Floor Statements

Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet Monday, March 22, 2004, from 2 p.m.-5 p.m. in Dirksen 628 for the purpose of conducting a hearing.

Mr. President, the Boxer amendment purports to deal with the loss of manufacturing jobs and the outsourcing problem. If some on the other side want to do something about manufacturing jobs, they should stop obstructing the FSC/ETI bill with poison pill political amendments. When we come back after next week, I'd ask those on the other side to put results ahead of politics and let us finish the bipartisan JOBS bill.

This amendment, on the other hand, just suggests that the Finance Committee repeal the tax policy of deferral and raise taxes on small manufacturers. The tax policy of deferral insures that American companies like Intel and Hewlett-Packard, compete on a level playing field with foreign companies. Eliminating deferral means U.S. companies will face a tax burden that is not shared by Japanese, German, British or other competing companies.

The Boxer amendment, though styled as a tax increase on the wealthy, contains a tax increase on our small business manufacturers. It would reverse the bipartisan Finance Committee bill's lower rate for manufacturers. Instead of 32 percent, small business manufacturers tax rates would be raised to a level higher than what the Fortune 500 pay.

If you care about manufacturing jobs, why would you punish our manufacturers by raising their marginal tax rates? If you care about manufacturing jobs, help us get the FSC/ETI bill passed and don't raise taxes on manufacturers.

I urge my colleagues to oppose the Boxer amendment.

Mr. President, I rise today to discuss the importance of accurate data to the debate over the budget resolution, particularly as it relates to the distribution of the tax burden. Over the past several days, a number of my colleagues have made claims that the tax relief we have enacted over the past three years only benefits the wealthiest of Americans.

In this debate, as well as all tax policy debates, it is important to use accurate data, and to debate the issues in an intellectually honest manner.

One of the key questions in any tax relief package is fairness. In evaluating fairness, we frequently look at whether a proposal retains or improves the progressivity of our tax system. Critics of tax relief continue to attempt to use distribution tables to show that tax relief proposals disproportionately benefit upper income taxpayers.

The tax relief that has been enacted to date, in the 2001 and 2003 tax relief packages, is promoting investment incentives so that companies will purchase additional capital and labor.

Criticizing these plans for benefiting wealthy taxpayers assumes that the rich stay rich and the poor stay poor.

Recent studies, including one produced by the National Center for Policy Analysis, indicate that this is untrue. The May 2003 study measures income mobility by breaking same age workers into five income levels and by monitoring their movement between the income quintiles over 15 years.

The study shows there is considerable economic mobility in America and that large numbers of people move up and down the economic ladder in relatively short periods of time. Moreover, in recent years earning mobility has increased.

The study demonstrates that within a single 1-year time frame that one-third of workers in the bottom quintile move up and one-fourth of workers in the top quintile move down. One-half of the remaining labor force changed quintiles within one year and 60 percent of workers are upwardly mobile within 10 years. The study also showed that after 10 years, two-thirds of workers change quintiles.

A University of Michigan study also concludes that taxpayers tend to move between income groups during their lifetimes. This makes sense. Taxpayers are likely to be lower-income earners early and late in life but are likely to be higher-income earners during the mid-points of their lives.

My understanding is that the Congressional Budget Office--CBO--is considering the use of income mobility concepts in its analyses. I'm pleased that the non-partisan official scorekeeping organization recognizes the important issue of income mobility.

What allowed these people to escape the lowest income quintile and start earning more money is college education and acquiring necessary skills on the job. Interestingly, anecdotal evidence shows 80 percent of individuals on the Forbes 400 list were self-made, as opposed to those who inherited fortunes.

Again, this underlines the importance of taking advantage of educational opportunities. Education allowed these people to overcome differences in parental income, increased their chances to escape low wage jobs, and determined the success of their future earnings.

Too often distribution tables are used in an almost fetish-like manner. It is important to understand that the tables are, at best, snapshots. The reality is much more complex. Distribution tables are useful policy tools, but they must be used in context.

The NCPA study confirms that there is substantial economic mobility between generations. Almost 60 percent of sons whose parents' incomes were in the bottom 20 percent are in a higher income group; 31 percent have incomes in the top 60 percent.

Therefore, whoever is saying that once rich, Americans stay rich, and once poor, they stay poor, is purely mistaken. I welcome this data on this important matter for one simple reason: it sheds light on what America really is all about--vast opportunities and economic mobility.

Built by people from all over the world, our country truly provides unique opportunities for everyone. These opportunities include better education, healthcare services, land financial security. But most importantly, our country provides people with freedom to obtain necessary skills to climb the economic ladder and live better lives.

We are a free nation. We are a mobile nation. We are a nation of hard-working, innovative, skilled and resilient people who like to take risks when necessary in order to succeed. We have an obligation as lawmakers to incorporate these fundamental principles into our tax system.

I yield myself such time as I might consume off the 18 minutes remaining on this side.

Madam President, once again I remind the Senate about some of the issues that face the Senate Committee on Finance which I chair and how certain assumptions being made by some of the amenders of the budget resolution might be affected by that or how their decisions might affect decisions we have to make.

First of all, there is the general proposition with all budgets and all amendments that pretend to dictate to committees where they ought to get the money or what legislation they ought to pass. This is just a recommendation that has no force of law. It can be entirely ignored by any of the committees, including the Committee on Finance. So when there is a premise certain loopholes ought to be closed, certain tax rate changes ought to be made to affect upper income limit people, the people voting on this amendment and similar amendments ought to understand they are voting on numbers they are giving us, nothing else, because we will have to make those decisions not just on the substance of the dictates of the budget resolution but also on the responsibility to report a bipartisan bill.

We will have yesterday, today, and much more tomorrow, a whole series of amendments coming from the Democrat side of the aisle, trying to dictate something Democrats want Congress to accomplish, but with almost no Republican support. The Senate Finance Committee cannot function under that sort of partisanship. We have to get things done in a bipartisan way. If people who offer amendments to the budget expect their amendments to be adopted, it starts with bipartisanship. I have not seen that in very many of the amendments we have had thus far. I guarantee, nothing will be done by the Senate Finance Committee in a strictly partisan way. That is a dead end. That is an alley with no opening. We have to report a bipartisan bill if we expect to get it through the Senate.

The other thing I want my colleagues to understand, and why they should vote against this amendment, is it assumes gaining certain revenue from loophole closings. I can tell you of tens of billions of dollars we are going to get from closing loopholes, but we are doing that because of the responsibility of the Senate Finance Committee, first of all, has to have a fair Tax Code, and secondly because we have the obligation, if we are going to make tax changes, to have those offset. Without revenue neutrality we do not have bipartisanship, and without bipartisanship nothing is going to get through the Senate.

A lot of very popular tax provisions Democrats or Republicans expect me to get passed before this year is out, like the marriage penalty, like the $1,000 tax credit for children, and the 10-percent bracket so we can help low-income people pay less tax because they need that money themselves to live rather than sending it to us to spend--both Democrats and Republicans expect me to get that passed. We are going to use the revenue from the loophole closings to fund those provisions. We cannot have that money spent on appropriated accounts. It has to be used to offset this social and economic policy that is involved in doing away with the marriage penalty--the $1,000 child credit and the 10-percent bracket, and even in addition to that, maybe, finding some bipartisan solution to bringing finality to what the estate tax ought to be in America as opposed to what it is now or what it will be in 2011 when we go back to just the $1 million exemption.

Those are things we are going to do. Obviously, we ought to close these tax loopholes and shelters because they are unfair. Some of them are outright schemes for corporations to avoid taxation. However, we cannot use that money twice. It will be used once. It will be used by our economy to establish a fair tax policy.

In addition to that, and unrelated to my position on the Senate Finance Committee, how I react to the debate we have had thus far on this amendment--particularly when I hear some Senators on the other side say something like this: Don't tell me we have increased education spending by 60 percent, because I know that.

What that Senator wants us to hear is we have not appropriated what somebody thought we ought to appropriate, which we seldom do anyway. I am well aware of that. I am well aware of promises that were made by an administration on education expenditures, maybe in the first year of this administration, but what I have not heard from the other side of the aisle is, they decide how money ought to be divided, is what happened on September 11 and the war on terror and how that changes everything. How has that changed everything?

You put your resources behind the men and women in battle. You put your resources behind winning a war. That has caused the President of the United States and the Congress, in turn, to divert some money from domestic expenditures to the war on terror, to the Defense Department, and to homeland security. That is what is different now from the time when people thought this administration made certain promises on a lot of Federal programs, not just education.

It seems to me a responsibility we have when we overwhelmingly pass a resolution for war that, if we are going to put our men and women on the battlefield, you have to give them all the resources it takes to win that effort. If you do not, you should not be going to war.

Now, those who voted against that resolution may have the privilege of voting against funding our men and women in the battlefield, but it seems to me, regardless of whether you voted for the war resolution or not, you have a responsibility to stand behind our men and women.

That is what has changed between promises being made on education and today. There has been a diversion of money. But even considering all that, this administration, on the present budget and on previous budgets, has put education No. 1, after the war on terror--including Afghanistan and Iraq--and after homeland security, because education is the domestic program that gets the biggest increase in expenditures over anything else.

With that in mind, I ask that we defeat this amendment. I ask that it be defeated because the revenue supposedly being used is the revenue we are going to use to make the Tax Code more fair to implement the social and economic policy we have that we call doing away with the marriage penalty, helping families, by keeping the $1,000 child credit, and helping low-income people to pay less tax and to have more money in their pockets so they can support their families to a greater extent.

I yield the floor.

I thank the Chair and I thank the Senator from New Hampshire for his great leadership in dealing with education.

I spoke about the necessity of the Finance Committee having the freedom to use revenue we can raise by closing these tax loopholes, and the necessity of getting a bipartisan bill out of committee to do it. I think the Senator from North Dakota spoke very well about some of the problems we have with corporations and schemers and scammers using the Tax Code to avoid taxation, by ridiculous things like leasing a subway for a city in the United States, where there is no risk or economic substance to the process. We want to close those loopholes.

I thought I ought to bring to the attention of the Senate one of the bipartisan bills out of committee that was using some of those loophole closings. They definitely have an impact upon some major industries and jobs in this country where they are going to be hurt, because the World Trade Organization has ruled contrary to our trade agreements, the foreign sales corporation, and the extraterritorial income provisions we have had to make to make our business competitive with European business. Since that is ruled out, a lot of jobs in major corporations--Microsoft and Boeing, to name a couple--are going to be hurt and be uncompetitive because of that.

We are taking some of the loophole closing money that is available to offset the revenue, to reduce corporate tax from 35 down to 32, so our businesses can be competitive. We can save jobs at Microsoft and Boeing which would otherwise be uncompetitive as a result of the foreign World Trade Organization ruling.

I don't want the Senate Finance Committee's hands to be tied by a scheme that thinks this money can be used four or five times and can be spent on domestic programs, when we have to have this money to offset very important tax provisions we want to get passed. Saving jobs through this JOBS bill that was before the Senate last week, and will be up again in 2 weeks, is an ideal place to use that revenue.

I yield the floor.

Mr. President, I yield myself up to 15 minutes of our 17 minutes for remarks I will have on the subject.

Mr. President, first of all, I think, based upon my close working relationship with the Senator from Montana and our work on guiding the Finance Committee, from what he said, I have just one disagreement with his position. I think the difference between what he said and the position I am taking is that I, myself, as leader of the committee, want to do things through regular order. I think we can do things through regular order.

But just in case we cannot, since this tax policy is so important to working men and women--not increasing their taxes next year is so important--I want the insurance policy a reconciliation package gives us, just in case there is something unpredictable out there.

Now, I do not think I would have said that same thing in 2001, I would not have said that same thing in 2003, where I believed we needed to absolutely pass something that was going to be so controversial that it would not pass maybe except by reconciliation.

In this particular case, I believe we are going to have the spirit, the bipartisanship to get this stuff done without going through reconciliation. So I think that is the only place I disagree with my colleague. In other words, I am speaking for the budget resolution as it came out of the Budget Committee.

But what we are setting the stage for is a debate on whether the Finance Committee will have an opportunity to reduce taxes for families and children or, in this particular case where we already have these tax reductions in place, to keep them from automatically, without a vote of the Congress, going up next year.

I want to underscore the word ``opportunity,'' because that is what this debate is all about today on the budget resolution, an opportunity--with some assurance because of reconciliation as a shotgun behind the door--for tax reduction.

This vote is not about the tax reduction itself. That debate and vote will come later, on the product of our committee, the Finance Committee, when we mark up tax reduction legislation. This vote today is about whether we will consider the tax reduction under reconciliation or the possibility of using reconciliation because reconciliation, just plain and simple, as we sit here today, is the only way that we can guarantee tax relief to the American people in a timely fashion.

Now, there have been some very strong statements made by some on the other side of the aisle about tax relief and about reconciliation. Let me say to those who are worried about this instruction, I, as chairman of the Senate Finance Committee, plan to use this as a backstop, not as my primary tool.

My hope is that we deliver family tax relief through regular order. I will not use this instruction, should it survive this vote in conference, unless we have to. We have reconciled tax cuts on several occasions--1995, 1997, 1999, 2001, and we did it last year.

The opposition is not based on precedent. The precedent is very clear. The measures we are talking about are supported on both sides of the aisle. I am talking about the child tax credit, the marriage penalty relief, and expansion of the 10-percent bracket.

Let's be clear. If the Congress does not act, we are talking about a tax increase for nearly every American who pays taxes. It will also help out a lot of low-income families with a refundable child tax credit, if we can deliver this relief. That is another thing I would suggest to people on the other side. If they want a refundable child credit and we get into a hassle where it cannot be done through regular order, it would seem to me they would want to have a process of reconciliation because it guarantees finality. You never get anything until you get to the finality of votes.

A bigger tax credit is a better tax credit. A tax benefit under refundability of $300 per child means a lot to hard-working men and women in my State, and every State. Keep in mind the opposition has no problem with raising taxes in reconciliation. Somehow that is OK. It has been done many times. If the 1993 Clinton tax increase were repealed today, it would score over $1 trillion over 10 years. Who is to say that a $1 trillion tax increase is appropriate in reconciliation, that somehow you can use the process of reconciliation guaranteeing finality, cutting off debate after 20 hours, OK, if you want to raise taxes. That would be for a $1 trillion tax increase. But somehow it is wrong to do it for a $90 billion tax reduction. Democrats, in 1993, used reconciliation--within their rights from our view--to further their President's program, a partisanly designed major tax increase. Eleven years later, we are faced with a different situation, though I am hopeful more than one Member on the other side will support the final product. Republicans, by a razor-thin edge, control the Congress and have a President of our party in the White House.

I want to make another point that, for those of us on this side of the aisle, is very compelling, especially in the context of our side's concessions in the power-sharing agreement. We believe the Byrd amendment should not be necessary. Reconciliation affords us a backstop to ensure that tax relief stays in place. I hope the Finance Committee will not need reconciliation. Hopefully,

one way or the other, we will get this tax relief.

A vote against the Byrd amendment is a vote for an insurance policy that tax relief will get to American families.

In closing, I point out this would be a hypothetical family, but presently for the year 2004, this family would be paying $6,000 a year in taxes. If we don't do anything before this year is out, then automatically certain provisions are going to expire. This family, starting January 1, 2005, is going to be hit with a 26-percent tax increase. You can see it would go up $600 because the $1,000-per-child tax credit would expire. When the marriage penalty relief expires, that family is going to pay $911 more. Why? Just because they are married. If they weren't married, they wouldn't be stuck with this, if they were filing separately. Then because they are going to have expiration of the 10-percent bracket expansion, they will pay $100 more. That is $1,611 more in taxes because of inaction by this Congress.

That is wrong. We have a chance to do something about it. We ought to do something about it. I think we can do something about it in a bipartisan way through regular order. But in case we cannot, because this body gets locked up too often--call it a filibuster, it is locked up, no finality. It takes a 60-vote supermajority to overcome it; sometimes you can't overcome it. Then for this family, they ought to be entitled to a reconciliation, shotgun, behind-the-door process so we can guarantee them no tax increase.

It is one thing for us to vote a tax increase: it is another thing to have a tax increase because of inaction by this Congress. That could happen. I don't want that to happen. It doesn't have to happen this way. We can use regular order. But we ought to provide some assurance to this family that they don't get a 26-percent increase in taxes.

I yield the floor.

Mr. President, I am going to oppose this amendment because this amendment is not about paying for tax cuts; it is about avoiding a tax increase. Although I understand the desire to impose pay-go, it should not apply to current law, and that is a very important distinction.

Under current law, we have a number of tax provisions, including the expanded 10-percent tax bracket, the $1,000-per-child tax credit, and marriage penalty relief that will expire at the end of this year. If we do not extend these provisions, taxes will go up, and taxes will go up automatically.

As I have said before in several other points I have been making on other amendments, it is one thing for Congress to have guts enough to vote a tax increase, but it is quite another to let taxes go up automatically without a vote of the people. I think that is wrong.

In order to extend the existing tax law, we need to pass legislation yet this year if we are going to have a seamless continuation of present tax law into the year 2005 and beyond. That is what this amendment is all about. We are going to either extend current law or we are going to let taxes go up.

Requiring the Senate to pay for this tax relief we already have in the law, that would not be in the law if we do not take some action this year, could lead to disastrous results. We are talking about disastrous results for families, such as if one is married and they get hit with the marriage penalty, that is a major concern to those families who have to pay more. If they have children and they benefit from the $1,000 child credit and that credit goes down, that is going to hit those families to a greater extent.

All families, low income or otherwise, but particularly this 10- percent bracket was put in the law to help low-income Americans pay less taxes. So it is a disastrous result on families, and we should not have to go to the extra extreme of maintaining existing law. If for some reason we could not agree on the necessary offsets that would be required under Senator Feingold's amendment, or if we could not get 60 votes, then current law would expire and taxes would automatically go up, without even any consideration by any of us. There would be 535 people just standing by and letting taxes go up.

Some people may be willing to take that risk, but I do not believe that is the right approach. Consequently, we need to reject this amendment. We need to support working families of America by extending the tax reductions that have already been provided for under current law. We need that to be seamless. We do not want to take any chance somehow somebody is going to say next October, just before we adjourn for the election, well, we will worry about this next year. That is a bad situation to leave the families of America. They ought to know what tax policy is for the long haul.

Certainty of tax policy is the best tax policy. Even if it might not be exactly the right tax policy, certainty of tax policy is better than the uncertain situation we have facing American working men and women today.

I yield the floor.

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

Mr. President, during this debate on this amendment, we have heard there is going to be $11 billion cut from various programs under the jurisdiction of the Senate Finance Committee. I have the budget resolution in front of me. I defy anybody to tell me where in this budget resolution there is an $11 billion cut.

I want to make it clear. What has been said, thus far, is based on some assumptions, assumptions that, in the global view of all the possible assumptions that the Senate Finance Committee could draw on to save a little

bit of money, it is in the realm of possibility, but it is a very extreme possibility of just exactly where the Senate Finance Committee ends up to save $3.4 billion, not $11 billion. This comes from the fact the budget includes an instruction to the Finance Committee to reconcile $3.4 billion over 5 years.

Now, if you were talking on ``Main Street'' in Waterloo, IA, about saving $3.4 billion over 5 years, out of the trillions of dollars that the Federal Government is going to spend over that period of 5 years, and you wanted to explain to somebody that you could not save a fraction of 1 percentage point, they would say: You better get some businessperson to serve in the U.S. Senate because the average businessperson has to deal with problems like that all the time. It is a small amount of money, but it is still some direction given to the committee.

Now, exactly where we might do that--there has been a lot said tonight, that somehow people know exactly where the Senate Finance Committee is going to get this sort of reconciled figure. I would have to say, I do not know yet. I do not know yet because I have not looked at all the possibilities. I do not know yet for a second reason: that even if I had a very good idea of exactly where this ought to come from, a chairman of a committee, particularly of the Senate Budget Committee, does not run the Finance Committee. We do things in a bipartisan fashion in that committee. Even within the Democrats, there is a difference of opinion, not a unified position among Democrats and, for sure, among my Republican members of the committee there is not a unified position.

It takes a lot of compromise to do anything in the Finance Committee. When you are talking about even saving a fraction of 1 percent--a very small fraction of 1 percent--let me tell you, there would still be a great deal of difference of opinion that it ought to be done. The fact is, there is nothing in this budget resolution that says where we have to save that money. That is our committee's decision.

When you vote this week on this budget resolution or when you vote on this amendment, I want to make it very clear to you that there is nothing in this that says how this money ought to be saved. So I can say to any of my colleagues on the other side of the aisle: I do not want this program cut. Another one says: I do not want that program cut. I can say: There is nothing in this resolution that says I have to cut program ``ABC'' or ``DEF.'' It is what we can do in our committee.

For sure, there has been a great deal of talk about it might come out of Medicaid or it might come out of the earned-income tax credit. Maybe it could, to some extent. But I do not know that yet. Even if I knew it, I could not produce 11 votes this minute, and that is the way it ought to be. This has to be a thoughtful process.

All we are doing in this budget resolution is making an overview of the fiscal policy of the Congress for the next 12 months. That is all we are doing. We are doing that so all the committees of Congress are disciplined. Before the budget resolution, when it came to fiscal matters, every committee and subcommittee in Congress was a kingdom unto itself. And what was the fiscal policy of the Congress of the United States? It was the total action of all the separate committees.

But the Budget Committee is set up so that before you spend money, before you make tax policy, you have a well-thought-out process of keeping within certain limits so that each committee is not a kingdom unto itself, but they are disciplined by the total view expressed in the Congress in a budget resolution--in the Senate and House separately; and then, after compromise between the two Houses, that policy is adopted.

Now, the budget assumes additional savings, but the Finance Committee is not required to reconcile these savings. Striking the $3.4 billion reconciliation instruction does not remove these other nonbinding savings. These nonbinding assumptions would remain. This amendment does not change any--does not change any--of those assumptions.

The amendment deals with $3.4 billion, but all the debate has been about certain assumptions, and there is nothing in the amendment that changes any of those assumptions. So what all the debate has been about is not what you are going to be voting on. You are going to be voting on $3.4 billion being saved. But the debate has been about, ``Oh, the money is going to come out of Medicaid; the money is going to come out of the earned-income tax credit'' because of some assumptions that were made. But the assumptions are not binding. The amendment before us does not even change the assumptions.

As to the point that the House-passed reconciliation bill could be handled in the Senate under what we call the rule XIV procedure--which is a way of bypassing the Finance Committee--the Congressional Budget Act clearly states that only a bill reported by the Finance Committee is entitled to the reconciliation protections. So you cannot bring something over from the House under rule XIV and have it reconciled. Our committee, and only our committee, has the responsibility to deal with this for the Senate.

Now, speaking to a specific program, I would address the issue that has come up about Medicaid. As chairman of the Senate Finance Committee--we have jurisdiction over the entire Medicaid Program--I am not bound by those budgetary assumptions. That is the third time I have said it. I hope it is clear. The chairman of the Senate Budget Committee and the Budget Committee can put certain assumptions in the resolution, and those are legitimate assumptions to put in the report, although we do not vote on those assumptions. But they are assumptions because it is legitimate for those of us in the Congress to expect the Budget Committee to be responsible. If you are going to put down a figure, you ought to have something to back it up. It should not be pulled out of the clear blue sky. It ought to be based on certain assumptions. That is what the Budget Committee and the chairman did, and that is what they should be doing. Now, I am not bound by those. I have respect for those, though, I want to point out, as I have respect for the work of the Budget Committee and its chairman. But I don't have to share the assumptions that any Budget Committee makes on how to arrive at the figure. In this particular instance, I might have different views about Medicaid. Frankly, I do. But that is not the issue of debate.

I happen to believe Medicaid is a vital safety net program for our most vulnerable citizens. It is for people who are low income. It is for pregnant women. It is for the elderly, for the disabled, and for others. States also spend a significant amount of their budgets on Medicaid. When I look at a program, how we save Medicaid money, if we go there--and we are going to have a responsibility to look at all this stuff; we might not even look at Medicaid at all, but we might--I have to be mindful of any effective changes we make to the Medicaid Program that it might have on the States, because this is a program where there is a partnership between the Federal Government and State governments and, in some States, even local governments.

Last year, for instance, this entire Congress felt very serious about doing something to help States, in addition to what we would do through Federal grants to the States, emergency grants, because most of the States had very tight budget situations. We gave $20 billion relief to States, of which $10 billion was just for Medicaid. I say that not that you need to be reminded of it, but I want you to know our committee, even 8 months ago, took into consideration the needs of the States.

I am going to look at how Federal tax dollars are spent, but I also have to know there is some impact they have on the States.

We also have to look at the reality of every Federal program. They ought to be reviewed from time to time. It seems to me we can look at Medicaid not as some sacred cow. Not that it is not a good program, not that it should not be preserved. It is part of the social safety net of our society. It will be maintained. It is a program that is 38 years old. But it is only an extension of a 200-year history our society has had of taking care of the most vulnerable, originally, entirely by counties or local governments. Then the States got involved, and then, in the 1940s, the Federal Government got involved in several ways. Then that was all kind of put together in the 1960s in the Medicaid Program.

There is no reason to think this is some sort of a flawless program that

can't be made a better program. You don't even have to assume it is some program that at least a fraction of 1 percent maybe can't be saved to some extent. No conclusions on my part, but I wouldn't be a very good public official, a very good trustee of the taxpayers' money if I thought any program couldn't be looked at to see could we save a half of 1 percent out of that program.

I am not opposed to reviewing whether there are instances of fraud or abuse in the Medicaid Program, but I want you to know that I will conduct oversight activities and do it in the open. I will do it in a bipartisan manner. I am going to do it with extensive input from stakeholders.

I yield the floor.

Yes, I do want to speak.

Madam President, what we have to think about when people suggest raising taxes is, I have hardly ever had anybody ever tell me they want to raise taxes. How high do taxes have to be to be high enough to satisfy the people asking to raise the taxes?

Since we hear that more from the other side of the aisle than we do from this side of the aisle, I cannot help but ask anybody on that side of the aisle who is going to be suggesting during this debate on the budget to raise taxes, how high do they have to be to satisfy you?

We have had marginal tax rates of 93 percent in the last 50 years. Was that high enough? We had 70 percent in the last 20 years. Is that high enough? We have had them as low as 28 percent. People felt an awful lot of economic good happened, particularly promoting entrepreneurship, when they were lower.

I think the most important thing for my colleagues to think about during this debate is on the issue of process. Quite frankly, we are being given some direction through this amendment to raise taxes. We are being told the intent is to raise them on the very wealthy, but that is not how the budget resolution works. The budget resolution just says to the Budget Committee, raise X number of dollars based upon what that budget says. We decide where that is going to be raised.

Anybody who believes that by voting for this amendment, they are putting the burden on just the wealthy, for instance, are sadly mistaken. What it takes to get a bill out of the Senate Finance Committee is a bipartisan compromise, and just taxing one class of people is kind of a nonstarter for our committee, if you believe in bipartisanship.

In addition, if the issue of raising taxes just on millionaires is an issue, you need to remember you cannot just tax the wealthy. You confiscate all the income of people over $1 million, and you are going to run the Government for a few days. If you see that as a solution to our budget problems, you don't study the statistics, you don't study the impact taxation can have on the economy.

Also, if it is the millionaires, just think in terms of the top 1 percent, earning about 27 percent of the income, paying 33 percent of all of the income tax coming into the Federal treasury. Once again, how much is enough for the top 1 percent to pay? They make 27 percent of all the income. They pay 33 percent of the taxes. Should they pay 50 percent? Pretty soon it gets to the point where maybe they ought to pay 100 percent of it all. But that is a nonstarter. There is not enough income there to take care of our problems.

What does this high tax philosophy lead us to? It eventually leads us to taxing the common ordinary American to a greater extent than is good for the country, good for economic freedom, and obviously a discouragement to entrepreneurship.

I believe I saw on the chart, the one the Senator from Arkansas had, does taxing higher tax rates or lowering marginal tax rates really help small business? That is probably based on the argument that every small business does not pay the highest marginal tax rate. We are not dealing just with what is the highest marginal tax rate; we are dealing with fairness between self-employed, sole proprietors, and their highest rate of taxation and the highest rate of taxation of corporations. So anybody who is suggesting we ought to raise the marginal tax rate above where it is now at 35 percent is being unfair to sole proprietors, self-employed people, compared to corporations.

We should not have a penalty against small business in America. Regardless of the income of that small business, there should not be a penalty. When you have a 38.6-percent marginal tax rate, that is a 13- percent penalty on small business. It is unfair to sole proprietors. There is no reason individuals paying taxes in America ought to have to pay more than corporations.

I am not arguing raising the corporation tax because we know what that does to our international competitiveness. That hurts our international competitiveness because we have high cost of capital. But I am arguing for fairness between corporations and sole proprietors, self-employed people, people who scrounge to get money to invest. They don't have stockholders. They can't go to the bond market like corporations can. They have to raise their capital. They live relatively moderately and maybe even low income throughout their livelihood to reinvest their earned income, to expand their business, to create jobs. Why do we want to penalize them? That is basically what this business of taxing the wealthy is all about.

There isn't enough wealthy in this country to do everything they want to do on the other side. Eventually it filters down to hurting the middle class.

We have to protect the middle class. What we are doing is talking about lower rates of taxation, protecting working men and women from having their resources confiscated by government.

I urge we defeat the amendment.

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

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 43, S. 671.

Mr. President, I would like to comment on a bill that has traveled a long and difficult journey to get to the floor today; S. 671, the Miscellaneous Trade and Technical Corrections Act of 2003, commonly called the miscellaneous tariff bill.

In fact, this bill's journey began nearly 2 years ago. The Senate historically passes a miscellaneous tariff bill at the end of every Congress. The bill under consideration today was supposed to have been passed at the end of the 107th Congress. However, a markup scheduled for September 26, 2002 was cancelled, leaving the bill as unfinished business for the current Congress. Upon resuming the chairmanship of the Finance Committee, my intention was to complete unfinished business from the 107th Congress as quickly as possible. To that end we passed the bill out of the Senate Finance Committee by voice vote on February 27, 2003. It was hoped that early passage of this bill would pave the way for consideration of another miscellaneous tariff bill in the 108th Congress. But that was not meant to be.

Traditionally, miscellaneous tariffs bills are non-controversial and pass the Senate by unanimous consent. Sometimes there are attempts to load the bill down with costly and controversial items, which is why we didn't produce a bill in the 107th Congress. That's also the reason this bill was delayed this Congress. Contrary to traditional practice, a few Senators insisted on adding unrelated and controversial provisions. Unless we agreed to add these controversial provisions, these Senators would not allow the full Senate to consider the bill. In effect, a few Senators have held this legislation hostage for months for their own parochial purposes. And that is truly sad and disappointing. I hope these members know that they have all but guaranteed the end to this process.

This package contains many trade provisions, primarily duty suspensions, reductions and extensions, for products that are not produced domestically. This bill supports American factories and workers by allowing manufacturers to save money when they import these products. At this stage in America's economic recovery, we must give every opportunity to our manufacturers to reduce costs and pass the savings on to consumers.

A product generally must meet three tests to be eligible for inclusion in a miscellaneous trade bill: first, it must be non- controversial and non-competitive, that is there can be no domestic producer who objects to inclusion of the provisions. Second, the product should be intended to benefit U.S. downstream producers, that is someone who utilizes the product in manufacturing. Third, the volume of imports and corresponding revenue loss should be relatively small. To ensure that the provisions in this bill met that this test, each provision went through an extensive vetting process including a public notice and comment period to ensure that they were eligible for inclusion in the bill. This process began during the first session of the 107th Congress.

The bill also contains a number of liquidations or reliquidations for certain entries. The general rule for inclusion here is that the product entered the country under an incorrect duty rate due to Customs or other administrative error. These provisions allow those entries to enter the country at the correct duty rate.

We also included in this bill a provision that extends preferences under the Generalized System of Preferences (GSP) to allow duty-free treatment for hand-knotted and hand-woven carpets. This provision is designed primarily to help the citizens of Afghanistan and Pakistan. I believe that allowing these products to be considered as eligible articles under GSP, will help beneficiary countries that have joined the United States in the fight against global terrorism. With respect to Afghanistan, which is rebuilding and looking for opportunities for its people, this provision is needed now more than ever.

Another important provision in this bill corrects a mistake in the Trade Act of 2002, P.L. 107-210, that inadvertently and temporarily raised duties on Andean originating handbags, luggage, flat goods, work gloves and leather wearing apparel under the Andean Trade and Preferences and Drug Eradication Act, ATPDEA. This provision retroactively reinstates the reduced duty treatment for eligible products that entered the United States from August 6, 2002, the date ATPDEA was signed, and the time in which these products met the import sensitivity test, several months later. It provides for continued duty- free treatment for these eligible products, which was the intent of the Trade Act.

I am also pleased that the bill includes the Emergency Protection for Iraqi Cultural Antiquities Act of 2003. I introduced the EPIC Antiquities Act of 2003 to authorize the President to impose immediate emergency import restrictions on the archaeological and ethnological materials of Iraq. The purpose of this bill is simple--to close a legal loophole which could allow looted Iraqi antiquities to be brought into the United States.

If Congress does not act to provide the means for establishing an interim ban on trade, the door may be opened to imports of looted Iraqi antiquities into the United States. Already the press has reported allegations that European auction houses have traded in looted Iraqi antiquities. The last thing that we in Congress want to do is to fail to act to prevent trade in looted artifacts here in the United States.

Also included in the package is a provision that simplifies the U.S. Customs Service's ability to process commercial importations, thereby resulting in increased efficiency and productivity for both Customs and the trade community.

I want to point out that the provisions I have covered are not the only important provisions contained in this bill. This bill makes a number of other technical yet meaningful changes to our trade laws.

While I am very disappointed some members have delayed the passage of this bill, and even tried to kill this bill with controversial provisions, I would like to thank my colleagues who respected the traditional rules governing this important legislation. I appreciate their support.

Mr. President, I ask unanimous consent that the Grassley-Baucus amendment at the desk be agreed to and that the bill, as amended, be read the third time.

Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of Calendar No. 51, H.R. 1047, the House companion bill.

Mr. President, I ask unanimous consent that all after the enacting clause be stricken and that the text of S. 671, as amended, be inserted. I further ask unanimous consent that H.R. 1047, as amended, be read the third time and passed; that the motion to reconsider be laid upon the table en bloc; and that S. 671 be returned to the calendar.

I yield the floor.

Mr. President, these Senators speaking remind me that ``made in America'' has always been a badge of honor, a badge of distinction--``made in America.'' It shows that America can compete. America has competed and America has won over the long, long haul.

We have been hearing from the defeatist wing of the Democratic Party, not from the wing of the Democratic Party that says the United States can compete and win and can even do it from a position of leadership. I am not prepared to be a defeatist in international trade. I intend to wear that badge ``made in America'' with honor, as it has been for decades and decades.

I think we need to remind the Senate now, after 24 hours on this legislation, what we are facing. It looks as if we have from here until hell freezes over to get this legislation passed. Already we are in a situation where the United States is suffering as a result of inaction by Congress. People need to remember that Senator Baucus and I worked very carefully to put together a bill that would go through this body very easily, and now we are seeing it stalled with things that may be legitimate issues. But while people are complaining about jobs going overseas, this bill that was voted out of committee 19 to 2 is being stalled.

In the process of stalling, U.S. manufacturing is already facing a 5- percent surcharge by Europe, to the point where it is not a case of just paying 5 percent more.

It is probably the case with a lot of our products that our products might not even be competitive and we are not selling. When you can't sell, people are laid off. So I think instead of worrying about situations that you want to help for the future, we have an opportunity to keep jobs that we know exist today, will continue to exist, and are only in jeopardy because of sanctions being put on our products by Europe.

We might be facing an amendment on overtime coming up shortly. It is one thing to worry about people getting overtime, but if you don't have a job, you can't even get overtime. So we have to get back to the basics. The basics are what this legislation is all about--maintaining the competitiveness of our industry, not going backwards.

While this bill is being stalled by other issues that are very legitimate--and I have talked to the Senator from Connecticut about the legitimacy of his issue and also about some modifications he made to get this through--it is holding up a bill that came out of committee 19 to 2. Those two votes were not cast by Democrats against the bill. They were cast by Republicans.

This bill should go forward to get rid of that 5-percent surcharge that we have on our products. In April it is going to be 6 percent, and in May it is going to be 7 percent. By the election it is going to be 12 percent. That is the basic issue before us.

I also wish to address some of the things that Senator Kennedy said. I don't want to address them from my point of view. I wish to address them from the point of view of the intellectual wing of the Democratic Party. We heard from the political wing of the Democratic Party by Senator Kennedy. So I would like to refer to an article written by Robert B. Reich, Secretary of Labor in the Clinton administration, a Secretary of Labor concerned about the rights of labor, concerned about jobs. He also is an adviser to the Democratic candidate for President. He ought to be listened to. This is what former Secretary Reich had to say in an article, printed December 26:

It's hard to listen to a politician or pundit these days

without hearing that America is ``losing jobs'' to poorer

nations--manufacturing jobs to China, back-office work to

India, just about every job to Latin America. This lament

distracts our attention from the larger challenge of

preparing more Americans for better jobs.

It seems to me that what Secretary Reich is saying to the political wing of the Democratic Party from the intellectual wing of the Democratic Party is we ought to be looking to the future, there are big challenges out there, and you should not spend all of your time haranguing about stuff that maybe you can't do a whole lot about.

``Most jobs losses over the last 3 years,'' Professor Reich says, ``haven't been due to American jobs moving anywhere.''

I will start that over again:

Most jobs losses over the last 3 years haven't been due to

American jobs moving anywhere. They have resulted from an

unusually long job recession. Hopefully, that is coming to an

end.

It is, and that is my parenthetical comment.

We can debate whether the Bush administration has done a

good job, or the right things to accelerate a job recovery,

but job growth eventually will resume--

Parenthetically, we know it is resuming--

as aggregate demand bounces back.

Continuing to quote:

It is true that U.S. manufacturing employment has been

dropping for many years, but that's not primarily due to

foreigners taking these jobs.

Let me stop there. Senator Kennedy, do you realize the intellectual wing of your party says manufacturing employment dropping hasn't been primarily due to foreigners taking these jobs? Then I quote:

Factory jobs are vanishing all over the world. Economists

at Alliance Capital Management took a look at employment

trends in 20 large economies and found that between 1995 and

2002, 22 million factory jobs had disappeared. The United

States wasn't even the biggest loser. We lost about 11

percent of our manufacturing jobs in that period--

Wasn't most of that 5 years during the Clinton administration?

[B]ut the Japanese lost 16 percent of theirs. Even

developing nations lost factory jobs: Brazil suffered a 20

percent decline, China a 15 percent drop. What happened to

factory jobs? In two words, higher productivity.

Parenthetically, that is exactly what we have seen in the U.S.-- higher productivity over the last year and a half. Last month was the highest productivity in 50 years. You have to go back to July 1950 to have the productivity gains that we have had.

Professor Reich goes on to say:

I recently toured a U.S. factory containing two employees

and 400 computerized robots. The two live people sat in front

of computer screens and instructed the robots. In a few

years, this factory won't have a single employee on site,

except for an occasional visiting technician who repairs and

upgrades the robots, like the gas man changing your meter.

I suppose I could quote the whole long article, but there is one other thing I ought to say. The intellectual wing of the Democratic Party is advising everybody, but it is good advice for the political wing of the Democratic Party as well:

We should stop pining after the days when millions of

Americans stood along assembly lines and continuously bolted,

fit, soldered, or clamped whatever went by. Those days are

over. And stop blaming poor nations whose workers get very

low wages.

Professor Reich asks the question: ``Want to blame something?''

If the political wing of the Democratic Party wants to blame something for loss of these assembly line jobs, he says: ``Blame new knowledge.''

Well, isn't that something we expect in the evolving world--new knowledge and making use of new knowledge?

He says here:

The Internet has taken over the routine tasks of travel

agents, real estate brokers, stockbrokers, and accountants.

With digitization, high-speed data networks and improved

global band width, a lot of back-office work can now be done

more cheaply abroad. Last year, companies headquartered in

the U.S. paid workers in India, China and the Philippines

almost $10 billion to handle customer service and paperwork.

Well, this article is probably summed up in a subheadline in the middle of the article, which says: ``Remember the elevator operator? Jobs become extinct.''

Isn't that true? But in the Senate we still have elevator operators running automatic elevators, pushing buttons that somehow a Senator doesn't have time to push or something.

What does the political wing of the Democratic Party want? Do they still want people making buggy whips when we don't have buggies anymore? Times change, but the defeatist wing of the Democratic Party has lost confidence in America. They don't think ``made in America'' is a badge of distinction anymore.

There is one other reference I would like to make. When this issue was talked about on ABC News on February 22, we had these exchanges between George Stephanopolous, Senator John Edwards, and Senator John Kerry. I don't hear this complaining that I hear from the political wing of the Democratic Party from these three Democrats. I don't hear their suggestions for solving this problem having anything to do with the amendment of the Senator from Connecticut. So I am going to quote George Stephanopolous, as he has a short interview with these two candidates:

Another big jobs issue has come up in the last couple of

weeks, the issue of outsourcing.

The very issue of this amendment.

The chairman of the Council of Economic Advisers for

President Bush got into a lot of trouble when he said that

outsourcing is a plus for the American economy.

We have been over that 100 times.

But when you look at this issue--

He is asking Senator Edwards--

what can you do about it?

Senator Edwards:

This is a very complicated issue.

OK, can we agree that it is a very complicated issue? If it is a complicated issue, I doubt if just President Bush is responsible for it or just President Bush is going to do anything about it. Anyway, he says:

This is a very complicated issue. It has caused a whole

group of things. One is--the thing that actually concerns me

the most is that I worry that we are starting to lose our

edge in science, math, and technology. China graduated about

half a million engineers last year. We graduated 60,000 to

65,000. And since we are going to have the standard of living

we have in this country, in fact we want to improve it, not

make it worse. We always--it is going to be critical for the

American worker to be more productive than other workers

around the world.

Then he goes on, after a short comment by George Stephanopolous, to say:

We--training, education. We need better and stronger

science and math curriculums, particularly in our early

grades. We need to strengthen our graduate programs in this

area. The other thing that we can--where we can have a real

image is we ought to build broadband high-speed Internet out

in every community in the next four years, because there are

lots of parts of America where it is easier for these

companies to do business in India and China because they have

access, and they don't have that access in rural communities

in a lot of America.

Every one of us ought to be able to buy into that, but it seems that Senator Edwards is speaking for the intellectual wing of the Democratic Party, looking to the long view, education and training, not some short solution that probably won't work and might even do more harm than good.

And then George Stephanopolous asks this question to John Kerry:

Senator Edwards says the most important thing to do is to

improve math and science education. Do you agree with that?

Senator Kerry:

It's one of the most important things to do. If you don't

give the American worker a fair playing field to compete on,

we're going to continue to be disadvantaged. I'll give you an

example. China manipulates the currency. China does not

enforce intellectual property laws. China and other countries

have not allowed us to have fair access to the marketplace.

Skipping down:

Education, I mean that's not new. Education was the

centerpiece of Bill Clinton's Presidency. It's the

centerpiece of my proposals. There are a whole series of

things that we can do.

Here again the person who is following the advice of Robert Reich representing the intellectual wing of the Democratic Party is looking ahead. I do not see these people offering any of the political sound- bite type solutions that have to be used if we are going to solve this problem, which I would put in the category of the political wing of the Democratic Party that we have heard from this morning.

I yield the floor.

Mr. President, I suggest the absence of a quorum.

Madam President, I move to reconsider the vote.

Madam President, I send an amendment to the desk and ask for its immediate consideration.

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

I ask unanimous consent, without the Senator from Kentucky losing his right to the floor, if I could have 60 seconds to say where we are right now.

The obvious thing going on here is that my colleague from Iowa wants to go out of turn and jump ahead of the line. We have an agreement lining up amendments. We did this yesterday morning. The overtime amendment is in that line, and it is just a matter of waiting until that sequence comes and that opportunity is going to be there. That is the fair way of doing business around here. As the manager of the bill, I am going to make sure we do this in a fair way.

I did offer an amendment to the Bunning amendment. That one part of the amendment that was just read is something that is very important to Iowa. We are going to have the largest wind energy generating project in mid-America in Iowa, if we can get the wind energy tax credit extended.

This is an amendment that extends a lot of the provisions that have run out. Wind energy is one of those. This gives an extension to all of these extenders that have run out. One of those is for wind energy, which affects the entire country, of course. But one of the largest wind energy projects ever is going to be in Iowa. If we can get this wind energy tax credit extended----

If it is OK with the Senator from Kentucky, yes, I will yield.

Those are things that are being discussed. I think it is fair to say it ought to be OK if I don't have an answer to that right now for the simple reason that yesterday, and even earlier today, we tried to get agreements from the other side on some votes, and we weren't able to get them. But those are things that are eventually negotiated, as the vote we just had, and the same thing may happen on other amendments.

Mr. President, I suggest the absence of a quorum.

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

Mr. President, I am happy to be, once again, on the floor with a very important piece of legislation. With the cooperation of the Democratic leadership of the Senate Finance Committee, Senator Baucus, we bring to the floor a bill that was voted out of committee 19 to 2. Senator Baucus and I always work together as much as we can--that is, most of the time--to bring to the Senate a bill that can get through the Chamber because as so many people who watch the Senate regularly know, the Senate, unlike the House of Representatives, can't function if it does not function in a bipartisan way.

So we proceed, then, with this bipartisan bill: the Jumpstart Our Business Strength Act. If I refer to the acronym JOBS, it is jumpstart our business strength.

Since March 2000, long before President Bush took office, the manufacturing sector has been under significant economic pressure. Obviously, that has affected manufacturing workers. A recent CBO study estimates that going way back to March 2000, an estimated 3 million workers have lost their manufacturing jobs.

The Congressional Budget Office attributes this job decline to the recession that began in November 2000 and the weak economy in demand that followed, part of it a result of September 11 and recovery not coming as normal as recoveries do.

But we always tend to look at bad news. Bad news tends to make the front pages of the newspaper. Good news tends to make the back pages, if there is good news printed at all.

There is good news on the horizon. That is, that new manufacturing orders, just this past December, surged to their highest levels in 50 years. They haven't been that high since July of 1950. And January was the sixth consecutive month that manufacturing activity expanded. In December, the manufacturing employment index grew for the second consecutive month, but the overall economy during that month added 1,000 jobs only. That was, of course, disappointing. But it wasn't disappointing from the standpoint of the manufacturing employment index growing because it seems that is the lagging sector of this recovery.

I believe we are on the right path for a strong recovery. In fact, there has been a recovery underway since economists ruled that the last recession ended October 1, 2001. But when a recovery ends, it is not always visible. Of course, it is visible in most segments of the economy by very strong indices that are there to prove that. But one area that is not is manufacturing employment. We do now have those 2 consecutive months of increased employment.

I believe we are on the right path to strong recovery, but we must do more to ensure manufacturing stays on the path of recovery. Manufacturing is so vital to the overall health of our economy, including follow-on sectors that benefit: the service and financial sectors.

As government policymakers, which we are, we have to act to revitalize the manufacturing sector. Today we have some good news on manufacturing, and that is, the legislation we bring to the Senate, because it is going to help enhance employment in the manufacturing sector.

As I have said previously, but I cannot emphasize too much, by a vote of 19 to 2 this bill was voted out of the Senate Finance Committee. Our bill is a bipartisan balance of domestic tax relief and international tax reforms, all meant to strengthen American business. Not as an end in itself, but as business strengthens, jobs are created. We are talking about jobs for Americans.

Most importantly, this bill is revenue neutral. That is important, when we read in the newspapers about facing a budget deficit. This bill then will not add one dime to the Federal deficit. The JOBS bill will repeal the current FSC/ETI regime and use all the money from repeal to provide a 3-point tax rate cut on income from U.S.-based manufacturing. I emphasize U.S.-based manufacturing. We start those cuts phasing in next year. This 3-point rate cut is only for manufacturing and only for manufacturing in the United States. This bill will not help American manufacturers that want to manufacture offshore.

I point out how our bill would approach this effort to help create jobs in American manufacturing and do it on American soil as opposed to the way that the Ways and Means Committee of the other body, and even other bills that will be offered in the upcoming debate, would face these issues. Our bill reducing taxes applies to all that manufacture in America.

I wish to make clear to our colleagues this is a bill to help manufacturing in the United States. American companies that manufacture overseas will not get the benefit of the corporate rate reduction. Foreign corporations that want to come over here to America and build plants and employ people in this country would get the benefit. But this bill is about helping American manufacturing that takes place in the United States of America.

I wish to differentiate the approach we use from the approach the Ways and Means Committee uses.

Unlike the pending Ways and Means bill, and other bills that will be offered during the upcoming debate, these cuts apply to all who manufacture in America, regardless of size. So this is going to include sole proprietors, partnerships, farmers, individuals, family businesses, multinational corporations, and foreign companies that set up manufacturing plants in the United States. All of these enterprises will benefit as long as they manufacture.

So the objectives of this bill are pretty simple. Three: Jobs, jobs, jobs, meaning jobs that pay money because of manufacturing in America.

Manufacturing is important to all States, and I want to point out some benefits. For my State of Iowa--the figures I have are for 2001-- Iowa's gross State product was $91 billion. Of that, $19 billion or 21 percent of the State's wealth was created by manufacturing. From 2001 to 2002, Iowa's exports grew by nearly 15 percent. We shipped nearly $5 billion of goods out of Iowa, and that was during the year 2002.

In Iowa, we have 222,000 jobs in manufacturing. So that shows how important it is for the United States to be competitive in manufacturing both home and abroad because of 222,000 jobs just in my State. Those kinds of export numbers translate into very good and lasting jobs at home. Many of our country's manufacturing jobs are dependent upon the current FSC/ETI international taxing regime.

I have a map behind me that makes this very clear. It shows by State the jobs that are existing today because of the current FSC/ETI provision: South Carolina, 47,000 jobs; my State of Iowa, 35,000 jobs; California, 429,000 jobs; Texas, 262,000; New York, 215,000; Illinois, 156,000; Washington State, 107,000 jobs generated by FSC/ETI.

As my colleagues probably know, FSC/ETI stands for Foreign Sales Corporation, extraterritorial income. This is what was determined to be contrary to our international trade agreements, and that is why we have this legislation before us because if we do not do something about this issue, these numbers of jobs that are dependent upon this legislation are in jeopardy because our manufacturing will not be competitive with our foreign competition.

Of course, what this is all about is passing legislation that will be in agreement with our trade agreements and, consequently, still protect American manufacturing as the FSC/ETI has done over the last 25 to 30 years.

FSC/ETI reduces the income tax on goods manufactured in the U.S. and sold overseas. FSC/ETI is critical to the manufacturing sector. It can reduce taxes on exports by as much as 3 to 8 tax rate percentage points.

The nonpartisan Joint Committee on Taxation says that 89 percent of the Foreign Sales Corporation benefits go to manufacturing companies. Many of those companies are the largest manufacturing employers in the Nation. This reduced rate of tax on exports of U.S.-manufactured goods keeps our companies competitive in the international marketplace. It allows our companies to compete with the European Union countries, which happen to have a taxing system where they get a rebate on their value-added tax on exports.

If we did not have the Foreign Sales Corporation, we would be exporting more of our taxes, making us uncompetitive with the European Community that has a different taxing system, value-added tax, that they do not export.

Several years ago, the European Union filed a claim with the World Trade Organization challenging FSC/ETI as an illegal export subsidy. Hence, we are here repealing such an important provision because under trading rules, according to the decision, we cannot have a subsidy if it is contingent upon the act of exporting. The World Trade Organization ruled that the FSC/ETI is an illegal export subsidy and has authorized the European Union to impose up to $4 billion a year of sanctions against U.S. exports.

The European Union has already started this because March 1, this year, was the date to do it. The sanctions start at 5 percent of the $4 billion, and they are going to increase 1 percent for each month if we do not repeal the FSC/ETI provisions. They are going to cap out at 17 percent. So by November, these sanctions will be 12 percent. How are we going to compete when the tax benefits that were supposed to level the playing field are not only used, but the European Union, in a legal way under our trade agreements, is levying sanctions. Just as the United States when the European Union lost a case on our beef--they did not take our beef--we leveled sanctions against European products that are coming into this country, all in a legal way but not necessarily in the best way to conduct international trade.

So eventually, these sanctions are going to get up to 17 percent, and at that point the European Union will review the effectiveness of the sanctions, and further increases are possible.

The European Union has been consistent in its message, that the FSC/ ETI must be repealed; the same way that we were insistent upon Europe and we won a case in the World Trade Organization that they take our beef.

This is a serious threat against American manufacturing, and Europe knows where to hit us. One of those is agricultural products, plus paper products, and also a number of important manufacturing industries, and they are hitting us right now in our soft underbelly.

These sanctions are going to undermine the economic recovery that is underway, as I indicated before--underway with 2 months in a row of a positive upturn in the manufacturing index. So I believe it is important for the United States to fulfill its obligations under our trading rules.

Now, it so happens that we win a lot more cases than we lose, and it also is true that the United States has been a leader--in fact, the entire world recognizes us as a leader, and they wait for us sometimes--in reducing trade barriers around the world. We have shown leadership for the last 60 or 70 years in this area going back to the reciprocity agreements of the 1930s of reducing trade barriers.

As we expect Europe to import our beef when we win a case, it seems to me that we must show leadership in complying with these rules. What the World Trade Organization is all about is to bring the rule of law to what would otherwise be a jungle of international trade. That is because we get more business activity when there is predictability and understanding of how we are going to do business. Just as that is true in our domestic policy for business expansion, it is true in international trade; if there is predictability, we will get more business expansion around the world.

Domestic law has made that possible within the United States. We need to support a regime that does the same thing in international trade because we have seen under that regime of rule of law in international trade for the last 50 or 60 years the expansion of the world economic pie.

We are not talking about something that is just good for the United States. It is good for the United States. But we are talking about something that is good for the entire world.

We have a growing world population. If you don't have a growing world economic pie, there will be less for more people and less for more people means political, economic, and social instability, and chaos.

So we have seen under this regime of rule of law in international trade that the world economic pie has grown tremendously, and to a great extent because of international trade.

The United States has led the way. We need to continue leading the way. There are some lobbyists who are suggesting this is no big deal, this doesn't have to be done now, it can be done tomorrow, it can be done next year, and somehow these sanctions don't mean anything. They do mean something because they are going to make our products uncompetitive and then we can't sell. If these were put on John Deere tractors in Waterloo, IA, one-fourth of the jobs could go.

One-fourth of the jobs at John Deere tractor in my home State are related to trade. But we do have to abide by the rule of law in international trade unless we want chaos, unless we want the jungle.

These lobbyists say sanctions don't matter. They argue: After all, sanctions only start at 5 percent. They would say: There has been a decline in the dollar. That is going to take care of that problem. With a decline in the dollar, add on 5 percent, no difference.

But I will bet these lobbyists who are spreading this word that Congress doesn't have to act don't represent anybody--any workers or any firms--on this retaliation list. But for those industries that I have already talked about, and there are a lot more, sanctions do matter because they will not be able to export if they can't compete. Five percent right now, and for sure 17 percent a year from now, is going to make a big difference.

In regard to the lower value of the dollar against the euro, that somehow merely restores the status quo of the 1990s for a lot of American companies so they can export more. The recent decline in the dollar helped these companies regain lost market share in Europe, and we have lobbyists saying they ought to be back in that position that they were in just a year ago, not being able to sell because of the high cost of the dollar?

Why would Congress want to deprive these companies and their employees, where these are good American jobs, of the opportunity to export? That is beyond me. These are good jobs, because

statistics show conclusively that jobs connected with exports pay 15 percent above the national average.

Besides, there is no guarantee that the value of the dollar will not go up tomorrow because our official policy is a strong dollar policy. Our official policy is also to let the marketplace decide the value of the dollar. But if it does go up, it is going to leave American exporters in even a worse situation than they are today with that 5 percent and next month 6 percent.

It is plain wrong for us in Congress, when we can do something about it--and this bill does something about it--to gamble the future of these American working men and women on the volatile international currency market.

There is another fancy suggestion from these high-paid lobbyists, that all we have to do is cut a Government check to these U.S. exporters that are hurt by the sanctions.

That suggestion is just as stupid as the previous one. First, it is likely that the World Trade Organization would find such a scheme to be a prohibited export subsidy anyway, just as they originally did. That would continue the cycle of noncompliance and retaliation.

These birds don't believe in the rule of law on international trade. They like the jungle of international trade. In fact, most lobbyists like a jungle because they are the ones who think they are smart enough to sort it out. We are not going to allow that jungle to grow just so lobbyists can prosper.

But this scheme, as the original suggestions, is unworkable. It would probably require a new government bureaucracy to administer. You know what. This JOBS bill is about creating manufacturing jobs, not jobs in a government bureaucracy.

It has also been suggested that the U.S. Government could simply pay compensation to some foreign government rather than comply with our international trade obligations. I suppose, in the era of foreign aid, you might say that suggestion is theoretically possible. But it is not very realistic.

Under the World Trade Organization dispute settlement system, there is only one way, just one way, a nation can bring itself into compliance with an adverse ruling, conforming with the WTO-inconsistent measure, and that is with a report adopted by the dispute settlement body. That would dictate that as long as FSC/ETI is not repealed, the United States remains in violation of these international trade commitments. So paying compensation to some government, in my reading of the obligations under the trade commitments, is not going to bring the United States into compliance.

Furthermore, it has to be remembered that compensation in lieu of retaliation is only a viable option if the prevailing parties agree.

I think that is something the European Union is not inclined to do.

Even if it were possible, I am not going to suggest on the Senate floor that the United States taxpayers ought to be writing a check to the country of France. I, for one, don't think Congress is going to buy these arguments that we don't have to deal with this now and there are other ways around. These proposals are shell games expounded by Washington lobbyists trying to confuse Congress, confuse the public, and thus avoiding a real permanent solution to a longstanding FSC/ETI dispute with the European Union. This is not realistic. They will not stop the imposition of European sanctions.

People suggesting these alternatives ought to face facts. Gambling America's exports on the volatile currency market won't work. Cutting government checks to U.S. exporters won't work. Transferring taxpayers' money to foreign governments such as France won't work. These are shell games. There is only one real solution for American workers. This is something that has been worked out in a bipartisan way for the Senate to consider by the Senator from Montana and this Senator. This is the JOBS Act that is before us, and the best solution is to pass the JOBS Act now. I hope my Senate colleagues and our counterparts in the House of Representatives will act on the Finance Committee's FSC/ETI legislation. It is all of our responsibility--Democrat and Republican alike--to pass this bipartisan legislation.

If we, as a body, fail to act, American workers will suffer with fewer jobs, and the United States will lose an opportunity to rejuvenate and remain globally competitive in the mainstay of its economy--the manufacturing sector of our economy.

Our majority leader, Senator Frist, should be commended for bringing this bill to the floor so that the Senate can act now to end sanctions before they seriously damage the economy and before they damage our transatlantic relations. The bill needs to be passed so we can end the sanctions as soon as possible.

Repealing FSC/ETI raises around $55 billion over 10 years. Eighty- nine percent of it comes from jobs in the manufacturing industry. If that money is not sent back to help the manufacturing sector to be competitive with Europe, FSC/ETI repeal will be a $50 billion tax increase on manufacturing. The old rule of economics is if you tax something more, you get less of it. So there is going to be less jobs in manufacturing.

I think we can all agree that a $50 billion tax increase on manufacturing will not stimulate job growth in that sector. That is why the JOBS bill passed by the Finance Committee uses every penny from the FSC/ETI bill repeal. To give this 3-percentage tax rate cut on all income derived from manufacturing--that is done in the United States-- there is no benefit to American companies manufacturing overseas. There would be a benefit to international companies that come here to create jobs in America in manufacturing. Our 3-point rate reduction is not export contingent under the World Trade Organization rules. Unlike the FSC/ETI regime, this 3-point rate reduction applies to goods manufactured in the United States and which are sold domestically in the United States, or if they are exported for sale outside the United States. If you make it here, we cut your taxes regardless of whether you are a U.S. or foreign corporation--bringing those manufacturing jobs, then, to the United States of America. The JOBS bill starts phasing in the 3-point percentage tax rate reduction immediately in 2004.

If you look at this next chart behind me, you see on average, European Union manufacturing income is taxed at 21 percent but U.S. manufacturing income is taxed at 24 percent. As you can see, the 3- point rate cut on manufacturing income in the JOBS bill keeps us even with the European Union on manufacturing tax burdens.

We included in the JOBS bill several international tax reforms that are aimed specifically to help manufacturing. The whole JOBS bill is slanted towards manufacturing. Flaws in our international tax rules seriously undermine America's ability to compete in the global marketplace. International tax reform, like doing something with FSC/ ETI, is long overdue.

Our current system is built upon a framework dating back to President Kennedy in the early 1960s. We clean up problems that cause foreign earnings to be double taxed by the United States and the foreign countries where those profits are earned. We reform subpart (f) to ensure that active foreign businesses are taxed when the money is brought home and not when the United States companies are locked in battle with foreign companies that do not pay taxes.

You will hear a lot of noise in the upcoming debate about these international provisions. But let me tell you right now that the international provisions in our bipartisan JOBS bill are targeted to benefit U.S. manufacturing companies. Members may be surprised to learn our international provisions can actually harm a company's expansion in the United States of America where we want companies to expand so that jobs are created here and so that those jobs are not exported. It is a simple thing to do. Just fix our tax laws so that jobs are created in America as opposed to overseas.

We will have plenty of opportunity to talk about that issue in the upcoming debate.

In an era of expanding global markets, in an era of falling trade barriers, and in an era of technological innovations that melt away traditional notions of national borders, it is critical that our international tax laws keep pace with these new business realities.

We also include a provision for manufacturing that is not making money

right now. We allow a 3-year net operating loss carryback. This will allow companies to reclaim prior taxes paid. This will give them cash liquidity to weather the current storm.

I understand there may be some effort to expand this 3-year carryback to a 5-year carryback.

The JOBS bill also includes the Homeland Reinvestment Act sponsored by Senator Smith of Oregon, Senator Ensign of Nevada, and Senator Boxer of California. That is a bipartisan group to which anybody ought to be drawn.

This subpart of our JOBS bill, which is sponsored by Senators Smith, Ensign, and Boxer, is intended to encourage companies to bring their foreign earnings back to the United States by temporarily providing the reduced rate of tax. This bill will tax foreign earnings at 5\1/4\ percentage points instead of the 35 percent that would normally apply.

Advocates of this Homeland Investment Act claim that those moneys will be invested overseas instead of the United States, if we don't tax them at a lower rate than the 35 percent.

These colleagues view this measure as I do, very much stimulative to the economy and helping with our unemployment problem.

One last point I will make is that our bipartisan manufacturing tax bill is revenue neutral. I don't think it does harm to emphasize, sometimes we pass a tax bill and less money comes into the Federal Treasury and we might have a bigger deficit. This bill does not do that. Not one dime is added to the current deficit.

Thank God, the President has been in the forefront of this, asking for a bill that would be revenue neutral. We have delivered for our colleagues who believe in revenue neutrality of tax bills. We have delivered for the President.

The JOBS bill provides over $112 billion in business tax relief which is paid for by shutting down tax shelters and by closing abusive loopholes. Let me emphasize that because people are reading about this every day in the newspaper, companies setting up shell corporations overseas, with nothing but a cabinet and maybe an address, a post office box, for the sole purpose of avoiding taxation. They dash and stash the cash, whereas we have all these other patriotic companies staying in America.

There are other schemes I will not go into, but we deal with those schemes in this legislation, bringing in additional revenue that can be used, then, to make our international taxing regime more fair and do it in a way that creates jobs in the United States of America, not overseas.

It is a fact of life with most bills that come to the Senate, there is never complete agreement on an approach. There is always 20 percent on the right and 20 percent on the left that might disagree with something that comes to this Senate. What this Senate is all about is moving things to the center, to get a consensus to get something passed. In the process, there is never complete agreement.

For instance, some Members did not favor including this Homeland Reinvestment Act which Senators Smith, Ensign, and Boxer have written. We have included it in this bill. So we may have votes on that.

Our bill contains a temporary haircut on the rate reduction some Members would like to remove and others would like to retain. We will probably have that divisive issue before the Senate. Some Members prefer a reduction in the top corporate rate in place of all these international tax reforms and manufacturing rate cut deductions. Now, that is a more simple approach than we have, but this approach misses a couple of factors.

First, the top level rate cut would only go to the biggest corporations of America. It would not go to the local family-held S corporation or partnership as our finance bill does. We think we ought to help small business in the process.

Second, FSC/ETI repeal will not create a large tax increase on the service industry. That repeal will be a $50 billion tax increase on manufacturing. If we redirect the FSC/ETI repeal money to an across- the-board corporate cut, as a couple of my colleagues will offer an amendment to do, then the manufacturing sector will be the revenue offset for the services sector of tax cuts. It is a fact that we have a struggling manufacturing sector and I don't think a sector of our economy that is slowly recovering ought to be hit with this sort of a revenue offset for the benefit of the service industry. We have to face what is the current crisis in manufacturing.

Working families are living in financial fear. We owe a secure future to these hard-working men and women. For them, we have a secure future. Their employers must be able to compete and thrive both at home and abroad. Then their future is secure. Their employers cannot thrive if these companies are burdened with excessive tax rates at home and international tax barriers abroad.

Our bipartisan JOBS bill presents the best opportunity to end that burden and to make a downpayment on putting Americans back to work. Let's hope the Senate gets to work, puts American manufacturing back in the game. That is why I am here, urging my colleagues to support a bipartisan JOBS Act and cooperate to get this bill on the President's desk.

In closing, I have one message for the 39 Democrats who are not on the Finance Committee and may not see this, other than just a piece of legislation voted out of the Senate Finance Committee. I say to the 39 Democrats who are not on the committee, they have an opportunity to help us very quickly move a bill to the other body, very quickly help us pass a bill to help manufacturing, help us pass a bill to create jobs for American men and women in manufacturing, which is slow to recover. They have an opportunity to help with bipartisanship in the other body because there are bills in the other body, but they are short of the number of votes they need. Part of the reason is maybe the other body does not see the need to pass a bipartisan bill as we do in the Senate. There are Republicans and Democrats in the other body who are working on a way to do this, a way that is not far removed from our legislation.

If we have a real strong vote over here and we get this done quickly, we might be able to help the House of Representatives pass some legislation and to do it in a bipartisan way. Helping to pass legislation in a bipartisan way is not a bad goal for Senators, since we practice that.

Also, those 39 Democrats will have an opportunity to help the Senate Finance Committee do something we want to do because we can get it done in this bipartisan way and it is not exactly the way the White House wants us to get it done. Here again, we share governing responsibilities with the President and with the House of Representatives, and so Democrats working with Senator Baucus and myself, Democrats who are not on the committee, can help get a bill to the President, help the President to see maybe the aspects about this bill they do not like, they ought to take a second look at to see the good work, and help get a bipartisan bill through the House of Representatives.

I don't say that in a defensive way because I don't know of any reason the other 39 Democrats do not want to help us accomplish what we want to accomplish. What I have just said is not for that purpose, but only said for the purpose of those Democrats who are not on this committee, there is a larger aspect than just the language of the legislation that is before the Senate. It benefits them for a lot of goals they want to accomplish that sometimes cannot be accomplished as a minority part of this body.

I suggest the absence of a quorum.

Madam President, I ask the following unanimous consent request. We have perfecting amendments that have been cleared on both sides. Therefore, I ask unanimous consent that the first-degree and second-degree perfecting amendments that are at the desk be considered and agreed to en bloc and that the motions to reconsider be laid upon the table; provided further that the committee substitute be agreed to and considered as original text for the purpose of further amendment. I further ask unanimous consent that the next first-degree amendments in order be the following: a Senator Hatch and Senator Murray amendment on R&D, with a Bingaman second-degree amendment which is relevant to the first degree; then Senator Dodd dealing with outsourcing; then Senator Bunning and Senator Stabenow dealing with accelerating manufacturers' tax cut; and then the fourth amendment will be Senator Daschle or his designee.

Madam President, I feel as if I owe that to the Senator from West Virginia because I already made arrangements for him to speak before we completed this agreement.

I suggest the absence of a quorum and that it come off of our time.

I move to reconsider the vote.

I will be glad to respond to that. Some Members on our side have not studied the amendment as much as they felt they should and have some questions about it. I would say there are two things. One is understanding completely the impact of your amendment, which obviously is a legitimate concern. The other is that kind of makes a determination whether some Members on our side would want to take some action, maybe with an amendment to the amendment. That decision has not been made. My guess is that decision is not going to be made today. That decision will be made tomorrow.

Maybe I am being more candid than a Republican ought to be, but that is the way it looks to me. You have always been transparent with me. I think I ought to be transparent with you.

Mr. President, I think maybe I answered too casually when I answered the Senator's question--that maybe I have a feeling there were not legitimate concerns by people on my side. There are a couple legitimate concerns. No. 1, the Senator's amendment does have some mandate on States. That creates a lot of concern--I will bet not only on my side but on his side as well. That is a very philosophical point of view of the impact which we make in the Senate on 50 States, and how many subdivisions I don't know. The other one is the extent to which this might lead to legitimate legal retaliation as a result of the Senator's amendment. That seems to me to be a reasonable, free, and fair trade consideration in any action this body takes.

I want to make clear that it is not strictly political. There are some concerns about his amendment. I enunciated at least two.

Madam President, first of all, the Senator from Connecticut has been right in the sense that we have raised some concerns, and we are working with him. He has made some modifications. We are still hearing about some more concerns. I have expressed two of those already. I would like to express another concern that I have heard.

Yes, it preserves jobs in America if there is not outsourcing of service jobs that are involved. But this is a legitimate concern on our side: The extent to which there might be retaliation by countries that outsource some things to the United States. That goes on as well. We want to make sure if we are losing jobs, we don't have a greater loss of jobs in retaliation for Americans who are already employed by a company outside the United States which is using the services of American people in America.

These are concerns that need to be addressed. These are things that will be brought out in debate, and it may be possible to work on continuing modifications of the Dodd amendment so that hopefully we can get it passed without a great deal of opposition.

At this point, we are not prepared to vote.

That is what my Blackberry said 5 minutes ago.

Mr. President, I come before this body to state that I would object to any unanimous consent or other requests to address H.R. 2751, S. 1522, entitled the GAO Human Capital Reform Act of 2003, as amended. The bill would, among other things, allow new authority to the General Accounting Office, GAO, to modify its personnel and workforce practices to allow greater flexibility in determining pay increases, pay retention rules, and other compensation matters. I am objecting to this bill because, at this time, I am evaluating a number of matters involving the operation and management of the General Accounting Office and one or more of its offices.

I support the amendments offered by my colleagues from North Dakota and Oklahoma. I was disappointed that, despite our best efforts, we were unable to clear the full text of the Conrad-Nickles amendment. But for an objection that was unrelated to the purpose of the Conrad-Nickles amendment, the highway bill would contain the full agreement between Senators Baucus, Nickles, Conrad, and me. I want to assure them that I fully intend to make good on the promise made in the committee markup. As the legislative process moves forward, I pledge that I will continue working to address their concerns.

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

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

Mr. President, I rise today to pay tribute to SPEC Joshua L. Knowles of Sheffield, IA who courageously gave his life for his country in Operation Iraqi Freedom. He is the 10th Iowan to be killed since the start of hostilities in Iraq. My deepest sympathy goes out to his parents, Sandy and Les, and his two sisters, Breanna and Michelle, as they deal with their loss. SPEC Joshua Knowles graduated from Sheffield-Chapin/Meservey-Thornton High School in 1999 where he played football. He enlisted in the Iowa National Guard 1133rd Transportation Company out of Mason City, IA, on February 18, 1999 and served as a motor transport operator. Specialist Knowles was killed on Thursday, February 5, 2004, when the cab of the military cargo truck he was riding in was hit by mortar fire as the convoy passed through Checkpoint 6 at the Baghdad International Airport. He was in the cab with fellow Iowan, SPEC Peter Bieber of Nora Springs, who was also injured in the attack. Specialist Knowles will be honored posthumously for his patriotic service to his country with the Purple Heart as well as the Bronze Star, which is awarded for members of the military who distinguish themselves ``by heroic or meritorious achievement or service while engaged in an action against an enemy of the United States''. In a press statement, Specialist Knowles' family recalled a shirt that he had sent them from Iraq. The shirt says, ``U.S. Soldiers Never Die, They Just Take Cover Until the Next Mission'' which they said exemplified his attitude toward military service. We can all be proud of this exceptional Iowan and I know he will be greatly missed by all those who knew him. In giving the ultimate sacrifice for his country, Specialist Knowles showed himself to be a true hero and patriot. I again want to express my sympathy for his family and my gratitude for his courageous service.

Mr. President, is my great honor and pleasure to be acquainted with Duane Halverson. In his 33-year career with Land O'Lakes, he has helped sustain agriculture, independent producers, and local economies through his dedication and commitment to rural America and the cooperative way of doing business.

Through his leadership, farmers across America now control a powerhouse supplier of agricultural inputs--feed, seed, crop nutrients, and protection products as well as state-of-the art technical advice and expertise.

Duane learned his love of agriculture and the people who work in it from growing up on a family farm near Eagle Grove, IA. Like most farm kids, Duane was active in 4-H and FFA. He earned a bushel full of ribbons from showing pigs and calves, and his 4-H projects focused on helping improve his dad's hog operation.

Through 4-H and school, Duane also began honing his leadership skills. He was elected president of the Webster County Boys' 4-H Clubs, and during his senior year at Eagle Grove High School he was chosen Mr. Future Business Executive of 1963 by the Future Business Leaders of America.

It was in High school that he met his future wife Mary Voigt. They now have two sons, Christian and Nicholas, and grandson, Jon.

After high school, he headed to Iowa State University where he earned his bachelor's and master's degrees in agricultural economics.

In 1970, Duane was hired by Land O'Lakes as a corporate planner. It was there where his illustrious career began. In 1978, he was named vice president of the petroleum division--the youngest vice president in the company's history. He rose through the ranks, heading up feed, seed, agronomy, international development and member services. By 1993, he was executive vice president and managing Land O'Lakes combined ag. services and dairy foods businesses. During his 5 years at the helm, total sales of Land O'Lakes doubled.

By the time he retired in December last year, Duane had helped build one of the most dynamic cooperative business systems in the world.

Duane has dedicated his life and his career to the agriculture industry. His legacy is a strong ag-supply cooperative system owned and controlled by those who do business with Land O'Lakes. Through his leadership, America will continue to be the bread basket of the world.

All of this is why it has been an honor for me to share his accomplishments today. We thank Duane Halverson. He deserves it.