Floor Statements

Mr. President, I rise to address an amendment that is very important to me and my State relating to Montana's magnificent Rocky Mountain front. I filed the amendment to the Energy bill and, even though we are not on the bill at the moment, I will talk about the amendment. I will speak about what it would have accomplished because I will not press for action on this amendment. Rather, I will offer it at a later time.

So what is the front? The front, as we call it back home, is one of the largest

and most intact wild places left in the lower 48 States. We call it a front because that is what it is. It is a front.

Anybody driving across the State of Montana westward, coming in from the east, first encounters open plains and prairies; they are vast. And then, suddenly, out in the distance the Rocky Mountains, the Continental Divide, jumps out of the plains. That is what we call the eastern front.

It is amazing and it astounds me every time I drive across the State and see it from a distance. It is special to Montanans and it is sacred to the Blackfeet Indian tribe. It is home to the Nation's largest population of big horn sheep, and the second largest population of elk, as well as deer, grizzly bear, and countless other species of fish and wildlife. In fact, the front is the only place in the lower 48 where grizzly bears still roam the plains, just as they did when Lewis and Clark passed through the area 200 years ago.

Because of this exceptional wild space, which includes Glacier National Park, millions of acres of wilderness and the Blackfeet Indian Reservation, the front offers unsurpassed hunting, fishing, and recreational opportunities.

Sportsmen, local landowners, local elected officials, hikers, Tribal leaders, local communities, and many other Montanans have worked for decades to protect and preserve the front for future generations. I have hiked in the front many times, including to the top of Ear Mountain. It's special to me personally.

Most Montanans believe very strongly, frankly, that oil and gas development and the front just don't mix.

The front is too wild and too precious to subject it to roads, pipelines, noise and other such development activities. In addition, surveys of the area indicate that there just isn't that much oil and gas in the front, certainly not enough to justify disturbing this pristine area.

That is why it has been well over a decade since any development activity occurred there at all, and why this administration last year halted an environmental impact study in the Blackleaf Area of the Front. The administration conceded that the time and expense associated with evaluating drilling options in the front was not the best use of taxpayer dollars.

They conceded that this area might indeed be one of those special places where the benefits of oil and gas development do not outweigh its costs. Even the administration understands that it's highly unlikely that any leaseholder will ever be able to drill in the front.

I couldn't agree more.

That's why I filed an amendment to the energy bill that offers a permanent solution to the century-long conflict over development on the front.

My amendment would establish a voluntary program allowing leaseholders in the Badger-Two Medicine or Blackleaf Areas of the front to cancel their leases. In exchange, leaseholders could receive rights to drill elsewhere in Montana, or bidding, rental or royalty credits for existing leases in Montana, or a tax credit.

Any canceled lease would be permanently withdrawn from future leasing and oil and gas development activity. This withdrawal provision would also apply to a lease canceled for any other reason, including as the result of a private buy-out.

To encourage leaseholders to take advantage of the program, it would expire at the end of 2009. Finally, it would provide economic development grants to Teton County, Montana, to compensate the county for the loss of any potential revenue from these leases.

This is a win-win proposal that provides leaseholders value for their investment, while providing permanent protections for the front. Because it's a purely voluntary program, leaseholders don't have to participate, but there will be a strong incentive for them to do so-- they know that their leases will probably never be developed, given the intense local opposition and the expense and time involved with trying to drill in the front.

Unfortunately, Mr. President, the time was not right for me to call for a vote on ame mendment, but I thought it was very important to share it with my colleagues. I will work hard in the coming months to build support for my proposal, which I think is critical to ending the conflict over the front and preserving its beauty and wildlife for future generations.

Mr. President, a little less than 2500 years ago, in Athens, Pericles the king looked out from the Acropolis. In the bay beyond the port city, he saw some of Athens's 200 ships, which brought peace, commerce, and Athenian pottery to a free-trade area of more than 100 Greek city-states. Pericles boasted: ``The wares of the whole world find their way to us.''

Pericles stood astride one the wealthiest, most culturally-advanced states of his time. Greeks had vanquished the evil empire of Persia to the east. Pericles had transformed the Delian League, a defensive alliance formed to contain Persia, into an Athenian empire. And Pericles advanced the world of ideas, advocating the new idea of democracy.

Said Pericles: ``Athens alone, of the states we know, comes to her testing time in a greatness that surpasses what was imagined of her. . . . Future ages will wonder at us, as the present age does now.''

Pericles had every reason to believe that Divine Providence had smiled on him and on his city.

A little less than 500 years ago, in Aachen, Charles V looked up to receive the crown of Germany. Charles had become the most powerful ruler in Christendom: Holy Roman Emperor and sovereign over what is now Spain, Central Europe, southern Italy, and Spain's new overseas colonies. Sir Walter Scott said: ``The sun never sets on the immense empire of Charles V.'' Charles sought to unite his empire into a universal, multinational, Christian empire. His motto was: ``Even further.''

Charles had every reason to believe that divine providence had smiled on him and on his empire.

A little more that 150 years ago, in London, Queen Victoria, adorned in pink, silver, and diamonds, escorted by a troop of the Household Cavalry, road in a closed carriage from Buckingham Palace to Hyde Park to see the Great Exhibition at The Crystal Palace. Trumpets flourished, and a thousand voices greeted her, singing Handel's Hallelujah Chorus.

She walked through the Exhibition, a world's fair, and saw exhibits displaying the riches of Britain's far-flung colonies: carved ivory furniture from India, furs from Canada, hats made by convicts from Australia. The theme of the Exhibition was one word: ``Progress.''

Victoria saw exhibits representing an England that was industrially supreme. England controlled one-third of the world's international trade. The English merchant navy handled three-fifths of the world's oceangoing tonnage. Senator Daniel Webster called the English empire: ``A power which has dotted over the surface of the whole globe with her possessions and military posts, whose morning drum-beat, following the sun, and keeping company with the hours, circles the earth with one continuous and unbroken strain of the martial airs of England.''

Victoria had every reason to believe that Divine Providence had smiled on her and on her empire.

The citizens of Periclean Athens, Habsburg Spain, and Victorian England each could feel that their nation had reached the zenith of human endeavor. From where they stood, Pericles, Charles, and Victoria were the most powerful leaders of their time. Their centuries belonged to them.

Pericles looked to ``future ages.'' Charles envisioned going ``even further.'' And Victoria saw ever more ``progress.''

But within a century, each nation had been eclipsed.

Periclean Athens fell victim to war. Not long after Pericles's death, the devastating Peloponnesian War with Sparta weakened Athens. Within a hundred years, the great city was dominated by a little known northern country called Macedonia.

Charles V, seeking to harness a new technology of shipbuilding and royal navies, incurred spiraling defense costs. Charles's wars caused him to pledge his revenues to bankers for years into the future. By 1543, two-thirds of his ordinary revenue went to pay interest on past debts alone. Not

long after Charles' death, dynastic division rent his empire apart. And within a hundred years, Europe had become a continent of many roughly- equal powers.

Not long after Victoria's death, England found itself surpassed by American economic growth and mired in World War. And within a hundred years, Britain's once-great empire had spun off into a splintered commonwealth.

And so began what Henry Luce called ``the American Century.'' At the beginning of the 20th century, America's economy was already 40 percent larger than China's and more than twice as big as Britain's.

And in the wake of World War II, America was the only major power whose homeland had not suffered massive devastation. America's economy dominated the world. At mid-century, America's gross domestic product was 5 times Britain's, 5\1/2\ times China's.

Look out today at the ships docked in the port of Seattle. Count the containers that bring grain and beef from Montana to the world. Count the containers that bring ``the wares of the whole world . . . to us.''

On behalf of a great and powerful nation, on February 2, President Bush could look out over lawmakers assembled in the House of Representatives and say: ``[W]e've declared our own intention: America will stand with the allies of freedom to support democratic movements in the Middle East and beyond, with the ultimate goal of ending tyranny in our world.''

America's is a great promise. Ours is the leading nation. We live in the preeminent country on earth.

Americans have every reason to believe that Divine Providence has smiled on us and on our Nation.

Today, Americans account for fewer than 1 in 20 of the world's people. But Americans produce more than a fifth of the world's economic output.

Today, America has a $12 trillion economy, three times the size of Japan's, fives times the size of Germany's.

But China's economy, when measured on a purchasing power parity basis, is now $7.3 trillion. And it is growing fast.

Like Athens or Spain or England in their day, America is the greatest power of our time. But our lease on greatness is no more certain than those of the great powers of the past. We, no more than they, cannot maintain our leadership of the world without effort.

The next two decades will challenge America. We face competition from rising economic powers, powers with vast populations with nowhere to go but up. And foremost among those competitors will be China.

We cannot blithely sit back and rest on our laurels. We must energize ourselves anew to maintain America's place in the world.

Over the last two decades, China's economy has grown an average of 9.5 percent, roughly three times as fast as America's. And although America is a populous country of almost 300 million people, China is home to 1.3 billion people. India is not far behind, with just over a billion people.

Starting in the late 1970s, China and India began to reform their economies. And in the late 1980s, Communism collapsed in Eastern Europe. In the last two decades, these transformations have led to nearly half the world's population--about 2.6 billion people--entering the global workforce. The world has only just begun to feel the effects of this awakening.

Visit export-zone China, and you will see that corporate America and corporate--Japan are already well in evidence. The international corporations already understand that China will fuel this century's economy.

Much of America, however, still has a shock ahead of it. Before 2020, China may surpass America as the world's largest economy. Superpower America has competition, after all. And we had better hustle, too, or the Chinese will eat our lunch.

Well-educated young people in China, India, and Eastern Europe increasingly have the skills to compete with Americans for high-value- added jobs. Companies are moving jobs offshore to workers in these countries not only because they work for less, but also because they are well educated in math and science.

An old Chinese proverb says: ``What you cannot avoid, welcome.'' Dramatic Chinese growth appears unavoidable.

China has drunk the Kool-Aid of capitalism and it is not looking back. Big city China hustles, bargains, and works hard for a better life. Skylines soar in Shanghai and Beijing.

Big city Chinese public street signs come in Chinese and English. Western and Japanese companies' neon signs dominate the skyline. Western commerce is well represented, half a world from the West. China is no longer as foreign as you might expect.

You can see one district of Beijing that still sports Cyrillic billboards and shop signs. But this Russian enclave sells furs, not ideas. You can see which economic system won the cold war.

They call it ``market socialism.'' And the European economic tradition is full of the melding of the two systems, so we cannot necessarily say that the term is a contradiction. But plainly the Maoist state-controlled economy is on the descent, and free-enterprise, self-interested capitalism is on the rise. Chinese government officials smile as they explain, quote, ``Communism.''

The bargaining economy now permeates China. Chinese merchants love to haggle over sales great and small.

The change began with Deng Xiaoping, who ruled from 1978 to 1997. But the change has now firmly taken root. Some will explain, in muffled tones, that in the wake of the 1989 Tiananmen massacre, the government made a concerted effort to demonstrate that China was ``open for business.''

China, India, and Eastern Europe are now actively seeking to move underemployed populations into more productive occupations--occupations that America and other developed countries once dominated. Millions of jobs in high-tech manufacturing, software development, and services are moving to these growing labor markets.

More than 700 million workers live in China. Half of them still work in agriculture and forestry. More than three out of every five Chinese still live in the countryside. As many as 200 million underemployed Chinese workers in rural areas could move into the cities and industrial jobs.

This huge pool of surplus labor presents China with a vast opportunity to modernize its economy, continue rapid growth, and move its people up the value-added ladder into more productive employment.

Tour an American or Japanese company plant in Shanghai. You will see rows of diligent, uniformed workers filling rows of clean, well-lit work stations. The plant manager will tell you how he pays these workers $1 an hour--+about $2,000 a year-plus food and housing benefits. That is a good wage in a country with an average income of $1,100 a year. Compare that to America's average income of $37,600. Plants like this boast of a 90-percent retention of employees.

The plant manager will complain, however, that for the less- sophisticated operations, still-lower-cost centers are already nipping at their heels. Even within China, competitive businesses need to profit from innovation and new ideas, or fall victim to even-lower-cost competition.

In the long-term, Chinese labor rights must advance to help lift Chinese wages. But with 200 million job seekers at the door, substantial wage increases still appear a ways off. For the near future, China appears to own the role of the world's low-cost manufacturer.

And China's workers are not all unskilled laborers. China has focused on its education system. It is quite good for a country its size. The literacy rate tops 86 percent.

Visit a primary school in a middle-sized Chinese city. Bright, enthusiastic, charming children will greet you and win your heart. Happy first graders will greet you in English. Chinese schools are preparing students to compete in an intertwined, multinational, multilingual world economy.

Are American schoolchildren learning Mandarin? Are they even learning Spanish? The coming generation of Chinese businesspeople will do business around the world. Americans need to broaden our linguistic abilities, or Chinese businesspeople will cut the deals before us.

China's growing population of college graduates also fuels its increasing strength in high tech. Last year, nearly 3 million Chinese entered the workforce from colleges and graduate programs. That was one-third more than

the year before and double the year before that. Last year, China produced 220,000 new engineers. America educated only 60,000.

China now has an unusually open economy. Foreign investment in China is more than a third of its economy, compared with only 2 percent in Japan. In 2004, the sum of exports and imports is likely to reach three-quarters of China's GDP, far more than in other large economies. In American, Japan, India, and Brazil, the figure is 30 percent or less. China has allowed foreigners to participate in its growth and development.

China has stoked the engines of its economic development through means both fair and foul. China promotes its domestic high-tech industry at the expense of foreign firms. World Trade Organization commitments prohibit discriminatory taxation of foreign products. But China applied a 17 percent value added tax on all semiconductor sales, and then rebated 11 percent of this for semiconductors produced in China and 14 percent for semiconductors designed and produced in China. The United States had to bring a WTO case to challenge the policy. China agreed to drop the policy last year.

And China does an abysmal job of protecting patents and intellectual property. Walk into an open-air market in Shanghai, and you can buy ties that bear less than credible labels: well-known brand names, ``Made in Italy.''

And it is not just ties that Chinese businesses knock off. A red sign festooned a Shanghai market: Respect ``trademark law,'' it cajoled. But as you walk under the sign, literally dozens of men hawk DVDs and watches of plainly dubious vintage.

And China also uses its currency exchange rate to distort the market. China has set, or pegged, its currency to the dollar, with an exchange rate of 8.28 renminbi to the dollar. Critics argue that as China's economy has grown, its currency should have appreciated against the dollar, making Chinese goods more expensive relative to American goods. The renminbi has not appreciated--and Chinese goods have not gotten more expensive--because of the peg. Many argue that China keeps the peg in place to support its manufacturing sector.

The reality may be more complex. But there is no denying that China does not have a free-floating currency. And there is no denying that a free-floating currency would be better for China and its trading partners, over the longer term. How to get there, especially with China's badly insolvent banking system, is what the debate is about.

China's economy could easily stumble, as America's did during the booms and busts of the 19th century. But barring any truly devastating crisis, China's economy will likely continue its upward trajectory. China will become the world's largest economy. The only question is when.

Faster growth in China should mean faster growth elsewhere. If China's real income grows by 8 percent per year--and it is--income distribution remains unchanged, then by 2020, China's top 100 million households will have an average income equal to the current average in Western Europe. That is a giant new market for consumer goods.

China's boost to global growth could exceed even those that the world economy has recently enjoyed from the spread of computers. Like that IT revolution, China's growth may lead to the loss of some jobs in the United States. But it will also likely lead to the creation of different jobs in greater numbers.

Notwithstanding the pervasive influence of American and Western culture even in once-isolated China, one senses a love-hate relationship with America. Chinese officials will note how our two nations had once been sworn enemies in a war that Americans, with our short memories, forgot long ago. On Chinese streets, men will walk up to you, asked you if you are American, and debate you about American foreign policy.

The Chinese Government maintains power through two tools: One, an improving standard of living, and two, nationalistic sentiment. In furthering the latter, China often paints America as the enemy keeping China from reuniting with Taiwan. The U.S. is thus second only to the Japanese in unpopularity in China. It need not be so.

Together, America and China accounted for half the world's economic growth in recent years. We are economic partners. We share interests in a non-nuclear Korean peninsula. And we share a common concern with radical terrorists. But many Chinese appear put off by the swagger of current U.S. foreign policy. We still have work to do to thaw U.S.- Chinese relations.

No American Government can prevent the challenges to the American economy posed by the increasing sophistication of labor markets in China, India, and Eastern Europe. We must accept the reality of these challenges.

The ancient Persians looked with disdain at the Athenian marketplace, the Agora. It was a proverb among the Persians that there: ``Greeks meet to cheat one another.'' But we can no more prevent the spread of the world's commerce than Persia could stop the spread of Hellenism.

Some may seek to avoid the unavoidable future. But we would do better to learn how to embrace it. We must adjust our policies to meet the challenge.

The American Government cannot stop international companies from hiring overseas workers instead of American workers, without inflicting great harm on the American economy. American companies compete in a global environment. If an American company cannot hire those hard- working but low-wage Shanghai workers, a foreign company will. That other company will sell the products of that factory at lower cost. Consumers worldwide will buy them. And the American company will lose the business and jobs.

Neither can we erect tariff barriers that wall off foreign competition. Higher tariffs are taxes that harm both the foreign sellers trying to sell into America and the American buyers who seek to buy foreign products. Tariffs impose a dead-weight loss on both sides. And protectionist measures invite retaliation. Protectionism thus ultimately harms a country's economy. Protectionism puts at even greater risk the jobs the politicians seek to protect.

Rather, to help prepare America to meet the challenges of the next 2 decades, we need to ensure that Americans develop the skills needed to continue to compete in higher-value-added fields. We need to continue our tradition of rewarding innovation and risk-taking. We need to fight to open new markets around the world. And we need to remove burdens that hinder our international competitiveness, like the high cost of health care in America.

Engineers play a critical role in the development of new jobs and new industries. In 1975, the United States ranked third in the world in the percentage of 24-year olds who held a science or engineering degree. By 2000, we had slipped to fifteenth. By 2004, we were seventeenth. At the same time, the Department of Labor projects that new jobs requiring science, engineering, and technical training will increase four times faster than the average national job growth rate.

Only a little more than 1 in 20 high school seniors who took the 2002 college entrance exam planned to pursue an engineering degree. The United States trains only half as many engineers as Japan and Europe, and less than a third as many as China. We should increase scholarships and loan forgiveness for engineering students to entice more young Americans to study engineering.

We should support community colleges, and strengthen the link between them and the workforce. Schools can then develop training programs relevant to jobs that actually exist in any given community.

We should make it easier, consistent with the requirements of national security, for foreign students to study in America. America has benefited from our ability to attract and to retain the best and brightest students from countries all over the world. Yet, since 9/11, many students are having a difficult time getting visas to study in America. Foreign applications to American graduate schools fell 28 percent in 2004. And enrollments of foreign students at all levels of college declined for the first time in 30 years.

Foreign students are increasingly studying in Europe and elsewhere. We are losing a generation of foreign minds, minds that in another time would have come to our shores. These

declines are due in large part to the difficulties foreign students now face in getting a visa to study in America.

We must not compromise our security needs to host foreign businesspeople or students. But there must be ways to streamline visa procedures and otherwise lighten the burden to make it easier for foreigners to study and conduct business here.

American universities and research institutes do much of the most innovative research in the world. But over the last 20 years, Federal research funding in the physical sciences and engineering has actually declined by nearly one-third as a share of the economy.

Money invested in Federal research programs pays dividends many times the investment. For example, National Science Foundation funding of research in the basic sciences and engineering has helped discover new technologies that have led to multi-billion dollar industries and created countless new jobs. These include jobs in fiber optics, radar, wireless communication, nanotechnology, plant genomics, magnetic resonance imaging, ultrasound, and the Internet.

We should invest in our future by fully funding research support organizations such as the National Science Foundation, National Institutes of Health, and the Office of Science at the Department of Energy.

Without Government support, private investment in research and development would be less than it should be. The society as a whole needs to foster the research that will build a better nation in the future. The R&D tax credit has helped. But we can improve the R&D tax credit by simplifying it and making it permanent.

The Government has expended a tremendous amount of time, money, and manpower negotiating trade agreements with countries like Bahrain, Morocco, and Colombia. None of these small economies offers much to American exporters.

By contrast, last year, American companies lost more than $3.8 billion to business software piracy in China alone. Putting more resources toward defending American intellectual property rights would have a real effect on the bottom line for many American companies.

American companies sold $626.6 billion in copyrighted products in 2002, 6 percent of American GDP, and employed 5.5 million workers, or 4 percent of the American workforce. Their foreign sales and exports amount to $89 billion, more than most other export sectors. Our intellectual property is among our most valuable assets. Some would say it is now the American comparative advantage. We must do a better job protecting it.

The political bargain that has kept a consensus in support of liberalized trade has long been that in exchange for labor market flexibility, those hurt by trade would have help finding new jobs. That bargain has eroded.

America spends less on labor-adjustment assistance than any major industrialized country. Japan spends nearly twice the share of GDP, Canada nearly three times, and Germany more than eight times as much.

Trade adjustment assistance provides retraining, income support, a health insurance tax credit, and other benefits to workers who lose their jobs due to trade. TAA is not a handout for idle workers, but a means to retrain them for competitive employment and help them through the transition.

We should expand trade adjustment assistance to service workers and emphasize, and possibly expand, the wage insurance program.

And we need to do more to keep jobs in America. For most American companies, health care costs are the single biggest disincentive to hiring new workers. The costs are enormous, increasing at a double- digit pace, far outstripping health care costs in other countries.

America spends more on health care than any other country in the world. Per capita spending on health care in America is nearly 2\1/2\ times the average in the industrialized world.

Employers in America also bear much of the cost of the rising number of uninsured Americans through cost-shifting by hospitals and other health care providers. Last year, employers paid an average of nearly $2,900 for single employee coverage and more than $6,500 for family coverage.

By contrast, most employers in other industrialized countries do not pay anything for their employees' health care. A Government-sponsored universal health program bears those costs. The difference is hurting America's competitiveness.

We can take several small, practical steps to help lessen health care's burden on American companies. We could provide tax credits to small employers, fund employer-based group-purchasing pools, increase funding for high-risk pools, expand Medicaid and the State Children's Health Insurance Program, and permit a Medicare buy-in for the near- elderly.

But we cannot keep kidding ourselves. We need real change to address the problem of American health care costs. We need to do so, to meet the challenge to America's place in the world.

In reality, the economic reforms in China, India, and Eastern Europe that cause the challenge to American leadership are a good thing. We should want China, India, and Eastern Europe to educate their people, open their markets, and trade with us.

Since World War II, there has been no greater advocate for free markets around the world than America. America has much to gain in a world of free markets. When foreign workers move into more productive work, their incomes will rise. As foreign workers become more prosperous, they will become better able to buy American goods and services. And by keeping our markets open to foreign products, consumer prices fall on everything from footwear to electronics, making the American consumer's dollar go further. Everyone can be better off.

Trade is not a zero sum game. Increasing competition from China, India, and Eastern Europe does not mean that America will suffer.

Remember, after World War II, America prospered as it helped to rebuild a shattered Europe. Competition from recovering European economies did not hurt America. Rather, as Europe emerged from the devastation of war, the American economy grew along with Europe's. With the right policies, much the same can happen perhaps with much larger positive effects with the growth in China, India, and Eastern Europe.

Remember, in 1957, when the Soviet Union launched Sputnik, the first man-made satellite to orbit the Earth. The challenge of Sputnik gave America the political will to devote the resources needed to become the world's premier space power.

In the same vein, the economic challenge of the next 2 decades presents its own opportunities. The challenge posed by economic development in China, India, and Eastern Europe could help create a political consensus in favor of change and growth.

The former Librarian of Congress Daniel Boorstein wrote: ``The most important lesson of American history is the promise of the unexpected. None of our ancestors would have imagined settling way over here on this unknown continent. So we must continue to have a society that is hospitable to the unexpected, which allows possibilities to develop beyond our own imaginings.''

We cannot rest on our laurels. But if we remain open to the unexpected, if we allow the possibilities to develop, we can maintain America's leadership in the world.

It will take work. But if we redouble our education, if we open more markets, if we better manage our healthcare, then we can face the challenges of the decades to come.

We must get to work. But if we do, we can make an America that, in Pericles's words, ``comes to her testing time in a greatness that surpasses what was imagined of her.''

If we do, America can continue to ``stand with the allies of freedom'' throughout the world.

And if we do, ``Future ages will wonder at us, as the present age does now.''

First, let me compliment my friend for his thoughtful discussion of this issue. The Senator from Delaware has obviously done a fair amount of homework on automotive technology, and I appreciate his insights on the benefits of clean diesel technology. Let me also congratulate the Senator on his work with Senator Voinovich and others on the recently introduced legislation to clean up heavy-duty diesel engines through retrofitting. We adopted that measure as an amendment to the energy bill earlier this week, and I think it is an important addition, so I thank the Senator for his work in that regard.

Now, to respond to the Senator's question concerning the diesel lean- burn provision from the House bill. Under the House provision, the tax credit would be available for the purchase of diesel vehicles meeting certain fuel efficiency and emissions standards. As long as a vehicle met those standards, it would be considered a ``lean burning'' vehicle and thereby merit the tax credit to the purchaser.

I agree with my colleague that lean-burn diesel is promising technology. We did include the diesel lean-burn credit in the energy conference measure in 2003. As you know, in the Senate bill, we have included similar incentives for the purchase of other energy- efficient vehicles--hybrids, alternative fuel vehicles and fuel cell vehicles. We often start out with different positions than our House counterparts, and typically we merge together the best pieces of each bill in conference. I think any new technology warrants serious consideration if it can help make U.S. vehicles more fuel efficient and lessen our dependence on foreign oil.

I believe we should, and I believe we will. I am confident that the clean diesel credit will get very careful consideration by the Senate conferees.

Mr. President, today I introduce the Trade Adjustment Assistance for Firms Reorganization Act.

The Trade Adjustment Assistance for Firms program assists hundreds of mostly small and medium-sized manufacturing and agricultural companies in Montana and nationwide when they face layoffs and lost sales due to import competition. Qualifying companies develop adjustment plans and receive technical assistance to become more competitive, so that they can retain and expand employment.

The program is very cost effective. It requires the firms being helped to match the Federal assistance with their own funds, and it pays the government back in federal and State tax revenues when the firms succeed.

For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its safflower oil. And it is helping Porterbilt Company of Hamilton to expand its product line.

Currently, TAA for Firms clients receive assistance preparing petitions and adjustment plans from twelve Trade Adjustment Assistance Centers, which are Commerce Department contractors. Program and policy decisions are made by a small headquarters staff in the Commerce Department's Economic Development Administration.

In the Trade Act of 2002, Congress voted to reauthorize this important program for seven years and to increase its authorized funding level. The program seemed headed toward some years of smooth sailing. But it turns out that is not the case.

For reasons unrelated to TAA for Firms, EDA began more than a year ago to move all its headquarters programs to its six regional offices. For TAA for Firms, that means clients will still get the same local services from the TAACs, but decisions will be made in six regional offices plus a national policy office. The likely result is more personnel needed to run the program, more layers of government, less centralized and consistent decision making, and less accountability-- all without any likely improvement in customer service.

In preparation for this reorganization, EDA transferred or otherwise eliminated most of its experienced TAA staff in the Washington office. But to date it has not completed the transfer and hired or trained the necessary regional staff. So the program is in limbo.

Meanwhile, the President recently announced a multi-agency consolidation of economic development programs that will eliminate EDA and its regional offices. Not surprisingly, the latest word from EDA is that plans to complete the move of TAA for Firms to the regional offices are now on indefinite hold. The President's fiscal year 2006 budget zeroes out TAA for Firms, even though Congress has authorized the program through fiscal year 2007. With funding in doubt and the Washington-based management structure for TAA for Firms already largely dismantled, this program is on the verge of a crisis.

TAA for Firms was not broken until someone decided to fix it. Now it is doomed to stay in limbo unless Congress acts to clean up the mess.

The bill I am introducing today solves these problems by moving administration of the TAA for Firms program from EDA into a different part of the Commerce Department--the International Trade Administration. I introduced this same bill last year with 15 co- sponsors.

Relocating the program to ITA makes sense. ITA has experience running this program, which was located there prior to 1990. Relocating TAA for Firms to ITA will result in fewer lays of government and more centralized and accountable program management than running it through EDA's regional offices or some new economic development agency.

Relocating the program also creates synergies by allowing better coordination of the TAA for Firms program with other trade and trade remedy programs administered by ITA. And it enhances the ability of the Finance Committee to carry out its oversight responsibilities for this program and for trade policy in general.

I do not want to see this important TAA program die of neglect. This legislation is a simple matter of good, sensible government. I encourage my colleagues to lend it their support.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, today I introduce the Trade Adjustment Assistance Equity for Service Workers Act.

Frankly, I am disappointed to be here introducing this bill yet again.

Just last week, the substance of the bill was adopted by a majority of members of the Finance Committee as an amendment to the implementing legislation for the United States-Central America-Dominican Republic Free Trade Agreement. But today, the administration sent us the final implementing bill with the amendment stripped out.

President Bush likes to say that trade is for everyone. That we all share the benefits, including workers. And he claims to care a lot about having a skilled workforce that can keep American businesses competitive in global markets.

This amendment presented the President with the perfect opportunity to put his money where his mouth is.

He could have said to the American people--as President Clinton did when Congress considered the NAFTA--that just as all Americans share in the benefits of trade, we all bear a responsibility for its costs. Trade liberalization and trade adjustment go hand in hand. And then he could have provided America's service sector workers with access to the one program designed to make that happen--Trade Adjustment Assistance.

But by submitting the CAFTA implementing bill stripped of the Trade Adjustment Assistance amendment passed by the Finance Committee, he chose not to.

Since 1962, Trade Adjustment Assistance--what we call ``TAA''--has provided retraining, income support, and other benefits so that workers who lose their jobs due to trade can make a new start.

The rationale for TAA is simple. When our government pursues trade liberalization, we create benefits for the economy as a whole. But there is always some dislocation from trade.

When he created the TAA program, President Kennedy explained that the Federal Government has an obligation ``to render assistance to those who suffer as a result of national trade policy.''

For more than 40 years, we have met that obligation through TAA, which is principally a retraining program designed to update worker skills.

The TAA program has not been static over time. Congress periodically revises the program to meet new economic realities. Most recently, in the Trade Act of 2002, Congress completed the most comprehensive overhaul and expansion of the TAA program since its inception.

I am proud to have played a leading role in passing this landmark legislation. But I am also the first to admit that our work is not done. Economic realities continue to change, and TAA must continue to change with them.

One fundamental aspect of TAA that has remained unchanged since 1962 is its focus on manufacturing. We only give TAA benefits to workers who make ``articles.''

Excluding service workers from TAA may have made sense in 1962, when most non-farm jobs were in manufacturing and most services were not traded across national borders.

But today, most American jobs are in the service sector. And the market for many services is becoming just as global as the market for manufactured goods.

In 2002, the service sector accounted for three quarters of U.S. private sector gross domestic product and nearly 80 percent of non-farm private employment.

Trade in services is a net plus for the U.S. economy. Although trade in goods continues to dominate, services accounted for 29 percent of the value of total U.S. exports in 2002 and the service sector generated a trade surplus of $74 billion.

Just as we have seen with trade in manufactured goods, however, there are winners and losers from trade. Trade in services will inevitably cost some workers their jobs.

Indeed, there have been some well-publicized examples in the papers. Software sign. Technical support. Accounting and tax preparation services. Not long ago, a group of call center workers in Kalispell, MT saw their jobs move to Canada and India.

Examples abound of service sector jobs--even high tech jobs-- relocating overseas. A series of studies estimate that between a half million and over 3 million U.S. service sector jobs would be moved offshore in the next 5 to 10 years.

That doesn't mean the total number of jobs in the U.S. economy is shrinking. But the fact that jobs may be available in a different field is cold comfort to a worker whose own skills are no longer in demand.

That is why this legislation is so important. It is a simple matter of equity.

When a factory relocates to another country, those workers are eligible for TAA. But when a call center moves to another country, those workers are not eligible for TAA. They should be.

The benefits service workers will receive under this legislation would be exactly the same as those that trade-impacted manufacturing workers now receive. They include retraining, income support, job search and relocation allowance, and a health coverage tax credit.

Hard working American service workers deserve this safety net. These benefits will always be second best to a job. But they can really make a difference in helping workers make a new start.

Truthfully, I am mystified by why the President so cavalierly dropped the TAA for Services amendment and let this opportunity pass him by. His actions are entirely inconsistent with his stated desire to make trade benefit all Americans. But, sadly, this has become a pattern.

Despite the obvious benefits of the TAA program, the Bush Administration fought tooth and nail against every penny, and against every provision in what became the Trade Adjustment Assistance Reform Act of 2002. Extending TAA to service workers was one of many needed improvements that was struck in the final version of the bill.

Again in the last Congress, the extension of TAA to service workers was offered as an amendment to the JOBS Act and opposed by the Administration. It garnered 54 votes from both sides ofthe aisle-- failing only on a technicality.

The world is changing and TAA must keep up with the times. Last year's Senate vote and this year's Finance Committee vote make clear that there is wide support for extending TAA to service workers. I truly believe this bill's time has come. I will work hard to move this legislation this year.

I want to thank Senators Coleman and Wyden for co-sponsoring this legislation. They have been stalwart supporters in the fight to bring equity to service workers. I look forward to working with them to make TAA for service workers a reality.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, today I introduce the Trade Adjustment Assistance for Firms Reorganization Act.

The Trade Adjustment Assistance for Firms program assists hundreds of mostly small and medium-sized manufacturing and agricultural companies in Montana and nationwide when they face layoffs and lost sales due to import competition. Qualifying companies develop adjustment plans and receive technical assistance to become more competitive, so that they can retain and expand employment.

The program is very cost effective. It requires the firms being helped to match the Federal assistance with their own funds, and it pays the government back in federal and State tax revenues when the firms succeed.

For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its safflower oil. And it is helping Porterbilt Company of Hamilton to expand its product line.

Currently, TAA for Firms clients receive assistance preparing petitions and adjustment plans from twelve Trade Adjustment Assistance Centers, which are Commerce Department contractors. Program and policy decisions are made by a small headquarters staff in the Commerce Department's Economic Development Administration.

In the Trade Act of 2002, Congress voted to reauthorize this important program for seven years and to increase its authorized funding level. The program seemed headed toward some years of smooth sailing. But it turns out that is not the case.

For reasons unrelated to TAA for Firms, EDA began more than a year ago to move all its headquarters programs to its six regional offices. For TAA for Firms, that means clients will still get the same local services from the TAACs, but decisions will be made in six regional offices plus a national policy office. The likely result is more personnel needed to run the program, more layers of government, less centralized and consistent decision making, and less accountability-- all without any likely improvement in customer service.

In preparation for this reorganization, EDA transferred or otherwise eliminated most of its experienced TAA staff in the Washington office. But to date it has not completed the transfer and hired or trained the necessary regional staff. So the program is in limbo.

Meanwhile, the President recently announced a multi-agency consolidation of economic development programs that will eliminate EDA and its regional offices. Not surprisingly, the latest word from EDA is that plans to complete the move of TAA for Firms to the regional offices are now on indefinite hold. The President's fiscal year 2006 budget zeroes out TAA for Firms, even though Congress has authorized the program through fiscal year 2007. With funding in doubt and the Washington-based management structure for TAA for Firms already largely dismantled, this program is on the verge of a crisis.

TAA for Firms was not broken until someone decided to fix it. Now it is doomed to stay in limbo unless Congress acts to clean up the mess.

The bill I am introducing today solves these problems by moving administration of the TAA for Firms program from EDA into a different part of the Commerce Department--the International Trade Administration. I introduced this same bill last year with 15 co- sponsors.

Relocating the program to ITA makes sense. ITA has experience running this program, which was located there prior to 1990. Relocating TAA for Firms to ITA will result in fewer lays of government and more centralized and accountable program management than running it through EDA's regional offices or some new economic development agency.

Relocating the program also creates synergies by allowing better coordination of the TAA for Firms program with other trade and trade remedy programs administered by ITA. And it enhances the ability of the Finance Committee to carry out its oversight responsibilities for this program and for trade policy in general.

I do not want to see this important TAA program die of neglect. This legislation is a simple matter of good, sensible government. I encourage my colleagues to lend it their support.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, today I introduce the Trade Adjustment Assistance Equity for Service Workers Act.

Frankly, I am disappointed to be here introducing this bill yet again.

Just last week, the substance of the bill was adopted by a majority of members of the Finance Committee as an amendment to the implementing legislation for the United States-Central America-Dominican Republic Free Trade Agreement. But today, the administration sent us the final implementing bill with the amendment stripped out.

President Bush likes to say that trade is for everyone. That we all share the benefits, including workers. And he claims to care a lot about having a skilled workforce that can keep American businesses competitive in global markets.

This amendment presented the President with the perfect opportunity to put his money where his mouth is.

He could have said to the American people--as President Clinton did when Congress considered the NAFTA--that just as all Americans share in the benefits of trade, we all bear a responsibility for its costs. Trade liberalization and trade adjustment go hand in hand. And then he could have provided America's service sector workers with access to the one program designed to make that happen--Trade Adjustment Assistance.

But by submitting the CAFTA implementing bill stripped of the Trade Adjustment Assistance amendment passed by the Finance Committee, he chose not to.

Since 1962, Trade Adjustment Assistance--what we call ``TAA''--has provided retraining, income support, and other benefits so that workers who lose their jobs due to trade can make a new start.

The rationale for TAA is simple. When our government pursues trade liberalization, we create benefits for the economy as a whole. But there is always some dislocation from trade.

When he created the TAA program, President Kennedy explained that the Federal Government has an obligation ``to render assistance to those who suffer as a result of national trade policy.''

For more than 40 years, we have met that obligation through TAA, which is principally a retraining program designed to update worker skills.

The TAA program has not been static over time. Congress periodically revises the program to meet new economic realities. Most recently, in the Trade Act of 2002, Congress completed the most comprehensive overhaul and expansion of the TAA program since its inception.

I am proud to have played a leading role in passing this landmark legislation. But I am also the first to admit that our work is not done. Economic realities continue to change, and TAA must continue to change with them.

One fundamental aspect of TAA that has remained unchanged since 1962 is its focus on manufacturing. We only give TAA benefits to workers who make ``articles.''

Excluding service workers from TAA may have made sense in 1962, when most non-farm jobs were in manufacturing and most services were not traded across national borders.

But today, most American jobs are in the service sector. And the market for many services is becoming just as global as the market for manufactured goods.

In 2002, the service sector accounted for three quarters of U.S. private sector gross domestic product and nearly 80 percent of non-farm private employment.

Trade in services is a net plus for the U.S. economy. Although trade in goods continues to dominate, services accounted for 29 percent of the value of total U.S. exports in 2002 and the service sector generated a trade surplus of $74 billion.

Just as we have seen with trade in manufactured goods, however, there are winners and losers from trade. Trade in services will inevitably cost some workers their jobs.

Indeed, there have been some well-publicized examples in the papers. Software sign. Technical support. Accounting and tax preparation services. Not long ago, a group of call center workers in Kalispell, MT saw their jobs move to Canada and India.

Examples abound of service sector jobs--even high tech jobs-- relocating overseas. A series of studies estimate that between a half million and over 3 million U.S. service sector jobs would be moved offshore in the next 5 to 10 years.

That doesn't mean the total number of jobs in the U.S. economy is shrinking. But the fact that jobs may be available in a different field is cold comfort to a worker whose own skills are no longer in demand.

That is why this legislation is so important. It is a simple matter of equity.

When a factory relocates to another country, those workers are eligible for TAA. But when a call center moves to another country, those workers are not eligible for TAA. They should be.

The benefits service workers will receive under this legislation would be exactly the same as those that trade-impacted manufacturing workers now receive. They include retraining, income support, job search and relocation allowance, and a health coverage tax credit.

Hard working American service workers deserve this safety net. These benefits will always be second best to a job. But they can really make a difference in helping workers make a new start.

Truthfully, I am mystified by why the President so cavalierly dropped the TAA for Services amendment and let this opportunity pass him by. His actions are entirely inconsistent with his stated desire to make trade benefit all Americans. But, sadly, this has become a pattern.

Despite the obvious benefits of the TAA program, the Bush Administration fought tooth and nail against every penny, and against every provision in what became the Trade Adjustment Assistance Reform Act of 2002. Extending TAA to service workers was one of many needed improvements that was struck in the final version of the bill.

Again in the last Congress, the extension of TAA to service workers was offered as an amendment to the JOBS Act and opposed by the Administration. It garnered 54 votes from both sides ofthe aisle-- failing only on a technicality.

The world is changing and TAA must keep up with the times. Last year's Senate vote and this year's Finance Committee vote make clear that there is wide support for extending TAA to service workers. I truly believe this bill's time has come. I will work hard to move this legislation this year.

I want to thank Senators Coleman and Wyden for co-sponsoring this legislation. They have been stalwart supporters in the fight to bring equity to service workers. I look forward to working with them to make TAA for service workers a reality.

I ask unanimous consent that the text of this bill be printed in the Record.

Mr. President, on rollcall No. 149 I voted ``nay'' but intended to vote ``yea.'' I ask unanimous consent that my vote be changed, as it will not affect the outcome.

Mr. President, I strongly support the Finance Committee's energy tax language.

Why are the incentives proposed in this language so important? First and foremost, they are important because of the energy challenges facing the Nation.

Energy is critical to our Nation's economy and security. Our continuing dependence on foreign oil increasingly threatens our vital national interests.

As the world's demand for oil continues to grow at a record pace, the world's oil producers strain to meet consumption. Today, OPEC is pumping close to full capacity. Even so, refined products remain scarce.

The price of oil has soared to more than $55 a barrel. The price of gas at the pump is a daily reminder of the scarcity of energy. Increasing energy prices stifle economic growth.

Folks in my home State of Montana are hit hard by rising energy prices. High gas prices particularly hurt folks who have to drive great distances. And high energy prices hurt small businesses, ranchers, and farmers by raising the costs of doing business.

We can do more to provide reliable energy from domestic sources. That is our first challenge.

Our next great energy challenge is to ensure safe, clean, and affordable energy from renewable resources. Energy produced from wind, water, sun, and waste holds great potential. But that energy cannot currently meet our national energy demands. Technology is helping to bridge the gap. But further development requires financial assistance.

The energy tax incentives take an evenhanded approach to an array of promising technologies. We do not yet know which new technologies will prove to be the most effective. As we go forward and provide the needed incentives to develop these new technologies, we also need appropriate cost-benefit assessments to guide future investments.

The energy tax language reflects the incentives endorsed by the Finance Committee last Thursday. These incentives make meaningful progress toward energy independence. They provide a balanced package of targeted incentives directed to renewable energy, traditional energy production, and energy efficiency.

These incentives would encourage new energy production, especially production from renewable sources.

They would encourage the development of new technology.

And they would encourage energy efficiency and conservation.

To encourage production, the tax language provides a uniform 10-year period for claiming production tax credits under section 45 of the Tax Code. This encourages production of electricity from all sources of renewable energy. It would not benefit one technology over another.

In Judith Gap, MT, wind whips across the wheat plains. Wind is a great and promising resource in Montana. But future development of wind projects needs support, like that provided in the tax language.

The tax language recognizes the value of coal and oil to our economy. It provides tax incentives for cleaner-burning coal and much-needed expansion of refinery capacity.

The lack of refinery capacity is driving up the price of oil. And our lack of domestic capacity increases our vulnerabilities. A new refinery has not been built in the U.S. since 1976. The tax language would encourage the development of additional refinery capacity domestically by allowing the development costs to be expensed.

The tax language also rewards energy conservation and efficiency, and encourages the use of clean-fuel vehicles and technologies. It provides an investment tax credit for recycling equipment. These incentives are environmentally responsible. They reduce pollution. And they improve people's health.

The energy tax provisions would make meaningful progress toward energy independence. They are balanced and fair. I encourage my colleagues to support this legislation.

I yield the floor.

Mr. President, I would like to briefly explain why I support Senator Cantwell's oil savings amendment to H.R. 6, the Energy bill.

First, Senator Cantwell's amendment sets a goal for the United States of reducing our dependence on foreign sources of oil by 4 percent by 2025. I do not understand how anyone could argue that it is not in this Nation's best interests to increase our domestic energy security and reduce our dependence on unreliable and undemocratic regimes abroad. We all like to talk about energy independence, but our efforts in that direction are lacking, as evidenced by the rapid growth in our dependence on oil imports that is projected to continue well into the future. I think Senator Cantwell's amendment sets a worthy target that we can all work together to achieve.

Second, we--the world' s greatest economy--can certainly achieve this goal in a way that not only reduces our reliance on foreign oil but spurs new innovation and economic growth, without penalizing any sector of our economy. This amendment is not a back-door effort to dramatically increase Corporate Average Fuel Economy standards, which I would not support. As modified it allows the President the flexibility to achieve the oil savings goal with existing authorities, or with new authorities that he or she requests from the Congress. Thus, the goal could be reached through a variety of means, including increased investments and incentives for hybrid vehicles and other transportation technologies or increased use of biofuels like ethanol and biodiesel.

Additionally, if the President is having difficulty reaching the goal, he or she need only reduce our depenence on foreign oil to the maximum extent practicable, and must ensure reliable and affordable energy for the country, and maintain a healthy economy with strong job growth.

This is a fair and sensible amendment, and I support it.

Mr. President, today I rise to pay tribute to Jesse R. Nichols, Sr. Mr. Nichols, who passed away on February 15, was the first African-American clerk for the Senate Finance Committee and one of its longest serving staff members. He worked with the committee from 1937 to 1971.

Born in Clarksdale, MS, Mr. Nichols came to the Finance Committee at a time early in the building of its staff. Back then, there were few, if any, African-Americans on staff with the Senate. At Finance, there were just three staff members with the committee and no standing subcommittees. Today, there are 70 staff members and 5 standing subcommittees.

During his more than 30 years with the committee, he created the committee's archival system and became our resident historian. He also contributed to the history of the Senate as a whole. In 1994, he generously participated in an extensive oral history for the Senate Historical Office. In it, he describes some of his most memorable moments during his long tenure. Mr. Nichols rubbed elbows with some of the most important leaders of the day--but he was excluded from eating in the Capitol's restaurant and cafeterias because of his race.

On the day that Mr. Nichols celebrated his 30th anniversary with the committee, several Senators paid him homage on the Capitol floor. They noted that Mr. Nichols outranked every member of the Finance Committee in terms of length of service. Senator Long in particular called Mr. Nichols a ``senior member'' of the committee and ``one of God's best people.'' When Mr. Nichols finally retired in 1971, the committee had to hire two people to carry on his extensive work.

I salute Mr. Nichols for his long and trusted service to the Senate and send my heartfelt condolences to the Nichols family.

Mr. President, today I am pleased to join my friend and colleague, Senator Hatch, in introducing legislation to make permanent the subpart F provision for active financial serviced income earned abroad.

The legislation we are filing today is identical to a bill we filed in the 107th Congress. Since then, this exemption has been temporarily extended but that will expire at the end of next year. This exemption ensures that the active financial services income earned abroad by U.S. financial services companies, or U.S. manufacturing firms with a financial service operation, is not subject to U.S. tax until that income is brought home to the U.S. parent company.

By making this provision permanent, our legislation will put the U.S. financial services industry on an equal footing with its foreign-based competitors, which do not face current home country taxation on active financial services income. I will tell my colleagues that this bill is about jobs in Montana, and in each of our States. In fact, one of these competitive U.S. financial services companies employs hundreds of Montanans in Great Falls alone, so the health of that company is critically important to my constituents.

American financial services companies successfully compete in world financial markets. We need to make sure, however, that the U.S. tax rules do not change that situation and make them less competitive in the world arena. This legislation will extend a provision that I believe preserves the international competitiveness of U.S.-based financial service companies, including finance and credit companies, commercial banks, securities firms, and insurance companies. This provision also contains appropriate safeguards to ensure that only truly active businesses benefit.

As my colleagues have heard year after year, the active financial services provision is critically important in today's global economy. Our U.S. financial services industry is a global leader playing a pivotal role in maintaining confidence in the international marketplace. It is a fiercely competitive business. And U.S.-based companies would surely be disadvantaged with an additional tax burden if we allow this exemption to lapse. Through our network of trade treaties, we have made tremendous progress in gaining access to new foreign markets for this industry in recent years. Our tax laws should complement, rather than undermine, this effort.

The temporary nature of the active financial services provision, like other expiring provisions, denies U.S. companies the stability enjoyed by their foreign competitors. It is time to make permanent this subpart F active financial services provision in order to allow U.S. business companies to make business decisions on a long-term basis. I ask my colleagues to join us in supporting this legislation, providing consistent, equitable, and stable tax treatment for the U.S. financial services industry.

Mr. President, today I am pleased to join my friend and colleague, Senator Hatch, in introducing legislation to make permanent the subpart F provision for active financial serviced income earned abroad.

The legislation we are filing today is identical to a bill we filed in the 107th Congress. Since then, this exemption has been temporarily extended but that will expire at the end of next year. This exemption ensures that the active financial services income earned abroad by U.S. financial services companies, or U.S. manufacturing firms with a financial service operation, is not subject to U.S. tax until that income is brought home to the U.S. parent company.

By making this provision permanent, our legislation will put the U.S. financial services industry on an equal footing with its foreign-based competitors, which do not face current home country taxation on active financial services income. I will tell my colleagues that this bill is about jobs in Montana, and in each of our States. In fact, one of these competitive U.S. financial services companies employs hundreds of Montanans in Great Falls alone, so the health of that company is critically important to my constituents.

American financial services companies successfully compete in world financial markets. We need to make sure, however, that the U.S. tax rules do not change that situation and make them less competitive in the world arena. This legislation will extend a provision that I believe preserves the international competitiveness of U.S.-based financial service companies, including finance and credit companies, commercial banks, securities firms, and insurance companies. This provision also contains appropriate safeguards to ensure that only truly active businesses benefit.

As my colleagues have heard year after year, the active financial services provision is critically important in today's global economy. Our U.S. financial services industry is a global leader playing a pivotal role in maintaining confidence in the international marketplace. It is a fiercely competitive business. And U.S.-based companies would surely be disadvantaged with an additional tax burden if we allow this exemption to lapse. Through our network of trade treaties, we have made tremendous progress in gaining access to new foreign markets for this industry in recent years. Our tax laws should complement, rather than undermine, this effort.

The temporary nature of the active financial services provision, like other expiring provisions, denies U.S. companies the stability enjoyed by their foreign competitors. It is time to make permanent this subpart F active financial services provision in order to allow U.S. business companies to make business decisions on a long-term basis. I ask my colleagues to join us in supporting this legislation, providing consistent, equitable, and stable tax treatment for the U.S. financial services industry.

Mr. President, I am pleased to join Senator Grassley, and our other colleagues, in introducing legislation to make the Section 529 enhancements enacted in 2001 permanent.

In 2001, it was the Senate, especially my good friend Chairman Grassley, that insisted on including education savings in the tax bill. I am proud of that fact. And I am proud that the Senate is again taking the lead to make these important provisions permanent.

Higher education is critical to our children's future and our Nation's economy. As a parent, or grandparent, you know that providing your children with a college education means they are likely to earn substantially more than if they only have a high school degree. One study estimated a million dollars more in today's dollars.

College is a good investment, but a very expensive one. The cost of tuition is rising every year. Over the past ten years, expenses at public universities have increased nearly 40 percent. The U.S. Department of Education says the average cost of a four-year education is currently $34,000 and almost $90,000 for private colleges.

In 1996, Congress created 529 plans to help families plan for this expense. Since their inception, 529 plans have helped families' college savings grow faster by not taxing investment income while it is accumulating in the account. In 2001, we saw a need to do more to help families deal with skyrocketing costs, so we allowed tax-free distributions from the account, as long as the money goes for its intended purpose--post-secondary education expenses. This income exclusion will expire after 2010 if we don't do something about it.

There are a lot of provisions that will expire in 2010--so why focus on this one provision today? Because saving for college doesn't happen in five or six years. We want families to save today for college expenses fifteen to twenty years from now. Without this legislation, we are asking families to make critical investment decisions without the promise of today's tax benefits. This is not a good way to encourage savings. Making this tax benefit permanent will allow families to plan and finance their children's education beyond 2010.

Thousands of young people back home have 529 plan accounts. By the end of 2004, Montana families had over $128 million set aside through the Montana Family Education Savings Program. Across the country there is about $68 billion invested in over 7 million accounts. The average account balance is just over $9,000. Not enough to finance a college education, but an important start.

One of the great things about 529 plans is that grandparents can save for the future of their grandchildren. That is what Arlene Hannawalt did--she saved through a 529 plan for her granddaughter Nicole's education. Nicole dropped out of high school, but she is getting her GED. Later this year, with help from her 529 account, Nicole will be going to the University of Montana--Helena College of Technology to study accounting.

Nicole's father is in the Army National Guard, serving in Iraq. Our prayers are with him. I'm sure Nicole's family is very pleased that she will soon be a college student.

Tax-favored treatment for college savings is good policy, but it is not free. I assure my colleagues that we will be looking for appropriate offsets to cover the cost of this bill.

Education is one of my top priorities. And saving for education should be one of a family's top priorities. I encourage my colleagues to join in making the tax status of 529 benefits permanent to help millions of American families plan for their children's future.

Mr. President, I am pleased to join Senator Grassley, and our other colleagues, in introducing legislation to make the Section 529 enhancements enacted in 2001 permanent.

In 2001, it was the Senate, especially my good friend Chairman Grassley, that insisted on including education savings in the tax bill. I am proud of that fact. And I am proud that the Senate is again taking the lead to make these important provisions permanent.

Higher education is critical to our children's future and our Nation's economy. As a parent, or grandparent, you know that providing your children with a college education means they are likely to earn substantially more than if they only have a high school degree. One study estimated a million dollars more in today's dollars.

College is a good investment, but a very expensive one. The cost of tuition is rising every year. Over the past ten years, expenses at public universities have increased nearly 40 percent. The U.S. Department of Education says the average cost of a four-year education is currently $34,000 and almost $90,000 for private colleges.

In 1996, Congress created 529 plans to help families plan for this expense. Since their inception, 529 plans have helped families' college savings grow faster by not taxing investment income while it is accumulating in the account. In 2001, we saw a need to do more to help families deal with skyrocketing costs, so we allowed tax-free distributions from the account, as long as the money goes for its intended purpose--post-secondary education expenses. This income exclusion will expire after 2010 if we don't do something about it.

There are a lot of provisions that will expire in 2010--so why focus on this one provision today? Because saving for college doesn't happen in five or six years. We want families to save today for college expenses fifteen to twenty years from now. Without this legislation, we are asking families to make critical investment decisions without the promise of today's tax benefits. This is not a good way to encourage savings. Making this tax benefit permanent will allow families to plan and finance their children's education beyond 2010.

Thousands of young people back home have 529 plan accounts. By the end of 2004, Montana families had over $128 million set aside through the Montana Family Education Savings Program. Across the country there is about $68 billion invested in over 7 million accounts. The average account balance is just over $9,000. Not enough to finance a college education, but an important start.

One of the great things about 529 plans is that grandparents can save for the future of their grandchildren. That is what Arlene Hannawalt did--she saved through a 529 plan for her granddaughter Nicole's education. Nicole dropped out of high school, but she is getting her GED. Later this year, with help from her 529 account, Nicole will be going to the University of Montana--Helena College of Technology to study accounting.

Nicole's father is in the Army National Guard, serving in Iraq. Our prayers are with him. I'm sure Nicole's family is very pleased that she will soon be a college student.

Tax-favored treatment for college savings is good policy, but it is not free. I assure my colleagues that we will be looking for appropriate offsets to cover the cost of this bill.

Education is one of my top priorities. And saving for education should be one of a family's top priorities. I encourage my colleagues to join in making the tax status of 529 benefits permanent to help millions of American families plan for their children's future.

Mr. President, this weekend, millions of Americans watched in suspense as Anakin Skywalker was lured to the Dark side and became Darth Vader. What millions of those same Americans may not be aware of is another Darth Vader lurking in our tax code; that is, the Alternative Minimum Tax, or AMT.

The AMT has many of the same qualities as Anakin Skywalker. The AMT was supposed to bring order and fairness to the tax world, but it eventually got off on the wrong path and became a threat to middle- income taxpayers. Both Skywalker and the AMT started off with great intentions, but eventually they went astray. And now we have the Darth Vader of the Tax Code bearing down on millions of unsuspecting families.

That is why I am pleased to join with my friend and Chairman Chuck Grassley, and our fellow committee colleagues, Senators Wyden and Kyl, to introduce legislation today that will repeal the individual AMT. Our bill simply says that individuals beginning January 1, 2006 will owe zero, I repeat, zero dollars under the AMT. Further, our bill provides that individuals with AMT credits can continue to use those up to 90 percent of their regular tax liability.

If we do not act, CRS estimates that in 2006, the family-unfriendly AMT will hit middle-income families earning $63,000 with three children. What was once meant to ensure that a handful of millionaires did not eliminate all taxes through excessive deductions is now meaning millions of working families, including thousands in my home State of Montana, are subject to a higher stealth tax. It is truly bizarre, Mr. Chairman, that we have designed a tax deeming more children ``excessive deductions'' and duly paying your State taxes a bad thing. Already, 5,000 Montana families pay a higher tax because of the AMT. But this number could multiply many times over if we do not act soon.

Not only is the AMT unfair and poorly targeted, it is an awful mess to figure out. The Finance Committee heard testimony today from our National Taxpayer Advocate, who has singled out this item as causing the most complexity for individual taxpayers, and also from a tax practitioner who has seen first-hand how difficult this is for her clients. We heard also from other witnesses who said it is time for repeal of the AMT.

Of course, repeal does not come without cost and that cost is significant even if we assume the 2001 and 2003 tax cuts are not extended. We are committed to working together to identify reasonable offsets. Certainly, I do not think we want a tax system unfairly placing a higher tax burden on millions of middle-income families with children. But it does not serve those families either if our budget deficit is significantly worse.

Again, I look forward to working with my colleagues on this AMT repeal bill will put an end to the Darth Vader of the tax code, without any sequels.