Floor Statements

Mr. President, as the ranking Republican of the Finance

Committee acting on behalf of a number of Republicans on the Finance Committee, I am objecting to discharging S. 3656 from the committee. While there are several provisions in the bill I personally strongly support, there are many problems in this bill and questions that have been raised about this bill. In addition, this bill has not come before the committee and the issues it addresses have not had the benefit of hearings or any committee action. As a result, I cannot support this bill being discharged from the committee at this time.

One of the provisions in S. 3656 that I personally support would delay implementing provisions of a CMS proposed rule that would change conditions of participation for rural health clinics and decertify clinics that are no longer in nonurbanized areas. The provision would also delay the proposed changes to the existing payment methodology for rural health clinics and Federally qualified health centers.

The CMS proposed rule would impose new location requirements for RHCs and require that clinics be located in a nonurbanized area, as defined by the U.S. Census Bureau, as well as meet shortage area designation requirements. Only new RHCs applying for the program are currently required to meet these criteria, but the CMS proposal would extend these requirements to already certified RHCs. According to CMS, about 500 of the approximately 3,700 RHCs operating today may not meet these requirements. Rural clinics in Iowa and elsewhere could also be severely impacted by the CMS proposed payment changes since RHC costs in Iowa and other States are already higher than the existing Medicare reimbursement cap.

Iowa is currently in the throes of a growing shortage of physicians, especially in the more rural areas of the State, due to inequitable geographic adjustments in physician payment that result in Iowa physicians receiving some of the lowest Medicare payments in the country even though they provide some of the highest quality care. These geographic payment disparities, which discriminate against rural areas, have further exacerbated the problems of access to care for beneficiaries in rural areas.

The CMS proposed rule could have a severe adverse impact on a number of rural health clinics in Iowa, including many located in counties that have been declared disaster areas from the severe flooding Iowa suffered earlier this year. If the CMS rule is finalized as proposed, rural health clinics in Iowa and elsewhere may be forced to close their doors, even though they have served rural populations very well for many years, leaving Iowa with fewer physicians and some patients with little access to primary care and other critical medical services.

As you can see, these provisions for rural health centers are important, which makes it all the more disappointing that my friends on the other side of the aisle did not work together with us to develop a bipartisan bill and that the committee is not in a position at this time to consider these important issues properly. I am very pleased, however, that a key issue for rural health centers in the proposal has already been addressed through a provision that was included in the Health Care Safety Net Act. That provision changes the CMS certification period for shortage area designations from 3 to 4 years in order to align the CMS certification period for shortage area designations with the Health Resources and Services Administration's, HRSA's, designation review period. I want to thank Senators Orrin Hatch, Pat Roberts, Gordon Smith, Tom Harkin, Ron Wyden, Kent Conrad, and John Barasso for championing the resolution of this important issue and Senator Max Baucus for working together with me to facilitate its inclusion in the Health Care Safety Net Act. And, of course, I want to again thank Senators Kennedy and Enzi for working with us on this issue. Thanks to this bipartisan collaborative effort, that bill with the RHC provision in it has now passed both Chambers and is on its way to being signed into law.

Another provision in S. 3656 would prevent the application of a CMS policy to phase out a payment adjustment for indirect medical education, IME, under the Medicare capital Inpatient Prospective Payment System, IPPS. Currently, teaching hospitals receive this upward payment adjustment under the capital IPPS. CMS announced in the fiscal year 2008 Medicare Hospital IPPS final rule that they would begin to phase out the IME adjustment for capital IPPS in fiscal year 2009.

As the former chair and currently the ranking member of the Senate Finance Committee, it has long been one of my priorities to ensure Medicare payments are both accurate and equitable. I question whether this proposed change to IME payments would further this goal, which many of us share.

The appropriateness of the IME capital IPPS adjustment has been analyzed extensively not only by CMS, but also by the Medicare Payment Advisory Commission, MedPAC, which advises Congress on Medicare payment issues. CMS has documented relatively high and continued positive margins for teaching hospitals under the capital IPPS compared to nonteaching hospitals. In fact, from 1998 through 2006, teaching hospitals had an aggregate positive capital IPPS margin of 11.2 percent while nonteaching hospitals had an aggregate capital IPPS margin of -0.8 percent. Based on those figures, it leaves open the question of whether the proposed change to IME payments is not justified. Certainly this is something the Finance Committee should explore further.

S. 3656 also proposes to establish a moratorium on a CMS rule regarding Medicaid payments for hospital outpatient services. Earlier this year, Congress placed moratoriums on 6 other proposed Medicaid regulations. Just as I opposed those moratoriums, I strongly oppose this one as well. The Finance Committee has not held the first hearing as to why a delay in this regulation is justified. The Finance Committee has not considered whether payments currently being made by some states to hospitals for outpatient services are being made consistent with the statutory rules governing the upper payment limit. The CMS regulation in question was intended to clarify what payments from States to hospitals are allowable. We should not simply place a moratorium on this regulation without the committee properly investigating the issue first. Medicaid is a critical program for children, pregnant women, the disabled, and the elderly. We have a responsibility to the people who depend on the program to make sure that funds are being appropriately spent. Placing a moratorium on these regulations without fully exploring these issues in the committee first is not consistent with that responsibility.

This bill also would intervene in a dispute between CMS and the State of California. The State of California has been seeking approval of an extension of their family planning waiver for 6 years. For 6 years, CMS has been urging California to improve their collection of Social Security numbers and citizenship documentation for women enrolled in the program. Given the concerns that have been raised about noncitizens receiving benefits to which they are not entitled, this provision raises a number of serious concerns. This bill would essentially require CMS to approve of the extension of California's waiver without requiring California to fulfill their obligation to improve their process of ensuring that people who receive benefits are actually eligible for those benefits.

In addition, this bill does nothing to assist ``tweener hospitals,'' which are hospitals that are too large to be critical access hospitals but too small to be financially viable under Medicare's prospective payment systems. I consider this to be a high priority because so many seniors in Iowa rely on these tweener hospitals for vitally needed health care services in rural areas of our State. If the Senate is going to consider Medicare legislation that is along the size and scope of the provisions proposed in S. 3656, including provisions to address the problems tweener hospitals face is a must.

I understand that legislation is often the art of compromise. We can't always get everything we want in every bill and keep everything we dislike out. It is a balance. This bill is currently pending before the Finance Committee, and it raises significant issues of Medicare and Medicaid payment policies. The Finance Committee has not held hearings on these issues nor has it given these important issues proper consideration. Without allowing the

committee process to work, this bill has not been subject to the rigorous analysis and debate that the legislative process should require to avoid unintended consequences and poor decisionmaking. This process should be permitted to take place before legislation of this magnitude is sent to the full Senate. That is the committee's role and it is an important one.

If the full Senate were to routinely bypass the Finance Committee and consider major Medicare bills like this one that have not been processed by the members of the committee, then nothing would prevent the Senate from legislating on other Medicare and Medicaid issues without the benefit of hearings or committee action. Occasionally, the committee does process extensions of current law and smaller, generally technical bills through a more informal committee process, but it is a committee process nonetheless. If the committee is routinely bypassed entirely and not allowed to perform its vital role in the legislative process, it would be almost impossible to cope with the number and assortment of Medicare, Medicaid, and other issues that would come directly to the Senate floor in bills like S. 3656. To avoid that result is why the Senate has committees in the first place.

Just an initial review of this legislation today produces more questions than answers and many obvious and serious concerns. It is disappointing that some of the important provisions in this bill, like the rural health center provisions and IME policy, are packaged into a bill that has not been presented in a timely way or brought before the committee for appropriate consideration, debate, and amendment. Just a quick review of this bill today quickly reveals, in any case, that both in terms of process and policy, this bill does not sufficiently achieve a balance I think is necessary, and I must, on behalf of myself and other members of the committee, object to discharging S. 3656 from committee for consideration by the full Senate.

I also want to join the chairman and express my intent to have the committee consider legislation that addresses this problem as soon as we can. We should not be imposing unreasonable rules on employees' use of cell phones and blackberries.

Mr. President, I have been examining several doctors at universities across the country to see if they are complying with the financial disclosure policies of the National Institutes of Health. I ask unanimous consent to have printed in the Record my latest letter to Emory University regarding Dr. Charles B. Nemeroff and the Emory- GlaxoSmithKline-National Institute of Mental Health Initiative.

Mr. President, I would like to take a few moments today to pay tribute to the Employee Benefit Research Institute, or EBRI, on the occasion of its 30th anniversary. EBRI is a well-known, nonpartisan research institution providing invaluable analysis, briefings, and publications on health and retirement issues, which are critically important to both America's workers and the employers that sponsor these benefits. The high-quality and objective work done by EBRI has won it respect within the halls of Congress, among members on both sides of the aisle in the House of Representatives and in the Senate. On EBRI's anniversary, I wish to register my appreciation for its work and my admiration for its commitment to issues relating to employee benefits. I commend EBRI for the valuable contribution the institution has made to policymaking in the all-important areas of retirement, health, and economic security, and wish EBRI continued success in the future.

Senator Baucus and I asked the Government Accountability Office to review the accuracy of tax returns that are filed reporting capital gains. The GAO found that as many as 7 million individual taxpayers, or 36 percent, who sold securities in 2001 may have misreported capital gains or losses, and around half of those taxpayers did so because they misreported their basis. This information reporting proposal will reduce errors and help taxpayers to file their returns more accurately.

The Congress further intends that the IRS will exercise its administrative authority to revise forms and take other actions as appropriate to help brokers and taxpayers understand and comply with this new law so that burden is reduced, errors decrease, and compliance is enhanced.

Mr. President, this Congress is on the cusp of making an extremely difficult decision that will not only affect our financial markets in the near term, but it will also leave a lasting footprint on the direction of the our economy for years to come.

We face an unprecedented economic challenge--failing banks, declining credit, rising unemployment, and a likely recession. These problems have led us to the point of placing hundreds of billions of taxpayer dollars at risk to purchase risky subprime mortgages in an effort to avoid, or lessen the impact of these looming problems. Allow me to discuss a few of the factors that led us to where we are today.

In response to the high-tech, dot-com bust in 2000, the Federal Reserve began a series of interest rate cuts reducing the Fed Funds rate from 6.5 percent to 1.0 percent. The rate averaged 1.4 percent from 2002 through 2004.

As cheap credit flooded the markets, financial institutions borrowed money at low short-term rates and invested at higher long-term rates-- playing the spread. They adopted reckless lending practices under the political banner of increasing homeownership. These practices included ``liar loans,'' i.e. no credit check, no-money down, interest-only, negative amortization, i.e. missed payments are added to the principal, adjustable-rates, and balloon payments.

As these risky loans were extended to marginal borrowers who could not afford their overpriced homes, the financial wizards on Wall Street devised schemes to theoretically insure themselves against default. These so called ``credit default swaps'' allowed investors who purchased mortgage-backed securities to pay fees to underwriters, like AIG, in exchange for a promise to cover any losses. However, the underwriters often failed to acquire and

maintain adequate reserves to cover such losses.

There is plenty of blame to go around for getting us into this mess. But the financial problems we face are much bigger and more fundamental than the home mortgage market itself.

Our financial system is based on the fundamentally unstable practice of maturity transformation--more commonly known as borrowing short and lending long.

The consequences of this practice are illustrated in the classic movie ``It's a Wonderful Life.'' In this movie, Jimmy Stewart plays the owner of the Bailey Building and Loan Association. In the wake of the Great Depression, the citizens of Bedford Falls panic and begin a run on his bank. Stewart's character explains that he does not have their money, but rather it has been used to build their homes. He asks them to be patient, and they will eventually get their money back. But they persist. He ultimately stops the run by convincing them to take only what they need right away. He uses his own money that he was saving for his honeymoon to repay his customers.

The scene from this movie illustrates the fundamental instability of our current financial system. We operate under the illusion that we can deposit our money in a bank and then withdraw it anytime we choose. But at the same time we expect the bank to pay us interest on our deposits.

However, the interest we receive can only be achieved by giving our money to someone else to invest for weeks, or months, or years.

Maturity transformation works only as long as people have confidence in our banking system. Federal deposit insurance was created to instill this confidence. By having the Government stand behind our banks ready to provide the cash necessary to repay our deposits, there is no reason to have a run on a bank. Moreover, if there is a run, banking regulators can swiftly close down the failed bank, or orchestrate a takeover by a healthier bank, and promptly resolve the problem.

Deposit insurance is not a perfect system, as we learned from the savings & loan fiasco in the late 80s and early 90s. Deposit insurance creates moral hazard. Because depositors are protected from their bank's failure, they have no incentive to question the reckless lending practices of their bank. Without adequate oversight, risk-based premiums, and adequate capital requirements, deposit insurance is unsustainable in the long run.

The current home mortgage mess is merely an extension of the maturity transformation and moral hazard problem. But in this case, instead of depositors and deposit insurance, we have overnight loans and too-big- to-fail institutions.

Essentially what happened is Wall Street created an alternate banking system in which participants loaned each other money overnight and invested in mortgage backed securities. They treated their overnight loans as deposits, and they relied on the widely-held belief that once their activities reached critical mass, they would be too-big-to-fail and the Government would bail them all out if anything went wrong.

This financial house of cards collapsed as home prices began to fall and default rates began to rise. At that point, investors became unwilling to rollover their overnight loans. Participants began to suggest there was not enough liquidity. That is a fancy way of saying investors were no longer willing to lend money overnight to buy long- term assets that were declining in value.

So what is the solution?

Last week, the President asked Congress to enact legislation to address this problem. The original plan proposed by Treasury Secretary Paulson would have authorized the Government to buy $700 billion in mortgage-related assets. By taking these troubled assets off the books of financial institutions, it was hoped the government could stabilize falling asset prices and restore investor confidence. Since this plan was first proposed, improvements have been made.

The bill we are considering isn't perfect. Like my constituents, I am outraged that we are in this position today. But the fact is, we are facing a global economic meltdown. Irresponsible lenders and greedy investors have put small businesses, farmers, and families at risk. While many in Iowa may not yet see the effects, our inaction will lead them to understand how dire this problem truly is. We must unfreeze the financial markets as soon as we can, and this is the only solution on the table that will come close to working. We can't guarantee to the taxpayers that this solution will work. What we can say is that we are doing the best we can, representing our constituents the best we can, and trying to solve the problem before the American people really have to suffer the consequences.

What I have come to learn is that the credit crunch doesn't just impact Wall Street. Our economy depends on America's small businesses. We are nine meals away from a revolution, making the farmer an integral part of our country's survival. But farmers and businesses are at risk. Parents who are hoping to send their children to college may not get the loans they need. Individuals that need loans to purchase autos or homes may be left without a ride to their workplace or a roof over their head. There is a trickle-down effect that is sure to be felt if Congress sidelines this bill today.

Since Congress was urged to act, I have stated--in public and private sessions--that there are core principles that must be addressed before I would vote for the bill. I wanted to see strong oversight of the program, including an independent inspector general. I wanted strict executive compensation restrictions for CEOs that got us in this mess. I wanted those who are responsible to give up their pin-striped suits for orange jump suits and to be held accountable. I wanted assurances that the Government would take equity in the firms we bail out. The bill, unlike the original Treasury proposal, includes the core principles I wanted to see. This bill is an improvement from the Treasury plan because there is transparency, oversight, and more protections for taxpayers.

One of the duties I take most seriously as a U.S. Senator is overseeing the policies and activities of the Federal Government. Government must have its checks and balances in place to prevent waste, fraud, and abuse by bureaucrats in Washington. I have been the chief supporter of inspectors general at Federal agencies, and making sure they remain independent overseers of taxpayer dollars. The proposal brought forward by the Secretary of the Treasury failed to include any oversight. Because the emergency plan is sure to be one of the most complex and difficult tasks ever undertaken, I pushed the leaders in the House and Senate to include a special inspector general to monitor the activities of the Treasury Department and its contractors. Timely, comprehensive and truly independent reporting is critical to these oversight efforts.

I am glad oversight was included in this bill. Not only will there be a special inspector general, but we will also have a financial stability oversight board responsible for reviewing the exercise of authority under the program, including the review of policies and making recommendations to the Secretary. Additionally, there is established a congressional oversight panel to review the current state of the financial markets and the regulatory system. This panel will be independent, tasked with reviewing the administration of the program. They will also study the effectiveness of foreclosure mitigation efforts and the effectiveness of the program from the standpoint of minimizing long-term costs to the taxpayers.

Despite these oversight boards and panels, you can be sure that I will not let up on my efforts to reign in fraud, abuse and misconduct. I will not tolerate bureaucrats taking advantage of taxpayer money, and will do my best to make sure heads roll if conflicts of interests by those who run the program are suspected.

Like all Iowans, I am concerned about the risk that this plan places on hard working and responsible taxpayers. Since we began discussing this plan, using taxpayer dollars responsibly has been the top priority. That's why many taxpayer protections were added to the bill.

Treasury's proposal had minimal oversight to protect taxpayer dollars. Like I said earlier, this compromise enhances the oversight structure by creating a financial stability oversight

board, a special inspector general, and a congressional oversight panel. It also requires the Secretary to develop regulations and guidelines necessary to prohibit or, in specific cases, manage any conflicts of interest with respect to contractors, advisors, and asset managers.

The Secretary also has to take steps to prevent ``unjust enrichment''--or paying more for a troubled asset than what the seller paid to purchase it. The Secretary--in considering the purchase of troubled assets--must take into account the ``long term viability'' of the financial institution. The bill requires Treasury to take an equity stake in the companies from which it purchases troubled assets. And it requires the Treasury Department to be transparent when they buy and sell. In fact, they must post, within 2 days, the purchases, amounts, and pricing of assets acquired. These provisions will help shield taxpayers from losses and may provide taxpayers with potential future benefits.

Should taxpayers lose out, the bill allows the government to go back after 5 years to recoup losses from financial companies. The Office of Management and Budget and the Congressional Budget Office will report on the net amount lost in the TARP after 5 years. The Government can assess a fee on companies that use TARP to make sure taxpayers don't lose out in the long run.

I am also glad that the final bill does not siphon profits from the program for an existing housing trust fund, as was proposed by the other side of the aisle. I firmly believe that all proceeds of sales must go to the Treasury and back to the taxpayers.

Taxpayers are protected because the final bill doesn't provide $700 billion upfront. The Administration originally wanted the authority to have it all at once, but this bill provides for the program to be implemented in stages. Only $250 billion will be provided immediately, and another $100 billion will be provided upon a written certification of need by the President. Finally, the remaining $350 billion will be provided unless Congress acts. Let's be clear. Congress can act anytime to revoke the Treasury's authority. They will be watched, and they will be questioned. And if Congress doesn't like what it sees, we can repeal this economic stabilization plan.

Finally, this bill provides for an increase in the deposit insurance cap through the Federal Deposit Insurance Corporation. The last time we increased the level was in 1980. The provision temporarily increases from $100,000 to $250,000 the amount of deposit coverage for banks and share coverage for credit unions. The coverage amount reverts back to $100,000 after December 31, 2009. The bill that was voted on by the House did not include this provision, which is an added protection for American families and businesses.

I am supportive of a provision in the bill to modify the tax treatment for banks holding preferred stock in Fannie Mae and Freddie Mac. The proposal would allow banks to treat gains and losses on Fannie Mae and Freddie Mac preferred stock as ordinary, instead of as capital, for tax purposes.

I have heard this relief is important for a number of Iowa community banks. These banks were permitted and even encouraged to hold these investments. These investments were believed to be safe. They had the backing of the Federal Government and provided reliable revenue streams through quarterly dividends.

In the wake of Treasury's acquisition of close to 80 percent of Fannie Mae and Freddie Mac, these preferred shares became virtually worthless. These small banks generally don't have capital gains. Accordingly, without this provision, they would not be able to recognize a tax deduction for their losses. This provision will help community banks satisfy their regulatory capital standards in order to continue to lend and support economic activity and growth in their local communities.

This legislation includes limits on executive compensation. I will be honest: I wish the executive compensation limitations were stronger. However, the limitations included in the bill are a step in the right direction. Why? Because those executives that got us into this mess should not be able to walk away from the institution that they ran with oodles of money. Not only should they be prohibited from walking away with oodles of money, they should go before the board of directors-- before the public--and before the stockholders and bow deeply and apologize for their mismanagement. Like the Japanese do. But I will say this--I will take what I can get, and I will look forward to taking a closer look at excessive executive compensation in the next Congress.

Despite my reluctant support for this bill, I remain concerned about the lack of provisions that will bring about long-term changes to our financial health. I would have liked to see language to address the underlying problems that led us to this emergency relief bill. However, I realize this situation calls for an emergency reaction, and we must temporarily forego consideration of provisions that would beef up the securities markets, and toughen regulations for companies that do business on Wall Street.

Take hedge funds, for example. Two years ago, I started conducting oversight of the Securities and Exchange Commission in response to a whistleblower who came to my office complaining that SEC supervisors were pulling their punches in their investigation of a major hedge fund. Nearly a year and a half ago, I came to this floor to introduce an important piece of legislation based on what I learned from my oversight. The bill was aimed at closing a loophole in our securities laws. In light of the current instability in our financial system, I think it is critical that Senators take another look at this bill. It is S. 1402 the The Hedge Fund Registration Act. It is pretty simple, only two pages long. All it does is clarify that the Securities and Exchange Commission has the authority to require hedge funds to register, so the Government knows who they are and what they're doing.

Given the SEC's current attempts to halt manipulative short selling and other transactions by hedge funds that threaten the stability of our markets, I am disappointed that the Senate did not adopt this legislation long ago. If it had, then the SEC might have more of the tools it needs now in these nervous markets.

One major cause of the current crisis is a lack of transparency. Markets need a free flow of information to function properly. Transparency was the focus of our system of securities regulations adopted in the 1930's. Unfortunately, over time, the wizards on Wall Street figured out a million clever ways to avoid transparency. The result is the confusion and uncertainty fueling the crisis we see today. This bill would have been one important step toward greater transparency on Wall Street, but so far it has been a lonely effort on my part.

Another problem in bringing about transparency in the market is the notion of suspending mark-to-market Rules. Mark-to-market accounting requires entities to calculate fair market value by estimating the price that would be received for that asset in an orderly transaction occurring on a specific date, i.e. willing buyer-willing seller. Contrary to public perception, the mark-to-market rule is not new. Other existing accounting standards have and continue to require certain assets to be written down if the asset value falls below cost. This is often referred to ``lower of cost or market''. Under mark-to- market, assets are required to reflect fair market value so they are measured above cost or below cost depending on market conditions. According to the Center for Audit Quality, an autonomous public policy organization affiliated with the American Institute of Certified Public Accountants, AICPA,``suspending mark-to-market accounting would throw financial accounting back to a time of less comparability, less consistency and less transparency''. This position is supported by the Council of Institutional Investors and the CFA Institute. The chairman of the Financial Accounting Standards Board said it best when he said ``the harsh reality is that we can't just suspend or modify the financial reporting rules when there is bad news.''

I hope Congress will consider these key statutory changes that are needed when we return early next year.

Aside from the economic stabilization plan that we are voting on today,

we are again discussing legislation designed in part to deal with time- sensitive tax matters. I strongly support this part of the package.

These identical AMT relief, disaster tax relief, and individual, business, and energy tax extender provisions were passed by the Senate by an overwhelming vote of 93-2 just last week. There are five categories of tax relief provided in the bill. The first one is the AMT patch. It expired on December 31 of last year. If we don't act, 24 million families will face an average tax increase of at least $2,000 each.

The second category of tax relief includes several tax benefits available to middle income taxpayers. They expired on December 31 of last year.

Included are deductions for out-of-pocket expenses for teachers, sales tax, and college tuition. Millions of taxpaying families would face an unexpected tax increase.

The third category consists of many valuable business incentives, like the research and development tax credit, that likewise expired.

In this time of high oil prices and instability in the energy markets, Congress should send a clear signal in support of alternative energy and conservation. This is the fourth category. We will not let the wide assortment of tax incentives for alternative energy and conservation expire this year.

The fifth and final category deals with disasters that have ravaged the Nation's heartland and the gulf coast. We need to respond to the folks in those regions, including my home State of Iowa.

This is must-do business. Congress cannot dawdle any longer. With a sense of urgency, Senators Reid and McConnell have devised a path for the Senate to complete action on these provisions. I would have rather processed this time-sensitive business several months ago, but better late than never.

Our leaders provided Chairman Baucus and me with the authority to make the deal. That was the critical step. I pulled out my notepad and resharpened my pencil. Chairman Baucus did the same thing. We have a bipartisan deal evidenced by our 93-2 vote last week.

Last year, I laid out the principles Senate Republicans would follow when it came to revenue raisers. The first principle would be whether the proposal is good tax policy. If the proposal is good tax policy, then we would support and vice-versa. This compromise meets that principle.

The crackdown on offshore deferred compensation plans is appropriate tax policy. I am pleased that we made it tougher on hedge fund managers by removing a charitable loophole. Likewise, the offsets in the energy portion of the bill are appropriate policy.

The second principle deals with how revenue raisers are accounted for. This is where the parties differ. How do they differ? Republicans don't want to go down the slippery slope of building in a bias towards tax increases and against current law tax relief. This is especially compelling when appropriations are wholly outside the Democratic version of pay-go. Likewise, $1.2 trillion of expiring entitlement spending does not figure into pay-go. The Democratic version of pay-go sets us down an irreversible path of higher taxes and higher spending.

If expiring tax relief and expiring spending and appropriations were treated similarly, maybe the deficit reduction rationale behind pay-go would be somewhat credible. As it exists now, it only reinforces an ideology of higher taxes and spending. The rejection of Senator McConnell's deficit neutral offer on AMT and extenders proves my point.

In any event, we found ourselves at an impasse. Democrats insisted on offsetting current law tax relief and Republicans resisted more tax and spend. Republicans were willing to use revenue raisers for new policy and for long-term or permanent tax policy. Republicans did not want to use revenue raisers for new spending.

We came to a compromise by looking at this impasse as a kind of prism. A prism breaks one beam of light into several different shades. Each side can look at the different shades of the prism from their own viewpoint and see that their principles were upheld.

At the end of the day, we will have an AMT patch, extenders, energy, and disaster relief package that is a compromise. Republicans will see that the compromise meets their principles. The offsets are good policy. From a Republicans standpoint, there is enough new policy in the energy part of the deal to tie the non-energy offsets. Otherwise, energy incentives are reformed. Republicans can see that the biggest item in the bill, the AMT patch is not offset. That preserves our point that the unfair AMT should not be a reason to raise taxes on other taxpayers. Likewise, there is enough new and modified policy to tie to the offshore deferred compensation revenue. Bottom line is that the leaders were able to secure a longer term extension of current policy as well with the revenue.

Democrats are able to see the offset policy from their standpoint. Democrats wanted significant revenue raisers and they got them. Both sides wanted the underlying revenue losing extensions and new policy.

Most prisms are delicate and transitory. This one is no different. Our friends in the House need to see that. They can break this fragile prism. The shards will cut millions of taxpaying families.

This deal defers the very vital debate between Republicans and Democrats on whether we tax our way out of this fiscal situation, the Democratic view. Or do we restrain spending, the Republican view.

That important debate, which has held us up for so long, is deferred to another day.

Each side holds to its principles. Each side does the Peoples Business. I thank Chairman Baucus and the leaders on both sides.

The tax provisions of this bill present the opportunity to preserve tax relief for millions of middle income families.

I would like to end by saying that I reluctantly support this bill. Again, I am outraged that Congress is in this position to relieve Wall Street and our financial industry. But, unfortunately, this is the hand we have been dealt and the options we have are limited.

I know people in Iowa are opposed to this bill. They would rather see companies fail than to have their dollars used to bail them out of this mess. My vote for this bill is not easy because I respect those concerns, and I agree with them. At the same time, this legislation is the best opportunity we have today to avoid a credit crunch that might cripple our economy. No doubt credit will be tighter with or without this bill as the system becomes more cautious after acting too fast and loose for too long. The argument for this bill is that by unplugging the pipeline that is clogged up with bad debt, good credit can flow. The U.S. Treasury can hold all that bad debt until its value returns with the goal of having the taxpayers recover some of the money, and possibly a great deal of the money, that's being committed with this legislation.

I have to vote in favor of this plan because I want to protect the people back home from what is coming their way if we don't act. I hope my constituents will understand why I feel the need to support this bill.

Mr. President, I have additional information to include in the Record that helps illustrate a point I made at the end of my speech yesterday regarding the comparative deficit impacts of the McCain and Obama tax and spending plans.

I noted that Senator Obama proposes to increase the national debt by a staggering $1.31 trillion more than Senator McCain over the next 10 years. This table illustrates that Senator Obama's combined annual tax and spending plan increases the deficit more than Senator McCain's on a cumulative basis beginning in 2009 and continuing each year thereafter over 10 years.

Once again, this data raises the question whether Senator Obama is serious about reducing our national debt by returning to responsible fiscal policies. Senator McCain will need to expand on this point as well.

I ask unanimous consent that this table be printed in the Record.

I ask unanimous consent to speak as in morning business.

Mr. President, beginning in the third week of July, I have come to the floor quite often to compare the tax plans of Senator McCain and Senator Obama, our two Presidential candidates. I have talked about the relationship between party control and the likelihood of tax hikes or tax cuts. I have used the infamous thermometer chart to demonstrate. I am not going to go through all of it again because I have talked about it several times on the floor of the Senate.

But up on the top, you can see that when a Democratic President controls the White House and the Congress at the same time, you had the biggest tax increase. And then, if you come down through there, you find in various phases you have more or less tax decreases or tax increases, and you have the most tax decreases when you have a Republican President and a Republican Congress.

Now, that is over the last 28 years, approximately. In another speech I talked about the 1992 campaign promise of the middle-class tax cut. I contrasted the promised tax cut with the 1993 tax legislation that contained a world record price increase. I have used this chart that is going up there now to depict what it would look like with 16 years of tax hike amnesia and Rip Van Winkle.

In our first week back after the August recess, I returned to these topics and I discussed the effects of the proposed 17- to 33-percent increase in the top two rates. I focused on small business activity and how increased taxes hurt that small business activity and hurt the job creation machine of our great economy, which is small business.

Last week, I discussed the impact of Senator McCain's and Obama's tax plans on seniors. Earlier this week, I discussed the fiscal effects of Senator McCain and Senator Obama's plans. Today, I focus on how both tax plans would affect the middle class. The press and the candidates have focused a lot of attention on the middle class. In fact, I remember a speech of Senator Obama's alluding to something about he never heard Senator McCain in the debate last week say anything about the middle class.

Well, Senator McCain is not comfortable in the class war-type rhetoric that some people are comfortable using, and he talks about the middle class a lot when he talks about small business and working men and women. So we have heard a lot about the middle class. So I wish to concentrate on that.

My discussion today will focus on tax policy. But to get a handle on what is and is not middle-class relief, we need to see if we can define the term ``middle class.'' Today I think we need to get answers to several questions as we try to get to the bottom line of where Senators McCain and Obama are on middle-class tax relief.

The first question would be: What is the definition of ``middle class''? To get at this question, we need to see what the two candidates say about who is in the middle class and how their plan defines the middle class.

The second question would be: Where are Senators McCain and Obama on the current law of middle-class tax relief that is set to expire. I am referring to the family tax relief provisions that expire at the beginning of 2011 and the alternative minimum tax fix.

To get to that question, we need to look at where each candidate's record has been on bipartisan tax relief. We also need to look at what they plan to do with these expiring tax relief provisions, which means when the tax laws of 2001 and 2003 sunset December 31, 2010.

The third broad question is: Where would Senator McCain and Senator Obama further reduce or hike taxes on middle-class families? To get an answer to this question we will take a look at each of the candidate's new proposals for middle-class tax cuts.

If you turn to factcheck.org, you will find the definition is not simple about what is a middle class. According to factcheck.org, there is no clear definition of middle class. Here is what they say there:

Middle class means different things to different people and

politicians. There is no standard definition, and, in fact,

an overwhelming majority of Americans say they are middle

class or upper middle class or

working class in public opinion polls. Hardly anyone

considers themselves lower class or upper class in America.

I ask unanimous consent to have this material printed in the Record at the conclusion of my remarks.

I have a chart that breaks down the answers to a Pugh Research Center poll. Among other questions, the poll asks whether folks thought of themselves as upper class, upper middle class, middle class, lower middle class, and lower class. In other words, basically dividing the country into different quintiles.

According to the poll, 53 percent of Americans considered themselves middle class, 19 percent consider themselves upper middle class, and 19 percent consider themselves lower middle class. So you have this outstandingly high percentage of 92 percent of Americans who consider themselves something other than upper class or lower class.

Since we are examining Senator McCain's and Senator Obama's tax plans, it is fair to ask about their definition of middle class.

On August 16 of this year, Senator McCain appeared on Pastor Rick Warren's forum at Saddleback Church in Albuquerque, NM. Pastor Warren asked Senator McCain to draw a line, in tax relief dollar terms, between the middle class and the rich. Senator McCain's answer reflects the ambiguity of the factcheck.org definition. I quote Senator McCain:

I think the rich should be defined by a home, a good job,

an education and the ability to hand our children a more

prosperous and safer world than the one we inherited.

So if you're just talking about income--

Then on television there was kind of a laugh and smile at that point--

how about $5 million? No, but seriously, I don't think you

can. I don't think seriously that the point is I'm trying to

make, seriously, and I'm sure that comment will be distorted

but the point is . . . that we want to keep people's taxes

low, and increase revenues. . . . So it doesn't really matter

what my definition of rich is because I don't want to raise

anyone's taxes. I really don't.

How does Senator Obama define the middle class? In an interview with Fox News of Bill Hemmer, Senator Obama answered the question this way:

You know, what I would say is, if you are making more than

$250,000, then you're more than middle class. You're doing

better. If you are making less than $250,000, then you are

definitely somewhere in the middle class. And if you're

making $150,000 or less, then I would think most Americans

would agree you're middle class. So that's why the fact that

you are making less than $250,000, you will not see your

taxes go up under an Obama administration. And you will see

tax cuts with more money in your pocket, if you are making

less than $150,000.

I ask unanimous consent to have printed in the Record the Bill Hemmer interview.

Senator McCain doesn't adopt a sharp line definition of middle class. Senator Obama defines middle class as everyone below $150,000. Senator Obama defines as a neutral area those earning between $150,000 and $250,000. Senator Obama defines families earning above $250,000 as upper class.

Now that we have the stated definitions of middle class, let's take a look at where Senators McCain and Obama would change the current family tax rate. If you take a look at Senator McCain's plan, you can get a handle of where he wants to cut middle-class taxes. In effect, you can get an idea of where Senator McCain believes further middle-class tax relief ought to go. Senator McCain would lower current law levels of taxation in two widely applicable proposals. The first would double the dependent personal exemption for a family of four. This relief would apply to taxpayers with incomes up to $120,000. This new tax relief would be phased out for those families between $50,000 and $120,000. I have a chart that shows which groups of families would be affected by Senator McCain's tax proposal. It is called the regular tax, between $32,000 and $132,000, by increasing the dependent personal exemption from $3,500 to $7,000.

The other area of family tax relief that Senator McCain is targeting is relief from the alternative minimum tax. During the last couple of weeks, the House and Senate have debated AMT extension bills. Take a look at the Congressional Record and examine the debate. If you do, you will see nearly all the Democrats and most Republicans in both bodies describe the overreach of the alternative minimum tax as a middle-class family tax problem. If the AMT patch is almost universally defined as middle-class tax relief, then a fair question is: Who benefits from this fix?

I have a chart that shows this. The chart refers to a Joint Committee on Taxation analysis of the last fix that became law, meaning the 2007 alternative minimum tax fix. You can see how it affected people in different categories. You will see from the chart that the AMT patch benefited families between $40,000 and $50,000 on the low end. And as we travel across the chart, you will see the biggest category of families benefiting to be in the $75,000 to $100,000 category and the $100,000 to $200,000 category. Roughly half the families benefiting, over 9 million, earned between $100,000 and $200,00. On the higher end, we find about half a million families earning between $200,000 and $500,000 also benefited from making sure that the alternative minimum tax doesn't hit middle-income people, a group of people who could be hit if Congress didn't fix it from year to year so that they didn't get hit. This year that number is 23 million people who would get hit if the Senate hadn't passed the bill we did last week.

The AMT patch relief conforms to polling data on how Americans define themselves. The AMT patch problem that the patch remedies spreads across a broad swath of American taxpayers, as we saw from the chart.

Senator McCain's second major tax relief proposal would build upon the alternative minimum tax fix. Senator McCain would extend the alternative minimum tax fix and enlarge it, starting in the year 2013. Under Senator McCain's plan, we would start to reduce the reach of the alternative minimum tax by expanding the patch by 5 percent per year on top of the increase in exemption amount of the patch for inflation. That proposal would provide more relief to some of the 4 million families currently paying the alternative minimum tax.

If we step back and take a look, we see that Senator McCain would further reduce regular taxes for families between $32,000 and $120,000. Again, we have up the same chart. Senator McCain would extend the AMT patch and gradually enhance it, and most of the families who would benefit from the AMT patch have incomes between $50,000 on the low end and $200,000 on the high. So it looks as if Senator McCain's operational definition of middle class probably conforms to the definition that we find in public opinion polls.

Senator Obama's stated definition of the middle class, in terms of further tax relief, consists of taxpayers earning under $150,000. Let's take a look at how his plan would operate. Senator Obama used a different definition of middle class in contrasting his tax relief plan with that of Senator McCain. Here is what Senator Obama's campaign said:

According to the Tax Policy Center, the Obama plan provides

three times as much tax relief for middle-class families as

the McCain plan.

Behind that claim is a comparison of the Tax Policy Center analysis of Senators McCain's and Obama's plans, proposals on families in the middle-income quintile. The middle-income quintile refers to the middle 20 percent of all families in America. According to the Tax Policy Center, that band of income runs between $37,596 and $66,354. I have a chart that depicts the band of income that would represent that middle income. We would point here to Senator Obama's tax relief down there, the light blue, between $37,000 and the $66,000 figures. As we can see, this is a much smaller group, 20 percent of the population topping out a bit above $66,000 a year income. That is far below the $150,000 and $250,000 figures Senator Obama mentioned in the Fox News interview I placed in the Record.

On the AMT patch, Senator Obama supports his words ``fiscally responsible'' AMT reform, whatever that vague concept means. Unlike Senator McCain, Senator Obama conditions extension of the AMT patch on his notion of ``fiscal responsibility.'' The Tax Policy Center assumes that this means that Senator Obama would extend the AMT patch and index it for inflation. However, this is just one think tank's interpretation of Senator Obama's statement that he supports fiscally responsible AMT reform. But for the sake of comparison, at least until 2013, the two candidates seem to be targeting the same middle-class family population. I depicted that band of middle-class tax relief on the chart, as we can see.

When we look at how both plans operate, Senator McCain's plan targets new regular family tax relief at middle-class families between $32,000 and $120,000. Senator Obama targets new regular family tax relief at middle-class families between $38,000 and $66,000. Both candidates target the same population for AMT patch extension. Senator McCain proposes additional alternative minimum tax relief by expanding the AMT patch in the year 2013 and beyond.

Let's turn to the second question. The question is, How will Senators McCain and Obama deal with middle-class family tax relief that will expire? The bipartisan tax cuts, from 2001 and 2003, provide a very large amount of tax relief to middle-class families. So the question is, Should we allow this tax relief to expire, as it will at the end of 2010? And if Congress doesn't do anything, as you have heard me say, we will get the biggest tax increase in the history of the country without even a vote of Congress because that is what sunsets do. You go back to old law. These 2001 and 2003 bipartisan tax cuts are set to expire at the end of 2010. If these tax cuts are extended, then in 2011 a married couple making $50,000 with two children would save an average of $2,300 on their tax bill. It is clear enough. I don't have to dwell on what the chart says. If we don't do anything for this class of taxpayers, the tax bill is going to go up $2,300 per year.

Likewise, you can take any class of people, but let's look at a single mom with two kids who makes $30,000 a year. She would save an average of $1,100 off of her tax bill in 2011, if the 2001 and 2003 tax cuts are extended--the same wall only with different figures. The 2001 and 2003 bipartisan tax relief bills provide much needed tax relief, almost all of which is scheduled to expire by the end of 2010. This bipartisan tax relief doubled the child tax credit, allowed this child tax credit to be used against any AMT liability, and made a large portion of this child tax credit refundable. This bipartisan tax relief also permanently extended the adoption tax credit and increased the credit to $10,000 per child. This bipartisan tax relief also increased the dependent care credit to a maximum of $6,000. In addition, it also provided tax relief from the marriage penalty. This bipartisan tax relief also provided a number of tax relief provisions to help make education more affordable.

For example, one provision gave a deduction up to $4,000 for college tuition and related expenses. In addition, another provision increased the annual limit on contributions to education IRAs from $500 a year to $2,000 a year.

I believe it is useful to look at where the candidates have been with respect to their positions on middle-class tax relief. Senator McCain has consistently supported middle-class tax relief in his Senate career. As far as I am aware, Senator McCain has never voted to raise taxes on middle-income families. Senator McCain helped prevent tax increases on middle-income families in 2004 by voting for the Working Families Tax Relief Act of 2004. Senator McCain's budget votes have consistently provided room for the extension of the lower income tax rates as well as suspension of the harmful PEP and PEASE provisions that are now being phased out because of the 2001 tax bill. In addition, Senator McCain has been consistently a supporter of even the repeal of those two provisions.

On the other hand, Senator Obama voted for the Democratic budget and the budget conference report this year that did not provide room to protect Americans in the 25-, 28-, 33-, and 35-percent tax brackets from being hit with this tax increase that will automatically happen at the end of 2010 because of sunsets. So we get, as I said once before, the biggest tax increase in the history of the country, without a vote of Congress.

According to the IRS, single individuals falling within the 25- percent bracket in 2008 start at taxable income of more than $32,550. They earn taxable income of no more than $78,850. Singles in the 28- percent bracket will earn taxable income of more than $78,850 or less than $164,550.

Senator Obama said in the Presidential candidates' September 26, 2008, debate he would not raise taxes a dime on people making under $250,000. But his two budget votes in 2008 do not provide room for him to keep that promise. In fact, he could not even make good on that promise to those singles making over $32,550 on taxable income based on the Democratic budget he voted for.

Instead, these taxpayers with over $32,550 in taxable income would be hit with a hidden marginal tax rate increase in the PEP and PEASE categories as well as a transparent marginal tax rate increase according to the budget that Senator Obama voted for.

I turn now to the harmful alternative minimum tax, or the AMT. Both parties agree the AMT is a tax on the middle class that the middle class should never have to pay. Why it hits them--and they should never have to pay it--and why Congress takes corrective action is because it was never indexed. In addition, both parties deserve blame for the problem we have, that the AMT is not indexed. However, the Omnibus Budget Reconciliation Act of 1993, passed strictly on party-line votes by a Democratic majority and signed into law by President Clinton, did even a lot more damage to the alternative minimum tax.

In the 1993 tax bill, the exemption level was increased to $33,750 for individuals and $45,000 for joint returns, but this was accompanied by yet great increases beyond what was already in law. Importantly, as in previous bills related to the AMT, these exemption amounts were not indexed for inflation. By the way, the 1993 tax increase was passed on strictly party-line votes, with the Democrats supplying the majority.

Once again, graduated rates were introduced, except this time they were 26 percent and 28 percent. By tinkering with the rate, as well as the exemption level of the AMT, these bills were only doing what Congress has been doing on a bipartisan basis for almost 40 years, which is to undertake a wholly inadequate approach to the problem that keeps getting bigger. By ``problem'' I mean taxing middle-income people by the alternative minimum tax--a class of people whom it was never supposed to apply to.

Aside from this futile tinkering I suggested from the 1993 bill, Congress--and, of course, we have tinkered with the AMT over the years to keep it from hitting additional middle class--Congress has in other circumstances completely ignored the impact of tax legislation on taxpayers caught by the AMT. In the 1990s, a series of tax credits, such as the child tax credit and the lifetime learning credit, were adopted without any regard to the AMT. The AMT limited the use of nonrefundable credits, and that did not change.

However, Congress quickly realized the ridiculousness of this situation and waived the AMT disallowance of nonrefundable personal credits, but it only did it through the year 1998. In 1999, the issue again had to be dealt with. The Congress passed the Taxpayer Refund and Relief Act of 1999. In the Senate, only Republicans voted for the bill. That bill included a provision to finally repeal the alternative minimum tax that was on the books from 1969 to that point. Senator McCain voted in favor of this bill to repeal the AMT. However, then- President Clinton vetoed the bill. So we still continued to have the alternative minimum tax.

Later on, in 1999, an extenders bill, including a fix good through 2001, was enacted which held harmless AMT for a little while longer.

In 2001, we departed from these temporary piecemeal solutions to fix the AMT through the tax bill of 2001. That bill permanently allowed the child tax credit, the adoption tax credit, and the IRA contribution credit to be claimed against a taxpayer's AMT. While this was certainly not a complete solution, it was a step in the right direction. More importantly, the 2001 bill was a bipartisan effort to stop the further intrusion of the alternative minimum tax hitting the middle class. The package Senator Baucus and I put together effectively prevented inflation from pulling anyone else into the AMT through the year 2005.

Our friends in the House originally wanted to enact a hold harmless only through the end of 2001. But the final compromise bill signed by the President increased the AMT exemption amount through 2005. Since the 2001 tax relief bill, the Finance Committee has produced bipartisan packages to continue to increase exemption amounts to keep taxpayers ahead of inflation, including the bill of 2005. Most currently, the 2007 AMT patch was extended in late 2007. Hopefully, the House will go along with what we did last week, and we will extend that through 2008.

These packages put together since 2001 are very unique in that they are the first sustained attempt undertaken by Congress to stem the spread of the AMT through inflation, hitting the middle class who was never intended to be hit.

Now, admittedly, these were nothing but short-term fixes. But they illustrate a comprehension of the AMT inflation problem and what needs to be done to solve it.

I now look at how the candidates have voted with respect to the AMT. Senator McCain has consistently voted to protect Americans from the alternative minimum tax. Senator McCain voted for the Tax Refund and Reconciliation Act of 1999, which contained a proposal to completely phase out the AMT. In fact, in the Senate, that conference report passed on Republican votes only, including Senator McCain's. In 2001, when the AMT patch began, Senator McCain supported the Senate version of the tax relief bill that patched the AMT for a longer period of time. Moreover, Senator McCain voted for the Tax Increase Prevention and Reconciliation Act of 2005 and later bills that extended the AMT patch.

In stark contrast to Senator McCain's voting record of providing relief from the AMT, Senator Obama voted against the AMT patch contained in the Tax Increase Prevention and Reconciliation Act of 2005. Also, Senator Obama opposed Republican budgets in 2005 and 2006 that provided revenue room for the AMT patch. Senator Obama supported the 2007 Democratic budget that omitted any revenue room for such an AMT patch. In 2008, Senator Obama supported the Democratic budget that, for the first time in this election year, provided some tax relief revenue room for fixing the AMT.

Senator McCain supported the 2008 Republican budget that provided similar revenue room for the AMT.

Therefore, when looking at each candidate's voting record, the conclusion that becomes apparent is Senator McCain has been much more supportive of middle-class tax relief than Senator Obama.

I will now turn to that third and final question I posed at the beginning of my remarks: What new proposals do the candidates offer on middle-class tax relief? We are going to move from the actions of the candidates and look, instead, at their words and what we can anticipate on whoever is sworn in on January 20 next year.

Let's take a look at Senator McCain's tax plan. Senator McCain proposes to extend all of the 2001 and 2003 bipartisan tax relief. In other words, for the most part, it seems to me you can say Senator McCain does not want to increase taxes, by keeping the present tax policy basically where it has been, at least as far as not sunsetting in 2010 what we did in 2001 and 2003 and, hence, not get the biggest tax increase in the history of the country, without even a vote of Congress, because that is what happens when those tax provisions expire. Also, that is where you go back to that family of four getting a $2,300 tax increase on a married couple making $50,000. Likewise, a single mom with two kids who makes $30,000 a year would save an average of $1,100 if the 2001 and 2003 tax cuts are extended. Now, we have gone through those figures before, but they are up here on the chart so you can recall what I previously had said. But I think it is necessary to emphasize it because that is exactly what is going to happen at the end of 2010 if Congress does not step in and keep the American people, but, more importantly, the American economy, from being harmed

by the biggest tax increase in the history of the country without a vote of the Congress.

In addition, Senator McCain proposes additional AMT relief by expanding the AMT patch in 2013 by indexing the patch by an additional 5 percent per year in addition to the indexing done for inflation, until the joint exemption amount is $143,000, at which time the patch would only be indexed for inflation. Therefore, those families making $143,000 and below would eventually be exempt from the AMT, and this $143,000 amount would be indexed for inflation.

Senator McCain would also double the dependent exemption from the current amount of $3,500 to $7,000. Senator McCain proposes to do this by increasing the dependent exemption by $500 each year beginning in 2010, until it reaches that $7,000 by the year 2016.

Therefore, this would provide significant additional tax savings for any married couple or single parent with one or more children. The tax relief provided by the doubling of the dependent exemption would be in addition to tax relief provided by the alternative minimum tax patch and extension of the 2001 and 2003 tax cuts.

Now, let's look at Senator Obama. He has said he is in favor of extending what he calls the Bush tax cuts, except for those Americans who make over $250,000 a year. As I have mentioned before, these should not be referred to as the ``Bush tax cuts,'' because if President Bush had gotten his way in 2001, they would have been much more than what they were. So Senator Baucus and I sat down in 2001. We were the leaders of the Finance Committee, as we are still; in his case, the chairman now, and I am ranking Republican. We worked on a bipartisan basis and did something significantly different than what President Bush wanted to do.

Regardless, Senator Obama says he would extend all of the 2001 and 2003 bipartisan tax relief for those making $250,000 or less. This includes the provision I discussed above regarding the 2001 and 2003 bipartisan tax relief, including lowering some of the marginal tax rates, providing marriage penalty relief and doubling the amount of the child tax credit to $1,000 per child.

Although Senator Obama's voting record might indicate otherwise, Senator Obama claims that he is in favor of ``fiscally responsible AMT reform.'' The Tax Policy Center assumes this means using the alternative minimum tax patch and indexing that patch for inflation to prevent more middle-class Americans from being hit by the AMT each year.

Senator Obama is proposing a new $500 tax credit called the making work pay credit that has the effect of exempting the first $8,100 of earnings from the Social Security tax. He also proposes a credit of up to $800 equal to 10 percent of the mortgage interest paid by Americans who do not itemize deductions.

Senator Obama also proposes turning the current nonrefundable saver's tax credit into a refundable credit, and the maximum credit for a married couple is $500.

Senator Obama proposes to rename the HOPE and lifetime learning credit by calling it the American opportunity tax credit. In addition, he would like to increase the maximum amount of this refundable credit from $1,800 to $4,000 and to make the credit refundable.

Finally, Senator Obama claims he wants to expand the earned-income tax credit in various ways. He also claims he wants to expand the child and dependent care credit by making it refundable.

I turn now to examine whether Senator McCain's and Senator Obama's promises regarding middle-class tax relief are realistic. Even if we assume both Senators want to enact all the tax cuts they are promising, could they deliver on these promises?

The nominally nonpartisan Tax Policy Center estimates that Senator Obama's tax plan will lose $2.9 trillion over 10 years when compared to current law. I have used this chart before in my speeches. I won't go into detail, but you can see the Obama plan is the top red line there which says how much it would lose. As I mentioned in a previous speech, this $2.9 trillion figure inaccurately assumes that Senator Obama's plan will be partially offset by $925 billion in revenue raisers. The Tax Policy Center refers to Senator Obama's $925 billion number as an ``unverifiable campaign-provided revenue estimate.'' As I mentioned in that previous speech, a more realistic estimate of revenue raisers over 10 years is approximately $220 billion, meaning Senator Obama's tax plan would actually lose another $705 billion in revenue. Therefore, the total revenue lost from Senator Obama's plan is not $2.9 trillion over 10 years but instead is approximately $3.6 trillion over 10 years.

The figure for Senator McCain's plan is higher. As my colleagues can see, the Tax Policy Center shows Senator McCain's plan to prevent widespread tax increases would lose revenue of $4.2 trillion over 10 years. In addition, as I mentioned in my prior remarks to the Senate, Senator McCain's proposal assumes revenue raisers of $365 billion. If we net that $365 billion number against the known revenue raisers number of $220 billion, we find that Senator McCain's plan is short of revenue raisers by $145 billion. Therefore, adding this $145 billion to the revenue loss of $4.2 trillion that the Tax Policy Center estimates for Senator McCain's tax relief plan results in total revenue loss of $4.3 trillion.

The National Taxpayers Union, also referred to around here as the NTU, is a nonpartisan public policy research organization. The NTU's analysis, updated September 25, 2008, says that Senator McCain's plan would include new spending of $92.4 billion per year. According to the NTU, this would result in spending increases of $924 billion over 10 years. Adding this $924 billion in estimated new spending to the revenue loss from Senator McCain's tax plan, this results in a total of $5.2 trillion of revenue loss, plus spending for Senator McCain's plan.

Now let's look at Senator Obama's tax and spending plans. Would Senator Obama's Democratic colleagues who have an obsession with pay- as-you-go on the tax side but not on the spending side, including House Blue Dog Democrats, go along with increasing the deficit approximately $3.6 trillion by Senator Obama's proposed tax cuts? This is even before taking into account the spending increases Senator Obama is proposing.

According to the nonpartisan NTU's analysis, which was updated September 25, 2008, Senator Obama has proposed to increase spending by $293 billion per year, which amounts to $2.9 trillion in additional spending over the 10-year window the Congressional Budget Office uses. Therefore, Senator Obama is proposing tax and spending programs that would increase the deficit by $6.5 trillion before even considering the cost of interest resulting from such an astronomical addition to our national debt. Therefore, Senator Obama proposes to increase the national debt by a whopping $1.3 trillion more than Senator McCain over that next 10-year period.

A portion of Senator Obama's March 13, 2006, speech regarding fiscal responsibility is posted on his campaign Web site. A portion of this speech states:

If Washington were serious about honest tax relief in this

country, we would see an effort to reduce our national debt

by returning to responsible fiscal policies.

Senator Obama's proposal to increase the national debt by $6.5 trillion is inconsistent with his statement regarding a return to fiscally responsible policy.

Even if he really did want to provide the tax relief he is promising, would a Democratic Congress let Senator Obama make good on most of his promises that would provide middle-class tax relief? Also, would a Democratic Congress fight attempts by Senator McCain to enact the tax relief proposals he has made?

Similar promises to those made by Senator Obama were made by candidate Clinton in 1992. Candidate Clinton said taxes wouldn't be raised on people making under $200,000 a year. However, President Clinton then raised taxes on everyone making $20,000 and over in 1993.

Perhaps Senator Obama would be able to provide some of the tax relief he has been promising but only to those Americans falling within his narrow version of the middle class, stopping at individuals making $66,000 or less, that he has been using in his campaign ads stating that he will provide three times more tax breaks than Senator McCain. Senator Obama has changed his definition of the middle class from $250,000 and below in his public statements to those making

$66,000 and below in his campaign ads and on his campaign Web site. This is definitely a change, but if you make more than $66,000, I wouldn't think this is a change you would ever want to believe in. One man's change is another man's flip-flop.

Considering the history when the Democratic Party has had control of the House, the Senate, and the Presidency--and I am going to put my thermometer chart back up here--considering the history of when the Democratic Party had control of the House, the Senate, and the Presidency, are you confident that Democrats won't raise taxes on you if you make $67,000, which is above the middle class, according to one of Senator Obama's two inconsistent definitions of middle class? As history has shown us, the largest tax increases come when Democrats control the House, the Senate, and the Presidency, and you see it at the top of the thermometer there. The lowest levels of taxation happen when you have a Republican President and you have a Republican Congress. As you look at the bottom, the figures appear at the bottom of the thermometer.

We need to carefully scrutinize Senator Obama's claims that Senator McCain wouldn't provide any tax relief at all for 100 million Americans, citing the IRS statistics of income tax stats. Moreover, Senator Obama has criticized Senator McCain's tax relief plan by saying that Senator McCain's plan would not provide any direct tax cut other than increasing the dependent exemption. Even the nominally nonpartisan Tax Policy Center states that Senator McCain would provide tax cuts for all Americans, as did the 2001 and 2003 bipartisan tax relief packages.

Exhibit 1

Q: Is there a standard, accepted definition of what

constitutes the ``middle class''?

Is there a standard, accepted definition of what

constitutes the ``middle class''? Politicians are fond of

talking about how the middle class will be affected by

policies and laws, but rarely do they define who is actually

part of that group.

A: No, there isn't. ``Middle class'' means different things

to different people--and politicians.

There is no standard definition, and in fact, an

overwhelming majority of Americans say they are ``middle

class'' or ``upper-middle class'' or ``working class'' in

public opinion polls. Hardly anybody considers themselves

``lower class'' or ``upper class'' in America.

It's possible to come up with a definition of what

constitutes ``middle income,'' but it will depend on how

large a slice of the middle one prefers. If we look at U.S.

Census Bureau statistics, which divide household income into

quintiles, we could say that the ``middle'' quintile, or 20

percent, might be the ``middle'' class. In 2006, the average

income for households in that middle group was $48,561 and

the upper limit was $60,224. But we could just as reasonably

use another Census figure, median family income. In 2006, the

median--or ``middle''--income for a family of four was

$70,354. Half of all four-person families made more; half

made less.

Journalist Chris Baker examined the ambiguous meaning of

the term ``middle class'' in a 2003 Washington Times story.

He, too, found no generally accepted definition, but he did

get this broad one from Jared Bernstein, an economist at the

liberal Economic Policy Institute: ``There are working

families who can pay their bills, but they have to really

think about such minimal expenditures as picking up a pizza

after work, going to the movies, making a long-distance

telephone call. They may have some investments, but they

depend on each paycheck for their well-being.''

But others could have different definitions. Baker

interviewed a man who earned about $100,000 a year and a

woman who made $35,000, both of whom said they were middle

class.

Public opinion polls show how slippery the term can be. An

Oct. 2007 poll by the Kaiser Family Foundation, Harvard

School of Public Health and National Public Radio asked 1,527

adults what income level makes a family of four middle class.

About 60 percent said a family earning $50,000 or $60,000 fit

that description. But 42 percent answered an income of

$40,000 and 48 percent said $80,000 were both middle class.

Other polls suggest that 90 percent or more of Americans

consider themselves to be ``middle class'' or ``upper-middle

class'' or ``working class.'' An April 2007 poll by CBS News

found that of 994 adults surveyed only 2 percent said they

were ``upper class,'' and 7 percent said they were ``lower

class.'' In another poll, taken by Gallup/USA Today in May

2006, 1 percent said they were ``upper class,'' and 6 percent

said they were ``lower class.'' Interestingly, since 12.3

percent of Americans were living below the official federal

poverty level in 2006, these poll findings suggest many who

are officially poor still consider themselves to be ``middle

class'' or ``working class.''

So what do politicians mean when they say ``the middle

class''? Good question. Each politician may be talking about

a different group of Americans, but the message many voters

hear is that the politician is talking about them.

For example, Democratic presidential candidate John Edwards

calls for ``tax breaks to honor and strengthen three pillars

of America's middle class: savings, work, and families.'' One

of his proposals is to expand a tax credit to give dollar-

for-dollar matches on savings up to $500 a year. Some version

of that credit would be available to families earning up to

$75,000.

Republican candidate Mitt Romney, meanwhile, has proposed

eliminating ``taxes on dividends, capital gains, and interest

on middle class families.'' He defines ``middle class'' as

anyone with an adjusted gross income of under $200,000--and

acknowledges that such a proposal would affect ``over 95

percent of American families.''--Lori Robertson

sources

U.S. Census Bureau. 2006 American Community Survey. Income

tables, accessed 23 Jan. 2008.

NPR, the Kaiser Family Foundation, and the Harvard School

of Public Health. Survey: Public Views on SCHIP

Reauthorization. Survey conducted Oct. 8-13, 2007. 17 Oct.

2007.

Survey by CBS News, April 9-April 12, 2007. Retrieved 23

Jan. 2008 from the iPOLL Databank, The Roper Center for

Public Opinion Research, University of Connecticut.

Survey by USA Today and Gallup Organization, May 5-May 7,

2006. Retrieved 23 Jan. 2008 from the iPOLL Databank, The

Roper Center for Public Opinion Research, University of

Connecticut.

Baker, Chris. ``What is middle class?; Income isn't

necessarily sole measure.'' The Washington Times, 30 Nov.

2003.

I yield the floor.

Mr. President, I want to visit with my colleagues for a bit about the tax treatment of health insurance. Republicans and Democrats who have studied the issue agree that the current tax treatment of health insurance is inequitable. Others believe our current tax rules increase health care spending and contribute to the growing number of uninsured, to add to other negative aspects of the present tax treatment of health insurance. Congress needs to take a very hard look at the Tax Code when it takes up health care reform.

There are a number of ways to structure a proposal that would change the tax treatment of health insurance. Today, I wish to talk about the way Senator McCain structures his proposal to change the tax treatment of health insurance. The reason I want to do this is because, as the senior Republican tax writer, it is my obligation to set the record straight.

For too many weeks, I have heard inaccurate statements made about McCain's proposal for a tax credit for health insurance proposals, and I have heard them from mostly Democrats. For example, my friend, the senior Senator from Illinois and the majority whip, was on the floor of this Chamber on Thursday, September 11, saying that ``Senator McCain will tax Americans' health insurance.'' The very next day, the junior Senator from Ohio, in an exchange with the majority whip, also said that Senator McCain ``wants to tax those health care policies that tens of millions of Americans have.'' The senior Senator from Delaware has also been saying Senator McCain wants to tax people's health insurance--not here on the floor but on the campaign trail as the Democratic nominee for Vice President. He has also been saying that in television interviews. The junior Senator from Illinois consistently makes this explosive claim on the stump.

Well, using the words of my distinguished friend: Enough. Whether or not the tax credit for health insurance proposals taxes a worker's health insurance, the claims that have been made are half-baked, and this is the reason: The critics of the McCain plan fail to mention a key component of his proposal. That key component is that Senator McCain would provide every American who purchases health insurance a tax credit.

It appears that the critics overlook--or maybe they just don't understand--that the tax credit provides a bigger tax benefit to people than they would receive under the current system. So people would be better off under the McCain plan. Don't the critics want to help lower and middle income workers better afford health insurance? Don't they want to help the uninsured? Senator McCain is on the side of these Americans, while his critics are favoring the status quo.

Another false claim I have heard is that the tax credit proposal would ``deny the deduction employers can take when they pay for all or a portion of their employees' health insurance.'' Again, that is flat wrong. Even Senator Obama has said that employers will pay taxes on health insurance under the McCain plan.

In the recent Presidential debate, my friend from Illinois said:

Here's the only problem: Your employer now has to pay taxes

on health care that you're getting from your employer.

I am taking the floor now to tell the junior Senator from Illinois and his Democratic colleagues, and especially the American people, that Senator Obama's description of his rival's proposal is inaccurate. Employers--and I emphasize this--will not pay taxes on the health insurance they offer to their workers.

I want to discuss how this issue is playing out in the media. Here is one instance. This past Sunday, on ABC ``This Week,'' Senator McCain was interviewed. In the interview, Senator McCain was asked about the accuracy of Senator Obama's claim that the McCain proposal for the tax credit for health insurance would ``tax health benefits for the first time by taking away the deduction that employers now get to provide health benefits.''

Here are the facts: The McCain plan does not--I repeat, does not-- take away the employer deduction.

Employers will not pay taxes on health benefits. Businesses will continue to be able to deduct health care expenses as they do now, and they will continue to be able to provide health care, as they do now.

For employers, then, there will be no change. No change. Finally, and most importantly, Senator Obama's campaign has consistently stated that the McCain tax credit proposal would ``raise taxes on the middle class.''

The left-leaning think tanks, funded by the likes of George Soros and company, have been making that same claim. So again I say enough. The McCain tax credit for health care insurance proposal would not increase taxes on the middle class. To the contrary, the proposal would provide low- and middle-income workers with, get this, a tax cut. But do not take my word for it. I would like to have you listen to the Tax Policy Center, a nonpartisan think tank that has received notoriety for analyzing the tax plans of Senator McCain and Senator Obama.

The Tax Policy Center illustrates that the McCain tax credit for health insurance produces a tax cut for workers. Len Burman, director of the Tax Policy Center, said, ``It is mostly a tax break,'' when he was interviewed by CBS News on September 15.

I ask unanimous consent to have the CBS News report printed in the Record.

The bottom line, the McCain tax credit for health insurance would not affect the employers' business deduction nor would employers pay taxes on health insurance. The proposal would not raise taxes on the middle class, rather it would provide a tax cut for the middle class.

Finally, while the proposal taxes workers' health insurance, Senator McCain is providing the same workers

with a tax credit, which is a bigger tax benefit than low- and middle- income workers receive under our current system.

I am going to slow down. Let me explain how health insurance is currently taxed. And the reason is because it is vitally important that my Senate colleagues and my friends in the media understand the current rules governing the taxation of health insurance. To be clear, there are very distinct tax rules that apply to, one, an individual purchasing their health insurance; two, an employer paying for all or a portion of its employees' health insurance; and, three, workers purchasing insurance through their employer.

Unfortunately, most people mix up these three different kinds of tax rules. For example, far too often I have heard people get the employee exclusion, which I will explain in a moment, confused with the employer business deduction. So I have a chart that lays it out. Employee exception and employer business deduction is not equal. Employee exclusion is for the worker; employer business deduction is for the employer.

The employee exclusion is there. Well, a worker purchasing health care through his or her employer does not pay income or payroll taxes on the cost of the health insurance policy.

In other words, the amount of health insurance coverage that is paid for by the employer is excludable from income. This means that the cost of the employer-provided health insurance is not taxable for income or payroll tax purposes.

In addition, the amount of the health insurance coverage that is paid for by the individual worker on their own behalf through a salary reduction arrangement reduces the worker's taxable income. This means that a worker has less income on which to pay income and payroll taxes.

As the chart says, the employee's exclusion is the tax benefit provided to the worker. Let's drill down on the employee exclusion for a moment. I want to explain how this tax benefit works.

Tax 101 teaches us that the tax benefit that you get from a tax exclusion, just like a tax deduction, is based on the tax bracket you are in. This means if you are in a high tax bracket, you receive a bigger tax benefit than someone in a lower tax bracket. So it is very regressive.

Here is a chart that illustrates how regressive the current employee exclusion of the cost of employer-provided health insurance really is.

So we have a new chart. Take a look at it. Here we assume that the average cost of a family's health insurance policy would be about $12,000. After all, the coverage that Members of Congress get costs around $12,000. So this ought to be a good number to use. As you can see, a worker in the 10-percent tax bracket would receive 1,200 dollars' worth of benefits. Compare this with a tax benefit that an upper income worker receives, and you find out it is $4,200 a year, a great amount of inequity.

We have to ask ourselves, is it fair that low- and middle-income workers receive a smaller tax benefit for health insurance than upper income workers receive?

Now, what is the employer business deduction? Here an employer paying for all or a portion of its employees' health insurance can deduct the amounts they pay as ordinary and necessary business expenses, no different than the employer can deduct wages. In essence, the Tax Code treats employer contributions for health benefits as compensation. This is consistent with how economists view employer contributions for health benefits. It is as simple as that.

It is important to note that the employer business deduction is a tax benefit provided to the employer. So we put the original chart back up. I did not want to leave out another very important tax benefit for health insurance, or should I say, the lack of a tax benefit. I am speaking about the fact that people who purchase their own health insurance generally do not receive a tax benefit under our current laws.

They could if they were self-employed, but I am talking about people not self-employed or not otherwise employed or employed where they do not have health insurance, and you want to buy it on your own. In this case, the individual purchases his or her own insurance with aftertax dollars out of their own pocket. These individuals are able to deduct medical expenses that exceed 7.5 percent of their adjusted gross income, but only if the individual itemizes their return. And exceeding the 7.5 percent of gross income to get an income tax deduction for health care and health insurance is not very common. That is why only about 6 percent of all tax returns claim the deduction above that 7.5 percent.

Let's now turn to how changing the current tax rules in the same manner, as contemplated by Senator McCain, would affect people and would affect employers. I want to explain to my friends who are critics, and I have told you who those Senators are, and my friends in the media, how the McCain tax credit for health insurance would actually work.

We can quickly cross the impact any changes would have on employers off the list right away. The reason: As I have said two or three times, employers will not be affected, contrary to what several Senators have said criticizing the health insurance plan of Senator McCain. Everyone needs to understand this key fact because the critics keep getting it wrong.

In other words, let me say for a fourth or fifth time: Employers will not be affected by how the McCain tax plan works.

Let's talk about individuals purchasing their own health insurance. As I mentioned, under the current tax laws, these people generally do not get a tax benefit. The McCain tax credit for health insurance proposal would give these people a meaningful tax benefit and do it for the very first time. The tax credit could be used by the individual to reduce the cost of their health insurance. In this case, the individual would not be required to spend as much of their own hard-earned money on health insurance as they do under the current system.

If the tax credit exceeds the pricetag of the individual's health insurance policy, the excess may be used for other health care expenses. You could use it like for copays or deductibles.

Now we get to the most important part. I am going to explain how workers will be affected by the McCain tax credit for health insurance. I would like all of my colleagues, whether you are Republican or Democrat, and particularly my friends in the media, to pay close attention because the senior Senator from Arizona has structured his tax credit for health insurance in a very unique way.

Let's get back to the basic. As I stated, health insurance that a worker purchases through his or her employer is not taxable to the worker. Again, this is referred to as the employee exclusion. The exclusion, however, has two parts. So we will look at a new chart.

No. 1, the worker does not pay income taxes on the cost of coverage; and, two, the worker does not pay payroll taxes on the cost of coverage. Very clear on the chart. The proposal advanced by my friend from Arizona would maintain the payroll tax exclusion. So let me repeat. The cost of health insurance a worker gets through their employer would not be taxed for payroll tax purposes. This goes for the employer as well.

That is why I have emphasized that the employers do not pay any taxes under the McCain plan. With regard to income taxes, Senator McCain converts the current income tax exclusion into a tax credit. Let me say it another way. The McCain tax credit for health insurance proposals does not eliminate the income tax exclusion. Instead, the income tax exclusion is converted to a tax credit.

So here, let's go back to tax 101. As I discussed earlier, tax 101 teaches us that a tax exclusion, just like a tax deduction, is tied to your tax bracket. A tax credit, on the other hand, is not tied to your tax bracket. Rather, the tax credit reduces your tax liability dollar for dollar. This means that, by definition, a tax credit is more valuable to a lower-income taxpayer. So if you were to convert the income tax exclusion into a tax credit, you would effectively be increasing the tax benefits for low-income workers.

Depending on the dollar amount of the tax credit, this would also be true for middle-income workers as well. So this is what I am saying: I am saying the McCain tax credit for health insurance is effectively increasing the tax

benefit for low- and middle-income workers. I am saying the McCain tax credit makes the tax treatment of health insurance more equitable because every worker is receiving the same tax benefit.

How can some of my friends on the other side oppose making the current tax treatment of health insurance more equitable? Do my friends not want to help out low- and middle-income workers? Let me show my colleagues and my friends in the media how the McCain tax credit for health insurance produces a tax cut.

Under the proposal, the health insurance a worker purchases through his or her employer would be taxed like compensation for income tax purposes. But, unlike compensation paid in the form of taxes, the proposal would not subject the cost of employer-provided health insurance to payroll taxes, as I have discussed. This means that amount of taxes a worker would be required to pay on the cost of their health insurance would only depend on the worker's income tax bracket.

Under the proposal, the worker would apply the tax credit against the new income tax liability that is generated from taxing the worker's health insurance.

In other words, the tax credit would offset any new income tax liability. As illustrated in this chart, because the new income tax liability would be less than the tax credit, the worker would actually receive a tax cut.

So let's take a closer look at the chart. We have several different brackets. Let's assume a family of four purchases a family health insurance policy of $12,000 through its employer. Under the proposal, this family would pay income taxes on a $12,000 policy. Let's assume this family would be in the 25-percent tax bracket. This family would pay $3,000 in additional income taxes. This new tax liability would be offset by a $5,000 tax credit for family health insurance. As a result, $2,000 would be left over. This means the family would receive a $2,000 tax cut. This is a tax cut that would be greater if a family purchased even less expensive coverage.

As we can see, the tax credit for health insurance produces a tax cut for all workers. The tax cut is progressive because workers in the 10- percent bracket are receiving almost five times the tax cuts for the workers in the 35-percent tax bracket.

You can see again, by looking at the chart, that a worker in the 10- percent tax bracket would receive a $3,800 tax cut, compared to the tax cut for an upper income worker in the 35-percent tax bracket of $800.

Like most campaign-related proposals, there are a number of questions of how the idea will impact people in the long run. As the senior Republican tax writer, I will ask these questions. If I determine that Congress needs to tweak the proposal here or there to improve it, I will recommend that we do so. But only time will tell whether we have to undertake such an exercise.

I hope my friends on the other side and those in the media have heard me. I hope they work on getting it right because it is clear, No. 1, that the McCain tax credit for health insurance produces a tax cut for workers; two, that the McCain tax credit for health insurance provides a tax benefit to people purchasing their own insurance and doing this for the very first time; and, three, that the proposal does not adversely impact employers in any way, shape, or form.

Exhibit 1

[From CBSNews.com]

The Truth About McCain and Insurance Taxes

Washington, September 15, 2008.--It's one of the most

explosive and important political charges of the election:

``He wants to tax your health benefits,'' Barack Obama said.

Obama's charge was that that John McCain wants to tax the

health insurance benefits. Americans buy through employers,

CBS News correspondent Wyatt Andrews reports.

``That's a $3.6 trillion tax potentially increase on middle

class families,'' Obama said. ``That will eventually leave

tens of millions of you paying higher taxes.''

John McCain wants a multi-trillion dollar tax on the middle

class? Here are the facts.

Obama has the tax part correct, but the impact on the

middle class is exaggerated--most people will see tax cuts.

McCain has proposed to end one of the largest tax breaks in

the entire economy. Some 60 million Americans buy health

insurance thru employers tax-free, and McCain would indeed

begin to tax the value of the benefit.

However McCain also proposes to give the money back as a

tax credit, $2,500 for individuals, $5,000 for families.

``Let's give them a $5,000 refundable tax credit to go out

and get the health insurance of their choice,'' McCain said.

``It's mostly a tax break,'' said Len Burman of the Tax

Policy Center.

The non-partisan Tax Policy Center says except for the very

richest Americans, most people buying insurance will see a

tax cut.

``Families at all income levels would pay lower taxes, at

least on average,'' said Burman. ``On average, is about a

$1,200 tax cut in 2009.''

On the issue of energy, meanwhile Gov Palin touts her

energy expertise based on Alaska's production.

``My job has been to oversee nearly 20 percent of the U.S.

domestic supply of oil and gas,'' she said.

Here are the facts: According to the Energy Department,

Palin's numbers are high.

Alaska provides 14.3 percent of America's crude oil, and

only 2.6 percent of its natural gas. You can check out the

Energy Information Administration statistics here.

On the health care debate, the Obama campaign tells CBS

News that one day, the middle class will be hit by a McCain

tax increase--but the experts CBS News consulted said that

day is 10 years away.

I thank my friend from Iowa. On that last point, my colleague from Iowa speaks of something that I would like to emphasize. And I presume one of the reasons he would

not like to see it on the continuing resolution is that it would jeopardize all of the relief in there for the flood victims we have in Iowa?

I would supplement also--I did not come here to speak on the same thing Senator Harkin did, but let me supplement something Senator Harkin said about suspicions that something could be wrong here and we need some sort of investigation.

Maybe my colleague from Iowa heard that about 2 or 3 days ago, there was an announcement by the FBI that they were investigating four of these institutions. If the FBI thinks something is wrong, you might not be far off that something is bad and needs to be investigated.

I wish to put my remarks this morning in the perspective of what I have been saying since June and July, and then we had the August summer break, and now in September on two previous occasions. So on maybe four or five previous occasions throughout the summer, I have come to the floor to speak about the differences of the tax policies of the two candidates for President. I come for that same purpose today.

But I wish to also say that my purpose in coming is twofold--one, so that people will pay more attention to the tax policies of the two Presidential candidates and consider those tax policies in light of some of the history I have brought to their attention, the history from a couple of standpoints: what had been said in previous elections and then what actually happened after those Presidents were sworn in, and maybe it was not exactly as they said it was in the Presidential election. So take that into consideration during this election.

The other one is to point out the history of different tax policy, when we have a President of one party, a Congress of another or when we have a Congress and a President of the same political party. So we take that into consideration when we want to analyze the checks and balances of Government working well for good tax policy. Why concentrate on tax policy? Because tax policy is a very important part of overall economic policy. Will we have a tax policy--hence, an economic policy--that grows the economy and creates jobs?

What this generation of policymakers ought to be all about is having an economic policy--and tax policy being part of it--that will advance opportunities for the next generation so we continue down the American trend of each generation succeeding, living better than the generation of mom and dad.

Starting in the third week of July, I have come to the floor to compare the tax plans of Senator McCain and Senator Obama. They are the two Presidential candidates. During this series of visits with my colleagues, I have talked about the relationship between party control and the likelihood of tax hikes or tax cuts. I use this famous thermometer chart. Well, I don't know whether it is famous, but I think it is a pretty good indicator of some things I have stated. There is a big difference between tax policy that comes out of a Congress, where the Congress and the President are of the same political party. A different tax policy emerges when the House and Senate may be of one party and the President of another. But we can see up there that when we have a Democratic President and a Democratic Congress at the top, we have less tax cuts and, in some instances, tax increases. When we have a Republican President and a Democratic Congress, we still have tax increases but somewhat less than when there is a Democratic President and Democratic Congress. Then, going down to the third from the top, we see a Democratic President, a Republican Congress. There we have tax decreases but not as much as if we go down to the next line, where we have a Republican President, a Republican Senate, and a Democratic Congress--more tax decreases but not as much as the next line. There is a Republican President, a Democratic Senate and a Republican Congress, where we get more tax cuts.

But we really get job-creating tax cuts and economy growth tax cuts when we have a Republican President and Congress.

I would like Members to think in terms of the thermometer, as we look at the debate going on in the campaign for the Presidency.

Later on in July, I talked about the 1992 campaign promise of a middle-class tax cut, then the 1993 tax legislation that instead of having middle-class tax cuts, we had, in the words of Senator Moynihan, then chairman of the Finance Committee, a ``world record'' tax increase. I use this chart, which depicts 16 years of Rip van Winkle, to remind people of Rip van Winkle waking up between the 1992 campaign for a middle-class tax cut that was promised before the November 3, 1993, election and then the tax legislation of 1993, which, in the words of Senator Moynihan, chairman of the committee at that time, ended up going from a middle-class tax cut promise of the 1992 campaign to the largest tax increase in the history of the country. Here we have the history of rhetoric in campaigns and how they might turn out after a President is sworn in.

In our first week back after the summer break, I discussed the effects of the proposed 17 percent to 33 percent increases in the top two tax rates. That is not my policy. That is not my making something up. That is basically what one of the candidates, Senator Obama, had said he is going to do if elected President. Then I also spoke during that speech of those 17-percent to 33-percent increases in the top two rates being very negative to the growth of small business activity and then, in the end, the detriment that does to job creation because small business creates most new jobs.

Then last week I discussed the impact of Senator McCain's and Senator Obama's tax plans on our senior citizens.

Today I would like to focus on the fiscal impact of both tax plans. It is particularly timely, considering the Treasury's recent activity and proposal to resolve the problems in our Nation's financial sector. Needless to say, from a fiscal policy standpoint, we are sailing into uncharted waters. I am sure everyone realizes there is always a large gap between what a Presidential candidate promises and what that candidate is able to deliver, if elected. We still need to carefully examine the plan that both my colleagues are putting forth during this election season. While neither plan is likely to be enacted exactly as laid out in the campaign, we can evaluate how realistic those plans are and also gain some insight into the candidate's vision of the Tax Code.

For a long time now, I have been saying we should stop calling the tax relief enacted in the 2001 and 2003 bills the Bush tax cuts and call it the bipartisan tax relief that it has been. Both bills, especially the 2001 bill, were passed with Democratic support in Congress where the Republican majority was narrow. My colleagues of the other party enjoy referring to it as the ``Bush'' tax cuts because they would like to put all blame on the President. That is quite easy to do when a President's popularity isn't so great. But, in fact, that is intellectually dishonest because the Bush tax cuts, if they had been enacted the way he campaigned and proposed them, would have been another $350 to $400 billion more than what Senator Baucus and I, in a bipartisan way, worked out because we thought it was more responsible and we could still do the economic good at a lower level of tax breaks. It should be called the bipartisan tax bill that it is and not denigrated with the Bush name on it because it was a lot different than what President Bush proposed to Congress.

In the case of the 2003 tax relief bill, Republicans passed it due to Vice President Cheney's tie-breaking vote. Maybe we don't want to speak to that so much as a bipartisan bill. But the first version of it going through the Senate, as I recall, was bipartisan. The implication that President Bush or Republicans were able to impose this legislation by themselves is ridiculous.

The 2001 and 2003 bipartisan tax relief bills became law only with the support of Members of both political parties. In confirmation of what I have been saying, that both bills were bipartisan, in those 2001 and 2003 tax relief bills we find that both major campaigns have adopted what is essentially the meat and potatoes of both bills.

To illustrate how both campaigns have adopted significant parts of the 2001 and 2003 tax relief package, I

present this chart. It is taken not from a partisan group but by the Tax Policy Center. This chart shows, as we can see, the fiscal impact of how both plans would change current law. The Tax Policy Center shows that Senator McCain's plan to prevent widespread tax increases would lose revenue of $4.2 trillion over 10 years. That is the red bottom line. Senator Obama's plan, which would include some widespread tax increases, would also contribute to the deficit. The Tax Policy Center says that number for the Obama plan would be $2.9 trillion. Remember, the Congressional Budget Office looks ahead 10 years, so I am talking about 10-year figures.

I have another chart. This chart assumes current law levels of tax relief in effect and then compares Senator McCain's and Senator Obama's plans. The Tax Policy Center also produced the data I am using in this chart. This chart shows Senator McCain's plan would raise $600 billion less than current tax policy. Senator Obama's tax plan would raise $600 billion more than current tax policy.

I respect the analysis done by veteran analysts at the Tax Policy Center. They have worked hard to develop a lot of data for policymakers, such as those of us in this Senate, for our use. If, however, we were processing legislation, it would have to be scored by the nonpartisan Joint Committee on Taxation, not by the Tax Policy Center. So the Tax Policy Center data is helpful, but we must note that the Joint Committee on Taxation will be the decisive scorekeeper of any legislation that either candidate would propose in their budgets after they are sworn in.

The Tax Policy Center has acknowledged that both candidates' plans lack detail. Necessarily then, the analyses and conclusions reached by the Tax Policy Center are qualified and need to be. There is a key caveat in these totals. Both plans assume revenue-raising offsets that lack specificity to be scored. Senator Obama has specified about $100 billion in defined revenue-raising proposals. That is close to the most aggressive accounting of revenue raisers in the congressional inventory. I am going to refer to a snapshot of the revenue raisers the House Ways and Means Committee has developed. It is in what I have referred to as the revenue-raising well chart. This is a chart that is modified from time to time, but I have been using it in the Senate for well over a year.

As this chart shows, roughly $90 billion in revenue-raising offsets have been defined, scored, and approved by the House Ways and Means Committee. That figure is considerably higher than revenue raisers approved by the Senate Finance Committee. Some of these offsets will be used in legislation we hope to pass shortly. This well chart gives us a rough snapshot of what is available. In other words, it is to bring some realism to what is politically accomplishable within the House and the Senate or between the two. This chart gives us that rough snapshot.

Let's then give the candidates the benefit of the doubt and round that $90 billion up to $100 billion.

Let's also look at the track record of tax-writing committees over the last few years. If you look at that history, you will find the committee generates about $1 billion per month. That is about--you can add it up--$12 billion per year. So let's gross-up the defined revenue raisers, then, to $220 billion.

Now, if you take that conservative number of $220 billion, how do the plans of the two candidates for President stack up? Senator Obama's tax plan contains $920 billion in unspecified, unverified tax increases. If we net that number against the $220 billion--that looks a little more realistic--we find that Senator Obama's plan is short on specified revenue raisers by $700 billion. To be evenhanded, Senator McCain is carrying $365 billion in unspecified revenue raisers. If we net that number against the known revenue raiser number of $220 billion, we find that Senator McCain's plan is short of revenue raisers by $145 billion. So let's take a step back just for a moment. It means the deficit impact of Senator McCain's plan is understated by about $145 billion. It means the deficit impact of Senator Obama's plan is understated by $700 billion. As against the current tax policy baseline, it means the plans are not as far apart as they might appear.

So let's go back to the current policy baseline. This is the Tax Policy Center's chart I have referred to two times already. It means we need to raise Senator McCain's deficit impact number from $5.3 trillion to $5.45 trillion. Likewise, we need to raise Senator Obama's deficit impact number from $3.9 trillion to $4.6 trillion. Keep in mind that the current policy baseline shows a revenue loss of $4.7 trillion. That is what the ranking Republican on the Ways and Means Committee, Mr. McCrery, calls the ``reality baseline.''

In recent weeks, Senator Obama has indicated he might revisit the marginal rate increases and increases in tax rates on dividends and capital gains after the election. I hope he will because his tax plan will stop growth in our economy. It is very bad when you have a recession. He said, if elected, he might reconsider them in light of an economy that might be in recession. So the deficit impact of Senator Obama's plan might be further understated.

If the candidates were just proposing tax changes, the deficit impact of their numbers would end with these figures I presented on these various charts. That would assume neither candidate would be doing anything on the spending side.

There is no Congressional Budget Office estimate of the two candidates' spending plans. A nonpartisan think tank, the National Taxpayers Union Foundation, has performed analyses and estimates of the two candidates' plans. I would use this chart that I do not think I have shown to Senators before. You can also find a comparative analysis at the National Taxpayers Union's Web site.

Let's take a look at Senator McCain's plan first. The National Taxpayers Union, a nonpartisan public policy research organization, NTU, says that Senator McCain's plan would include new spending of $68.5 billion per year. You can find the document, again, on the NTU's Web site.

Senator McCain has made it clear he wants to cut spending. That is consistent with his career in the Senate. He has been a spending cutter. Sometimes he has found it to be a very lonely fight. Senator McCain, despite fighting wasteful spending, has too often lost. Sometimes I have disagreed with his definition of wasteful spending, and, obviously, other times I have agreed with him. But one thing is clear: Senator McCain pushes spending cuts, and any honest, nonpartisan observer could not quarrel with that point. Senator McCain's overall economic plan continues his principle of cutting spending and keeping taxes low.

Senator Obama's plan on spending is completely different. The National Taxpayers Union counted up 158 new Federal spending programs. A conservative estimate of those programs came to $344.6 billion per year. We are talking, then, for emphasis, that Obama would spend $344.6 billion per year. You can look that up also on the NTU Web site.

If my friends on the other side have what they feel is a better estimate of Senator McCain's, on the one hand, and Senator Obama's, on the other hand, new spending plans, I would be glad to take a look at it. But when you look at the NTU analyses, you can see that Senator Obama's spending plans would amount to $276 billion more per year. Conservatively speaking, it means that, if elected, a President Obama's tax and spending plans, if enacted, would exceed a President McCain's plans, in deficit impact, before the end of the first term.

Something has to give. Senator McCain has been willing to put spending cuts on the table. It has been a hallmark of his congressional career. He would have to find a way to get the Congress to follow because that is not Congress's inclination, to cut spending. It would probably be his greatest challenge, but we know he is in the fight to restrain spending.

As a country, we cannot endure a deficit impact as large as would be projected under Senator Obama's tax plan, on the one hand, and add to it his spending plan, on the other hand. Where will Senator Obama adjust his plan, if elected? Will he abandon the tax cuts he has promised? Will he enlarge the group of Americans he has targeted for tax increases? Will he abandon his ambitious spending plans? Will he cut spending?

I think you need to think of the history of past campaigns, of what can happen to spending or tax policy enunciated in a campaign but not carried out after that President is elected, as evidenced by President Clinton in 1993, passing the biggest tax increase in the history of the country--and those are Senator Moynihan's words--contrary to the middle-class tax cuts he promised during the campaign. I hope Senator Obama is not up to that same game. But voters ought to be alerted to it, ought to be alerted, too, to make sure, as to things Senator McCain is saying, that if he is President, you have that to measure against. We need to keep candidates intellectually honest, not to promise too much on the campaign trail; when they get sworn in, they do not have so many promises to keep. But we should expect Presidents to keep promises.

More importantly, a President McCain or a President Obama is likely to be dealing with expanded Democratic majorities on Capitol Hill. That gets me back to my tax increase thermometer and what it has told us over the past 20 years: that with a unified Democratic Government, taxes are likely to go up, as evidenced by the top of the thermometer shown on this chart. At the highest level of tax increases, you get that when you have a Congress and a President that are both under Democratic control, as evidenced by the 20-year history. Spending is not likely to go down because whether Republicans are in control of Congress or the Democrats, the inclination of Congress is not to cut spending. That is not right, but that is a fact of life, and a President who wants to veto bills is a damper on that.

In closing, I would like to review the issues I have raised today very quickly. Many folks are asking about the fiscal impact of the tax plans proposed by Senator McCain and Senator Obama. The Tax Policy Center has produced data looking at the proposals against current law. Both candidates implicitly acknowledge current law is not a realistic measure. With that noted, the Tax Policy Center has examined the proposals against the more realistic baseline--current tax policy. If unspecified revenue raisers are deducted from both plans, the deficit impact of both plans grows. Likewise, we find the gap in deficit impact between the two plans narrows.

We cannot ignore the deficit impact of the spending side of each candidate's plan. Senator Obama's plan outspends Senator McCain's plan by over 500 percent. When Senators McCain's and Obama's plans are combined, Senator Obama's plan adds more to the deficit. In this troubled time, the Federal Government has stepped into the breach of the financial sector meltdown--all the more reason we need to closely scrutinize the tax and spending policies of our colleagues, Senators McCain and Obama.

Mr. President, out of respect for my colleagues--I had more to say, but it was in a little different version--I am going to give up the floor. But is anybody on the record to speak after the Senator from Michigan is done?

Senator Harkin?

How much time do I have?

Mr. President, I ask unanimous consent to have the floor for 5 minutes after the Senator from Michigan speaks.

Mr. President, there is a provision in the bill we passed Tuesday on taxes with only two dissenting votes that hasn't been discussed much, and I wish to refer to that provision. It is a modification of the alternative minimum tax credit allowance against incentive stock options. So the important words there are ``incentive stock options.'' Because of how stock options are treated by the AMT, the economic downturn in 2000 created a situation where many individuals owed tax on income they never realized. This is because they owed tax on the value of their stock options when they were exercised and not on what the value of the stock actually was when the shares were sold. Many people owed tax that was several times their actual income. Congress acted to remedy this situation through past legislation, but that did not completely

solve the problem. Many families are still facing an IRS bent on collecting liabilities owed now, despite the fact that those liabilities would be offset by credits in the near future. This means that the IRS was--and could, in the future--be working to seize assets such as family homes to satisfy present tax liabilities that would be eliminated within the next few years under current law.

One Iowa family caught in this AMT trap is the Speltz family of Ely, IA, near Cedar Rapids. Ron and June Speltz found themselves in the crosshairs of the IRS after Ron used stock options to purchase several shares of stock of his employer. I ask unanimous consent that an editorial printed in the Des Moines Register on July 24, 2006, that describes the Speltz family ordeal be printed in the Record.

Mr. President, despite the previous stock option alternative in minimum tax relief enacted earlier, the IRS is still after the Speltz family. In fact, this past June, Ron and June received a notice from the IRS announcing their intent to levy certain assets. After stating that the IRS intends to levy any State tax refunds, the notice continued: ``In addition, we will begin to search for other assets we may levy.''

I think anyone would be terrified to receive something such as this in the mail, especially when the outstanding liability derives from income never actually realized, and Congress has already decided that it shouldn't happen.

In July, I sent a letter with 26 of my colleagues in the Senate and the House to IRS Commissioner Shulman asking that he use the discretion provided to him by effective tax administration to suspend collection efforts to collect incentive stock option alternative minimum tax liabilities in order to give us a chance to fix this problem once and for all. Commissioner Shulman gave us that chance by agreeing that the IRS would not undertake any collection enforcement action through the end of the fiscal year. The end of the fiscal year is next Tuesday.

If the House does not stop playing politics with the taxpayers and instead pass the Senate extenders package that we passed with only two dissenting votes, Commissioner Shulman promises in his letter that ``the IRS will then continue to administer programs in accordance with current law.'' That means the Speltzes and probably a lot of other people spread around Iowa, California, and other places where high-tech was a big thing in the 1990s, their assets will be needlessly seized from them if we do not fix this problem.

This is not a political issue either. The original legislation to fix this problem was introduced in the Senate by Senator Kerry, and in the House by Congressman Chris Van Hollen. Both bills were cosponsored by Members of both parties. Even the National Taxpayer Advocate, in her Fiscal Year 2009 Objectives Report, agreed that this problem demanded immediate action.

Commissioner Shulman has given us the window we need to prevent additional taxpayers from being crushed in the grip of incentive stock option AMT liability. Any delay in enacting the Senate-passed legislation is to aid and abet the seizure of the Speltz family's assets and those of many other families.

According to the latest Small Business Administration report, issued in December 2007, all net new private sector jobs in 2006 were created by small businesses. According to the National Federation of Independent Business, almost half of those job-creating businesses are owned by taxpayers who are targeted with a marginal rate increase of 17 percent to 33 percent. Since these small businesses are likely to create or retain new jobs, maybe we could get a bipartisan agreement not to raise their taxes on small business.

I yield the floor.

I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, 2 years ago I started conducting oversight of the Securities and Exchange Commission. I did it only in response to a whistleblower who came to my office complaining that the Securities and Exchange Commission supervisors were pulling their punches in their investigation of major hedge funds. Nearly a year and a half ago, I came to this floor to introduce an important piece of legislation based on what I learned from my oversight 6 months before. The bill was aimed at closing a loophole in our security laws.

Now, in light of all the discussion going on about the problems of our financial markets and Wall Street and a very unusual weekend session we are having, as people are attempting to work compromises to help on Wall Street in light of all this current instability, it is critical that Senators take another look at this bill I introduced. It is S. 1402, introduced a year and a half ago, not just because it has become clear that we have a lot of financial problems up on Wall Street. S. 1402 is called the Hedge Fund Registration Act. It is pretty simple. It is only two pages long. All it does is clarify that the Securities and Exchange Commission has the authority to require hedge funds to register so the Government knows who they are and what they are doing. In other words, a little transparency that seems to be lacking in our ability to quantify the instruments that are securitized mortgages that are creating problems. So if there was a little more transparency there, unrelated to the issue I bring before the Senate, transparency makes a difference. We know what is going on. We quantify it.

Given the Securities and Exchange Commission's current attempts to halt the manipulative short selling and other transactions by hedge funds that threaten the stability of our markets, I am disappointed the Senate did not adopt this legislation a long time ago. If it had, the Securities and Exchange Commission might have more of the tools it needs now in these very nervous markets.

One major cause of the current crisis is, as I have said just now, the lack of transparency. Markets need a free flow of information to function properly. Transparency was the focus of our system of securities regulations adopted in the 1930s. Unfortunately, over time, the wizards of Wall Street figured out a million clever ways of avoiding transparency. The result is the confusion and uncertainty fueling the crisis we are trying to solve this weekend on the helping of Wall Street financially and stopping a credit crunch in this country. This bill would have been one important step toward greater transparency on Wall Street, but so far it has been a lonely effort on my part from the standpoint of this bill I introduced a year and a half ago. Perhaps attitudes have changed in the last several months, so I would urge my colleagues to support this legislation and help me assure it becomes law.

Technically speaking, the bill would amend section 203(b)(3) of the Investment Advisers Act of 1940. It would narrow the current exemption from registration for certain investment advisers. This exemption is used by large, private pooled investment vehicles, commonly referred to as ``hedge funds.'' Hedge funds are operated by advisers who manage billions of dollars for groups of wealthy investors in total secrecy. They should at least have to register with the Securities and Exchange Commission, such as other advisers do.

Currently, the exemption applies to any investment adviser who had fewer than 15 clients in the preceding year and who does not hold himself out to the public as an investment adviser. The Hedge Fund Registration Act I introduced narrows this exemption and closes a loophole in the securities laws that these hedge funds use to avoid registering with the Securities and Exchange Commission and operate in secret. Hedge funds affect regular investors. They affect markets as a whole.

My oversight of the SEC has convinced me that the Commission and the self-regulatory organizations need much more information about the activities of hedge funds in order to protect the markets. Organizations that wield hundreds of billions of dollars in market power every day should be registered with the agency Americans rely on to regulate financial markets.

As I explained when I first introduced this bill 1\1/2\ years ago, the Securities and Exchange Commission has already attempted to do this by regulation. So bravo, SEC. In other words, they acted, and bravo to them. But Congress needs to act now because of a decision by a Federal appeals court. In 2006, the DC Circuit Court of Appeals overturned an SEC administrative rule that required registration of these same hedge funds. That decision effectively ended all registration of hedge funds with the SEC unless and until Congress takes action--hence, my legislation.

The Hedge Fund Registration Act would respond to the court decisions by narrowing the current registration exemption and bring much-needed transparency to hedge funds. Most people say the devil is in the details. Well, let's go over the details so I am not trying to hide something.

The bill would authorize the Securities and Exchange Commission to require all investment advisers, including hedge fund managers, to register with the SEC. Only those that meet all four of the following criteria would be exempt. No. 1, managed less than $50 million; No. 2, had fewer than 15 clients; No. 3, did not hold himself out to the public as an investment adviser; and, No. 4, managed the assets of fewer than 15 investors, regardless of whether investment is direct or through a pooled investment vehicle, such as a hedge fund.

The Hedge Fund Registration Act is a first step in ensuring that the SEC simply has clear authority to do what it already tried to do and the courts said it could not do. Congress must act to ensure that our laws are kept up to date as new types of investments appear. Unfortunately, this legislation, introduced more than a year and a half ago, has not had many friends. These funds do not want people to know what they do and have fought hard to keep it that way. Well, I think that is all the more reason to shed some sunlight on them, to see what they are up to so maybe a couple years from now we are not dealing with problems the hedge funds have caused.

I urge my colleagues to cosponsor and support this legislation, as we work to protect all investors, large and small. It does not prohibit anything. It just makes sure these folks are registered and that you know who they are and how many there are. That is something we ought to know. It does need to be emphasized that we ought to know that in this day, when we are dealing with the problems we are here on this Friday night and Saturday and Sunday and Monday to find a solution to, the Wall Street problems this country now faces.

I yield the floor and suggest the absence of a quorum.

Mr. BOND addressed the Chair.

Oh, yes. I am sorry.

Mr. President, I want to provide some comments for the Record with respect to S. Res. 580. This resolution expresses the sense of the Senate on preventing Iran from acquiring a nuclear weapons capability.

Today, I have agreed to cosponsor S. Res. 580, introduced by Senator Bayh, Senator Thune, and Senator Smith. This resolution makes clear the need to take economic, political, and diplomatic action to prevent Iran from acquiring the capability to develop nuclear weapons.

S. Res. 580 sends an important message, and I support the policy reflected in this resolution. I did work with the authors of the resolution, however, to come to an agreement on a few minor changes to the resolution. For example, the word ``importation'' should be replaced with the word ``exportation'' on page 6. That's a technical change. I also wanted to see the word ``banning'' replaced with the phrase ``encouraging foreign governments to ban.''

Again, my staff and I have worked with Senator Bayh and his staff to address these two concerns, and he's graciously agreed to work toward incorporating these changes prior to any action by the Senate. On the basis of that understanding, I have agreed to cosponsor S. Res. 580.

I agree with my colleague, Chairman Baucus, and would

also like to extend my thanks to the chairman and ranking member of the HELP Committee, Senator Kennedy and Senator Enzi, for working with us on this issue. In my 7 years as chairman and ranking member of the Finance Committee, I have worked to preserve the committee's jurisdiction over legislation amending the Social Security Act, as Senator Baucus is doing now. In this case, the CMS certification requirement for rural health clinic designations is governed by title XVIII of the Social Security Act, which, as the Chairman has noted, is within the exclusive jurisdiction of the Finance Committee. The Balanced Budget Act of 1997 required that rural health clinics be located in an underserved or shortage area that were designated or updated within the previous 3 years but the 3-year requirement has only been applied to new facilities seeking to be designated as rural health clinics. The Centers for Medicare and Medicaid Services, CMS, recently issued a rule proposing changes in the requirements for rural health clinics. One of the proposed changes would apply the 3-year designation requirement to all rural health clinics and decertify RHCs located in communities where the shortage area designation is more than 3 years old.

The Health Resources and Services Administration, HRSA, and most States update their shortage area designations every 4 years. We need to align the timeframes for HRSA and CMS shortage area designations so that CMS certifications of rural health clinic designations would be valid for a 4-year period, consistent with the 4-year period used for HRSA designations. Otherwise, many rural health clinics in Iowa and other States throughout the country could lose their RHC designation simply because their State is not able to comply with the new CMS 3- year timeframe for certification.

Under the CMS proposal, if an RHC loses its designation or the State has not renewed its shortage area designation within 3 years, the RHC must request an exception within 90 days or it will be decertified 180 days after the 3-year period ends. Unless the statutory 3-year CMS certification period is changed to 4 years, many RHCs could be subject to being decertified in the near future unless they are deemed ``essential.'' Rural health clinics should not be jeopardized with closure because a shortage area designation has not been updated in a timely fashion by the State or Federal Government.

CMS has estimated that approximately 500 of the 3,700 rural health clinics operating today no longer meet the existing location requirements for RHCs, either because they are not in an area designated by the U.S. Census Bureau as ``nonurban'' or they are not designated by HRSA as being located in an eligible shortage area. Others believe that this estimate is too low. The National Rural Health Association has estimated that the proposed changes to the location requirements could result in up to 45 percent of RHCs being ineligible to continue in the program unless they are granted an exception. If this estimate holds true for RHCs throughout the country, over 1,600 RHCs could be decertified. This would severely impact access to health care for those in rural and medically underserved areas where rural health clinics provide the only access to critical medical services.

We are most appreciative of the efforts of our colleagues, Senator Kennedy and Senator Enzi, to amend H.R. 3343 to change the CMS certification period for shortage area designations from 3 to 4 years in order to align the CMS certification period for shortage area designations with HRSA's designation review period.

Mr. President, I am here today to talk about health insurance. A year ago, in the spirit of bipartisanship, I joined Senator Wyden and Senator Bennett in cosponsoring the Healthy Americans Act. The Wyden-Bennett bipartisan legislation offers elements that are consistent with a ``patient-driven'' approach to improving our health care system. A ``patient-driven'' approach means people can shop for their own health insurance in a competitive marketplace, which will allow them to choose the type of health care coverage that meets their needs. Many in the Democratic Party, including the Democratic Presidential candidate, want a Government-controlled system that is not ``patient-driven.'' This is a non-starter and is bad policy. And the majority of Americans do not want the Government making their health care decisions for them.

I continue to be interested in exploring ways to reform the health care system through the Tax Code. I am interested in examining whether Congress should offer Americans a choice between a tax credit and a deduction for health insurance. The Wyden-Bennett bill raises some tough questions that we need to explore as we look at health care reform. We need to determine the future role of Medicaid and SCHIP in our system over the long haul. We need to explore better ways to make the market work to hold down the rising costs of health care. And we need to find better ways to make health coverage more affordable and secure. This ``patient-driven'' approach--with insurance reforms and changes in the tax treatment of health insurance--should make health insurance more affordable for everyone. The goal should also be, if people are happy with their current health care coverage, they can keep it.

During my tenure in the Senate, I have sought to build bridges between Republicans and Democrats. I believe that there are times where Republicans and Democrats need to come together to produce results. Health care reform cannot be successful if it is not bipartisan. I commend Senators Wyden and Bennett for forging the only bipartisan effort in Congress to date.

As I did last year, I want to make clear that my cosponsorship of the Wyden-Bennett bill is not an endorsement of all that the bill proposes. Instead, I am cosponsoring this bill to add my voice to those who are calling for people to work across party lines to find innovative solutions that can work. While I support the ``patient-driven'' approaches in the bill, I have serious concerns about a number of the provisions of the Healthy Americans Act. For example, this bill would require all individuals to buy health insurance. I support accessibility to private insurance and differ with my colleagues on this point. Also, Senator Wyden's approach envisions a bigger role for Government than I would prefer. In addition, I certainly am not endorsing the repeal of the non-interference clause in Medicare Part D. That is not going to be on the table for me.

I also need to address a concern about the Wyden-Bennett bill I have seen pop up lately. These accusations are particularly troubling because I don't think they are accurate. It is true that the Joint Committee on Taxation has estimated the gross cost of the bill to be about $1.4 trillion annually by the year 2014. It is also true that the Joint Committee on Taxation estimated that the bill is fully paid for so the net cost to the Federal Government is zero. I have also read a concern that the Wyden-Bennett bill does not do enough regarding mandated benefits. The Wyden-Bennett bill reduces the impact of the myriad State mandates so that there will only be a much more limited set of requirements of a health plan much more consistent with what is already provided to Federal employees today.

Finally, I want to refute one particular charge regarding coverage of abortion services. The Wyden bill does not mandate that every American buy a health insurance plan that covers abortion services. This Senator supports legislation that protects life, and one only needs to point to my record in this area for evidence of that fact. I would not support a bill that requires individuals to purchase health insurance that covers abortion, or legislation that encourages women to seek abortion. And, while I agree that Americans deserve similar health care options that Members of Congress enjoy, I don't agree that Washington should mandate coverage of procedures that purposely end human life. Should this bill move forward, I will work with my colleagues to make sure abortion coverage is not made mandatory.

So my cosponsorship is not an endorsement of all provisions of the bill. Instead, I have cosponsored the Healthy Americans Act to add my

voice to the bipartisan call for significant changes in our health care system. This is only one step in the process of the public discussion of ideas for improving our health care system. I also intend to continue working with Chairman Baucus and members of the Senate Finance Committee on his health care reform agenda.

We have serious problems, and we need to solve them. So it's time to get to work.

Madam President, I rise today to honor SSgt Nathan M. Cox who was killed on September 20, 2008 in Korengal Valley, Afghanistan. Staff Sergeant Cox was serving with B Company, 1st Battalion, 26th Infantry Regiment, 1st Infantry Division, out of Fort Hood, TX, and died following the injuries that he sustained after his vehicle encountered an improvised exploding device by the roadside. I would like to express my condolences to Nathan's friends and family, in particular Nathan's parents Jane and Leslie, wife Annie, and 5-year-old daughter Sophia. They are in my thoughts and prayers.

Staff Sergeant Cox was deployed to Afghanistan in July of this year, having spent a year in Iraq prior to his arrival in Afghanistan. He had attended Davenport Central High School in Davenport, IA, and enlisted in the Army straight after leaving high school. Nathan spent 3 years in Bosnia during the mid 1990s. Then, in 2005, at age 29, he re-entered the Army to make it his career. Nathan made the ultimate sacrifice defending the country and the

people that he loved, so that those of us back home can enjoy safety and freedom. His bravery and the bravery of all of his comrades will never be forgotten by a grateful nation.

Jane Cox, Nathan's mother, said that Nathan was very interested in foreign affairs and hence chose the Army to utilize his talents. She added that Nathan had finally come to terms with his ``gift of being a leader.'' People who knew him describe a man with a great sense of humor who always looked on the bright side of everything. It is during these times of uncertainty abroad and at home that we look to the examples set by people like Staff Sergeant Cox, who carry out their duty in a way that is both courageous and honorable. I know that Nathan did not die in vain, but his tremendous sacrifice has helped to secure peace and freedom for the United States and our allies around the world.