Immigrant Children's Health Improvement Act of 2003

Mr. President, today I am introducing a package of five measures to sustain and, indeed, renew the Federal commitment to restoring the water quality and living resources of the Chesapeake Bay watershed. Joining me in sponsoring one or more of these measures are my colleagues from Virginia, Pennsylvania, and Maryland, Senators Warner, Allen, Mikulski and Specter.

This year marks the 20th anniversary of the Chesapeake Bay Agreement, the historic Federal-State compact that launched the Chesapeake Bay restoration effort. Over the past two decades, we have made important progress both in putting in place the comprehensive, coordinated Federal-State-local and private sector management structure to guide the program and in specific initiatives to address key problems in the watershed. Three subsequent agreements were signed in 1987, in 1992 and in 2000, respectively, setting specific goals and action plans to restore the Chesapeake watershed. There are today over 700 groups and some 40 committees involved in the Bay Program. More than twenty-five Federal agencies are partnering with EPA and the Bay area States and there are numerous State agencies, local governmental organizations and citizen groups actively engaged in the restoration efforts. The level of public support and the degree of cooperation and coordination among all parties is unparalleled.

Despite these efforts, the job of restoring the Chesapeake to levels of quality and productivity that existed earlier in this century is far from complete. In its latest report card issued in November, 2002, the Chesapeake Bay Foundation gave the Chesapeake Bay a score of 27 out of 100--far short of the ``70'' level believed necessary for the Bay to be declared ``saved.'' The index underscores the continuing serious challenges facing the Bay. Nitrogen pollution from farms and city streets, sewage treatment plants, and air deposition, among other so- called non-point sources, continue to overload the Bay. Many of the living resources--oysters, shad, white perch, crabs--which are indicators of the Bay's health, are still in decline. Toxic chemicals are still present in the Bay's surface and bottom waters, having untold impacts on water quality and wildlife. A recent analysis undertaken by the Chesapeake Bay Commission estimates that the costs to clean the Bay and achieve the goals of the Chesapeake 2000 agreement over the course of the next seven years will exceed projected income by nearly $13 billion. Pollution from all sources will have to be further reduced, thousands of acres of watershed property must be preserved, significant efforts must be made to restore living resources, buffer zones to protect rivers and streams need to be created, education and stewardship efforts must be dramatically expanded.

While $13 billion seems like an enormous sum, we should remember that the health of the Chesapeake Bay is vital not only to the more than 15 million people who live in the watershed, but to the Nation. It is one of our Nation's and the world's greatest natural resources covering 64,000 square miles within six States. It is a world-class fishery that still produces a significant portion of the finfish and shellfish catch in the United States. It provides vital habitat for living resources, including more than 3600 species of plants, fish and animals. It is a major resting area for migratory waterfowls and birds along the Atlantic including many endangered and threatened species. It is also a one-of-a-kind recreational asset enjoyed by millions of people, a major commercial waterway and shipping center for much of the eastern United States, and provides jobs for thousands of people. In short, the Chesapeake Bay is a magnificent, multifaceted resource worthy of the highest levels of protection and restoration.

The five measures that we are introducing today are intended to help address some of the highest priority needs in the watershed and provide a Federal blueprint for restoring the Bay in the years ahead. I want to address each of these measures briefly.

The first measure, the Chesapeake Bay Watershed Nutrient Removal Assistance Act, would establish a grants program in the Environmental Protection Agency to support the installation of nutrient reduction technologies at major wastewater treatment facilities in the Chesapeake Bay watershed. I first introduced this measure during the 107th Congress and provisions of the legislation were included as part of S. 1961, the Water Investment Act of 2002, reported favorably by the Senate Environment and Public Works Committee. Unfortunately, no further action was taken on that legislation. Despite important water quality improvements over the past decade, nutrient

over-enrichment remains the most serious pollution problem facing the Bay. The overabundance of the nutrients nitrogen and phosphorous continues to rob the Bay of life sustaining oxygen. Recent modeling of EPA's Bay Program has found that total nutrient discharges must be reduced by more than 35 percent from current levels to restore the Chesapeake Bay and its major tributaries to health. To do so, nitrogen discharges from all sources must be reduced drastically below current levels. Annual nitrogen discharges into the Bay will need to be cut by at least 110 million pounds from the current 300 million pounds to less than 190 million pounds. Municipal wastewater treatment plants, in particular, will have to reduce nitrogen discharges by nearly 75 percent.

There are 304 major wastewater treatment plants in the Chesapeake Bay watershed: Pennsylvania, 123, Maryland, 65, Virginia, 86, New York, 18, Delaware, 3, Washington, D.C., 1, and West Virginia, 8. These plants contribute about 60 million pounds of nitrogen per year--one-fifth--of the total load of nitrogen to the Bay. Upgrading these plants with nutrient removal technologies to achieve nitrogen reductions of 3 mg/ liter would remove 46 million pounds of nitrogen in the Bay each year or 40 percent of the total nitrogen reductions needed. Nutrient removal technologies have other benefits, as well. They provide significant sayings in energy usage, 20 to 30 percent, in chemical usage, more than 50 percent, and in the amount of sludge produced, five to 15 percent. They are one of the most cost-effective methods of reducing nutrients discharged to the Bay.

My legislation would provide grants for 55 percent of the capital cost of upgrading the plants with nutrient removal technologies capable of achieving nitrogen reductions of 3 mg/liter. Any publicly owned wastewater treatment plant which has a permitted design capacity to treat an annual average of 0.5 million gallons per day within the Chesapeake Bay watershed portion of New York, Pennsylvania, Maryland, West Virginia, Delaware, Virginia and the District of Columbia would be eligible to receive these grants. As a signatory to the Chesapeake Bay Agreement, the EPA has an important responsibility to assist the states with financing these water infrastructure needs.

The second measure, the Chesapeake Bay Environmental Education Pilot Program Act, would establish a new environmental education program in the U.S. Department of Education for elementary and secondary school students and teachers within the Chesapeake Bay watershed. There is a growing consensus that a major commitment to education--to promoting an ethic of responsible stewardship and citizenship among the nearly 16 million people who live in the watershed--is necessary if all of the other efforts to ``Save the Bay'' are to succeed. Expanding environmental education and training opportunities will lead not only to a healthier Chesapeake Bay ecosystem, but a more educated and informed citizenry, with a deeper understanding and appreciation for the environment, their community and their role in society as responsible citizens.

One of the principal commitments of the Chesapeake 2000 Agreement, is to ``provide a meaningful Bay or stream outdoor experience for every school student in the watershed before graduation from high school'' beginning with the class of 2005. Despite important efforts by Bay area states and not-for-profit organizations, only a very small percentage of the more than 3.3 million K-12 students in the watershed have had the opportunity to engage in meaningful outdoor experiences or receive classroom environmental instruction. Many of the school systems in the Bay watershed are only at the beginning stages in developing and implementing environmental education into their curriculum, let alone exposing students to outdoor watershed experiences. What's lacking is not the desire or will, but the resources and training to undertake more comprehensive environmental education programs.

This legislation would authorize $6 million a year over the next three years in Federal grant assistance to help close the resource and training gap for students in the elementary and secondary levels in the Chesapeake Bay watershed. It would require a 50 percent non-Federal match, thus leveraging $12 million in assistance. The funding could be used to help design, demonstrate or disseminate environmental curricula and field practices, train teachers or other educational personnel, and support on-the-ground activities or Chesapeake Bay or stream outdoor educational experiences involving students and teachers, among other things. The program would complement the NOAA Bay Watershed Education and Training Program that we established last year.

The third measure would reauthorize and enhance the Chesapeake Bay Environmental Protection and Restoration Program. This program, which was first established in Section 510 of the Water Resources Development Act of 1996, Public Law 104-303, authorizes the U.S. Army Corps of Engineers to provide design and construction assistance to State and local authorities in the environmental restoration of the Chesapeake Bay. To date, the Corps of Engineers has constructed or approved $9.3 million in projects under the Chesapeake Bay Environmental Restoration and Protection Program including oyster restoration projects in Virginia, shoreline protection and wetland/sewage treatment projects at Smith Island in Maryland and the upgrade of the Scranton Wastewater Treatment Plant in Pennsylvania to reduce the amount of nutrients delivered to the Chesapeake Bay. These projects have nearly exhausted the current $10 million authorization.

This legislation increases the authorization for this program from $10 million to $30 million. Consistent with all other environmental restoration authorities of the Corps of Engineers, it enables States and local governments to provide all or any portion of the 25 percent non-Federal share required in the form of in-kind services. It also establishes a new small-grants program for local governments and nonprofit organizations to carry out small-scale restoration and protection projects in the Chesapeake Bay watershed. The program would be administered by the National Fish and Wildlife Foundation which has extensive experience and expertise in managing these kinds of grants for other Federal agencies. Ten percent of the funds appropriated each year under this program would be set-aside for these grants. In view of the great need and the many requests for assistance from the Bay area states, this legislation is clearly unwarranted.

The forth measure, the Chesapeake Bay Watershed Forestry Act, would continue and enhance the USDA Forest Service's role in the restoration of the Chesapeake Bay watershed. Forest loss and fragmentation are occurring rapidly in the Chesapeake Bay region and are among the most important issues facing the Bay and forest management today. According to the National Resources Inventory, the States closest to the Bay lost 350,000 acres of forest between 1987-1997 or almost 100 acres per day. More and more rural areas are being converted to suburban developments resulting in smaller contiguous forest tracts. These trends are leading to a regional forest land base that is more vulnerable to conversion, less likely to be economically viable in the future, and is losing its capacity to protect watershed health and other ecological benefits, such as controlling storm water runoff, erosion and air pollution, all critical to the Bay clean-up effort.

Since 1990, the USDA Forest Service has been an important part of the Chesapeake Bay Program. Administered through the Northeastern Area, State and Private Forestry, this program has worked closely with Federal, State and local partners in the six-state Chesapeake Bay region to demonstrate how forest protection, restoration and stewardship activities, can contribute to achieving the Bay restoration goals. Over the past 12 years, it has provided modest levels of technical and financial assistance, averaging approximately $300,000 a year, to develop collaborative watershed projects that address watershed forest conservation, restoration and stewardship.

With the signing of the Chesapeake 2000 Agreement, the role of the USDA Forest Service has become more important than ever. Among other provisions, this Agreement requires the signatories to conserve existing forests along all streams and shoreline; promote the expansion and connection of

contiguous forests; assess the Bay's forest lands; and provide technical and financial assistance to local governments to plan for or revise plans, ordinances and subdivision regulations to provide for the conservation and sustainable use of the forest and agricultural lands. To address these goals, the USDA Forest Service must have additional resources and authority, and that is what this measure seeks to provide.

This legislation codifies the role and responsibilities of the USDA Forest Service to the Bay restoration effort. It strengthens existing coordination, technical assistance, forest resource assessment and planning efforts. It authorizes a small grants program to support local agencies, watershed associations and citizen groups in conducting on- the-ground conservation projects. It also establishes a regional applied forestry research and training program to enhance urban, suburban and rural forests in the watershed. Finally it authorizes $3.5 million for each of fiscal years 2004 through 2010, a modest increase in view of the six-State, 64,000 square mile watershed.

The fifth measure, the NOAA Chesapeake Bay Watershed Education, Training, and Restoration Act, would enhance the National Oceanic and Atmospheric, NOAA, Chesapeake Bay Office's authorities to address the living resource restoration and education and training goals and commitments of the Chesapeake 2000 agreement. It builds upon provisions contained in the Hydrographic Services Improvement Act Amendments of 2003, and addresses several urgent and unmet needs in the watershed. To help meet Bay-wide living resource education and training goals, it codifies the Bay Watershed Education and Training or, B-WET, Program-- the first federally funded environmental education program focused solely on the Chesapeake Bay watershed--that we initiated in the Fiscal 2002 Commerce, Justice, State Appropriations bill and establishes an aquaculture education program to assist with oyster and blue crab hatchery production.

To better coordinate and organize the substantial amounts of data collected and complied by Federal, State and local government agencies and academic institutions--data such as information on weather, tides, currents circulation, climate, land use, coastal environmental quality, aquatic living resources and habitat conditions--and make this information more useful to resource managers, scientists and the public, it establishes an internet-based Coastal Predictions Center for the Chesapeake Bay. It also authorizes a shallow water monitoring program to address critical gaps in information on near shore and river area water quality conditions needed for restoration of living resources. And to help meet Chesapeake 2000 living resource restoration goals, it codifies the ongoing oyster restoration program an authorizes a new submerged aquatic vegetation restoration program.

Mr. President, these measures would provide an important boost to our efforts to save the Chesapeake Bay and a blueprint for the course ahead. They are strongly supported by the Chesapeake Bay Commission, the Chesapeake Bay Foundation, and other organizations in the watershed. I ask unanimous consent that the text of the bills and supporting letters to printed in the Record. I urge my colleagues to join with us in supporting the measures and continue the momentum contributing to the improvement and enhancement of our Nation's most valuable and treasured natural resource.

Mr. President, I'm pleased to join my colleagues to introduce the No Child Left Behind Improvement Act. Our goal is to chart a better course for bringing the reforms under the law to all students across the country.

I was proud to stand with President Bush in January 2002 as he signed the No Child Left Behind Act into law. At that time, Republicans and Democrats came together to recognize the need to create a strong education system where every child attends a good school with a good teacher. Together, we recognized the importance of achieving that goal for the future of our democracy, economy, and national defense.

In drafting the No Child Left Behind Act in a bipartisan manner, we made great progress from the days when Democrats and Republicans were light years apart on school reform, with some trying to abolish the U.S. Department of Education and privatize our public schools.

No Child Left Behind made improving our public schools a national priority. It laid the cornerstone for a solid accountability system in every State. It called for high academic standards in reading, math, and science, and high-quality tests to measure progress toward those standards. For the first time, it placed our low-income children, children with disabilities, minority children, and English language learners at the top of the school reform agenda. No longer would their needs be hidden, overlooked, or ignored.

It also provided the building blocks for quality in all schools. A fully-qualified teacher in every classroom and better teacher training to make it happen. More after-school tutoring and supplemental services to help students with the greatest needs. Special programs for English language learners. Expanded support for reading in early grades. School report cards to provide information to parents and motivate them to be part of their children's education.

No Child Left Behind promised a great deal to our students and to their families. It's still the right promise. But it hasn't been kept.

Since the law passed, the country has seen the promise of funding No Child Left Behind flagrantly broken by the Bush administration, time and time again. President Bush proposed to cut funding for the law by $90 million just 1 month after signing the bill. His next education budget cut funding by far more--$1.2 billion.

Today, he's leaving 4.6 million children behind, and he's underfunding the law by $9.4 billion. At the same time, President Bush proposes to give tax breaks for the top 1 percent of Americans that total five times the funds promised but never delivered under the No Child Left Behind Act.

Despite these broken promises, our schools are trying to do their part. They've been asked to help all students reach proficiency, and they are responding. Teachers and other school professionals are beginning the hard work of tackling disparities in student achievement, and putting into place the curriculum needed to turn-around thousands of schools that have been identified as needing improvement.

School leaders are struggling to respond to the challenges of providing more highly qualified teachers, supplemental services, and after-school programs in school districts. They're laboring hard in their work to implement the No Child Left Behind Act and bring the promise of true reform to more children and their parents.

The work of school reform is not easy, and schools are struggling to succeed under No Child Left Behind. But on top of the broken promise to provide schools the resources they need to get the job done right, the administration has undermined the efforts of schools to comply with the law, and crippled reforms through its ineffective implementation effort.

Since No Child Left Behind passed, the Department of Education's track record in issuing basic guidance under the law been mired in delay. Final accountability guidelines for children with special needs and limited English

proficient children were announced 2 years after the law was enacted, and long after the law's accountability requirements were already in place for schools.

The administration has abandoned requirements to measure adequately the progress of English language learners in a valid and reliable way. They've suggested to States that they don't have to bother to develop native language assessments, and they've done nothing to help improve assessments for children with disabilities.

They've ignored standards for supplemental service providers, and failed to enforce the civil rights protections that are so essential to providing all children fair access to such services. Families are relying on tutoring and extra support to help their children. But the administration's guidance actually prohibits States from requiring high standards for that supplemental support. A highly qualified teacher in every classroom is good policy. Why shouldn't the same apply for supplemental services?

The administration's ham-handed implementation of public school choice has ignored questions of capacity in school districts with overcrowded classrooms.

And their weakened regulations undermine protections against high dropout rates--especially for low-income and minority students. Without information and reporting of those rates for each subgroup of children, the public won't have a complete picture of how children are succeeding.

It's time for the administration to correct these problems and do their part to improve implementation of the No Child Left Behind Act.

The bill that I'm introducing today gets these reforms on track. It will help keep the promise of public school choice, promote quality and access in supplemental services, provide for better assessments for children, and ensure better reporting by schools and states of graduation and dropout rates so that children don't fall through the cracks.

It's important to acknowledge what this bill does not do. It does not make fundamental changes to the requirements under No Child Left Behind. Those reforms are essential to improving our public schools. Every child deserves a chance to learn in a good school, and that chance depends on whether we succeed in implementing the law.

The No Child Left Behind Improvement Act will ensure that school districts consider health and safety codes as they draw up their plans for providing public school choice to students, consistent with the law. In order to ensure that public school choice actually helps children succeed educationally, we must provide an environment that is safe and conducive to their learning--not overcrowded.

It will provide better access to quality supplemental services for eligible students, and ensure full enforcement of civil rights protections under those provisions. The administration's policy of relaxed enforcement in this area allows some private providers off-the- hook from serving children that need the most help. That's wrong.

All students should have a fair chance to choose a supplemental service provider that meets their needs. Limited English proficient children and children with disabilities are often those students that need the most extra help and assistance in our public schools, and this bill would ensure that each State select some providers with the skills to serve those populations.

This bill will also better enable teachers and para-professionals to meet the required standards for teacher quality under the law. A highly qualified teacher is the single most important factor in improving student achievement, and the No Child Left Behind Act requires that every classroom have a qualified teacher by 2006.

We must provide for a system that ensures all teachers have the opportunity to meet that goal. The No Child Left Behind Act includes an alternate standard for veteran teachers to demonstrate their competence and be counted as highly qualified in the subject matter that they teach. This bill ensures that every State develop and implement that standard under the law, and that every state provide para-professionals with the opportunities provided under No Child Left Behind to demonstrate their competence.

Fifteen States have not yet developed or applied standards for veteran teachers. We must do better especially for the 67 percent of all public school teachers that have been teaching for more than 5 years.

And finally, for No Child Left Behind's accountability provisions to be useful, they must be accurate. We need accurate determinations of whether schools are making progress.

The Department's delay in issuing adequate accountability rules for counting children with disabilities and limited English proficient children has created unnecessary confusion, caused a potential mislabeling of schools, and misdirected resources from the schools and students who actually need them. The Department should apply those regulations retroactively, so that schools may be judged on the same standards for the past year as they will be in the future, not by different criteria for different years. In June, I introduced a bill-- The No Child Left Behind Fairness Act--to accomplish that goal. The bill that I'm introducing today also includes those requirements.

We're at an important crossroads in reforming our public schools. Schools are hurting, crippled by shrinking budgets and a broken promise of funding under the law. The ineffective track record of this administration in implementing No Child Left Behind largely has contributed to their problems and frustrations.

We must do better. Turning our back on the reforms in the No Child Left Behind Act is no solution. Neither is turning our back on public education. I urge my colleagues to act to ensure that the promise of the essential reforms under No Child Left Behind are realized. Our students and families deserve no less.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, today I am introducing a package of targeted, affordable tax relief provisions designed to help the Nation's small businesses during this time of economic stagnation. After the Easter recess, I know that the Finance Committee will be marking up a wide-ranging tax bill whose ultimate size is yet to be determined. I also know, however, that few of the proposals offered by the President will truly stimulate the economy or help the millions of struggling small businesses. Instead, the Bush tax proposal will reward the richest among us and pass the bill to our children. We can and must do better.

As the Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I have drafted legislation that will truly help small businesses and the Nation. It is a tax proposal with meaningful, affordable reforms that will make a difference without sticking our kids with a huge bill. I hope that all of part of this legislation can be incorporated into a Senate economic stimulus package. I have titled the bill that I am introducing today ``The Affordable Small Business Stimulus and Simplification Act of 2003,'' and it builds upon a bill that I introduced in the 107th Congress.

I call my bill an ``affordable'' stimulus package for small business because it targets the policies that can make the biggest difference and uses our limited resources as wisely and efficiently as possible. It does not include everything that I would like to do for small business, but it includes enough to help stimulate this essential component of our economy. Moreover, the bill will help address the tax complexity concerns of small businesses because it includes the Single Point Tax Filing Act that has passed the Senate on two previous occasions and a new standard deduction that will benefit millions of small businesses.

Let me briefly explain the contents of my bill.

First, my bill increases the expensing limitation for small businesses. It raises it to $35,000, rising to $40,000 in 2008, and it increases the phase-out level, above which expensing is not allowed, to $350,000, rising to $400,000 in 2008. I know that others have proposed raising this limit as high as $75,000, but such an increase is simply unaffordable while we face huge budget deficits. Raising it to $35,000 now, rising to $40,000 in 2008, is a more responsible approach and will provide an immediate investment incentive to many small businesses.

Second, my bill creates a new standard deduction of $500 for sole proprietorships. This provision provides tax relief and real tax simplification to the smallest of small businesses because it would relieve these businesses of the paperwork burden of having to itemize the myriad of small expenses on IRS forms. Of course, businesses with expenses greater than $500 would retain the option of full itemization. But for the very smallest businesses, many of them home-based or part- time, this new provision will be a significant step towards tax simplification.

Third, the bill modifies and expands a provision that was signed into law in 1993 regarding new equity investments in small businesses' stock. Under my bill, new investments in companies with capitalization of up to $100 million at the time of investment will have a 75 percent capital gains exclusion if the investments are held at least four years. The exclusion for such investments will be 100 percent if they are made in a business involved in such critical technologies as transportation or homeland security, defense-related technologies, anti-terrorism, pollution control, energy efficiency, or waste management. The 100-percent exclusion would also be allowed for investments in specialized small business investment companies, or SSBICs, whose investments are made solely in disadvantaged small businesses. Both the 75 and 100 percent exclusion levels would be available for investments made by both individuals and corporations. In addition, the rollover period for such investments would be increased from 60 days to 180 days. The provision passed in 1993 was crafted too narrowly to stimulate substantial new investment. I hope that this new, expanded capital gains treatment will prompt new investments in small and entrepreneurial businesses.

Fourth, my bill recognizes that the current depreciation schedules for high-tech equipment and software are out of date, given how quickly such items become obsolete in our fast-changing economy. My bill would reduce the recovery period for computers or peripheral equipment from five years to three, and for software from three years to two. This change would be permanent.

Fifth, my bill would fix a problem with the tax deductibility of health insurance expenses for the self-employed. Under current law, these expenses are fully deductible in 2003 for the first time--but the Internal Revenue Code denies the deduction to taxpayers who are eligible to participate in another plan, such as their spouse's employer's plan. My bill would clarify that the deduction is denied only if the taxpayer actually participates in the other plan.

Sixth, to simplify tax filing, my bill would include the Single Point Tax Filing Act. This section would simplify the tax filing process for employers that choose to participate by allowing the Internal Revenue Service and State agencies to combine, on one form, both State and Federal employment tax returns. This provision has been passed by the Senate twice before, but has not yet become law. There is currently a demonstration project along these lines in Montana, which is working very well. I believe such authority should extend to all States.

Seventh, my bill clarifies that married couples who co-own a business can elect to be sole proprietors for purposes of filing their Federal income taxes. This provision aligns the law with the way many married couples actually do business. Under present law, married couples who co-own a business technically own that business as a partnership for Federal income tax purposes. This treatment carries with it all the complications of the partnership provisions of the Internal Revenue Code, including having to file partnership returns. But in reality, many married couples in this situation consider themselves sole proprietors and are incorrectly filing tax returns as such. While the IRS may not be strictly enforcing the law against these taxpayers, this technical non-compliance can cause trouble down the road. Upon divorce, for example, it may not be clear that the business had been jointly owned. This same ambiguity might complicate a spouse's ability to get the full Social Security and Medicare benefits to which they are entitled. My bill makes clear that for Federal income tax purposes, married couples who co-own a business can be treated as sole proprietors.

Eighth, my bill would extend the existing income averaging provisions to cover fishing as well as farming. In other words, the choice to average income from a farming trade or business under present law would be extended to cover income from the trade or business of fishing as well. Under my bill, a farmer or fisherman electing to average his or her income would owe the alternative minimum tax, AMT, only to the extent he or she would have owed AMT had averaging not been elected. This is an important change that will benefit not only people in my state, but also throughout New England, the Pacific Northwest, the Gulf of Mexico region, Alaska, and in other areas of the country where fishing is an important industry.

Finally, my bill would modify the tax treatment of investments in debenture small business investment companies, or SBICs, so they are less likely to create unrelated business taxable income, UBTI, liability. The current tax treatment of money borrowed from the government by a debenture SBIC creates taxable income for an otherwise tax-exempt investor, which makes it almost impossible to raise capital from these investors. Free to choose, tax-exempt investors opt to invest in venture capital funds that do not create any UBTI liability. Therefore, my bill would assure that money borrowed from the government by an SBIC does not subject tax-exempt investors to UBTI. In so doing, the bill would encourage greater investment in SBICs, which provide critically needed venture capital to emerging small businesses. These venture capital funds are sorely needed in today's stalled economy.

I believe that ``The Affordable Small Business Stimulus and Stimulus Act of 2003'' will provide a much-needed stimulus to small business in a way that we can afford, particularly if we can find offsets to pay for the bill. I look forward to working with the Chairman and Ranking Member of the Finance Committee to have some or all of its provisions enacted into law.

Mr. President, I request that the manager allot me 5 minutes.

I thank the Senator from Montana.

Amendment No. 1066

Mr. President, I would like to take this opportunity to explain amendment No. 1066, which is scheduled to be one of the amendments considered in this next block of amendments.

Mr. President, I am concerned that the prescription drug coverage included in S. 1 is not sufficient to fully meet the needs of our seniors and that those seniors who elect to participate in Part D and get this prescription drug benefit will be restricted from purchasing supplemental coverage.

The Kaiser Family Foundation estimates that in 2006--which is the year this legislation really takes effect, this benefit occurs--the average Medicare beneficiary will spend $3,160 per year on prescription drugs. Under the current plan, those individuals will have $1,700 that same year in out-of-pocket expenses in addition to the $420 they pay in Part D premiums. Therefore, the average Medicare beneficiary who elects Part D will have approximately $2,100 per year in out-of-pocket expenses. This translates, of course, into $175 a month. That is a significant expenditure for a lot of individuals and couples on a fixed income.

It would seem reasonable to allow these individuals who want to protect themselves against unpredictable and increasing prescription drug expenses to purchase supplemental insurance coverage that would allow additional prescription drugs to be purchased.

Medigap was designed to fill the gaps in Medicare. A sizable gap exists in the prescription drug benefit we are offering in this bill. Yet the current bill specifically prohibits seniors from filling that gap with a Medigap policy.

Section 103 of S. 1, which is the bill we are considering, explicitly prohibits people who elect Part D prescription drug coverage from purchasing additional prescription drug coverage as part of any Medigap plan.

Let me give you the quotation out of the bill. It says:

No Medicare supplemental policy that provides coverage of

expenses for prescription drugs may be sold, issued, or

renewed under this section to an individual who is enrolled

under Part D.

So you essentially have a choice: Am I going to enroll in this new Part D and get this benefit and therefore forego any Medigap policy or am I going to stay out?

We are telling seniors whose cost burden, on average, will be $2,100 a year, and 10 percent of whom are likely to have out-of-pocket expenses of $4,000 or more per year, they will not be allowed to seek additional prescription drug relief.

The amendment I am offering would give seniors the option of purchasing more prescription coverage as part of a comprehensive Medigap plan. The amendment calls on the National Association of Insurance Commissioners to devise two new Medigap plans that would each offer prescription drug coverage to beneficiaries who elect Part D.

There are currently 10 standard Medigap plans. They are designated A through J, and they offer insurance to seniors. Of those, plans H, I, and J offer prescription drug coverage in addition to Part A and Part B wraparounds. Of these, H and J are the most commonly elected plans.

Under S. 1, the way it now stands, seniors who elect Part D would no longer qualify for H, I, or J. However, if the amendment is adopted, the two new policies designed by the National Association of Insurance Commissioners would be similar to the current Medigap policies of H and J, but their prescription drug coverage would be tailored to wrap around the Part D coverage. So seniors who are currently H or J subscribers would have the option of electing Part D and still maintaining a Medigap plan similar to what they have now.

The amendment would give the National Association of Insurance Commissioners 18 months to develop and report back on these two new plans. In my view, it would be a substantial improvement to the current bill.

As I said, my amendment will give the National Association of Insurance Commissioners 18 months to develop and report back on two new plans. The NAIC is the appropriate body to develop these plans because they have a system already in place for doing so with appropriate representation from all interested and affected parties. The NAIC can best determine how the benefits proposed in this amendment can be designed in order to avoid over-utilization and to coordinate with the existing medigap benefit packages. They were the body employed to develop the current Medigap plans A through J and they are the body best equipped to develop these two new plans.

This amendment is similar to language already included in the House version of the bill and thus already has a great deal of support in the House of Representatives.

This amendment also provides a provision to stabilize the Medigap market

during this time of transition. The current bill states that seniors who are enrolled in H, I, or J at the time when they elect Part D will be displaced from their current Medigap plans and given open enrollment into any other Medigap plan A-G offered in their State. Our amendment will still guarantee them the option of enrolling in substitute coverage without the risk of discrimination based on age, health status, utilization, etc. However, our amendment will reduce the chaos of this transition time by keeping the majority of Medigap subscribers with their current carriers.

Let me explain. Beneficiaries displaced from H, I, or J will have the option of choosing any other Medigap plan--A-G--that their carrier offers or one of the two new plans. If their current carrier does not choose to offer one of the new plans then they will have the option of switching carriers in order to obtain a medigap policy that includes prescription coverage. Thus, the majority of seniors will be staying with their current carriers and thus, those carriers will be better able to predict the affect of this shift and better able to ease the transition for their subscribers.

This is a simple amendment that should elicit very little controversy. People may raise concerns because it will be difficult to construct a standardized wrap around benefit to compliment Part D when Part D is not standardized. But this is not a reason to deny people access to supplemental coverage. Rather, we are giving the NAIC 18 months to put together such a plan.

Consumer groups such as the Consumer Union and Medicare Advocacy support our amendment because it provides much needed additional coverage options for our Nation's seniors. Likewise, insurance carriers like it because it allows them to continue to provide a service that they have been providing up until this point and yet it does not force them to offer these new plans if they do not see them as viable. The cost of the amendment should be negligible as it is not adding any additional Government expenditure nor expediting a beneficiary's trip to the catastrophic threshold. This amendment simply gives seniors an opportunity to continue to seek the insurance industry an opportunity to meet the needs of our seniors not met by Medicare Part D.

Mr. President, I ask my colleagues to review this amendment before they vote. I think it is an excellent amendment.

I ask them to join me in supporting it.

I thank the Chair. Mr. President, I would like to make a couple comments before we begin voting.

This legislation is historic. It is incredibly important. It is the first reform in a major way to the Medicare Program since we wrote it over 35 years ago in 1965.

To get this legislation adopted by the Congress and signed into law by the President, there obviously has to be a great deal of work, a great deal of legitimate compromise among the various parties that have put this package together. That is what this bill does.

There are some Members of Congress who argue the Federal Government should do nothing with regard to Medicare--that the private sector should do everything and that the Federal Government should do nothing. There are others, on the other hand, who take the position that with regard to Medicare the Federal Government should do everything and the private sector should do nothing.

What we have been able to put together, under the leadership of the chairman and ranking member and many others who have worked so hard, is a compromise that says let's combine the best of what the Government can do with the best of what the private sector can do and put that package together. That is why we have gotten to the point we are today.

We saw a bill come out of the Senate Finance Committee in a bipartisan fashion with 16 votes in favor; only five votes against it. I predict when the final vote comes on this bill, we will see the same type of bipartisan representation with a significant number, maybe over three-fourths of the Senate saying, yes, this has sufficient improvement and reform in it for me to support it.

It has enough Government involvement to make sure it is paid for, enough Government involvement to make sure it is run properly but not micromanaged, and it has enough private sector involvement to deliver, for the very first time, through a competitive private delivery system, prescription drugs for all seniors regardless of where they are or in what program they happen to be.

It also says the private sector will offer, for the first time on a voluntary basis, to seniors who want to move into a new system a private delivery system that will cover drugs, will cover hospitals, and will also cover physician charges under the program. This is a historic opportunity to combine the best of what Government can do with the best of what the private sector can do.

There is going to be a very important amendment offered by Chairman Grassley and the ranking member, Senator Baucus. Because we were able to get a score that said there is $12 billion extra money available, the question then became, How do we divide it? I never thought we would have such a difficult time spending money. We normally get into fights when we do not have enough money. Lo and behold, we found there was $12 billion in extra funds.

The question then for the Senate is how are we going to allocate that money? Senator Baucus and Senator Grassley, working with Senator Kennedy and others, came up with a plan that is fair.

It says to the Republican Members: Take half of it, and they want to utilize it for a demonstration program to determine whether PPOs or the provider networks in the private sector will work. We are not certain. We think they will. But let's do a test. And if it costs more, there will be $6 billion available to pay for it starting in the year 2009. That is what many Republicans thought was the right way to use half of the money.

On the other hand, Members on my side said, We need to do more for traditional fee-for-service. If they are going to experiment with the preferred providers in the private sector, we want to also know what will happen if we are able to put in more money for preventive health care and for people who want to stay in the old program.

What Senator Baucus and Senator Grassley did, working with Senator Kennedy, was to say to people who are inclined to the Democratic perspective, we are going to let you use $6 billion for people who want to stay in the old program. Here is what you can do with it: You can use the money to provide enhanced benefits for people who stay in traditional Medicare. What we mean by that is to give them additional care for chronic care coordination, for the chronically ill, to coordinate better how they are getting their health care.

We have more money for disease management, which is incredibly important. When we are talking about saving money and giving people a better quality of life; disease management is important. Also, they can use the money for other benefits and services that the Secretary determines will improve preventive health care for the beneficiaries.

What we have crafted is an effort to take the extra money and allow for a legitimate experiment, a legitimate test of whether the preferred provider system will cost less money--I think it will; they can provide services that I think are better and at a better price, but we do not know that for sure, so let's do some testing on it in certain regions of the country. If it saves money, hallelujah for everybody. But if it costs money, they will have $6 billion to help pay for those extra charges.

The Democrats, on the other hand, have the provisions to have $6 billion over the period in order to provide disease management and preventive health care services in the traditional Medicare Program. That is as fair as it can be in a divided Senate. If one side had their way, they would do it all with the preferred providers. If our side perhaps had their will, it would provide all the money to be put back in traditional Medicare, but we all know in a divided Senate that is not possible.

So the best possible compromise has been crafted by the chairman, Senator Grassley; by the ranking member, Senator Baucus; and by Senator Kennedy's involvement and many others who have worked on this issue.

This is a good amendment. It is an important amendment. We are on the edge of an historic day in being able to enact real Medicare reform with prescription drugs for all of our Nation's seniors. We cannot let that goal be lost while we fight over how to divide extra funds. I think this division is as fair as it possibly can be, and I urge all of our Members to vote for it. In fact, I think the vote should be approximately like it came out in the Finance Committee. We lost a few what I would say were on the left, we lost a few what I would say were on the right, of the political spectrum. But in the end the vast majority supported this legislation in the committee and will do so on the Senate floor.

I certainly ask them to support the Grassley-Baucus amendment when it is voted on as well.

I yield the floor.