Floor Statements

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, the order is what?

Mr. President, I use morning business as a forum to discuss some of the issues that are going to be coming up tonight and tomorrow morning before we vote on the tax bill conference, the jobs bill, the growth package--whatever you want to call it. I take my opportunity to speak to the conference report that was agreed to this afternoon.

There has been a great deal of hard work that has taken place in the last few days to bring the reconciliation conference agreement to completion. I thank all of my colleagues and the House for their hard work and their cooperation in meeting our goal of getting a jobs and growth bill to the President by this Memorial Day recess.

We all agree the economy needs a shot in the arm. Although our economy is growing, it is not growing fast enough to create jobs. The difference is it has been growing for about a year and a half at 2 percent, roughly. We do not create jobs at 2 percent even though the economy is growing. It takes growth of about 3 to 3.5 percent to create jobs. We believe this bill will bring about the proper growth.

Some estimates, some versions of the growth package, although not necessarily this compromise before the Senate, is that it will create 1.4 million new jobs. A major cause of the sluggish economy is the bursting of the stock market bubble created in the 1990s. This bill will address the ailing stock market. It will help create jobs. It will grow the economy. It will put money back into the hands of families, consumers, investors, and businesses that will help fuel our economic engines that create those jobs that we hope will be created from this legislation.

It is often said that various bills before the Congress might be historic in nature, and I don't want to overplay this one, but I do want to use the term about this being an historic agreement in this sense: It will amount to the third largest tax cut in history. President Bush should be highly praised for initiating two out of the last three largest tax relief packages passed by the Congress in that period of time.

The packages before the Senate abide by the budget agreement of the Senate side limiting the overall number to $350 billion. It includes the speeding up of all rate reductions, as well as the House's innovative version of the President's dividend proposal that will not only reduce dividend tax but also reduce the capital gains rate, as well.

Capital gains and dividends will be taxed when this bill becomes law at 15 percent and 5 percent depending upon the level of income. The 5 percent eventually will be phased down to reach zero level of taxation in the year 2008.

This happens to be the lowest level of capital gains tax since 1934. Dividends will also be taxed at historic lows, and those figures would be the same rates of taxation as apply to capital gains.

We also included in this package an expenditure of $20 billion in aid to States that was in the Senate bill, which I know my fellow Senate colleagues, including Senator Rockefeller, who was a conferee, will appreciate.

In addition, the bill includes further child tax credit and marriage penalty relief. Some may argue that we did not do enough regarding the two problems. This bill will greatly improve current law. If Senators vote for this measure, they are voting to put approximately an extra $1,000 in the pockets of a family of four if that family has two children. They are going to do this for the next couple of years compared to current law. That is going to be retroactive to January 1 of this year, and it would presume a rebate of $400 per child back to any family who reported children on their income tax. That check should be in the mail later this summer or very early in the fall. So a family with two children would get an $800 rebate check from the Federal Treasury later this year.

As chairman of the Finance Committee, I certainly intend to continue and enhance improvements in marriage penalty and child tax credit in the coming years. In other words, we should get to that goal of continuing

the $1,000 credit as permanent legislation, not as temporary legislation. We should resume our goal of eliminating the paper right now rather than down the road a few years when it is slated to be phased out.

I happen to be very disappointed about an aspect of the conference report I and a lot of other people from rural States worked on, to bring some equity in Medicare reimbursement to our respective rural States. My amendment had 86 votes in the Senate. We addressed the Medicare rural equity. This is what was not included in the final agreement.

Here is where the House comes from. They did not have a similar provision in their bill. They argued in the other body that this tax relief bill and the Medicare issues should be addressed in the Medicare legislation coming up for consideration in just 2 weeks. What I heard was this is a tax bill, not a Medicare bill, and why can't this wait an additional 2 weeks and take it up in an environment very closely related to the subject of Medicare reimbursement and not isolate it in a tax bill.

My answer to that is, I know this bill before the Senate will be signed by the President. I hope later on this summer or early fall we have a Medicare prescription drug bill for the President to sign. But, obviously, I am not as sure of that as I am of this bill going to the President. There are obviously a lot of things about the reimbursement of Medicare for our health care providers in rural America that are very unequal to that of urban areas.

On this very issue of Medicare rural equity, President Bush weighed in strongly supporting my efforts in the context of the Medicare bill, and this is a continuation of things that he spoke about at two or three different events over a period of months in Iowa just in the last year. It is a continuation of discussions I have had with the President on this very same subject during the month of December, last year, and the month of April, this year, when I had very private meetings with the President on the subject of Medicare.

Given the President's strong endorsement of my proposal, and the strong support in the Congress evidenced by the 86 votes in the Senate, and the fact we will be considering Medicare very soon, and also Chairman Thomas's willingness to consider these issues, I am encouraged we will succeed before the end of summer.

I ask unanimous consent to print a copy of the President's letter in the Record, wherein the President speaks about support for my efforts.

Mr. President, some are going to say during this debate on this reconciliation compromise tax relief for working men and women that we cannot afford to give money back to the American people. You get the impression from people who say that this is the Government's money and not the people's money. It is the people's money that comes to Washington. We spend it for them--a lot of times not as they would. But it is never the Government's money. No government creates wealth. Only working men and women, either through their labor or the use of their genius and using that in a productive manner, is what creates wealth in America.

It is not right to assume in this body or any other legislative body that the resources of the American people belong to Government and we let them keep some of their own resources to use as they want, but it all belongs to us. This attitude is that we in Government are smarter and know better than other people how to spend other people's money.

This bill before us underscores the President's, and the majority's, belief that this is the people's money first. The people will spend and invest their money in more productive ways than government ever will. This bill reinforces that philosophy. I commend the President for his leadership, his perseverance, and his ability to get things done.

I am still going to speak on the issue of the conference committee report before us, but I want to concentrate now for just a few minutes on the accuracy and intellectual honesty in the debate over our bipartisan tax relief package. This mostly would address who benefits and who does not benefit. Too many people on the other side of the aisle want you to believe this legislation only benefits the wealthy or high-income people of America. In fact, what this bill is about is not worrying just about income, but it is an effort through what we do on capital gains and what we do on dividend taxation to encourage the creation of wealth.

We are not starting from ground zero here in the creation of wealth. This was started by the people themselves over the last now maybe a couple of decades. Because just 20 years ago, maybe less than that, about 12 percent of the people in the country had money invested in the stock market or had pensions and 401(k)s that were dependent upon the stock market. Today that is about 55 percent of the people in the country. So there is an expansion of instruments leading to the creation of wealth. There is a broader range of people in the United States now, compared to 10 years ago, or let's say 20 years ago, who have an interest in the stock market. So I want to discuss the importance of the accuracy of the data in the debate over the bipartisan tax relief package before us.

In this and all tax policy debates, it is very important to have accurate data and to debate the issues in an intellectually honest manner. Involved is the key question of whether a tax relief package is fair. In evaluating fairness, we frequently look at whether a proposal retains or improves the progressivity of our tax system.

We have critics of President Bush's growth plan who attempt to use what we call distribution tables to show that a certain proposal--in this case President Bush's proposal--disproportionately benefits upper- income taxpayers. Let me say flat out this is factually inaccurate. But more importantly, it misses the point of this legislation for several reasons I want to present to my colleagues.

Make no bones about it, this is not a tax relief package for the sole purpose of just giving more money back to the taxpayers. It is for the purpose of doing that with the end result that it will lead to the creation of jobs and it will cause our economy to grow, which is necessary to create jobs. As such, the proposal attempts to promote investment incentives so that companies will purchase capital and labor. Although the package is balanced between consumption and investment, it is the investment-side incentive that will result in long-term economic growth.

What we are trying to do is enhance the capital-to-labor ratio. When there is a surplus of capital, that is when labor benefits. When there isn't capital to invest, there is a surplus of labor and consequently labor cannot advance up the economic ladder the way we want all Americans to be able to do. But when you bring in a surplus of capital that is invested, there is an increase in demand for labor. When there is an increase in the demand for labor, wages and benefits go up for working men and women. This bill is all about increasing--or at least a good part of it; some of it is oriented toward consumer spending, but a good part of this is oriented towards encouragement for capital and enhancing that capital-to-labor relationship.

Those who criticize this plan for benefiting wealthy taxpayers assume the rich stay rich and the poor stay poor through a lifetime. It is almost ``born rich, you are always rich; born poor, you are always poor.'' That is not

America. America is all about economic mobility, the dynamics of the free marketplace. That gives people opportunity to improve themselves and that is what America is all about.

Recent studies, including one produced by the National Center for Policy Analysis, indicate this is untrue, that the rich are always rich and the poor are always poor. The study measures income mobility by breaking same-age workers into five income levels and monitoring their movement between the income quintiles over a period of 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, earnings mobility has in fact increased. The study demonstrates that within a single 1-year timeframe, one-third of the workers in the bottom quintile moved up and, in fact, one-fourth of the workers in the top 20 percent of our population moved down. One- half of the remaining labor force changed quintiles within that year, and 60 percent of the workers are upward mobile within 10 years.

The University of Michigan study also concluded that taxpayers tend to move between income groups during their lifetime. It is quite obvious how much sense this makes. It makes a lot of sense.

Taxpayers are likely to be lower income earners early and late in life, but are likely to be higher income earners during their midpoints of life.

My colleagues, just think of your own lifetime starting out in your first job out of high school or your first job out of college. Hasn't there been a great deal of movement during your lifetime, both up and down? We hope most of it is up. But for some, it is down. What allows these people to escape the lowest-income quintile and start earning more money is a college education and acquiring necessary skills on the job.

Interestingly, anecdotal evidence shows that 80 percent of the individuals in the Forbe's 400 list were self-made as opposed to those who inherited fortunes. Again, this underlies the importance of taking advantage of educational opportunities. Education allowed these people to overcome differences in income, increase their chances to escape low-wage jobs, and determine the success of their future earnings.

These findings are backed by a third study produced by the Financial Services Roundtable by the same organization I have been quoting, the NCPA. This study confirms that there is substantial economic mobility between generations. Almost 60 percent of the sons whose parents' incomes were in the bottom 20 percent are in higher income groups. Thirty-one percent have incomes in the top 60 percent.

Therefore, whoever is saying that once rich, Americans always stay rich and once poor, they always stay poor are purely mistaken.

I welcome this data on this important matter for one simple reason. It sheds light on what America really is all about. We are a nation of vast opportunities. We are a nation of tremendous economic mobility by people from all over the world. Our country truly provides unique opportunities for everyone. These opportunities include better education, health care services, financial security but, most importantly, our country provides people with freedom to obtain necessary skills to climb the economic ladder and to 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, and this bill succeeds in doing that.

If I could, I would like to continue on an item that was in the Senate bill more specifically than I have spoken about the bill in the past. I want to speak about a provision that was, in fact, dropped in conference. It was very important to Zell Miller, the Senator from Georgia.

On a preliminary point, I express my appreciation to Senator Miller for his support of the President's package. It has not been easy for a person from the other side of the aisle to be so consistent in their support. But he has been a fearless man with the Marine courage and conviction that is in his background.

Senator Miller discussed a proposal regarding CEOs to sign a corporate tax return. This measure has been in the tax shelter curtailment proposal passed by the Senate Finance Committee. I support the proposal.

I share Senator Miller's commonsense view of this proposal. As does Senator Miller, I think CEOs ought to be accountable on their companies tax returns just as individuals are. Unfortunately, I was not able to secure Senator Miller's position in conference. I faced two barriers. One was a potential procedural problem. The other, the opposition of the House to any proposals that raised revenue.

Despite my effort, I was not able to deliver this provision back to the Senate for Senator Miller. But I would like to make clear to downtown lobbyists and to corporate America that Senator Miller and I will be back on this very important provision.

Chairman Thomas and his staff know the importance of this issue to Senator Miller and to me. I have let them know that we will be back at it in legislation that has passed the Senate called the CARE Act--that is a charitable giving act--or if we don't do it there, we will do it in other tax legislation this year.

At a later point in this debate, Senator Miller and I may engage in a colloquy on this very important subject to all of us; but very important for Senator Miller because of his instigation of it, the CEO signature provision.

I yield the floor.

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

Mr. President, I wish to take an opportunity just before we close down tonight to express some disappointment on my part that none of the specific small business and agricultural provisions survived the final conference agreement.

I truly believe there are many provisions in the final agreement that will be generally good for small business, but there are several specialty areas that continue to need tax relief in a special way to address the particular concerns of some industries.

Many of the items included in the original Senate bill are important to the bipartisan membership of the Senate. It previously passed the Finance Committee as well as the Senate. Again, I stress bipartisanship.

I plan to continue to work on a bipartisan basis with Senator Baucus, the ranking member of the committee, to assure that we are able to address the tax needs of S corporations, cooperatives, particularly farm cooperatives, small business excise tax problems, livestock drought relief through the tax efforts, and historic rehabilitation, just to name a few areas of concern.

As we finalize this growth package for the Senate's final vote and the President's signature, we will review the upcoming Finance Committee schedule and move forward with these important small business and agricultural provisions, all of which have bipartisan support.

Mr. President, in case I do not get an opportunity tomorrow--or who knows, maybe even forget it--I am reminded by the Senator's statement that even though we have disagreed on the substance of this legislation, the Senator from Montana, the ranking member of the committee, has very cooperatively helped us move this legislation along. We have entered into several agreements to help us get amendments out of the way. A couple of times when there were some political differences, he helped smooth my path to move this bill along. That is all within the tradition of the Senate Finance Committee, and I say it not only to bring attention to the cooperative effort of Senator Baucus and also of the committee but also to demonstrate to the people of the country who might be watching this debate on the Senate Finance Committee bill and feel, well, it is just all the Republicans on one side and all the Democrats on the other side, that we are always that way and very seldom is a product from the Senate Finance Committee not a bipartisan product.

I thank Senator Baucus for helping us move this bill along, even though he is not in agreement with the substance of the legislation.

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

Mr. President, today I am resubmitting a Senate resolution to amend the Standing Rules of the United States Senate to eliminate the practice of secret holds. I'm pleased that I am once again joined by my colleague, Senator Wyden, in this effort. Senator Wyden and I have been working together on this issue for some time and we have made some progress in bringing this issue to light and having it addressed. Still, the problem continues to reoccur and a permanent solution is needed.

I know many of my colleagues are well aware of the practice of placing an anonymous ``hold'' on a piece of legislation or a nomination. Some Senators have been victims of a secret hold placed on one of their bills and others may have used this practice.

Holds are not explicitly mentioned anywhere in the Senate Rules, but they derive from the rules and traditions of the Senate where a single Senator possesses a great deal of power to derail any matter. In order for the Senate to run smoothly, objections to unanimous consent agreements must be avoided. Essentially, a hold is a notice by a Senator to his or her party leader of an intention to object to bringing a bill or nomination to the floor for consideration. If the Majority Leader were to attempt to bring a matter up for consideration despite an objection, the Senate would be forced to consider the motion to proceed, which would be subject to a filibuster. Because this kind of delay would paralyze the working of the Senate, holds are usually honored as both a practical necessity and a senatorial courtesy.

A Senator might place a hold on a piece of legislation or a nomination because of legitimate concerns about an aspect of a bill or a nominee. However, there is no legitimate reason why a Senator placing a hold on a matter should remain anonymous.

I believe in the principle of open government. Lack of transparency in the public policy process leads to cynicism and distrust of public officials. I would maintain that the use of secret holds damages public confidence in the institution of the Senate.

It has been my policy to disclose in the Congressional Record any hold that I place on any matter in the Senate along with my reasons for doing so. I know Senator Wyden does the same. I have used holds in the past when I thought a matter was progressing too fast and more questions needed to be answered. However, I feel that my colleagues have a right to know that it was Grassley that placed the hold as well as why I did it.

As a practical matter, other members of the Senate need to be made aware of an individual senator's concerns. How else can those concerns be addressed? As a matter of principle, the American people need to be made aware of any action that prevents a matter from being considered by their elected senators.

Senator Wyden and I have worked twice to get a similar ban on secret holds included in legislation passed by the Senate. But, both times it was removed in conference.

Then, at the beginning of the 106th Congress, Senate Leaders Lott and Daschle circulated a letter informing senators of a new policy regarding the use of holds. The Lott/Daschle letter stated, `` . . . all members wishing to place a hold on any legislation or executive calendar business shall notify the sponsor of the legislation and the committee of jurisdiction of their concerns.''

This agreement was billed as marking the end of secret holds in the Senate. Unfortunately, this policy has not been followed consistently. Secret holds have continued to appear in the Senate. Last year, Senator Wyden and I decided that we needed to continue to pursue a permanent change in the Senate Rules to end this practice and we introduced a Senate resolution to do just that. We were later joined by Senators Lugar and Landrieu and I was glad to have their support. We are now submitting that same measure and I am encouraged that Rules Committee Chairman Lott has expressed interest in examining our legislation and the problem of secret holds.

The Grassley-Wyden resolution would add a section to the Senate Rules requiring that Senators make public any hold placed on a matter within two session days of notifying his or her party leadership. This change will lead to more open dialogue and more constructive debate in the Senate.

Ending secret holds will make the workings of the Senate more transparent. It will reduce secrecy and public cynicism along with it. Moreover, this reform will improve the institutional reputation of the Senate. I look forward to working with Chairman Lott and all my colleagues to address the problem of secret holds and hopefully make progress toward ending this distasteful practice once and for all.

Mr. President, on behalf of myself and Mr. Baucus, I ask unanimous consent the following statement be printed in the Record.

Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 556

Mr. President, this amendment is designed to kill the growth package. It would eliminate the acceleration of all individual income tax rate reductions, and it would eliminate the entire dividend exclusion.

What is also interesting about this amendment is that our colleagues on the other side of the aisle who are solely responsible----

Mr. President, the bottom line is that this tax on Social Security income is as high as it is because, in 1993, all except one Senator now serving on the other side of the aisle imposed a tax in the first place. I believe we should have an opportunity to repeal this tax. However, as my colleagues are aware, the revenue from this tax goes into the Medicare hospital fund without other changes in Medicare. Repealing this tax would bankrupt the Medicare trust fund. We should consider this in light of other Medicare legislation, and it ought to be done in the Finance Committee.

This language is not germane to the measure now before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

I move to reconsider the vote.

Mr. President, I don't care if anybody listens to me, but it would be nice if everybody would shut up so you don't have to go through that 10 times today.

Mr. President, I am pleased to work with Senator Baucus to strengthen criminal tax penalties. We have seen in Enron-type corporation scandals that there is no end to the cleverness of con artists in the corporate world. The con artists will even pay a little tax to cover up their deception. Then after the fraud, the corporation asks for its money back.

This amendment will ensure the corporate con artists pay full freight for their crime of duping shareholders and workers.

I yield the floor.

I move to reconsider the vote.

Mr. President, I appreciate Senator Baucus' efforts. We, in this bill, have tried to balance investment and spending incentives. This bill already provides $95 billion for children and the child tax credit. The bill includes acceleration of the credit for low- income families, whom Senator Baucus seeks to help.

In addition, I believe the market will benefit more from the proposal contained in the bill because of how we have approached it in a balanced effort. However, I do thank the Senator for his efforts.

I have to raise a point of order. The pending amendment offered by the Senator from Montana increases mandatory spending and, if adopted, would cause the underlying bill to exceed the committee's section 302(a) allocation. Therefore, I raise a point of order against the amendment pursuant to section 302(f) of the Congressional Budget Act of 1974.

I move to reconsider the vote.

Mr. President, as I said yesterday, we are willing to extend current unemployment benefits. We are willing to do it before the end of the week. In fact, yesterday I offered a unanimous consent request to accomplish this, and it was rejected on the other side.

We have Senator Murkowski standing by ready to offer a unanimous consent request to extend unemployment benefits. This amendment is overreaching. This amendment would go way beyond anything we have done on unemployment at a level of 6 percent right now. In fact, this makes it as high as when unemployment was at 8 percent. We are asked to deal with an amendment that goes way too far to score political points. That is why it should be rejected.

I raise the point on this amendment that the language is not germane to the measure before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. President, I move to reconsider the vote.

Mr. President, the Senator from Arkansas has done well in the last tax bill and this tax bill to help in the area of refundability, and I compliment her for that, but this amendment goes too far because it provides a new entitlement with regard to the child credit.

The bill already provides $95 billion for the child credit. That is the biggest part of this bill. It also includes acceleration of the child credit for low-income families, an issue of great importance to Senator Lincoln as well.

The bill has a balance between spending and investment. The amendment cuts back significantly on the investment part, the partial dividend exclusion. I appreciate the Senator's efforts, but this amendment would gut our jobs bill.

The pending amendment offered by the Senator from Arkansas increases mandatory spending and, if adopted, would cause the underlying bill to exceed the committee's section 302(a) allocations. Therefore, I make a point of order against the amendment pursuant to section 302(f) of the Congressional Budget Act of 1974.

I move to reconsider the vote.

The R&D tax credit doesn't expire until June 30, 2004. That is more than 1 year away. The President has included permanent extension of R&D in his fiscal year 2004 budget. I want the people to know I am committed to extending the credit in subsequent legislation.

However, we have before us the amendment by Senator Cantwell proposing striking the dividend exclusion in order to pay for the R&D extension. The exclusion for dividend income is a very significant piece of any jobs and growth plan--the President has it in his, obviously--even though in our bill it is scaled back some.

Finally, extension of this R&D credit is not germane to the jobs and growth bill. I therefore raise a point of order under section 305(b)(2) of the Congressional Budget Act of 1974.

Mr. President, I move to reconsider the vote.

Mr. President, the leader asked me to remind everybody that starting right now the 10-minute rule for voting is going to be enforced because these votes are taking so long and we have so many more votes to go.

I have made the announcement, and I yield the floor.

Amendment No. 587

Mr. President, I compliment Senator Jeffords for doing a lot of work in this area. I was able to work with him on the 2001 tax bill to accomplish lots of what he wanted to accomplish in the area of refundability. But what we have here is an example of going just a little bit further than we should. There is $95 billion in this bill for children.

In addition, we accelerate the refundable child credit for low-income families, the exact group Senator Jeffords seeks to help.

I note also that there are some problems with the earned-income tax credit. It has 30-percent improper payments, according to the Treasury. That is $10 billion a year of improper payments. The GAO lists this program on its high-risk list.

I think we are at a point where before we expand the earned-income tax credit we need to make sure it is reformed.

I haven't made a point of order yet, but I would like to make a point of order.

The pending amendment offered by the Senator from Vermont increases mandatory spending, if agreed to, and would cause the underlying bill to exceed the committee's section 302(a) allocations. Therefore, a point of order is raised against the amendment pursuant to section 302(f) of the Budget Act.

I move to reconsider the vote.

Mr. President, I ask unanimous consent to set aside the Burns amendment No. 593 and proceed to the next amendment, which is my own amendment No. 594.

Mr. President, I also ask unanimous consent to add the following people as cosponsors: Ms. Collins, Mr. Thomas, Mr. Baucus, Mr. Harkin, Mr. Bingaman, and Mr. Campbell.

Now I can speak for 1 minute on my amendment.

Mr. President, my amendment takes urgently needed steps to end Medicare's discrimination against rural States.

Doctors and hospitals in rural America provide some of the lowest cost, highest quality care in the country. Academics, researchers, and policy people know this, but Medicare does not know it.

This amendment changes that by fixing unfair payment formulas once and for all. Doctors, hospitals, home health agencies, and ambulances in rural communities can count on payment fairness from this day forward by adopting this amendment.

My fairness amendment is paid for by changes in other parts of the Medicare Program, and it is not offset by other parts of the tax provisions of this bill.

My amendment is a dose of commonsense medicine for Medicare in rural America.

One final word to cancer patients in Iowa and across the country regarding the AWP offset. I am going to work in conference and directly with the Secretary of HHS to ensure that seniors and their caregivers have adequate payment for, and continued access to, important cancer therapies.

Mr. President, I ask unanimous consent that Senator Stevens be added as a cosponsor to the amendment.

Mr. President, I ask for the yeas and nays.

Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 595 Withdrawn

Mr. President, I move to set aside the Burns amendment so we can go to the Harkin amendment.

Mr. President, Senator Collins is ready to speak on her amendment.

Mr. President, I rise in opposition to the amendment offered by the Senator from Washington. First, many priorities identified by Senator Murray have already been addressed in Senator Collins' amendment. Second, I consider $40 billion for this amendment to be fiscally irresponsible. I do appreciate the needs for State fiscal relief, and that is why I supported Senator Collins' amendment. Therefore, I urge my colleagues to vote against this very costly amendment.

The amendment offered by the Senator from Washington increases mandatory spending and, if adopted, would cause the underlying bill to exceed the committee's section 302(a) allocation. Therefore, I raise a point of order under section 302(f) of the Budget Act.

Mr. President, I oppose this amendment. I feel exactly about Medicare and prescription drug issues as the Senator from Michigan, but this is not the way to do it. This amendment reduces our jobs and growth package even before the Finance Committee takes up a comprehensive prescription drug benefit and Medicare improvement bill.

I hope everybody knows that I am very committed to reporting a $400 billion bill out of the Finance Committee, and doing it this summer, hopefully within the month. This will add a comprehensive prescription drug benefit for seniors.

The amendment before us jumps the gun. I am working in a bipartisan way on a prescription drug policy that fits within that $400 billion framework in our budget resolution. In fact, I have a 4 o'clock meeting today with Senators on that issue that, obviously, I am not going to be able to keep because of these rollcall votes. We need to keep the jobs and growth package complete.

Mr. President, I want to raise a point of order. This upsets the balance of our bill. This language is not germane to the measure before the Senate. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act.

Mr. President, I move to reconsider the vote.

I ask unanimous consent that the Warner amendment be set aside to take up another amendment, and then we will take up the Warner amendment next.

I move to reconsider the vote.

The Senator accurately stated what my intentions are, but let me say it for myself so the Senator knows I have said it.

First of all, I need to thank the Senator for his cooperation in working with us on this amendment so we can expedite the bill. Also, I make clear I am a strong supporter of the Senator's legislation and the expansion of it and would agree to make sure we get this done before the end of the calendar year, so that would involve extending it and expanding these teacher provisions.

This all deals--so everyone knows what we are talking about--with the extension of legislation passed within the last 2 years. It sunsets. We make these permanent, and there would be a significant increase in the above-the-line deduction for teachers.

Mr. President, I move to reconsider the vote.

Mr. President, the Senate is not in order.

Mr. President, the way to make sure the American people are not buying a pig in a poke is to get more money in the pockets of the taxpayers so that there is less money around here for 535 Members of Congress to play with.

I want to speak in regard to this amendment; that the complete substitute will cut back our efforts to reduce marginal rates for families and small businesses.

In addition, the bill will make millions of taxpayers subject to the alternative minimum tax.

I appreciate the Senator's efforts on the child tax, and we already have a $95 billion child tax credit.

We also have significant State aid in the bill.

We have a point of order, as we have had before on an amendment like this.

I raise that point of order--that the language is not germane to the measure now before the Senate. The point of order is under section 305(b)(2) of the Congressional Budget Act.

Mr. President, I move to reconsider the vote.

Mr. President, this amendment proposes to offer a 50- percent tax credit for employers of reservists to encourage differential pay.

This amendment does not benefit those who are self-employed and provides little benefit to small businesses with little equity.

In addition, nearly 80 percent of the cost of the military tax bill, which we have already passed in the Senate, is dedicated to reservists with the above-the-line deduction that was included because Senator DeWine pushed very hard for it.

The amendment is paid for by reducing the dividend exclusion which is essential to our growth package; in other words, to keep a well balanced growth package.

So the amendment I see as an attack on the jobs and growth bill, and I ask that it not be adopted.

Mr. President, I raise a point of order on germaneness, that the amendment is not germane. The point of order comes under section 305(b)(2) of the Congressional Budget Act.

I urge we now adopt the amendment by voice vote.

I move to reconsider the vote.

Mr. President, in opposition to this amendment, first, ask people at the IRS. This would be very difficult to handle mechanically.

Regardless of that, repeating as I have often in opposition to other amendments along these same lines, we have $95 billion for children in the bill already. The amendment includes an acceleration for low-income families paid for by tax increases on small business owners. We need to balance incentives for spending and investments. We have a correct balance in this bill. This amendment breaks this balance.

There also would be a budget point of order, and I make that, that the amendment increases spending and if adopted would cause the underlying bill to exceed the committee section 302(a) allocations. Therefore, a point of order ought to rise against it pursuant to section 302(f).

Mr. President, I move to reconsider the vote.

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, for our leader, I ask unanimous consent that the next amendments in order be the following in the order mentioned: Senator Daschle, substitute; Senator Nickles, on the subject of dividends; Senator Reid; then Senator Breaux, and Senator Breaux's deals with section 911; Senator Santorum, dealing with annuities; Senator Bingaman, small business pensions; Senator Mikulski, caregivers; Senator Sessions, sunset tax increase provisions; and Senator Dayton, a substitute.

I further ask unanimous consent that there be 2 minutes equally divided prior to the vote in relationship to the amendments, that no amendments be in order to the amendments prior to the vote, and, finally, that this sequence of votes be limited to 10 minutes each.

Mr. President, 1 minute does not give justice to saying what is wrong with this amendment, so I will just give two or three points.

First, in regard to the marriage penalty relief, it provides for acceleration of the standard deduction of married couples but doesn't do anything regarding the expansion of the 15-percent individual income tax bracket. And that is a major part of marriage penalty relief. It doesn't help hard-working, middle-class families the way it should.

Second, in regard to the child tax credit, this proposal only increases the child tax credit to $700 in 2003 and $800 in 2004. The mark accelerates it to the full $1,000 in 2003.

Again, for real relief for working families, the wage credit is a key component of this proposal.

This would send $300 checks to anyone, regardless of whether they paid any income tax, and even if they didn't file an income tax return.

There is a point of order on this amendment. I raise that point of order: That it increases mandatory spending and, if agreed to, it would cause the underlying bill to exceed the committee's section 302(a) allocation. Therefore, a point of order lies against the amendment pursuant to 302(f) of the Congressional Budget Act.

Mr. President, once again, we have a substitute that would basically eliminate all the growth we have in our growth package. We have a well-balanced package before us between short-term investment, long-term investment, between consumer spending and investment.

This amendment is not about investment; it is all about spending.

I hope we will defeat the amendment. This language happens to not be germane to the measure now before us. Therefore, I raise a point of order under section 305(b)(2) of the Congressional Budget Act.

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

Mr. President, once again, albeit good intentions on the part of people offering these amendments, what they are doing in the process of offering their very favorable new program--one on which I have legislation, in fact--they are destroying the growth in our growth package by taking money from the growth portions and the investment portions of our bill to do other good things.

Right now, we are concerned about the economy. We have a balanced bill and want to keep it balanced. We don't want to destroy portions of our bill to create a new program. However, the Senator knows I am very interested in long-term care, and I hope she will work with me and the Senator from Florida, Mr. Graham, in the hopes that she can join us in advancing long-term care insurance for senior citizens but doing it in a context that doesn't destroy other very important pieces of legislation.

This language is not germane to the measure before us. Therefore, I raise a point of order under section 305(b)(2) of the Budget Act.

I move to reconsider the vote.

I move to reconsider the vote.

Mr. President, let us set the record straight. This is not a tax increase. This is a loophole closure for people who live overseas. Taxpayer dollars should, in fact, not be subsidizing an employer's cost of sending an employee overseas. This subsidy equals $98,000 of taxes for each employee each year. Repeal will not cause people to be double taxed because of the fact that the foreign tax credit can be used against American taxes owed. A vote for the Breaux amendment will in fact gut the dividend exclusion we just passed.

The bottom line is, let us weight the advantage of the dividend exclusion of the 234 million people who will benefit from that against only 358,000 people who benefit from section 911.

I think it is pretty clear that this amendment should be defeated. It will destroy the well-balanced provisions we put together between investment and consumer spending, a well-balanced bill between helping investment and helping people of lower income with the refundables that are in the bill.

I yield the floor.

Mr. President, we support the amendment and urge its adoption.

Mr. President, I hope the Senator from Pennsylvania will withdraw his amendment. I have had a lot of discussion with him tonight on it. He makes a very strong case about something which I have not studied, nor am I convinced he is wrong. But based upon how I approach bankruptcy--that is, I see bankruptcy as an impartial person, a judge making a decision on whether a business ought to continue or go out of business or how it ought to be restructured--we are talking about tax legislation that has been on the books for an awfully long time.

But we are also aware, as the Senator has told me, of crafty people giving advice to corporations on how they can maybe restructure and become strong and avoid taxation such that other corporate entities that are competitors maybe would have a disadvantage. But I am not convinced of it. I would probably have to fight the amendment if it were offered tonight.

I can promise the Senator, first of all, we will go into depth on this matter with Treasury, with my own Finance Committee staff, and with the Joint Committee on Taxation staff, and it probably will lead to a hearing. I hate to promise with the workload of the committee on taxes, on welfare, and on prescription drugs this summer that we are going be able to have a hearing tomorrow. But I will give very serious consideration to the very strong position that the Senator from Pennsylvania has made.

The Senator is a member of my committee. He is a strong advocate for his position. I don't think it is going to get lost in the dust. I will do what I can to keep it paramount in my mind because I want to make sure we don't have crafty people advising people who are in bankruptcy any more than we have crafty people advising about corporate tax shelters who are not in bankruptcy. We will look into it with the same vigor that I pursued other corporate tax shelters and as I pursued other inversions and other attempts of corporations to avoid taxation.

Amendment No. 648 Withdrawn

Mr. President, I move to reconsider the vote.

Mr. President, I appreciate very much what Senator Kerry has stated to us. I want everybody to know that I share their concerns. I think I expressed and shared that in legislation on which I joined with Senator Baucus last fall, not reintroduced this year. But Senator Baucus and I reflected on this and accommodated this as one of many factors in a Medicare bill that we put together. The disproportionate share program, of course, is a primary source of support for safety net hospitals which serve vulnerable patients. I agree that the safety net hospitals are also under considerable financial strain and that the disproportionate share hospital cuts now in effect make it even harder. That has been compounded by a weaker economy. The number of uninsured has gone up.

Nationally, the 2003 disproportionate share hospital cliff represents an estimated reduction of $1.1 billion to total State allotments for fiscal year 2002 to 2003. I supported fixing this in the past, as I have stated.

In June, we will in fact be considering Medicare prescription drug legislation. I think it is very appropriate to deal with that at that particular time. I am committed to working with my colleagues on this important issue in the context of our work on the Medicare prescription drug bill.

Mr. President, is it in order to continue now on the growth package?

Mr. President, I have a series of amendments that both sides have cleared. I send the amendments to the desk, ask that they be considered, as modified, ask that they be agreed to en bloc, and that the motion to reconsider be laid upon the table.

Mr. President, I ask unanimous consent to add Senator Murkowski as a cosponsor to amendment No. 594 on rural equity, and amendment number 596, the Collins amendment.

Mr. President, I thank my colleague from Pennsylvania for raising this issue. He is correct that my staff has been working with these organizations to obtain a fuller understanding of their transaction. We have learned that there is widespread abuse involving donations of patents and similar property. We made this provision effective May 7, 2003, so that abusive donations could not be rushed to completion if a later effective date was chosen.

We will continue our discussion with these organizations, and will objectively consider their concerns and whether further clarifications are appropriate as the bill moves to conference.

I appreciate the concern of the Senator from Alabama with respect to Section 333. It was not the Committee's intent to prohibit deductions for amounts paid by companies as a condition to their operation in a regulated industry.

The Senator from Maryland is correct. The Committee addressed this issue in its publication entitled: ``Technical Explanation of Provisions Approved by the Committee on May 8, 2003.'' Footnote 164 of this publication states:

The bill does not affect amounts paid or incurred in

performing routine audits or reviews such as annual audits

that are required of all organizations or individuals in a

similar business sector, or profession, as a requirement for

being allowed to conduct business. However, if the government

or regulator raised an issue of compliance and a payment is

required in settlement of such issue, the bill would affect

that payment.

It is my intention to amend and clarify Section 333 in the conference report in order to reflect the Senators' comments and to carve-out certain fees and expenses paid by companies operating in highly-regulated industries.

That is correct. The Senator from Oregon refers to a common form of financing transportation and other equipment that involves the production of numerous units, all subject to a common lease. We refer to this form of financing as ``syndication''.

I can assure the Senator from Oregon that I support the effort to clarify this situation in conference and ensure that the 2002 bonus depreciation provision is available to purchasers of equipment pursuant to this method of financing multi-unit sales of heavy equipment. I thank the Senator for bringing this inadvertent error in the original 2002 Act to my attention.

I appreciate the Senator from Oregon providing me with this information. This is a serious oversight in the original language and I will work closely with the Senator to ensure that this is corrected in conference with the House.

I am happy to confirm the understanding of the distinguished Senator from Louisiana. The provision was adopted to provide needed clarifications in order to eliminate the uncertainties that have arisen regarding the proper application of the income forecast method. I believe the disputes that have arisen regarding the mechanics of the income forecast formula are extremely unproductive and an inefficient use of both taxpayer and limited tax administration resources. By adopting these clarifications, I believe the committee intended to end any disputes and prevent any further waste of both taxpayer and Government resources in resolving these disputes. Any existing disputes should be resolved expeditiously in a manner consistent with the clarifications included in the bill.

I would echo the comments of my colleague from Oklahoma. I, too, will do all that I can in conference to ensure that States revenues are not reduced by any dividends provisions that are included in the final product.

If the Senator will yield, I would say to my distinguished colleague from Nevada that I share his concerns and that it may not properly reflect congressional intent for the IRS to separate an integrated hotel, restaurant, and casino business into different pieces subject to different depreciation treatment. Equipment, furniture, and similar personal property used in a such a business should be depreciable in accordance with the current law treatment of the hotel industry and the retail industry generally. I will be happy to work with the Senator to provide appropriate clarification for depreciation of assets used for gaming in the hospitality industry.

amendment no. 545

Mr. President. I commend my colleagues for their work on this important amendment, which injects much needed flexibility and funding for safety net hospitals that treat especially vulnerable populations. This amendment alleviates pressure on those hospitals and allows ``extremely low-DSH States'' to increase Medicaid DSH allotments to 3 percent in Fiscal Year 2004. Currently, Federal law restricts Medicaid DSH allotments to ``extremely low-DSH States'' to only 1 percent of Medicaid Program costs.

I thank Senators Bingaman and Domenici for their work and for their dogged commitment to the cause. I have supported low DSH improvement legislation in the past, and I am thankful for their leadership on this important issue this year.

Mr. President, it has come to my attention that certain provisions of S. 1054 have engendered concern in the equipment leasing industry. I recognize that assets used by vital American industries are often lease-financed. It is not the intention of the Senate or Committee on Finance to impede legitimate leasing transactions. I wish to assure the markets that in any final legislation, the tax incentives utilized in leases that are considered appropriate under current law will be maintained.

I move to reconsider the vote.

Mr. President, I ask unanimous consent that the order with respect to S. 1054 be modified to allow for the following conferees: Senators Grassley, Hatch, Nickles, Lott, Baucus, Rockefeller, and Breaux.

Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to conduct a hearing during the session of the Senate on Thursday May 15, 2003. The purpose of this hearing will be to review the nominations of Glenn Klippenstein, Julia Bartling, and Lowell Junkins to be a member of the Board of Directors of the Federal Agricultural Mortgage Corporation.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, May 15, 2003, at 5 p.m., in closed session to receive a briefing by the General Counsel of the Air Force, Ms. Mary L. Walker, on the results of the inquiry into reports of sexual assaults at the U.S. Air Force Academy.

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to conduct a business meeting on Thursday, May 15 at 9:30 to consider the following:

A bill to provide for the security of commercial nuclear power plants and facilities designated by the Nuclear Regulatory Commission.

A bill to amend the Federal Water Pollution Control Act to enhance the security of wastewater treatment works.

S. 994, Chemical Security Bill, a bill to protect human health and the environment from the release of hazardous substances by acts of terrorism.

Mr. President, I ask unanimous consent that the Committee on Governmental Affairs be authorized to meet on Thursday, May 15, 2003 at 9:30 a.m. for a hearing entitled ``Investing in Homeland Security: Challenges Facing State and Local Governments.''

Mr. President, I ask unanimous consent that the Committee on Governmental Affairs be authorized to meet on Thursday, May 15, 2003 at 2 p.m. for a nomination hearing to consider the nominations of Susanne T. Marshall to be Chairman of the Merit Systems Protection Board, Neil McPhie to be a Member of the Merit Systems Protection Board and Terrence A. Duffy to be a member of the Federal Retirement Thrift Investment Board.

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Thursday, May 15, 2003 at 10 a.m. in Room 485 of the Russell Senate Office Building to conduct a hearing on S. 575, a bill to amend the Native American Languages Act to provide for the support of Native American language survival schools, and for other purposes.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, May 15, 2003, at 10:00 a.m.

I. Nominations: Michael Chertoff to be U.S. Circuit Judge for the Third Circuit; David G. Campbell to be U.S. District Judge for the District of Arizona; L. Scott Coogler to be U.S. District Judge for the Northern District of Alabama; and Mark Moki Hanohano to be U.S. Marshal for the District of Hawaii.

II. Bills: S. 878, A bill to authorize an additional permanent judgeship in the District of Idaho and S. 1023, A bill to increase the annual salaries of justices and judges of the United States.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, May 15, 2003 at 2:30 p.m. to hold a closed hearing.

Mr. President, I ask unanimous consent that the Subcommittee on Oceans, Fisheries and Coast Guard be authorized to meet on Thursday, May 15, 2003, at 2:30 p.m. on Marine Mammal Protection Act in SR-253.

Mr. President, I yield to our majority leader whatever time he might consume.

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

Mr. President, we are in a position where there is a lot of anxiety about the economy. That anxiety probably started back in March of 2000, when we first saw a downturn in the manufacturing index, and the manufacturing index has been in a downturn for 33 months, at least as far as it relates to employment.

There is anxiety that the economy might go back to mid-2000 and later in 2000 when Nasdaq lost half its value. Then September 11 happened. There is anxiety about the war on terrorism, reinforced by the murder of Americans in Saudi Arabia yesterday. There is anxiety about the economy because of the war in Iraq and the war in Afghanistan. As far as war and foreign relations are concerned, there is not a lot we in Congress can do about it because people expect us to fight a war against terrorists. They expect us to make sure that bases for terrorism training against American citizens are not maintained by protection of foreign countries, such as Afghanistan.

Americans expect us to not allow a nation such as Iraq, where there has been a great deal of evidence of the existence of weapons of mass destruction that could be used against American citizens, to continue to exist, or a nation such as Iraq that supports terrorist organizations such as Hezbollah or Hamas, to create greater turmoil in the Middle East, threatening the oil supply coming to the United States which will affect our economy. There is not much we can do about that, but the American people expect us to do what we can.

Also, there are some actions we can take domestically that deal with the anxiety about the economy, whether it

is related to the downturn of the domestic economy or whether that downturn is related to our international relations, our international responsibilities, or the protection of American citizens.

What we are doing today is responding, as best we can, through the tax policy of our country, to the anxiety about the economy. We have had the good fortune of a President with vision, with ideas to stimulate the recovery and, in the process of this legislation, as economists will tell us, create more than 1 million new jobs through changes in tax policy.

We are responding to the issues that are on the minds of Americans, and those issues are the need to create jobs and bringing robust growth to the economy.

I have the good fortune of serving in the Senate at the same time we have a President who has a tax policy that tries to accomplish what I have been working for in the Senate as a member of the Finance Committee for a much longer period of time than President Bush has been President of the United States.

As chairman of the Senate Finance Committee, that good fortune gives me the opportunity to work for my goals simultaneously with the goals the President seeks. Many times being a member of the Senate Finance Committee--I was not chairman at that particular time--I found myself trying to fight what I thought were bad ideas put forth by Presidents of the United States on tax policy. Today I have the good fortune of trying to accomplish for President Bush good things for our economy along the lines that I have tried to accomplish over a long period of time. Not often do Senators have that opportunity.

On the other hand, we faced a challenge in meeting the President's goals. As many of my colleagues know, several weeks ago the Senate agreed upon the size of the reconciled tax relief cuts for jobs and for growth. I join many of my colleagues in wishing the reconciliation amount had been larger, and I believe we have put together a good proposal, given the limitation we face of the realities of compromising on the budget which we adopted 1 month ago.

I am pleased that the Finance Committee was able to report out legislation that received bipartisan support, although not as broadly bipartisan as I had hoped. While I wish the number of supporters from the other side of the aisle had been greater for final passage, I think the vote reflects broad bipartisan support for a significant majority of the provisions in this bill.

The vote also reflects a common goal: to see our economy strengthened by tax relief policies. At least three-fourths of this bill enjoys bipartisan support, for instance, with major parts of the income tax policy that is in this legislation, meaning personal income tax policy.

I believe the bill before us today is a balanced package of consumption and investment incentives that will provide short-term stimulus and provide the building blocks for meaningful future economic growth.

There is wide support for the provisions that accelerate the child tax credit, the marriage penalty relief, expansion of the 10-percent bracket, almost all of the marginal rates expanding small business expensing, and providing much needed alternative minimum tax relief.

These six provisions make up approximately $300 billion of the total package of economic growth proposals before the Senate and represent the three-fourths of the bill that I described that had broad bipartisan support. Unfortunately, from the statements by a few of my colleagues, one would never know about these items having broad bipartisan support.

I believe the American people sent us here to get the people's business done. Sadly, despite a bill that provides so much benefit to working families and will create over 1 million new jobs, there are many who put partisanship first and turn the other song on its head: accentuate the negative and eliminate the positive.

Let me try to counter the efforts to eliminate the positive by briefly taking Members through key provisions of the bill. I will emphasize first those that I can say categorically would have overwhelming support, meaning overwhelming bipartisan support, if they were voted upon separately.

With regard to the child tax credit, we immediately bring the child tax credit to $1,000 per year instead of waiting for that to be phased in over the rest of this decade. In addition, we also accelerate the refundable portion of the child credit.

In other words, we are going to speed up the giving of money to people who have not even paid income tax so that they benefit from our emphasis upon helping families with children.

Finally, we simplify the definition of a child for several different tax programs. I know it is not imaginable to the average taxpayer that somehow we would complicate the Tax Code by having half a dozen different definitions of the world ``child,'' but we do have. We simplified this by expanding who is eligible and making more families eligible for certain tax benefits. This is what that means: Over $75 billion that hard-working families will get to keep in their pockets. Thus, by far and away the biggest part of this bill is direct benefits that help middle and lower income families.

There is one more thing. Not only are hard-working families getting the biggest benefits, they are first in line to get the benefits of this bill because we include the President's proposal that would send checks--rebate checks, if you want to call them that--to those who receive the child credit in their 2002 tax year. The Treasury Department states that these checks will be sent out within 6 weeks of Congress approving this bill. So in just a few weeks, eligible families will receive a check from the Treasury of up to $400 per child.

Why $400 per child? Because presently the child credit is $600 and it would not reach $1,000 until later in this decade, gradually phased in. We make that $1,000 credit effective right now for the year 2004.

Now, there is another very popular change in this bill that a vast majority of this body believes should have been done a long time ago and was done in the year 2001 tax bill but phased in over this decade. What we do is provide marriage penalty relief of $51 billion in this package to de-emphasize the penalty for people being married, meaning they pay a higher tax bill than people who would have the same incomes not being married. So these people will not be penalized for being married and having both husband and wife working.

It also enhances tax relief for those families where one spouse decides to stay home and spend their time, rather than outside the family and the workforce, doing that work in the family, raising kids. As my wife reminds me, raising the family is one of the hardest and most important jobs, and that has been emphasized very effectively by the President of the United States.

So the marriage penalty would have been phased in over this decade, and now, retroactive to January 1, 2004, we are going to have the marriage penalty fully brought in under the 2001 tax bill policy.

There is another problem particularly for middle-income taxpayers, and that is how the alternative minimum tax is hitting an increasing number of American taxpayers. The bill before us actually ensures that fewer Americans will be subject to the alternative minimum tax through the year 2005, and we devote $49 billion in this bill to addressing the alternative minimum tax.

I want to be candid with the taxpayers of America and tell them that we are not doing in this bill, because of costs now, what we did in 1999 when, during the Clinton administration, the Senate and House sent to the President a bill abolishing the alternative minimum tax. That was vetoed by President Clinton. I am sure I am going to have Members on the other side of the aisle saying we are not doing enough for the alternative minimum tax. I hope they remember that when it was not as far down the road as it is now on covering more Americans being hit by the alternative minimum tax, this Congress had the foresight to do away with the alternative minimum tax and President Clinton vetoed it.

In this regard of how we handle the alternative minimum tax, we eliminate more people from being hit by the alternative minimum tax than we would have under the 2001 tax law.

In another area where we want to increase investment to create jobs, the bill provides for increasing expensing of depreciable investment by small

business. We increase that from a $25,000 a year write-off to a $75,000 a year write-off, to encourage expansion and investment by small business today and the new jobs that will result from that small business investment.

The acceleration of the expansion of the tax brackets at the 10 percent bracket benefits all taxpayers and will mean thousands of taxpayers no longer even owe Federal income tax. That 10 percent bracket relief reports $44 billion of revenue loss in this bill, meaning that people hit by the 10 percent bracket will pay $44 billion less in taxes. This is another one of the provisions in the 2001 tax bill that would have been phased in over the next decade that we are bringing back effective January 1, 2004, fully implemented.

The reduction of tax rates at all other levels--and this does reduce marginal tax rates back to January 1, 2004, rates that would have otherwise been reduced gradually over the rest of this decade, making those marginal tax rates fully effective this year. The reduction of the top rate amounts to less than 7 percent of the total cost of this package, although I fear that many speakers will have us think it is 93 percent from all the words spent on this matter.

The reduction of all tax rates will help the husband and wife who, after years of hard work, have finally achieved good paying jobs and now face the triple threat. That triple threat is the cost of paying for their children going to college, saving for their own retirement and, oddly enough, probably helping their own parents in retirement.

The reductions of rates as well as expensing will help small business owners, as in my own city of Dubuque, IA, and small business owners across the country. These small business folks are key to job creation. If they hire more workers, if they expand their businesses, we are all better off.

That brings me to the point of who most benefits from the reductions of rates as well as small business expensing: The people who are hired by the small business owner. What this bill is all about is the creation of jobs. Of all the people benefiting, it is going to be those who want to work and will have an opportunity to work because of the 1 million-plus jobs that will be created by this legislation. These new jobs and the people who will be in them do not show up on any of the charts that we will see. They do not show up on the benefit table. But it is those people and their families who benefit greatly from this bill.

This is jobs creation legislation. This is based on the presumption that if money is in the taxpayers' pockets and 110 million taxpayers in America decide how that money is going to be spent or invested, it will do more economic good, turn over the economy many more times, than if it comes through the Federal Treasury and 535 Members of Congress decide how it will be divided.

Do not buy into the argument: How can we afford a tax cut when the budget deficit is what it is. A lot of the same Members who are going to be bringing that issue forward are some of the same Members who offered amendments on the Budget Act or offered amendments on the appropriations bill in January to spend more money. A lot of the votes on the budget took money away from tax relief in the budget and spent it somewhere else. Anyone who is concerned about the budget deficit ought to have reduced taxes and put it against the bottom line, not spend it someplace else.

The conclusion can be drawn that a lot of Members expressing concern over the budget deficit are not really concerned about the budget deficit but want more tax money coming through the Federal budget, through the Federal Treasury, so 535 Members of Congress can spend the money rather than 110 million American taxpayers having it in their pockets.

I happen to believe how 535 Members of Congress spend the money is not going to respond to the dynamics of our free market system, compared to 110 million taxpayers making the decision of how that money is spent.

Much of the discussion I have spoken about, worry of the budget deficit, is going to be related to discussion regarding the top rate and whether or not we should reduce the top rate from 38.6 to 35. Remember, that was already legislated in 2001 but not going to be fully effective until the year 2006. We made a judgment that putting money into the pockets of people who will invest it and create jobs, particularly small business owners, is better to do now, starting January 1, 2004, rather than waiting until 2006.

For those listening, do not look exclusively at the number of taxpayers impacted by those rates. Such an analysis fails to tell a complete story about the efficacy and efficiency of lowering top rates and seems to focus instead on who gets what in a distributional sense, not the economic good that comes from the policy decisions.

In my opinion, the better way to think about it is to focus on: One, what most efficiently changes behavior of taxpayers; two, what provides incentives for the creation of jobs; and, three, what has the largest multiplier effect on the economy. And by ``multiplier effect,'' I mean what is going to be done with the money by the 110 million taxpayers who create jobs. That has to be one of two ways. Either they spend it and it enhances two-thirds of the economy related to consumer spending or it will be invested and, with investment, the creation of jobs.

We will hear a lot about distributional analysis of how this tax bill might affect certain classes of taxpayers. It also ignores the fact that successful businesses--in other words, profitable businesses that pay proportionately higher taxes and the highest marginal tax rates-- are the ones who will disproportionately add the most labor and capital. This is an important point to keep in mind.

Everyone knows most of my livelihood outside of Congress or even while I have been in Congress has been from farming. But throughout my lifetime I have had jobs with small business people in the Waterloo- Cedar Falls area of Iowa. I have had those jobs because I started out as a small farmer. If you are farming 80 acres, you cannot make a living so you moonlight someplace else to provide income to support your family. I had an opportunity to work at a little business called Universal Hoist. We made grain-moving equipment for farmers and grain elevators to buy. That business is still operating in Cedar Falls. I worked 10 years, from 1961 to 1971, as an assembly line worker at a company called Waterloo Register Company. We made furnace registers. I had the beautiful job of putting screw holes in those registers. Do that for 10 years and you have a lot of time to think about public policy, too, I guess. Regardless, that is what I did. That factory closed down in 1971. It no longer exists.

The point I make about higher income people, they provide jobs for people in my State. They probably provide a lot more jobs than the John Deeres and Maytags. These are outstanding businesses in my State and I do not denigrate their contribution to the economy. I had jobs because of small entrepreneurs investing and creating a job for me that I could not create for myself on an 80-acre farm. I created a part-time job on an 80-acre farm. Someone else invested money. These were middle-income taxpayers, as I knew them at that time. It takes people with money to create jobs.

Also, people who have money have not always been rich. And they are not always going to be rich. We have economic mobility studies that show that. One might get the opinion from debate on this bill--and I hope I am accurately anticipating because I have heard these debates before. One gets the idea from the debates on class warfare that somehow people who are poor in America are poor throughout their lifetime, and people who are rich are rich throughout their lifetime. People at the top levels have problems and they come down, and there is great mobility upwards in our society. I want people who discuss we are not doing enough for the poor or we are doing too much for the rich in America, I want these Members to understand the studies show as we divide our working people into quintiles of income, these studies show the people in the lowest quintile after 10 years have moved to the second, third, and fourth quintile, maybe some even up to the fifth quintile. But there is only 10 percent of the original 20 percent in the lower quintile after 10 years. That is 2 percent of our workforce.

There is great upward mobility. Those studies also show a lot of people

in the top quintile after 10 years are not in the top quintile. There is mobility downward.

What we are talking about in this legislation to create jobs, to give tax relief to American workers, is to give small business, and even large business, an incentive to create jobs in one of two ways: Either take the money and invest it and create jobs rather than spending it for you or for consumers to take their extra money and buy things and create consumer demand, in turn creating jobs.

It also has something to do with enhancing the capital-to-labor ratio. That is because when capital is more available, when there is a surplus of capital, that is when labor in America does its best because labor is going to be much more in demand when there is a surplus of capital. That is where labor is going to make its progress, with higher wages and more jobs being created. This bill will enhance the capital- to-labor ratio.

To further be definitive on what I have said as a philosophical statement with statements that are backed up by studies that have been made, we have, as far as cutting the marginal tax rate is concerned, studies suggesting that a 5 percentage point reduction in the top marginal tax rate would increase small business investment by as much as 10 percent. The Treasury has indicated that 80 percent of the benefits from the top rate acceleration go to small business.

I will digress for a minute to talk about something that troubles me about the debate on bringing down the top rate to 35 percent. Some folks, especially those who have acquired their wealth through professions, big business, or inheritance, are the ones most violently opposed to reducing the top rate. It makes you wonder why these people so oppose bringing down the tax burden on businesses that they probably do not even know about--small business.

I gave this some thought while I was out in the field helping to plant corn the other day. I asked myself, Could it be that they are envious? No, that doesn't make sense because these folks generally have more money than successful small business people.

I asked myself another question: Could it be they do not want others, maybe those looking to make the transition from modest success to very successful status, to make that transition that is possible given the economic mobility of our society? Could it be that they see high taxes as a way to bar others from moving up? Could it be that they believe high taxes are the necessary tool to block successful small business people? Could it be that these elitists want to block a class of people who move up because of hard work rather than by pedigree? Could it be that high taxes on small businesses is a way to sustain the status quo?

I hope that is not true, but it makes you wonder. I know in the heartland of America people do not resent or try to block success of those who acquire it through developing small businesses. In my State of Iowa, the opinion of a successful small business person is very important, if not more important, than that of a corporate CEO.

I was amused to read some press reports about how K Street lobbyists and the Fortune 500 have reservations about this Finance Committee bill before us. There were too many revenue raisers, too many loophole closers, too much to ask from big business.

I would like to ask a different question. Are we doing enough for small business and the people who want to hire them? I want to focus on that question. Small businesses, as I have indicated, are engines of growth for our economy. In the recent past, they have been the source of most newly created jobs. I also continue to believe it is important to ensure that small businesses do not operate at a competitive disadvantage vis-a-vis large corporations because they are forced to pay higher marginal income tax rates. Currently, successful small businesses incur a 10-percent rate penalty when compared to their big business counterparts. In other words, if you are not incorporated, you pay the higher marginal tax rate of 38 percent. There is a bias in favor of corporations away from small business, individual entrepreneurs, because of the 38-percent bracket on personal income versus the 35-percent bracket for the corporate tax rate.

Even common sense would tell you that does not make good economic sense. Why should you have a bias in the Tax Code against people who do not want to incorporate?

I want to leave that issue now and turn to the last major part of the bill, and that is the part of the bill that provides for a partial exclusion of dividend income from taxes. As my colleagues know, the President called for a complete end to this double taxation of dividends. He would even go further, as I would, and say that double taxation of anything is wrong, dividends or otherwise. I have to admit that our bill is not a bill that is an absolute victory against double taxation because the proposal as reported covers only 86 percent of dividend-receiving taxpayers and is a good step in the effort to eliminate economic distortion resulting from that tax policy framework. When in full effect, this policy would ensure that dividends would be subject to the top rate of 28 percent. All other ordinary income would be subject to a top rate of 35 percent. This means that dividend income would enjoy a significant preference over other forms of periodic investment income such as interest.

Let me note to my colleagues that we provide State fiscal relief in this bill. A lot of Senators, over a 2-year period of time, have talked to me about the necessity of doing this, both members of the Senate Finance Committee as well as people even in my own Republican caucus, and people who are not on the Senate committee. They have been indicating to me that they view State fiscal relief as a key component to an overall agreement on taxes and on growth.

To be perfectly candid, we have Members of this body, right or wrong, who are telling us if we don't have something in here for fiscal relief, this bill is not going to get 51 votes to pass. Like it or not, they have a great deal of leverage. So we are dealing with that and hopefully dealing with it in a responsible way, through programs where there has been a Federal/State partnership, such as Medicaid. There are some areas where there has not necessarily been a State/Federal partnership. These funds, under our agreement--and there will be an amendment that fleshes this out to a greater extent--could be used for education, health care, law enforcement, and essential Government services. I look forward to continuing to work with my colleagues on this important issue as we start filling in the details of that that will be part of an amendment offered later on.

I conclude by commenting briefly about the offsets that are in this bill.

Let me first note that there has been some surprise in the media about the fact that these are offsets. I respond by saying that if the media is somehow shocked that we would have offsets, they haven't been paying attention to a lot of tax bills which have been going through here. The fact is you are not going to get a tax bill through this body under what you call regular order unless there is unanimous consent to do it without a point of order. If there is a point of order, you have to have 60 votes, or you have to avoid a point of order, which is hard to do, by having offsets, meaning it would be revenue neutral.

As the President's own spokesperson stated, the President in his budget provided several billions of dollars in offsets--not necessarily the same ones we are using in this bill. In addition, my counterpart in the House has stated that he will look to offsets to pay for improvements in the international tax arena. Offsets are not new.

I will not discuss all the offsets at this point. But my colleagues should know that many of these offsets deal with the scandals we have seen recently at Enron and many other bad actors in corporate America.

That is not denigrating corporate America because the bad actors are a few compared to tens of thousands of legitimate, ethical, honest corporations in America.

It is my view that while we are trying to help shareholders with reductions in dividends, we should also be closing down the loopholes, the games and the gimmicks that executives have been playing. The shareholders and the workers--and many of the workers who also own shares--have been greatly

harmed by the actions of corrupt executives. This bill takes great strides in ending these loopholes.

Thus, shareholders benefit greatly from the dividend deductions as well as our efforts to end the fast and loose games being played in some corporate suites.

I haven't thanked Senator Baucus yet for his continued efforts to work with me despite our inability to find common ground on all the elements of this economic recovery package. Senator Baucus, ranking Democrat and former chairman of the committee, has worked very hard to help me move this bill along even though he could not vote for it in committee. That is particularly in the tradition of our committee. Rarely does a bill come to this floor where he and I are not on the same side of the fence. Yet there are going to be a lot more bills coming to the floor this year, as before, on which we are on the same side of the fence.

I look forward to continuing to work through our differences to produce legislation that will be helpful and getting things moving again as quickly and effectively as possible.

Amendment No. 555

Mr. President, I send an amendment to the desk.

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

Mr. President, I yield the floor.

Mr. President, the Senator from Alaska has asked for time to speak as in morning business for whatever time she needs. I will be glad to yield time to the Senator from Alaska.

Off our time, not extra time.

Let me explain why the distinguished Senator from Nevada is wrong. We are going to take it off the time on the bill, not extra time. This will come off the 7 hours we have on the bill.

I yield whatever time the Senator from Alaska may consume. I understand she is only going to take about 5 minutes.

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

I have enjoyed listening to this debate. It is just like being in another world. The reason I say that is, why do you think that we tax 85 percent of Social Security income for certain Americans in the higher income tax brackets--I would say even in the middle-income tax brackets--at 85 percent? That was done in 1993. Do the people who have just spoken forget that every one of them voted that increase, to have the Social Security income be taxed at 85 percent of that income that has to be reported? Every one of the people who have spoken are responsible for that level of income reporting of 85 percent being on the tax books. Why do they want to repeal what they are responsible for passing? During the debate on the tax bill, every one of the Democratic Senators now serving in the Senate, except for Senator Bingaman from New Mexico, voted to have this money taxed. Now they are trying to take it out.

On June 24, 1993, there was an amendment offered by Senator Lott to change the amendment which was in the Democrat tax increase bill at that time to not report 85 percent of Social Security income for taxation. The rollcall shows that the motion to table was agreed to 51 to 46. The 51 Members who voted at that particular time were the ones who were voting to keep the level of Social Security income that was taxed at 85 percent and which needed to be reported. Every Democrat still serving in the Senate voted to table Senator Lott's amendment. Every Republican voted not to table the Lott amendment, which meant that every Republican was voting against that. We had the support of Senator Bingaman--the only Democrat from whom we had support.

They wonder why I am amused? If they think it is so bad today, why didn't they think it was bad 10 years ago? And we wouldn't even be debating this issue. It looks to me as if they want to maybe detract from the mistakes of the past. I don't know.

But also, earlier this year, on an amendment by Senator Bunning to the Budget Act, the very same Members opposing this amendment voted against the very same amendment when Senator Bunning offered it. What has happened in the last month? Do they realize that maybe the vote at that time was wrong and they have to have cover? I don't know. But every one of the Members who are proposing this amendment or speaking for it voted just the opposite way on Senator Bunning's amendment. That amendment was defeated 48 to 51.

But there are bigger things to worry about than how people voted in the past. I want the public to understand that there is some game playing going on here. We are talking about serious business as well. We are talking about a jobs bill before the Senate to give tax relief to American working men and women so they can have more money in their pockets.

To get the cover that some people need for previous votes, they are going to take tax decreases away from middle-class Americans to pay for that. I will be a little more specific on that in just a minute.

I have to repeat something I said in my opening remarks. We just heard a speech on the debt situation which might be forthcoming if we grow the economy. Reducing taxes is one way to grow the economy and will not have the debt situation we found with the growth we had in the 1990s. We paid down the national debt $550 billion.

We hear about this debt situation. My friends on the other side of the aisle are worried about the debt. They said if we adopt the President's plan, we are going to have greater debt. If they are so concerned about the debt, why didn't they offer all of their amendments on the budget bill about a month ago? They wanted to take money away from the tax reduction aspect of the budget. It begins at the bottom line. They took money away from tax decreases and spent it someplace else. If they are concerned about the national debt, it seems to me-- and they believe that one more dollar coming into the Federal Treasury is going to reduce the national debt--they shouldn't have been offering amendments to spend it someplace else. But they are very consistent in doing that. Amendment after amendment after amendment took money away from the tax reduction figure in the budget, which this bill is a result of, and spent it someplace else.

Do you know why? I think there is a difference in philosophy between my party and the other party. That difference in philosophy is very basic to this debate going on today. I just think people ought to realize that this is not a Republican-Democrat fight, or some little cat fight over some little bill in the Senate.

There is the difference between one party that believes money in the pockets of 110 million taxpayers is going to do more economic good if the 110 million taxpayers spend it or invest it than if I, Senator Grassley, and 534 others here in DC are going to make that decision. We have to believe that if the money is in the pockets of 110 million taxpayers and they spend it or invest it, it is going to do more economic good. It is going to turn over more times in the economy. It will respond to the dynamics of our free market economy rather than a political decision being made about what to do with it.

Obviously, I believe people on the other side of the aisle have the attitude that we in Congress know better than they do how to spend the taxpayers' money. If we are going to have a tax reduction, that will mean less money for us to spend. But it ignores the economic good that comes from private sector investment and private sector spending as opposed to public sector spending.

I think there is very much an inconsistency here. What we are talking about is a $430 billion tax reduction package--net $350 billion. As we have been told, we have been led to believe that this is responsible for doubling the national debt. This tax package is only one-half of 1 percent of all the dollars that are going to be collected by the Federal Government under existing tax law over the next decade. That is going to be $24.7 trillion. Tell me things are so tight here in Washington, DC, that somehow one-half of 1 cent on the dollar left in the taxpayers' pockets is going to be responsible for doubling the national debt. No. What is going to be responsible for doubling the national debt--if it were to happen; I don't think it is going to happen--is not because the people of this country are undertaxed; it is because this Congress overspends.

There again I would remind the Senator from North Dakota, the distinguished ranking member of the Budget Committee, the President's plan does not follow the pattern of the last few years, where back to back we had 9-percent increases in domestic discretionary spending each of those years. But the President's program, plus the budget of this Congress, has domestic discretionary expenditures not at 9 percent but at 4 percent. Now, yes, that is an increase. That is an increase, but that is an increase that is sustainable over the long haul. Nine- percent budget increases are not sustainable.

We are in a situation where nothing around here surprises me anymore. The very people offering this amendment are the same ones who created this tax increase back in 1993. As I indicated, they even voted against repealing the tax just 2 months ago on the budget resolution.

I think this is an amendment that is trying to fool the American people. Just about every Member on the Republican side has vehemently opposed the Democrats' 1993 tax increase on Social Security. Except for Senator Bingaman, every Democrat in the Senate today voted for that back in 1993. Now they want to try to cover up their votes supporting this tax, and they want to do it by destroying the underlying jobs and growth bill.

This is how they destroy it: The Dorgan amendment strikes our efforts to reduce all marginal tax rates above 10 percent. The efforts to reduce marginal tax rates for the middle class are eliminated by this amendment. As a result, a single mom making $40,000 in taxable income will see no reduction in the tax on her small pay increase. A family with taxable income of $70,000 will see no reduction in their marginal tax rate.

The Dorgan amendment takes away our bill's tax cuts for middle-income Americans. The Senator from North Dakota says this isn't a tax increase. I would like to have you tell that to the single mom, who is one of the targets of this amendment, who, on her pay raise, will not see a reduction in her tax. A vote for this amendment is, in fact, a tax increase, no matter how the authors want to try to dress it up.

I yield the floor.

Mr. President, I ask how much time remains on the Dorgan amendment on both sides.

Forty-five minutes on my side?

I rise to address a couple of issues that have been presented before we go to other people who want to speak. This is on the Dorgan amendment. It might be in the form of asking rhetorical questions or what have you. But first of all, I want to say to my friend from Montana, the distinguished ranking member of this committee, that for this farmer to be called a lawyer, if he were not a good friend of mine, I would take offense.

Regardless, before us is this amendment that reduces the amount of Social Security income that must be reported for taxation. One of the issues I didn't mention in my debate against the amendment is the fact that all the money raised from this tax goes into the Medicare health insurance trust fund. We all know the Medicare Program is in much more serious condition than the Social Security Program.

The Medicare trust fund has a drop dead date of 2026. The Social Security trust fund has a drop dead date of 2042. None of those dates are anything that I am making light of, that they are so far off that we should not be concerned. We have to be very concerned. But people ought to understand that to the extent this amendment is adopted, it would take money out of the Medicare health insurance trust fund. And I don't think we ought to be doing anything to weaken the Medicare trust fund. I would rather refer to a point made by the two Senators from North Dakota, most often made by the sponsor of this amendment. I cannot help but ask both of these Senators who are trying to make an issue about this bill by saying that this bill will increase the debt. Somehow that just doesn't add up, when you consider the thrust of their amendment.

How does this amendment they have before us reduce the debt? The bottom line of the bill is exactly the same with or without the Dorgan amendment. In other words, it costs the same as the underlying bill. So, again, we have people speaking on three sides of a two-sided coin. Senator Dorgan's amendment will increase the debt, so I don't hear any more about increasing the debt on the part of the underlying bill, because with their amendment, we end up exactly in the same place.

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

Madam President, the arguments we hear for various amendments are very interesting. It is kind of like the other side is going in a circle. In regard to the amendment of the distinguished Senate minority whip, the Senator argues against the jobs bill because Social Security funds are used.

Well, let's compare that argument to the arguments Senator Dorgan was using. How does the Senator from Nevada think the Dorgan amendment he supports is paid for? As the Senator from Montana pointed out, general revenues will be used to cover the costs of the Dorgan amendment.

We are in a deficit situation. Everybody acknowledges that. So where does the Senator think these revenues will come from? They will raid the Social Security trust fund to pay for the Dorgan amendment.

Once again, it seems to me the other side is trying to be on three sides of a two-sided coin. Maybe if we keep this up long enough with their circular arguments they will be supporting the jobs bill when we finally get to final passage.

I yield the floor.

Madam President, I yield such time as he might consume to the Senator from Utah to either speak on the pending amendment or to speak on the bill.

I am prepared to do that. The answer is, yes, we will have a vote at 2 o'clock, but I don't want to propound the unanimous consent right now.

I could make the unanimous consent request and then raise a point of order later.

Madam President, I ask unanimous consent, notwithstanding the remaining debate time, it be in order for me to raise a point of order against the pending Reid amendment No. 560; provided further that Senator Reid then be recognized and ordered to move to waive. Finally, I ask consent that the vote in relationship to the amendment occur at 2 p.m.

Madam President, I yield such time as the Senator from Utah might consume.

I move to reconsider the vote.

Mr. President, an amendment will be offered tomorrow which Senator Breaux has already spoken in favor of. I wanted to speak in support of the language that is in the bill. I am speaking against the amendment which will be offered by Senator Breaux tomorrow.

The policy issue presented by repeal of section 911 is whether taxpayer dollars should be used to underwrite an employer's cost of sending employees overseas. Section 911 excludes from tax the first $80,000 of foreign wages and additional foreign housing costs that are paid for by the employer. Under normal tax rules, these amounts would be taxable. According to the latest IRS data, 358,000 taxpayers claim this exclusion, yet repeal of the exemption raises $35 billion.

The reason repeal raises so much is because many U.S. citizens living overseas don't pay tax to either the United States or even to the foreign country. The section 911 is skewed heavily towards upper-income taxpayers. The more a person owns, the more they can exclude free foreign housing.

Section 911 then is a subsidy to an employer for the costs of sending employees overseas. Section 911 only applies to private sector employees who move overseas of their own free will. It is not available to government or military employees stationed overseas who are obviously there through somebody's command and not by their own choice.

Most employers offer their overseas employees ``tax equalization'' packages which guarantee the employee will not pay more taxes working overseas than they would pay if they were working within the United States.

Section 911 reduces the amount of tax an employer has to reimburse under those agreements, making it then a help to the employer as much as to the employee.

Why does this make any sense? Obviously, I feel it makes sense or it

wouldn't be in this bill that I present to the Senate. If an employer sends an employee from Florida, which has no income taxes, to Massachusetts, which has very high income taxes, we do not provide such a subsidy.

Why do we subsidize moving employees overseas? I think sending employees overseas should be a business decision, not a tax decision. Repeal will not cause U.S. citizens to be double taxed. A U.S. citizen who earns income that is taxed by a foreign country is allowed to reduce their U.S. taxes for any foreign income taxes paid. A foreign tax credit is not allowed, however, for foreign property and gas taxes and levies for social programs sponsored by the governments of foreign countries.

We do not subsidize those taxes or those policies. Many claim U.S. exports are enhanced by sending U.S. personnel overseas. However, there is no basis for such a claim. Whether a U.S. company uses U.S. products in its foreign operations is a business decision of the U.S. employer. It is not determined by the nationality of the foreign manager.

It has come to our attention that certain nonprofits, charities, and religious organizations use section 911 to further their overseas activities. We plan to work with these organizations to exempt these activities.

Section 911 is a tax loophole that forces you and me, as well as every other taxpayer out there throughout the United States, to subsidize high-paid corporate employees and their companies. It is unfair, and the Congress needs to fix it, and the legislation before us fixes it.

The Breaux amendment, if agreed to, would take that fix out of this legislation. Everyone voting for the Breaux amendment will be voting for these tax benefits the rest of us are paying for.

So obviously, tomorrow, I urge the defeat of the Breaux amendment.

I yield the floor.

Madam President, I yield the Senator from Pennsylvania such time as he may consume.

Madam President, I am a cosponsor of the amendment by the Senator from Pennsylvania. I very much support this amendment. I do not think we have a hard time convincing the people of this country about the complicated aspects of the Tax Code and the need for something more simple to replace it. There seems to be an overwhelming consensus on the part of the American people about that point.

What we need a national dialog about--and I think this amendment encourages that dialog--as well as a study is what is going to take its place. Seventy percent of the people think the present Tax Code ought to be thrown out, partly because of how complicated it is and because it may be viewed as unfair. There does not seem to be that sort of consensus as to what takes its place.

For instance, I have had opportunities to see surveys where approximately 20 percent of the people want a national sales tax and 30 percent of the people want a flat rate income tax. Maybe Congress ought to show leadership and follow up on that 20 percent or 30 percent, but I do not think that is going to happen until we get some consensus among the American people that is in the 40-percent range of what ought to take the place of the present income tax mess.

The amendment before us is very useful from the standpoint of encouraging congressional committees to do the proper work, but I believe in the final analysis, to get the consensus that it is going to take to bring about a simplified tax system, replacing the present complicated system, is when it becomes part of the national debate between two candidates for President.

For instance, ideally, we have President Bush seeking reelection next year, and he would make an issue out of how complicated the Tax Code is and offer an alternative. Ideally, a flat rate income tax along the lines of what Mr. Forbes did a few years ago when he was running for the Republican nomination and made this type of reform a major plank of his campaign. Ideally, we would have a Democratic candidate who says the current progressive system, even though it is a mess, is what is best for the country. Then we will have a winner out of this that shows a clear division of keeping what we have, which I hope does not happen, or coming up with something new.

That mandate from an election will move the people and the people then will move the Congress. Being chairman of the Senate Finance Committee, I should not have to wait for that to happen, but it seems that we have so much work before us dealing with short-term issues that we do not spend time on the long-term policies, which this amendment encourages.

I thank the Senator from Pennsylvania for his amendment. I am going to obviously vote for it. I hope it is adopted overwhelmingly, but I hope it has an impact beyond what we in the Congress will be called upon to study. I hope it has an impact on the next Presidential election.

Madam President, we do not want this vote now. We want to have this vote later.

I suggest the absence of a quorum.

I yield myself such time as I might consume.

I find it necessary to explain what our legislation does because a lot of times there are explanations about it that are not very accurate. One of the impressions is our bill is not very well balanced. Our bill does, in fact, attempt to strike a good balance between consumption on one hand and investment on the other hand. We do this to provide incentives such that we can provide both short-term economic stimulus and the building blocks for meaningful future economic growth.

The refundable tax credit outlined in the amendment before the Senate, which I oppose, would be paid irrespective of whether a person had any income tax liability at all. If the person owes no tax, we are to view this proposal as effectively refunding payroll taxes. But we already have a provision that refunds payroll taxes. It is called the earned-income credit and the child tax credit. This proposal, the Baucus amendment, a refundable tax credit proposal, would be duplicative of the earned-income tax credit and the refundable child tax credit to refund payroll taxes for those with insufficient income to have tax liability with the result of encouraging people to work as opposed to receiving welfare or unemployment compensation.

In my estimation, such refundable credits do not provide incentives to work. They do not create jobs, and they do not stimulate the economy.

Providing incentives to work, creating actual jobs, and stimulating the economy are the purposes of the legislation from the Senate Finance Committee that I presented.

Job creation is a handup, not a handout. It is a handup to help people out of poverty. Refundable tax credits are handouts which may have just the opposite effect. We should ensure that we are providing building blocks for long-term growth and the economic stability that comes from that growth.

I appreciate Senator Baucus's support for our dividend proposal and his desire to accelerate into this year. However, acceleration means we subject more dividends to double taxation because the exclusion never reaches 20 percent. In other words, ours goes from 10 percent through the year 2007; 2008 to 2013, it is 20 percent, whereas his proposal always stays at 10 percent.

People invest in stock for long-term gain. We need to provide long- term tax relief. This bill contains a lot of short-term stimulus already.

I appreciate the points he has raised regarding the child credit. The largest item in this bill is the child credit, and that amounts to over $95 billion. It includes a simplification of definition that Senator Baucus has already mentioned. In addition, I note we expand the refundable portion of the child credit that targets help to the low- income families he seeks to assist with his amendment.

I appreciate his position. I believe our bill provides proper balance in encouraging the economy.

Finally, I note this amendment violates section 202, page 35 of the Budget Act, so I will be raising a point of order later on.

I yield the floor.

Madam President, I suggest the absence of a quorum.

Would the Senator from Massachusetts yield? I do not intend to object, but we have always been promised copies of amendments. I assume the Senator is going to offer an amendment.

Amendment No. 544

(Purpose: To provide for additional weeks of temporary extended

unemployment compensation, to provide for a program of temporary

enhanced regular unemployment compensation, and for other purposes)

I ask Senator Kennedy, would he speak without our consenting to the hour so we could look at the amendment for a while?

I thank the Senator.

Mr. President, we will extend unemployment compensation. We will support an extension, though, of current law. We will do it before its expiration at the end of May. But this amendment goes beyond extending unemployment compensation as it is written in current law.

This is unprecedented for sure, and I also think it is an unjustified expansion. There might be legitimate debate on that point, but there is no legitimate opposition to a statement that this is unprecedented.

Also, this extension and this change in law comes at a time when unemployment is not as high as it has been in previous recessions. The current unemployment rate is 6 percent. That is compared to 7 percent at times during the 1990s and more than 8 percent during the 1980s.

It was in the 1990s at 7 percent, in the 1980s at 8 percent. Those happen to be the last two times that Congress provided extended benefits.

I also point out the unemployment rate right now in 23 States is lower than it was 1 year ago. When it comes to people who have exhausted benefits, this amendment would provide 26 weeks of Federal benefits even without regard to the duration of State benefits. So this violates an insurance principle that we followed for a long time inherent in the unemployment program, and it violates it by breaking the link between the time someone has worked and the time that person can collect unemployment benefits.

This amendment additionally would also allow someone who worked as few as 20 weeks to collect as much as 26 weeks of federally-funded benefits.

This amendment also deals with part-time workers. In offering this amendment, what they forget at the Federal level is that we already give States the option of covering part-time workers. So why a national policy of covering part-time workers when this has been historically a State program that has been financed through some Federal taxation? There are a lot of details left to individual States to decide. It is not possible for us to legislate at the Federal level the conditions that exist in various States for deciding whether part-time workers should be included.

This provision would allow those seeking only part-time work to collect unemployment benefits. What this basically means is a worker could turn down a full-time job and continue collecting unemployment benefits.

There is a provision of this amendment that changes policy in regard to low-wage workers. This is another provision under Federal law where States already are given the option of doing this. This provision would require States to use what is referred to as an alternative base period. That means using the most recent quarter to calculate benefits.

In 1997, this was offered to the Senate and we voted 85 to 15 to overturn a Federal court decision that would have required the States to use the most recent quarter. In other words, Congress decided in 1997 against a court decision doing what this amendment does. We decided 85 to 15 to leave it to the respective States, as has historically been the case, to make this decision of using an alternative base period.

So as I mentioned, I will support, and I believe the Senate will pass, an extension of current law for unemployment benefits before it runs out.

This amendment is paid for in a way that discourages job creation. Remember, the fundamental purpose underlying this legislation is to give incentive for investment for the creation of jobs. So how is this amendment paid for? By attacking small businesses, by delaying the tax relief that is in this bill for 80 percent of those who are taxed at the 39 percent rate. Remember, we reduce the highest marginal tax rate down to the same as the highest corporate tax rate. Why? Because there should not be a bias in our tax law against small entrepreneurs, unincorporated entrepreneurs.

As we have been told so often by Joint Tax and by the White House, 80 percent of the benefits go to small business. Now, that does not mean all small business is taxed at the 39 percent level, but by reducing this we are taking away a bias against small business. There should not be an 11 percent penalty for being an unincorporated small business. It is unfair. When we had a lower marginal tax rate for small

business at 28 percent for the top individual rate, as we did after 1986 until it was raised, we had a 5 percent differential between the corporate rate of 33 percent and the highest individual rate of 28 percent. During that period of time, we had an explosion of small business, setting the stage for the massive growth we had in the economy in the 1990s.

What does this amendment do? It will kill the opportunity for job expansion that we have prepared in lowering the marginal tax rate for self-employed people, doing away with the bias in favor of corporations so that where 80 percent of the jobs are created in small business, there will be an incentive to create new jobs.

The National Bureau of Economic Research shows that the surest way of expanding small business is from their own equity, by reducing the marginal tax rates, which is going to encourage the sort of investment that creates jobs.

The Senators who have offered this amendment are complaining about lost jobs, but then this amendment undermines the very provisions of the basic bill that will create the jobs we need.

Obviously, I urge the defeat of this job-killing amendment.

I yield the floor.

I ask unanimous consent that immediately following action on S. 1054, the Senate turn to consideration of legislation introduced by the majority leader or his designee to extend emergency unemployment benefits until November 30, 2003; that the bill be considered as read three times and passed; further, that the motion to reconsider be laid upon the table, with all this to occur without intervening action or debate.

Mr. President, I will answer his question, if I am permitted.

Two reasons: One, this amendment is not germane to this bill; two, it goes to the expansion of unemployment benefits as opposed to extension of existing benefits.

Yes.

Mr. President, we all owe the Senator from Arkansas a debt of gratitude for a lot of leadership she has shown in this area, not only on the present bill that is before us, because she did get some amendments adopted in committee. She voted for our bill on final passage. I appreciate very much that being the case because it made it a bipartisan piece of legislation. But also, she has expressed the same concern because she was a member of the committee, 2 years ago, when we passed the existing tax law that we are adjusting now to bring it up to date and fully implement it in 2003, rather than as we decided 2 years ago, to implement it over a 10-year period of time. She was very active in these areas in that basic legislation.

So she is very consistent in expressing concerns about families of low income, and particularly low-income families with children. I wish I could do all the things she asked us to do, but we have to craft legislation that is pretty well balanced. One of the largest parts of our bill is the $95 billion that is provided for families with children.

Obviously the Senator from Arkansas would like to make this more generous. I wish we could. But I don't feel we can. The provisions that are in this $95 billion have been, to a great extent, because of the work of the Senator from

Arkansas. It includes expanding benefits for low-income families, a provision that is included in great part because of the hard work of the Senator from Arkansas. Moreover, this legislation creates a new benefit.

But I think that the exception I take to her amendment is just basically because it hurts the balance of this bill between investment and spending.

I appreciate the Senator's work on these matters. It would be subject to a budget point of order. I will raise that at the appropriate time. I will not do it taking exception to policy but taking exception to what can be accomplished at one time, and the fact that we are trying to have a balanced package between investment and spending. I think it would put us over the balance on the spending side.

For that reason, I will raise that point of order but do it without prejudice.

I yield the floor.

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 going to yield to the Senator from Oklahoma what time he might consume either on amendments or on the bill.

Madam President, first of all, I think it is pretty unanimous in this body about the need for the R&D tax credit, and I think it enjoys pretty broad support. I suppose it is not a case of ``if'' we will do it; it is a case of ``when'' and exactly how. I would say there is probably not much disagreement within this body yet. I have visited with my colleagues so much during this debate about the purposes of the legislation and the balance that we brought to this between investment and enhancing consumer spending, and between those things that are tax reductions versus tax expenditures, it is this balance that I want to preserve in this legislation.

Every attempt we have had, as well intended as it is, obviously, takes away

from the job creation aspects of our tax reduction. It is to do something special and, in many cases, is worthy, but it detracts from the overall approach to our legislation. So this is another example where I must rise in opposition to an amendment, but not because of the good intent or because I have a disagreement with the amendment, but because of how it is accomplished. And most of that is on the side of where they take the money to pay for the proposal in this amendment, or any other amendment that we have had before us.

I am very confident that we will extend the R&D credit this year. I call the attention of my colleagues to the fact that the President has proposed extending it in his budget. I note that the extension is paid for in this amendment by eliminating partial exclusion of dividends, and this exclusion of dividends is meant to encourage the investment we are talking about here.

Obviously, the amendment on R&D is a tax incentive to encourage R&D, and it takes a lot of R&D to get jobs, but it is a very indirect way of creating jobs, whereas we believe the dividend exclusion, at least if it were fully implemented the way the President proposed, and I know our underlying legislation does not do that, but at least the way the President proposed, according to economists, would create 400,000 new jobs, besides making our capital costs for our industry much more competitive with those of our competition internationally because our cost of capital is as high as that of any nation with which we compete.

If we were to adopt the President's program, it would put us in the middle of the advanced nations for cost of capital and make us much more competitive.

This detracts from the investment efforts in our legislation which is where the money is being taken to pay for the R&D amendment.

I say to the Senator from Washington that I look forward to working with her at another time--not this time--to extend the R&D credit down the road.

There is another point that should be made about the R&D credit, and that is that it does not benefit all businesses and taxpayers equally or apply as broadly as do the provisions of this underlying growth bill that I have been trying to demonstrate is a well-balanced bill to create jobs. It is well balanced between larger businesses and smaller businesses, particularly where it brings equity between a corporation form of business and individual proprietorship form of business. It does that by eliminating the bias in favor of corporations that is in our present tax system.

I look at R&D credit as not benefiting all businesses equally as our underlying bill does. The R&D credit provides a benefit to a limited number of large corporations in certain industrial sectors. While the purpose of the R&D credit is very important, as it encourages higher levels of technology development and innovation which brings about greater productivity, it does not help small businesses that will provide so many new jobs for the economy under our underlying legislation.

I ask the Senator from Washington to think about whether or not she has checked with organizations or their tax representatives that support R&D credits. I think the last thing they would want to happen is for the extension to lose at this time. If they want their extension--and I am sure they do, and I have indicated a willingness to work on this--they should be working with the Finance Committee and not against it as we try to accomplish this goal.

Right now, I have to consider this amendment counterproductive in that it slashes job-creating provisions to give generous tax breaks to large corporations to do research and development. Many may ask: Why do rich corporations need a tax break to do something that is essential to their business anyway?

As I indicated, I do support the R&D tax credit, but I also support, more importantly and more eminently, the provisions of this bill which are more broad based in helping to create jobs and doing it in a balanced way, not in the targeted way of this amendment.

There is nothing wrong with the amendment. It is just the wrong time and wrong place. I ask my colleagues to vote against it.

Mr. President, I think the Democrats have the next opportunity.

I yield the floor.

Mr. President, I yield to the Senator from Montana whatever time he might consume.

Mr. President, I yield to the Senator from Oklahoma such time as he may consume.

Mr. President, I ask unanimous consent to set the pending amendment aside.

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

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

(The amendment is printed in today's Record under ``Text of Amendments.'')

Mr. President, I put before you not a tax amendment, but I am addressing a funding crisis that affects rural America. I am talking about the issue of Medicare.

We have heard a lot about relief to States and about Medicaid during this debate, and legitimately so. But there has been no discussion of the role Medicare plays in keeping our health care infrastructure strong in rural States like mine.

Today, our rural health infrastructure is falling apart. Hospitals and home health agencies in rural areas lose money on every Medicare patient they see. Services are being slashed

and staff are being cut, all to make ends meet and keep the facility open--but not to keep it open with the quality of care that ought to be there, or to meet necessarily all the needs of the community.

Medicare formulas penalize rural physicians in 30 States by reducing their payments below those of their urban counterparts for the very same service. Small physician clinics, and especially solo practitioners, who are facing rising malpractice premiums on top of the Medicare formula inequities are on the verge of closing up shop. My amendment takes important steps toward correcting geographic disparities that penalize rural health care providers.

I will summarize some of the key provisions of the amendment. On hospitals, we eliminate the disparity between large urban hospitals and small urban and rural hospitals by equalizing inpatient-based payment. The hospitals in my State and in other rural areas are paid 1.6 percent less on every discharge. That is a $14 million loss every year in my State.

We received bipartisan support to temporarily end this inequity in the fiscal year 2003 omnibus appropriations bill, but it is time to end this inequity in a permanent way.

We also revise the labor share of the wage index for inpatient hospitals. The wage index calculation is killing our hospitals in rural areas. They have to compete with larger hospitals in the big cities for the same small pool of nurses and physicians. But because of the inequity in the wage index, these hospitals are not able to offer the kinds of salaries and benefits that attract health care workers. This amendment would reduce the labor share of the wage index from 71 percent to 62 percent.

We strengthen and improve the Critical Access Hospital Program which has been so successful in keeping open the doors of some of our most remote hospitals. We also create a low volume adjustment for those small rural hospitals that are not able to benefit from the Critical Access Hospital Program. These hospital corrections are not partisan rhetoric. They are supported by the nonpartisan Medicare Payment Advisory Committee, by the CMS administrator in a recent letter to the House Ways and Means Committee, and by 31 bipartisan Members of the Senate rural health caucus.

For doctors, my amendment ends once and for all the penalty Medicare imposes on doctors who choose to practice in rural areas of our country. Medicare adjusts payments to doctors downward based on where they live, but, in fact, the value of a physician's service is the same in Brooklyn, IA, as it is in Brooklyn, NY, but the Medicare formula does not think so. My amendment changes that and sets a floor for all physician payments that will end the negative adjustment doctors in Iowa and 30 other States currently face.

My bill also provides assistance to other rural health care providers, such as ambulance services and home health agencies which millions of seniors in rural areas rely on every day.

Providers in rural States, such as Iowa, practice some of the lowest cost, highest quality medicine in the country. This is widely understood by researchers, academics, and citizens of those States, but it is not recognized by the impersonal formulas of Medicare. Medicare instead rewards providers in high-cost, inefficient States with bigger payments that have the perverse effect of incentivizing overutilization of services and also poor quality.

My legislation is paid for not by taking resources away from our growth and jobs package, nor by taking money away from those high-cost States that I mentioned, but by other modifications to the Medicare Program that make good policy sense.

I want to emphasize that because every other amendment we have had before the Senate today has taken money out of the tax package to spend someplace else. My amendment does not affect the tax provisions of this legislation.

This amendment represents a fair and balanced approach to improving equity in rural America. I urge my colleagues to support its adoption today. For those of us from rural States, our doctors, hospitals, and whole communities are counting on us.

I yield the floor.

I yield such time as the Senator from Maine may consume.

The Senator from Maine suggested the absence of a quorum.

Madam President, before we move on with the next amendment, I think it would be accurate for me to say that the speech by my good colleague from the State of Iowa emphasizes the difference of philosophy I have tried to emphasize that our bill tries versus other approaches. These are honest, faithfully held ideas about the role of the Government in our society.

The alternatives my colleague from Iowa has given--tax cuts on the one hand, or spending money on the other hand--is exactly the point I have been trying to make of whether or not the resources of this country should go through the Federal Treasury and have 535 Members of Congress divide them up, keep taxes high in the process, or whether it is better to reduce taxes to create jobs and create the jobs by leaving the money in the hands of 110 million taxpayers making their own individual decisions; the dynamics of our free market system respond very well to that. Money that is spent by individuals or invested by individuals turns over in the economy many more times than it does if I make a decision on how that is spent.

Some believe, as evidenced by the recent speech, it is better to have higher levels of taxation, bring the money through the Federal Treasury and decide how to spend it. The other approach is that we will, as we do through this bill, give tax reduction with the taxpayers of this country deciding on investing and spending, or both, and enhancing the economy that way and creating jobs.

Another goal of this bill is to bring taxation of the people of this country within the band that it has been for about 50 or 60 years, of about 17 percent or 19 percent of the resources of this Nation coming to the Federal Government for us to finance programs and to make decisions on how that will be spent. About 17 to 19 percent of the gross domestic product has generally, over 40 years, been taxed. In recent years that has gotten as high as 21 percent, as high as it was in World War II, so the highest in peacetime history.

This tax bill, besides the motive of creating jobs, is to bring the level of taxation down so it falls within that historic band, based on two propositions. One is it is a level of taxation that has not been so high to be harmful to our economy and to our people, because our country has advanced tremendously well with the Federal Government operating within that band of deciding how to allocate 17 percent to 19 percent of our resources. The other is it is a level of taxation that has been accepted by the people of the United States.

Some of them would say it is still too high, but I guess I would have to say over the long haul I have not heard too much complaint about the level of taxation that has existed over that long period of time of 17 percent to 19 percent.

So I do not find fault with anything my colleague from Iowa said. He is expressing one very legitimate philosophy of government and the financing of that government and the distribution of resources and having that done by political decision. I am expressing another philosophy of government shared by some Democrats and hopefully by a lot of Republicans, that a level of taxation can get so high it hurts the economy, and the way to enhance the economy and grow the economy is to let people have a lower level of taxation.

Another way to say it is if we have any budget problems and any deficit problems, they are not related to the undertaxation of the American people. They are related to the overspending by the Congress.

Now we move on to another issue. But before I yield whatever time she might consume to the Senator from Maine, we are adopting policy with her amendment, in a bipartisan way, that is unrelated to the policy that is in the bill. That is because as chairman of the committee, responding to the people in my committee, both Republicans and Democrats, as well as responding to people outside the committee as represented by Senator Collins and Senator Nelson of Nebraska, there was a desire to have more people involved with the policy of how to meet the needs of the States through some State aid. So we have deliberately left kind of a vacuum in this legislation that is now going to be filled by the good work of Senator Collins and Senator Nelson off the committee, and by Senator Rockefeller and others on my committee. I commend them for their hard work.

There is an awful lot of compromise that has gone into this product and I am proud to be affiliated with this product. But the product is not mine, because it was my determined effort to leave it to people who have worked on this issue for about 2 years now. For about 2 years people have been promoting this concept. I compliment them for their stick-to-it-iveness. Tonight proves that hard work pays off.

Madam President, I yield myself off the bill such time as I may consume.

I am in support of this amendment. I am very glad that such a compromise has been worked out. I am very happy with the team of people both on and off the committee who have put it together. I would like to emphasize one thing about the amendment. I am sure it has been stated very well by other sponsors, but this is meant to bring temporary--and I want to stress ``temporary''--fiscal relief to the States. I have heard from my State and many others about the difficult budget situations they are currently experiencing. This amendment will help to bring temporary relief to all States during this difficult fiscal time.

It is important for the Senate to successfully pass a strong growth bill, and

this amendment helps to achieve that goal. Numerous Senators have indicated that State fiscal relief is a key component of this growth package. Some of my colleagues believe strongly that we should direct some State fiscal relief through the Federal Medical Assistance Percentage Program or something we call around here by the acronym FMAP. This is the funding structure for Medicaid. This amendment uses a temporary adjustment in the FMAP formula.

Some of my colleagues feel strongly about giving flexible grants to the States and localities. This amendment also uses flexible grants to those States and localities. Many Members both on and off the Finance Committee have worked hard to reach this agreement. As I stated in the Finance Committee markup, I believe all Senators should have an opportunity to weigh in. The amendment before us reflects the hard work of many Senators who care deeply about State fiscal relief. It is a good compromise. For these reasons, I am going to vote for this amendment, and I urge my colleagues to do the same.

I want to state a couple more times, just so it is not forgotten, to any State and local people listening or who will read about it or for sure will be reminded about it a year or so from now: This is meant to be temporary.

Madam President, I spoke earlier in support of the Collins amendment which is a $20 billion fiscal relief package. We have been told that $20 billion is a drop in the bucket. I don't think $20 billion is a drop in the bucket. We have been told that maybe $75 billion is not enough for State aid.

We have to be fiscally responsible as we approach this. I do not fault the good intentions behind people who have higher figures in mind, including the amendment by the Senator from Washington. There are Members on both sides of the aisle for whom fiscal relief is a key component of any larger tax and jobs package. I have worked hard to accommodate Members' priorities relative thereto.

A number of provisions in this amendment have been addressed by the State fiscal conservative relief amendment offered by Senator Collins. The State fiscal relief amendment offered by Senator Collins represents a significant boost to States. It provides $20 billion. To me, that is lots of money. This is much more money than some would like to spend at all. However, there will be those for whom no amount of spending will ever be enough.

I am not saying Senator Murray is one of those for whom no amount of money would ever be enough. All I am saying is that at some point we have to determine a final dollar amount for State aid.

We have an amendment that provides $20 billion for States, and I think we should stick with that number. Therefore, Senator Murray's amendment at $40 billion is too expensive and must be opposed. I urge my colleagues to vote against this amendment. I urge them to support the Collins amendment.

I yield the floor.

I yield to the Senator from Texas what time he might consume.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand in adjournment until 9:15 a.m., Thursday, May 15. I further ask that following the prayer and the pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time of the two leaders be reserved for their use later in the day, and that the Senate then resume consideration of Calendar No. 97, S. 1054, the jobs and economic growth bill, as provided under the previous order; provided further that no second- degree amendments be in order to the amendments offered during Wednesday's session, prior to a vote in relationship to the amendment.

Finally, I ask unanimous consent that following the first vote, all succeeding votes in sequence be limited to 10 minutes each.

For the information of all Senators, the Senate will resume consideration of the jobs and economic growth bill and immediately begin a series of stacked votes on the remaining amendments to the bill. There are approximately 25 amendments that will need to be disposed of. Following the votes on the pending amendments, additional amendments are possible and therefore this is going to be a very lengthy voting sequence. All Members are urged to remain close to the Chamber during this so-called vote-arama in order to expedite passage of this bill.

I also ask that any Member who intends to offer an amendment during tomorrow's session contact the chairman and ranking member of the Finance Committee. We are not encouraging additional amendments. However, it would be helpful to know in advance the substance of the amendment to be offered. The majority leader has stated that we will finish the jobs and economic growth bill on Thursday.

Under a previous order, following passage of the jobs and economic growth bill, the Senate will begin consideration of H.R. 1298, the Global HIV/AIDS bill. The majority leader has also stated it is his intention to complete action on this vital legislation this week as well.

Finally, I say to my colleagues that tomorrow will be a very busy session, with numerous rollcall votes. With the cooperation of all Members, we can finish our work on these two bills in an orderly way.

If there is no further business to come before the Senate, I ask unanimous consent that the

Senate stand in adjournment under the previous order.

I yield myself such time as I may consume.

Mr. President, a number of misleading and just flat out wrong statements have been made by the proponents of this amendment. They said this package does not help the military. I wonder where they have been the last few months. We have already passed the military tax cut bill in the Senate and we are trying to work it out with the House. That is the situation. So do not tell me we have not dealt with the problems of the people in the military.

They argue we do not deal with unemployment benefits. I guess they were not paying much attention when just a few hours ago we were talking about extending unemployment benefits. I offered a unanimous consent agreement at that time, but what happened? The other side, which is now complaining, rejected my offer to make that the top priority just as soon as we are done with this bill.

We also put together a strong bipartisan State aid package, which the other side has cried crocodile tears over. So I hope no one is misled by some of the previous rhetoric we have heard. The amendment is nongermane and violates the Budget Act. So obviously later on there will be a point of order made on it.

To relieve any concern that the underlying bill is only concerned about giving more money to corporations, I want to point out how this legislation helps families. I will make a couple of points regarding the distribution of tax benefits in our package. As I stated repeatedly, the package fairly balances investment and consumption incentives within the plan and benefits families at all levels of income.

Now, this is quite contrary to much of the rhetoric we have heard on the proposal's distributional benefits. I have heard repeatedly that the typical family receives only $217 of benefits under the bill, while millionaires receive tens of thousands of dollars of such tax breaks. One response to this is to note the progressivity of our system. A simple example, however, is an effective way to demonstrate the bill does in fact provide benefits to families at all income levels. For illustrative purposes, I have analyzed the tax benefits of accelerating the $400 increase in the child tax credit combined with the increased refundability for single mothers of two children at various income levels under the bill.

The example does not account for additional benefits that are also provided in this bill with expanding the 10 percent bracket.

The charts I have with me demonstrate the tax benefits to that single mother with $15,000, single mother with $20,000, single mother with $30,000 of wage income during the 2003 tax year. As we can see, the first chart demonstrates a single mother of two with $15,000 of wage income will receive an additional $250 of refundable tax credits under this bill. This increased $250 comes from a combination of increasing the tax credit amount and reducing the limits on refundability. With her refundable earned income credit of $3,823, her total refundable tax credits would increase by $250 all the way up to $4,573.

The second chart is for a family of $20,000 wage income, which demonstrates a significant increase in benefit to the same single mother. At a slightly higher income level, she receives an additional $710 of benefits under the Finance Committee plan for a total refundable credit of $4,270.

Finally, at $30,000, we can see this single mother receives the entire benefit of $800 increased child tax credit in the form of refundable payments.

I ask my colleagues to consider these examples as further evidence of the impact this bill will make on hard-working families in this country at different income levels, and I might say at all income levels. I hope the informed judgment will be made based upon fact and not upon the statements previously given about this bill.

I yield the floor.

I yield such time as he might consume to the Senator from Nevada.

Mr. President, in regard to the statement just made by the Senator from Nevada, I voted for the amendment that he speaks about in committee. It lost by a 1-vote margin. I don't know whether Members have had a chance to give it the thorough thought it ought to have when it is brought up on the floor. I hope Members will take a good look at it. If there is evidence to back up what has been said about the amendment bringing money home, it is something that would give a shot in the arm to the economy. It ought to be something we look at. I think there has been some talk about it, but not enough at this point. I am not suggesting the amendment should not be voted for tomorrow. I am just suggesting it is something I am taking a very good look at.

I yield for a short statement and then I want to continue.

I agree that an additional advance refunding opportunity would be helpful and practical in your situation and in others. I will work with you in conference to see if there is an opportunity to accommodate you.

Mr. President, I ask unanimous consent that the Senate proceed to a period for morning business.