Home Office Tax Deduction Simplification and Improvement Act of 2009

Mr. President, President Obama, in his press briefing this past Tuesday, June 23, 2009, made the following statement regarding his assessment of the first four months of the American Recovery and Reinvestment Act: ``I am not satisfied with the progress that we've made.'' I could not agree more with President Obama's assessment. Thus far, the $787 billion American Recovery and Reinvestment Act has fallen short on virtually every one of its advertised effects.

In the abbreviated debate leading up to the consideration of this bill, we constantly heard the mantra from my friends on the other side: JOBS, JOBS, JOBS! This stimulus bill was supposed to create jobs, jobs, jobs, but in the four months since the bill's passage, there are still no jobs in sight.

The architects of this bill made several bold claims in projecting the job effects of the $787 billion stimulus bill. First, they said that its passage would keep the unemployment rate from exceeding 8 percent. Second, they said it was going to create or save 3 to 4 million jobs. And third, they said that 90 percent of the new jobs created would be in the private sector.

So far, in all three of these areas, the actual effects of the stimulus bill have not lived up to the hype. Let us examine each of these areas one by one.

First, the stimulus bill was supposed to keep unemployment at or below 8 percent. In fact, the administration projected that in the absence of stimulus, the unemployment rate would peak at around 8.8 percent. However, four months into this program, the unemployment rate stands at 9.4 percent and rising--higher than the administration projected it would be in the absence of stimulus.

Just listen to President Obama's comments from his June 23rd press briefing to see which direction the unemployment rate is headed: ``I think it's pretty clear now that unemployment will end up going over 10 percent, if you just look at the pattern, because of the fact that even after employers and businesses start investing again and start hiring again, typically it takes a while for that employment number to catch up with economic recovery. And we're still not at actual recovery yet. So I anticipate that this is going to be a difficult, difficult year, a difficult period.''

When asked how high he thought the unemployment rate would go, President Obama responded, ``I am not suggesting that I have a crystal ball. Since you just threw back at us our last prognosis, let's not engage in another one.'' Once again, I have to agree with President Obama's assessment.

As the unemployment rate continues to go up, that means job numbers continue to go down, which brings me to my next point: The administration projected that the stimulus bill would create--or save-- between 3 and 4 million jobs by the end of 2010. While we've got a long way to go before the end of 2010, the prospects of the stimulus bill living up to this job creation estimate seem very unlikely. Before we look at the actual job numbers for the past few months from the Department of Labor, let me discuss the source of the administration's projections.

In January, Christina Romer, who is now Chair of the Council of Economic Advisers, and Jared Bernstein, who is now the Chief Economist for the Vice President, released a 14-page paper titled ``The Job Impact of the American Recovery and Reinvestment Act.''

In this document, Romer and Bernstein repeatedly asserted that a package of the size discussed by the President-Elect would be expected to create between three and four million jobs by the end of 2010, which would more than meet the President-Elect's goal of creating or saving 3 million jobs by the end of 2010. In a follow-up report in May, the Council of Economic Advisers attempted to explain how the administration planned on measuring the number of jobs created or saved by the stimulus. This document articulated that all recipients of stimulus funds for government investment will be required to provide ``recipient reports'' estimating the number of jobs retained or created directly by the funds.

Then, to arrive at the total estimate of jobs created or saved by the stimulus, the job numbers from the recipient reports will be added to the administration's estimate of jobs created or saved through tax cuts, State fiscal relief and transfer payments. These estimates will be derived from administration-produced multipliers and macro-economic modeling.

Sounds pretty simple, don't you think? Unfortunately, there are some problems.

The first problem is that the most accurate part of these job estimates will be from the recipient reports, and since the stimulus bill included approximately $271 billion in government investment spending, these reporting requirements cover just over a third of the $787 billion of stimulus funding.

While the job estimates from these recipient reports should be an accurate representation of actual jobs created by the stimulus, the administration even admits that ``there will likely be inconsistencies and measurement error across the individual reports.''

This leads us to the second problem: for the other \2/3\ of the bill, in the administration's own words, ``There is no mechanism available for collecting data on actual job creation from these parts of the Act.'' So, for \2/3\ of the bill, the job estimates are basically going to be guesswork from the administration based on mathematical formulas.

Since President Obama's ``First 100 Days'' address on April 29, 2009, we have heard plenty about the 150,000 jobs that have been created or saved so far by the stimulus.

As I have pointed out, it is impossible to verify these numbers with any degree of certainty, and the administration can not even give an estimate of how many of the 150,000 jobs were created and how many were saved.

What we can verify are the actual job numbers produced on a monthly basis by the Department of Labor. According to the Department of Labor, in the 3 full months March, April, and May, following the enactment of the stimulus bill, the U.S. economy has lost over 1.5 million jobs. In the first 5 months of 2009, the U.S. economy has lost 2.9 million jobs. These are the painful numbers that really matter.

As Jared Bernstein, Chief Economist for the Vice President, said on June 8, 2009, ``Most importantly from the perspective of American families, the nation's employers are still shedding jobs on net.''

So, the advertised effect of the stimulus on unemployment was clearly wrong, and the job claims resulting from the stimulus are unverifiable. Now, how about the claim suggesting that 90 percent of the jobs created by the stimulus will be in the private sector?

To be clear, this claim was first made in Romer and Bernstein's January report, and the President himself has repeated this assertion. Unfortunately, this projection--like the first two--is missing the mark by a long shot.

Let's look at the actual data from the Department of Labor once again. In the first three months since the stimulus bill has been the law of the land, the private sector has lost nearly 1.6 million jobs. In those same 3 months, government payrolls have actually expanded by 81,000 jobs. Similarly, in the first 5 months of 2009, while the private sector has lost over 3 million jobs, the government has gained 96,000 jobs.

While I am encouraged to see at least one sector of the economy experiencing job gains, I don't expect that the administration's projection of 90 percent of stimulus jobs being in the private sector will be realized. The administration has promised that 600,000 additional public sector jobs will be created or saved this summer. While an increase of 600,000 government jobs would certainly be a positive development if it comes to pass, it does raise concerns as to whether the government will be the only winner from the stimulus bill.

My point today, Mr. President, is not to berate the administration or those who voted for this bill.

My point is, first, to note the conspicuous absence of job gains in our economy following the stimulus, and second, to bring our focus back to the source of 70 percent of net new jobs over the past decade--the engine that drives the U.S. economy. Of course, I am talking about America's small businesses.

America's small businesses have been suffering during this recession. If you go back to your States frequently, like I do, you'll hear about it directly. A few months ago, Senators Landrieu and Snowe held a hearing on the credit crunch hitting small business. They found that big banks have been cracking down on lending to small businesses.

Another very good source of answers about the environment of small business is found in the monthly survey of small business. This survey is published by the National Federation of Independent Business ``NFIB''.

NFIB is the largest small business organization. NFIB has been conducting these surveys for 35 years.

NFIB's membership includes hundreds of thousands of small businesses all across America. You can find the survey on NFIB's website at http:/ /www.nfib.com/Portals/0/PDF/sbet/sbet200906.pdf. I would encourage every member to check out the June 2009 survey.

The survey shows some extremely disturbing trends. On credit availability, small businesses are getting squeezed very hard. The availability of loans has fallen off a cliff since late 2007 and is at its lowest point since the recession period of 1980 to 1982.

This credit crunch and other factors have contributed to NFIB's index of small business optimism falling well below average. According to the survey, small business owners have become extremely pessimistic in the last couple of years. What you see here is the attitude of the decision makers in small business America.

Those are the decision makers for businesses that President Obama and Congress agree are the businesses most likely to grow or contract jobs. This data should concern every policy maker in this town.

While those two sets of data are bad, it doesn't get any better when you look at small business hiring plans. Another question on the survey asks the small business owner whether he or she plans to expand or contract employment over the next three months. The survey results show small business activity contracting tremendously, and the overall small business employment numbers tell the same story.

I must say that the President's recent efforts to increase lending to the small business sector are commendable. The center piece of his small business plan will allow the federal government to spend up to $25 billion to purchase the small-business loans that are now hindering community banks and lenders. Unfortunately, that is a drop in a very empty bucket.

Remember, colleagues, that small business accounts for about half of the private sector.

Moreover, the positives that will come to small businesses from this relatively small package of loans--which will ultimately have to be paid back--will be heavily outweighed by the negative impact of the President's proposed tax increases. Helping small businesses get loans just to take that money back in the form of tax hikes is not wise.

I now want to turn to those aforementioned tax hikes on small businesses that President Obama and my colleagues on the other side of the aisle have proposed. I certainly understand that small business is vital to the health of our economy. The President and I agree that 70 percent of new private sector jobs are created by small businesses.

However, where we differ is that I believe small businesses' taxes should be lowered, not raised, to get our economy back on track. In 2001 and 2003, Congress enacted bipartisan tax relief designed to trigger economic growth and create jobs by reducing the tax burden on individuals and small businesses. This included an across-the-board income tax reduction, which reduced marginal tax rates for income earners of all levels, a reduction of the top dividends and capital gains tax rate to 15 percent, and a gradual phaseout of the estate tax.

Unfortunately, like many of the other provisions enacted in 2001 and 2003, these tax relief measures are scheduled to expire at the end of 2010.

Some have referred to this bipartisan tax relief as ``the Bush tax cuts for the wealthy'' and have suggested that the tax relief provided for higher-income earners should be allowed to expire. However, this tax relief was bipartisan and provides tax relief for all taxpayers. The President and my colleagues on the other side of the aisle have proposed increasing the top two marginal tax rates from 33 percent and 35 percent to 36 percent and 39.6 percent, respectively.

They have also proposed increasing the tax rates on capital gains and dividends to 20 percent, and providing for an estate tax rate as high as 45 percent and an exemption amount of $3.5 million.

Also, the President has called for fully reinstating the personal exemption phaseout, or PEP for short, and

the limitation on itemized deductions, which is known as Pease. Under the 2001 tax law, PEP and Pease are scheduled to be completely phased out in 2010. However, like other provisions in the law, PEP and Pease are scheduled to come back in full force in 2011 should Congress fail to take further action.

With PEP and Pease fully reinstated, individuals in the top two rates could see their marginal effective tax rate increased by 20 percent or more. For example, a family of four that is in the 33 percent tax bracket in 2010 could pay a marginal effective tax-rate of 41 percent after 2010--or even more if they had more children--because of PEP and Pease.

Some of my colleagues on the other side of the aisle have defended this proposal by claiming they will only raise taxes on ``wealthy'' taxpayers who make over $200,000 a year. For the vast majority of people who earn less than $200,000, raising taxes on higher earners might not sound so bad.

However, this means that many small businesses will be hit with a higher tax bill. These small businesses happen to at least 70 percent of all new private sector jobs in the U.S.

These small businesses that are taxed as sole proprietorships, S corporations, and partnerships--including LLCs--whose owners make over $200,000, or $250,000 if married, would get hit with the President's proposal to raise the top two marginal tax rates.

In addition, there are just under 2 million C corporations that are not publicly traded, and all C corporations are subject to double taxation. To the extent these C corporations' owners that make over $200,000, or $250,000 if married, pay themselves a salary, they would get hit with the tax increase on the top two marginal tax rates proposed by the President.

Also, any owners of C corporations that receive dividends or realize capital gains and make over $200,000, or $250,000 if married, would pay a 20 percent rate on these dividends and capital gains after 2010 under the President's tax hike proposals, instead of paying the current law rate of 15 percent.

According to NFIB survey data, 50 percent of owners of small businesses that employ 20-249 workers would fall in the top two brackets. According to the Small Business Administration, about \2/3\ of the Nation's small business workers are employed by small businesses with 20-500 employees.

Do we really want to raise taxes on these small businesses that create new jobs and employ \2/3\ of all small business workers?

With these small businesses already suffering from the credit crunch, do we really think it's wise to hit them with the double-whammy of a 20 percent increase in their marginal tax rates?

Newly developed data from the Joint Committee on Taxation demonstrates that 55 percent of the tax from the higher rates will be borne by small business owners with income over $250,000. This is a conservative number, because it doesn't include flow-through business owners making between $200,000 and $250,000 that will also be hit with the Budget's proposed tax hikes.

If the proponents of the marginal rate increase on small business owners agree that a 20 percent tax increase for half of the small businesses that employ two-thirds of all small business workers is not wise, then they should either oppose these tax increases, or present data that show a different result.

I will also fight for a lower estate tax rate and a higher estate tax exemption amount to protect successful small businesses and farmers. In a time when many businesses are struggling to stay afloat, it does not make sense to impose additional burdens on them by raising their taxes.

Odds are, they will cut spending. They will cancel orders for new equipment, cut health insurance for their employees, stop hiring, and lay people off. Instead of seeking to raise taxes on those who create jobs in our economy, policies need to focus on reducing excessive tax and regulatory barriers that stand in the way of small businesses and the private sector making investments, expanding production, and creating sustainable jobs.

As the current ranking member of the tax writing Finance Committee, you can be sure that I will continue to fight to prevent a dramatic tax increase on our nation's job engine--the small businesses of America. This includes working to protect small businesses from higher marginal tax rates, an increase in the capital gains and dividends tax rate, and an increase in the unfair estate tax rate that will penalize the success of small businesses and farmers who would like to pass on their gains to the next generation.

In fact, today I have introduced a bill to lower taxes on these job- creating small businesses.

My bill contains a number of provisions that will leave more money in the hands of these small businesses so that these businesses can hire more workers, continue to pay the salaries of their current employees, and make additional investments in these businesses.

For instance, my bill would increase the amount of capital expenditures that small businesses can expense from $250,000 to $500,000. Also, my bill would allow more small C corporations to benefit from the lower graduated tax rates for smaller C corporations.

Another provision takes the general business credits, which are listed in section 38, out of the Alternative Minimum Tax, AMT, for those sole proprietorships, flow-throughs and non-publicly traded C- corps with 50 million or less in annual gross receipts. This provision amends section 39 to extend the 1-year carryback for general business credits to a 5-year carryback. This applies to general business credits for those sole proprietorships, flow-through entities and non-publicly traded C-corps with 50 million or less in annual gross receipts.

Another provision in my bill amends section 199 of the Internal Revenue Code, which contains the deduction for manufacturing, to provide a 20 percent deduction for flow-through business income for all small businesses, which are defined as flow-through entities with 50 million or less in annual gross receipts. Another provision in my bill deals with the situation where a C corporation becomes an S corporation. Under current law, there is no tax on built-in gains of assets within a C corporation that converts to an S corporation if those assets with built-in gain are held for 10 years by the S corporation. The stimulus bill reduced this 10-year period down to 7 years for sales of assets with built-in gain that occur within 2009 and 2010.

My provision reduces this time period down to 5 years for all S corporations that have converted from a C corporation.

Another provision in my bill expands the net operating loss provision contained in the stimulus bill. Current law provides that net operating losses from any size business may be carried back 2 taxable years before the year that the loss arises and carried forward 20 years. The stimulus bill amended the carryback provision by expanding the carryback from 2 years to 5 years if a small business had gross receipts of $15 million or less.

This provision expands that $15 million gross receipt requirement to $50 million in gross receipts so that more small businesses can qualify for this benefit.

Another provision in my bill amends section 1202 of the Internal Revenue Code to eliminate the tax on capital gains for certain start-up C corporations. The stimulus bill reduced the capital gains tax to approximately 7 percent on stock qualifying under 1202. However, President Obama has called for eliminating, not simply reducing, the tax on capital gains for these start-up businesses, and that is exactly what my provision would do.

The final provision in my bill permits a deduction for payments made under the Self-Employment Contribution Act, or SECA, at one-hundred percent of health insurance premiums that are paid by those who are self-employed.

We all want to see the job numbers from the Department of Labor moving in a positive direction. We all want to see the unemployment rate plummet. I firmly believe that the best way for us to do that is to prime the job-creating engine of our economy, which is small businesses. Furthermore, increasing taxes on small businesses as President Obama has proposed will destroy even more jobs.

My small business bill, if enacted, will lead to many new jobs. As opposed

to the jobs President Obama argues that the stimulus bill has saved while our economy has been hemorrhaging jobs, my bill will create countable, verifiable, private sector jobs that will put people to work and get the economy moving in the right direction again.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to join my fellow New Englander, Senator Susan Collins of Maine, in introducing the Lyme and Tick-Borne Disease Prevention, Education, and Research Act of 2009.

As families in New England look forward to outdoor fun this summer-- and as families around the country look forward to vacationing in New England--they might not be thinking about the risks and dangers associated with hiking, camping, and other outdoor activities.

But every year, tens of thousands of Americans working or playing outdoors are bitten by ticks.

For most, a tick bite is nothing more than a minor annoyance. But approximately 20,000 Americans contract Lyme disease each year, and the numbers are rising. And because Lyme disease is difficult to diagnose, many experts believe the true number of cases each year could be as much as 10 or 12 times the reported number. Worst of all, it is our children who are most at risk.

Lyme disease was first described in my home State of Connecticut, and we still have the unfortunate distinction of being ten times more likely to contract Lyme disease than the rest of the Nation. But the Centers for Disease Control and Prevention has received reports of new cases from 46 States and the District of Columbia. According to some estimates, Lyme disease costs our Nation more than $2 billion in medical costs each year.

Lyme disease can affect every part of the body. Tens of thousands of Americans suffer through pain, severe fatigue, sleep disturbance, and cognitive difficulties, among many other symptoms. Some of these victims are able to lead normal lives, finding ways to cope with the disease. But many more find the disease significantly disrupts their lives, preventing them from everyday experiences that we all take for granted.

The legislation we offer today directs the Secretary of Health and Human Services to establish a Tick-Borne Diseases Advisory Committee at HHS to coordinate efforts and improve communication between the federal government, medical experts, physicians, and the public.

It will improve diagnostic efforts, establish a national clearinghouse for research and reporting, and require that scientific viewpoints on this often-frustrating disease be disseminated in a balanced way.

It contains tools for researchers, physicians, and the public to improve awareness and treatment.

Finally, it requires the Secretary to prepare and submit to Congress an annual report tracking developments related to Lyme disease, its spread, its treatment, and its impact on families in Connecticut and around the country.

Lyme disease is a frustrating puzzle for physicians, a burden on our Nation's health care system, and most importantly, a threat to American families enjoying our beautiful outdoor spaces.

I want to specifically mention and thank the organization from my home State of Connecticut that worked closely with me to develop this legislation, Time for Lyme. The co-presidents and founders of Time for Lyme, Diane Blanchard and Debbie Siciliano, are tireless advocates for the patients struggling with chronic Lyme disease. This is not their job. They are parents whose children suffer from this disease. They work to find time in their busy schedules to make a difference. This is their mission and they give me hope that we can get this done.

I also want to thank my good friend, Senator Collins, for her leadership on this issue. I want to thank Senators Reed, Lieberman, Cardin, and Whitehouse for their support for this bill. Whether it is fishing on the Housatonic River or exploring Gillette Castle State Park near my home in East Haddam, Connecticut families enjoy a variety of outdoor activities.

But Lyme disease remains a persistent and dangerous risk for my constituents, for Senator Collins's constituents, and for those across the country. With leadership from this body and better coordination from federal agencies, we can more effectively combat this disease, better protect our children and families, and make our outdoor spaces safer places to work and play.

I urge my colleagues to join Senator Collins and myself in support of this legislation and thank them kindly for their consideration.

Mr. President, I rise today to introduce a piece of legislation--and not just any old piece of legislation, I might add, because this organization I am about to talk about had as much to do with the formation of who I am as my family did: the Peace Corps Improvement and Expansion Act of 2009.

I would point out that some 35 years ago a young man from Massachusetts and an equally young man from Connecticut were elected to the House of Representatives. A fellow by the name of Paul Tsongas and myself were the first two former Peace Corps volunteers to be elected to the Congress. Paul Tsongas went on to be elected to the Senate, I think, in 1978. He is no longer with us. He died tragically a number of years ago. His wife Niki is now a Member of the House of Representatives from Massachusetts.

Paul Tsongas and I were great friends and enjoyed sharing stories with each other for many years about our respective Peace Corps experiences.

Paul Tsongas served in Ethiopia--one of the earliest programs, if not the earliest program, in that country. I served in the Dominican Republic from 1966 through 1968 as a Peace Corps volunteer up in the mountains of that country, not far from the Haitian border. The Peace Corps experience for me was as formative, as I said at the outset of these remarks, as anything else in my life, with the exception of my own family; growing up with wonderful five brothers and sisters in Connecticut and a family who was deeply involved in public service.

The Peace Corps experience was formative, and so over the years, I have expressed a great deal of interest in the organization and the various administrations that have served in Washington since the late 1970s through the 1980s and 1990s and this decade. So my interest in the organization is strong.

The contribution of the Peace Corps has been remarkable over the years. It is one of the few Federal agencies that enjoys almost universal support from the American public. It has had greater moments of celebration and public awareness than at others, but it has been consistent in the minds of most Americans. This organization sends mostly younger Americans, but not always younger Americans, to serve in underprivileged nations, nations that are struggling, including Third World nations, to make a difference in the lives of others. It has been a unique contribution to the world.

There are many other volunteer organizations--some in our own country, some in other nations--but I think the Peace Corps holds a special place in the minds not only of our own fellow citizenry but also millions of people around the world who have come to know those Peace Corps volunteers--as I said, mostly younger people but not always younger people--who serve and spend 2 years working with them in their villages or urban areas, not only making a difference in their daily lives but also getting to know them, getting to know us. People who would never have the chance to come to America got to know America because they got to know that young American who was learning their language and spending time with them and making a contribution to improve their lives.

Well, for 48 years, the Peace Corps has stood as a uniquely American institution. I know other nations make contributions. This is not a unique idea for ourselves. But what other great nation would send its people abroad not to extend its power or intimidate its adversaries, not to kill or be killed, but to dig, to teach, to empower, and ask for nothing in return. For 48 years, those men and women--180,000 of us-- have returned, as stronger, wiser, and more inspired people prepared to live our American lives of service.

For a half century, the Peace Corps has shaped our lives and the identity of all Americans; who we are as a people and what we hope to achieve, not only for our own Nation but also for others who share this planet with us.

Today I rise to offer a piece of legislation for one simple reason, Mr. President: I want the Peace Corps to continue playing that role that it has for the last half century for another half century to come. But before we consider how the Peace Corps can grow going forward, I think it might be worth remembering just how it came into being. Where did it all start? How was it created?

Like an awful lot of groundbreaking ideas, Mr. President, the Peace Corps might not have survived a board meeting or a subcommittee hearing where the idea was first proposed. It was a wild notion in many ways, so breathtakingly outrageous that it could only have been born out of idealism, youthful energy, and--perhaps a key element--too much caffeine. For you see, the Peace Corps was born at 2 in the morning.

It was October 4, 1960, and a then young Senator from Massachusetts by the name of John F. Kennedy was running for the Presidency. He was running hours late, as candidates often do, for a campaign stop at the University of Michigan in Ann Arbor. John Kennedy assumed that most of the crowd would have gone home by that late hour. But when he arrived at the student union, at the campus in Ann Arbor, he found 10,000 students waiting outside in the frigid dark to greet him. As public officials and holders of elective office, I think we can sympathize with then-Senator Kennedy at that hour, having endured months of late nights on a campaign trail, uncomfortable beds, and a bad diet along the way. I suspect he might have been sorely tempted at that late hour--as all of us have been from time to time--to offer a perfunctory thank-you to the Michigan students for hanging around all that long, recite a memorized stump speech--having given it on countless occasions, he would know it from memory--and send them home and retire himself.

But something besides a chill was in the air that night in Ann Arbor. Floodlit and shivering, the crowd began to chant his name as he climbed the steps to the student union, and Senator John Kennedy realized this was something special. He realized he owed these students more than just that perfunctory set of remarks. So at 1:30 or 2:00 in the morning, on a frigid night in Michigan, he challenged them as a candidate, as a United States Senator, and he asked:

How many of you, who are going to be doctors, are willing

to spend your days in Ghana? Technicians or engineers, how

many of you are willing to work in the Foreign Service and

spend your lives traveling around the world?

I believe, Mr. President, that challenge is the Peace Corps' founding document. It didn't begin with a white paper or a TV ad. It began with a simple question.

In the days that followed the Kennedy rally at the student union in Michigan, students drafted a petition, circulating it to colleges all across the State, and within a couple of weeks across the country, presenting several scrolls ultimately to John Fitzgerald Kennedy containing thousands upon thousands upon thousands of names. Some 30,000 letters flooded his office asking him to continue with this idea.

So I think it is fair to say, Mr. President, the answer to that question--are you willing to serve your country by serving the world?-- was an overwhelming yes by a generation almost 50 years ago. Of course, several other pressing questions also followed: How do you build an organization around that raw energy? How do you pay for that? What do you even call that idea or organization?

John Kennedy's top advisers were already working on those issues. After all, they had decided, if we don't start doing our part for the developing world, they were concerned--and rightfully so--the Communists around the world would. At a time much like today, when our Nation faced conflicts with people who knew as little of America as we knew of them, this case for a Peace Corps could be made not only in the lofty rhetoric of idealism but in the cold hard language of realpolitik.

The notion that service could be a part of our foreign policy--indeed that it could be a powerful weapon in the Cold War--was truly a radical idea. It suggested that there could be more measures of strength than caliber or tonnage. It argued that the world needed to see our ideals not just in ink but incarnate in the person of Americans with dirty hands working under a hot foreign sun. It said: You cannot hate America if you know Americans.

The skeptics quickly descended upon John Kennedy's idea. Richard Nixon called the Peace Corps ``a haven for draft-dodgers.'' Former President Dwight Eisenhower called it ``a juvenile experiment.'' Even those old foreign policy hands who supported Kennedy's idea thought it was a fine idea, as long as it was kept small. Academics and State Department officials agreed: Proceed with caution, they urged. Start with just a few hundred volunteers. Don't create a fiasco, they said. Don't let this experiment get out of hand.

If they had gotten their way, I suspect the Peace Corps might not even exist today. But just as a late-night burst of exuberance gave birth to the Peace Corps in Ann Arbor, a similar bolt of sleepless inspiration kept it alive. In a hotel room in downtown Washington--not far from where I am on the floor of the Senate--with only a few typewriters and a stack of blank papers, two aides--only two of them; one named Sergeant Shriver and the other named Harris Wofford, who turned out many years later to be a colleague of ours in the Senate-- comprised the entirety of the Peace Corps staff that had been tasked with figuring out how to put this outrageous idea into practice.

The one thing the two of these men knew, Sergeant Shriver later told us, was that the conventional approach then in vogue wouldn't work. America would only have one chance to get it right. So it was that Sergeant Shriver happened to be in the office at 3 o'clock in the morning--not unlike the hour at Ann Arbor--reading a paper prepared by a State Department employee who had sent along some ideas. His name was Warren Wiggins.

Warren Wiggins called his paper ``The Towering Task,'' a reference to JFK's first State of the Union Address, where the young President said:

The problems are towering and unprecedented and the

response must be towering and unprecedented as well.

Warren Wiggins called for a towering and unprecedented Peace Corps. He wrote:

One hundred youths engaged in agricultural work of some

sort in Brazil might pass by unnoticed, but 5,000 American

youths helping to build Brasilia might warrant the full

attention and support of the President of Brazil himself.

Where a handful of young people might present a nuisance to a foreign ambassador, an army of motivated young Americans could make a real difference. Besides, wasn't it a moment for great ambition?

At 3 o'clock in the morning, Sergeant Shriver read Warren Wiggins's conclusion: The Peace Corps needed to begin with a ``quantum jump,'' and it needed to begin immediately, by Executive order, with as many as 5,000 to 10,000 volunteers right away. By 9 o'clock that same morning, Warren Wiggins himself was sitting alongside Sergeant Shriver in that very hotel room drafting a report for the President of the United States.

Within a month of that date, President John Kennedy had created the Peace Corps by Executive order. Within 2 years, more than 7,000 young Americans were serving across the globe, and that number had more than doubled by 1966, the year that I joined the Peace Corps.

One of those young Americans--as I mentioned, the person speaking to you this afternoon--was a 22-year-old English major at Providence College who arrived in the small village of Moncion in the Dominican Republic. As a young person, I spoke barely any Spanish. I had little idea I was doing, and I certainly didn't have a clue that more than 40 years later I would be standing on the floor of the United States Senate explaining that the Peace Corps gave me the richest 2 years of my life.

I owe those 2 years, and the impact they had on all of my years since, to John Kennedy's 2 a.m. question and Warren Wiggins paper that Sergeant Shriver read at 3 in the morning.

From the story of the Peace Corps, and my own story, we can learn three things: First, the Peace Corps works,

Mr. President. Besides simple labor and goodwill, every American we send abroad brings with him or her another chance to make America known to a world that often fears and suspects us and our motives. Every American who returns to our country from that service comes home as a citizen strengthened with the knowledge of the world in which he or she has just lived.

As Sargent Shriver said, ``Peace Corps Volunteers come home to the USA realizing that there are billions--yes, billions--of human beings not enraptured by our pretensions, or our practices, or even our standards of conduct.''

Second: size matters. The perils of a small, timid Peace Corps are just as clear today as they were in 1961. Just as then, advocates of a stripped-down mission make the same arguments: sending untrained, untested students only aggravates our host countries and raises the chance of a mishap--so let's send a few experts instead. And just as in 1961, our response is fundamentally the same, and still fundamentally correct: of course we need volunteers of the highest quality. But we need the highest quantities, too.

Third: size comes at a cost. The bigger any organism grows, the slower it gets. The Peace Corps that charted its course in a hotel room with a staff of two now enjoys a staff of over a thousand and a fine office building close to the White House. But even the most groundbreaking ideas must all make, in good time, what the philosopher Gramsci called ``the long march through the institutions.'' And where President Kennedy once predicted that, within a few decades, our Nation would have more than one million returned volunteers, today fewer than 200,000 have had the opportunity to serve.

The legislation I offer today is designed to help the Peace Corps not only grow--and I have joined the many voices calling for it to grow dramatically--but also reform.

To those who know and love the Peace Corps, reform is an uncomfortable subject. After all, we don't want to destroy what has made this institution so remarkable and unique. There wouldn't be a Peace Corps if JFK had stuck to the script in Ann Arbor. There wouldn't be a Peace Corps if thousands of students, acting on their own initiative, hadn't caught his attention with their movement. There might not be a Peace Corps if Sargent Shriver had listened to the respectable voices of caution in the early days of 1961.

The Peace Corps is unlike any other organ of our government because of its uniquely grassroots origin. And we can't treat it like any other organ of our government for those reasons.

So the Peace Corps Improvement and Expansion Act of 2009 does not include a list of mandates. It does not micromanage.

Instead, it asks those who have written this remarkable success story--from the Director to managers and country directors to current and returned volunteers--to serve once more by undertaking a thorough assessment of the Peace Corps and developing a comprehensive strategic plan for reforming and revitalizing the organization.

Just as JFK's question to those Michigan students sparked the Peace Corps, asking questions today, some 50 years later, I believe will strengthen it. How can volunteers be better managed? How can they be better trained? Can we improve recruiting? Are we sending our volunteers to the right countries? Why do we have volunteers in Samoa and Tonga, but not in Indonesia, Egypt, or Brazil? Are we still achieving the broader goals of the Peace Corps and helping our country meet 21st century challenges?

Most of all: How can we strengthen and grow this remarkable organization without losing the spark--the ambitious sense of the possible that led JFK to stay up late dreaming with those students in Ann Arbor and Sargent Shriver to stay up even later reading Warren Wiggins's paper?

Warren Wiggins died 2 years ago at the age of 84. His obituary quoted Harris Wofford: ``I think he embodied the watchwords that were once given to me: We must be more inventive if we're going to do our duty.''

Inventiveness and duty: two qualities that don't often go together. But the Peace Corps is the result of just such a combination. It has strengthened our Nation, improved the world, and stands today as one of the signal accomplishments of the 20th century. It has been supported by Republican and Democratic administrations over the last 50 years.

As I said at the outset of these remarks, except for my own family, nothing has meant more in my life--or in the lives of so many others-- than the experience I enjoyed so many years ago.

Today we honor the accomplishment of this organization. But let us commit to strengthening and expanding the Peace Corps by passing this legislation which I will send to the desk momentarily. Let us strive to inspire future generations to walk the path of service and exploration, the one that led me and thousands of our Nation's citizens to nations such as the Dominican Republic or Ethiopia, where Paul Tsongas served, and then years later to arrive at this institution, which I cherish and love as well. And let us never lose that spirit, that idealism, that ambition that led a young President of a young nation to ask a generation to serve.

Mr. President, along with my friend, Senator Barrasso, I am introducing legislation to keep rural America from becoming a health care sacrifice zone. Our legislation, the Rural Health Clinic Patient Access and Improvement Act, will make it more financially attractive for doctors and other providers to treat patients in rural areas. Both Senator Barrasso and I have heard from the folks back home about how hard it is to get doctors and mid-level practitioners in rural areas. My constituents have had to travel hours to get treatment when they need it. This bill takes major strides to ensure access to health care by building on the successes of the rural health clinic program. When it comes to health care, rural residents should not have to accept second-class status.

As the Senate takes up comprehensive healthcare reform, this Congress must not lose focus on the health needs of folks in rural areas. Too many Oregonians cannot get the kind of affordable and comprehensive coverage or access to care their Members of Congress receive. In addition, many patients in rural Oregon, even those with good health benefits, do not have access to providers or have to travel long distances to get medical care.

Meanwhile, providers lack incentives to go to--or stay in--rural areas. It is a lot more lucrative for them to work in big cities where they can work in state-of-the art facilities and earn top dollar. According to the Oregon State Office of Rural Health, a major obstacle facing Oregon's rural health clinics is the severe shortage of health care providers willing or able to work in a rural area. One out of three Oregon rural health clinics was recruiting in 2008.

That is why Senator Barrasso and I come here to introduce the Rural Health Clinic Patient Access and Improvement Act. Simply put, our bill would help improve access for patients in rural areas, while increasing reimbursement rates and giving incentives to providers in rural areas.

The Rural Health Clinic Patient Access and Improvement Act increases the all-inclusive Medicare payment rate for rural health clinics by more than 20 percent per visit from an average of $76 to $92. This bill would provide an additional $2 bonus for rural health clinics that participate in a quality improvement program. Quality of care should be a focus for all providers.

The bill will allow for better collaboration between community health centers and rural health clinics. It also creates a 5-state demonstration project to recruit and retain providers in rural communities by subsidizing a portion of the provider's medical liability costs if they practice in a rural health clinic. These reforms will help ensure rural residents have access to the same level of quality care as those in other parts of the country.

This bill builds upon the success of Oregon's 54 rural health clinics that serve 26 out of 36 counties across the state. These rural health clinics help to ensure access to primary care for the underserved elderly and low-income populations. Ninety-eight percent of Oregon's rural health clinics are willing to see Medicare and Medicaid patients as well as patients with no insurance. Not only are they willing to see these patients, but 96 percent are currently accepting new patients. Many rural residents--whether they are uninsured, publically insured or have private insurance--would have nowhere to go to receive primary care without rural health clinics.

When it comes to health care, people want to go to a provider they know and trust. One of the reasons rural health clinics have been so successful is that they have become an integral part of their communities. A great example of this is Gilliam County Medical Center. Gilliam County hosted a succession of short-term physicians placed in the community through the National Health Service Corps. In the 1970s, the community, in conjunction with the State, sought a more permanent, stable health care provider situation. The Oregon legislature appropriated $20,000 as seed money to attract a team of health professionals to the community and the residents of Gilliam County created the South Gilliam Health District to support Gilliam County Medical Center, a certified rural health clinic.

Two physician assistants, David Jones and Dennis Bruneau who were on the faculty at the University of Washington PA program at the time they heard about the opportunity with the clinic were hired. Dave, Dennis, their spouses, who also work at the clinic, and supervising physician Dr. Bruce Carlson created a team that continues to sustain one of the most stable and long-term small rural primary care clinics in the state.

Dr. Carlson visits the clinic one day every 2 weeks to see those patients in need of his services and provide overall medical direction. Otherwise, the clinic is staffed full-time by physician assistants Jones and Bruneau. David's wife is a medical technician who works in the clinic and Dennis' wife serves as the clinic manager. When Dr. Carlson is not in Condon, he has his own medical practice 70 miles away in Hermiston, OR, which is also the location of the nearest hospital to Condon.

Not all rural areas are alike and the rural health clinic program gives these providers the flexibility they need to be the regular source of care of primary care in their communities. Regular access to primary care, as you know, is one of the key tests of whether or not you will receive the preventive health screenings that can mean the difference that could save your life. They allow for health problems to be caught early on so that they can be headed off for just a little money, instead of at later stages, which require costly specialty care that runs up the bill for the patient and the taxpayer.

Oregonians in rural areas have the same right to quality, affordable medical care as those living in urban areas, but they do not have it under our current system. This bill will expand access to health care for folks in rural areas and level the playing field for rural health clinics by giving them the tools they need to attract and retain quality medical providers.

I want to thank Senator Barrasso and his staff for their hard work in bringing this important bipartisan legislation before the Senate.

I hope my colleagues will join Senator Barrasso and me, and support this much needed and bipartisan bill.

Mr. President, today I am introducing a bill to amend the Wild and Scenic Rivers Act to designate segments of the Molalla River as Wild and Scenic. I am pleased to be introducing this legislation with my colleague from Oregon, Senator Merkley. This legislation has already been introduced by Representative Schrader in the House, who is a champion for protecting the river. The Molalla River Wild and Scenic Rivers Act of 2009 will designate an approximately 15.1-mile segment of the Molalla River, and an approximately 6.2-mile segment of Table Rock Fork Molalla River as a recreational river under the Wild and Scenic Rivers Act.

The Molalla River Wild and Scenic Rivers Act protects a popular Oregon destination that provides abundant recreational activities all of which take place among the abundant wildlife that call this area home. The scenic beauty of the Molalla River provides a backdrop for hiking, mountain biking, camping, and horseback riding, while the waters of the river are a popular destination for fishing, kayaking, and whitewater rafting enthusiasts. My bill would not only preserve this area as a recreation destination, but would also protect the river habitat of the Chinook salmon and Steelhead trout,

along with the wildlife habitat surrounding the river, home to the northern spotted owl, the pileated woodpecker, golden and bald eagles, deer, elk, the pacific giant salamander, and many others.

The Molalla River is not only an important habitat for wildlife and a popular northwest recreation destination, but it is also the source of clean drinking water for the towns of Molalla and Canby, Oregon. Protecting the approximately 21.3 miles of the Molalla River will provide the residents of these Oregon towns with the assurance that they will continue to receive clean drinking water, and will provide all the people of the Pacific Northwest and beyond the knowledge that this important natural resource will be preserved for continued enjoyment for years to come.

I want to express my thanks to the Molalla River Alliance--a coalition of more than 45 organizations that recognize that this river is a jewel. Michael Moody, the President of this Alliance, made sure that irrigators, city councilors, the mayor, businesses and environmentalists all came together on this. I look forward to working with Senator Merkley, Representative Schrader, and the bill's supporters to advance this legislation to the President's desk.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I am introducing legislation that I hope will enable our national intelligence agencies to increase their employees' proficiency in critical foreign languages. I have been a member of the Senate Intelligence Committee for over eight years, and during that time I have sat in a number of briefings and hearings that addressed foreign language capabilities. While specific details regarding the intelligence community's capabilities are generally classified, it is no secret that there is still a great need for more analysts and agents trained in key foreign languages. Over the past few years there have been a number of new initiatives designed to address this problem from different angles, and even newer initiatives are being introduced this year. The legislation that I am introducing today, which I have drafted along with Senator Chambliss of Georgia, is not designed to replace any of those initiatives--rather, we think it will complement those other initiatives by filling a key gap.

Let me explain this gap a little, so it will be clear what problem we are trying to fix. Most efforts to improve the language capabilities of various intelligence agencies focus on recruiting Americans who have a background in critical foreign languages--either from their education, or from their family. But this only attacks the problem from one angle. If you want the national security workforce to have the strongest language skills possible, you also need to improve language training for people who already work for the intelligence agencies. This means both teaching the basics of key languages to more people, and helping people who are already proficient improve their skills further. Unfortunately, language training is time-intensive, and this can mean that personnel are diverted from short-term priorities.

Here is an example of how this problem might crop up in practice. Imagine that you are the supervisor of a group of 10 people somewhere in the intelligence community, working on counterterrorism issues, and that one of those employees decides he wants to go spend several months in intensive language training to improve his Arabic. This would be a good career move for that individual, and a good long-term investment for your agency. But for you, the supervisor, it means that you might be short-handed for several months while one of your employees is off getting language training. Since you have a fixed number of positions available for your office, it is difficult for you to replace someone while they are gone. This means that as the supervisor you actually have an incentive to resist letting that employee head off for language training, since it will leave your team less well-equipped to meet short-term priorities.

I am not saying that all supervisors within the intelligence community are focused solely on short-term priorities, to the detriment of our long-term security interests. But I am saying that if we want our intelligence agencies to effectively balance short- and long-term priorities, we need to give them incentives that encourage them to do so, and not penalize people who try to balance short-term needs and long-term goals.

Here is how the bipartisan legislation that Senator Chambliss and I are introducing today would attempt to address this problem. Our bill would give the Director of National Intelligence the authority to transfer additional positions to offices whose personnel are

temporarily unavailable due to language training. The Director of National Intelligence is uniquely situated to evaluate which offices are most in need of these extra positions, and could transfer them to the places where they would do the most good.

So, to return to my previous example, if you were the supervisor of a young counterterrorism analyst who wants to take 6 months to go learn Arabic, you could go ask the Director of National Intelligence to transfer an extra position to your office for that 6 month period. That way, you could bring someone else in on a temporary basis to do that analyst's work while they are gone for training. The analyst and the agency would get the long-term benefits of additional language training, and you, the supervisor, would not have to sacrifice in the short-term.

Senator Chambliss and I do not claim that this legislation will revolutionize the intelligence community's language capabilities overnight. But it is our hope that it will make it easier than it is today for managers to balance short- and long-term priorities. If we can achieve that it will be good for our national intelligence workforce, and for our national security interests.

Mr. President, I rise today to introduce legislation that will correct an inequality in the Department of Justice's Public Safety Officers Benefits, PSOB, Program by extending benefits to non-profit EMS providers who die or are disabled in the line of duty. I am pleased to be joined in this effort by Senator Sanders.

Vermonters were deeply saddened earlier this week when we received word that veteran EMT specialist Dale Long died in a tragic, on-duty accident in Bennington. Dale Long had a superb 25-year career as a Vermont EMT, and I extend our deepest condolences to his family, to the Bennington Rescue Squad, and to the entire Vermont EMT community.

First responders nationwide literally put their lives at risk every day for the people of their communities. They represent the best of our nation's dedicated service to others, and Dale Long was a solid example of that tradition. He was Bennington Rescue Squad's 2008 EMT of the Year, and a 2009 recipient of the American Ambulance Association's Star of Life Award. I had the pleasure of meeting Dale just last month when he visited my office during the Star of Life festivities.

This tragedy highlights a major shortcoming in the current PSOB program, which Congress established over 30 years ago to provide assistance to police, fire and medics who lose their lives or are disabled in the line of duty. The benefit, though, only applies to public safety officers employed by a federal, state, and local government entity. With many communities around the United States choosing to have their emergency medical services provided by non- profit agencies, medics working for non-profit services unfortunately are not eligible for benefits under the PSOB program.

Non-profit public safety officers provide identical services to governmental officers and do so daily in the same dangerous environments. With a renewed appreciation for the important community service of first responders since the national tragedy of September 11, 2001, more people are answering the call to serve their communities. At the same time, more rescue workers are falling through the cracks of the PSOB program.

The Dale Long Emergency Medical Service Provider Protection Act would correct this inequality by extending the PSOB program to cover non- profit EMS officers who provide emergency medical and ground or air ambulance service. These emergency professionals protect and promote the public good of the communities they serve, and we should not unfairly penalize them and their families simply because they work or volunteer for a non-profit organization.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I am pleased to join with Senator Bond in introducing the National Guard Empowerment and State-National Defense Integration Act of 2009. This is a clearly needed piece of legislation that will enable the Nation to tap more of the tremendous experience and expertise that exists within the National Guard.

This legislation--known as Empowerment II--ensures that the Department of Defense takes advantage of the Guard's unique strengths and focuses on the critical mission of domestic operations and military support to civilian authorities. This bill is about focusing attention on the military's response to emergencies at home and fleshing out the structure of that response. Doing that will ensure our National Guard, Reserves and active forces can bring their specialized capabilities to bear, all while safely under the control of democratically elected officials and civilian authorities.

The bill will specifically make the Chief of the National Guard a full member of the Joint Chiefs of Staff, while creating a new three- star deputy to the Bureau Chief to reflect the Bureau Chief's increased responsibilities. Additionally, the 2009 Empowerment Act provides the National Guard Bureau with limited budget authority to be able to acquire specially designed equipment for domestic operations, and it requires the Department of Defense to establish procedures to formalize arrangements to allow National Guard forces to have tactical control over active forces that operate in a domestic setting.

Today Senator Bond and I seek to build on some of the major improvements to the Guard that we, together, made in the Fiscal Year 2008 Defense Authorization Bill. That landmark bill enacted large portions of the first version of the Guard Empowerment Bill which elevated the Chief of the National Guard from three-star general to full General. The goal of all the changes enacted was to begin to ensure that the Guard has a seat at the table in major budget and policy decisions.

We need to pick up where we left off early last year and sharpen the focus on the National Guard's role as a homeland defense and defense support to civilian authorities force. In fact, we are trying, in the realm of domestic operations and military support to civilian authorities, to do exactly what Secretary of Defense Robert Gates is trying to do in the realm of irregular warfare. The Secretary is working to ensure that at least a good portion of the Department of Defense's equipment has utility in counterinsurgency situations. The Secretary has recently testified that he foresees about 10 percent of procured equipment to be dedicated solely for counterinsurgencies. I strongly support the Secretary's initiative.

There also is a need to carve out a small wedge of the defense budget to develop technologies and systems that will help the National Guard, serving in a Title 32 capacity under the control of the Governors. Much of all Guard equipment is considered and should be ``dual use,'' but a sliver should be specially designed and used solely for domestic situations.

The Guard Empowerment bill we are introducing today will also reduce the confusion that sometimes exists when there is a domestic emergency about how National Guard forces, serving under a Governor during an emergency, will interact with active duty forces that serve under the President's command. United States Northern Command in Colorado has unfortunately only exacerbated those concerns through attempts to override Governors and take command-and-control of National Guard assets in a State even though they are in their so-called Title 32 status.

There is nothing in this bill that the National Guard is not already undertaking. The President and the Secretary of Defense look to the Guard Bureau Chief on matters related to defense at home. The Guard works to purchase homeland defense-oriented equipment through the so- called Guard and Reserve Equipment Account, and the Governors already wield active duty personnel during so-called National Security Events. The chain of command arrangements made during last year's political conventions in Minnesota and Colorado are a good example.

The President recognizes that this legislation makes sense. In his ``Blueprint for Change,'' his new Administration's national security plan, President Obama endorsed the idea of making the Guard Bureau Chief a full member of the Joint Chiefs of Staff, a move that Vice President Biden also has endorsed. In developing the bill, we worked closely with The National Guard Association of the United States, the Adjutants General Association of the United States and the Enlisted National Guard Association of the United States--organizations that we expect to formally endorse the bill after its introduction.

Everyone recognizes that if there is an emergency like Katrina and our civilian resources at all levels get overwhelmed, the military is going to have to come in to assist. The American people expect no less than a swift, coordinated and effective response. And it is the National Guard that knows how to do this mission right. Providing support to civilian authorities at the State level is what the Guard has done since its inception more than two centuries ago, and it is a mission that the National Guard continues to take seriously.

This legislation solidifies and codifies sensible approaches to improving the Guard's ability to support civil authorities in an emergency. Enactment of this legislation is the very least we owe our proud citizen soldiers and airmen for their efforts.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, today I rise to reintroduce legislation to offer a drastically simplified alternative for home-based businesses to benefit from the home office tax deduction. The U.S. Small Business Administration's, SBA's, Office of Advocacy designated reforming the home office tax deduction as one of its top 10 regulatory review and reform initiatives for 2008. By establishing an optional home office deduction, the Home Office Tax Deduction Simplification and Improvement Act of 2009 would take a strong step toward making our tax laws easier to understand. I would like to thank Senator Conrad for joining me to introduce this critical bill here in the Senate and Representative Gonzalez for introducing identical legislation in the House of Representatives.

As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I continually hear from small enterprises across Maine and this nation about the necessity of tax relief and reform. Despite the fact that small firms are our economy's real job creators, the current tax system places an entirely unreasonable burden on them as they struggle to satisfy their tax obligations.

Notably, according to the Office of Management and Budget's Office of Information and Regulatory Affairs, the American public spends approximately nine billion hours each year to complete government- mandated forms and paperwork. A staggering 80 percent of this time is consumed by completing tax forms. What is even more troubling is that companies that employ fewer than 20 employees spend nearly $1,304 per employee in tax compliance costs, an amount that is nearly 67 percent more than larger firms.

Turning to the legislation we are reintroducing today, the Internal Revenue Code currently offers qualified individuals a home office tax deduction if they use a portion of their home as a principal place of business or as a space to meet with their patients or clients. That said, although recent research from the SBA indicates that roughly 53 percent of America's small businesses are home-based, few of these firms take advantage of the home office tax deduction. The reason is simple: reporting the deduction is complicated.

A 2006 survey conducted by the National Federation of Independent Business Research Foundation found that approximately 33 percent of small-employer taxpayers try to comprehend the tax rules governing the home office tax deduction, but only about half of those respondents believe that they actually have a good understanding of the rules. As Dewey Martin, a Certified Public Accountant from my home State of Maine, so aptly said in testimony last year before the Senate Finance Committee, ``Many small business owners avoid the deduction because of the complications and the fear of a potential audit.''

With a morass of paperwork attributable to the home office deduction, the time-consuming process of navigating the tangled web of rules and regulations makes it unsurprising that so many small business owners forego the home office deduction. So to encourage the use of the home office tax deduction, the bill we are introducing today would establish an optional, easy-to-use incentive.

Specifically, our bill would direct the Secretary of the Treasury to establish a method for determining a deduction that consists of multiplying an applicable standard rate by the square footage of the type of property being used as a home office. The proposal would also require the IRS to separately state the amounts allocated to several types of expenses in order to reduce the burden on the taxpayer. It is vital that the IRS clearly identify the amounts of the deduction devoted to real estate taxes, mortgage interest, and depreciation so that taxpayers do not duplicate them on Schedule A. Finally, the bill makes two changes designed to ease the administration of the deduction: First, to reflect an economy in which many business owners conduct business or consult with customers through the Internet or over the phone versus face-to-face, our legislation takes these entrepreneurs into account by allowing the home office deduction to be taken if the taxpayer uses the home to meet or deal with clients regardless of whether the clients are physically present. Second, our bill would allow for de minimis use of business space for personal activities so that taxpayers would not lose their ability to claim the deduction if they make a personal call or pay a bill online.

I would be remiss not to note that the bill we are introducing today is the result of the dedicated efforts of various groups and organizations, which have worked with Senator Conrad and me on a consensus approach to improve the current home office tax deduction. In particular, it is significant to note that the IRS Taxpayer Advocate Service strongly backs this bill. In fact, the National Taxpayer Advocate, Nina E. Olson, sent my office the following statement regarding our legislation:

``In my 2007 Annual Report to Congress, I made a similar proposal to simplify the home office business deduction. I am pleased that Senator Snowe and Conrad's proposed bill reflects the gist of my legislative recommendation. Reducing the burdensome substantiation requirements for employees and self-employed taxpayers who incur modest home office costs would make the home office business deduction simpler and more accessible to them.''

Our bill also received an endorsement from the National Federation of Independent Business. Dan Danner, the organization's Executive Director, said the following: ``Currently only a small percentage of home-based businesses in the U.S. take advantage of the home-office deduction because calculating the deduction is unnecessarily complicated. NFIB small business owners have advocated for a simpler, standard home-office deduction for years. The Snowe-Conrad legislation gives home-based businesses the option to deduct a legitimate business expense with minimum hassle. This commonsense change to the tax code will reduce tax complexity and help many home-based businesses take advantage of this deduction.'' Additionally, the SBA's Office of Advocacy added: ``The SBA Office of Advocacy reviewed the legislation and supports it.''

In closing, according to the SBA's Office of Advocacy, America's home-based sole proprietors generate $102 billion in revenue annually. With this in mind, it is absolutely critical to endow these small firms with as much relief from burdensome tax constraints as possible so that they can focus their efforts on developing the products and services of the future, as well as creating new jobs. The confusion over the home office business tax deduction, in my estimation, can be easily solved by passing this legislation. I urge all Senators to consider the benefits this bill will provide to thousands of small business owners, and I look forward to working with my colleagues to enact it in a timely manner.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.