Floor Statements

Mr. President. I rise today to introduce a bill that would further expand the definition of anabolic steroids under the Controlled Substances Act to include DHEA. I am pleased to be joined in this bi-partisan effort by my colleagues Senator McCain and Senator Durbin.

Eight years ago, baseball fans everywhere were witness to history as Roger Maris' 37 year old single season record of 61 home-runs was finally broken. Mark McGwire and Sammy Sosa captivated the public as their chase for the home-run record unfolded in living rooms everywhere. Three years later, Barry Bonds of the San Francisco Giants set a new record when he hit an unthinkable 73 home-runs in just one season. Now, with another Major League Baseball season just around the corner, the 42 year old Barry Bonds is on the brink of breaking the all time home-run record held by the great Hank Aaron.

A lot has changed since that historic 1998 season though. We now know that Mark McGwire had been taking an over the counter testosterone boosting supplement known as ``Andro'' at the time he broke the home- run record. A few years later, an anonymous phone call sparked what has since become the largest doping scandal in professional sports history. The BALCO scandal as it is famously known today, has exposed numerous top athletes across a wide range of sports and continues to this day. In fact, just this week, we learned that investigators found evidence that testosterone and other performance enhancing drugs may have been illegally purchased over the internet by current and former Major League Baseball and NFL players, college athletes, high school coaches, a former Mr. Olympia champion, and another top contender in the body building competition.

The publicity generated from these doping scandals even spurred Congress into action. In 2004, we passed legislation expanding the list from 23 to 59 anabolic steroids that are now regulated by the DEA, including ``Andro''. Legislation has also been introduced that would force Major League Baseball and other professional sports leagues, to strengthen their testing procedures and set new minimum penalties for any violations of the policy.

While all this publicity has helped to raise public awareness about the dangers of illegal performance enhancing drugs, much work remains to be done. Some recent studies appear to indicate that the use of illegal steroids among adolescents is beginning to decline. While this is good news, an alarming number of young people are still turning to these dangerous drugs to improve performance, appearance, or their self image.

Even more widespread however, is the use of over the counter supplements. Many young people turn to these ``supplements'' as an alternative to already illegal steroids, mistakenly believing that because they are sold over the counter, they must be safe. Yet, many of these over the counter ``supplements'' actually produce the same dangerous effects on the body as illegal steroids, some even become steroids in the blood stream.

In the year following Mark McGwire's record breaking 70 home-run season, sales of andro surged by more than 1000 percent. In 2004, we took action to control sales of these dangerous drugs and protect the unsuspecting public. Yet as I speak today, one anabolic steroid remains on the shelves of health stores around the country. This potentially harmful steroid can be bought by anyone, at any age and without consulting a physician first.

DHEA, is a steroid hormone that when ingested in the body, is converted into other more powerful steroid hormones including Andro and Testosterone. Both Andro and Testosterone are already controlled by the DEA under the Controlled Substances Act.

DHEA like all other steroids, may cause a number of long-term physical and psychological effects. Women could experience facial hair growth, scalp hair loss, deepening of the voice, and increased girth. Men could experience increased blood pressure or breast enlargement. Unfortunately, side effects associated with hormones don't always appear right away. While these effects may be mild at low doses, according to many experts high levels of DHEA might promote liver damage and cancer of the breast or prostate over time. The truth is we know very little about DHEA's long term effects.

In addition, because DHEA is marketed as a dietary supplement rather than a medicine, companies distributing DHEA products are not required to prove their safety and effectiveness to the Food and Drug Administration. Therefore, it is impossible to tell if these products are 100 percent pure or whether you are getting the same amount of DHEA the label claims. In fact, in 2000, the Good Housekeeping Research Group examined 8 popular DHEA products with ``antiaging'' claims and found that 5 of the 8 brands sent to an independent lab for testing, failed to accurately state the level of DHEA labeled on their product.

While often cited as an anti-aging pill, some advertisements do specifically target athletes. Take for example this advertisement on www.bodybuilding.com:

DHEA is HOT, and you will see why. As a pre-cursor hormone,

it leads to the production of other hormones. When this

compound

is supplemented, it has shown to have awesome effects.

Here is another advertisement found on AST Sports Sciences,

If you're a bodybuilder, and want to increase lean body

mass at the expense of body fat, actual studies show this

supplement may significantly alter body composition, favoring

lean mass accrual.

DHEA is already banned by the Olympics, the World Anti-Doping Agency, the National Collegiate Athletic Association, the National Football League, the National Basketball Association and minor league baseball, yet under current Federal law it enjoys special protections.

In 2005, as Major League Baseball and their steroid policy were coming under increasingly heavy fire, the top medical advisor to the League turned the tables on us as lawmakers, referring to DHEA and accusing us of failing to write a zero tolerance steroids policy into Federal law.

With that in mind, I am pleased to introduce this legislation today, which would put these potentially dangerous steroids behind the counter where they belong. We must make every effort to keep ALL steroids out of the hands of children and protect unsuspecting consumers. DHEA is not a food supplement, and should be treated as every other testosterone boosting substance in the steroid family.

I encourage my colleagues to join in support of this legislation.

I send the draft of this legislation to the desk and ask unanimous consent that the text of this bill be printed in the Record.

Mr. President. I rise today to introduce a bill that would further expand the definition of anabolic steroids under the Controlled Substances Act to include DHEA. I am pleased to be joined in this bi-partisan effort by my colleagues Senator McCain and Senator Durbin.

Eight years ago, baseball fans everywhere were witness to history as Roger Maris' 37 year old single season record of 61 home-runs was finally broken. Mark McGwire and Sammy Sosa captivated the public as their chase for the home-run record unfolded in living rooms everywhere. Three years later, Barry Bonds of the San Francisco Giants set a new record when he hit an unthinkable 73 home-runs in just one season. Now, with another Major League Baseball season just around the corner, the 42 year old Barry Bonds is on the brink of breaking the all time home-run record held by the great Hank Aaron.

A lot has changed since that historic 1998 season though. We now know that Mark McGwire had been taking an over the counter testosterone boosting supplement known as ``Andro'' at the time he broke the home- run record. A few years later, an anonymous phone call sparked what has since become the largest doping scandal in professional sports history. The BALCO scandal as it is famously known today, has exposed numerous top athletes across a wide range of sports and continues to this day. In fact, just this week, we learned that investigators found evidence that testosterone and other performance enhancing drugs may have been illegally purchased over the internet by current and former Major League Baseball and NFL players, college athletes, high school coaches, a former Mr. Olympia champion, and another top contender in the body building competition.

The publicity generated from these doping scandals even spurred Congress into action. In 2004, we passed legislation expanding the list from 23 to 59 anabolic steroids that are now regulated by the DEA, including ``Andro''. Legislation has also been introduced that would force Major League Baseball and other professional sports leagues, to strengthen their testing procedures and set new minimum penalties for any violations of the policy.

While all this publicity has helped to raise public awareness about the dangers of illegal performance enhancing drugs, much work remains to be done. Some recent studies appear to indicate that the use of illegal steroids among adolescents is beginning to decline. While this is good news, an alarming number of young people are still turning to these dangerous drugs to improve performance, appearance, or their self image.

Even more widespread however, is the use of over the counter supplements. Many young people turn to these ``supplements'' as an alternative to already illegal steroids, mistakenly believing that because they are sold over the counter, they must be safe. Yet, many of these over the counter ``supplements'' actually produce the same dangerous effects on the body as illegal steroids, some even become steroids in the blood stream.

In the year following Mark McGwire's record breaking 70 home-run season, sales of andro surged by more than 1000 percent. In 2004, we took action to control sales of these dangerous drugs and protect the unsuspecting public. Yet as I speak today, one anabolic steroid remains on the shelves of health stores around the country. This potentially harmful steroid can be bought by anyone, at any age and without consulting a physician first.

DHEA, is a steroid hormone that when ingested in the body, is converted into other more powerful steroid hormones including Andro and Testosterone. Both Andro and Testosterone are already controlled by the DEA under the Controlled Substances Act.

DHEA like all other steroids, may cause a number of long-term physical and psychological effects. Women could experience facial hair growth, scalp hair loss, deepening of the voice, and increased girth. Men could experience increased blood pressure or breast enlargement. Unfortunately, side effects associated with hormones don't always appear right away. While these effects may be mild at low doses, according to many experts high levels of DHEA might promote liver damage and cancer of the breast or prostate over time. The truth is we know very little about DHEA's long term effects.

In addition, because DHEA is marketed as a dietary supplement rather than a medicine, companies distributing DHEA products are not required to prove their safety and effectiveness to the Food and Drug Administration. Therefore, it is impossible to tell if these products are 100 percent pure or whether you are getting the same amount of DHEA the label claims. In fact, in 2000, the Good Housekeeping Research Group examined 8 popular DHEA products with ``antiaging'' claims and found that 5 of the 8 brands sent to an independent lab for testing, failed to accurately state the level of DHEA labeled on their product.

While often cited as an anti-aging pill, some advertisements do specifically target athletes. Take for example this advertisement on www.bodybuilding.com:

DHEA is HOT, and you will see why. As a pre-cursor hormone,

it leads to the production of other hormones. When this

compound

is supplemented, it has shown to have awesome effects.

Here is another advertisement found on AST Sports Sciences,

If you're a bodybuilder, and want to increase lean body

mass at the expense of body fat, actual studies show this

supplement may significantly alter body composition, favoring

lean mass accrual.

DHEA is already banned by the Olympics, the World Anti-Doping Agency, the National Collegiate Athletic Association, the National Football League, the National Basketball Association and minor league baseball, yet under current Federal law it enjoys special protections.

In 2005, as Major League Baseball and their steroid policy were coming under increasingly heavy fire, the top medical advisor to the League turned the tables on us as lawmakers, referring to DHEA and accusing us of failing to write a zero tolerance steroids policy into Federal law.

With that in mind, I am pleased to introduce this legislation today, which would put these potentially dangerous steroids behind the counter where they belong. We must make every effort to keep ALL steroids out of the hands of children and protect unsuspecting consumers. DHEA is not a food supplement, and should be treated as every other testosterone boosting substance in the steroid family.

I encourage my colleagues to join in support of this legislation.

I send the draft of this legislation to the desk and ask unanimous consent that the text of this bill be printed in the Record.

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

Madam President, my remarks are in regard to amendment No. 309, which is my amendment, but it was offered, as a lot of other amendments on this side of the aisle were, by Senator McConnell, and so I am going to speak now on amendment No. 309.

This amendment seeks to shut down terrorists and criminal organizations by attacking their most valuable resource, and that is their money. Terrorists and criminal organizations take many different forms, but there is one factor that they all have in common, and that is the need to obtain, transit, and store money to do their dirty work.

In the past few years, we have made some significant advancements in identifying how these groups obtain and attempt to legitimize their illicit funds. Yet as we close one door, these criminals seek to open another to move their money around and to continue their dirty work. In fact, they continue to take advantage of loopholes and inconsistencies in our current law. We must continue to be vigilant in closing these loopholes, and we must not underestimate their capabilities or resolve.

As we consider amendment No. 309, I think we have to consider that this will not necessarily be the last word. These terrorists are so sophisticated in their operation that they may find some way to get around what we are doing now. As long as we are constantly vigilant, as long as we are constantly throwing roadblocks in the way of legitimizing their money and transiting their money, we will curtail their dirty work to some extent. Any

efforts that we make to improve America's security must then, without question, address how terrorists and criminals are funding and financing their operations.

One of the main recommendations that have come from the 9/11 Commission Report was that, and I quote:

Vigorous efforts to track terrorist financing must remain

front and center in the U.S. counterterrorism effort.

These groups know well that we are looking hard to determine sources of funding that they use. They also know that we must continually develop new tactics to avoid detection, prosecution, and ultimately to protect those sources of funding. This has become, as we say in the Midwest, a kind of cat and mouse game. Like the larger war on terror, we cannot afford to lose this cat and mouse enterprise.

My amendment will close existing loopholes. My amendment will remove the inconsistencies that allow terrorists and criminals to hide illegal funds within legal institutions and then move those funds for profit or to fund their activities or, you might say, for both.

Our law enforcement agencies and our prosecutors must have the resources they need to bring these criminals to justice and to shut down their operations and, hopefully, shut them down permanently. For example, my amendment simplifies the continual growing list of over 200 predicate crimes dedicated for Federal prosecutors to bring a money laundering charge.

My amendment will allow U.S. attorneys to use any Federal or State felony as a predicate offense to bring a money laundering charge.

My amendment will also greatly simplify how prosecutors may seek indictments for money laundering violations. It also closes many loopholes that have allowed the terrorists and criminals to move money into this country.

Clever tricks, such as traveling with blank checks with bearer form or in bearer form and the commingling of illegal and legitimate money in bank accounts will no longer be available to these criminal organizations.

Under my amendment cash smugglers will no longer be able to hide behind a claim of ignorance about the source of the money they carry.

The amendment will also provide necessary changes to our antiquated counterfeiting statutes. The stability of our currency is paramount to not only our economy but also the economies of so many other countries that seem to follow the dollar. The dollar is the most recognizable currency in the world and an inescapable target for counterfeiters.

For instance, U.S. currency counterfeiting operations have been identified in places such as Colombia, North Korea, and the Middle East, undoubtedly giving counterfeiting ties to drug cartels and to sponsors of terrorism. This crime has evolved and continues to evolve with the explosion of computer printing technology.

This amendment will bring our counterfeiting statutes in line with these dramatic technological changes and give law enforcement agencies, especially the Secret Service, the resources to fight counterfeiting and other financial crimes on an international scale.

Any effort we make to increase the security of this Nation must then strive to remove sources of funding available to the terrorists and to the criminals. Without financial resources, these groups will no longer be able to make profits or fund operations.

Our Nation, for a long period of time, has been trying to shut off sources of funding. As I indicated earlier, we are up against a sophisticated enemy that always finds some way around our laws to legitimize what they do. Once again, I want to emphasize that it is a constant struggle to keep our laws so that the criminal element cannot find these loopholes and do something legally that finances their illegal activities.

These criminals should not be allowed to hide behind loopholes in our laws, and we should give law enforcement and prosecutors the ability to deal the ever-changing tactics of terrorists and criminals. In essence, our goal should be nothing less than putting these criminal organizations out of business, and putting them out of business for good.

This amendment is critical to our homeland defense. It implements changes that the 9/11 Commission recommended in its report, which was a bipartisan commission and, consequently, a bipartisan report. We are dealing with something that should have support on both sides of the aisle.

This amendment also has the support and backing of both the Department of Justice and the Secret Service. It has the support of the Secret Service because one of their many responsibilities--and maybe one of their original responsibilities--is to protect the integrity of American currency.

I urge my colleagues to support this important amendment and improve America's security by combating terrorist financing and criminal money laundering.

Amendment No. 300

Madam President, another amendment that was filed by our Republican leader, Senator McConnell, is No. 300, which I will also now discuss. That amendment to the underlying bill will revise current laws related to visa revocation for visa holders who are on U.S. soil.

Under current law, visas approved or denied by consular officers are nonreviewable and are deemed final. However, if a visa is approved but later revoked, and that individual is on U.S. soil, the decision by the consular officer then becomes automatically reviewable in our U.S. courts. My amendment would treat visa revocations similar to visa denials because the right of that person to be in the United States is no longer valid.

It is very important that we do this for these reasons: Consider visa revocations related to terrorism. From September 11, 2001, until the summer of 2003, the State Department revoked about 1,200 visas based upon terrorism links. I asked Secretary Chertoff, the Secretary of Homeland Security, about the problems with our current law on visa revocation. I will quote what he said to me on Wednesday when he was before the Judiciary Committee:

The fact is that we can prevent someone who is coming in as

a guest. We can say, you can't come in from overseas, but

once they come in, if they abuse the terms and conditions of

their coming in, we have to go through a cumbersome process.

That strikes me as not particularly sensible. People who are

admitted as guests, like guests in my house, if the guest

misbehaves, I just tell them to leave. They don't get to go

to court over it.

That is the end of his quote, but he makes it very clear that he believes somebody who should not have been here in the first place shouldn't have the right of protection of our courts before they are removed.

Following on the Secretary's analogy, I think we can equate the role of homeowner to that of consular officer. Currently and historically all decisions by consular officers with regard to the granting of visas are final and not subject to review. Revocations, then, should not be treated any differently than that original denial, when somebody did not have the right to come here in the first place.

Let me explain how we got here. Back in 2003, a Government Accountability Office report revealed that suspected terrorists could stay in the country after their visas had been revoked on grounds of terrorism because of a legal loophole in the wording of the revocation papers. This loophole came to light after the Government Accountability Office found that more than 100 persons were granted visas that were later revoked because there was evidence the person had terrorism links and associations.

The FBI and intelligence community suspected ties of terrorism in over 280 visa applications. The FBI did not share the information with our consular offices in time, so the consular officers actually granted the visa so somebody with terrorism connections could come here when they should not have been allowed into the country. When they got the derogatory information from the FBI, it was too late; they had access to our courts.

The consular officer had to revoke the visas. What the Government Accountability Office found was that even though the visas were revoked, immigration officials couldn't do anything about it. They were handicapped from locating the visa holders and deporting them. In the end, it turned out OK, but it is an example of the mistakes that can be made. It is also an example of the loophole terrorists are smart enough to exploit.

Why, then, are revoked visas such a problem? The short answer is that the

person with the revoked visa can stay in the United States--a terrorist, then, can stay in the United States--and can appeal the consular officer's decision of whether they had a right to be here in the first place. Thanks to a small provision inserted during the consideration of the Intelligence Reform and Terrorism Act of 2004, the visa holder has more rights than he or she should have, considering the terrorist connection. If they were originally denied a visa by the consular officer, there would be no right to dispute it.

I will give an example. If a consular officer grants a visa to a person and that person makes his or her way to the United States and after arriving in the United States the consular officer finds out that the foreign individual has ties to terrorism--maybe the consular officer found out that the visa holder attended a terrorist training camp or maybe the intelligence community just informed the consular officer that the visa holder was linked to the Taliban or maybe our Government just learned that the visa holder gave millions of dollars to a terrorist organization before they applied for a visa--whatever the case might be, the person should not have a visa, and the consular officer has to revoke it. This revocation should be a final determination--no ifs, ands, or buts about it. It should not be reviewable and especially should not be reviewable in the U.S. courts.

What are the ramifications, then, of where we are today with the law and why change the law? Deporting an alien on U.S. soil with a revoked visa is nearly impossible today if the alien is given the opportunity to appeal that revocation. This exception has made the visa revocation ineffective as an antiterrorism tool. Allowing review of revoked visas, especially on terrorism grounds, jeopardizes the classified intelligence that led to revocation. It can force agencies such as the FBI and the CIA to be hesitant to share information if it might get out within the environment of a court. Current law could be reversing our progress in information sharing.

So why is this relevant, then, to the bill on the floor? The 9/11 Commission--again, I want to emphasize it is a bipartisan commission-- found flaws in our visa policies. Specifically, the staff report said that the 19 hijackers used--these are the 19 people who died on those airplanes that killed 3,000 Americans--these 19 hijackers used 364 aliases. Two of the hijackers may have obtained passports from family members working in the Saudi passport ministry. The 19 hijackers applied for 23 visas and obtained 22. The hijackers lied on their visa applications in detectable ways. The hijackers violated the terms of their visas, and they came and went at their very own convenience.

The leaders of the Senate claim that the underlying bill will finish the implementation of the 9/11 Commission recommendations. The floor manager on the other side of the aisle was quoted as saying:

Every day that we don't act is another day in which we are

not as secure here at home as we should be.

The 9/11 Commission pointed out the obvious by stating:

Terrorists cannot plan and carry out attacks in the United

States if they are unable to enter our country.

The 9/11 Commission explicitly recommends, on page 385, that:

The United States should combine terrorist travel

intelligence, operations, and law enforcement in a strategy

to intercept terrorists, find terrorist travel

facilitators, and constrain terrorist mobility.

So we are back to my amendment. The amendment, amendment No. 300, helps to achieve this goal. Intelligence officials need to share information with immigration and consular officers to prevent terrorists from entering the United States and impede the mobility of terrorists throughout our country, wherever they want to do their dirty work.

The Speaker of the House pointed out that:

Implementing the 9/11 Commission recommendations is

supported by 62 percent of Americans.

I think a higher percentage of Americans would agree that reforms to our immigration and visa policies should not be ignored, especially given the 9/11 Commission's recommended actions on these issues that then would make it easier to get these people with revoked visas out of the country and would not put them in an environment where, if they were going to be pursued through the courts to get them out of the country, that intelligence information or FBI sources would have to be disclosed in the courts.

Unfortunately, our leaders have forgotten a major recommendation of the 9/11 Commission. In other words, this bill is not as complete as the authors of this legislation want us to think it is, and this amendment will make it more complete. This amendment would constrain terrorists' travel, and it should be accepted on this bill. Allowing aliens to remain on U.S. soil with revoked visa or petition is a national security concern and is something about which the 9/11 Commission would suggest correction is needed. We must encourage, as the 9/11 Commission recommended, a procedure in which our intelligence community can work with consular officers, who then cooperate with our Nation's law enforcement to keep terrorists from coming to the United States. We should not allow potential terrorists and others who act counter to our laws to remain on U.S. soil and to run to the courts and to seek relief from deportation.

Terrorists took advantage of our system before 9/11--and I have laid this out, how you can get more visas than you even need, how you have hundreds of aliases, the tools they use--and proved how sophisticated they are and proved how they could carry out their dastardly acts on September 11. Enough is enough. They took advantage of our system before 9/11. We need to do everything we can to make sure they don't take further advantage of our system.

I hope my colleagues will support amendment No. 300.

I ask unanimous consent to add Senator Vitter as a cosponsor of this amendment.

Mr. President, I am pleased today to introduce the Guaranteed Access to Medicaid for Newborns Act. This bill corrects a problem that has arisen during the implementation of the Deficit Reduction Act, DRA, of 2005. Through this act, we will guarantee that children born in America who are eligible for Medicaid can seamlessly get Medicaid coverage.

For the last two decades, Medicaid recipients have been required to be a U.S. citizen or qualified alien who has been in the country for at least 5 years. In a July 2005 report, the HHS Office of Inspector General found that 47 States allowed individuals to ``self attest'' their citizenship status to qualify for Medicaid benefits. In short, the State simply asked a Medicaid applicant if they were a citizen. The applicant need only respond, ``Yes, I am an American.'' No documents necessary. And of those 47 States, 27 did no followup verification such as checking with the Social Security Administration. In response to this report, the DRA included a House-led provision that I supported to require States to more carefully document the citizenship of Medicaid recipients and applicants.

Implementation of this provision, as is often the case with legislation, has not been without its challenges. The interim final rule that was issued by CMS effective July 6, 2006, did make many improvements so that the new statute could be implemented consistent with legislative intent. I think, on the whole, CMS did a good job. However, there was one specific provision in the interim final rule that I do not think is consistent with congressional intent: the provision that makes it more difficult for children born to undocumented mothers to gain Medicaid eligibility.

In section 1903(v) of the Social Security Act, the Medicaid statute makes available payment to States for treatment of an alien who is not otherwise eligible for Medicaid in the case of an emergency medical condition. A woman who is undocumented or not

otherwise eligible for Medicaid is covered under Medicaid for labor and delivery. Nothing in the DRA changed that nor was anything in the DRA intended to change that.

Under section 1902(e)(4) of the Social Security Act, a child born to a woman receiving Medicaid at the time of the child's birth is deemed onto Medicaid for a year. States had been interpreting that to mean the child of a woman who was undocumented could be deemed onto Medicaid for a year since the mother, under 1903(v), was eligible for Medicaid at the time of the child's birth. The interim final rule now specifically prevents a State from deeming the child of an undocumented mother onto the State Medicaid program without properly documenting the child's citizenship first.

In this case, I believe CMS has gone too far. A child born in the United States of America is a citizen. Before the DRA, children born to mothers on Medicaid were deemed onto Medicaid, and I think that is absolutely in the best interest of that newborn child. The DRA did not change two fundamental facts: First, the mother, regardless of documentation status, was eligible for Medicaid at the time of the child's birth and, second, the child is a citizen. In my mind, there is no reason then to have any new documentation requirement for the child.

The legislation I am introducing today reinstitutes the pre-DRA policy with one notable exception. Under the old rule, a State could issue a temporary Medicaid identification number to the mother which served as the identification number for the child for up to a year. I don't think that it's necessary or appropriate for a State to provide a child Medicaid benefits by issuing the mother a Medicaid card. This especially problematic in cases where the mother may not be in the country legally nor eligible for Medicaid after delivery. My legislation changes the old policy by requiring the State to issue an identification number to the child of the undocumented mother. This does not in any way change the States' responsibility to provide the mother benefits when she comes to the emergency room in labor.

The legislation makes one further change to the statute to benefit newborns. Under the interim final rule, all children born to mothers on Medicaid are required to document their citizenship within 1 year of birth. I do not think that is necessary. Medicaid paid for the birth of an American citizen. It is simple common sense that the child is a citizen and requiring any further documentation is redundant and counter-intuitive.

I want to be clear that I support the requirement that a State more fully document the citizenship of applicants for Medicaid. Given what the Congressional Budget Office has told us would be the cost of making undocumented aliens eligible for public programs, the Deficit Reduction Act addressed a real concern by requiring documentation. I want the new statutory provision to go forward to ensure that the people getting the benefits are actually eligible for the benefits. However, CMS and the States should recognize what is to me, common sense: A child born in the United States whose birth was paid for by Medicaid is a citizen under current law. No further documentation necessary.

Mr. President, I am pleased today to introduce the Guaranteed Access to Medicaid for Newborns Act. This bill corrects a problem that has arisen during the implementation of the Deficit Reduction Act, DRA, of 2005. Through this act, we will guarantee that children born in America who are eligible for Medicaid can seamlessly get Medicaid coverage.

For the last two decades, Medicaid recipients have been required to be a U.S. citizen or qualified alien who has been in the country for at least 5 years. In a July 2005 report, the HHS Office of Inspector General found that 47 States allowed individuals to ``self attest'' their citizenship status to qualify for Medicaid benefits. In short, the State simply asked a Medicaid applicant if they were a citizen. The applicant need only respond, ``Yes, I am an American.'' No documents necessary. And of those 47 States, 27 did no followup verification such as checking with the Social Security Administration. In response to this report, the DRA included a House-led provision that I supported to require States to more carefully document the citizenship of Medicaid recipients and applicants.

Implementation of this provision, as is often the case with legislation, has not been without its challenges. The interim final rule that was issued by CMS effective July 6, 2006, did make many improvements so that the new statute could be implemented consistent with legislative intent. I think, on the whole, CMS did a good job. However, there was one specific provision in the interim final rule that I do not think is consistent with congressional intent: the provision that makes it more difficult for children born to undocumented mothers to gain Medicaid eligibility.

In section 1903(v) of the Social Security Act, the Medicaid statute makes available payment to States for treatment of an alien who is not otherwise eligible for Medicaid in the case of an emergency medical condition. A woman who is undocumented or not

otherwise eligible for Medicaid is covered under Medicaid for labor and delivery. Nothing in the DRA changed that nor was anything in the DRA intended to change that.

Under section 1902(e)(4) of the Social Security Act, a child born to a woman receiving Medicaid at the time of the child's birth is deemed onto Medicaid for a year. States had been interpreting that to mean the child of a woman who was undocumented could be deemed onto Medicaid for a year since the mother, under 1903(v), was eligible for Medicaid at the time of the child's birth. The interim final rule now specifically prevents a State from deeming the child of an undocumented mother onto the State Medicaid program without properly documenting the child's citizenship first.

In this case, I believe CMS has gone too far. A child born in the United States of America is a citizen. Before the DRA, children born to mothers on Medicaid were deemed onto Medicaid, and I think that is absolutely in the best interest of that newborn child. The DRA did not change two fundamental facts: First, the mother, regardless of documentation status, was eligible for Medicaid at the time of the child's birth and, second, the child is a citizen. In my mind, there is no reason then to have any new documentation requirement for the child.

The legislation I am introducing today reinstitutes the pre-DRA policy with one notable exception. Under the old rule, a State could issue a temporary Medicaid identification number to the mother which served as the identification number for the child for up to a year. I don't think that it's necessary or appropriate for a State to provide a child Medicaid benefits by issuing the mother a Medicaid card. This especially problematic in cases where the mother may not be in the country legally nor eligible for Medicaid after delivery. My legislation changes the old policy by requiring the State to issue an identification number to the child of the undocumented mother. This does not in any way change the States' responsibility to provide the mother benefits when she comes to the emergency room in labor.

The legislation makes one further change to the statute to benefit newborns. Under the interim final rule, all children born to mothers on Medicaid are required to document their citizenship within 1 year of birth. I do not think that is necessary. Medicaid paid for the birth of an American citizen. It is simple common sense that the child is a citizen and requiring any further documentation is redundant and counter-intuitive.

I want to be clear that I support the requirement that a State more fully document the citizenship of applicants for Medicaid. Given what the Congressional Budget Office has told us would be the cost of making undocumented aliens eligible for public programs, the Deficit Reduction Act addressed a real concern by requiring documentation. I want the new statutory provision to go forward to ensure that the people getting the benefits are actually eligible for the benefits. However, CMS and the States should recognize what is to me, common sense: A child born in the United States whose birth was paid for by Medicaid is a citizen under current law. No further documentation necessary.

I ask unanimous consent to talk as in morning business.

Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. President, I rise to discuss the tax relief that was passed by Congress and signed into law by President Bush in 2001 and 2003, and to bring some reality to an upcoming debate this month that involves the budget resolution. Since that tax relief was enacted in 2001 and 2003, and especially since last November, we have heard from the liberal establishment in Washington and elsewhere that this bipartisan tax relief must be ended and that taxes should be increased on millions of Americans of all income levels.

Today, I am going to look at what is driving the tax increase crowd and talk about why they are wrong and why increasing taxes is a bad idea. The liberal establishment uses deficit reduction as a primary excuse for their craving to raise taxes, but before we applaud their efforts to balance the budget, let's think about their solution. When anyone says we need to increase taxes to balance the budget, what they are saying is they are unwilling to cut Government spending. In actuality, the tax increase crowd wants to increase Government spending.

Yesterday, I focused on what extending the bipartisan tax relief package means to nearly every American who pays income tax. So today, as I promised yesterday, I want to examine the tax relief and to look at the impact it has on our economy.

Regardless of whether you look at Federal revenues, employment, household wealth, or market indexes, the impact of tax relief has been overwhelmingly positive. I am going to put a chart up that gives the figures I want you to consider as I go through the points I am making.

The first chart illustrates the growth of revenue with the red line and the growth in GDP with the green line. As we can see, revenues are currently increasing, and are projected to increase in the near future, even before tax relief is scheduled to sunset under current law in the year 2010. Clearly, tax relief has not destroyed the Government's revenue base. I want to point out that this chart shows percentage changes in revenue and percentage changes in GDP. So if the lines are flat in places, it means revenues and GDP are increasing at a constant rate.

The next chart graphs the Standard & Poor's 500 equity price index over a period of several years. So, here again, the lowest point of both the red line, representing the weekly S&P, and the green line, representing an average, seems to correspond closely with May of 2003, which, not coincidentally, is when dividend and capital gains tax cuts were signed into law. Aside from benefiting Americans directly invested in the stock market, this is good news for anyone with a pension who invests in the stock market as well. Of course, that happens to be well over half the people. I think somewhere between 56 and 60 percent of the people, either through pensions or directly investing in the stock market, have money reserves in the stock market. So this is not something that affects 10 or 15 percent of maybe the wealthiest people in the country, as it did 20, 25 years ago; more people are vested in the stock market, mostly through pensions.

According to the Federal Reserve--I have another chart--net wealth of households and nonprofit organizations has increased from a low of around $39 trillion in 2002 to more than $54 trillion in the third quarter of 2006. Since tax relief went into effect, our Nation's households and nonprofit organizations have benefited from more than $15 trillion of new wealth.

This trend is also apparent when we are looking at employment. I show you yet another chart. Total nonfarm employment was calculated to consist of

around 130 million jobs in the summer of 2003 but is projected to be 137 million jobs in January of this year. This shows a 7 million increase in nonfarm employment since the 2003 tax relief bill was signed into law.

I have just described to you four indicators of prosperity. All four of them have increased since bipartisan tax relief was passed by Congress and signed into law. I wish to emphasize that word ``bipartisan'' tax relief legislation of 2001 and 2003. Federal revenues are growing steadily at a rate, then, greater than the gross domestic product. The S&P 500 ended a downward slide and began moving upward around the time of the 2003 tax bill. Also, since the 2003 tax bill became law, household and nonprofit wealth has steadily increased, and literally millions of new jobs have been created. I think it is more than a coincidence that all of these positive economic indicators are correlated with tax relief. I do not think anything short of willful ignorance could lead anyone to say tax relief has been bad for this country.

Now, going back to what I was saying before, the liberal establishment wants to reverse the tax relief that has done all the good things I was just talking about and that we demonstrated by chart, and all in the name of deficit reduction. However, this same crowd has not expressed any interest in reducing the deficit through reduced spending. I believe the reason for this is that this crowd, comprised of lobbyists, the big-city press, and the entrenched Federal bureaucracy, wants to raise taxes--your taxes--to spend your money on growing Government rather than working to trim spending. In fact, the more Government spends, the more power these interests are able to accumulate. The Federal bureaucracy gets to control more money, which will lead to more people hiring high-paid lobbyists to apply pressure to take a bigger piece of the pie the taxpayers are paying for. While these interests have no trouble thinking of themselves, they are not thinking of America's families, America's senior citizens, America's small business owners, and hard-working workers across America. These people may not be able to hire lobbyists or write syndicated columns, but their welfare should be our top priority.

I am going to talk in greater detail about America's families, seniors, small business owners, and workers, but for now, I just want to mention some more about our economy as a whole and how rolling back the 2001 and 2003 tax relief would have dire consequences for our whole economy.

There is an old saying that goes something like this: Figures don't lie, but liars can figure. This saying is especially true in Washington, DC. Any given issue has champions on both sides of the aisle able to generate studies and research that just happens to support their position. I say this because the source for the information I am going to present now is not one of those groups but, rather, the Goldman Sachs Group.

Goldman Sachs is an enormously successful and well-respected financial services firm. I do not think it is possible for any Democratic politician, liberal think-tanker, or liberal journalist to accuse Goldman Sachs of being a tool of my party, the Republican Party. Clinton Treasury Secretary Robert Rubin served as cosenior partner and cochairman, and current New Jersey Governor and former Senator Jon Corzine served as chairman and CEO of Goldman Sachs. Our current Treasury Secretary also enjoyed a prominent career at that firm. So I would recommend that Republicans, but especially Democrats, pay attention when a Goldman economist sends up a red flag.

In a report that is titled ``Fiscal Policy: Marking Time until the Tax Cut Sunsets,'' the U.S. Economic Research Group at Goldman Sachs, in this report, projects a recession--projects a recession--if the 2001 and 2003 tax relief is allowed to sunset. Now, this study actually came out in November of 2006, so I am a little surprised we have not heard more about it.

For this report, Goldman Sachs economists used the Washington University macro model. To give a little background on the Washington model, it is a quarterly econometric system of 611 variables, 442 equations, and 169 exogenous variables. The Washington model was developed and is maintained by Macroeconomic Advisers, Limited Liability Corporation, out of St. Louis, MO. Macroeconomic Advisers is where former Congressional Budget Office Director Douglas Holtz-Eakin serves as a senior adviser. Plus, the firm won the prestigious 2005- 2006 National Association for Business Economics Outlook Forecast Award for their accurate GDP and Treasury bill rate forecasts. That ought to give them a great deal of credibility. Now, of course, Macroeconomic Advisers and their Washington model must be accurate enough for people to pay to use it, which is not true for every organization that has been modeling the effects on the economy of letting tax relief expire.

Getting back to the Goldman Sachs study, the authors assumed that Congress would let the 2001 and 2003 tax relief expire, so they reset taxes to their year 2000 levels, grossed them up slightly to match the Congressional Budget Office estimate of the revenue impact of letting the tax cuts expire, and allowed for an appropriate monetary response. For monetary policy, the study's authors assumed that the Federal Reserve would call for interest rate cuts when output falls below its trend and for interest rate increases when inflation rises above its comfort zone.

The study states that:

In the first quarter of 2011, real GDP growth drops more

than 3 percentage points below what it would otherwise be.

Absent a strong tailwind to growth from some other source,

this would almost surely mark the onset of a recession.

If tax relief is allowed to expire, this study shows that a recession is likely to result. By not extending or making tax relief permanent, Congress will be deliberately inflicting a recession on the American people. Is a lot of hollow, high-sounding rhetoric about balanced budgets worth the job losses or business closures that would result in such a recession?

The study eventually predicts higher output but notes that consumption would be lower.

So that everyone has the opportunity to review this study, I ask unanimous consent, Mr. President, that it be printed in the Record, along with one of the very few news stories to note its findings.

The Goldman Sachs study was clearly not written by cheerleaders for tax relief; indeed, the authors seemed to share the point of view of many in this Chamber that a cut in spending is not an option. The authors regard an eventual drop in consumption as a forgone conclusion of tax relief and equate it with the necessity to pay back what had been borrowed over the previous decade. At the very least, the study says: ``The economy suffers a lot of short-term pain.''

Congress needs to act to extend or make permanent tax relief enacted in 2001 and 2003 or we risk plunging the country into a frivolous recession. I say frivolous because the recession will be the result of vanity on the part of those who use balancing the budget as a cover for tax-and-spend politics.

More cause for concern of the impact of tax increases comes to us from China. I am sure everyone is aware that the Shanghai Composite Index lost 8.8 percent of its value this past Tuesday. According to various news reports, including a dispatch from the Associated Press, a factor in the drop may have been rumors that a capital gains tax on stock investment was in order.

I ask unanimous consent that an ABC NEWS article entitled ``Shanghai Shares Rebound Nearly 4 percent'' be printed in the Record.

The same AP report notes that regulators have already denied those rumors and that the Shanghai Securities News ran a front page report to the same effect yesterday. Incidentally, the Shanghai Composite Index gained 3.9 percent yesterday.

I think the Chinese regulator's swift debunking of rumors that a capital gains tax was going to be enacted shows the negative impact such a tax could have on growing markets and expanding economies.

As I have said before, what is missing from the debate on extending tax cuts and clearly missing from the reasoning of the authors of the Goldman Sachs study is the option, and necessity, of reducing Government spending. The right thing to do is to let Americans keep as much of their own money as we can and not seize it from them to promote special interests, encourage high-priced lobbyists or give free rein to the big city press to tell everyone else what to do.

It is often said by the Democratic leadership that tax cuts are not free. That statement is true. Tax cuts score as revenue losses under our budget rules. What is equally true, if you listen to economists and, more importantly, the American taxpayer, is that tax increases are not free as well. Taxpayers have to write a check to Uncle Sam.

Tax increases change taxpayer behavior. Tax increases will affect work, investment, and other economic activities. From an economic policy standpoint, tax increases, especially those that are used to cover more Government spending, have a policy cost. Tax increases are not free to the taxpayers and are not free to a growing economy.

So I would ask that the Democrat leadership, as they draw up their budget resolution, to hopefully keep this in mind. Tax increases have consequences to the American taxpayer and consequences to the American economy.

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

Mr. President, I ask unanimous consent to speak as in morning business for 20 minutes. I don't think I will use all that time. If I need more time, I will ask for it.

Mr. President, as everybody who follows Congress on a regular basis knows, when you get close to the month of March, we are in budget season. The President sent his budget to the Hill, which he does regularly, the first week of February, about a month ago. So now it is up to the Congress. In the next few days the Senate Budget Committee will be marking up our budget resolution.

For the public at large, don't confuse a budget resolution, which is a discipline for Congress on budgeting, with appropriations bills that actually give the President the authority to spend money. They come along a little bit later in the year.

At a minimum, the budget resolution will lay out the fiscal priorities of the next 5 years. As everyone knows, the American people spoke last November and sent a Democratic majority to both Houses of Congress. For the first time in 12 years, Democrats will take the initiative on the Senate budget. As ranking Republican on the Finance Committee, which deals with taxes, trade, Social Security, Medicare, and Medicaid, and also as the senior Republican on the Budget Committee, which is the committee that sends the budget to the Senate, I am eager to see the direction the new Democratic majority wants to take on fiscal policy for this year, but the budget also has long-term implications of 5 years.

There are a lot of questions I am waiting to get answered. What will be their plan on pay-go, which means pay as you go? With spending at higher-than-average levels of our economy, what kind of spending discipline will the Democratic majority show? On the revenue side of the ledger, will Democrats look to prevent a tax increase on virtually every American taxpayer a few years down the road, when the present tax policy sunsets, or will the Democratic majority, without a vote, set in motion, then, the largest Federal tax increase of all time? This is a fact. It will happen. When we have a sunsetting of tax law, it is possible to have a tax increase without Congress voting it. In this particular instance, this would put in place the biggest Federal tax increase ever.

Over the next few days, I want to talk about the tax issues--I want to do it topic by topic--that are going to come up during debate on the process of the budget. There are probably many ways to do it, but this is how I split the general subject into topics: One, the importance of preventing a tax hike on virtually all American taxpaying families and individuals. That is what I want to visit about today. Next is the negative economic consequences of sunsetting the bipartisan tax relief plan that will be the biggest tax increase in the history of the country without a vote of the people, if we don't do something about it. Then another time, I am going to review Democratic tax increase offset proposals with a specific focus on the limits and problems associated with those tax increases.

Next I will focus on one particular ill-defined but often mentioned offset; that is, reducing the tax gap. Everybody is for reducing the tax gap, and I am working with Senator Baucus to do that. He is chairman of our committee. But there has to be realism brought into that debate, and I hope to provide that realism. Then fifth and last, tax reform and simplification, its necessity and bipartisan opportunities to do so.

These discussions are meant to be about the revenue side of the budget. But before we get into the revenue side of the budget, I want to issue a challenge to my friends on the other side of the aisle. It is a challenge I have made over the last few years. It is in the context of intellectually honest budgeting. It is also in the context of the bipartisan record of the Finance Committee on tax policy over the last few years. That tax policy has been led by this Senator, when I was chairman, and by Senator Baucus working with me during that period of time, or Senator Baucus, now leading the committee and, hopefully, my always working with him as he worked with me.

That bipartisan record of the Senate Finance Committee shows about $200 billion of revenue raisers from antitax shelter measures and corporate loophole closures, basically doing something about abuse of the Tax Code, unintended by Congress, by people who can hire very sophisticated lawyers to find ways around paying taxes. We have closed $200 billion of those, and it has been bipartisan. So when I hear from self-styled deficit hawks, or from the media, who are sympathetic to those points of view that we need higher taxes to reduce the deficit, I believe the Finance Committee has anted up in terms of producing revenue raisers without raising general levels of taxation on the American people.

Here is my challenge, and I will ask my friends to listen up. Anyone on the other side who considers themselves a deficit hawk needs to prove it, then, on the spending side. Compared to our committee already raising revenue by $200 billion by closing tax loopholes and tax abuse, show me, then, a spending restraint proposal for deficit reduction. I issued that challenge several years ago and have issued it repeatedly. No one from the other side has stepped up. We can look and look and look and we won't find such a proposal. All of those liberal think tanks that oppose tooth and nail any kind of tax relief are usually advocates of spending increases, all of this under the guise of fiscal responsibility. We won't find any proposals to restrain spending from these liberal think tanks.

If we look at the media sources that are sympathetic to the views of the Democratic leadership or the liberal think tanks, we will find hard-line opposition to tax relief and a lot of tax increase proposals but, likewise, no proposal reining in spending. They will claim the mantle of fiscal responsibility but won't show anything on the spending side other than spending increases. For these folks, when it comes to deficit reduction, there is only one side of the Federal ledger. That is raising taxes.

We have a Federal Government that is projected to spend $2.7 trillion for this fiscal year alone and is projected to spend $33.7 trillion over the next 10 years. Yet leadership on the other side of the aisle, the liberal think tanks that back them up, and the media that helps them get their message out so easily and is sympathetic to their views, can't find a dollar of savings on the spending side. To these folks, with all due respect, I want to call them out. They won in November. The Congress is in their hands. Let's see some credibility on the spending side of the ledger. Show the taxpayers the money. Show me a proposal to restrain spending and put it to deficit reduction. That is a preliminary point.

Now I will move to talk about preventing tax hikes. The same group's position on current law tax relief is radically different than its position on spending restraint. Back in 2001 and 2003, Congress approved, and the President signed, legislation that provided across- the-board tax relief to nearly every American taxpayer. The Democratic leadership, liberal think tanks, and sympathetic east coast media criticized tax relief on a couple of grounds. One charge was that the tax relief was a tax cut for the rich. The other charge was that the bipartisan tax relief was fiscally irresponsible.

Nonpartisan Joint Committee on Taxation distribution tables actually put a lie to that first charge. The record levels of revenue show that the growing economy, the expanding U.S. economy, and economic stimulus from tax relief better the Nation's fiscal situation, bringing in more tax dollars,

not depriving the Federal Treasury of dollars.

This debate on preventing tax increases is often couched only in macroeconomic terms. We will hear what it ``costs'' to extend bipartisan tax relief. We will hear very big numbers. For instance, the Joint Committee on Taxation projects that the revenue loss from making the bipartisan tax relief permanent is $1.9 trillion over the next 10 years. That is the way the Democratic leadership, liberal think tanks, and sympathetic east coast media will define proposals to prevent a tax hike. We won't see them talk about the number of families who benefit from the extension of the $1,000 child tax credit. You won't see them talk about the number of married couples who benefit or the average family benefit from marriage penalty relief.

Today I am going to take a few minutes and shed some light on the side of the debate about extending bipartisan tax relief. Lord only knows, there is not much light shed on these important facts, because everybody is talking about tax relief for the rich. I will acknowledge the critics' point on the macro cost of extending tax relief. But keep in mind, a liberal's tax relief cost is a conservative's tax hike, when we are talking about extending current law. They are the two sides of the same taxpayer's coin. I will agree to that number, but call it a $1.9 trillion tax increase.

So I am going to follow the Democratic leadership plan and dismantle the bipartisan tax relief package bit by bit. I am also going to challenge the Democratic leadership to show us the money by indicating whether they want to scrap each piece as I move through the package. Which pieces would they scuttle? I will work through the bipartisan tax legislation piece by piece.

Let's start, then, with the basis for the 2001 bipartisan tax relief measure. That is the new 10-percent bracket. The revenue loss for this part of the package is $299 billion over 10 years, according to the Joint Committee on Taxation. The 10-percent bracket is a huge piece of tax relief for low-income people. The 10-percent bracket does that. No wonder 100 million families and individual taxpayers benefit from the 10-percent bracket. I do not think anybody wants to dismantle that piece. But I want to hear that from the Democratic leadership because that is a compromise of their position of whether the 2001 tax increases ought to sunset.

Where do we go next, then? The marginal tax rate cuts, which include the 10-percent bracket, lose $852 billion over 10 years, according to the Joint Committee on Taxation. That proposal reduces the taxes of approximately 100 million families and individuals across America. It appears some folks think 35 percent is too low of a top rate. Well, guess what. Repealing the marginal rate cuts hits small business--the biggest source of new jobs in this great country of ours--and it hits small business the hardest.

The Treasury Department estimates 33 million small business owners who are taxed on their business income at individual rates benefit from the marginal rate cuts. Repealing these cuts would cause 33 million small business owners to pay a 13-percent penalty. Do the Democratic leaders want to raise taxes on these small business taxpayers, restricting the ability of small business to create jobs?

Treasury also projects that small business gets over 80 percent of the benefits of the cuts in the top two rates. Do we want to raise the tax rates on these people--small businesses for the most part--by 13 percent? Does that make any sense? So to the Democratic leadership, what do you say?

How about the death tax relief package? The Joint Committee on Taxation scores that package at $499 billion over 10 years. Most of the revenue loss is attributable to increasing the exemption amount and dropping the rate to 45 percent on already taxed property. Is it unreasonable to provide relief from the death tax or should we raise the death tax on small businesses and family farms? That is what will happen if the bipartisan tax relief package is not extended. So to the Democratic leadership, what is your take on that provision?

Do the opponents want to repeal the proposal to double the child tax credit, which the 2001 bill does? Mr. President, 31.6 million families benefit from the child tax credit, according to the Joint Committee on Taxation. Or how about the refundable piece that helps 16 million kids and their families? That proposal loses $135 billion over 10 years. I do not think we would have a lot of takers on that one. They are going to want to extend that. Democratic leadership, do you agree?

How about the lower rates on capital gains and dividends? Thirty- three million Americans--a good number of them low-income seniors-- benefit from the lower tax rates on capital gains and dividends, according to the Joint Committee on Taxation. Does the Democratic leadership think we should raise taxes on these 33 million Americans benefiting from these lower tax rates? That would be families and individuals.

On a side note, in another speech, I will be talking about the worrisome Goldman Sachs economic report on the adverse economic effects of failing to extend lower rates on capital gains--this line right here, as shown on the chart--when it expires.

There are consequences to what Congress does. When you have a booming economy, there could be very detrimental consequences to the country when you take away the incentives that have had this economy exploding like not any time since the early 1990s.

Let's take a look at the marriage penalty piece. It is the first marriage penalty relief we delivered in over 30 years. The Joint Committee on Taxation scores this proposal at $52 billion over 10 years, and Treasury estimates that in 2004, nearly 33 million married couples benefited from this tax relief. Again, I do not think many folks would want to raise taxes on people because they decided to be married. I hope the Democratic leadership would agree with that statement.

Another proposal is expensing for small businesses; in other words, writing everything off in 1 year instead of stretching it out over 10 years. This is a commonsense, bipartisan proposal and directed specifically to small business--the engine that creates new jobs. According to IRS Statistics of Income, 6.7 million small businesses across the country benefited from this expensing provision in 2004. If we do not make it permanent, small businesses face a tax increase of $19 billion over 10 years and probably sputtering the engine that creates so many jobs in America. Does the Democratic leadership think small business expensing is an unwise tax policy?

Continuing on through the bipartisan tax relief package, let's take a look at education tax relief. This package, which will help Americans deal with college education costs, scores at $12 billion over 10 years by the Joint Committee on Taxation. IRS Statistics of Income show nearly 16 million families and students benefited from this tax relief in 2004.

In this era of rising higher education costs, should we gut tax benefits for families to send their kids off to college? Does the Democratic leadership think that is the way to go, which would be the way we would go if Congress does nothing and you let this tax law sunset?

Finally, families where both parents work have to deal with childcare expenses. The tax relief package includes enhanced incentives for childcare expenses. Mr. President, 5.9 million families across America benefit, according to the Joint Committee on Taxation. Does the Democratic leadership think we ought to take away these childcare benefits? That is what would happen if the tax cuts of 2001 were sunset. It would happen without a vote of the Congress either.

Now, I have taken you through about $1.9 trillion of tax relief. It sounds like a lot in abstraction, but it provides relief to every American who pays income tax. I would ask any of those who want to adjust or restructure--and those are words that are used around here about this tax relief package passed in 2001--do you want to adjust it or restructure it? Where would you cut in this package?

Would you hit the 10-percent bracket, driving up the taxes of low- income people? Would you hit small business tax relief and sputter the growth machine, the job machine of America; or the now refundable child tax credit, and hurt low-income people; or the death tax relief; or the marriage penalty relief;

dividends and capital gains relief; education tax relief; or childcare tax relief? I hope not. Because in a recovering economy, with above- average levels of individual income tax, as a percentage of GDP, even with the tax relief package in place, which areas would you adjust, which areas would you restructure?

Why, then, undo bipartisan--with emphasis upon ``bipartisan''--tax cuts that make the Tax Code actually more progressive? Now get that, not regressive; it is more progressive now than before the tax bill of 2001.

As folks on both sides of the aisle say, budgets are about priorities. As the Democratic leadership draws up its budget, we will hear a lot of talk about a big number for extending tax relief. It is a big number. It is the biggest tax increase ever. It is going to affect nearly every American taxpayer.

If leadership now in the majority of this body, because of the results of the last election, decides to propose the biggest tax increase in history in the name of deficit reduction, I will be looking for that one, single dollar of spending restraint I never see. Now, maybe we will see it, but I will bet we would not. Only time will tell, and it will be within the next 2 or 3 weeks.

Mr. President, I yield the floor. I do not think I see any colleagues who wish to speak, so I suggest the absence of a quorum.

Mr. President, today I would like to honor SPC Travis Vaughn, who died on February 18, 2007, in a helicopter crash while fighting in Afghanistan. A Cedar Falls, IA, native, Travis served proudly and with distinction during Operation Enduring Freedom.

With bravery and valor, Travis accepted the call to defend America against those who seek to undermine our values, our democracy, and our way of life. In Afghanistan, he and others from the 160th Special Operations Aviation Regiment out of Fort Campbell, KY, served their country in a dangerous part of the world, helping to make the rest of the world a safer place. Sadly, Travis's service to his country cost him his life, forever earning him the gratitude of the American people.

Travis is remembered fondly and will be greatly missed. A longtime friend of Travis recently said of him, ``He was always there to help anybody that he could and do whatever he could to make people happy.'' Still other friends recalled Travis's fondness for adventurous recreational activities. These qualities made Travis well-suited for military service, and certainly we were fortunate to have a man of such drive and ability serving in the U.S. Army.

On behalf of all Iowans and people throughout this country, I offer my heartfelt condolences to Travis Vaughn's friends and family. In particular, my thoughts and prayers go out to his wife Heather, his stepson Taylin, his father Brad, and mother Christine. They should know that the entire Nation stands behind them during this time of mourning. His loss is

indeed tragic, but he will be remembered as a hero and a patriot.

Mr. President, I ask unanimous consent that the text of The American National Red Cross Governance Modernization Act of 2007 be printed in the Record.

Mr. President, I ask unanimous consent that the text of The American National Red Cross Governance Modernization Act of 2007 be printed in the Record.

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

Madam President, I ask unanimous consent to speak in morning business for such time as I might consume and that it be roughly 20 to 30 minutes.

Madam President, you and other Senators have seen me on the floor in the last few days in order to bring some clarity to our discussion we have every year about what to do with the alternative minimum tax. When I say ``every year,'' for at least the last 3 years we have had some discussion about the alternative minimum tax. I would remind people that in 1999 we passed a repeal of the alternative minimum tax, but President Clinton vetoed it and we haven't been able to repeal it since.

Now, this alternative minimum tax was originally created in 1969 targeting wealthy taxpayers who were able to legally eliminate their entire income tax liabilities. The AMT has turned into a monster that has threatened to hurt the middle class and maybe eventually touch lower income taxpayers if we don't do something about it. Obviously, if it is a monster, that ought to indicate to my colleagues that I think it ought to be repealed.

The reason for this, as I have explained, is the failure a long time ago to index the alternative minimum tax for inflation. Thirty-eight years of inflation has allowed the alternative minimum tax to spread to literally millions of taxpayers who were never intended to pay it in the first place. Although more middle and lower income taxpayers will be hit by the alternative minimum tax, it has not decreased the percentage of high-income taxpayers who have no tax liability. So here we have the anomaly of a tax that was supposed to hit just the very wealthy.

In the year 1969, we were talking about a study which showed 155 people. Now it is hitting millions of people. This year, if we don't act, it is going to hit another 9 million or 10 million. And the anomaly is, there are people who have figured a way to even not pay the alternative minimum tax, and those people obviously are the wealthy whom it was supposed to hit in the first place.

The alternative minimum tax also takes more than the taxpayers' money; it takes an awful lot of time to figure through this when you are doing your taxes. I think it was on Tuesday of this week or Monday of this week when I said the IRS estimates that the taxpayers spend an average of 63 hours computing the alternative minimum tax liability. The alternative minimum tax is truly a very cruel way of raising revenue. While there seems to be general agreement that the AMT is a problem, there has been less agreement on the solution for that problem. Perhaps I shouldn't be surprised that there are more problems than there are solutions, but I am surprised by some of the obstacles preventing a solution to the alternative minimum tax.

There are some who make the argument that any revenue not collected in the future as a result of the alternative minimum tax repeal, or reform, ought to be offset. I explained this before, but you can't say it too many times around here: The alternative minimum tax is a phony revenue source and should not be offset. Since the alternative minimum tax collects revenues, it was never intended to collect from people who were never intended to pay it in the first place.

Although the alternative minimum tax is still with us, it is not because solutions have not been considered and proposed. Right now I will walk through some of those solutions that have been suggested. Before I begin, I wish to emphasize a point I made a couple days ago. With surprising regularity over the past 38 years, Congress has been meddling with the AMT, including the year I said we passed legislation to repeal it and President Clinton vetoed it. Since 1969, more than 20 bills have made changes to the alternative minimum tax. Sometimes the rate was adjusted. Sometimes the exemption amounts were modified. More than once, graduated rates were introduced. My point is that for 38 years, Congress has hoped to tinker with the alternative minimum tax in just the right, very right way, very perfect way, to finally get it right but not succeeded. Unless we truly believe we are the smartest Congress in 38 years, anything short of complete repeal of the AMT will probably require yet further action down the road in a few years.

I would also like to draw attention to the revenue estimates done by the Joint Committee on Taxation in 2005 that is reproduced on this chart, and these numbers are so small I am only going to talk around them and not specifically to those numbers. I ask unanimous consent that this estimate be printed in the Record.

This is an estimate of how various proposed fixes to the alternative minimum tax will impact revenues expected to be collected under the current law. What you should note is that full repeal aside--which I suggest is about the only way to do it but not considering that--each of those proposals will still allow the alternative minimum tax to bring hundreds of billions of dollars into the Treasury. If you consider any proposal aside from full repeal, you are saying that hundreds of thousands, if not millions, of people in our country deserve to bear the burden of an alternative minimum tax that is not even, in some instances today, taxing to people who are supposed to pay the tax: the very wealthy.

One possible solution is to continue doing what we have been doing for the past several years. Ever since 2001, the Finance Committee has produced legislation that has kept additional taxpayers from falling prey to the alternative minimum tax because of inflation. In the tax increase prevention and reconciliation bill of 2005, we were able to extend the hold-harmless clause through December 31, just ended. That hold harmless now has expired and action will need to be taken this very year or the AMT will return to its pre-2001 exemption levels, and tens of millions of taxpayers will fall into the AMT and have to pay it this year.

Suppose we are able to continue enacting 1- or 2-year temporary patches, as we did last year. First, this strategy assumes that Congress will have the time and the inclination to spend time dealing with the alternative minimum tax every year or two. This means that whatever the issues of the day may be--Iraq, unemployment, natural disasters such as Katrina--Congress will have to stop dealing with those other problems and periodically return to holding harmless people who would be otherwise hit by the alternative minimum tax.

Is the alternative minimum tax an issue that we, as a legislative body, should revisit every year or wouldn't it be better to do away with a piece of legislation that was never intended to kill the middle class but will? Today I can show you some taxpayers who ought to be paying it who have found ways of getting around a provision that no wealthy taxpayer was supposed to get around. I hope this body would be ashamed to say that to anyone, that we would consider going down that road, but there we are.

The second point I wish to make is Congress attempts to enact or do this every year. Every time a patch is considered, there is another chance for taxpayers to be subject to a stealth tax increase. Finally, we have to remember that more than 3 million taxpayers are currently caught by the AMT, and we are putting a chart up here now that will show more than 3 million families and individuals paid this tax in 2004. This is the way it hits every State. In case the Senator who is presiding can't see this, in the case of Minnesota, there are 69,000 people in that State who paid this for the last year we know about, 2004. In my State of Iowa, if I can find Iowa on here, 17,000, and I will bet most of these people in Minnesota or Iowa who are paying it-- you know, in 1969, it was never anticipated that they pay it. But they are paying it because that is the way our tax laws work, until you make some change in them, and because this wasn't indexed.

In dealing with the alternative minimum tax, are we going to tell these people we know that isn't fair and we would like to help you, but in fact you are out there on your own? Well, no taxpayer hearing me say that wants to hear that. I hope this body would be ashamed to say to anyone, much less more than 3 million families and individuals, that any extension of a patch or hold harmless will be fundamentally flawed in that it doesn't take people already hit by the AMT into account. If we are going to decide to protect people from falling into the clutches of the AMT, it would be immoral to forget about those already subject to it.

I wish to add, as someone involved in enacting the recent hold- harmless provisions, so people preparing their income tax right now, there aren't any more of them hit by the alternative minimum tax than were hit the previous year, but that is ended December 31. But as one who was involved in that, they were never intended to be a permanent solution. The patches were always ``kicking the can down the road'' and letting somebody else worry about them. Well, I am still here, and I have to worry about it, so I am creating problems for myself. But I don't know how you can get people tuned in to doing away with a tax, and you can't do away with it because you have to offset it, but you are offsetting it with a bunch of phantom income that was never supposed to be paid by these people in the first place. The public listening to this are going to say: Well, what planet did these Congressmen come from?

Well, let's go on to another idea, to limit the reach of the alternative minimum tax based on income. We might decide, for instance, that anyone who makes less than $125,000 a year will not be subject to the alternative minimum tax or maybe we could set it at the amount of $200,000 or you could say $400,000. Now, in a nutshell, I have laid out a principal difficulty with setting a minimum threshold based on income. How do we set a number that would be equitable throughout the country? I am not thinking of myself so much as those who come from the so-called blue States, their taxpayers. Any Iowan who has spent any time in Washington, DC, knows right away that it generally costs more to live in those States than in other States, more rural States. It costs more to buy a house, to buy food at the grocery store. What I am trying to get at is that prices and incomes are relative. Taxpayers living in areas such as Manhattan or San Francisco could be especially hard hit by the alternative minimum tax by income. In fixing the AMT, I don't want to move problems around or reassign hardships. That is akin to reassigning the tables and chairs on the deck of the Titanic.

Another proposal which has been suggested is to allow certain preference items in the calculation of the alternative minimum tax. This would allow taxpayers to count items, such as a personal exemption, the standard deduction, the State and local taxes, against their income for the purposes

of calculating AMT liability. This approach is also fraught with difficulty and unnecessary decisions. To implement this proposal, we would have to arbitrarily give some taxpayers an escape hatch, while others would not be able to escape the AMT.

If we allow State and local taxes to be a preferenced item, for example, we are giving an advantage to people who choose to live in high-tax jurisdictions over those who choose to live in low-tax jurisdictions. In my way of thinking, it is not fair for the Federal Government to give more favorable tax treatment to some taxpayers because of where they live. Also, it seems likely that taxpayers who pay the most in State and local taxes are going to be wealthy taxpayers whom the AMT was supposed to tax in the very first place.

If we were to give the standard deduction preferential status in calculating AMT liability, then I have concerns about the impact this might have, for instance, on charitable giving. If we only allow the standard deduction to be taken against the AMT, people may decide not to make charitable donations they might otherwise consider. On the other hand, we could allow individuals to count their total charitable contributions when calculating AMT. This approach favors those wealthy enough to make large charitable contributions.

The point I make is allowing taxpayers to consider certain preferenced items when calculating their AMT liabilities will make it necessary to favor some taxpayers and will lead to more bills making more changes in the future to the AMT as various groups or interests fight to allow a given exemption or deductibility they favor to be taken against the AMT liability.

These are all items which have been floating around as suggestions to fix this problem we have. I don't think any of them are very sound tax policy. They might help some people, but they are going to hurt others.

Before I explain how we can deal with the AMT once and for all--and I have already pointed out what I think that is, and that is repeal--I wish to explain how various proposals impact the number of taxpayers already hit by the AMT as calculated by the nonpartisan Joint Committee on Taxation.

This chart shows numbers from last year. As the blue line on this chart shows, under current law, the number of AMT filers will jump by over 20 million this year if Congress does nothing.

The red line shows what would happen if the exception applicable in 2005 was made permanent and indexed for inflation still at a higher level, hitting people who were never intended to be hit, but it would still moderate the impact for tens of millions of people. Clearly, the number of taxpayers affected is less, but still a very large number that, after dropping to a low of 1.7 million people in 2011, begins to increase again, to 2.1 million people by the year 2016.

The orange line represents the establishment of a 24-percent rate along with the 2005 exemptions made permanent and indexed for inflation. This plan just described--the orange line--follows the trend of the red line as it incurs a drop before creeping back up.

Finally, the green line on the chart shows what would happen if we took the 1985 exemption amount, which was $30,000 for individuals and $40,000 for joint returns, and indexed it for inflation. As with the other three lines, the number of taxpayers affected drops more before creeping back up once again.

Although some of these options seem to assist most taxpayers, do not be fooled by the large scale of this chart. Even the option to index by 1985 exemption leaves at least several hundred thousand taxpayers exposed to the AMT. It would be difficult to explain to these people why others deserve fair treatment and they do not.

Clearly, there is only one way, then, to fix the alternative minimum tax so that no taxpayer is subject to what has become a complete policy failure, because even some wealthy people who were supposed to pay a minimum tax for the privilege of living in America are able to get around it as well. We must completely repeal the individual alternative minimum tax. There is a bipartisan consensus that only complete repeal is an adequate solution to this problem. Chairman Baucus, with me and with Senator Crapo, Senator Kyl, Senator Roberts, Senator Schumer, and Senator Smith, last month introduced the Individual Alternative Minimum Tax Repeal Act of 2007. By the way, that is a bipartisan group of people.

The alternative minimum tax was originally conceived as a means to ensure that the Tax Code was equitable and more progressive. Ironically, the only equitable thing to do is to completely banish the individual AMT from the Tax Code. Any other solution will entail we treat taxpayers in similar situations differently or that we arbitrarily choose winners and losers.

As I have said many times, the alternative minimum tax has been a complete and absolute failure. The alternative minimum tax was only supposed to hit a very small number of wealthy taxpayers who were able to legally eliminate their entire income tax liability. In reality, the AMT is gradually consuming our middle class and is projected to absorb more revenue coming in from the alternative minimum tax than the regular income tax in just a little while. Furthermore, the alternative minimum tax does not even prevent wealthy taxpayers from eliminating their tax liabilities. If Members have heard me say that four times, I say it to impress that the original intent of the alternative minimum tax is not even being met.

For the tax years 2003, the IRS calculated that there are 2,366 taxpayers with incomes of over $200,000 a year or more who did not pay any income tax. These 2,366 taxpayers did not use medical or dental expense deductions to limit their tax liability.

We must repeal the AMT. We must do it without offsetting any revenue the AMT is expected to collect in the next few years because it was never intended in 1969 that these people pay the alternative minimum tax. I have made this point before but cannot make it too many times: The AMT was never intended to be a significant source of revenue. It was supposed to be making a point that when some of the very wealthiest use every legal means they can--and I stress ``legal'' because these are not criminals--every legal means to avoid paying income tax, they ought to pay a little bit for the privilege of being in America. Not that they don't pay in other ways--it is a matter of progressivity as much as it is the privilege of living in America, to be a matter of principle. It was never meant to be a significant source of income.

Despite this, we will see the alternative minimum tax ballooning Federal revenues to historically high levels if something is not done. This chart which I used a couple of days ago shows how revenues are projected to exceed the 30-year historical average. This historical average is actually about a 50-year historical average, somewhere between 17 percent and 19 percent. We are at the historical average right now. Even though we were a little bit below after the income tax cut of 2001, we are back up to 18.4 or 18.6 of GNP. If we do not do something about this alternative tax and we also continue to collect it from people who were never intended to pay it, this is where we end up--with income coming into the Federal Treasury way above the historical average.

I emphasize historical average, not that it is sacrosanct, but I come to the conclusion that over a period of 50 years, if we have a tax policy falling between 17 percent and 19 percent--and this is whether there were 93 percent marginal tax rates that President Kennedy did away with or as low as 28 percent marginal tax rates that we had in the tax year of 1986 under Reagan--if we overlap all of the marginal tax rates on top of the GNP portion the Federal Government takes, we still average 17 percent to 19 percent, which shows that it does not matter how wealthy you are, some people come to the conclusion that they will only work so hard and pay so much tax regardless of how high the marginal tax rate is, and you get the same amount of money coming in.

So try to tax the wealthy, raise the marginal tax rate, you get less revenue. If you want to soak the rich, lower the marginal tax rate because they are people who will take their money out of leisure, they will take it out of nonproductive investments such as antique and gold and put it into productive investments because probably they are greedy and they want to make

more if it is worth working to make more.

Regardless of where we set it, 17 percent to 19 percent seems to work because, at least in my judgment, a very commonsense judgment, it is a level of taxation that there has not been a revolt against. It is a level of taxation that 50 years of our country shows has increased the standard of living for the American people very dramatically.

If we consider the AMT to be fundamentally an unfair tax, any tax that would replace it would be equally unfair. Anyone who wants equity to be a fundamental value represented by our Tax Code or who wants fair treatment for this country's taxpayers must support complete repeal of the alternative minimum tax and should support the Baucus-Grassley bill, which is the Individual Alternative Minimum Tax Repeal Act of 2007, a bipartisan bill.

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

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