and reduce the need for expensive hospitalizations for chronic conditions. It is my hope that this further, more extensive study of chronic care management provided by geriatricians and their health care teams will prove this. We in Arkansas are blessed to have the Donald W. Reynolds Department of Geriatrics and the Center on Aging at the University of Arkansas for Medical Sciences, whose geriatric specialists have vastly improved the care for seniors across our State. These provisions will make it easier for our medical school and others across the country to better care for patients with chronic conditions while also training more physicians in geriatrics. The other provision included in S. 1 provides the Secretary of HHS with the authority to clarify that geriatric training programs are eligible for 2 years of fellowship support under Medicare. This change would help maintain incentives for fellows to continue into second-year training, a critical pathway to careers in academics and geriatric research.

S. 1 also allows the Secretary of HHS to cover preventive benefits that aren't currently covered under traditional Medicare between the years 2009 to 2013. I have long fought to add new preventive services to Medicare, such as cholesterol screening, medical nutrition therapy services for beneficiaries with cardiovascular disease, counseling for cessation of tobacco use, and diabetes screening. These benefits are especially important for women, who are the majority of Medicare recipients and who make up 71 percent of the Medicare population over 85 years of age. By encouraging women to get screened for diseases like heart disease, osteoporosis, and breast cancer, we can save and improve lives.

I also succeeded in including my legislation, S. 1114, to provide Medicare coverage for kidney disease education services. Each year, some 80,000 people are diagnosed with chronic kidney failure--also known as end-stage renal disease (ESRD). Patients with ESRD require regular kidney dialysis treatments or a transplant to survive, and most are entitled to have this care paid for by the Medicare Program. Unfortunately, many of these renal patients are never informed that, prior to kidney failure, there are a number of steps they can take to improve their chances of having better outcomes with dialysis. Medicare currently requires that ESRD patients receive education on treatment options--but not until after the patient is already under the care of a dialysis clinic. Unfortunately, by then it is essentially too late to take advantage of much of the information. My provision makes counseling available to patients before dialysis is initiated to help patients understand all the therapies available for the treatment of ESRD. My amendment will save money and improve patient care.

I also succeeded in including an important amendment to ensure Medicare coverage for insulin syringes. Before my amendment, S. 1 provided no coverage for insulin syringes although it did provide coverage for insulin. Roughly 40 percent of the senior population with diabetes, or 1.8 million seniors, use syringes to inject insulin into their bodies to control their diabetes every day. Without coverage, syringe purchases--which can be especially expensive for seniors on fixed incomes--would not count towards cost-sharing and yearly maximum out-of-pocket expenses. My amendment changed that. Now, the bill ensures coverage for syringes and other necessary medical supplies associated with administering insulin as determined by HHS. Providing coverage for insulin syringes will help diabetic seniors who take insulin keep their disease under control. Syringe coverage will help seniors manage or prevent long-term complications of diabetes like kidney failure, blindness, and amputations by helping to keep blood glucose levels in a normal range.

I was also able to include a 3-year, 5-site demonstration project to determine the merits of allowing Medicare beneficiaries direct access to physical therapists' services within the Medicare Program, as authorized by State law. Currently, some 37 States, including Arkansas, allow direct access to physical therapist services. While non-Medicare patients can directly access such services in these States, Medicare beneficiaries are restricted from such access by the requirement that they obtain a referral from another practitioner. Requiring a referral is unnecessary and limits access to timely and medically necessary physical therapist services. This demonstration, which is designed to be budget neutral, will determine if direct access does in fact improve patient care and save Medicare money.

I also worked with Senator Craig Thomas to include a bill we sponsored together, S. 310, to provide Medicare coverage of licensed professional counselors and marriage and family therapist services. Although the rate of suicide among seniors is higher than for any other age group, fewer than 3 percent of seniors report seeing mental health professionals for treatment. Lack of access to mental health providers is one of the primary reasons why older Americans don't get the

mental health treatment they need. Not surprisingly, this problem is exacerbated in rural areas. Licensed professional counselors are often the only mental health specialists available in rural communities. This is true in Arkansas, where 91 percent of Arkansans reside in a mental health professional shortage area. This provision will significantly increase the number of Medicare-eligible mental health providers in Arkansas, providing better access for patients.

I was successful in working with Senator Cantwell on an amendment that will restrict pharmacy benefit managers (PBMs), and require the Department of Justice and the Health and Human Services Inspector General to review PBM financial practices for any potential collusion between PBMs and drug manufacturers on drug pricing and availability. I also supported an amendment with Senator Enzi to ensure that pharmacists have the option of offering 90-day prescriptions when they are also offered by mail order.

I sponsored an amendment with Senator John Ensign to repeal the $1,590 cap on outpatient physical therapy, occupational therapy, and speech-language pathology. The current therapy cap discriminates against the most vulnerable of Medicare beneficiaries. While the majority of enrollees will not exceed an annual $1,590 limitation on rehabilitation services, approximately 13 percent of seniors and individuals with disabilities covered by Medicare will be forced to pay for medically necessary services out of pocket. This is a particularly burdensome situation for beneficiaries living in rural communities. Most likely to be harmed are beneficiaries who have experienced a stroke or hip fracture or who have Parkinson's disease or other conditions that require extensive rehabilitation following injury or illness. Before Senator Ensign and I withdrew our amendment to repeal this cap, we discussed the amendment on the floor with the chairman of the Finance Committee, Senator Grassley, who promised to work in the conference committee to enact a moratorium on the therapy cap.

I also succeeded in including a number of my amendments during debate of the bill in the Senate Finance Committee. The committee adopted my amendment to waive temporarily the late enrollment penalty for military retirees and their spouses who sign up for Medicare Part B and to permit year-round enrollment so that retirees can access the new benefits immediately. Currently, military retirees and their spouses who do not join Medicare Part B when initially eligible can only do so during the annual open enrollment season. This amendment was needed because many retired beneficiaries previously saw no value in enrolling in Medicare Part B because they believed they were promised lifetime health care in military treatment facilities, many of which were subsequently closed due to base realignment and closure.

The committee also adopted my amendment to establish an adult day services demonstration project for home health beneficiaries. A bill I introduced earlier this year, S. 1238, would give Medicare beneficiaries the option to receive their Medicare home health services in an adult day setting. This would be a substitution, not an expansion, of services and is designed to be budget neutral. The option of Medicare home health services in an adult day location has a number of important advantages for beneficiaries and their families, including: increased social interaction, therapeutic activities, nutrition, health monitoring, medication management, and enabling family caregivers to continue working, since care would be provided all day. More than 22 million families nationwide, or nearly one in four families, serve as caregivers for aging seniors, providing close to 80 percent of the care to individuals requiring long-term care. Nearly 75 percent of people providing care for aging family members are women who also maintain other responsibilities, such as working outside of the home and raising young children. The average loss of income to these caregivers has been shown to be over $650,000 in wages, pension, and Social Security benefits. The loss of productivity in U.S. businesses ranges from $11 to $29 billion a year. The services offered in adult day care facilities provide continuity of care and an important sense of community for both the senior and the caregiver. This important demonstration project will benefit women of all ages.

The bill also includes my amendment to ensure that Medicare Quality Improvement Organizations (QIOs), can assist providers, practitioners, benefit administrators and plans to improve the quality of care under the new Medicare drug benefit system. This will be consistent with the role that QIOs already play in ensuring quality health care.

These initiatives, among others, will dramatically improve the Medicare Program. I am also pleased that S. 1 includes a number of provisions that I have cosponsored over several years that will significantly help rural health care providers in Arkansas keep their doors open to Medicare beneficiaries. By correcting a disparity in the way the Medicare physician fee schedule values physician work, practice expenses, and professional liability insurance, Medicare will pay rural physicians more fairly for treating Medicare patients. Also, the bill contains several provisions contained in my bill with Senators Conrad and Thomas, S. 816, to correct the disparities in Medicare payments to rural hospitals. Rural physicians and hospitals in Arkansas will receive millions of dollars of extra Medicare reimbursements under this bill.

And now that I have discussed some of the positive aspects of this bill, I would like to focus on some of my concerns regarding other provisions.

I am concerned that private, drug-only plans may not provide the stability or predictability that seniors want and need. The insurance companies have told me they don't want to offer a prescription drug- only plan. The administrator of the Centers for Medicare and Medicaid Services has said such a plan ``doesn't exist in nature.'' And, quite frankly, I believe we have proven through the Medicare, Medicaid, and Veteran's program that the Government can do it in a more cost- effective manner.

That is why I am glad the bill contains a Medicare guaranteed drug plan--or safety net--called the fallback. However, the fallback is that it is available for seniors for only 1 year at a time. That means if private insurers decide to test whether they want to offer the benefit in a community, seniors lose access to the fallback plan, even if the new plan is significantly more expensive for them or more restrictive. I offered an amendment to S. 1 that would have provided more stability for seniors by giving the fallback a 2-year contract instead of one. This would prevent seniors from having to switch plans from year to year with no end in sight. Although my amendment failed on a narrow margin, I will continue to try to improve the stability of the drug benefit by enacting this small, but important change to the fallback before the benefit starts in 2006.

I am also concerned about the fact that drug plans will vary throughout the country, meaning that seniors in Arkansas may have different premiums, cost-sharing, and formularies than seniors in other States. And, even worse, these plans can change their premiums, cost- sharing, and formularies every other year. I voted for many amendments to make the prescription drug benefit less volatile for seniors. For example, to reduce the variance in premiums across the country, I supported an amendment to limit variations in the amount seniors have to pay in premiums to only 10 percent above the national average, no matter where they live. I felt that we should give seniors some assurance that their premiums will not vary or increase unreasonably. Currently, all Medicare beneficiaries pay a $58.70 premium for physician services no matter where they live. Seniors should have this same stability in the drug benefit. I am concerned that under S.1, seniors in rural areas, who are often older and sicker, will pay higher premiums than seniors in urban areas. Unfortunately, this amendment to stabilize the premium was defeated. However, I succeeded in the Senate Finance Committee in passing an amendment with Senator Snowe to encourage the Secretary of Health and Human Services to geographically adjust payments to plans to account for differences in drug utilization across service areas so that premiums wouldn't vary as much.

I voted for many other amendments to strengthen the drug benefit in this bill but they failed. I voted to make the drug benefit more attractive to seniors by closing the ``coverage gap'' that exists in S. 1. This gap may penalize sick seniors. Once a senior's total drug spending reaches $4,500 for the year, the benefit shuts down until her total drug expenditures reach at least $5,813, unless the senior qualifies for low-income protections. I voted to allow employer- sponsored retiree health plans contributions to count in this gap. I voted to eliminate the coverage gap altogether. I voted to prevent seniors from paying premiums when they are in the coverage gap. Unfortunately, all these amendments were defeated. I will seek to work with my colleagues to close this coverage gap before the benefit starts.

I also voted for amendments to contain the skyrocketing costs of prescription drugs. One measure that I supported, which passed, seeks to increase access to more affordable and equally effective generic drugs. I also voted for an amendment, which failed, to help consumers better compare the cost-effectiveness of prescription drugs. Finally, I voted for a successful amendment to allow wholesalers and pharmacists to import prescription drugs from Canada, which will provide substantial savings to consumers while ensuring their safety.

Another concern I have about S. 1 is its $6 billion experiment that starts in 2009 to test whether private insurance plans are more efficient and less costly than Medicare. To me and many others, the evidence we have already speaks to the fact that Medicare is more efficient. The Congressional Budget Office, the General Accounting Office, and outside experts all agree that private, preferred provider organizations and managed care plans cannot achieve the efficiencies Medicare can due to their need to make profits. Given these findings, I wonder how much of the ``savings'' this demonstration project seeks to achieve will come from privatization and how much will come from shifting more costs to seniors and health care providers? More importantly, I wonder why we couldn't have used the $6 billion to reduce drug costs to seniors by making the benefit better?

Medicare provides health care for a special population of Americans-- millions of seniors, individuals with disabilities, and people with kidney failure--those who are uninsurable in the private market. Congress created Medicare in the first place because private insurance plans were failing to provide affordable health care coverage for this high-risk population. I wonder why we must turn back the clock and commit billions of taxpayer dollars to again test whether the private insurance market wants to insure this population.

In conclusion, much has been accomplished but more needs to be done. I look forward to the deliberations of the conference committee and urge my colleagues to engage with me and others in the Senate who are eager to get a good bill signed into law. I hope my friends on the conference committee will retain the Senate low-income assistance provisions, for they are far superior to those in the House bill. This low-income assistance is of special importance to our nation's older women. Of the 19.5 million female Medicare beneficiaries over age 65, 12.4 percent or 2.4 million enrollees live on incomes that are below 100 percent of the Federal Poverty Level. Another 3.2 million, 16 percent, live on incomes between 100 percent and 150 percent of poverty. Of senior men, on the other hand, only 7 percent are below poverty and another 11 percent are between 100 percent and 150 percent of poverty. Medicare seniors are disproportionately women and disproportionately poor, and will be far better served by the Senate's low-income provisions.

Our parents and grandparents are depending on us, and we must not let them down once again. I hope that partisan politics do not stand in the way of a drug benefit that is available to all seniors under traditional Medicare.

Mr. President, I rise to speak in opposition to the amendment of the Senator from Arizona. This amendment would retroactively breach the contracts entered into by States and their attorneys, and the settlement agreement reached in the tobacco-related Medicaid expenses litigation.

Let me remind my colleagues of the context in which this historic tobacco settlement came about. There were over 40 years of law suits brought against tobacco companies, occurring over three different time periods.

When these attorneys brought this litigation, cases against tobacco companies would go on for years and years, almost always with little or no favorable results. In order to catch the deception and subterfuge of these companies, these cases needed staying power. The attorneys bringing these cases needed the ability to withstand significant losses while they uncovered the facts needed to make the damning case that the tobacco companies had been hiding from the public.

The plaintiffs' attorneys undertook this riskiest of cases against daunting odds, with a high likelihood of never getting paid at all. In the first phase of tobacco litigation, no one was able to muster the resources needed to bring these cases. Then a group of attorneys in the public interest pooled over $100 million of their own money in order to withstand the onslaught put up by tobacco companies bent on hiding the truth from the public.

The tobacco companies spent approximately $700 million a year in legal fees to their lawyers during this period. Thanks to their tenacity, their legal skill, and the righteousness of their cause, in the end the attorneys who brought this action prevailed. They secured a settlement that returned $246 billion to the States. That is ``billion'' with a ``b.'' To put it in perspective, that is almost as large as our entire budget deficit.

Let me say that again the tobacco settlements resulted in a huge windfall for the States and for the American people. I daresay that, in this day and age when State budgets are more squeezed than ever as a result of Federal cuts and unfunded mandates, if the States were offered this deal again, including the attorney's fees, they would take the deal in a heartbeat. In a heartbeat.

And the money collected by the States under this settlement is only the beginning. The settlement funds a new public education program to reduce youth tobacco use; it provides money every year for tobacco- related research; it dissolves the organizations that have historically served as the tobacco companies' propaganda machines; and it prohibits tobacco advertising aimed at children, such as the use of cartoon characters.

Supporters of this amendment would have you believe that its provisions somehow make the existing system fairer. Nothing could be further from the truth.

The American way is to reward those who take a risk and succeed. We grant patents that protect inventions for 17 years. We give copyright owners exclusive rights to their works for their entire life, plus another 70 years. More importantly, we don't punish people who come up with a great idea and turn it into a success. To the contrary we let them keep the fruits of their labor. But under the logic of this amendment, we would seek to penalize Bill Gates' $40 billion net worth, simply because he started with little more than a great idea and a vision to make it happen, took the risk, and prevailed. Just like these attorneys who brought the tobacco cases.

Supporters of this bill would also have you believe that it is only the trial lawyers and their supporters who oppose this amendment. Nothing could be further from the truth. Among others, consumer advocates people who look out for the little guy strongly oppose this amendment.

I also find it ironic that this amendment, which would abrogate a settlement entered into by the States, is being offered by some of the very same Senators who have made a career of advocating for States rights. This amendment, which would abrogate the contractual rights of private parties, is being offered by some of the very same Senators who have made a career of upholding the right to enter into contracts without undue regulation.

Just to be clear my colleagues refuse to interfere in the right of States to send defendants to execution without competent counsel, but insist on interfering to undo an agreement where the States reap $246 billion from the tobacco companies. Quite simply, they have got their priorities backwards.

I might also remind my colleagues of one other historical fact: Some of the Senators who are pushing this amendment today are the same folks who, just a few years ago, were doing everything in their power to defeat Federal attempts to force the tobacco companies to pay for the huge damages they have inflicted on the American people. Fortunately for the American people, and for the 50 States, they failed. Now, however, they are trying to undo this successful settlement after the fact.

Ladies and gentlemen, this is America. We make deals and we stick to them. We do not go back on our word. I urge you to oppose this amendment.

amendment no. 594

Mr. President, our economy is in a slump unlike any in recent memory. In fact, we are experiencing a downturn with features unseen since the days of the Great Depression.

In the last 2 years, we have lost over 2.6 million jobs in the private sector. That is the longest continous decline in the number of jobs in over 50 years. It has almost doubled the number of Americans who are stuck in long-term unemployment--out of a job for over half a year.

The unemployment rate has just risen to 6 percent, with 8.8 million Americans out of work.

The stock market has lost value by more than ten percent each of the last 3 years. The last time that happened was, again, the Great Depression of the 1930's. A drop of almost 30 percent in the value of the stock market has decimated the retirement savings of millions of Americans, and drained over $5 trillion in wealth from their net worth.

That is why we are here today, to debate how to respond to this crisis. This crisis is real, it is affecting millions of families directly and indirectly across this country. In addition to the thousands of jobs lost with every new report, millions more families are concerned about the security of their own jobs.

In fact, the situation is so precarious that the Federal Reserve, under the leadership of Alan Greenspan, has shifted its historical concern about inflation to a worry we haven't seen since the 1930's-- deflation. Despite a series of 12 interest rate cuts in a row, that thave pushed interest rates to forty-year lows, the Federal Reserve's meetings are now focused on keeping us out of the kind of deflation trap that Japan has been stuck in for more than a decade.

When the Fed is more worried about deflation than inflation, you know you have a probiem.

And while we ended the last century with the Federal budget in balance for the first time in a generation, we now begin the new century facing deficits bigger that we have ever seen. The Congressional Budget Office has just raised its estimate of this year's deficit to $300 billion, and that doesn't even count this $350 billion tax cut before us today.

Wall Street analysts expected the actual deficit to be closer to $400 billion or even more for this year--the biggest dollar figure ever.

This kind of budget policy is the reason why we will soon be voting to raise the national debt ceiling--to allow us to borrow enough money to pay the bills we have already incurred.

This will be the single largest increase in the national debt in our history, adding almost a trillion dollars to the debt limit, raising it to over $6.7 trillion.

Just a few short years ago we were paying down the national debt.

We have gone from a projected surplus of $5.6 trillion to a $1.8 trillion deficit. This is a record of economic bad news that has not been equaled in most American's lifetimes.

Now we are piling up additional debt, and adding heavy new interest charges to the spiraling costs of this administration's irresponsible budget policy. Over the next 10 years, we will add an additional $1.7 trillion in interest costs on that Debt--$1.7 trillion that will not be available for homeland defense, for health care, for education, for law enforcement.

How well I remember. How the men and women in the business community would come to me in the decades of deficit and tell me, ``Balance the budget, stop borrowing money like nobody else needs it. Get the government out of the credit markets so we can invest and grow.''

Where are those voices we used to hear on the Senate floor, imploring us to reverse decades of borrowing and return to the straight and narrow of balanced budgets?

We need a strong dose of those principles now. We need an economic stimulus that works. And we need an economic policy that does not mortgage our future, that does not dump the bill on our children and grandchildren.

We need a plan that we can afford, that treats the very real, specific problems that average families in Delaware and around the country are facing today. Unfortunately, the bill before us is the wrong plan, at the wrong time, at the wrong price.

We need an economic policy that has an impact right now, in the very short term--an impact on consumer spending, on the demand side, to give employers a reason to bring those workers back.

That means tax cuts for the vast majority of American families who need some relief, and who can be counted on to go out and spend that money--to create demand for more products, create more jobs.

But in addition to the very real and very serious problems we are facing today, in the very near future, just around the corner, the retirement of the baby boom generation will stretch our Social Security system to the breaking point.

Just a decade from now, surpluses in the Social Security system-- extra funds that help to cover some of our current deficits--those surpluses will disappear. Then the drain on our resources will accelerate until--according to the Social Security System's trustees-- by 2030 Social Security and Medicare will be a third of every Federal income tax dollar, and by 2040, almost half of every Federal income tax dollar.

That is clearly an impossible situation that we cannot permit to occur. We must act now to makes sure that we have the resources to keep the promises we made to the millions of Americans who have paid their Social Security taxes over the years.

But every dime of the $350 billion tax cut before us today is borrowed from Social Security--it breaks our promise to those who depend on Social Security, and sends the bill to our children and grandchildren.

The solution we are seeking today, for the ongoing loss of millions of jobs, must not ignore the crisis in federal finances that is beginning now and crests just a decade away.

It is not just that it is unfair and irresponsible to put the burden of our choices off on our children. That should be reason enough to reject this policy out of hand.

But a moment's reflection tells us that if we borrow $350 billion, or $550 billion, or--if the President had his way, $726 billion--if we borrow that money from the same capital markets where our corporations and home buyers get their money, that policy is self-defeating.

It raises the cost of money, and slows the economy down, while handing out windfall tax breaks that people will get without any change in the behavior.

That policy is indeed unfair. It is irresponsible. And it is ineffective.

But a kick-start that gets people spending and businesses hiring--and that has a reasonable cost--that kind of policy can work.

First, we all know that the real price of this bill is not $350 billion. We have already heard that key members of the Republican leadership do not expect that the tax increases in this bill, that keep the cost of the tax cuts down, will survive a conference with the House. If those tax increases go, the cost of this bill goes up.

And key provisions in the bill--like the dividend exemption--phase in slowly and then are supposed to expire after ten years. Even if you buy the idea--which I don't--that giving a tax break to the small percentage of Americans who receive dividends can somehow turn the economy around, how can you expect that change to happen if businessmen know they should wait a few years until the exclusion is phased in?

And what kind of permanent change in corporate behavior can we expect

when we know that the door is going to slam shut on this deal 10 years out?

One answer is that they don't expect that door to close. They expect the dividend provision and others to be extended. Or more and more dividends could be excluded--that creeping expansion and acceleration has been the pattern since we passed the 2001 tax cuts.

Full exemption of dividends, if it were in place at the end of this decade, would cost $750 billion over the next 10 years.

For that and many other reasons, this tax cut, as big and irresponsible as it is, is just a place holder for even more reductions, and even more deficits, even more debt.

But designed this way, to get ten pounds of tax cuts into a five pound bag, so to speak, has resulted in a tax cut that even a conservative economist who supports the administration has called, and I quote from yesterday's Washington Post, ``one of the most patently absurd tax policies every proposed.''

But maybe if this bill offered the average American family some real tax relief, maybe if we could expect a little help for the millions of jobless men and women stuck in long-term unemployment, some of the cost would be worth it.

Tragically, there is no reason to expect this legislation to do anything to stimulate the economy this year or next. The way this tax cut is designed, there is no reason to expect any benefit to the economy, and every reason to believe that the deficits it creates will cause harm.

Estimates by Congressman Henry Waxman, who examined corporate statements, show that the top three executives at Fortune's largest 100 companies would get a tax cut of $118 million if dividends were totally excluded from taxation, the goal that administration officials admit is the real aim of the partial exclusion in this bill. Under full exclusion, twenty one executives would get a tax cut of $1 million.

That is for doing nothing. Just for doing what they already do. That is not corporate tax reform, it is simply a windfall. I trust that those men and women earn every dime they already make. But no one can argue that a $118 million personal windfall into the already large pay packages of those executives is going to create a single new job.

I you really wanted to fix the problem of dividend taxation, even Republican economists--indeed, especially Republican economists--will tell you that you should eliminate the tax at the corporate level. That at least has the potential of changing the behavior of firms that now must choose between borrowing that is not taxed and dividends that are taxed.

That could be part of an honest debate about tax reform and job creation.

And when Alan Greenspan endorsed the idea of reforming dividend taxes, he said it should be done in a way that does not add to the national debt, and that it should be part of a bigger plan of reform. This proposal flunks all of those tests.

Only 13 percent of the impact of this bill will be felt in this year, Mr. President--and less than half in its first 2 years. And the vast majority of the revenue losses come in the future, as the crisis in Social Security approaches. This plan turns economic logic on its head.

This is not designed to stimulate the economy--if it were, it would provide a quick, short-term boost to family incomes, and would give businesses incentives to act right now to increase investment and create jobs.

Under this bill, the one-tenth of one percent of Americans who have an income of over $1 million will receive an average tax cut of $64,000. But those Americans in the middle 20 percent of the income spectrum would get an average tax cut of $233.

That's right, the average American gets a tax cut of $233, under this bill.

That is not fair. But it is not good economic policy either. Those good men and women fortunate and hard-working enough to make over a million dollars a year are not going to change their behavior, they aren't going to create any new jobs, just because they get an additional $64,000.

But getting money to the families who will go out tomorrow and spend it, getting money to those who are about to lose long-term unemployment benefits, getting money to the states to prevent further state tax increases or spending cuts--that has the best hope of giving the economy the stimulus it needs.

The tax cut program that makes sense and that I supported would provide a tax cut for every American taxpayer--for example, $300 for every adult, $300 for the first two children. It increases the child tax credit to $700 this year and $800 next year. And for middle class and working families, this tax cut plan that I supported accelerates relief from the marriage penalty.

Altogether, a middle class family of four would have gotten a tax cut of $1630 this year under the Democratic tax cut plan.

And if you add to that my proposal to allow parents to deduct the cost of college tuition a family with kids in college could get an additional $3000 tax break. That is real help, for real families, to deal with a real problem, and frees up real money to stimulate the economy.

Incredibly, this so-called ``Jobs'' bill makes no provision to extend the life of the long term unemployment program that expires in just two weeks. With the number of long-term unemployed at record levels and growing, this bill simply ignores their needs.

Equally astounding, the bill provides almost nothing for the states whose fiscal crisis is dragging the economy down. State budget cuts in education, health care, law enforcement--even homeland security--slow the economy as workers lose jobs and businesses lose customers.

While there appears to be $20 billion in aid to the states in this bill, in reality, the reductions in federal dividend and income taxation will cut as much as $11 billion from state taxes based on those sources.

Under the tax cut plan I support, small businesses would get three times the tax write off for investments--$75,000 worth--this year, and a tax deduction for 50 percent of the cost of new equipment, along with help getting health insurance for their employees.

The tax cut I support would get $20 billion in real help to the states to confront the fiscal crisis that is compounding the national economic slump.

And the tax cut program I voted for would extend unemployment benefits to help those looking for work sustain that search in a time of record job losses.

Finally, the plan I supported is affordable. Its effects take place immediately, and it would not leave a hole in our finances for our children to repair.

That's the plan I supported, and it is the plan our country needs. I cannot vote for this bill that is now before us because it fails to do so.

Mr. President, on rollcall vote No. 162, I voted nay. It was my intention to vote yea. I ask unanimous consent that I be permitted to change my vote to yea, which was the Landrieu amendment, since it will not affect the outcome of the vote.

Mr. President, imagine a world with cars that spew out no smog, no toxic emissions, and no greenhouse gases. The only thing that would come out of the tailpipe would be water pure enough to drink.

Imagine a world in which we don't import a drop of Mideast oil, because clean, domestic, renewable energy sources meet all of our needs.

Imagine a world in which we don't need to worry about a terrorist strike on our large nuclear power plants, or a storm causing a blackout over a large region, because we get all of our electricity from small distributed generators on farms and in buildings throughout the country.

Sound too good to be true? The technology to do this, using hydrogen energy and fuel cells, is out of the labs and being tested on our streets and in our buildings today. For those of us who have been working for many years to bring this vision into reality, that is very exciting. But we still need a major effort to bring the costs down and commercialize the technology.

And there is remarkable bipartisan agreement on the need for government action. A couple years ago we were fighting for scraps of funding. Now the President has proposed $1.7 billion over 5 years toward getting hydrogen fuel cell vehicles on the road. The Senate energy bill last year, before it died in conference, included tax incentives for stationary fuel cells, fuel cell vehicles, hydrogen vehicles, hydrogen fueling infrastructure, and hydrogen fuel.

But we are still too timid to bring about the fundamental shift to the hydrogen economy. The Department of Energy is working toward a go- no go decision by the car companies by 2015, and mass production of vehicles by 2020. But the car companies themselves have been talking about commercial vehicles by 2010.

We need a bolder, more comprehensive plan. That's why I am introducing the Hydrogen and Fuel Cell Energy Act of 2003. This bill addresses three critical requirements to bringing hydrogen energy and fuel cells into commerce, and start gaining their environmental and security benefits, as soon as technically feasible.

First we need a technological push. We need better fuel cell stack components to reduce costs and improve longevity. We need lighter, more efficient ways to store hydrogen on-board vehicles. In the long term, we need cheaper ways of converting renewable energy to hydrogen fuel.

This bill reauthorizes the Matsunaga Act, which established the Federal hydrogen energy research program. It updates the language and sets clearer priorities. It expands the authorization to cover fuel cell research and development as well, to reflect the technical and bureaucratic reality that research on fuel cells--the most efficient, flexible, and cleanest way to use hydrogen energy--has become inextricably linked to research on hydrogen energy. It supports work on domestic and international codes and standards, to work through a major regulatory barrier to working with combustible hydrogen and to making all the infrastructure pieces fit together. It includes a specific mandate to do public education on hydrogen and fuel cells and to do university training in critical skills needed in the industry. And it increases funding levels over the next few years to accelerate progress in pre-commercial technologies.

Second, and perhaps most important right now, we need a near-term demand pull. As long as the fuel cells and hydrogen appliances are made by hand, they will remain very expensive. But it's also expensive to build the factories to build them more cheaply. We need support to get industry over that initial cost hump.

The first step is large demonstration programs that serve a dual purpose: they provide a realistic test of how the laboratory technologies work in the real world, and they provide funding for pre- commercial prototypes of the technologies, including starting to build a hydrogen fueling infrastructure.

The Hydrogen and Fuel Cell Energy Act authorizes several new, large demonstration programs:

The main demostration program would provide over $1 billion over 7 years for demonstrations of the full range of fuel cell applications and associated hydrogen infrastructure. These demonstrations would include fleets of fuel cell passenger vehicles, fuel cell buses and farm vehicles, stationary fuel cells in houses and commercial buildings, and portable fuel cells such as auxiliary power units in trucks.

A second, closely related program, would provide hydrogen fueling infrastructure over major transportation corridors and entire regions, and then demonstrate hydrogen-powered vehicles that are not tethered to a single pump. Early demonstrations, at least, would likely use vehicles that burn hydrogen; these are similar to gas-electric hybrids that you can buy today, but run on hydrogen rather than gasoline. These vehicles provide most of the benefits of fuel cell vehicles at a fraction of the current cost. They are not as good as fuel cell vehicles in the long term, they are less efficient, less flexible, and produce a little pollution, but would move us a long way toward the goal and would provide a good large-scale test of a hydrogen fueling system.

A third program would demonstrate hydrogen and fuel cell technologies in foreign countries. Hydrogen energy could have an early application in places where a competing fossil fuel infrastructure is not already well-developed. And assisting this application is in our national interest in order to promote global development without causing global warming and other harmful environmental effects, and to increase the global market for American hydrogen and fuel cell technologies.

The last program would focus on emerging technologies for production of hydrogen from renewable resources. Two approaches show particular promise for clean, efficient production of hydrogen at this time. Biorefineries make hydrogen and other products from biomass. And in ``electrofarming'' the hydrogen is produced and used on the same farm. The hydrogen might be made by growing and reforming biomass, from wind energy, or from farm waste; it could be used in farm vehicles and equipment and for heat and electricity in farm buildings.

All these demonstration programs would be conducted using competitive merit review of funding proposals from a wide variety of companies and organizations, and they would require cost-sharing from awardees.

Third, we need to show there will be a market for commercial hydrogen and fuel cell technologies in the long term. The Federal Government can do this by buying early commercial products and by providing incentives to others to do so, in recognition of their public benefits.

The bill includes Federal purchase requirements for both zero emission vehicles and stationary fuel cells. The vehicle requirements are similar to Federal fleet requirements for purchase of alternative fuel vehicles. They would require zero emission vehicles, most likely hydrogen fuel cell vehicles, to make up an increasing percentage of Federal fleet vehicle purchases up to 75 percent. Alternative fuel vehicles with very low emissions, such as hydrogen hybrid vehicles, would get partial credit. For stationary fuel cells, the bill

would require modifying energy efficiency regulations for Federal buildings to presume use of fuel cells to power new Federal buildings and to encourage their use in older buildings.

The bill also provides a broad array of tax incentives for stationary and portable fuel cells, hydrogen and fuel cell vehicles, hydrogen fueling infrastructure, and hydrogen fuel. These incentives are similar to those that have been proposed in the CLEAR Act on alternative fuel vehicles, in previous bills on stationary fuel cells, and in last year's energy bill. However, this bill makes some important changes. It makes all the tax credits tradable so that government agencies and non- profit organizations can use them as well as consumers and private companies. It increases the credit for hydrogen fueling infrastructure to recognize the cost of making the hydrogen on-site, not just pumping it. It adds an additional incentive for hydrogen from renewable resources to encourage a transition to a sustainable hydrogen system. And most importantly, it extends the tax credits so the industry will know the incentives will be there when they are needed--when real commercial products are available.

Finally, the bill ensures effective coordination and oversight of the expanded Federal hydrogen and fuel cell energy activities, with a new interagency task force to coordinate activities, a revamped technical advisory panel, and periodic outside review by the National Academies.

These measures will require a significant Federal investment in our energy future. But with these measures we can use hydrogen and fuel cell technologies to turn into reality a vision of cars that don't pollute, of power that won't go out, and of feeling less dependent on an area of the world where we are fighting the second war in recent years. It is time to take these steps now.

Mr. President, in the early 1990s, a large number of U.S. companies began a process of switching their defined benefit pension plans to cash balance plans. Many of the employees whose pension plans were to be altered drastically weren't told and didn't notice that they were essentially going to be working for years without earning any more benefits. Their not knowing was viewed as a key benefit by management. And the retirees were furious.

As Keith Williams with Watson Wyatt Worldwide and Amy Viener with William Mercer, two firms that put together these plans in 1998 said at an Actuaries conference:

Mr. Williams: I've been involved in cash balance plans five

or six years down the road and what I have found is that

while employees understand it, it is not until they are

actually ready to retire that they understand how little they

are actually getting.

Ms. Viener: Right, but they're happy while they're

employed.

One of the most abusive practices in cash balance conversions is known as ``wear away.'' Older workers see nothing added to their pensions as the value of the pensions is frozen, often for many years, until it reaches the lower value of the new pension plan. At the same time younger workers are getting their pensions increased. In my view, this is clearly age discrimination and bad pension policy. In 1999, I introduced a bill to make it illegal for corporations wear away the benefits of older workers during conversions to cash balance plans. I offered my bill as an amendment. Forty-eight Senators, including 3 Republicans, voted to waive the budget point of order so we could consider this amendment. We did not have enough votes then, but I believe the tide is turning.

After that vote, more and more stories came out about how many workers were losing their pensions. In September of 1999, the Secretary of the Treasury put a moratorium on conversions from defined benefit plans to cash balance plans. That moratorium has been in effect now for over three years. In April of 2000, I offered a sense-of-the-Senate resolution to stop this practice, and it passed the Senate unanimously.

But last December, the Treasury decided to end that moratorium. The Department proposed a regulation that will allow hundreds of companies, many employing thousands of workers each to go forward with conversions that will allow for the wear-away of the current benefits of people across the country. This plan is breathtaking in its audacity. In a time when people have lost their life savings to market downturns and corporate duplicity, they are looking at changing the rules so that employers can once again bolster their bottom line by shifting funds from the pensions they promised their workers. I will not stand by and let it happen.

There are over 800 age discrimination complaints currently pending before the EEOC based on cash balance conversions. How many more will there be if we again start allowing companies to make these abusive conversions?

I want to make it very clear: I am not opposed to all cash balance plans. Some cash balance plans can be very good. What I oppose is the unilateral decision of a company being able to change their plans and stop contributing to older employees' pensions while benefits are given to newer employees.

That is what this issue is all about. It is fairness. It is equity. I know discussion of pension law can become very convoluted. But in essence, what some of these companies have been doing to these workers is nothing less than sheer thievery. They are able to save millions, in some cases hundreds of millions of dollars, by converting their plans, robbing workers who have been loyal and hard working, robbing them of their rightful claims on future benefits, It is not right. It is not fair.

There is one thing that has distinguished the American workplace from others around the world. We have valued loyalty. At least we used to. That is one of the reasons pension plans exist--the longer you work somewhere, the more you earn in your pension program. Obviously, the longer you work someplace, the better you do your job, the more you learn about it, the more productive you are. We should value that loyalty.

If companies are able to wear away the benefits of the longest serving workers, what kind of a signal does that send to the workers? It tells workers they are fools if they are loyal because if you put in 20 to 25 years, the boss can just change the rules of the game, and break their promise. It tells younger workers that it would be crazy to work for a company for a long time, that it's best to hedge your bets and move on as soon as it is convenient.

This destroys the kind of work ethic we have come to value and that we know built this country. But some of these cash balance conversions counter all of that. Her is an analogy. Imagine I hire someone for five years with a promise of a $50,000 bonus at the end of five years of service. At the end of three years, however, I renege on the $50,000 bonus. But the employee has three years invested. Had they known that the deal was going to be off, perhaps they would not have gone to work for me. They could have gone to work someplace else for a total higher compensation package. Is that the way we want to treat workers in this country, where the employer has all the cards and employees have none, and employers can make whatever deal they want, but can change the rules at any time?

That is why I am introducing this legislation. It is simple. It says that you have to give older, longer serving employees a choice, at retirement, when their pension plan is converted to a cash balance plan to get the benefits earned in the old plan instead. It also says that employers must start counting the new cash balance benefits where the old defined benefit plan left off, instead of starting the cash balance

plan at a lower level than an employee had already earned.

In the March 3, 2002 issue of Fortune magazine, Janice Revell said of the possible impending flood of cash balances conversions: ``Brace yourself for a very un-fairy-tale ending to this tory. Millions of American workers are sure to see a large slice of their retirement income go up in smoke. It may not happen right away, but the groundwork is being laid right now.''

I urge my colleagues in the Senate to join me in cosponsoring this measure, so that we can stop the flood before it starts.

Mr. President, I am pleased to join with my friend and colleague, Chairwoman of the Senate Committee on Small Business and Entrepreneurship, Olympia Snowe, in reintroducing the ``Independent Office of Advocacy Act'', which our Committee and the full Senate endorsed unanimously last Congress. This legislation will help ensure the Small Business Administration's, SBA, Office of Advocacy has the necessary autonomy to remain an independent voice for America's small businesses. I would like to thank Senator Snowe and her staff for working with me and my staff to make the necessary changes to this legislation to garner bipartisan support.

The independent Office of Advocacy Act rewrites the law that created the Small Business Administration's Office of Advocacy to allow for increased autonomy. It reaffirms the Office's statutory and financial independence by creating a separate funding account for the Office from the General Fund of the Treasury instead of being allocated through the SBA's annual appropriation.

At its heart, this legislation will allow the Office of Advocacy to better represent small business interests before Congress, Federal agencies, and the Federal Government without fear of reprisal for disagreeing with the position of any current Administration.

For those of my colleagues without an intimate knowledge of the critical role the Office of Advocacy and its Chief Counsel play in protecting and promoting America's small businesses, I will briefly elaborate its important functions and achievements. From studying the role of small business in the U.S. economy, to promoting small business exports, to advocating for the best interests of small business in a myriad of areas, to lightening the regulatory burden of small businesses through the Regulatory Flexibility Act, RFA, and the Small Business Regulatory Enforcement Fairness Act, SBREFA, the Office of Advocacy has a wide scope of authority and responsibility.

The U.S. Congress created the Office of Advocacy, headed by a Chief Counsel to be appointed by the President from the private sector and confirmed by the Senate, in June of 1976. The rationale was to give small businesses a louder voice in the councils of government.

Each year, the Office of Advocacy advises Congress and the executive branch regarding policy issues affecting small businesses, brings together

small business people with members of Congress, congressional staff and executive branch officials to resolve issues affecting small business, publishes numerous studies and reports, compiles vast amounts of data and successfully lightens the regulatory burden on America's small businesses. In the area of contracting, the Office of Advocacy developed PRO-Net, a database of small businesses used by Federal contracting officers to find small business interests interested in selling to the Federal Government.

The U.S. Congress, the Administration, and, of course, small businesses have all benefited from the work of the Office of Advocacy. In October 2001, an Advocacy research study titled, The Impact of Regulatory Costs on Small Business, established that small businesses with less than 20 employees spend nearly $7,000 each year, per employee just to comply with Federal regulations and mandates. By working with Federal agencies to implement the Regulatory Flexibility Act, the Office of Advocacy in 2002 saved small businesses over $21 billion in foregone regulatory costs that can now be used to create jobs, buy equipment and expand access to health care for millions of Americans.

Small businesses remain the backbone of the U.S. economy. According to a study conducted by the Small business Administration Office of Economic Research and released in January 2003, small businesses account for approximately 99 percent of all employers, account for 51 percent of private-sector output, represent 52 percent of GDP and, in 2002, provided two-thirds of all net new jobs.

Small businesses have also taken the lead in moving people from welfare to work and an increasing number of women and minorities are turning to small business ownership as a means to gain economic self- sufficiency. Put simply, small businesses represent what is best in the United States economy, providing innovation, competition and entrepreneurship.

Their interests are vast, their activities divergent, and the difficulties they face to stay in business are numerous. To provide the necessary support to help them, SBA's Office of Advocacy needs our support.

The responsibility and authority given the Office of Advocacy and the Chief Counsel are crucial to their ability to be an effective independent voice in the Federal Government for small businesses. This bill has been endorsed by the U.S. Chamber of Commerce, the Small Business Legislative Council and the National Federation of Independent Businesses. Small businesses are asking us to do everything we can to protect and strengthen this essential office. I believe this legislation accomplishes that important goal.

I have always been a strong supporter of the Office of Advocacy and I am pleased to join with Chairwoman Snowe in introducing this legislation, which will ensure that the Office of Advocacy remains an independent and effective voice representing America's small businesses.

Mr. President, with most of the country's attention focused on the war in Iraq, important issues at home are falling through the cracks. Today I rise to talk about one of the needs of working moms and dads and their children--child care. We have a shortage of childcare in this country, and it is a problem for our families, a problem for our businesses, and a problem for our economy. The Census Bureau estimates that there are approximately 24 million school age children with parents who are in the workforce or pursuing education, and the numbers are growing. There has been a 43 percent increase in dual-earner families and single parent families over the last half a century. As parents leave the home for work and education, the need for quality child care in America continues to increase.

As the Ranking Democrat of the Committee on Small Business and Entrepreneurship, I think we can foster the establishment and expansion of existing child care businesses through the Small Business Administration, SBA. Today with Senators Harkin, Landrieu, Pryor, Lieberman, Daschle, Bingaman, and Johnson. I am introducing the Child Care Lending Pilot Act of 2003, a bill to create a three-year pilot that allows small, non-profit child care providers to access financing through SBA's 504 loans.

There is a real need to help finance the purchase of buildings, to expand existing facilities and improve the conditions of established centers to meet the demand for child care. It is appropriate to provide financing through the 504 program because it was created to spur economic development and rebuild communities, and child care is critical to businesses and their employees. Financing through 504 could spur the establishment and growth of child care businesses because the program requires the borrower to put down only between 10 and 20 percent of the loan, making the investment more affordable. Another advantage of 504 loans is that they have terms of up to 20 years, with fixed interest rates, allowing small businesses to keep their monthly payments low and predictable.

As anyone with children knows, quality childcare comes at a very high cost to a family, and it is especially burdensome to low-income families. The Children's Defense Fund has estimated that child care for a 4-year-old in a child care center averages $4,000 to $6,000 per year in cities and states around the Nation. In all but one state, the average annual cost of child care in urban area child care centers is more than the average annual cost of public college tuition.

These high costs make access to child care all but non-existent for low-income families. While some states have made efforts to provide grants and loans to assist childcare businesses, more must be done to increase the supply of childcare and improve the quality of programs for low-income families. According to the Child Care Bureau, state and federal funds are so insufficient that only one out of 10 children in low-income working families who are eligible for assistance under federal law receives it.

For parts of the country, when affordable child care is available, it is provided through non-profit child care businesses. I formed a task force in my home state of Massachusetts to study the state of child care, and of the many important findings, we discovered that more than 60 percent of the child care providers are non-profit and that there is a real need to help them finance the purchase of buildings or expand their existing space. Child care in general is not a high-earning industry, and the owners don't have spare money lying around. Asking centers to charge less or cut back on employees is not the way to make child care more affordable for families and does not serve the children well. An adequate staff is needed to make sure children receive proper supervision and support. Furthermore, if centers are asked to lower their operating costs in order to lower costs to families, the safety and quality of the child care provided would be in jeopardy.

I urge my colleagues to join us in supporting this legislation so non-profit childcare providers can access funds to start new centers or expand and improve upon existing centers. As we have done in Massachusetts, Senators could bring together 504 lenders, childcare providers not for-profit and non-profit--and the state department of child welfare to facilitate the increase of childcare providers in their states.

As common sense tells us, and the child advocates if we listen, there is no magic bullet to addressing the shortage of safe and affordable child care in this country--it takes coordinated and complementary efforts to make a real difference. This is as much a child welfare issue as a workforce issue, and it makes sense to leverage one of SBA's effective resources to try and contribute to making a positive difference. I argue--we argue--that allowing non-profit child care centers to receive SBA loans can increase the availability of child care in the United States. Non-profit child care centers provide the same quality of care as the for-profit centers, and non-profit centers often serve our nation's neediest communities. I hope that my colleagues will recognize the vital role that early education plays in the development of fine minds and productive citizens and realize that in this great nation, child care should be available to all families in all income brackets.

I ask unanimous consent that several letters of support be printed in the Record. These letters demonstrate that this is a good investment and good for our country.