Floor Statements

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on February 14, 2006, at 10 a.m., to conduct a hearing on the nomination of Mr. Randall S. Kroszner, of New Jersey, to be a member of the Board of Governors of the Federal Reserve System; Mr. Edward P. Lazear, of California, to be a member of the Council of Economic Advisers; Mr. Kevin M. Warsh, of New York, to be a member of the Board of Governors of the Federal Reserve System.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, February 14, 2006, at 10 a.m., on State and local issues and municipal networks.

Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Tuesday, February 14 at 10 a.m. The purpose of this hearings is to discuss the Energy Information Administration's 2006 annual energy outlook on trends and issues affecting the United States Energy Market.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, February 14, 2006, at 10 a.m. to hold a hearing on the President's budget for foreign affairs, and a business meeting.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet on Tuesday, February 14, 2006, at 10 a.m. for a hearing titled, ``Hurricane Katrina: The Homeland Security Department's Preparation and Response.

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Tuesday, February 14, 2006, at 2:30 p.m. in Room 485 of the Russell Senate Office Building to conduct an oversight hearing on the President's Fiscal Year 2007 Budget Request for Indian Programs. Those wishing additional information may contact the Indian Affairs Committee at 224-2251.

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on Tuesday, February 14, 2006, for a committee hearing on the Administration's proposed fiscal year 2007 Department of Veterans Affairs budget. The hearing will take place in room 418 of the Russell Senate Office Building at 10 a.m.

Mr. President, I ask unanimous consent that the Subcommittee on Readiness and Management Support be authorized to meet during the session of the Senate on February 14, 2006, at 2:30 p.m., in open session to receive testimony on improving contractor incentives in review of the defense authorization request for fiscal year 2007.

Mr. President, I ask unanimous consent that the Subcommittee on Retirement Security and Aging, be authorized to hold a hearing during the session of the Senate on Tuesday, February 14th at 2:30 a.m. in SD-430.

Mr. President. I ask unanimous consent that the Subcommittee on Trade, Tourism, and Economic Development be authorized to meet on Tuesday, February 14, 2006, at 2:30 p.m., on Canadian softwood lumber.

Mr. President, I ask unanimous consent that all quorum calls which we might have on the pending issue be equally charged to both sides.

Mr. President, earlier this month we began and finished the second floor debate on the tax relief reconciliation bill. At that time, I spoke in recognition of Groundhog Day because it was just around the corner. I have next to me that portrait of Punxsutawney Phil. Phil is the groundhog.

In thinking of Phil and his unique form of weather reporting, I thought about that popular film entitled ``Groundhog Day'' starring Bill Murray in which a man relives the same day, Groundhog Day, over and over again. This film has taken on even greater significance for me as I seem to be in a similar situation for the third time. More than just the sense of deja vu, I feel as though I am reliving a couple of past experiences, and before these several votes tonight or tomorrow, I think everybody will agree with me.

I have before you another chart. The chart shows a scene from the Bill Murray movie ``Groundhog Day.'' From this movie is a picture of Phil, the groundhog, driving the car and Bill Murray is there with him. Bill Murray is in this case the copilot. Phil is driving the car. You see Phil with his paws on the steering wheel, and you see the copilot seated behind him.

As I said just now, I feel like the Bill Murray character in the movie. It seems we are reliving the same events over and over again. We are going through the same debates over and over again.

For those who watch C-SPAN regularly--probably not too many Americans--they know what I am talking about because it was 2 weeks ago we were debating the tax reconciliation bill, the same tax reconciliation bill we were debating back in November, and the same debate we had a couple of weeks ago.

I will summarize the floor process we have been going through on this bill.

At 11:08 a.m. on Wednesday, February 1, 2006, I opened the second Senate floor debate on this bill. The rollcall vote on final passage occurred at 9:42 p.m. on Thursday, Groundhog Day, 2006. All the time permitted for debate under reconciliation--20 hours--was used in the second floor debate--again, Groundhog Day.

Three Senators were not here for the final vote. There was a total of eight rollcall votes that day, including the vote on final passage.

You will recall that, as I said, this was the second time. I hope you will recall I said then that we actually had debate earlier in November on the very same bill. The very same bill is this bill right here, S. 2020, the Tax Reconciliation Act.

We started that debate at 3:35 p.m. on Wednesday, November 16, 2005. For 20 hours on Wednesday, Thursday, and into Friday we debated this bill, S. 2020. A total of 80 amendments was filed, and 7 of those amendments were agreed to. The liveliness of the legislation culminated in 18 rollcall votes.

The final vote on passage came at 12:05 in the morning of Friday, the 18th of November, 2005. According to the Secretary of the Senate, 97 of us were there for that vote. I must not be the only one who is reliving this experience of Groundhog Day over and over again.

There is one Senator whom I can't speak for, so I have to clarify that the new Senator, Senator Menendez, was not a Senator during the first debate back in November. He has been appointed to the Senate since then. He was here for the second debate because he joined the Senate after the first bill passed. Maybe the second debate would not be old hat to him, but for the other 99 Senators it would be more or less old hat.

Here are the two bills. Technically, right now we are on the House bill, H.R. 4297, but between these two publications, I guess it would be fair to say they are 95 percent the same.

This bill, S. 2020, was first debated in November last year and passed then as the Tax Relief Act of 2005. The Senate passed the second bill, after we amended the provisions of this to it, as H.R. 4297. The first bill, S. 2020, is 417 pages long, and the second bill, H.R. 4297, as amended, is 363 pages long. The bills are very close to the same length. What happened in between was between November and February, the Senate removed the Hurricane Katrina provisions and interest suspension provision because those proposals became law in a separate piece of legislation in November 2005. Removing the Katrina provisions and the interest suspension provision accounted for a reduction of 63 pages from this bill. The five amendments agreed to during the second floor debate added 14 pages to H.R 4297.

Again, except for those five amendments that were put in, plus the Katrina provisions taken out, most all of this bill is pretty much the same.

So why are we debating this for a third time, November of last year, 3 days, 2 days this year, on February 1 and February 2, and now back here again this very day, February 13?

My point is these two bills are virtually the same. The Senate basically debated the same popular, bipartisan bill twice, and we are going through another one of these purposeless delays at the insistence of the Democratic leadership again today, and it may take much more than 1 day.

As we consider what they are going to offer--we refer to them as motions to instruct the conferees--to the bill, we are going to go to conference on H.R. 4297 to work out the differences between the House and Senate. I have to ask my colleagues: Why are we still doing this? Didn't we already go through this exercise? Shouldn't we be finished with the Senate debate? For me, the answer to those questions is there is no reason to be here. All you have to do is in 5 seconds appoint conferees and get to work ironing out the differences between the House and the Senate.

Without a doubt, we have gone through this exercise twice. When is debate on the same subject enough for the Senate? In the face of the multitude of other important issues this body needs to deal with, does the Democratic leadership want to reenact recent debates and resuscitate old talking points? The tax reconciliation bill already passed with the support of 64 of us the first time. The second time we passed this bill, the bill garnered the support of 68 Members. Included in the first count were 15 Democrats. I am pleased we picked up two more Democrats the second time we debated the bill. Maybe if we keep up this exercise enough times, we will have a bill that will get 100 Senators for it.

What is the purpose of that? If we do that, we will not be passing this bill in the year 2006; we will be passing this bill in the year 2007. Do not think that the millions of taxpayers expecting us to act would be very happy about running the Senate through that many Groundhog Days. Even Phil, the groundhog, might even be a bit irritated. Phil, wouldn't you be irritated if you had to go through all of this?

This legislation is extremely important. We will debate it as long as necessary. I question the necessity of going through a process that resulted in bipartisan passage of the same bill almost 3 months ago. We often think bipartisanship is when we get to 60. You are lucky to get to 60. That is what you have to do in the Senate to get anything done. To get to 64 or 68 is almost a landslide in the Senate. Why the continued debate? I doubt if the people who are stalling this want to continue the debate long enough to convince even more Democrats to vote for this bill. I don't think that is their motive.

That is my first point. This is a very curious exercise. It is an exercise with no apparent purpose other than delay. Is the delay on the part of the Democratic leadership important? The answer is, yes. Ask American tax-paying families and you will get an answer, but you get a different answer. The answer is, yes, if you are 1 of 20 million families waiting for certainty that you are not caught in the clutches of the alternative minimum tax with which this bill deals.

We hear a lot of talk about the alternative minimum tax. We will hear about it in the debate over the next few hours. This bill does something about the AMT. It holds harmless 20 million Americans so they will not be hit by a tax that they were never supposed to pay in the first place.

I will use some charts that describe different provisions of this legislation and how it affects the constituents of each of the Senators, on a State-by-State basis. The data is from the Internal Revenue Service. It is the latest available in terms of State-by-State impact. The data comes from the year 2003, so it understates the tax problems of citizens in the various States for taxes in the year 2006. I apologize for not having more up-to-date information. I suggest to people who are considering the figures on the charts to more than double the figures; that will be a rough State-by-State idea.

We will look at a chart dealing with the alternative minimum tax. This tax will hit 20 million Americans if we do not pass this legislation. It is not on the taxes they will file for 2005 because we are talking about income earned during the year 2006. They will be hit by the alternative minimum tax 12 months from now, when people file their taxes, if we do not pass this legislation.

When you start a tax year, you ought to have some idea what the tax laws are going to be for the next 12 months and into the future. That is why this legislation should have been passed in conference last fall to get a permanent law so people earning money on January 2, 2006, would know they would not be hit by the alternative minimum tax.

The basis of the bill the Senate passed and the bill that is once again before the Senate is an extension of the AMT hold harmless, so that no additional number of people will be hit by the alternative minimum tax. Every Member who is participating in this deliberate strategy of delaying our entry to conference to work out the difference between the House and the Senate is delaying the certainty these millions of American families deserve. Again, it affected 8 million in 2003. That figure now is 20 million in 2006. For my State of Iowa, it is 65,000 taxpayers. It is probably tens of thousands more now. In Nevada, there are 68,000, with a lot more than 68,000 being hit in 2006.

Those are the facts on the alternative minimum tax. Look it up in the Internal Revenue Code. The AMT relief provisions expired December 31, 2005. I ask my friends and the Democratic leadership to look at the calendar: 1\1/2\ months have passed, and the alternative minimum tax hold harmless has not been extended to prevent 20 million Americans from being hit by a tax on income earned in 2006; earning the same income in 2005, they would not have had to pay that tax. The AMT hold- harmless provisions are the cornerstone of this legislation. It is the cornerstone of a bill that the Democratic leadership is delaying. I don't want to hear people talk about the alternative minimum tax problem and at the same time delay real action to help those millions of tax-paying families. I suggest we may hear that.

This bill also includes another provision, broadly popular and broadly applicable in its tax benefits. I will talk about them beyond the alternative minimum tax.

This chart shows deductibility of college tuition, first inaugurated in the tax bill of 2001. This is a benefit for families who send their kids to college. By definition, this benefit goes to middle-income families. A lot of these families are not low income so their kids

possibly do not qualify for Pell grants. They are not high income either. All they have to do is have mom and dad write out a check, and they go to college. These are families that get the full benefit of the deduction if they make up to $65,000 as a single person or up to $130,000 as a couple.

The reason I say it is conservated on the middle income is because above those figures the benefit phases out. A lot of these families are paying significant Federal, State, and local taxes, and they get no help in defraying the high costs of their kids' college tuition. This tax deduction provides help for these hard-pressed, middle-income families with a benefit and furthers a very important national goal that we try to give attention to, the support for higher education. This deduction runs out at the end of this year, 2006. These families next year will face tax increases if we do not act on this bill. We ought to act on it now, although it does not phase out until the end of this year. During the spring, people anticipate their capability of sending their kids to college. If they cannot count on this, they have to dig up money someplace else for their kids to start college in September, which carries over into 2007.

The chart before the Senate shows the number of families, on a State- by-State basis, that benefit from this deduction. I emphasize that these are 2003 figures. I don't know exactly how much more we increase them because we are now in 2006, but it would be significant. In Iowa, more than 37,000 families are affected by this legislation, 37,000 in Iowa who do not know for sure if the tax deduction will be available when their kids go to college next year.

Now I will pick out another State. Nevada has 25,000 families. If we do not pass this legislation, 25,000 families will not know whether their kids are going to get the advantage of this tax for the next school year.

It seems to me the perpetuation of support for higher education, particularly for middle-income families, that their families cannot qualify for Pell grants, we ought to be reenacting this legislation now so these families can plan on sending their kids to college next September.

Another benefit addressed in this bill is the small savers credit. This gets back to the problem we are always talking about, that Americans are not saving enough. Lower income people, spending most of their disposable income on the necessities of life, do not have money left over to save. They may not have an ethic to save. Through the Tax Code, we try to give incentive to save and some help to save. This happens to be the tax credit for low-income people to save through an individual retirement account or a pension plan. Saving money is important. We all want all Americans to be part of the effort to save for the future.

This chart shows the number of low-income savers who benefit from this bill, on a State-by-State basis, from the small savers tax credit. Again, more than 5.5 million people take advantage of this. How many more for the 2006 figures, I don't know, but in Iowa 95,000 people take advantage of saving money through the small savers tax credit. And I will also take Nevada: 36,000, almost 37,000 people 3 years ago were saving through this program. That needs to be reenacted or there will not be incentive to save.

The bill before the Senate also extends another needed tax deduction. This is for teachers who buy their own supplies for their students. This provision was developed by Senators Warner and Collins. It makes whole teachers who go that extra mile to pay out of their own pocket classroom expenses. Who is going to argue with a devoted teacher whose school district does not provide enough supply if she wants to spend out of her own salary, his or her own salary, to buy supplies? That proves the dedication of our teachers.

I will point to the number of teachers included on the chart, on a State-by-State basis, who take advantage of this deduction. This deduction needs to be reenacted for these teachers to have the certainty that money they will spend today will be deductible from the taxes they file 12 months from now. Again, in my State of Iowa, almost 34,000 Iowa teachers benefit from this. Another State we could look at would be Nevada, where 22,000 families benefit.

Is there any reason this help to teachers--who are good teachers but want to make better use of their talent, to make sure their students have adequate supplies--why that should not be reenacted, and why, this very day, in classrooms across America, teachers have to be worrying about whether they are going to have this benefit to reimburse them for going that extra mile?

Now, there is another item in this bill which is very popular which I do not have shown on a chart. But this bill extends what we call small business expensing, so that anything which is depreciable, on an increased amount of money of up to $100,000, can be expensed in 1 year rather than spreading it out over a period of 5 to 10 years. Many small businesses use this benefit to buy equipment on an efficient, after-tax basis.

This is very good for small business. Small business creates 70 to 80 percent of the new jobs in America. So it is a job-creation tax incentive. It is good, then, for workers in these small businesses. Obviously, if you employ more people, you end up with greater economic growth for our entire country.

The final chart I have deals with the tax deductibility of the State and local sales tax deduction. This applies to the States of Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

This bill helps 12.3 million taxpayers in your States. Tennessee is one of these States. It is the home State of our majority leader. He has worked hard to get this bill to the floor. For the third time now, our majority leader, Senator Bill Frist, has worked hard to move this bill into conference. I want the good people of Tennessee to know that.

Now, another State that could benefit when we get this passed is Nevada, the home State of our Democratic leader. Unfortunately, this bill is going through another process of holding it up for another day of debate, meaning the people in these States who have deductibility of their State taxes do not know whether, come 12 months from now when they are filing their income tax on income earned in 2006, it will be deductible.

So I would ask them to focus on the taxpayers of these respective States. I still hold out hope that the Democrat leadership will see the light. I hope they will work with me to guarantee that the folks in their States will be able to deduct their sales taxes this year. This is the third time, then, this bill has been delayed.

This is a bipartisan bill with a bipartisan consensus. This needs to pass. Maybe the third time will be a charm. Maybe we will finally get this bipartisan bill to conference because you do not get bills to conference around here that are not bipartisan because when you only have 55 Republicans in the Senate, there is no way, even when all of us vote alike--and we do not vote alike--we can move a bill to conference. So it has to be bipartisan. You have to have Democratic support. So in this particular instance, we have 15, 16, 17, roughly, of the Democrats voting for it.

Every Senator ought to help us pass this bill because of the provisions I just went through on these charts which are included in the bill. But there are also other reasons for supporting this bill.

Our bill addresses expiring business and individual provisions that are known as extenders. These provisions include items such as the research and development tax credit and the work opportunity tax credit. This bill also includes many of the charitable incentives introduced in what we call by the acronym the CARE Act and which provisions have previously passed the Finance Committee and passed the entire Senate.

In this regard, in regard to the CARE Act, in regard to the R&D credit, I have to give particular applause to Senators Santorum and Baucus in working with me to balance these incentives with several of the much-needed reforms that are supported by the charitable sector, the Treasury Department, the IRS, and donors and taxpayers to make sure charitable giving is not abused.

Last, but not least, this bill contains loophole closers and tax shelter-fighting provisions that raise revenue.

This bill is bipartisan.

I thank my friend and working partner and ranking member, Senator Baucus, for his cooperation. He and I were not always partners on this bill, at least in the beginning, but we teamed up in the Finance Committee. We teamed up in the first Groundhog Day floor debate. We teamed up in the second Groundhog Day debate. I look forward to working with him today and hope we can team up in the conference working out the differences between the House and the Senate. As always, his cooperation and, in tense times, his good humor make a big difference in this body.

Let me also thank those Democratic Senators who joined us in this bipartisan effort on our first floor journey. Most of them repeated through the second time on February 1 and 2 of this year. I ask them to help me persuade their leaders to let this bill proceed. I ask them to ask their leaders to focus on taking care of tax legislative business, bringing certainty to the tax policy of this country for the benefit of our taxpayers and the benefit of investment because investment creates jobs. I ask that the political games be cut out. I ask that we roll up our sleeves and get down to the people's business.

I suggest the absence of a quorum.

Mr. President, on Medicare--and I know the debate here is not about Medicare, but Senator Kennedy spoke to one part of the new prescription drug program to which I wish to make reference. He referred in his remarks to the dual eligibles. He spoke about a problem that is real--the problem of signing up people who were dual eligibles into the new Medicare Part D prescription drug program.

I do not find fault with his explanation. I will say, however, that our committee which has jurisdiction over this, the Senate Finance Committee, has been working with Secretary Leavitt and Administrator McClellan of CMS to work through these problems. They pointed out seven problems they have identified. They have assumed responsibility for those problems, and they are giving us a program to work through those problems so they will not be repeated and enrollment will by easier and work more smoothly.

But the Secretary has told us about dual eligibles, that with 50 different States having 50 different ways of handling dual eligibles, frankly, merging the information technology system at the Federal level with the information which came out of 50 different States has been difficult to do.

Several of us in the Senate knew this was going to be a problem in 2003. That is why, in the Senate bill, along with the White House, we wanted to leave the dual eligibles just as they were--covered by Medicare and Medicaid. It happens that most of the Democrats in the Senate, along with Republicans in the House, felt we should end up with just 1 national Medicare Program so all of the 50 different States' dual eligibles ought to be merged into the national program.

We had a debate on the Senate floor on that issue, and my point of view won on a very narrow margin. Let me see if I can find it exactly-- a very narrow margin of 47 to 51. We defeated an amendment on the Senate floor to bring them together.

What bothers me is Senator Kennedy is bringing up all these problems. If he had listened to us 2 years ago, we would not have ended up where we have because we would not be integrating dual eligibles into the national Medicare Program. But people on his side of the aisle were just totally insistent that was the wrong way to go, that we ought to have them integrated into the prescription drug Part D Program.

So, without embarrassing any Senator, I wish to quote a Democratic Senator who was in the middle of this debate. I am not going to give the name. Comments like this came out about how gung-ho they were to have dual eligibles in the Medicare Program. It says:

It's not a frequent day that Chairman Thomas--

I assume that refers to Chairman Thomas of the House Ways and Means Committee.

and I are in full agreement. But he does say such a shift

``ensures that all seniors across the country will have

access to affordable prescription drugs, while alleviating

much of the burden that states now confront.'' I say to my

colleagues, as I indicate, I am not always in agreement, but

we are going forward directly on this policy, I hope.

Continuing to quote:

Fully integrating a key benefit for prescription drugs into

Medicare is a critical first step toward improving the

current system's flaws. Not only is it unfair to exclude the

poorest seniors from part of the Medicare program, it is a

raw deal for some of our neediest seniors. For seniors who

have worked all their lives, paid into the Medicare system,

it is not fair for them to be at the mercy of State coverage

decisions. All Medicare beneficiaries deserve to receive

Medicare benefits. There should be no exception for drugs. It

would be a very bad precedent to make Medicaid pay for items

that are clearly the responsibility of Medicare except at the

present and in this bill for one particular discrete

population.

I think that--i.e., coverage under Medicaid--puts the dual

eligibles, 74 percent or less of poverty, at terrible risk,

and that is not something I associate with my understanding

of the values of the Senator from Iowa--

Meaning me, I believe--

whom I so much respect.

That was on January 23, 2003.

On June 26, 2003, this quote was given by the same Senator:

Never in the history of Medicare have we precluded Medicare

beneficiaries from being Medicare beneficiaries. In the

underlying bill, for the very first time, we do.

In that rollcall of 47 to 51, to leave the dual eligibles as they were, which presumably we would not have the problem Senator Kennedy is complaining about now--that we have a hard time integrating them into the program--he was one of those 47 Senators who thought they ought to be put into the prescription drug program.

The reason we left them out is because we wanted to solve a problem for people who did not have prescription drugs, people who were dual eligibles, already had their prescription drugs through a State/Federal program, probably to a better point than maybe their having it through our bill where they pay some copay. At least in some States, they probably didn't have to pay a copay. We wanted to take care of the seniors who didn't have any prescription drug program, and by leaving the dual eligibles as they were, it would free up money to take care of more seniors.

As I said, we lost out in the final analysis. In conference, we agreed to include the dual eligibles in this program. Now I hear all this complaint about how it is working to the detriment of seniors because of the integration of 50 different State programs into 1 national program. It will be worked out. It will be worked out. The Secretary of HHS, Mr. Leavitt, says it will work out. He is working on it. He has identified a solution to it, and every day the signup is getting better as we sign up 94,000 people each day into the Part D prescription drug program.

Mr. President, Senator Kennedy repeats the old demagogic saw about capital gains and dividends being only tax benefits for the wealthy. The facts are very different. I have two charts here which will show how wrong he is. One of these charts deals with capital gains. The other one deals with dividends.

Dividends is the first one to which I make reference because, in the State of Massachusetts, you can't have all these wealthy people benefiting from the 15-percent dividend tax instead of what he would prefer, the 20-percent dividend tax. Don't forget, again, as I referred in my opening remarks, these are year 2003 figures, so it could be a lot more than that right now, but these are the most up-to-date Internal Revenue Service figures we have.

In Massachusetts, we have 589,897 taxpayers who benefit from the 15- percent capital gains dividend. Don't tell me that all 589,000 of those are millionaires. Massachusetts may be a very wealthy State, but it doesn't have that many millionaires in it. So somewhere along the line, Senator Kennedy ought to wake up to the fact that there are a lot of middle-income and common folks in his State who are benefiting from the 15-percent tax on dividends instead of having a 33-percent increase in that tax and having it go back to 20 percent.

My friend from Montana did make a correct judgment that this is not running out right now. But the point is that when you are asking people to invest to create jobs in America, they have to have the long-term view of that investment. If you want to encourage investment to create jobs, people have to know what the tax law is for the long term, not for the short term.

The point is, in order to persecute a few millionaires, Senator Kennedy wants to punish the many. And the many are the 589,000 people in his State who benefit from the 15-percent tax on dividends.

Let's go to the number of people in that State who benefit from the 15-percent capital gains tax. There are 212,000 people in Massachusetts--again, I remind you these are 2003 tax year figures because that is the most up-to-date we have from the IRS. There are more today, probably. But there are 212,000 people in Massachusetts, taxpaying families and individuals, benefiting from the 15-percent capital gains tax. Those are not wealthy people.

Again, you get back to the point of whether we ought to persecute the few, the few millionaires he is talking about, persecute them and at the same time punish 212,000 people in the State of Massachusetts. I don't think so. I don't think it is good policy.

I hope this Congress is able to have a sensible tax policy that not only includes sensible levels of taxation, but if you look at all the dividends that are being paid out today that wouldn't have otherwise been paid out, you think you would come to a conclusion that is a sensible policy because we have tens of millions of taxpayers deciding how the profits of a corporation are going to be spent instead of a few thousand chief executive officers of those same corporations deciding how it is going to be spent. When millions of taxpayers are making those decisions, it is going to respond to the dynamics of our economic system and create more jobs and important prosperity than when a few corporation executives keep all those profits internal in a corporation making those decisions.

I don't think we ought to be persecuting a few to punish the many.

When it comes to these motions to instruct, we may have some motions to instruct on this side of the aisle that will set the record straight on what we are trying to accomplish and give people opportunities to vote on good economic policy and good tax policy as well as bad economic policy and bad tax policy that we are getting from some on the other side of the aisle.

In 2003, a bipartisan Congress lowered the top tax rate on dividends and capital gains to 15 percent through December 31, 2008, and for low- and middle-income taxpayers to 5 percent through 2007 and zero percent through 2008.

I filed six motions to instruct conferees to report back a conference report that includes the extension of these tax rates through 2009 and through 2010, the same as the House of Representatives has.

Critics of this policy claim these are tax cuts for the rich that make a budget deficit worse because they want to persecute the few and in the process punish the many. But I filed these motions that are going to tell the other side of the story; that when you have sound tax policy which encourages the economy to grow, we are also going to reduce the deficit.

Besides, let me suggest to you that I don't know how it is in other States, but I don't run into very many in my State who are saying I am undertaxed, tax me more. But I run into people day after day in almost every one of my town meetings where they are complaining about the overspending of the Congress of the United States.

In regard to the other side of the story and the motions to instruct that I filed, the lower rates of capital gains and dividends have produced several positive effects. They benefited low- and middle- income families in a meaningful way.

Can't you see that when you have a very low tax rate for certain low- income people, as one example? For low- and middle-income taxpayers, it will be 5 percent through 2007 and zero percent through 2008. This is going to encourage people to save to a greater extent, particularly people who have a lower income and don't have the ability to save.

These lower tax rates have reduced the tax burden on senior citizens who rely on their investment incomes during retirement. They have contributed to our economic recovery and continue to help the economy grow. They have made capital investments in America more competitive with the capital investment in other countries. With the globalization of the economy, that is something we always have to be cognizant of in this Congress, that you can't have a tax policy that makes our corporations, particularly in manufacturing, uncompetitive with manufacturing overseas.

Finally, these tax rates have helped impose transparency and discipline on corporate managers which is critical to protecting investments and workers.

I may or may not seek a vote on these motions to instruct, but I want to go through each one of these points which I made so that when Members come over to vote tonight, they will know some of the rationale behind Republican motions.

The lower rates on dividends and capital gains have benefited low- and middle-income families in a meaningful way. That is the third time I have said that in the last 5 minutes. But we have to get away from this attitude of persecuting a few and in the process punishing the many.

I don't know whether they on the other side of the aisle realize it, but when they want to persecute a few millionaires, they are punishing hundreds of thousands of people--I guess it is millions of people, if you take all 50 States, but I was making reference to the State of Massachusetts.

According to the Internal Revenue Service estimates for 2003 tax return data, about 10 million low- and middle-income taxpayers have $34 billion of income taxed at the 5-percent rate and saved at least $1.7 billion, or about $170 per taxpayer on average.

I know what I am going to hear from the other side. Well, $170 is nothing. Why don't we let the taxpayers of this country decide whether they would rather spend that $170 or that we ought to spend it for them?

I can guarantee if they invest it, or if they spend it, it is going to do more economic good than if I spend it for them as a Member of Congress. That is the way the dynamics are and the way society works. Money spent by the Government doesn't turn over as many times in the economy as it does if it is spent in the private sector.

At these 2003 levels, these taxpayers I have referred to save a heck of a lot of money. Don't forget, in 2008 that rate drops to zero percent.

My motion would instruct the conferees to ensure that Congress won't raise the annual tax bill on low- and middle-income taxpayers at the 2003 levels. That tax increase would be at least $3.4 billion. That is an average of $340 per taxpayer.

Senior citizens benefit from lower tax rates on dividends and capital gains. They have reduced the tax burden for senior citizens who rely more than working people do on investment income, and they need this particularly during retirement.

According to IRS estimates for 2003 tax return data, about 57 percent of the tax returns for taxpayers age 65 and older had taxable dividends income. That is over 6.5 million tax returns. These taxpayers rely on investment income, and particularly dividend income in their retirement. Low- and middle-income seniors pay tax on this dividend income at the 5-percent rate instead of 20 percent or 15 percent. That rate for these low-income seniors is going to drop to zero in 2008. Other taxpaying citizens, those with higher incomes, paid at the 15- percent rate, but that was instead of paying at the 35-percent rate.

We need to instruct the conferees that Congress won't impose a new tax on low- and middle-income seniors and more than double the tax on other taxpaying seniors in 2009 and 2010. In other words, we need to tell the other side to quit persecuting a few because in the process you punish the many.

In this particular case, why would they be crying about what we might be doing to senior citizens in one of the recent speeches and then stand there and want to increase the tax rates from zero percent to 35 percent for some of these people who are senior citizens?

Also these reduced tax rates on dividends and capital gains have contributed tremendously to our economic recovery and continue to help our economy grow. They reduce the cost of capital for American businesses and increase return on investment, enhancing economic growth, creating more jobs, and expanding the tax base.

Companies are responding to shareholder demand created by the lower 15-percent rate on dividends by paying record levels of dividends.

According to the Congressional Budget Office, capital gains realizations increased significantly in 2003, 2004, and 2005, causing capital gains tax revenues to be $62 billion higher over those years than were projected before we changed this law.

Don't tell me that $62 billion more coming in, according to the CBO-- not a partisan like me; they are nonpartisan--$62 billion more didn't benefit the Treasury and reduce the deficit by reducing taxes. You know what you get out of this--a growing economy. That means more jobs, and 44.7 million jobs have been created since this tax policy has been in effect. The unemployment rate has dropped during the same period of time from 6.1 percent to 4.7 percent.

I feel very strongly, just as the other side wants to persecute the few to punish the many by going after what they call millionaires, that we ought to state the reality: that is, my motion to instruct the reality of keeping these tax rates so the economy continues to grow.

The progrowth policy will not expire at the end of 2008 or at the end of 2009 because investors who need the long-term view of investing know what the law is going to be and are going to make decisions.

The lower rates have done another thing--they have made our businesses more competitive with the global economy. And other countries around the world, having lower tax rates than we have, have jumped ahead of our businesses. Even with the United States at 50.8 percent, we still have the eighth highest tax rate on corporate income among the 30 nations in the OECD. For every dollar an American corporation makes on its U.S. investments, more than half of it ends up in Federal and State governments. Without the lower

dividend tax rate, it would have been nearly 63 cents of every dollar, ranking second only behind Japan.

High taxes on capital investment make the United States less attractive compared within investment opportunities in other countries. That costs us jobs. In today's global economy, we should do everything we can to ensure the competitiveness of our businesses.

In this process of persecuting a few, the few millionaires, punishing everybody, you are punishing the people who need jobs, and who lose jobs because our businesses can't be competitive because our cost of capital is higher than global competition. Also, there is a benefit to a motion to instruct for transparency of how a corporation works. The lower rates have helped impose transparency and discipline on corporate managers. That is very important to protecting investors and, particularly, jobs for our workers.

The high tax on dividends causes corporations to favor debt financing over equity financing, leaving more highly leveraged businesses vulnerable to economic downturns. High dividend taxes reduce the demand to receive and thus the incentive to pay dividends, leading corporate managers to invest in wasteful and unprofitable projects and to hide the results from their investors and their workers.

On the other hand, the reduced tax rate on dividends lessens the disparity between debt and equity financing, thus heightening demand for dividends, thus contributing to more transparency and more accountability of corporate managers for their decisions.

It seems to me in this post-Enron era, we need to instruct the conferees to ensure that the transparency and the discipline imposed on corporate managers by lower dividend taxes and critical to protecting investors and workers is not threatened by this expiration date in 2009 and 2010.

I yield the floor.

Mr. President, I rise for the purpose of offering some motions to instruct for myself and my colleagues.

Motion To Instruct Conferees

I send the first motion to the desk and ask for its consideration.

Mr. President, in explaining the rationale for my motion to instruct, I will be referring to other motions to instruct that two Senators on the other side have put in place, Senator Dodd of Connecticut and Senator Reed of Rhode Island.

The Dodd motion to instruct is yet another episode in the tale of the ``groundhogization'' of this tax relief reconciliation bill, a long journey. The Senate adopted the alternative to the Dodd amendment, a Grassley amendment, that passed, including the following Budget Act waiver language:

Waive all provisions of the Budget Act and budget

resolutions necessary for the consideration of the pending

amendment to this bill, and for the inclusion of the language

of the pending amendment in consideration of an amendment

between Houses.

That is what we added back on February 2 to S. 2020. The Dodd motion instructs conferees to proceed by ignoring this waiver language. You see, the waiver language only applies for the purposes of our action in the Senate. If Senator Dodd were to prevail, the conferees could not follow his directive without violating the Budget Act. It is because the Dodd motion deals with outlays. We can't do outlays in a budget reconciliation package. I might add that the Reed motion that we expect to vote on tomorrow suffers from the same defect. The conferees, even if they were inclined, can't return from conference with a provision that contains outlays.

We all know this is a political season. If you look at this motion, and if you look at the Reed motion, both cannot

be adopted and followed. You can draw your own conclusion, then, why they are adopted, unless the Members don't know that this is a parliamentary situation. I can't believe they don't know what that parliamentary situation is.

While we are at it, I am going to offer a motion to clarify what the Dodd and Reed motions are all about. Basically, if you support the principles of providing more health care for veterans, the supposed purpose of the Dodd amendment, and, secondly, assisting our troops with body armor, the supposed purpose of the Reed amendment, then vote for the Grassley motion. If you support these two principles but don't support a tax increase on America's seniors, at a higher cost of capital for American business, support the Grassley motion. If you just want an increase, then vote for the Dodd motion.

I will summarize it this way: I appreciate Senator Dodd's attention to the issue of our veterans health care needs. This issue is of utmost importance to the Members of the Senate, as evidenced by the fact that we appropriated a massive amount of extra money last fall for the fiscal year we are in now to meet the needs of veterans, particularly those who were not recognized, people returning wounded from Iraq. But my colleagues suggest that in order to provide this support, we should give up the important economic tax policy of reduced capital gains and dividends tax, the present tax policy, just continue it for 2 more years so that people have a long-term view of what the tax policy is so that they know what they are going to invest.

The Dodd motion claims to be paid for by capital gains, but capital gains offsets don't even come into play until the year 2009. I have offered a motion that supports military health care facilities, but we don't tie it up with an offset that is 3 long years down the road.

You will remember that the Senate debated this issue on Groundhog Day and voted to accept my amendment that provides the same benefits but does not raise taxes to pay for it. I urge my colleagues to vote against Senator Dodd's motion and to support my motion to instruct the conferees on the amendment we have already passed.

In regard to what Senator Reed is trying to do with his motion to instruct, this is the issue of funding for our military. Proper funding for those serving our country is not a controversial issue. The method of providing this funding for our military is, on the other hand, being made into an unnecessarily controversial issue. My colleague suggests that in order to provide for this funding, we eliminate a tax benefit that doesn't even arise until the year 2009, similar to the same issue in the Dodd amendment. I ask how this would provide the funds so badly needed this very day to ensure that we meet the operational needs of our courageous military service personnel.

I offered an amendment that supports the operational needs of our military without tying it to an offset that is 3 long years down the road.

Again, in an effort not to sound repetitive, you will remember that the Senate debated this issue also on Groundhog Day and voted to accept my amendment that provides the same benefits but does not raise taxes to pay for them. So I urge my colleagues to vote against Senator Reed's motion and to support my motion to instruct conferees on the amendment we have already passed.

To sum up, if you are against a tax increase but for veterans health care and properly equipping our military, vote for the Grassley motion. If you are for a tax increase, then look elsewhere to our colleagues who are offering their version of it.

Motion To Instruct Conferees

Mr. President, I am sending several motions to the desk now. I ask that these be taken up together. I ask that the clerk would read each one at a time because I want to speak to each one. I would ask the clerk to read the first one.

Mr. President, the motion to instruct that was just read is mine. Simply stated, this is a motion that says there are sufficient funds to do both alternative minimum tax and capital gains and dividends and that we should do both--in other words, as an instruction to conferees.

Motion to Instruct Conferees

Mr. President, I ask the clerk to read the motion that I am introducing for Senator Lott, listed as No. 3.

Mr. President, as I said, I am doing that for Senator Lott of Mississippi. I think it is self explanatory. Just to reiterate, this motion, on behalf of Senator Lott, calls for full and permanent repeal of the alternative minimum tax.

Motion to Instruct Conferees

Mr. President, I now go to motion No. 4, which is for Senator Hutchison.

Mr. President, this is repetitive, but I will state this for Senator Hutchison. This resolution of instruction calls for a permanent deduction of State and local general sales tax.

Motion to Instruct Conferees

Mr. President, I offer motion No. 5 for Senator Santorum.

Mr. President, this motion I offer on behalf of Senator Santorum of Pennsylvania would make permanent the above-the-line deduction for tuition and fees for college.

Mr. President, I turn to motion No. 6, which is my own. I ask for the reading of it.

Mr. President, I offer this motion instructing conferees that in the years 2009 and 2010, the international competitiveness of the United States in attracting capital investment, and therefore job creation, is not weakened further by higher combined corporate and individual increased tax rates on corporate and capital income as a result of the higher dividend rate.

Motion to Instruct Conferees

Mr. President, I send a motion to the desk that I am going to file and not discuss at this point.

Mr. President, I ask unanimous consent that at 8 p.m. tonight, the Senate proceed to a vote in relation to the Grassley motion on veterans, to be followed by a vote in relation to the Dodd motion on veterans, with no amendments in order on either motion.

Mr. President, I yield the floor.

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

Mr. President, I rise for the purpose of asking unanimous consent to change the names of the sponsors of a motion that I filed.

I ask unanimous consent that the Grassley motion regarding the permanence of the child tax credit be identified as Grassley for Talent and Snowe.

Mr. President, the words ``paid for'' also mean tax increase. The difference between these motions is, the Grassley motion does not contain the tax increase. The Dodd motion asks the conferees to raise taxes.

Mr. President, I am calling upon Congress to honor Dr. Norman E. Borlaug, the man of whom it is often said ``has saved more lives than any other person who has ever lived,'' with the Congressional Gold Medal.

Dr. Borlaug is commonly known in the agricultural world and beyond as the father of the Green Revolution. His accomplishments in terms of bringing radical change to world agriculture and uplifting humanity are without parallel.

Named by TIME Magazine as one of the 100 most influential minds of the 20th Century, Norman E. Borlaug is one of the great stories of our time. Norm, as he is known to all who work with him, was born in 1914 to Norwegian-American parents outside the town of Cresco in northeast Iowa near the Iowa/Minnesota border. His boyhood was spent on a Norman Rockwellesque farm and in a one-room schoolhouse. Eventually Norm found his way to the University of Minnesota where he became a star in Big Ten Wrestling and earned a Ph.D. in Plant Pathology.

Following World War II, he spent 20 years working in the poorest areas of rural Mexico. It was there that Dr. Borlaug made his breakthrough achievement in developing a strand of wheat that could exponentially increase yields while actively resisting disease.

With the strong support of the governments involved, Dr. Borlaug's Green Revolution uplifted hundreds of thousands of the rural poor in Mexico and saved hundreds of millions from famine and outright starvation in India and Pakistan. His approach to wheat production next spread throughout the Middle East and was then adapted to rice growing, increasing the number of lives saved to more than one billion people.

In 1970 Norman E. Borlaug was awarded the Nobel Peace Prize, the only person working in agriculture to ever be so honored, for a lifetime of work to feed a hungry world. Since then, he has received numerous honors and awards including the Presidential Medal of Freedom, The National Academy of Sciences' highest honor--the Public Service Medal, and the Rotary International Award for World Understanding and Peace.

At age 91, Dr. Borlaug continues to alleviate poverty and malnutrition. He currently serves as president of Sasakawa Global 2000 Africa Project, which seeks to extend the benefits of agricultural development to the 800 million people still mired in poverty and malnutrition in Sub-Saharan Africa.

Finally, Dr. Borlaug continues as Chairman of the Council of Advisors

for the World Food Prize, an organization he created in 1986 to be the ``Nobel Prize for Food and Agriculture''.

The World Food Prize presents $250,000 award each October at an international ceremony in Des Moines, IA, to the Laureate who has made an exceptional achievement similar to Dr. Borlaug's breakthrough forty years ago. Beyond recognizing these people for their personal accomplishments, Borlaug saw the World Food Prize as a means of establishing role models who would inspire others.

In the 20 years of its existence, the World Food Prize has honored Laureates from Bangladesh, India, China, Mexico, Denmark, Sierra Leone, Switzerland, the United Kingdom and the United States.

While Dr. Borlaug was born in Iowa, he is truly a citizen of all of America and, indeed, of all the world. The State of Minnesota has enacted a special day of recognition in his honor; He continues as a teacher, serving as a Distinguished Professor at Texas A&M University; and he has received honorary degrees from colleges and universities in virtually every state of the union.

Reflecting this fact, a year ago the U.S. Senate passed a resolution designating October 16 as World Food Prize Day in America in honor of Dr. Borlaug. Beyond that, his name is widely recognized in Mexico, India, Pakistan and the Middle East reflecting his great humanitarian achievements in those countries. And he continues to be honored throughout South Asia and Africa, for his ongoing efforts to expand the benefits of the Green Revolution to the hundreds of millions of people still suffering from chronic hunger and malnutrition.

Dr. Borlaug's achievements are in keeping with the recent presentation of Congressional Gold Medals.

For over a half century, the scientific and humanitarian achievements of Dr. Norman E. Borlaug have kept starvation at bay for millions of people in third world countries. Through the passage of this legislation, the United States Senate can recognize the humanitarian contributions Dr. Borlaug has made to the entire world. The man who has saved more lives than any other person who has ever lived certainly deserves the highest honor the Congress can bestow.

As the only working farmer in the U.S. Senate, I am proud and honored to introduce this important bill, and I call upon my colleagues to support this noble legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am calling upon Congress to honor Dr. Norman E. Borlaug, the man of whom it is often said ``has saved more lives than any other person who has ever lived,'' with the Congressional Gold Medal.

Dr. Borlaug is commonly known in the agricultural world and beyond as the father of the Green Revolution. His accomplishments in terms of bringing radical change to world agriculture and uplifting humanity are without parallel.

Named by TIME Magazine as one of the 100 most influential minds of the 20th Century, Norman E. Borlaug is one of the great stories of our time. Norm, as he is known to all who work with him, was born in 1914 to Norwegian-American parents outside the town of Cresco in northeast Iowa near the Iowa/Minnesota border. His boyhood was spent on a Norman Rockwellesque farm and in a one-room schoolhouse. Eventually Norm found his way to the University of Minnesota where he became a star in Big Ten Wrestling and earned a Ph.D. in Plant Pathology.

Following World War II, he spent 20 years working in the poorest areas of rural Mexico. It was there that Dr. Borlaug made his breakthrough achievement in developing a strand of wheat that could exponentially increase yields while actively resisting disease.

With the strong support of the governments involved, Dr. Borlaug's Green Revolution uplifted hundreds of thousands of the rural poor in Mexico and saved hundreds of millions from famine and outright starvation in India and Pakistan. His approach to wheat production next spread throughout the Middle East and was then adapted to rice growing, increasing the number of lives saved to more than one billion people.

In 1970 Norman E. Borlaug was awarded the Nobel Peace Prize, the only person working in agriculture to ever be so honored, for a lifetime of work to feed a hungry world. Since then, he has received numerous honors and awards including the Presidential Medal of Freedom, The National Academy of Sciences' highest honor--the Public Service Medal, and the Rotary International Award for World Understanding and Peace.

At age 91, Dr. Borlaug continues to alleviate poverty and malnutrition. He currently serves as president of Sasakawa Global 2000 Africa Project, which seeks to extend the benefits of agricultural development to the 800 million people still mired in poverty and malnutrition in Sub-Saharan Africa.

Finally, Dr. Borlaug continues as Chairman of the Council of Advisors

for the World Food Prize, an organization he created in 1986 to be the ``Nobel Prize for Food and Agriculture''.

The World Food Prize presents $250,000 award each October at an international ceremony in Des Moines, IA, to the Laureate who has made an exceptional achievement similar to Dr. Borlaug's breakthrough forty years ago. Beyond recognizing these people for their personal accomplishments, Borlaug saw the World Food Prize as a means of establishing role models who would inspire others.

In the 20 years of its existence, the World Food Prize has honored Laureates from Bangladesh, India, China, Mexico, Denmark, Sierra Leone, Switzerland, the United Kingdom and the United States.

While Dr. Borlaug was born in Iowa, he is truly a citizen of all of America and, indeed, of all the world. The State of Minnesota has enacted a special day of recognition in his honor; He continues as a teacher, serving as a Distinguished Professor at Texas A&M University; and he has received honorary degrees from colleges and universities in virtually every state of the union.

Reflecting this fact, a year ago the U.S. Senate passed a resolution designating October 16 as World Food Prize Day in America in honor of Dr. Borlaug. Beyond that, his name is widely recognized in Mexico, India, Pakistan and the Middle East reflecting his great humanitarian achievements in those countries. And he continues to be honored throughout South Asia and Africa, for his ongoing efforts to expand the benefits of the Green Revolution to the hundreds of millions of people still suffering from chronic hunger and malnutrition.

Dr. Borlaug's achievements are in keeping with the recent presentation of Congressional Gold Medals.

For over a half century, the scientific and humanitarian achievements of Dr. Norman E. Borlaug have kept starvation at bay for millions of people in third world countries. Through the passage of this legislation, the United States Senate can recognize the humanitarian contributions Dr. Borlaug has made to the entire world. The man who has saved more lives than any other person who has ever lived certainly deserves the highest honor the Congress can bestow.

As the only working farmer in the U.S. Senate, I am proud and honored to introduce this important bill, and I call upon my colleagues to support this noble legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am pleased that the House of Representatives has passed S. 1932, the Deficit Reduction Act of 2005, DRA. This is a relatively modest deficit-reduction bill that represents just one-fourth of 1 percent of what Congress would otherwise spend during the next 5 years.

It has been 8 years since Congress last passed legislation to reduce mandatory spending. The kinds of Medicaid changes made in the conference report are a fraction of what Governors across the country-- Republican and Democrat--asked Congress for to help State governments keep their Medicaid programs afloat for the millions of people who rely on Medicaid. Beneficiaries and taxpayers both deserve to get the highest value for every dollar that is spent on Medicaid, Medicare, and other safety-net programs.

It is especially rewarding to have included in this overall package a bill I first authored in 1999. The Family Opportunity Act, which I have pushed for year after year with Senator Kennedy, was inspired by an Iowa family struggling to access health care services for a disabled child. Melissa Arnold, the mother, didn't give up, and today's legislative victory is a tribute to her kind of determination. The measure will let States create options for families that have children with multiple medical needs to buy into Medicaid while continuing to work. It is a pro-work initiative because it lets parents work without losing their children's health coverage. It is pro-family because it encourages parents to work and build a better life for their children, rather than being forced to impoverish themselves to access health care. And it is pro-taxpayer because it means more parents continue to earn money, pay taxes and pay their own way for Medicaid coverage for their children.

In addition to this expansion of the Medicaid program, the comprehensive legislation includes $400 million in child-support payments that will go directly to welfare families, along with grants to promote healthy marriages and responsible fatherhood, $100 million to improve the handling of court cases involving foster care, a $200 million increase for a Safe and Stable Families program to help keep troubled families together and support adoption, and $1 billion to help parents pay for child care when they leave welfare and join the workforce.

On Medicaid, some partisan critics and their allies will probably continue to distort the bill's intent and effect. I am repeating this-- the provisions on benefit flexibility and cost sharing are clear and unambiguous. The Congressional Budget Office and the Centers for Medicare and Medicaid Services agree. The conferees agreed to language that clearly provides early periodic screening, diagnosis and treatment as a guaranteed benefit to all children on Medicaid. The conferees also agreed to language that clearly exempts individuals with incomes of less than 100 percent of the Federal Poverty Limit from any increased cost-sharing. I fought hard for these provisions and I will take appropriate actions to prevent any misreading of them to occur down the road.

Mr. President, on Wednesday, February 1, 2006, the House of Representatives passed the Deficit Reduction Act of 2005, DRA, clearing the way for the President to sign this bill into law. This legislation was the product of a great deal of work on the part of Members and our dedicated staff and the experts who work in the congressional support agencies.

I would like to highlight two provisions in the DRA: the Family Opportunity Act and the reauthorization of the Temporary Assistance for Needy Families and pay special tribute to the Members and staff who worked so hard on them over many years.

Mr. President, I am particularly pleased that after years and years, the Family Opportunity Act is about to become law. This legislation has been something of a crusade of mine. This legislation extends Medicaid eligibility to families with a severely disabled child that are faced with either staying poor in order to continue to qualify for Medicaid or, worse, relinquishing a child to the State so that the child can receive the services that the child needs.

The introduction of the Family Opportunity Act was motivated by the circumstances of individual families, the Melissa Arnold Family and the Dylan Lee Family. I offer my heartfelt thanks to these families for sharing their struggles with me and for being the inspiration for this legislation.

I pay special tribute to my partner in this endeavor, Senator Edward Kennedy, who is a tireless champion on behalf of children and those with disabilities. During the many years we worked side by side on this bill, Senator Kennedy was most ably assisted by Connie Garner, of his staff.

On my own staff, I would like to single out the efforts of Hope Cooper who worked for many years on the Family Opportunity Act and whose knowledge and compassion were invaluable assets in developing the bill.

I also appreciate the work done by policy leads, Leah Kegler, Becky Shipp; health policy director, Mark Hayes; deputy staff director, Ted Totman, and staff director for the Finance Committee, Kolan Davis.

I am grateful for the work done by Jeanne De Sa and Eric Rollins at the Congressional Budget Office and Ruth Ernst at the Office of Legislative Counsel, especially for their patience in analyzing and drafting the many different versions of the legislation.

Mr. President, the reauthorization of the Temporary Assistance for Needy Families, TANF, has been a long and very difficult process, spanning three Congresses. Everyone who has worked on this reauthorization has been guided by a fundamental principle: helping those in deep and persistent poverty achieve the economic self sufficiency needed to overcome that poverty. We may disagree on some of the best ways to overcome poverty, but everyone who devoted their labor to this program did so out of the best of intentions.

I particularly thank my friend and partner on the Senate Finance Committee, Senator Max Baucus, for his work on this program over the past 5 years. We didn't always agree, but we kept working together until we finally got to a compromise that satisfied us both. I hope at some point we can revisit some of the common themes we developed together in the PRIDE bill.

I thank Senator Baucus's staff who worked on this issue over the past 5 years, Doug Steiger, Kate Kahan, and Liz Fowler. They are passionate, knowledgeable, and care deeply about low-income programs and the individuals who rely upon them.

Other Members and their staff who contributed to the policy and the process include, the initial ``Tripartisan'' members: Senator John Breaux and his staff, Sara Triagle and Michelle Easton; Senator Orrin Hatch and his staff, Becky Shipp; Senator Jay Rockefeller and his staff, Barbara Pryor; Senator Olympia Snowe and her staff, Carolyn Holmes; Senator James Jeffords and his staff, Justin King; Senator Blanche Lincoln and her staff, Elizabeth MacDonald and Mike Anzick.

Other critical Members and staff include: Majority Leader Bill Frist and

his staff, Eric Ueland and Libby Jarvis; Minority Leader Tom Daschle, and his staff, Joan Huffer; Senator Rick Santorum and his staff, Randy Brandt; Senator Christopher Dodd and his staff, Grace Reef; and Megan Hauck, who contributed as a advisor to Senator Don Nickles, as well as working at the Department of Health and Human Services Office of Legislation and the White House.

Throughout much of the process, Members and staff were indebted to the expertise of the Director of the Office of Family Assistance at the Administration of Children and Families, Andrew Bush and the Assistant Secretary for Human Service Policy in the Office of the Assistant Secretary for Planning and Evaluation, Don Winstead.

The Congress simply could not do our work, were it not for the incredibly talented and hardworking individuals serving in the congressional support agencies. We owe a substantial debt of gratitude for the work done by Gene Falk, Melinda Gish, and Carmen Soloman Fears at the Congressional Research Service; Shelia Dacey at the Congressional Budget Office; and Ruth Ernst at the Office of the Legislative Council.

As ranking member and then chairman of the Senate Finance Committee, I was well served by policy leads, Hope Cooper and Becky Shipp; health policy director, Mark Hayes; deputy staff director, Ted Totman; and staff director for the Finance Committee, Kolan Davis.

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

Mr. President, I rise to make an opposite point of view and critical comments on a statement that was made yesterday by the Senator from North Dakota, Mr. Dorgan. Once again, he made a very impassioned case, and everybody who hears him knows he presents his case very well. He made an impassioned case for American workers whose jobs have been lost when plants move overseas.

We have all witnessed this heart-wrenching event. I know even in my home State of Iowa we have had plant closings for that reason. Some of those operations have been moved out of the United States. But as far as Iowans are concerned, let me remind you this has been a phenomenon of plants moving from Iowa to other places for a long time, before we ever heard the word ``outsourcing.''

I remind my colleagues I was a member of the International Association of Machinists at a sheet metal factory, the Waterloo Register in the town of Cedar Falls, IA. We made furnace registers. I started working there in 1961, when I was a young member of the Iowa Legislature, to supplement the income of a citizen legislator, and also to supplement the income of a young farmer getting started at that time because I was only farming 80 acres at that time. Even in 1961, you could not make a living farming 80 areas. You could not make a living getting $3,000 every other year being an Iowa legislator. So I became a factory worker.

At about 1971, the people who owned our company decided people in Texas would work for less money than people in Waterloo, IA, so they moved the plant to Texas. Our job was shut down. Our job was lost. The outsourcing was not to China, it was to Texas. I presume that 25 years later there were jobs that moved from Iowa to Texas that eventually moved to Mexico, and then it was not long Mexico was losing jobs from Mexico to China. Now we hear about jobs moving from China to someplace else, where somebody is going to work someplace else for a lower wage. I guess when you have a planet of 6.5 billion people, and people want to eat, they want jobs, somebody is going to seek that work and do it. So I believe I have been a victim of outsourcing not to China but to Texas. But it is still a problem today, and it is one for which we have to have sympathy.

Senator Dorgan, obviously, presents a great case for those people. But I want people to know I have lived through that and know what it is like when I am commenting because I do not want people to think I am unsympathetic to outsourcing. But I think we have to recognize the economic facts of life, whether it is my job at the Waterloo Register in Cedar Falls, IA, or whether it was 250 years ago when manufacturing jobs left Great Britain to come to the Colonies in the United States of America.

Now, I want to say, unfortunately, Senator Dorgan's amendment--if it is the same one we saw in 2004. And you can tell from the debate that we just had that we do not have the language on these amendments, and we are begging for them. Anybody who believes in transparency of Government ought to get these amendments out here. There is no reason to be secretive about the people's business because everybody is watching us right here on television. We are not trying to hide anything. So we need to see those amendments.

But the point is, if it is like the amendment in 2004, that amendment will not do one thing to bring jobs back to America. In fact, it could very well cost even more U.S. jobs. I would like to explain, then, why I come to this conclusion.

This amendment, if it is similar, repeals deferral for property imported into the United States by a foreign subsidiary of a U.S. company, without regard to whether that property was ever previously produced, manufactured, or grown in the United States.

This means the amendment by Senator Dorgan fails to focus on their primary complaint that U.S. companies are shutting their plants, moving production offshore, and selling back into the United States. The bill does not focus on this scenario. Instead, it overshoots the mark by hitting all goods sold into America by U.S. companies, even if it is impossible for those goods to be produced in America.

For example, if a produce company sets up a banana farm in Costa Rica to import bananas into the United States and around the world, the income from sales to the United States is not eligible for deferral. I may be mistaken on this point, but I am not aware of too many banana farms in Texas or Florida, so I do not see how allowing a banana farm in Costa Rica is going to cost U.S. jobs.

Similarly, if a U.S. company wanted to start a mining operation in some faraway land to extract a new and exotic mineral that is not found at home, they could see that anywhere in the world, but they cannot import that back into the United States without triggering the impact of this amendment.

Or let's look at coffee. We have a lot of coffee shops on our streets these days. If they set up their own coffee plantation in Brazil, they would be hit by the Dorgan amendment. I think we only raise coffee in one State in the United States, and maybe they do not do that in Hawaii anymore. But there is not much coffee raised in the United States. We sure do not raise it in my State of Iowa.

Our friends from New York and New Jersey ought to consider the effects of this amendment on Puerto Rican residents who work in plants owned by subsidiaries of U.S. companies. Many of the U.S. multinationals have manufacturing subsidiaries in Puerto Rico that import products into the U.S. market. Since our Tax Code treats Puerto Rican corporations like foreign corporations, this amendment would hit those companies very hard. But it would not hit their foreign-owned competitors who sell into the United States.

It seems Senator Dorgan's amendment would allow a U.S. company to sell a foreign-produced good to anyone in the world except Americans, but it would allow a foreign-based company to sell those same goods to Americans. When you stop to think about looking out for the benefit of Americans, this does not make any sense.

I have described how the bill would operate, but I do not think this is the intent of the legislation. What I believe is intended is that deferral should be denied if a company closes a U.S. plant, produces the goods offshore, and then imports the goods back into the United States.

This does not actually happen very often. We have had this debate before. The last time I spoke on this issue was when we were debating the JOBS bill back in 2004. I do not think much has changed since then.

At that time, the latest Department of Commerce data on U.S. multinationals showed that only 7 percent of foreign subsidiary sales were into the United States--only 7 percent.

Nevertheless, this amendment insists that the rule of ``deferral'' in our tax law is somehow a ``tax benefit'' that moves jobs offshore and allows you to not pay taxes on foreign income. This is not true, of course. Deferral has nothing to do with moving jobs, and it never forgives taxes that are owed on foreign profits of U.S. companies.

Many U.S. companies, however, choose to reinvest their foreign earnings in foreign markets, and so the U.S. tax on those earnings is, then, indefinitely deferred.

As Senator Dorgan noted, the JOBS bill, that we call the American Jobs Creation Act of 2004, did contain a provision that provided U.S. multinationals a temporary ability to receive dividends from their foreign subsidiaries at a reduced tax rate. Now, it is important to note that companies could only avail themselves of this reduced rate on an amount of earnings they identified in SEC filings as ``permanently reinvested.'' That is a legal term, which means they had no intention of bringing that money back to the United States.

Senator Dorgan's characterization of that provision is misleading, and I would say in two ways. First, Senator Dorgan calls the repatriation provision a tax cut of over $100 billion. To arrive at that huge number, the Senator's calculation must assume these companies would have brought close to $340 billion of their foreign earnings home in the absence of the repatriation provision of the JOBS bill.

Now, the fact is--and I get this from scoring by the nonpartisan Joint Committee on Taxation--this provision has a cost to the Treasury of not $100 billion but $1.9 billion over 5 years and $3.3 billion over 10 years; and it actually scored as a revenue raiser in the first year of $2.8 billion.

Now, I plan on looking at the actual results of this repatriation provision when all the facts are in, after the fact. You are kind of guessing before you pass a bill. But after it has operated for a couple years, then you get a chance to get a real look at it. So we are going to look at this repatriation provision. But the Joint Committee on Taxation must have scored this provision as a raiser in year 1, and a relatively small cost over 5 and 10 years, because 5.25 percent of a large amount that was repatriated is a lot more than 35 percent of a much smaller amount that would have been repatriated otherwise.

In other words, it is not as much money coming back into this country, and if it does not come back here, it is not taxed.

I am not here to defend the repatriation provision or those companies that laid off workers or took advantage of the repatriation provision. I am just as troubled by those announcements as Senator Dorgan. I am simply pointing out that Senator Dorgan's characterization of that provision as a $100 billion tax cut is extremely misleading.

Second, Senator Dorgan talks as if the repatriation provision was the cornerstone of the American Jobs Creation Act, and it was kind of an appendage. In fact, the repatriation provision was a very small part of the bill. One of the key pieces of the JOBS bill was the manufacturing deduction which does actually give a tax break for companies that manufacture, leaving jobs here or creating jobs here. The Joint Committee on Taxation scored this provision as a cost to the Treasury of $76 billion over a 10-year period. That is, in fact, a tax cut, and it is a tax cut that will maintain jobs in America and will create jobs because one of the problems for American corporations compared to international competition is the high tax rate that we have on corporations compared to a lot of other countries. Those other countries are waking up. Just look at Ireland, look at Europe, what we are talking about doing now--sometimes through the European Union, sometimes through individual countries. They are seeing great advantage by reducing the corporate tax rate in their respective countries.

Two years ago, we thought we had moved ahead of them. Now they are following suit. We may have to go back and look at our corporate tax to find out if we are going to continue to be noncompetitive.

I would like to go back to the deferral issue. The rule of deferral exists to keep U.S. companies competitive in the global marketplace. Deferral is not something new. It has been in our tax laws since 1918. We have debated the rule of deferral on several occasions, and we will no doubt continue to do so when we debate tax reform proposals.

Opponents of deferral too often make wild accusations about how this rule, which has been in place since 1918, spells doom for the American worker. Of course, none of this is true. In fact, just the opposite is true because we must always be vigilant about enhancing international competitiveness for our U.S. companies. Hence, deferral ensures an ever-growing base of opportunity for U.S. companies and, more importantly, their employees at home and abroad.

U.S. multinationals are a critical component of our economy. These companies operate in virtually every industry and, the last time I checked, have investments of more than $13 trillion in facilities located within the United States. As employers, they provided 23.5 million jobs for Americans in the year 2001. That was nearly 18 percent of the payroll jobs in the United States. They had a payroll of $1.1 trillion. When you go back to this debate we had in the year 2004, I noted at that time that the U.S. multinationals created more than 53 percent of the manufacturing jobs in America and employed more than two U.S. employees for every foreign worker. Those were the latest years for which I had figures, but I have no reason to believe it is different today.

During the 10 years from 1991 to 2001, U.S. multinationals increased domestic employment at a faster rate than the overall economy. A recent study confirms that U.S. multinationals are significant job creators, and those jobs are not created through ``exporting'' jobs to foreign nations with low-labor and low-tax costs, as Senator Dorgan contends. The Department of Commerce data shows that the bulk of the U.S. investment abroad occurs in high-income, high-wage countries.

Again, referring to the year 2001, 79 percent of foreign assets and 67 percent of foreign employment of U.S. multinationals were located in high-income, developed nations such as Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, and the countries of the European Union. We have to remember a very simple maxim for why companies go into foreign markets: 4 percent of the people in the world live in the United States. If you want to create jobs in America and you just want to sell to that 4 percent, you are going to have a very limited market. Whether you are in agriculture, like I and my son and grandson are, selling corn and soybeans overseas, or whether you are manufacturing John Deere tractors, whatever you are manufacturing, if you want prosperity, you go where the market is. That is the 96 percent of the people who don't live in the United States.

Again, referring to that debate on the JOBS bill in 2004, fully 95 percent of the world's population and 80 percent of its purchasing power--so the only new thing I am giving is not that 96 percent of the people live outside of the United States, but 80 percent of its purchasing power--is located outside the United States. Foreign sales growth has outstripped domestic sales growth. So our companies are taking advantage of selling to the rest of the world. This increased growth requires increased employment wherever you can find it. The good news is that foreign growth also results in U.S. job growth.

A recent study confirmed that during the 10 years from 1991 through 2001, for every one job that U.S. multinationals created abroad, they created nearly two U.S. jobs in their parent corporations. That is why it is critical to our economy that U.S. companies remain competitive in the international marketplace.

I would like to review a more rational explanation of deferral and how it works to keep our U.S. companies competitive. The United States taxes all of the worldwide income of its citizens and corporations. The U.S. income tax applies to all domestic and foreign earnings of U.S. companies. The United States fully taxes income earned overseas by foreign subsidiaries of U.S. companies. However, many foreign countries tax their companies on a territorial basis, meaning that they only tax income earned within their country's borders and don't impose tax on the earnings of foreign subsidiaries. Major countries using this territorial system of corporate taxation are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Sweden, and Switzerland. A company from one of these countries that uses the territorial tax system has great advantage over U.S. companies.

For example, a U.S. company with a Singapore subsidiary will pay U.S. tax and Singapore tax on the subsidiary's income. A French company with a Singapore subsidiary will pay Singapore tax but no French tax. This means that a U.S. company in Singapore has a higher tax burden than a French company in Singapore. Two basic tax rules answer this problem and seek to put U.S. companies on a level playing field with foreign competitors from territorial countries. The first rule says that when foreign income is brought home, the U.S. allows a reduction against U.S. tax for any foreign taxes paid on that income. The foreign tax credit prevents the U.S. from double-taxing foreign earnings which would make our companies noncompetitive in the international marketplace. And like deferral, this has been in the tax law since 1918.

The foreign tax credit, however, is limited. It may only offset the U.S. tax on that income which is currently imposed at a 35-percent rate. If the foreign tax rate is higher, the credit stops at 35 percent. If the credit is lower, say 10 percent, then additional U.S. taxes

will be owed up to the full 35 percent. In this example, an additional 25 percent of the taxes would be owed to the United States, which is the difference between the 10 percent and 35 percent of the U.S. rate.

The second basic tax rule is that U.S. companies are allowed to defer U.S. tax on income from the active business operation of a foreign subsidiary until that income is brought back into this country, usually in the form of dividends paid to the U.S. parent. This is referred to as the rule of deferral, meaning that the U.S. tax is deferred until the earnings are brought back. This is the rule the Dorgan amendment attacks.

It is important to note that deferral is not the forgiveness of tax. It simply means that we impose the full U.S. tax when foreign earnings are repatriated to the United States instead of doing it the very day of earning. The reason that we defer tax on active business operations is so that U.S. companies can remain competitive with foreign companies that have a different system of taxation than what we have. I am referring to what I called the territorial tax. We don't defer tax on passive activities like setting up an offshore bank account or other passive investments. We tax passive activities yearly. But active operations are subject to competitive disadvantage.

For example, if we impose U.S. tax today on the profits of a Singapore subsidiary, then the U.S. company will pay a 35-percent tax in the United States, net of any Singapore taxes, but that French competitor located right next door in Singapore will pay only the Singapore tax. If the Singapore tax rate is less than 35 percent, which is the U.S. tax rate, then the French competitor will have a tax advantage. Who wants to give any advantage to a French competitor? This is because the United States allows a foreign tax credit to offset the U.S. income tax imposed on those foreign earnings but only up to the 35 percent U.S. corporate rate.

If the foreign rate is less than the U.S. 35 percent rate, then residual U.S. taxes are owed on the difference between the U.S. tax rate and the foreign rate. For example, if a Singapore tax is 15 percent and the U.S. tax is 35 percent, then the United States will impose an additional 20 percent on those Singapore earnings. The French company, however, would only pay the 15 percent Singapore tax. If we did not allow deferral on that additional 20 percent of tax, then the U.S. company today would have a 20-percent tax disadvantage compared to the French company.

The question on repealing deferral is whether we want to hand over the world market to companies from France and Germany and other countries that have a different system of taxation than we have, called the territorial system. Repealing deferral means that we export our high U.S. tax rates to U.S. corporations around the globe. The United States has one of the highest corporate tax rates in the world. There are few countries with rates higher than the United States. This means that without deferral, U.S. companies will be at a continual worldwide disadvantage compared to their foreign competitors.

That is why we defer U.S. tax on active business operations, so that U.S. companies can be competitive in the global marketplace.

Some Senators have proposed repealing deferral or cutting back on it, as Senator Dorgan's amendment would do. These proposals would export the high U.S. tax rate to U.S. operations around the world. That would be fine if all companies around the world were paying the high U.S. tax rate, but, as I have said so many times, they are not. We have one of the highest corporate tax rates in the world. Companies of foreign countries are not subject to our tax laws and are usually taxed at lower rates. This all brings us back to the implications of Senator Dorgan's proposal. It would enhance the competitive advantage of foreign-owned multinationals over U.S. multinationals.

Our focus in considering this amendment must be on the ability of American companies to compete within the United States as well as in foreign markets if we want to maintain and create jobs in America. The issue is not whether we tax foreign earnings currently but whether we cede the U.S. market to foreign competition.

The Dorgan amendment will increase taxes on U.S. companies, but their foreign competitors in the U.S. will not face a similar tax increase. This can lead to a loss of domestic market share, or even if market share is maintained, losses may be incurred on domestic sales because of pricing pressures and uncompetitive margins created by the additional tax burden.

No one is happy when companies move abroad to a tax haven to avoid U.S. tax. But let me tell you another side effect of the proposal to eliminate and cut back on deferrals. In the American Jobs Creation Act of 2004--that bill I always referred to as the JOBS bill--we enacted a provision that prevents corporate inversion, where a company would pretend to move its corporate headquarters to Bermuda, to a simple post office box there, and do it not because they are going to do anything productive there but for the sole purpose of avoiding U.S. taxes. Many U.S. multinationals complained that inversions were necessitated by an inability to compete with foreign-owned multinationals that aren't subject to the higher U.S. tax rate.

We should be proud, then, that we shut down those inversions, those shell corporations, those postal box corporations which do nothing over there except go there to avoid tax and then make the situation even worse for honest corporate taxpayers in America that are paying the tax into the Federal Treasury. But in the process of doing that, we didn't do it at the expense of repealing deferral. Now that we have shut down inversions, if we repeal deferrals, or significantly cut back on them, the only other alternative that would be available to U.S. multinationals would be to sell themselves to foreign companies or to be taken over by a foreign company in a possible hostile takeover. If we prevent U.S. companies from deferring their foreign profits, we will see more and more U.S. multinationals being bought out by foreign-owned multinationals. Tax changes have consequences.

Increasing taxes on U.S. multinationals will not bring jobs back to America. You only pay taxes if the company is profitable, and you only stay profitable as long as you remain competitive. But in the United States, taxes are 35 percent cost-to-profit, and that is where a competitiveness disadvantage can occur when a U.S. company is competing against foreign companies that will not incur this tax increase.

Senator Baucus and I held hearings a couple years ago regarding the effects of the international competition within the United States, so we as leaders of the Finance Committee are very familiar with the effects of these kinds of rate differentials.

I think a quote by Joseph Guttentag, international tax counsel of the Clinton administration, during testimony before the Finance Committee in July of 1995 is a very good place to end this debate. So I end with this quote:

Current U.S. tax policy generally strikes a reasonable

balance between deferral and current taxation in order to

ensure that our tax laws do not interfere with the ability of

our companies to be competitive with their foreign-based

counterparts.

Now, if that position just expressed by Joseph Guttentag, international tax counsel in the Clinton administration, the last Democratic administration, testifying before a Republican Congress, isn't good enough evidence that the route Senator Dorgan wants to go is the wrong route and a route contrary to previous leaders of his own party, then I don't know what will be evidence that this position is going to make American companies uncompetitive, not go to the marketplace of the other 96 percent of the consumers around the world outside the United States, and consequently creating jobs in the United States, and I don't know what it takes to convince him that position is a wrong position for the United States and is so different than what we have traditionally had for the Tax Code since 1918. When I say 1918, that goes back almost to the beginning of the income tax in the United States.

I yield the floor.

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

Mr. President, I yield myself such time as I might consume.

I will make some additional points on the Dorgan tax haven included in the Conrad substitute. I share Senator Conrad's concerns about the ability of large corporations to manipulate the Tax Code, to shift large amounts of profit offshore, but this provision is not the right way to address those concerns. It is very overbroad and inadequate. It is overbroad because it harms the competitiveness of United States multinationals, repealing deferral for holding company structures

that allow them to efficiently allocate active foreign generated resources among their foreign operations without incurring U.S. tax on entirely foreign transactions.

It is inadequate because it applies only to the subsidiaries in black-listed countries. Companies that use tax savings for abusive purposes could easily avoid this rule by locating in a low-tax country that is not on the list.

Ireland would be a perfect example of that, where we read press reports that companies such as Microsoft are shifting huge profits. Treasury would have authority to add countries to the list, but does anyone think Ireland, with whom we already have a tax treaty, would be added to that black list? The way to deal with those cases is through effective transfer pricing policy and enforcement, not by curtailing deferrals.

Another issue that is going to be soon before us is the Democratic substitute of revenue raisers that are in our bill. I am flattered by the tax relief side of Senator Conrad's substitute amendment since it includes extension of the same widely applicable tax relief provisions in the underlying bill.

I should also be flattered, and I am, by some of the pay-fors in that amendment--in particular, the provisions regarding the so-called SILO transactions. It is a fact that we shut down the abusive tax shelters that involve U.S. corporations claiming tax benefits on foreign subways and sewer systems in 2004. So these deals can no longer be done. The underlying bill would repeal a generous grandfather provision for certain domestic deals and would deny benefits for foreign deals entered into before the effective date of the JOBS Creation Act of 2004.

We have introduced a fully offset tax relief bill in the past. Most recently, that act of 2004 produced $82 billion of tax relief that was completely offset. The underlying bill, in fact, contains almost $20 billion of offsets while providing $90 billion in broad-based tax relief. We do not need any more offsets to pay for the lost AMT revenue that we never intended to collect and for other provisions, such as the R&D credit, for example, that are broadly supported as good for the economy.

We all know tax receipts are on the rise. In 2005, we had $274 billion more coming in over the taxes that came in in 2004 under the same tax policy, and we exceeded the CBO baseline by--can you believe it--$97 billion. It is a very vibrant economy which produces that kind of revenue. That amount, whether it is the $274 billion in 2005 over 2004 or the $97 billion above the CBO baseline, that amount exceeds the $70 billion of reconciled tax relief over 5 years provided in the budget resolution.

So I hope we will be able to take these points I have just made about the inadequacies of the amendments we are going to be dealing with when we vote on these amendments.

I would now, Mr. President, speak on the issue of an amendment I am going to place before the Senate this afternoon. In fact, I will submit this amendment at this point.

I wish to take just a few minutes, in offering this amendment, to speak about amendments that are also offered by Senator Bingaman and Senator Nelson regarding the Medicare prescription drug program. I thank the Senators for their amendments. I know their intentions are good and their hearts are in the right place. But having said that, I am forced to oppose the amendments, and my reasons follow.

Opponents of the benefit are trying to make it look as if Republicans are indifferent to the problems of the implementing part of the Medicare program. Such is not the case because everyone has to be concerned about the issues faced by some beneficiaries in getting their prescription drugs, even if that might be a very small percentage of the people who are involved. Whoever needs these prescriptions, we have to do everything we can to get them to them.

Like everybody else, I am concerned about the drug benefit implementation issues. It is not acceptable that some of the most vulnerable and frail seniors are experiencing problems. But my opposition to the amendments is rooted in the goal of not just taking some action, but that we need to take the right action when we act. There is no question that Congress meddling could just make things worse.

With that in mind, I want to share with you the following quote as to another new program that was getting underway:

As the program gets under way the danger is that the

strains on it will generate pressures for unsound change.

They will come from those who will be disappointed because

they have been led to expect too much as well as from those

who see failure in every shortcoming. Changes will come in

time, but they should be made on the basis of the program's

own experience. This program must be given ample time to get

over its growing pains.

Now, that is not about the prescription drug bill that is just now going into effect. That is a quote from the July 1, 1966, edition of the New York Times, and it is about the implementation of the original underlying Medicare Program passed by Congress a year before this July 1 edition of the New York Times.

Now, when I read that quote of 1966 just now, it said ``the program'' instead of ``Medicare'' because I did not want to give it away. The point of this editorial is that those words are extremely relevant today.

I am not trying to make excuses or minimize the difficulties some are having. Those problems need to be fixed, and fixed fast. By all accounts, everyone is working hard to get them resolved. But in my opinion--echoed by the New York Times nearly 40 years ago--rushing to ``fix'' things through legislation could do more harm than good.

Just last week, the Finance Committee, in a bipartisan setting--with almost every member of the Finance Committee there--had a meeting with Secretary Leavitt and CMS Administrator Mark McClellan. We had a candid discussion about the unfortunate glitches, and we heard about steps taken by the agency to address them. We had a very constructive dialog. That dialog covered a range of issues the Agency had identified and the administration's actions already taken to address them.

It is clear to me legislation is not needed at this time. Secretary Leavitt has the authority. Current law allows him to have a smooth transition. And administrative actions will work faster than if we pass this legislation. That is because changes in law have to be followed by more administrative actions. This is very much going to slow things down. That is not what we want. We want, need, and will get quick action.

The issues that have surfaced do not lend themselves to legislative fixes. For example, we talked about problems in the data files. The data files have not always identified the plan where a dual eligible is enrolled. Obviously, that is a problem. But can Congress write a law to dictate exactly how to fix computer system data files? That is not something I would want to do. There is an opportunity for getting something wrong, if I ever saw an opportunity for Congress to do something wrong.

But more importantly, these amendments are unnecessary. Senator Bingaman's amendment gets at issues that have already been addressed administratively. CMS has the authority to address these that way. And it will get fixed faster than if we pass additional legislation.

So I am going to offer a sense-of-the-Senate resolution. That resolution expresses our concerns about these problems, and it expresses the Senate's support for the Agency's efforts to fix them.

For example, prescription drug plans must have a first-fill policy. The first-fill policy already requires at least 30 days of coverage for the first prescriptions filled, even if the drugs are not on the plan's formulary. And just yesterday, Secretary Leavitt announced that the first-fill policy is being extended further. It is now going to be in place for 60 or 90 days as a first-fill policy. The Bingaman amendment requires only a 30-day policy. So it is already out of date. The administrative actions are much faster. Changes in law are not needed to address the issue.

Now, here is another one. The Bingaman amendment says that dual- eligible beneficiaries, whom we call dual eligibles, should be presumptively eligible. But the dual eligibles are already automatically eligible under the law, and they are automatically assigned to a plan. So again, no change in law is required.

Another example. The Bingaman amendment says it would require plans to reimburse enrollees for cost-sharing

problems. Here again, plans are already responsible for the costs to cover drugs. They are responsible for reimbursing beneficiaries for any cost-sharing charged in error. No change in law is required.

Let me give you another one. Some States have stepped up to fill claims during the transition. The Bingaman amendment requires States to be reimbursed for their costs. This is already happening. Last week, Secretary Leavitt announced that the Federal Government will reimburse States for costs they have incurred during the transition period. We were told that that day we met with Secretary Leavitt. I do not know exactly when Senator Bingaman was there, but he was there for that meeting. Not every Senator stayed for every minute of the meeting, but Secretary Leavitt made this very clear. So again, legislation is not needed because administrative action is being taken, with the legal authority of the Secretary to do it. So no additional legislation is needed.

Senator Nelson's amendment would extend the enrollment period through the end of the year and permit beneficiaries to change once before the end of the year. We have discussed this amendment before. The Senate has already voted twice, and we voted it down twice. And changing the enrollment period does nothing to address any of the issues experienced by beneficiaries just this last month.

We are well into the enrollment period. Enrollment is exceeding expectations. Twenty-four million beneficiaries out of 44 million, potentially, have prescription drug coverage. Every day, nearly 90,000 beneficiaries are enrolling in the program, and about 1 million prescriptions are being filled daily. So again, legislation is not needed.

There are a number of resources for beneficiaries to help them choose a plan. There is the Medicare call center. It is available 24 hours a day, and the Medicare Web site. Every State has counselors available to assist beneficiaries through the State Health Insurance Information Program. That is the whole point of that program--the SHIIP program, it is called for short--to help beneficiaries understand their Medicare benefits. The prescription drug plans based their proposals to serve Medicare beneficiaries on the enrollment period specified in the law.

In addition, there are already rules in place under which a beneficiary can change their enrollment outside of the open enrollment period. A beneficiary can seek what is called a special election period if that is needed for that individual--for example, if a plan fails to provide a beneficiary with information about the plan's benefits on a timely basis, or if it fails to provide benefits in line with quality standards, or if the plan, its agent, or plan provider materially misrepresents the plan in marketing that plan. So in all of these instances, there can be a special enrollment period or an opportunity to change.

So again, we do not need legislation. These are issues already covered in the law today.

I want to make another point about what is going on with these amendments. There was a time when opponents of this benefit were concerned that there wouldn't be enough choice. Now their concern is that there is too much choice. When we were in conference with the House on this 2 years ago, we were fearful there might not be a choice for people. So we provided if there wasn't a choice, the Secretary set up a subsidized choice so that every individual could at least choose from two. We wanted people to have choice. We followed the Federal Employees Health Benefit Plan where people have the choice of many plans to choose from, and they get to change once a year. We wanted to make sure we didn't cram anything down any senior citizen's throat. If they didn't want to participate, if they were satisfied with Medicare the way it was, they didn't have to. But if they wanted to participate, they elected.

You don't write one plan for 44 million seniors because everybody has different benefits. And one-third of the people already had some prescription drug coverage. We didn't want to screw up their plans. So we subsidized those plans so that those people who had something they wanted would be able to keep it. I don't know when you satisfy people. I didn't think there would be enough choice. Now we are hearing complaints about too many choices. There are 44 million Americans; there are 44 million different personal needs of those people. We, sitting on the floor of the Senate, are not going to figure out what those 44 million needs are and pass a one-size-fits-all plan that is going to satisfy the needs of everybody.

The point is, the opponents of this new benefit will complain and fight it no matter what happens. I hope everyone remembers that. I also find it ironic that folks think that legislation is the answer. These are the same people who are concerned about confusion. Now they are proposing legislative changes in a bill that has only been in operation for 1 month, on top of administrative actions that the agency has already taken. They want to screw that up with legislation on the floor of the Senate with changes that will have no impact on any of the problems encountered this last month, legislation that would have to be followed by yet more administrative action, a snowball rolling down the hill, just getting more complicated as it rolls on.

I ask whether this is going to help these perceived problems. Well, not just perceived problems; I admitted there are problems out there. I admitted when you put something like this into place, there are growing pains, just like I quoted that New York Times article from 1966 about the growing pains that we were going to have with Medicare when it was first put in place. Do you think these things are going to smooth the transition? I don't think so. Talk about opportunity for confusion among beneficiaries, pharmacists, and plans. This is not going to reduce the confusion.

Passing legislation now runs the very real risk of undermining and complicating things. It can undermine the progress already made. It will interrupt actions taken by the administration. It will create more problems, not fewer problems. I, for one, have a steadfast commitment to gaining a full understanding of the problems and pursuing the most appropriate and timely course of action.

When the Secretary came before my committee and everybody turned out to make their complaints known, and the Secretary announced at that time seven problems and he announced at that time seven solutions to those problems and took full responsibility for them, I had a feeling people left that meeting fairly satisfied that nobody was going to blame somebody else and they had a grasp of the problems and solving problems, with some accountability that some changes had already taken place for the better.

So then when you come out of an environment of a committee meeting like that, you wonder what planet they have been on when these amendments are being offered--amendments that, if they were passed, would not get to the President for another 30 days--to solve problems that were evident 30 days ago that the Secretary has already identified and taken action to overcome.

Senator Baucus and I are working together to get to the bottom of this issue. That is how we do it in our committee. We do it in a bipartisan way so that we are going to also be able to work together if it turns out that legislation is needed. But I asked the Secretary at that very committee meeting: Do you need any legislative changes to take care of these problems that we have all identified, particularly the seven that he identified? He said: No, he had ample legislative authority to do it.

An important part of Senator Baucus's and my work in this regard is going to be brought up at next week's Finance Committee hearing, an open hearing. We will hear from Dr. McClellan. We will hear from representatives of the plans. We will hear from pharmacies. We are, most importantly, going to hear from the people involved in educating and enrolling beneficiaries into the plan. More than once I have heard Members take issue with attempts to bypass the committee process. The amendments before us are just that.

Senator Bingaman's amendment has not gone through the Finance Committee. It is clear that this amendment falls within the jurisdiction of the Finance Committee, and the Senator from New Mexico is a member of that committee. I ask him to work within

the committee. If the Senate proceeds on legislation that the full committee has not considered, then nothing would prevent the Senate from legislating on other Finance Committee issues without the benefit of hearings or committee action.

Next week's hearing is very important. We need to gather more information about what is happening. This is needed to inform all of us of any necessary response. In the absence of such information gathering, it is dangerously premature to consider any amendments related to the prescription drug program. We all know that this whole issue of Medicare prescription drug coverage has long been a political issue. With the amendments offered today, I can't help but think that is very unfortunate. It is also unfortunate that is probably not going to change during the 109th Congress.

On the other hand, I hope that is not the case. But here we are, just 1 month into the prescription drug program, already we see a lineup of amendments to perhaps the most inappropriate vehicle there could ever possibly be to deal with Medicare. In other words, these amendments are on a tax bill. But more importantly than just the process, these amendments are unnecessary because of administrative actions taken to date or to be taken tomorrow, if a new problem comes up.

When these amendments that I have discussed--the Bingaman and Nelson amendments--come up for a vote, I hope my colleagues will trust what we learned in the committee: that the Secretary of HHS doesn't need any new legislative authority, consequently bringing any more uncertainty into this process by voting for these amendments. Vote them down.

I said that I had an amendment I wanted to have considered when we vote this afternoon. I send the amendment to the desk and ask for it to be printed.

I yield the floor. And since nobody else is desiring to speak, I suggest the absence of a quorum.

Mr. President, I disagree with the proposal in two important parts.

First, the proposal does not extend to 2009 several provisions that are very important to both sides, bipartisan--specifically, the section 179 expensing, which encourages the growth of small business in our country, and the college tuition deduction, which will give parents more certainty in the planning of their children's education, and the low-income savers' credit, which assists families who make less than $50,000 in saving for their retirement.

The second point I have----

I only have 1 minute.

We don't have that time.

Then I will take 30 seconds, too.

All I can say in my 30 seconds on my point is that the Senator may be entirely correct, but that is one of the things that happens when we have 2 days of debate and these amendments are not put before the Senate to study until the last minute.

The second concern I have about the proposal is the inclusion of offsets which we have not had an opportunity to fully consider or with respect to which we have some policy concerns. An example of that is the revival of the environmental excise tax offered, referred to as the ``Superfund tax.'' As you might expect, I believe the bill passed by a bipartisan majority with 64 votes in the Senate in November, which we are not going through again, represents a more balanced bill, one that provides longer-term benefits, including increased certainty and reduced complexity for planning.

In addition, I raise a point of order that the budget does not meet reconciliation instructions to the Senate. It is an issue of germaneness, Mr. President.

Mr. President, I move to reconsider the vote.

Mr. President, the amendment expresses the sense of the Senate about the concerns regarding the problems encountered in implementing the new drug benefit. It expresses the Senate's support for the administration's efforts to fix them. These efforts have proven to be much speedier in getting the problems fixed, and fixed fast, than any legislation can do. To that point, one amendment offered yesterday has provisions that are completely unnecessary because administrative actions have already taken care of it. I see no point in legislating for the sake of legislating.

Moreover, legislative action on top of administration action will undermine and complicate progress to date.

I urge my colleagues to support this sense-of-the-Senate amendment.

I call up amendment No. 2731.

Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, I object to this amendment. Remember, all but two of our members of the Committee on Finance, Republican and Democrat, joined with Secretary Leavitt to go over the problems 2 weeks ago that this program is having. Secretary Leavitt took responsibility for those problems. He laid out seven problems. He laid out seven solutions to those problems that he has already inputted.

I asked him if he needed additional legislative authority to solve these problems. He did not need any additional legislative authority. He had plenty. We are going to pass legislation now that not only will take a while to get passed, but we will also have a period of time afterwards of having regulations to administer that legislation.

The problem goes on and on. The problem is being solved by the Secretary right now. Let's not screw up what the Secretary is trying to do, something that is working very well. There are problems, yes, but those problems are identified, and they can work.

I raise a point of germaneness on this amendment. I raise a point of order under section 310 of the Budget Act, and I ask for the yeas and nays.

I move to reconsider the vote.

I move to reconsider the vote.

Mr. President, I call up amendment No. 2732.

Mr. President, the problem with the Dodd amendment is that it doesn't even do what the author says it does. He says it is paid for by using capital gains, but capital gains offsets don't even come into play until the year 2009. The author is leading us to believe that the military assistance is coming now. But it is not, if it is tied to an offset that won't come due until 2009. Our alternative now before the Senate will do the same thing as the Dodd amendment, but we don't tie it up with an offset that is way down the road 3 years. That is not truth in budgeting. I urge support for my amendment.

Mr. President, I raise a budget point of order on my amendment, and I also move to waive all provisions of the Budget Act and budget resolution necessary for the consideration of the pending amendment to this bill and for the inclusion of the language of the pending amendment in the consideration of amendments between the House and conference report on the bill.

I ask unanimous consent that the motion be agreed to.

I have asked for unanimous consent.

Mr. President, I ask unanimous consent to waive all provisions of the Budget Act and budget resolutions necessary for the consideration of the pending amendment to this bill, and for the inclusion of the language of the pending amendment in the consideration of an amendment between Houses.

Mr. President, first, since we adopted the previous amendment, we obviously don't need this amendment. But even if we consider this amendment, I raise a budget point of order on the amendment.

Just not to confuse anybody, we are kind of going through the same thing we did on the previous two amendments, so be alerted.

I call up amendment No. 2736.

The same arguments that I made on the previous amendments apply here as well. My amendment will do the same as the Reed amendment but doesn't raise taxes to pay for it, so it will provide more equipment for our troops without increasing taxes. I urge support of my amendment.

Mr. President, again I raise a budget point of order. I ask unanimous consent it be exactly the same as the previous one on the last two bills. I ask unanimous consent to waive all provisions of the Budget Act and budget resolutions necessary for the consideration of the pending amendment to this bill and for the inclusion of the language of the pending amendment in the consideration of one amendment between the Houses--an amendment.

Again, I raise a budget point of order on this amendment.

Mr. President, I hope we just have one more rollcall vote--on final passage. It is my understanding that the Menendez amendment has been changed to a sense of the Senate, so that means the amendment I was going to offer on AMT will not be offered. Consequently, I am hoping we can get this amendment agreed to on a voice vote.

I dispute the presumption we have to choose between AMT hold harmless and not extending capital gains and dividends. We can do both. The presumption in this bill is that we can and we are going to be able to do that in the conference committee.

Since the amendment reflects the position of what we in the Senate previously had anticipated doing anyway, Members ought to vote for the amendment. I will vote for it.

Yesterday afternoon, I took time to respond to Senator Harkin's statement that we have an AMT problem to a significant degree because of what the Finance Committee did in the 2001 tax bill. Importantly, he fails to recognize that we have addressed the problem for 2001 to 2005. And, now, we are trying to do the same thing for 2006--to make sure that the AMT problem is not worsened.

To the extent that Senator Harkin suggests, like others who have looked at this issue, that the Bush tax cuts are responsible for the AMT problem, I respond in this way. Most who have reached that conclusion have done so by misusing data provided by the Joint Committee on Taxation, JCT, to distort the record on this issue. Additional analysis will demonstrate that conclusion to be erroneous. To the contrary, the analysis suggests an alternative explanation for the AMT problem--Congress's failure to index the AMT for inflation over the past 35 years.

Senator Harkin suggests that the Bush tax cuts are responsible for the AMT problem. The conclusion is reached in error because it is based on faulty logic. Those who have done similar analyses have based their conclusions on the mistaken assumption that a reduction in Federal receipts should be interpreted as percentage causation of the AMT problem. JCT was asked to project Federal AMT revenue if the Bush tax cuts were extended, but the current-law hold-harmless provision was not extended--$1.139 trillion--and Federal AMT revenue if neither the Bush tax cuts nor the hold-harmless provision is extended--$400 billion. From that data, some erroneously concluded and publicly represented that the Bush tax cuts are responsible for 65 percent of the AMT problem--$1.139 trillion minus $400 billion divided by $1.139 trillion--and conversely, that the Bush tax cuts tripled the size of the AMT problem--$1.139 trillion divided by $400 billion.

The logic used to reach that conclusion is flawed. That is because the many variables affecting the AMT have overlapping results, and the order in which one analyzes those overlapping variables will directly impact the outcome of the analysis.

In that way, we can use the same JCT data in the analysis above to suggest that failure to index is actually the dominant cause of the AMT problem. If one were to first index the current tax system for inflation by permanently extending an indexed version of the current hold-harmless provision, Federal AMT revenue would be reduced from $1.139 trillion to $472 billion over the 10-year period. Thus, extending and indexing the current hold-harmless provision for future inflation would reduce AMT revenues by 59 percent over the same period, referred to in a JCT letter dated October 3, 2005, as ``percentage of AMT effect attributable to failure to extend and index hold-harmless provision''. A copy of the entire letter is attached. If we then assume that the Bush tax cuts are repealed, AMT revenue falls by an additional $302.3 billion, from $472 billion to $169.7 billion. That second drop, attributable to the repeal of the Bush tax cuts, reduces Federal revenues by only 27 percent. Thus, one could argue that failure to index is the greater cause of the AMT problem--59 percent vs. 27 percent. Using logic similar to that undertaken above would also cause us to conclude that failure to index is responsible for 59 percent of the AMT problem--$1.139 trillion minus $472 billion divided by $1.139 trillion--or alternatively, that failure to index also nearly tripled the size of the AMT problem, $1.139 trillion divided by $472 billion.

But simple logic suggests that the Bush tax cuts cannot be responsible for 65 percent of the AMT problem and failure to index responsible for 59 percent of the problem. The anomaly arises because there is overlap between the variables being analyzed. Although the analysis fairly demonstrates the amount of AMT revenue saved by making a particular change to the Federal tax system, it is inappropriate to represent that such analysis accurately isolates causation of the AMT. Because there is overlap in the variables being analyzed--in these examples, indexing and the Bush tax cuts--the order of analysis of those variables is crucial to the outcome. JCT acknowledges this point to us in a letter dated October 3, stating: ``There is, however, interaction between these two contributing factors to the AMT effect. In order to avoid double counting of interactions, a stacking order is imposed. The apportionment of effects to each contributing factor will vary depending on the stacking order, even though the total effect remains constant.''

To this point in time, I have not seen anything that accurately suggests that the 2001 tax cuts have worsened the AMT problem to date. It is my intention to ensure that we continue to honor that commitment and that is an important part of this tax reconciliation legislation.

I ask unanimous consent that a memorandum be printed in the Record.

Mr. President, I appreciate the Senator bringing this matter to my attention and regret that it is too late to amend the bill today on the floor. I will agree with the Senator, however, to review this proposal further with the intent of taking it up in conference.

Mr. President, I ask unanimous consent that the committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on February 2, 2006, at 10 a.m., to conduct a hearing on ``Proposals to Reform the National Flood Insurance Program.''

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, February 2, 2006, at 9:30 a.m., to hold a hearing on tax treaties.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, February 2, 2006, at 2:30 p.m., to hold a hearing on nominations.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental affairs be authorized to meet on Thursday, February 2, 2006, at 10 a.m. for a hearing titled, ``Hurricane Katrina: The Role of the Governors in Managing the Catastrophe.''

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``Executive Nominations'' on Thursday, February 2, 2006 at 10 a.m. in Hart Senate Office Building, Room 226.

Panel I: Members of Congress TBA

Panel II: Paul J. McNulty to be Deputy Attorney General

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on Thursday, February 2, 2006, for a committee hearing titled ``The Jobs for Veterans Act Three Years Later: Are VETS' Employment Programs Working for Veterans?''

The hearing will take place in room 418 of the Russell Senate Office Building at 10:30 a.m.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on February 2, 2006 at 10 a.m. to hold an open hearing on the World Threat.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on February 2, 2006 at 2:30 p.m. to hold a closed hearing.

Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet tomorrow, February 2, 2006 from 10 a.m.-12 p.m. in Hart 216 for the purpose of conducting a hearing.

Mr. President, we are back at taxes once again. What the people of this country are going to be hearing in the debate for the most part is very similar to what we discussed in this Chamber back in the second and third week of November of last year. Thinking of how to give a picture to this debate, I picked as a starting point the fact that tomorrow is Groundhog Day. I think you see a portrait of Punxsutawney Phil, the famous groundhog. Tomorrow, is he going to see his shadow? If he does, then we have 6 more weeks of winter. If he doesn't, then spring is here. I guess that is the way it has been for 100 years or maybe longer.

Punxsutawney is in Pennsylvania, and Phil is the name of the groundhog. In thinking of Phil and his impending weather report, I also thought of a popular film entitled ``Groundhog Day,'' which starred Bill Murray, in which a man relives the same day, Groundhog Day, over and over and over. This film has taken on greater significance for me as I seem to be in a similar situation. More than just a sense of deja vu, I feel I am reliving a past experience because starting this hour, we are going to begin debate on a Senate tax reconciliation bill. Yet I seem to remember that we had this debate. I referred to these debates in the first words of my time when I said that we did this starting Wednesday, November 16, 2005. That was at 3:35 Wednesday afternoon. We took up S. 2020, the Tax Relief Act of 2005. I want to hold this up here. This isn't just any little document we took up; it is a tax bill, expiring provisions. Everything in this, when we were discussing this on November 16, was reenacting provisions that sunset December 31, 2005, so that there would not be an automatic tax increase on the American people. We are in a situation that if we don't get this done pretty soon and a year from now people are filing their taxes for 2006 and 2007, they are going to have big tax increases. One that is very obvious to everybody is the alternative minimum tax, which I will discuss in a minute. The alternative minimum tax is going to hit no fewer than 14 million people and maybe as many as 19 million people who would not otherwise be paying the alternative minimum tax. All these people would be basically middle-income Americans. The alternative minimum tax was meant to hit very wealthy people who took advantage of every tax relief available or every tax loophole that was legally available within the Tax Code and still didn't pay any taxes, that they ought to pay some tax. So it was referred to as the alternative minimum tax so that everybody, regardless of how wealthy they might be or how high their income might be, paid a little something into the income tax fund for the privilege of living in America. That privilege is a constitutional right, but everybody contributes something to it. That was the theory behind it.

Well, that was not indexed. And since that wasn't indexed, we have to change the Tax Code from time to time so it doesn't apply to more people. Actually, the thing ought to be repealed because it is not serving the purpose it was intended to serve.

First of all, it was not meant to hit middle-income taxpayers. Secondly, a lot of people today, because they hire the right people to do their income tax, have legally found ways of avoiding the alternative minimum tax. So it is not even hitting the people it was supposed to hit. Yet it is hitting millions of people it was never intended to hit. How you keep tax policy like that on the books, I don't know. I would like to repeal it. If I could get 51 votes to repeal it, that would be my first amendment. But under the way we do things in the Senate and the points of order that can be made, I am not apt to get that sort of an approach. So what we do is, we kick the can down the road.

I wish to get back to this history--deja vu--of seeing the shadow and the Groundhog Day and all that stuff to give you the history of why the question is, Why are we going through this now on February 1 and 2, and it will probably carry over into next week, to February 4, 5, and 6? Why are we going through this when we spent all that time back in November doing exactly the same thing?

The rules of the Senate provide the minority--or maybe I should say not just the minority, every Member, but in this case it looks to me as if it is mostly the minority which is taking advantage of it--certain motions that have to be given to get to conference to iron out the differences between the House and the Senate. In this case, the minority is going to take full advantage of that even if we redo all the debate.

I will bet you can take speeches out of November 2005 and you will read the same speeches today and tomorrow and next Monday and Tuesday in the debate on this bill. If you take out

speeches of a month ago and can repeat them, there is no end to the speech-making you can do in this body. We started this debate at 3:35 on Wednesday, November 16, 2005. We took up this bill, S. 2020. As we were considering this bill, we dealt with 80 different amendments. They were filed. Maybe we didn't deal with 80, but at least there were 80 ideas out there by people who wanted to change this bill. They were filed. Now, seven of them were agreed to. It was a very lively debate. It culminated in 18 rollcall votes about whether amendments ought to be included in the bill or whether there ought to be final passage. We finally got to final passage at 12:05 a.m., Friday, November 18.

According to the Secretary of the Senate, at least 97 of us were there at that midnight hour to vote on this bill, so I am not the only one reliving this experience. There are going to be 97 Senators who were there at midnight on November 18--or I guess you would say that Friday morning at 12:05 a.m. As we considered the Senate amendment to the House version of this bill--the House version is the Tax Relief Extension Reconciliation Act of 2005--I have to ask myself--but in a sense, I am asking each of the Members--why are we still here? Didn't we already go through this exercise? Are we not finished with the Senate debate?

I conclude that there is no rational reason for still being here because, normally, it would be a unanimous consent motion that we ought to go to conference to work out the differences between the House and Senate. Unless you do that, you never get anything to the President. It has to pass both bodies in identical form. That is usually a pro forma operation here. We could have done that in 5 minutes--Senator Baucus and I--or the leaders could have done that, but we are still here because maybe people want to slow up the process. Maybe they don't want to get to the asbestos bill next week, which is very important to get to. The fact is, we already went through this exercise, and we ought to be finished with the Senate debate, but we are not.

In the face of a multitude of other important issues this body needs to deal with, does the Democratic leadership really want to reenact recent debates and resuscitate old talking points? Our tax reconciliation bill already passed, and not just by Republican votes because 64 of us voted for that, including 15 Democrats. The only way you get anything done in the Senate, because of protection of minority rights, which the Constitution allows, is by bipartisanship; otherwise, nothing gets done. So we had bipartisanship on this bill.

While I believe this legislation is extremely important, and I will, as chairman of the committee and manager of the bill, debate it as long as is necessary, quite frankly, as I have indicated in my points, I question the necessity of going through a long process that resulted in the bipartisan passage of the same bill just 2 months ago. So that is my first point.

This is a very curious exercise. It is an exercise with no purpose, no apparent purpose other than simply delay. Is the delay on the part of the Democratic leadership important? The answer is yes. Ask the American taxpayers, and you will get an answer. The answer is yes, if you are one of almost 20 million families waiting for certainty that you are not going to be caught up in the clutches of the alternative minimum tax.

We hear a lot about the AMT, the alternative minimum tax. You will hear about it in this debate over the next few hours. This bill does something about the AMT: it extends the hold-harmless provisions so those 14 million, up to 19 million Americans won't get hit with it. I have a chart here that will tell you exactly the number of people in the respective States, based upon the previous year, 2003, so it doesn't add up to the 14 million to 19 million people we think will be hit by 2006. But the number of people who will be hit by it in my State of Iowa is 65,813.

In the State of Nevada, even more people--68,273 people--are going to be hit by it. Why would anybody from Nevada not want to do something yesterday rather than tomorrow about the alternative minimum tax? As I said, these numbers understate what this problem is today because there are going to be a lot more people getting hit by it.

The basis of the bill the Senate passed, and the bill that is once again before us, is an extension of the alternative minimum tax hold- harmless provision. So every Member who is participating in this deliberate strategy of delaying--delaying our entrance into the conference with the House of Representatives is delaying the certainty these millions of American taxpayers deserve.

I emphasize the word ``certainty'' as far as the Tax Code is concerned. There is nothing that does more economic good than knowing what the future holds in the way of taxes as it affects spending and investment. So if you want to improve the economy of this country, if you want to keep this economy strong, certainty of tax policy is very important.

These are the facts on the AMT. Look it up in the Internal Revenue Code. The AMT relief provision expired already, on December 31, 2005. I ask my friends in the Democratic leadership to take a look at the calendar. One month now has passed, and the AMT hold-harmless provision has not been extended. That is the cornerstone of this very massive piece of legislation. It also happens to be the cornerstone of a bill the Democratic leadership is delaying. So I don't want to hear folks talk about some sort of AMT problem and at the same time delay real action to help those millions of taxpaying families.

This bill goes way beyond helping people who would be hurt by the AMT. It also includes popular and broadly applicable tax benefits. I wish to talk about some of them and talk about them individually and use charts as I move along.

For instance, the deductibility of college tuition is a very important part of that 2001 tax bill. This is a benefit for families sending their kids to college. By definition, this benefit is geared toward helping middle-income families who always have a hard time educating their kids. They might not qualify for Pell grants or guaranteed student loans, yet they need help to send their kids to college because they are not millionaires. These are not high-income people. They get the full benefit of the deduction if they make up to $65,000 as a single person and up to $130,000 as a couple. Beyond these levels, the benefit phases out. A lot of these folks are paying significant Federal, State, and local taxes, and they get no help in defraying the high costs of a college education for their kids. This tax deduction helps provide and helps these hard-pressed, middle-income families with a benefit, and it furthers a very important national goal of supporting higher education--not an end in itself, but to keep America competitive in the global economy.

This deduction runs out at the end of this year. It did run out December 31, 2005, but we have to be ahead of the curve as people plan to send their kids to college. Will this be around for 2007? Not unless this bill passes. So these folks are going to face a tax increase without even a vote of the Congress. Automatically, taxes are going to go up if we don't enact this piece of legislation which we already passed back in November.

Here I have a chart that shows for each Member how many families in their respective States are going to be hit next year if we don't enact this legislation. Again, I will speak to my State of Iowa, where the number is 37,364 taxpayers. In Nevada, it is 25,776 taxpayers. Why would anybody want Nevada taxpayers to pay more taxes? And why would you not want them to know that today rather than tomorrow? Why not get this bill to conference and get this issue behind us so that the taxpayers in Nevada know that in the year 2007, their families are going to be able to take advantage of the college tuition exemption from the income tax? Once again, in that particular State, it is 25,000 families.

There is another benefit that is addressed in this bill, S. 2020. It is called the small savers credit. Here I am talking about a tax credit for low-income people to save through an IRA or a pension plan. We are talking about people who don't know about saving or don't have the ability to save, that we are going to give an incentive to save and can get an ethic for saving because saving for retirement is something not

enough Americans have done and particularly not enough low-income Americans have done. So as a matter of public policy, to encourage savings for people who cannot afford to save or don't have the ethic to save, give them an incentive to save through the small savers credit. We all think that savings is important. We all want low-income people to save for retirement.

I have a chart that shows the number of low-income savers who benefit in this bill on a State-by-State basis, which benefit won't be there if we don't pass this, or it is being delayed by 4 or 5 days because we have to go through the same debate we went through back in November.

Again, in my State of Iowa, there are 95,000 people who could take advantage of this small saver's credit but who will not be able to.

Let's take another State, Nevada. There are 36,923 people who are low income who will not be able to take advantage of this provision.

Again, if you want to establish an ethic for saving, you should not pass tax policy to encourage that ethic for saving and then sunset it and expect people to establish a lifelong pattern of saving. You cannot stop and start tax policy and expect people to develop an ethic to conform to saving, and I believe we all think the ethic of saving is very important.

The bill before us will also extend a tax deduction for teachers who buy their own supplies for their students. I think this provision was developed in the 2002 tax bill by Senators Warner and Collins to give teachers who go that extra mile by paying out-of-pocket expenses some help through the Tax Code.

Who is going to argue with that? One might argue that we ought to pay teachers more, so they don't have to do that. We ought to appropriate more money for schools so they don't have to buy the supplies out of their pockets. But we have 40,000 school districts in the country, and we are not going to be able to make policy here for every school district. We know that some teachers are so devoted to their students that they are going to spend some of this money out of their pockets, so Senators Collins and Warner came up with this idea of a tax credit for teachers who pay for supplies out of pocket.

Again, on a State-by-State basis, I have a chart that shows how many teachers benefit from this provision. I will pick out Nevada again. Nevada has 21,853 teachers who took advantage of this provision. In Iowa, we had 33,812 teachers take advantage of this provision. Why wouldn't you want teachers who devote a life to a profession at relatively low pay--compared to what other people with the same amount of education get in other segments in the economy--because they are devoted to doing good or they wouldn't be teaching in the first place-- why would you want to question this so they won't have it this year?

Right now those teachers are buying supplies and probably don't think the least bit that Congress would have sunsetted this legislation on December 31, 2005. So they are going out and buying all these supplies thinking they are getting a deduction, and then when they file their income tax a year from now, they are going to be surprised.

I wish I could tell every one of them that the Democratic leadership won't let us go to conference so we can keep that provision. I am not going to be able to tell all 33,000 teachers in Iowa. They are going to find it out the rude way when they go to file their income tax. I would really like to tell the teachers in Nevada about this as well.

We don't have to have this problem. All we have to do is get to conference. We can get to conference in 5 minutes and work these provisions out, and by next week, we can have this bill to the President of the United States, or give us another week to work out the differences between the House and the Senate. We can get this all worked out, get the bill to the President, and we don't have to worry about that.

There is another point. We all think of small business. There are small business provisions in this bill, S. 2020, that passed the Senate by a bipartisan vote at the midnight hour way back in November, and here we are piddling around with procedural motions to get to conference.

Everybody advocates small business because it creates 70 to 80 percent of the new jobs in America. This bill would extend the small business expensing. Many small businesses use this benefit to buy equipment on an efficient aftertax basis. It is good for small business, it is good for small business workers, and it is good for economic growth.

I have a chart on a very important issue, at least to the people of Alaska, Florida--and Nevada, again, is going to benefit--South Dakota, Tennessee, Texas, Washington, and Wyoming. This is because we established in the tax bill the deductibility of State and local taxes. This bill will help 12.3 million taxpayers in these States--Alaska, Florida, Nevada, Washington, Texas, South Dakota, Tennessee, and Wyoming. Tennessee is involved. It is the home of our distinguished leader. Senator Frist has worked very hard to get this bill to the floor, and for the second time. He is frustrated because we can't move this along.

Nevada is one of these States. It is the home of my friend, the Democratic leader. Unfortunately, the Democratic leader has fought this bill tooth and nail, even though his constituents benefit from it, particularly in this instance with the deductibility of State and local taxes.

I ask them to focus on the taxpayers of their respective States, whether they are from Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming, to get this bill passed so their taxpayers will know their local and State sales taxes can be deducted. I hold out hope that the Democratic leadership will see the light. I hope they will work with me to see their folks in their State will be able to deduct these State and local taxes this year and know they can do it very soon this year.

These provisions are bipartisan and millions of American taxpayers rely on them. Every Senator ought to help us pass this bill for these provisions alone.

The bill before us addresses expiring business and individual provisions that I have not talked about yet, what we call extenders. These provisions include research and development tax credits and the work opportunity tax credit, just to mention a couple.

This bill also includes many of the charitable incentives that were introduced in what we refer to as the CARE Act and which have previously passed the Finance Committee and previously passed the Senate. I appreciate the work of Senator Santorum and Senator Baucus in working with me to balance these incentives with several of the much needed reforms that are supported by the charitable sector, the Treasury Department, the IRS, the donors, and the taxpayers to make sure charitable giving and the tax exemption for it serves the purpose intended and that charitable organizations use the money that was donated to them for the purpose they asked for it.

Beyond the CARE Act, this bill contains loophole closures and tax shelter fighting provisions that raise revenue.

This bill is bipartisan. I have not thanked my friend and ranking member, Senator Baucus, for his cooperation. We had cooperation going way back when we first started working on this bill in the summer of last year so we could be ahead of the curve. He and I, when we first started, were not partners, but we teamed up in the Finance Committee. We teamed up in the first Groundhog Day floor debate and, as always, his cooperation and, more important with something as serious as this, his good humor makes a difference.

I thank those Democratic Senators, and that is 13 others besides Senator Baucus, who joined me in a bipartisan effort on our first floor journey. I ask them to help me persuade their leaders to let this bill proceed. I ask them to ask their leaders to focus on taking care of the legislative business and put a damper on the political games that appear to me to be nothing but going through what we went through last November. We waste enough taxpayer money. There is no point wasting it again, duplicating the debate of 3 days back in November.

We can move on to other important items, including a lot of items the Democrats want us to bring up on the floor of the Senate. I yield the floor.

Mr. President, my response to that is a friendly response. It is not a very definitive response because I think my friend from Montana knows that some of these negotiations go on at a little higher level than he and I are in leadership.

Well, there are other considerations that come into this. I will put it in this perspective. First of all, I hope what he says could happen. It seems to me that, No. 1, we are kind of in an environment where we believe we are wasting some time, in the sense that we are going through a lot of procedural motions that redebate something that was decided in a bipartisan way by this body back on December 18 on a 64-to-something vote, a very bipartisan vote. Normally, what we are doing now is trying to go to conference. We are faced with a lot of amendments--some that might be the same as what we dealt with previously. So that is kind of an environment that maybe a lot of us believe we should not have to go through because it is a waste of time. But now that is a fact of life. That is how the Senate operates.

So as what my friend, the distinguished Senator from Montana, said, it boils down to this: To the extent we can have a massive amount of transparency on what might be offered, with some limit on the number of amendments that might be offered, and get that settled very soon, then what happened in the sense of him saying we would fill up the tree with amendments, we would not do that.

That is what we would like to do. But it seems to me there has been some inability to know exactly how many amendments might come from the Democratic side of the aisle, what they were, and the extent to which they were germane versus nongermane. Obviously, the more that are nongermane as opposed to germane makes it even more difficult. If we can settle those things--I know Senator Baucus and I could settle those things, and we could be on our way to not filling the tree. So far we have not seen that sort of transparency.

Mr. President, I always anticipate the picture show that we are going to have now from the Senator from North Dakota. Anyway, I hope he will be tolerant. I have always wanted to engage him in some debate on these issues because I think he always tells half the story. I don't think he ever says anything that is wrong, but the whole story could give a different impression to the public.

I yield the floor.

Mr. President, I want to comment on what the Senator from Massachusetts said.

First of all, I think everything he said about the AMT, I agree with; what he said about the capital gains, I disagree with.

I am only going to comment on that part that I agree with him on about the AMT.

But let us have a little history in the process of doing that.

No. 1, either in 1998 or 1999, we repealed the AMT. President Clinton vetoed it.

So we wouldn't be dealing with this issue if President Clinton had signed that bill.

In a sense I am kind of asking for support from anybody on the other side of the aisle who thinks we are not doing enough on AMT. I happen to be one of those who even today, 6 to 7 years later, is for repeal. I believe it ought to be repealed. We ought to have a standup vote, without any points of order, and get rid of this.

There are Republicans who would say if we do that in the out years, our budget might look like it has a much bigger deficit than it has, and over here there might be people who say if you are going to get rid of this tax, you ought to have an offset for it, so the budget deficit does not look different. The reason neither one of those concerns is legitimate is because in this bill we are talking about having the AMT hit the middle-class Americans whom it was not intended to hit.

The Senator from Massachusetts is right in the sense that for parents with children and the larger the family the more it hits them. It was never intended to hit but a few wealthy people who used every legal loophole to avoid paying taxes and that somehow everyone who makes a lot of money ought to pay a little something of income tax into the Federal Treasury. A little something or big something, whatever the case might be, whatever the alternative minimum tax hit them with, they ought to pay that.

If Senator Baucus will bear with me, he has heard me say 150 times how ridiculous it is to have this side of the aisle say we ought to offset a tax that was never intended to be collected in the first place from the people who otherwise will be hit with it if we did not pass this legislation, and over here, people are worried if we do away with it, the budget deficit will look bigger because we do not have the phantom tax income coming in from people who were never supposed to pay the alternative minimum tax in the first place. If we have a tax hitting people who were never intended to pay it in the first place, it should not be showing up in the budget figures, anyway. So we have to worry about an offset or we have to worry about whether we have a burgeoning budget deficit over here if it is not there. It is a phantom. We ought to do what you do with phantoms, hit them with a needle, let the air out, get rid of them.

Also, particularly what the Senator from Massachusetts said about hitting people, it is like a geographical tax to some extent because a lot of States, such as New York, New Jersey, and California, have a lot of high-income people. Therefore, they have a disproportionate number of people getting hit by the AMT. If you fall into that income class, you will get hit with it. More of these people live in higher income States and it happens that some of the States are what we call blue States instead of red States, so I don't know why we do not have a massive drive on this side to force Republicans to do something that is hurting your constituents.

Let's do away with the darned tax. People aren't supposed to be paying it in the first place. Why are we spending a lot of time working the issue? I would like to have the Senator from Massachusetts solve this problem forever and help us repeal it, like we did in 1998, with a President who I am sure will sign it.

On a procedural matter, I wish also to make a comment. My good friend from Montana asked if we could see what we could work on, on amendments. I will briefly comment even beyond what he has asked us to do and try to help speed this along as best I can, as to where we are.

It has been suggested on this side that Republicans work with Members to help them get their amendments up and voted on. First, we should not even be in this situation, a truly unprecedented situation, where we are essentially being forced to do a reconciliation bill over. Yes, we are doing a reconciliation bill over, within 2 months of when we first did it. We could be doing the Nation's business of problems that have to be solved, not waste 3 days on this bill now when we spent 3 days on it in November. We could be working on lobbyist reform. We could be working on asbestos reform and a lot of other things that Members want before the Senate. However, leadership on the other side is wasting the Senate's time and the American people's time. Surely there is a better way.

For those who thought this was over back in November, we are in the middle of a rude awakening. Cooperation is a two-way street. Even though we should not be in this position where the minority party is trying to reopen the bill, we have said we are willing to entertain a limited number of amendments. Another way to put this, I said to Senator Baucus privately that we need total transparency on this, get everything on the table. We do not get a response from the Democratic leadership.

They have taught me a few lessons from our first go-around on this bill. I

learned that you do not vote on amendments too early because we know what happens if you do that; they get their press release out, they lose the amendment, then it comes back within a matter of hours, sometimes two or three different versions of the very same amendment. We end up voting on all of them, wasting everyone's time. So the extent to which we lay everything on the table and level with everyone on what we are faced with, we will be able to get this bill completed. We could finish this late tomorrow night.

Unless we can get an agreement for a limited number of amendments or amendments in total, I don't see any reason but to wait until the time has expired on the bill and let the so-called vote-arama begin one vote right after another and we spend a couple of minutes debating an amendment back and forth, to have that vote-arama without an agreement. I am convinced this will save the Senate a lot of time in the end. Either way, we have a limited number of amendments. Let us know what they are, have some sort of agreement so we can get done, or have a vote-arama.

I yield the floor.

Mr. President, I hope every taxpayer in this country knows that what they heard was a philosophy that every dollar you make belongs to the Government, and we are going to let you keep a little bit of it.

We kept hearing about tax cuts costing us, tax cuts costing us. If we give you a tax cut, it is costing us in Government, and we can't do as much for you as if we tax you more.

So there is a basic philosophy behind this legislation whether we ought to let tax cuts stay in the pockets of Americans and let them spend it and do the economic good and let the marketplace decide how the goods and services in this country be divided or whether we ought to tax at a higher rate and bring it to Washington and let a few politicians make a decision on how to spend it.

I opt for trusting the American people with how they spend their money and the growth that comes from the investment that creates jobs that causes our economy to expand.

I will have more to say about some of the other speakers who have been in

opposition to this bill as soon as the Senator from New Hampshire concludes. I wanted to make that point before my good friend got out of here because a lot of times he never gets a chance to hear what I say, and I wanted to make sure he heard it.

I yield whatever time he might consume to the Senator from New Hampshire.

Mr. President, I appreciate hearing from all my colleagues, both Republicans and Democrats, about everything that is wrong with the AMT because there is a lot wrong with the AMT. But I take great pleasure in trying to remind, particularly my Democrat colleagues, that a Republican-controlled Senate and House in 1998 completely repealed the alternative minimum tax. They completely repealed it, sent it to President Clinton, and he vetoed it. So I don't want anybody telling me how bad the alternative minimum tax is and that something ought to be done so that middle-income Americans, who were never intended to pay the tax, don't get caught paying it.

Besides the repeal that we proposed in 1998, I can also point to a lot of tax bills since then where we have done what we call hold- harmless so no more people are hit by the alternative minimum tax because of tax changes that you make in any tax bill which indirectly, then, affects who might pay the alternative minimum tax.

So I specifically want to take issue with the remarks of my colleague from Iowa, Senator Harkin. It was suggested the tax cuts have contributed to this AMT problem. That demonstrates a complete misunderstanding of what we have done in several tax bills, going back to the year 2001, or it at least doesn't give us credit for proposing repeal of the AMT in 1998.

It is true that we are required to act to extend the hold-harmless provision as the Senate has done in Senate-passed reconciliation bills and in the years going forward--the bill we are on now and in the bills going forward. But that is the point of the hold-harmless. Of course, it is critically important that we included AMT relief in our bill. Moreover, it has been the subject of public debate, as all my colleagues likely know. But we take issue with analyses that suggest that tax cuts are the source of enhancing the AMT problem. Quite to the contrary, the fact is that failure to index the alternative minimum tax for inflation for the last 35 years is the key source of the problem.

I don't know why folks cannot own up to that fact and recognize that at a minimum we are going to have to index the alternative minimum tax going forward, if it is meant to serve its original purpose of hitting just very high-income people who avoid paying any income tax through use of legal loopholes and not hit middle-income Americans.

Again, for the understanding of my colleague from Iowa who spoke on this point--but other people have spoken on it as well, mostly from the other side of the aisle--in 2001 and 2003, in those tax bills, we made sure that the alternative minimum tax would not impact any more taxpayers as a result of the tax reductions of those bills.

So it is entirely wrong to say that tax cuts bring about the AMT problem or that we don't care about that problem or that we didn't do anything about that problem because we did in each of those tax bills.

We have to continue to uphold the promise that we made that we were not going to tax any more people with the alternative minimum tax.

This is a very important part of this reconciliation bill that we passed back in November that we are now making a rerun of this year.

This bill includes $30 billion of alternative minimum tax relief to ensure that Senator Harkin's argument is, in fact, untrue, and it is also untrue as far as the 2001 tax bill and the 2003 tax bill is concerned.

I wish to give some figures so people know what this is. It is not just in the State of New Jersey, as we heard from the junior Senator from New Jersey. It is not just a problem in Illinois, where we heard from the junior Senator from Illinois. It is not just a problem in Massachusetts, as we heard from the Senator from Massachusetts. The alternative minimum tax problem is a problem in Iowa as well.

Another point that my colleague brought up--I don't think anybody else has talked about the arcane issues of what we call PEPS and Pease. I don't want to say those things without explaining what they are. They were put in, I think, in the 1990 tax bill because nobody wanted to go over the 40-percent marginal tax rate. Yet they wanted to raise more money and have a higher marginal tax rate on a little higher income people.

What was done in that tax bill to camouflage a higher marginal tax rate was to leave the marginal tax rate at 39.6 percent, but for certain people above--for certain people of higher income--then phase out a lot of the exemptions that every other taxpayer can use and effectively raise the marginal tax rate--I do not know for sure, around 42 percent--maybe people who were involved in subchapter S corporations, maybe even a marginal tax rate around 45 or 46 percent. I am not sure exactly what those percentages were.

But the idea was the terms ``PEPS'' and ``Pease'' were put into the Tax Code to camouflage higher marginal tax rates by making it look like nobody ever paid a tax rate above 39.6; whereas, the fact was a lot of taxpayers got hit at a marginal tax rate above 40

percent--in some cases quite a bit above 40 percent.

I am very troubled by the comments of my colleague regarding PEPS and Pease because they are hidden in the marginal tax increase that affects millions of Americans, including thousands of Iowans. We have 32,906 Iowans that are hit by the Pease part of the Tax Code on their returns. And we have 14,000--almost 15,000--Iowans that are hit by what we call the PEPS part of the Tax Code on their returns.

If somebody tells me that these are tax cuts for the millionaires, let me tell you, I know that we don't have 32,900-plus, or 14,900 millionaires in my State of Iowa.

So we are talking about camouflaging the Tax Code to raise the marginal tax rate on a lot of middle-income Americans.

That was done in the 1990 tax bill. Starting this year, under the 2001 tax bill, these are gradually going to be phased out.

I think it is truth in taxing, truth in packaging, that if you have a marginal tax rate of 35 percent, it ought to be a marginal tax rate of 35 percent. And you shouldn't remove a lot of exemptions from a certain number of people to raise it up to 40 or more percent. If you want to tax people that high rate of taxation, you ought to have the guts to do it.

We took those camouflage things out of the Tax Code because we wanted a marginal tax rate of 35 percent which was transparent, with no hidden additional taxes.

Now it is said that we are trying to benefit millionaires through this, when 33,000 and 15,000 people--that would be 48,000 people in my State--are being hit by those taxes.

To listen to my colleagues, you would think that PEPS and Pease was paid only by millionaires. Nothing could be further from the truth. PEPS and Pease hit millions of families, two-income families that are struggling to pay their mortgage, as most Americans do, struggling to send their children to college, as most families do, or people who want to contribute to their churches and charities, as most middle-income Americans do.

In fact, the families hit by PEPS and Pease are very often the same families hurt by the AMT that my colleague was expressing so much concern about.

PEPS and Pease is bad tax law. It is dishonest tax law. It complicates the Tax Code. It hurts families and discourages charitable giving. It is bad tax law that needs to be shown the door.

We did that in the 2001 tax bill, truth in taxing, and somebody is finding fault with it. It isn't a millionaire tax. Keeping PEPS and Pease is a ``Full Employment for Accountants Act'' because of that complicated Tax Code, and the people who have to deal with it are going to hire more accountants to accomplish the goal that we have.

We have heard from many Senators today, singing the old song that the problem of the deficit before us, the budget deficit, is because we cut taxes. The tax cuts that have brought about our economic growth and created millions of jobs is good policy. I don't expect anybody to accept Senator Grassley, the Senator from Iowa, making that statement. There is no one with better credibility on economic and tax policies than Chairman Greenspan. And he has made it very clear that the 12 quarters of economic growth that we have had, creating 4.6 million new jobs, and a higher rate of growth than we had even during the 1990s-- and most of my Democrat colleagues would think the 1990s was the best economy you could ever have. But in fact, the economic growth of the last 12 quarters is higher than the average growth we had during the previous administration. Chairman Greenspan said that the tax cuts are responsible for this growth.

To get back to the reality of deficits, it is caused by record spending. It is done by Republican Congresses or Democratic Congresses, whether we have a Democratic President or a Republican President. Spending beyond our means has caused our budget deficit problem.

Because of the tax cuts, revenues are way up--record highs projected.

Chairman Greenspan gives Congress credit for the tax cuts of 2003 bringing about the best economic growth we have ever had and which has resulted in $270 billion more coming into the Federal Treasury from income taxes in 2005 than we had in 2004; in fact, so much beyond projection that we had $70 billion more coming in throughout 2005 than we even thought we would have coming January 1, 2005.

The answer is not to raise taxes and hurt our economy. The answer is to do something on the spending side of the ledger.

We can say, after the vote in the House of Representatives this very day by a 2-vote margin, they passed our budget reconciliation bill, saving $39.6 billion over the next 5 years that Congress would have otherwise spent if we had not passed that measure. We didn't get any help from the other side of the aisle on getting this budget reconciliation through.

That came from the fiscal responsibility of people on this side of the aisle.

Whether it is tax cuts, spending cuts, tax increases, whatever the issue might be, if you listen to your people in town meetings--and I only have the opportunity to listen to Iowans in my town meetings because I don't represent anyplace else in the country--I know I don't have people coming to me and saying: I am undertaxed, tax me more. But I surely have people come to my town meetings and saying: You guys are responsible for your spending there in Washington, DC. Get your spending down.

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

Mr. President, today the House of Representatives completed final action on the S. 1932, the Deficit Reduction Act of 2005, DRA. I am pleased that this important legislation will soon be enacted into law.

It has been 8 years since Congress last passed a reconciliation bill. In crafting S. 1932, we worked hard to ensure that none of the changes made would adversely affect beneficiary coverage. The Deficit Reduction Act will allow States across the country to continue to offer these essential services to their beneficiaries.

The Deficit Reduction Act also includes a number of provisions to ensure that the Federal Government pays Medicare providers accurately and appropriately. One such provision relates to payment policies under the Medicare Advantage program. Specifically, Section 5301 of S. 1932 phases-out the budget neutrality adjustment for Medicare Advantage plans. Section 5301 and the joint statement which accompanied the conference report in the Senate requiring adjustments for differences in coding patterns is intended to include adjustments for coding that is inaccurate or incomplete for the purpose of establishing risk scores that are consistent across both fee-for-service and Medicare Advantage settings, even if such coding is accurate or complete for other purposes. This will ensure that the goal of risk adjustment--to pay plans accurately--is met.

I am also pleased that the Deficit Reduction Act includes the Family Opportunity Act. I have been working tirelessly on this legislation since 1999 with Senator Kennedy. The measure will allow States to create options for families who have children with multiple medical needs to buy into Medicaid while continuing to work. Families with children with such medical needs should not have to choose between providing for their children and their children's health care. This provision in the Deficit Reduction Act will help prevent just that.

I applaud the Congress for passing this important legislation today. Beneficiaries and taxpayers across the country deserve to get the highest value for every dollar that is spent on Medicare, Medicaid and other safety net programs. This legislation will help accomplish that objective.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Wednesday, February 1, 2006, at 10 a.m. on Women in Sports.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet on Wednesday, February 1, 2006, at 10 a.m. for a hearing titled, ``Hurricane Katrina: Managing the Crisis and Evacuating New Orleans.''

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized

to meet on Wednesday, February 1, 2006, at 9:30 a.m. in room 106 of the Dirksen Senate Office Building to conduct an oversight hearing on Off- Reservation Gaming. The Process for Considering Gaming Applications lands eligible for gaming pursuant to the Indian Gaming Regulatory Act.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``Consolidation in the Energy Industry: Raising Prices at the Pump?'' on Wednesday, February 1, 2006, at 9:30 a.m. in Hart Senate Office Building room 226.

Witness list

Panel I: The Honorable Bill Kovacic, Commissioner and former General Counsel, Federal Trade Commission, Washington, DC; James Wells, Director, Natural Resources and Environment, United States Government Accountability Office, Washington, DC; The Honorable Richard Blumenthal, Attorney General, State of Connecticut, Hartford, CT; R. Preston McAfee, Stanley Johnson Professor of Business, Economics and Management, California Institute of Technology, Pasadena, CA; Tyson Slocom, Acting Director, Energy Program, Public Citizen's, Washington, DC; Tim Hamilton, Founder and Executive Director, Automotive United Trades Organization, Seattle, WA.

Mr. President, I ask unanimous consent that the Subcommittee on the Constitution, Civil Rights and Property Rights be authorized to meet to conduct a hearing on ``An Examination of the Death Penalty in the United States'' on Wednesday, February 1, 2006, at 1:30 p.m. in SD226.

Witness list

Panel I: Mrs. Ann Scott, Tulsa, OK; Ms. Vicki Schieber, Chevy Chase,

Mr. President, I am pleased to join my colleagues Senator McCain and Senator Kennedy in sponsoring a resolution designating the month of January as ``National Mentoring Month.'' Adult-to-youth mentoring has long shown positive impacts on our Nation's young people in becoming responsible, productive adults.

This January will mark the fourth anniversary of the National Mentoring Month campaign to focus national attention on the need for mentors, as well as how each of us within the public and private sector can work together to increase the number of mentors and assure brighter futures for our youth.

Currently, it is estimated that 15 million children need or want a mentor. That is 15 million young people who need the guidance to improve life-essential skills, make healthy choices, and increase their own self worth. I hope the rest of the Senate will join in supporting this resolution and supporting this very important campaign.

Mr. President, Today, I wish to honor an heroric Iowan who has given the ultimate sacrifice for his country in Operation Iraqi Freedom. SGT Nathan R. Field died January 7, 2006, in Umm Qasr, Iraq due to injuries sustained when his Humvee was hit by a civilian vehicle. Sgt. Field was assigned to the 4249th Port Security Company, U.S. Army Reserve out of Pocahontas, IA, but was temporarily assigned with the 414th Military Police of Joplin, MO. I want to extend my condolences to his parents Bill and Mary, his brother Eli, his fiancee Connie, and his many family members and friends.

Sergeant Field graduated from South East Webster High School in 2000 where he was a member of the student council, senior class president, captain of the wrestling team, and was a three year member of the football team and manager of the football team his senior year. SGT Field enlisted in the Army Reserve while still in high school and after the terrorist attacks of September 11, 2001. His unit was called to active duty where he accompanied ships to Belgium, France and Germany. In September of 2005, he volunteered for duty in Iraq, something that he felt compelled to do for the freedom of our country.

Nathan Field will be remembered for his loyalty to friends and for his love of life. As his father said, ``If Nathan liked you, there wasn't anything he wouldn't do for you.'' I call on my colleagues in the Senate and every American to pay tribute to this brave American and to give thanks to this courageous soldier who gave the ultimate sacrifice in defending our freedom.

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

Mr. President, do I have 30 minutes?

Thank you.

Mr. President, I support the nomination of Samuel Alito. President Bush has made a very excellent choice in picking Alito. He has the intellect, judicial temperament, and integrity to be an excellent Justice.

He seems to have a very clear understanding of the proper role of the judiciary in our government. That came out very clearly in the hearings.

He commands the respect of his colleagues on the Third Circuit, as their testimony before our committee demonstrated.

He also has the respect of the lawyers who practice before him and the employees who have worked with him. That was demonstrated in testimony before our committee as well.

But we can't always accurately predict how an individual ultimately will make decisions once he or she gets on the bench. But we do have a constitutional process in place, and we have to use our judgment within that process and trust the confirmation process.

I would say the 225-year history of our country succeeding as it has is an affirmation that the process has worked well.

We have confirmed many outstanding individuals to the Supreme Court, and the process has worked well thus far and will continue to work well with Judge Alito.

Judge Alito was very impressive in the hearings. He did an excellent job under a great deal of fire. He was thorough, he was candid, and he was forthright with all 18 of us on the committee, and demonstrated a deep understanding of the law and a deep understanding of the law and our Constitution.

Contrary to the claims of some of my colleagues from whom we have been hearing this morning and yesterday, Judge Alito's testimony was very substantive, and he was responsive.

Let me quantify that. Judge Alito answered more than 650 questions during nearly 18 hours of testimony. Compared to the performances of Justice Ginsburg who answered 307 questions at her hearing, and Justice Breyer, who answered 291 questions, one can hardly swallow what we hear on the other side--that Judge Alito was not forthcoming with the Committee.

I easily conclude, as I think the public concludes, that he has been one of the most forthcoming nominees to come before the Judiciary committee.

The Constitution provides the President with the power to nominate Supreme Court Justices. And it provides the Senate with advise and consent duties, presumably ending up in an up-or-down vote.

In Federalist No. 66, Alexander Hamilton wrote:

It will be the office of the President to nominate, and,

with the advice and consent of the Senate, to appoint. There

will, of course, be no exertion of choice on the part of the

Senate. They may defeat one choice of the executive, and

oblige him to make another; but they cannot themselves

choose--they can only ratify or reject the choice he may have

made.

That is Alexander Hamilton commenting on the role of the President and the Senate in the judicial confirmation process. I have been on the Judiciary Committee for more than 25 years. I take this constitutional responsibility very seriously. Our work in committee allows us to evaluate whether a nominee has the requisite judicial temperament, intellect, and integrity. We also evaluate throughout that process whether the nominee understands the proper role of a Justice in our democratic system of government; mainly, but not limited to, respect for the rule of law and respect for the Constitution, all over any personal agenda the nominee might have. A Justice, to do justice, cannot have a personal agenda.

Specifically, a Supreme Court nominee should clearly understand that the role of a judge under the Constitution is a limited role, to say what the law is, rather than make the law.

I quote Alexander Hamilton, Federalist Paper No. 78:

The courts must declare the sense of the law, and if they

should be disposed to exercise will instead of judgment, the

consequences would equally be the substitution of their

pleasure to that of the legislative body.

In fact, most Americans want judges who will confine their job to interpreting the law and the Constitution, rather than making policy and societal choices from the bench. But what we have seen lately is a trend where the courts have expanded the role of the judiciary far beyond what was originally intended in the Constitution and by the Framers. The courts have taken on a role that is much more akin to what we do in Congress, the legislative branch, making law, which is to make policy choices and to craft laws based on those choices.

As a consequence of this power grab by the courts, the judicial confirmation process also, unfortunately, has become extremely politicized. That is because when judges improperly assume the role of deciding essentially political questions rather than legal questions, the judicial confirmation process also devolves into one focused less on whether a nominee can impartially and appropriately implement the law. Instead, the process devolves into one focused on whether a nominee will implement a desired political outcome from the bench, regardless of what the law says, regardless of what the Constitution requires.

But Judge Alito understands the proper role of a judge. Judge Alito understands the judicial branch plays a limited role in our system of government--but not surprisingly so because that is what the Constitution intended. Judge Alito testified:

The judiciary has to protect rights, and it should be

vigorous in doing that, and it should be vigorous in

enforcing the law and interpreting the law . . . in

accordance with what it really means and enforcing the laws

even if that's unpopular.

He continues:

But although the judiciary has a very important role to

play, it is a limited role. . . . It should always be asking

itself whether it is straying over the bounds, where it is

invading the authority of the legislature, for example, and

whether it is making policy judgments rather than

interpreting the law. And that has to be a constant process

of re-examination on the part of the judges.

Judge Alito's record is clear that he will not make law, but rather he will strictly interpret the law we write. His record is clear that he will do his very best to remain faithful to the actual meaning of the Constitution, rather than mold it into what he would like that Constitution to say.

Judge Alito said, along that line:

Judges do not have the authority to change the

Constitution. The whole theory of judicial review we have, I

think, is contrary to that notion. The Constitution is an

enduring document and the Constitution does not change. It

does contain some important general principles that have to

be applied to new factual situations that come up. But in

doing that, the judiciary has to be very careful not to

inject its own views into the matter. It has to apply the

principles that are in the Constitution to the situations

that come before the judiciary.

Judge Alito possesses a knowledge of and respect for the Constitution that is necessary for all Supreme Court Justices. Judge Alito, in his testimony, demonstrates an understanding of the proper role of a Justice. He understands and respects the separate functions of the judicial branch as opposed to the functions of the legislative branch and the executive branch, the political branches of government.

Judge Alito explained that a judge's role is not one of an advocate. He testified:

The role of a practicing attorney is to achieve a desired

result for the client in a particular case at hand, but a

judge cannot think that way. A judge can't have any agenda. A

judge can't have any preferred outcome in a particular case.

And a judge certainly does not have a client. The judge's

only obligation, and it's a solemn obligation, is to the rule

of law, and what that means is that in every single case, the

judge has to do what the law requires.

For all of his opponents, when we hear things such as that and they fit in with what the Constitution's writers intended for the judiciary to do, how can we find fault with Judge Alito's approach? Why would we fear him at all?

Judge Alito also believes in justice for all, as afforded by the laws and the Constitution of our great nation. He told the 18 members of the Judiciary Commitee:

No person in this country, no matter how high or powerful,

is above the law, and no person in this country is beneath

the law.

He said:

Our Constitution applies in times of peace and in times of

war, and it protects the rights of Americans under all

circumstances.

Another very important position Judge Alito takes:

Results-oriented jurisprudence is never justified because

it is not our job to try to produce particular results. We

are not policy makers and we shouldn't be implementing any

sort of policy agenda or policy preference that we have.

Contrary to the claims of his opponents, Judge Alito understands the Judiciary has an important role in our system of checks and balances. He understands the importance of the independence of the judicial branch. Judge Alito will not shirk from that responsibility and he will see that the Judiciary is an effective check on abuses of power, both by the executive and the legislative branches of government. In fact, as Judge Aldisert, who served with Judge Alito on the Third Circuit testified:

Judicial independence is simply incompatible with political

loyalties, and Judge Alito's judicial record on our court

bears witness to this fundamental truth.

Let me quote former Judge Gibbons, who also served with Judge Alito and who now is litigating with the Bush administration over the treatment of detainees held at Guantanamo. He believes Judge Alito will not shy away from checking Government abuses. He does not believe Judge Alito will rubberstamp any administration's policies if they run counter to the law and the Constitution. And he certainly did not have any concern about Judge Alito's judicial independence.

Judge Gibbons testified:

It seems not unlikely that one or more of the detainee

cases that we are handling will be before the Supreme Court

again. I do not know the views of Judge Alito respecting the

issues that may be presented in those cases. . . . I'm

confident, however, that as an able legal scholar and a

fairminded justice, he will give arguments, legal and

factual, that may be presented on behalf of our clients

careful and thoughtful consideration, without any

predisposition in favor of the position of the executive

branch.

I agree. I believe Judge Alito will be that independent judge who will apply

the law and the Constitution, not just to Congress, but to every branch of government, and every person, because Judge Alito knows no one, including the President, is above the law.

Not only is Judge Alito an intelligent and experienced jurist, he is also an openminded and fair judge. I am telling everyone that, but anyone that saw the hearing knows that, from the 18 hours he testified before the Judiciary Committee 2 weeks ago. He is an openminded and fair judge. He told the committee:

Good judges develop certain habits of mind. One . . . is

the habit of delaying reaching conclusions until everything

has been considered. Good judges are always open to the

possibility of changing their minds based on the next brief

that they read or the next argument that is made by an

attorney who is appearing before them, or a comment that is

made by a colleague when the judges privately discuss the

case.

How much more appropriate is that approach to the law than just yesterday the Supreme Court decided to hear an execution case of a person in Florida when they got the decision made and the word down as they were strapping him in to inject the lethal chemical into him: Wait, don't make a decision until all the facts are in. So that person did not die last night.

In fact, Judge Alito acknowledged he has changed his opinion in the middle of the judicial process because he is waiting for all the facts, those motions, those debates, to be done before he finally concludes. He testified:

There have been numerous cases in which I've . . . been

given the job of writing an opinion . . . and in the process

of writing the opinion, I see that the position that I had

previously was wrong. I changed my mind. And then I will

write to the other members of the panel and I will say, I

have thought this through and this is what I discovered and

now I think we should do the opposite of what we agreed, and

sometimes they'll agree with me and sometimes they won't.

Now, what do you hear from the people opposed to Judge Alito? His critics have tried to paint him out to be an extremist. An activist judge with some agenda hostile to individual rights and to what his critics have called the ``average American.''

We were presented with analyses on how outside the mainstream Judge Alito's opinions were. But that is not what we heard from the American Bar Association. This group of men and women unanimously voted to award Judge Alito its highest possible rating: ``well qualified.'' We have heard from the Democrats that this ABA rating is the ``gold standard'' about how to make any judgment about who is qualified to serve on the judiciary.

But that is also not what we heard from the panel of four sitting and two former Third Circuit judges who have worked with Judge Alito for more than 15 years. They did not think Judge Alito was out of the mainstream, as certain people on the floor are trying to claim, or an extremist, as you have heard often argued by the other side. We heard quite to the contrary.

I have to say the committee received absolutely extraordinary testimony from these appellate judges, which included nominees from-- just think, these different Presidents nominated these people who testified before us, who said Judge Alito will make a great Justice-- President Lyndon Johnson, President Richard Nixon, President Ronald Reagan, President George H.W. Bush, and President Bill Clinton, these Presidents appointed the people who came to us and said Samuel Alito will make a good Justice.

There is disagreement on the floor of the Senate as to whether he will be a good Justice. These are individuals we have heard from who have had the opportunity to witness the interworkings of Samuel Alito as a judge during their private conferences, on a daily basis, behind closed doors, when all the hair is let down. They saw his deliberative process. They know the ``real deal'' Sam Alito. And these witnesses-- all respected and accomplished judges in their own right--each of them only had glowing comments about Judge Alito. Their support was unqualified.

As Judge Aldisert told the committee:

We who have heard his probing questions during oral

argument, we who have been privy to his wise and insightful

comments in our private decisional conferences, we who have

observed at first hand his impartial approach to decision-

making and his thoughtful judicial temperament and know his

carefully crafted opinions, we who are his colleagues are

convinced that he will also be a great justice.

Let's go to Judge Becker:

The Sam Alito that I have sat with for 15 years is not an

ideologue. He's not a movement person. He's a real judge

deciding each case on the facts and the law, not on his

personal views, whatever they may be. He scrupulously adheres

to precedent.

Judge Becker said:

I have never seen him exhibit a bias against any class of

litigation or litigants. . . .His credo has always been

fairness.

Chief Judge Scirica said:

Despite his extraordinary talents and accomplishments,

Judge Alito is modest and unassuming. His thoughtful and

inquiring mind, so evident in his opinions, is equally

evident in his personal relationships. He is concerned and

interested in the lives of those around him. He has an

impeccable work ethic, but he takes the time to be a

thoughtful friend to his colleagues. He treats everyone on

our court, and everyone on our court staff, with respect,

with dignity, and with compassion. He is committed to his

country and his profession. But he is equally committed to

his family, his friends, and his community. He is an

admirable judge and an admirable person.

Judge Barry said:

Samuel Alito set a standard of excellence that was

contagious--his commitment to doing the right thing, never

playing fast and loose with the record, never taking a

shortcut, his emphasis on first-rate work, his fundamental

decency.

So contrary to what his misguided critics have alleged, Judge Alito is fair and open-minded, and will approach cases without any bias and without a personal agenda.

Unfortunately, Judge Alito's record--as you have heard for the last 2 days and as you heard 2 weeks ago in the hearing--has been wildly distorted. Contrary to these critics' claims, Judge Alito has ruled for plaintiffs as well as defendants in civil rights, ADA, and employment discrimination cases. I think a statistical analysis of how many times a certain kind of plaintiff wins or loses is not the best way to judge a judge's record. It is wrong to think there should be a scorecard on how often plaintiffs or defendants should win, like some basketball game. Who should win depends upon the facts presented in the case and what the law says, just as it should be in a country based on the rule of law.

What is important to Judge Alito is that he rules on the specific facts in the case and the issue before his court, in accordance with the law and the Constitution. Judge Alito does not have a predisposed outcome in a case. He does not bow to special interests, but sticks to the law regardless of whether the results are popular or not.

Similar to Chief Justice Roberts, Judge Alito rules for the ``big guy'' when the law and the Constitution say the ``big guy'' should win. He rules for the ``little guy'' when the law and the Constitution say the ``little guy'' should win. That is precisely what good judging is all about, and that is precisely the kind of Justices who ought to be on the Supreme Court and, for most of the time in our history, have been on the Supreme Court--I think it will be 110 of them when Alito gets there.

The claims that Judge Alito is somehow hostile to civil rights, minorities, women, and the disabled are really off the mark, and those arguments are intellectually dishonest. It is easy to cherry-pick cases and claim that a judge is out of the mainstream. His fellow colleagues on the Third Circuit, though, give you a completely different picture of Judge Alito than what you have seen painted here in the last 2 days. Fellow colleagues on the Third Circuit testified about Judge Alito's fairness and impartiality with respect to all plaintiffs.

For example, Judge Garth testified:

I can tell you with confidence that at no time during the

15 years that Judge Alito has served with me and with our

colleagues on the court and the countless number of times

that we have sat together in private conference after hearing

oral argument, has he ever expressed anything that could be

described as an agenda. Nor has he ever expressed any

personal predilections about a case or an issue or a

principle that would affect his decisions.

Judge Higgenbotham, Jr., a liberal judge, said:

Sam Alito is my favorite judge to sit with on this court.

He is a wonderful judge and a terrific human being. Sam Alito

is my kind of conservative. He is intellectually honest. He

doesn't have an agenda.

Kate Pringle, a former Alito law clerk and Democrat who has known the judge since 1994, testified that:

[Judge Alito] was not, in my personal experience, an

ideologue. He pays attention to the facts of cases and

applies the law in a careful way. He is conservative in that

sense. His opinions don't demonstrate an ideological slant.

I found Judge Lewis's testimony to be particularly compelling. Judge Lewis described himself to the committee this way. These are his words: ``openly and unapologetically pro-choice'' and ``a committed human rights and civil rights activist.'' That is how he described himself, Judge Lewis.

He testified about Judge Alito:

[I]t is in conference, after we have heard oral argument

and are not propped up by law clerks--we are alone as judges,

discussing the cases--that one really gets to know, gets a

sense of the thinking of our colleagues.

Judge Lewis continued:

And I cannot recall one instance during conference or

during any other experience that I had with Judge Alito, but

in particular during conference, when he exhibited anything

remotely resembling an ideological bent.

Judge Lewis further said:

If I believed that Sam Alito might be hostile to civil

rights as a member of the United States Supreme Court, I

guarantee you that I would not be sitting here today. . . .

My sense of civil rights matters and how courts should

approach them jurisprudentially might be a little different.

. . . But I cannot argue with a more restrained approach. As

long as my argument is going to be heard and respected, I

know that I have a chance. And I believe that Sam Alito will

be the type of justice who will listen with an open mind and

will not have any agenda-driven or result-oriented approach.

Judge Lewis concluded:

I am here as a matter of principle and as a matter of my

own commitment to justice, to fairness, and my sense that Sam

Alito is uniformly qualified in all important respects to

serve as a justice on the United States Supreme Court.

So who do you believe has accurately depicted Judge Alito's qualifications and record? The speeches of opponents today and yesterday? Or the people who have worked with the judge, day in and day out for years, who know him personally, and who have seen him up close and in the trenches? I will pick those people who have worked with Judge Alito for 15 years, particularly because they come from different political backgrounds and different approaches to the law and the Constitution, as opposed to the partisan, liberal outside interest groups that have probably never even met Judge Alito. I, then, know whom I believe.

Not only that. If one wipes away the distorted and deceptive characterizations, as well as the false insinuations and calculated smears, Judge Alito's record plainly shows that he is a dedicated public servant who practices what he preaches: integrity, modesty, judicial restraint, devotion to the law, and devotion to the Constitution.

Let me briefly address this issue which has been brought up that somehow Judge Alito's appointment is going to upset the balance of the Court. As I said before, history will take care of the proper ``balance'' on the Court. But some of my colleagues--or maybe speaking for their outside liberal interest groups--have taken the position that Judge Alito has to share Justice O'Connor's judicial philosophy and voting record in order to take her seat on the Court. They argue that Judge Alito should not be confirmed, regardless of whether he is qualified or not, because he does not appear to be Justice O'Connor's judicial philosophy ``soul-mate'', and he would change the ideological balance of the Court.

Well, the last time I checked, the Supreme Court does not have seats that are reserved for a conservative or a liberal or a moderate or a Catholic or a Jew or a Protestant, one philosophy or another philosophy--no! The Senate has never taken the position, moreover, that like-minded individuals should replace like-minded Justices leaving the Court. And until just recently, I never heard the argument from the other side of the aisle. That kind of reasoning is completely antithetical to the proper role of the judiciary in our system of government.

The reality is that the Senate has historically confirmed individuals to the Supreme Court who are determined to be well qualified to interpret and apply the law. It has not been the Senate's tradition to confirm individuals to promote special interests or represent certain causes. That is not what the Constitution says for the Senate to do. In fact, the Court's composition has changed with the elected branches over the years. Almost half of the Supreme Court Justices have been replaced by individuals appointed by a President of a different political party.

The truth is that the Senate has not ever understood its role as maintaining any perceived ideological balance on the Court. In fact, the Senate outright rejected that kind of thinking when Ruth Bader Ginsburg came before us. She was a known liberal, a former general counsel for the ACLU, and she was overwhelmingly approved by the Senate by a vote of 96 to 3. She replaced whom? A conservative justice, Justice Byron White. Yet there were not any arguments from the other side of the aisle or from this side of the aisle that she would upset the balance of the Court. And she did--change the balance of the Court, radically swinging it to the left.

I certainly did not agree with Justice Ginsburg's liberal judicial philosophy, but I voted for her. The fact is that the Senate confirmed Justice Ginsburg because President Clinton won the election. He made a promise in that election who he was going to appoint to the Supreme Court. He had a right to nominate who he wanted based upon the results of that election--the same thing for George Bush in the 2000 election and the 2004 election. Moreover, and more importantly, though, Justice Ginsburg had the requisite qualifications to serve on the Court, and she was not a political hack. So she was confirmed.

This was the same for Justice Breyer. I knew that Breyer was a liberal and that I probably would not agree with his judicial philosophy, but he was qualified. So I voted for him. The Senate confirmed Justice Breyer by a vote of 87 to 9. The President had made his choice. The Senate found him to be qualified, and we confirmed him. Republicans certainly did not put up any roadblocks to the Ginsburg and Breyer nominations. I would say that Judge Alito is no more out of the mainstream than Justices Breyer and Ginsburg.

The Democrats and liberal outside interest groups are intent on changing the rules of the game because they did not win at the ballot box in 2000 and 2004, or maybe over the last 10 years. The way the Democrats want to operate now is not the way we have operated in the past. But the truth is, by politicizing and degrading the nominations process, and the nominees themselves, we will end up driving away our best and brightest minds from volunteering for public service. It is disappointing to me to see a decent man and his family have to endure hurtful allegations and insinuations which are just plain false and, moreover, mean-spirited.

It is disappointing to me that so many of my colleagues are going down this path, creating a standard that can only harm the independence of the judiciary, and severely distort our system of government.

Before I conclude my remarks, I want to quote from a letter I received from an Iowa constituent. I will only quote it in part, but I will include it for the Record. Her name is Joan Watson-Nelson, and she wrote about her very personal impressions of Judge Alito when they attended high school together in the late 1960s in New Jersey. I don't know exactly how she got to Iowa. But she is there and she wanted me to know how she remembered Sam Alito.

She wrote:

I remembered [Samuel Alito] because he stood out in his

class and in the school. He was one of the leaders of the

school. . . . I remembered him being very bright, well

prepared, and brilliant. He appeared to be an individual with

vision. . . . . He stood out as a young man with a great deal

of integrity. Many of his teachers from high school are gone

now. But I know if they were here and could write letters on

his behalf, they would have many stories to tell about the

kind of student he was both inside and outside the classroom.

The letter continues:

I am not a very political person. I have some issues that I

believe in deeply and others that I do not have a deep

commitment about. I am sure that Sam and I do not agree on

all the issues that will be placed before him. The abortion

issue is likely to be one of those, as I understand from the

media that he may be against abortion. However, I do strongly

believe that he will listen to the arguments placed before

him, research the law, and decide honorably.

She concludes her letter this way:

It has been nearly 40 years since he graduated from high

school.

I think the implication is she hasn't even talked to him in the last 40 years. She says:

And although I have a good memory for details, the specific

details of my involvement with Sam are not as clear as I

would like to have them be in my endorsement for him. What is

left, however, is the internalized memory of Sam. That memory

tells me that he will make an excellent Supreme Court

justice. I hope that with your hearings on his appointment,

you and the others will be able to make that clear to any who

may wish to try to discredit him for political reasons. What

I learned about the Supreme Court branch of government--

Talking about when she was in school--

is that this part of the ``checks'' in our system is to be

devoid of politics. I believe that Sam has what it takes to

fulfill that role.

I think this is a very nice testimonial about the man we are going to vote on and hopefully confirm to become the next member of the Supreme Court. I appreciate Ms. Watson-Nelson's letter letting us know about her personal experience with Sam Alito. She hit the nail on the head. The Supreme Court needs to get out of the business of politics, and we need to stop discrediting good nominees for political reasons. She, like most Americans, knows what is going on.

So, it is clear to me, the people who know Judge Alito personally believe, without any reservation, that he is a judge who follows the law and the Constitution without preset outcomes in mind. They believe he is a man of great intellect and insight. They believe he is a fair and open-minded judge committed to doing what is right, rather than committed to implementing a political agenda or a personal agenda. They believe he is a man of integrity, modesty, and restraint.

I am pleased to support Judge Alito's nomination. Judge Alito will be a great Justice, not a politician on the bench. He won't impose his personal views or be a judicial activist, but will make decisions as they should be decided--in an impartial manner, with the appropriate restraint, in accordance with the laws and the Constitution. Judge Alito will carry out the responsibilities of a Justice in a principled, fair, and effective manner. I am proud to cast my vote in support of this decent and honorable man.

I wish this story would end with qualifications, integrity, and judicial restraint, because only those considerations should matter. But it looks as though the most partisan and political among us won't let that happen. There may be some who will vote against Judge Alito's confirmation, not because of qualifications or integrity, and not even because they want somebody to legislate from the bench or treat the Constitution as a blank slate that judges can freely draw upon.

No, it appears some Senators will vote against this nominee because they think doing so is a good political issue. Instead of applying the same standard we Republicans applied when the Senate overwhelmingly confirmed Justice Ginsburg, the most liberal Justice on the Court, these partisans will change the rules in the middle of the game once again. They will vote against Judge Alito with an eye toward the next election and the demands of their most extreme and activist supporters.

The Washington Post had it right when it editorialized on January 15:

A Supreme Court nomination isn't a forum to refight a

presidential election.

I would go a step further than that editorial. A Supreme Court nomination is not a forum to fight any election. It is the time to perform one of our most important constitutional duties and decide whether a nominee is qualified to serve on the Nation's highest court.

I hope my colleagues will cast their vote based on Judge Alito's outstanding qualifications, rather than on the distorted claims of liberal outside-interest groups. I urge my colleagues to rise above partisan politics and support this worthy nominee, Samuel Alito. Samuel Alito deserves our overwhelming vote of approval, and it would be a great shame if he doesn't get it.

I ask unanimous consent to print in the Record the letter from which I quoted.

Mr. President, I speak today with deep sorrow, for we have lost a truly brave American and soldier. MAJ Stuart Anderson died on January 7, 2006, when the Blackhawk helicopter he was in crashed just outside Tal Afar in northern Iraq. His helicopter was part of a two helicopter team providing support for the 101st Airborne Division. Major Anderson was assigned to the 3rd Corps Support Command, Army National Guard. My condolences go out to his wife, Tori; his two daughters, Keely 15, and Kirsten 10; his parents, Claremont and Nancy Anderson; and many other family and friends.

Major Anderson grew up in Hoffman, MN, and then graduated from Benson High School in Benson, MN. He attended North Dakota State University. Maj. Anderson had been living in Dubuque, IA, for the past 5 years and was scheduled to return home this fall. He was a supply and service support representative for his Des Moines based unit; he made sure combat troops in some of Iraq's most dangerous areas had the proper supplies.

Major Anderson joined the Army Reserve in 1984, became an officer in 1989, and was serving in his second tour of duty in Iraq. Many of Major Anderson's colleagues define him as a trusted and humble leader. LTC Thomas Nielsen wrote that ``Major Anderson was one of the finest officers I have known in my 28-year career.'' Major Anderson's father said that ``he was very proud of being in the military . . . he just loved it.'' He was known to sprinkle in humor with his training and with his annual Christmas cards. His humor will be missed by all who knew him. I ask my colleagues in the Senate and every American to remember the sacrifice that Major Anderson gave for our freedom.