Floor Statements

Mr. President, I rise today to thank Mr. Andrew Harig for his hard work on the Senate Finance Committee.

Andy was on the staff of the Finance Committee throughout most of the 107th Congress. He was an integral part of the international trade policy team which, among other things, worked hard to win passage of the implementing legislation for the U.S.-Jordan Free Trade Agreement and the Trade Act of 2002.

In my estimation, last Congress was the most productive in at least a decade on important international trade legislation. Last year, we finally built a new bipartisan consensus that ended a deadlock that had frozen progress on most new trade agreements for nearly a decade, finally made some real progress on integrating labor and environmental issues into trade negotiations, and revamped the U.S. programs for workers who lose their jobs because of trade.

In the press, the credit for these achievements was given to Senator Grassley, Representative Thomas, myself, and other Members of Congress. But as is always the case, the achievements on trade could not have been made were it not for the contributions of people like Andy who toil behind the scenes. Without their efforts there would be no legislation passed.

In Andy's case, he cheerfully undertook one of the most thankless tasks on the Finance Committee's list of responsibilities--passage of the Miscellaneous Tariff Bill. This legislation is made up of literally dozens of smaller bills that suspend collection of tariffs on products not made in the United States and address other Customs issues.

Passage of this legislation requires a seemingly endless effort to analyze the hundreds of bills submitted and eliminate those that are controversial or have too great a budgetary impact. It requires coordinating with a half dozen administrative agencies, the U.S. International Trade Commission, the other House of Congress, and, of course, 100 Senate offices.

As I said, it is a largely thankless task, but one that is critical to hundreds of American companies and thousands of American workers. Andy Harig was the lead staff person on this legislation for the majority and--together with his counterpart on the other side of the aisle, Carrie Clarke--he did the lion's share of this work.

Unfortunately, the Senate was not able to pass this important legislation last year, but Senator Grassley and I continue to work on the bill, and I hope we can eventually win passage of it--either as a free standing bill or as part of other legislation.

But whether we succeed or not, the Senate, the business community and I all owe Andrew Harig thanks for his efforts on the Miscellaneous Tariff Bill and other international trade legislation.

Andy has decided to leave the Senate to pursue an opportunity in the private sector. I wish him all the best. Of course, the Senate will continue to work after Andy leaves, but I think it will be a bit poorer for the loss of another hard-working staff person. Goodbye, Andy, and good luck.

Mr. President, I yield 10 minutes to the Senator from Minnesota, Mr. Dayton.

Mr. President, I yield 10 minutes to the Senator from North Dakota.

I yield 30 seconds more to the Senator from North Dakota.

Mr. President, I yield myself 5 minutes.

Mr. President, as this debate on the budget reconciliation bill comes to a close, I congratulate the chairman of the Finance Committee, Chuck Grassley. He has done a very good job with a very difficult task. For him, the race has not been easy. Even though some may not have thought it possible, he has come to the finish line today.

In some ways, the conference report has responded to the debate in the Senate. For example, the conference report did move roughly three- fifths of the benefits of the package into the first 2 years. That is clearly more stimulative than the structure of the bill that went to conference.

I also wish to commend Senator Grassley, Senator Voinovich, and Senator Snowe for doing what they could to restrain the total size of the bill. Senator Voinovich kept his promise and forced the conferees to keep the conference report, on its face, within the $350 billion Senate agreement.

Unfortunately, this tax bill busts through the $350 billion with a series of gimmicks to hide the true cost of the bill. In this time of increasing deficits, we must live within limits. This conference report fails to do so. Instead, it uses a series of sunsets to shoehorn large tax cuts into a small budget window. In the words of a conservative tax cut advocate, Stephen Moore, ``It's bigger than it looks.''

The conferees have designed a tax cut that is one big yo-yo. Now you see it, now you don't. Child credit is increased for 2003 and 2004. Then it is taken away. Part of the marriage penalty is eliminated for 2003 and 2004, and then the penalty comes back. The 10-percent tax bracket is expanded for 2003. Then it reverts back. Even the dividend tax cut disappears after 2008. If accounting gimmicks and financial statement manipulations were intolerable for corporate America, then why not for the Congress?

Further, this conference report is not fair to working Americans or to our military personnel. The benefits of this bill are skewed heavily to the elite. One of the beauties of America is that we work to treat people equally, but this bill does not treat all Americans alike. We are not being brought together as Americans.

The bill lowers the rate for dividends, it lowers the tax on capital gains, and it increases the tax on 1.6 million more Americans by forcing them into the alternative minimum tax in 2005. The bill says it is a priority to ensure that only the people who pay full freight are those hard-working Americans who earn their income in wages.

The bill that returned from conference also stripped out provisions to provide tax relief for those serving our country in the armed services--those serving in Iraq, Afghanistan, and across the globe.

This conference report does less than it could to rebuild the American economy. It misdirects its tax breaks to those more likely to save them and less likely to spend them immediately.

The bill increases the budget deficit and lays the bill at the door of our children and our grandchildren, it fails to follow in the American tradition of fairness, and the bill is simply not structured to be effective in rebuilding the American economy.

This week, Alan Greenspan expressed his dismay at the lack of budget discipline in Washington, especially with the failure to take seriously the significant budget problems looming because of the aging and baby boom generations. In his words, ``The silence is deafening.'' I will not be part of that silence.

I urge Senators to consider what they are doing today. I urge my colleagues to vote against this conference report.

I reserve the remainder of my time, Mr. President.

Mr. President, I commend the chairman for raising this issue at conference. It is a very serious issue; that is, whether corporations that invert should enjoy the privileges of some of the provisions of the bill about to be passed and soon signed by the President.

I say to my good friend that I want to work with the chairman in defining what the proper way is to deal with dividends paid by corporations who invert. I hope to find a good solid solution.

I yield back the remainder of my time.

Mr. President, before we turn to the debt limit bill, I just have a couple of remarks to make.

Putting this tax bill together that was just passed has been a difficult task and made more difficult by the politics involved. Nonetheless, the Finance Committee staff--both Democrats and Republicans--worked very well together, I think in a bipartisan fashion, to help get us where we are.

I thank the Finance Committee staff for their counsel and for their hard work. They spent many long hours on this legislation.

I appreciate the cooperation we received from the Republican staff, particularly Kolan Davis, Ted Totman, Mark Prater, Christy Mistr, Ed McClellan, Elizabeth Paris, Diann Howland, and Dean Zerbe.

I also thank my staff for their hard work and dedication, including Jeff Forbes, Russ Sullivan, Bill Dauster, Matt Jones, Liz Liebschutz, Patrick Heck, Anita Horn Rizek, Jonathan Selib, Lara Birkes, Liz Fowler, Alan Cohen, Tom Klouda, and Kate Kirchgraber.

I also thank our dedicated fellows: Alisa Blum, Mark Kirbabas, Rhonda Sinkfield, and Renee Johnson.

Finally, I thank our intern, Mike Wiedrick, who joined the Finance Committee the week of the markup of this bill and did not miss a step.

Particularly, I thank the staff of the Joint Committee on Taxation for their invaluable service. They worked very hard under very difficult circumstances. I know I speak for all Members in commending them.

Mr. President, today we are discussing legislation to raise the statutory limit on the Federal debt, the ceiling on how much the Treasury Department can borrow. It is a very important matter.

The Federal debt is like the family credit card. Sooner or later you have to pay down the debts that you have already incurred. If you don't, your credit rating will suffer. The way the Government raises the debt limit is also like a family who just keeps calling the bank every time they hit the credit limit and asks the bank over and over again for an increase in their credit limit without regard to anything else. Rather than pay down their debt, they just keep on asking for a higher debt limit.

When the credit card bill comes, it is a time to reassess the family's budget. It is a time to review the debts and to control the future spending. The fiscally responsible approach is that of the typical Montana family who, rather than just ask for an increase in their credit limit, sits down at the kitchen table and reassesses their budget. And so should we.

Let's put this in perspective. This debt limit increase is one big bill. This bill calls for an increase of almost $1 trillion. I have a chart behind me that shows the increase of the debt limit. This bill calls for an increase of $984 billion in the debt ceiling, nearly $1 trillion. This will be the largest debt limit increase in history. This will be an increase of about $3,400 in debt for every man, woman, and child in America. That is signified by the column on the right, which is the debt limit increase being asked for here.

That is just the increase. The debt subject to limit is already more than $22,000 per person. This $3,400 increase would come on top of that. Before this bill, the largest increase was in 1990, under the first Bush administration. Then the Government increased the debt limit by $915 billion.

Since 1990, the Government has increased the debt limit five times. The average of those five increases was about $450 billion. So $984 billion is a very large number. It is out of line with the most recent precedents. It is too large a number for us to make now.

As this debt limit increases, it is just the tip of the iceberg. The budget resolution lays out the fiscal course on which we are headed. Page 4 of the budget resolution says in black and white: If we follow the budget resolution, the debt will grow to $12,040,000,000,000 in 2013. That is page 4 of the budget resolution Congress passed. That would be $39,000 in debt for every man, woman, and child in the country in 2013, 10 years from now. Following the budget resolution, of course, would leave a legacy of nearly $40,000 in debt for every American child coming into the world about the time the baby boomers arrive.

I come from a State where the average income per person is about $22,000. So these are large numbers. This large debt means that the Federal Government has to spend the first dollars it receives to pay interest on past debts. Before the Government can spend a cent on national defense, education, it would have to set aside $157 billion a year on net interest on the debt. More

than 11 cents on every on-budget tax dollar has to go directly to pay net interest before the Government can spend on any current needs.

That is a debt tax that every taxpayer has to pay. It is a debt tax that robs this generation and future generations of the ability to make their own fiscal choices.

The time has come for us to reassess our budget. This is a time to look to see where we are and how we got here. Not long ago our country was paying down the debt. When the Government ran budget surpluses in the late 1990s and the beginning of this decade, it reduced the Government's demand on the credit markets.

From 1998 to 2001, the Government reduced debt held by the public by $448 billion. That is demonstrated by the chart behind me to my immediate left. It shows from 2000 to 2003, about 33.1 percent was the debt ratio to GDP; that is, we were paying down the debt. That is that steep declining solid red line with the debt being paid down.

When the Government returned to budget deficits at 2002, it began, once again, to mount up debt held by the public. In 2002, the Government ran a deficit of $158 billion. The deficit this current year will be much higher.

In January 2001, the Congressional Budget Office projected surpluses of $5.6 trillion for the next decade. That was 2001. Now CBO projects that the President's budget will result in deficits of $2.1 trillion for the same period. Thus, CBO's projections of the decade to come have changed by almost $8 trillion in just 2 years. Imagine, an $8 trillion difference in just 2 years--from a $5.6 trillion surplus to a $2.1 trillion deficit.

These are times of great uncertainty for budget projections. The recent budget projections have continued this trend. In its May budget review, CBO made a new larger deficit projection for fiscal year 2003. According to that new review, the most recent, CBO now expects that the Government will end 2003 with a deficit of over $300 billion. That is compared with its March baseline of $246 billion. So the budget resolution projection of $12 trillion debt limit for 2013 may understate the debt we will pass along to future generations. That is certainly clear if we stay on the present course. And all these deficit figures are for the total budget deficit before netting out the surpluses contributed by Social Security.

Since the Social Security reforms of 1983, Social Security has been running surpluses. I will never forget Alan Greenspan headed that commission; Senators Dole and Moynihan were on it. They came up with good suggestions for the Congress to pass, and we did. Consequently, since the recommendations, Social Security has been running surpluses. The goal of doing so was to increase national savings in anticipation of the retirement of the baby boom generation starting in the next decades. Senator Moynihan would constantly remind us of that date. If we had balanced the rest of the budget, we would have increased national savings.

But the rest of the budget has not been in surplus. It is not in surplus now. So these trust fund surpluses have masked the size of Government deficits.

The Government's deficits are thus much larger than they appear. As the baby boom generation begins to retire, Social Security's annual surpluses will eventually turn into deficits. Moreover, CBO projects deficits for the rest of the Government will continue as far as the eye can see. So the true larger size of the Government's budget deficits will become all too apparent in the next decade.

This debt limit bill is very much related to our budget deficits and the coming budget pressure from the retirement of the baby boom generation. Think of our children and our grandchildren trying to make ends meet in their lives. When this generation piles up debt, it is imposing a tax on them. It is raising their taxes. We have a moral obligation, I believe, to act as good stewards of what we have been given, whether it is in the environment or the economy. We have an obligation to leave things for our children and grandchildren in at least as good shape as we found them.

This is a great country of which we can be proud. We have weathered many storms in the past--economic and otherwise.

We live in times of great uncertainty and great challenges. A good steward would not tempt the fate. A good steward would ensure that we do not add to the challenges our children will have to face.

In too many spheres, there has been too much seeking after rewards for this generation, for now. Rather, we should exercise responsibility. We should ensure that we act as guardians of future generations. After all, we are not all going to be here forever.

It is time to reassess. It is time to change course. First, we need to stop making the deficits and the debt worse. We need to put the brakes on the size of spending increases and tax cuts.

This debate is very much related to the one just concluded on the tax bill. We need to limit the size of future tax cuts. And wherever possible, we need to pay for tax cuts, as we did with the CARE act and the military tax bill. Stop the gimmicks. Be honest about long-term costs.

Second, we need to extend and strengthen our budget process constraints. The pay-as-you-go rule and the appropriations caps contributed to the fiscal responsibility of the 1990s. We need to follow the rules.

Third, the debt limit itself should provide a much needed brake on fiscal irresponsibility. We should not increase the debt limit by the large amount that the House of Representatives proposes. Rather, we should force the Government to reassess its fiscal situation again later this year--not next year as the House contemplates--when we will have a clearer picture of how the economy and budget are faring.

Returning to the analogy of the family credit card, the credit limit on the credit card is a check on future spending. Similarly, with the debt limit, a smaller increase now will ensure that we in Congress address the Government's fiscal policy again later this year.

So this is an important debate. It may not be a glamorous issue, but it is a very important one. We have a weighty responsibility. This is an issue that the Senate should debate. Certainly, we should not hide behind the rules to avoid votes, as the House of Representatives has done. Certainly, we should not flee from the issues, and to a recess, without full consideration of this issue.

We will address it best if we do not simply approve this bill without amendment. Rather, we need to debate and understand why we are here. We need to scale back this too large amount. If the Senate doesn't reduce the size of the debt increase, I will oppose it. And we should add procedures to ensure greater fiscal responsibility in the future.

Only by taking these steps will we be meeting our responsibility. I urge my colleagues to join me in that effort.

At the appropriate time, I will offer an amendment to reduce the increase in the debt limit.

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

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

Mr. President, this amendment is simple. This amendment would reduce the amount by which we are raising the debt limit to $350 billion. That is $634 billion less than the underlying bill.

The legislation the House sent to us would raise the debt limit by $984 billion. That would be the largest debt limit increase in history. The previous record was $915 billion in 1990, under President George Herbert Walker Bush.

The average of the five debt ceiling increases since 1990 has been $450 billion. Plainly, the debt limit increase in the bill before us is out of proportion with recent precedent.

We should not raise the debt limit by so much. We should increase it by an amount significantly smaller than $984 billion.

It is very easy to explain why we have a smaller increase. It is because we are living in uncertain times, unpredictable times. I have sort of a pet theory that increases in technology, particularly communications technology, which makes our society much more complex and uncertain--not only for the U.S. but for the world--and we are experiencing the effects of actions in the world, from terrorism and SARS--make it difficult for the U.S. to rely on the best of projections.

The best of projections indicate that the fiscal condition of the country is unhealthy for both the current year and future years. This is especially troubling because the baby boom generation will begin to retire in a few short years. Social Security, Medicare, and Medicaid expenditures will soar, putting enormous strains on the Federal budget.

And new projections of even the short run keep showing conditions worsening, even when only a short time has elapsed since the previous estimate. Most recently, the CBO increased its forecast of the current year deficit by more than $55 billion. That is over just 2 months. If you project that out, that means in a year--6 times 55--that is about a $330 billion difference.

Under these circumstances, Congress should reexamine the fiscal situation later this year. To ensure that this occurs, the size of the debt limit increase must be significantly smaller than $984 billion. We cannot wait until next year--late next year or in the summer of next year as contemplated by the underlying proposal--to examine and reexamine our budgetary problems. A $984 billion debt limit increase is just not responsible.

I made the credit card analogy a couple of times. I will say it once again. A $984 billion debt limit increase is like a family that wants the credit card bill to come only once a year. If the credit card bill came only once a year, the family might well not talk about the family budget quite so often. As a result, they would probably not maintain as good control of the budget as they would with a monthly statement. There is reason the bank sends bills more frequently, sends statements out monthly. It ensures more frequent review of the debt limit. That is all my amendment would require. I urge my colleagues to support it.

Mr. President, how much time do I have remaining?

Mr. President, I want to make clear that I have not heard one substantive reason against this, not one. Rather, the argument against this is the House is gone. We all know the House has gone because they do not want to vote on this issue. They planned to have the Senate bring the debt limit up at this time. The House planned to leave before the debt limit came up. They planned that so they do not have to vote on the issue. The other side plans to vote down all amendments so they do not have to go back to the House. It is a gimmick. It is a game.

There is not one word of substance as to why we should not have a smaller

debt ceiling rather than a full year. I think it is time to call it as it is and explain what has happened here. What I explained is what is happening.

Mr. President, I yield back my time. I believe the yeas and nays have already been ordered.

These are important amendments. I believe Senators should listen to debate.

Mr. President, sometime in the near future--near is in the eyes of the beholder--we are going to vote on the conference report to the tax cut bill. When that does come up before the Senate, I will oppose the bill and recommend the conference report not be adopted.

The conference report, which will be before us soon, is, first, not fiscally responsible. It is not fair to working Americans, and is not likely to succeed in rebuilding the American economy.

First, fiscal responsibility: Two years ago when we considered the 2001 tax cut, the Congressional Budget Office projected trillions of dollars of surpluses well into the future. In fact, $5.6 trillion was projected as budget surpluses over the next 10 years. Today, that same neutral, independent body, the Congressional Budget Office, projects deficits well into the future, and the rough estimate is about $2 trillion of deficits, a swing of close to $7 trillion to $8 trillion over just 2 years.

The fiscal environment has dramatically changed since 2002. If that is the case, I believe our tax policies should also change. Whereas in 2001 it made sense to cut taxes, today we should look much more carefully at any potential tax cut.

The fiscal environment has changed very much today compared to where it was in 2001. Consequently, we should be carefully examining our tax policies and asking whether our tax policies should change accordingly.

The Senator from Ohio, Mr. Voinovich, kept his word and forced the conferees to keep the conference report, at least on its face, within the $350 billion Senate agreement. Unfortunately, this tax cut bill busts through that $350 billion ceiling through a series of gimmicks that hide the true cost of the bill, and in this time of increasing deficits, I believe we must live within our limits, and this conference report fails to do so.

Instead, it uses phase-ins and sunsets to shoehorn large tax cuts into a small budget window. Republicans have designed a tax cut that is one big yo-yo. Now you see it, now you don't. Here again, on again, off again. It is one big yo-yo which I will explain in a few minutes.

The child credit, for example, has increased for the years 2003 and 2004, and then guess what. It is taken away. That is one yo-yo.

Part of the marriage penalty is eliminated for the years 2003 and 2004. Guess what again. The penalty comes back again after 2004.

The 10-percent bracket is expanded for 2003 and 2004. Then it reverts back.

Even the dividend tax cut disappears after 2008.

Individual taxpayers and corporate taxpayers, I believe, want certainty. They want some predictability. They want to be able to plan for their families, and companies want to plan for the future. Individuals want to know whether they can plan for vacations, education, and companies want to know whether to invest or not invest. We certainly do not give them that certainty and predictability in this bill.

As for planning, this bill tells American taxpayers, for example, to get married in the year 2003 or 2004, have a child in 2003 or 2004, and then get divorced in 2005. This bill is simply full of way too many gimmicks.

Last year, Members of Congress and the President expressed their outrage at the accounting gimmicks and manipulations of income and expenses by Enron, WorldCom, Adelphia. In fact, legislation was enacted last year to put the brakes on the use of accounting gimmicks by corporate America.

If these accounting gimmicks and financial statement manipulations are so intolerable in corporate America, then why are they not intolerable for the U.S. Congress? Why should Congress be allowed to deceive the American public?

What is really going on here? What is really going on is that the majority intends to extend these tax cuts beyond the budget window. That is what is really going on here. That is the accounting gimmick. That is what is hidden. But if we extend the tax cuts, they will only add to the long-term budget problem. That is, if they are extended as intended by the majority party, they will add to the fiscal nightmares just as we face budget strains brought on by the baby boom generation. Congress should come clean with what is really going on, what it is really up to.

Second, this conference report is not fair to working Americans. The benefits of this bill are skewed heavily to the elite in this country. It mistakenly directs less of its resources to working American families--much less. In this sluggish economy, that is also not good economic policy. Working American families are more likely to spend tax cuts quickly; that is, tax cuts directed at working American families will more likely help rebuild the American economy, but that is not what this bill does.

Take, for example, the tax cuts for dividends. This tax cut alone is heavily weighted to the elite. Three out of four American taxpayers have no dividend income, and half of those who do have dividend income have less than $500 in dividend income. That is about one out of eight at $500 or less in dividend income. So the overwhelming majority of Americans will get little or no benefit from this provision. But look how much this single provision will benefit the elite who do profit from it.

A taxpayer who had a million dollars in dividend income will get a tax break of $236,000. In contrast, $118 or less in tax cuts for the seven-eighths of taxpayers who receive $500 or less in dividend income and $236,000 for the dividend millionaire. That is simply not fair.

Let's look at priorities. The dividends provision is the single largest provision in the bill. That means the bill imposes a penalty on wage earners by definition.

Under the bill, the maximum tax on investment income, that is, dividends and capital gains, is 15 percent. The tax on the wages, however, continues to be heavy. A single fireman earning $35,000 per year pays 40 percent of his marginal income in Federal taxes, 15 percent in payroll taxes, plus 25 percent in income taxes.

In contrast, a retired investment banker living off the dividends on a $1 million portfolio of stocks pays only 15 percent of his marginal income in Federal taxes. Again, this is not fair.

Whatever happened to the argument that we need to eliminate the double taxation of dividends? I thought that is what this bill was supposed to be primarily about. This conference report does not do that. It does not eliminate the double taxation of dividends. Rather, in many cases it would eliminate not only the double taxation of dividends, but it eliminates even the one-

time taxation of dividends income. That means zero taxation on dividends.

In many cases, as a consequence of the way this conference report is written, there will be no taxation on many dividends offered by corporations. The corporation will not pay the tax, and the shareholder will not pay the tax.

So this bill lowers the tax for dividends. It lowers the tax for capital gains. The bill says it is a priority of the majority party and the President, apparently, to ensure that the only people who need to pay full freight are those hard-working Americans who earn their income in wages.

The American way is to work hard, to earn income, to do well. There is much more opportunity and mobility in America than any other country, by far. Foreigners who come to America to live and start a business are astounded at the opportunity and mobility in this country compared to the country from which they came.

I do not criticize--in fact, I applaud--anybody who works hard and can earn an income and do well in America. At least they have a much better chance in this country compared with any other country. So I am not being critical of those who make a lot of money. That is great. I wish all Americans could make a lot of money. In fact, that is my underlying goal, certainly in my home State of Montana, to do what we can to get more people to earn more money and get higher paying jobs so more Americans are able to make ends meet.

In this bill, all of America is not being treated alike. We are not being treated together as Americans. This bill is tilted very heavily toward the elite, the extremely wealthy. They are the ones who get the big tax breaks, whereas the average American does not. That is not fair. The benefits of this bill should be evenly distributed among all Americans. That is not what has happened in this bill.

I am not being critical of tax breaks for the wealthy. They should get tax breaks, but I am saying as Americans we should pass legislation that treats Americans equally. That is not what is happening in this bill.

Basically, this bill is not fair. It is not good tax policy, and it does nothing to encourage the work ethic that built this Nation.

I might ask now, how did the conference committee pay for this nontaxation of dividends? The conference committee turned to the Americans today who otherwise would receive the relief under the marriage penalty to, in effect, pay for these tax-free dividends. To say it differently, the marriage penalty tax cuts were scaled back to pay for the dividend proposal in this bill; that is, couples are going to be penalized under this bill to pay for the huge breaks in dividend income for the elite of this country.

What about the marriage penalty for lower income families? No, this conference report does not find the resources to speed up the elimination of the marriage penalty for recipients of the earned-income tax credit, but it does find the money for the dividend tax break. Once again, that is not good tax policy. It is not fair. It does illustrate priorities but I think the wrong priorities for our country.

So this bill increases the budget deficit and lays the bill at the door of our children and grandchildren. I think those of us who seek public office have a moral responsibility to represent people in our home States. That moral responsibility is to do our best to leave this country in as good a shape or better shape than we found it. We have that responsibility because we are not going to be here forever.

We are going to have children and grandchildren and they will have children and grandchildren. We would like the United States of America to continually be strong and be the country that most people in the world look up to. That is our responsibility because we are not going to be here forever. This bill does not fulfill that moral responsibility. It leaves a huge additional burden on our children and grandchildren. That is another reason to not pass this bill.

By the time the baby boomers start to retire, when there will be huge budget pressures to help reform Medicare, to make sure that our senior citizens have the health care benefits they need and, in addition, Social Security, make sure that our senior citizens have the retirement benefits, at least the basic minimum benefits, a safety net, we should not pass this bill because this bill, in effect, makes that problem much more difficult. It adds a huge burden that Members of Congress are going to have to face when those years come up in about 5, 10, or 15 years from now.

This bill increases the budget deficit and lays the bill at the door of our children and grandchildren. It inappropriately targets its tax breaks at the elite instead of those more likely to spend it. This bill is simply not structured to be effective in rebuilding the American economy. I believe it would be irresponsible to enact this legislation, especially at this time.

I might add, there is an interesting article--in fact, it is a bit of an alarming article--in the Financial Times printed on Wednesday, just yesterday. On the front page of the Financial Times, they reported their interview of Federal Reserve Chairman Alan Greenspan. Mr. Greenspan aised concerns about the impact of further tax cuts and spending increases.

According to the Times, Mr. Greenspan:

[E]xpressed dismay at what he characterized as a breakdown

in budget discipline in Washington. He reminded lawmakers

that the U.S. Government was facing a ``significant'' budget

problem as the baby-boom population ages and draws on more

healthcare and retirement benefits.

Mr. Greenspan added that he would:

[L]ike to see that addressed more seriously than it is.

In his words:

The silence is deafening.

I will not be part of that silence. I strongly urge Members of this body to do what is right, to consider what they are doing today.

In return for a short-term gain, they will be creating a long-term, much greater problem if they vote for this bill. I urge my colleagues to vote against the conference report.

I yield the floor.

I suggest the absence of a quorum.

I suggest the absence of a quorum.

Mr. President, I thank my good friend, the chairman of the committee, Senator Grassley, for making that statement. We both agreed. Those are provisions that are very important, particularly to certain parts of America. These are provisions that we have been working on in the past to try to get included in law, and I very much appreciate the chairman of the committee making that statement to that effect just now. I join with him and look forward to working with him as we get these measures passed.

Reserving the right to object, all this assumes, I take it from the majority leader, that we actually do get the conference report in time for the debate and then the vote.

Mr. President, given that assurance, which I trust will occur, I do not object.

Mr. President, I rise today in support of the Trade Adjustment Assistance for Communities Act of 2003.

I want to commend Senator Bingaman for introducing this bill today. He has been a strong advocate of Trade Adjustment Assistance and a strong voice for communities that need a helping hand facing the challenges of the global economy.

Trade and trade-opening policies create benefits for our country. But that fact should not keep us from acknowledging that the benefits of trade are seldom evenly distributed. In fact, there can be losers from trade, even when the economy as a whole is better off.

In 1962, President Kennedy said that ``those injured by . . . trade competition should not be required to bear the full brunt of the impact.'' ``There is an obligation,'' he said, for the Federal Government ``to render assistance to those who suffer as a result of national trade policy.''

That year, President Kennedy and a bipartisan majority of Congress created Trade Adjustment Assistance--a program designed to help those who are displaced by trade policy to retrain and get back on their feet.

Last year, with help of another bipartisan majority of Congress, we passed the Trade Adjustment Assistance Reform Act of 2002--a historic expansion of the TAA program.

The Trade Adjustment Assistance for Communities Act continues to build on this important tradition by creating a new TAA program for communities.

In a recent study, the General Accounting Office found that, even with TAA benefits available to displaced workers, the loss of a major employer can have ripple effects on the local economy.

In addition to the direct job losses, local economies can experience reduced tax revenues, reduced sales by the closed plant's supplier firms and by local retailers, and rising social services costs. Until they can attract well-paying new jobs, these communities can face extended periods of economic distress.

This is especially true in smaller and rural communities, such as we have in Montana. These communities may not have a lot of job opportunities for displaced workers, even with TAA retraining. Indeed, one of the main criticisms of the current TAS program has been that it does nothing to make sure there are jobs for workers at the end of the retraining process.

There are a number of Federal programs out there that might offer some help. They are all over the map--in Commerce, Treasury, Labor, Agriculture, HUD and the SBA, just to name a few. But these communities have no way to start, no go-to person or resource to guide them through this maze of potential help. And the Federal Government doesn't make it any easier. There is very little coordination of response among the various agencies. Finally, even if communities can find

these Federal resources, most existing programs are not tailored to the special needs of trade-impacted communities.

This bill tries to make Federal economic assistance work better for trade-impacted distressed communities in a few simple ways.

It creates a single office responsible for coordinating the Federal response.

It creates a simple trigger process to identify potentially eligible communities and bring appropriate resources to their attention.

It gives communities the technical assistance they need to develop a strategic plan--basically a roadmap for economic recovery. That helps ensure that Federal resources are being used in the most coordinated and cost-effective way possible.

Finally, it makes sure that there are expertise and resources tailored to the special needs of trade-impacted communities.

I am pleased to be a cosponsor of this bill. I hope we will be able to consider it in the Finance Committee this year.

Mr. President, I rise today to 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 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.

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 Commerce's Economic Development Administration. This organizational structure is efficient and has served the program well for many years.

For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its rapeseed oil. The program is helping Pyramid Mountain Lumber of Seeley Lake, MT to upgrade its production process and train employees to use new process controls. And it is helping Porterbilt Company of Hamilton to expand its product line.

Last year, in the Trade Act of 2002, a bipartisan majority of 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 is about to move all its Headquarters program operations to its six regional offices, with a policy office in Washington. For TAA for Firms, that means clients will get the same local services from the TAACs, but decisions will be made in six regional offices and the national policy office--a net increase in layers of government. The likely result is more personnel needed to run the program, less centralized and consistent decision making, and less accountability--all without any likely improvement in customer service.

The organizational structure of TAA for Firms is not broken and it doesn't need to be fixed. This bill preserves the existing efficient management structure of the TAA for Firms program. Instead of moving the program out of Commerce Headquarters entirely, it simply moves the program to a different part of the Commerce Department. That way it can continue to be centrally managed with a minimal staff.

Under this bill, administration of TAA for Firms will move from the Economic Development Administration at the Department of Commerce to DOC's International Trade Administration.

Relocating the program to ITA makes a lot more sense that dividing it up among seven different EDA offices, for several reasons. First, ITA has experience running this program, which was located there prior to 1990. Second, relocating TAA for Firms to ITA will result in fewer layers of government and more centralized and accountable program management. It 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 want to thank Senators Rockefeller, Bingaman, Dayton, and Murray who have joined me in co-sponsoring this bill. This is a simple matter of good, sensible government and I encourage more of my colleagues to lend it their support. I urge Chairman Grassley to take up this bill in the Finance Committee as soon as possible.

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

Mr. President, I rise today to introduce, on behalf of my self and Senator McCain, the Middle East Trade and Engagement Act of 2003.

For more than a thousand years, the most important trade route in the world ran through the heart of the

Middle East. The Silk Road that linked the Western world with China wound its way through what is today Egypt, Iraq, Jordan, Turkey, and a host of other countries in the Middle East.

Merchants who traveled either direction along the Silk Road brought with them not only their goods for sale, but also their ideas and culture. In this way, all peoples from the West through the East were enriched with both money and knowledge.

But in modern times, the countries of the Middle East have retreated from their historically critical role in world trade. Today, few countries in the Middle East engage fully in the global trading system.

Many are not members of the World Trade Organization. Many have high barriers to international trade and investment. Their economies have suffered as a result. A declining share of world trade and investment has led to decades of deepening poverty and slow job creation in the countries of the Middle East.

At the same time, they have been experiencing population growth rates among the highest in the world. That means that a growing number of young people will be entering the workforce to look for jobs that don't now exist.

The United States cannot stand idly by as a generation of young people in the Middle East grows up to discover that there is no meaningful work for them, and that they have no way to provide for a family of their own.

The problem will only get worse if we don't act now. As the rest of the world continues to liberalize its trade, the countries of the Middle East will only be left further behind.

That is why we're today introducing the Middle East Trade and Engagement ACt of 2003. Under this Act, countries in the Middle East will be given preferential access to the U.S. market.

This is not a one-way street. Countries must meet certain conditions. They must support our war on terrorism, and they must pursue economic reforms. Only then will they reap the benefits of this legislation.

Our proposal can have an immediate impact. Opening our markets to the countries of the Middle East will encourage higher levels of trade and direct investment in those countries. And we know it can be a success because if has worked before in other regions. Our bill is modeled on successful programs that increased economic development in sub-Saharan Africa and the Andean countries.

This legislation will do the same for the countries of the Middle East. Increased economic development in that region means jobs for the young and the unemployed, some of whom may otherwise be recruited by our enemies in the war on terrorism.

By helping to strengthen these economies, we also increase the number of people who can afford to purchase American products and services. That means increased export opportunities for American businesses and more jobs for American farmers and workers.

President Bush recently announced an initiative to create a free trade area for the United States and the countries of the Middle East by the year 2013. This is a good long-term goal. But the people in the Middle East need our help now. They need jobs now, not ten years from now.

The Middle East Trade and Engagement Act would bring the benefits of trade to the people of the countries in the Middle East in a much shorter time. It would also help those countries make the economic reforms they'll need to make before a free trade area can become a realistic option.

And just as trade in the time of the Silk Road allowed the exchange of ideas and culture as well as goods, increased trade now can strengthen ties between the United States and the countries in the Middle East.

Now, in the Aftermath of the war in Iraq, the whole world's attention is focused on the Middle East. It is the ideal time for the United States to engage these countries in a comprehensive way and help bring them more fully into the global trading system.

I hope that my colleagues will join Senator McCain and me in cosponsoring this important legislation, and I hope we will have a change to consider this in the Finance Committee this year.

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

Mr. President, I rise today in support of the Trade Adjustment Assistance for Communities Act of 2003.

I want to commend Senator Bingaman for introducing this bill today. He has been a strong advocate of Trade Adjustment Assistance and a strong voice for communities that need a helping hand facing the challenges of the global economy.

Trade and trade-opening policies create benefits for our country. But that fact should not keep us from acknowledging that the benefits of trade are seldom evenly distributed. In fact, there can be losers from trade, even when the economy as a whole is better off.

In 1962, President Kennedy said that ``those injured by . . . trade competition should not be required to bear the full brunt of the impact.'' ``There is an obligation,'' he said, for the Federal Government ``to render assistance to those who suffer as a result of national trade policy.''

That year, President Kennedy and a bipartisan majority of Congress created Trade Adjustment Assistance--a program designed to help those who are displaced by trade policy to retrain and get back on their feet.

Last year, with help of another bipartisan majority of Congress, we passed the Trade Adjustment Assistance Reform Act of 2002--a historic expansion of the TAA program.

The Trade Adjustment Assistance for Communities Act continues to build on this important tradition by creating a new TAA program for communities.

In a recent study, the General Accounting Office found that, even with TAA benefits available to displaced workers, the loss of a major employer can have ripple effects on the local economy.

In addition to the direct job losses, local economies can experience reduced tax revenues, reduced sales by the closed plant's supplier firms and by local retailers, and rising social services costs. Until they can attract well-paying new jobs, these communities can face extended periods of economic distress.

This is especially true in smaller and rural communities, such as we have in Montana. These communities may not have a lot of job opportunities for displaced workers, even with TAA retraining. Indeed, one of the main criticisms of the current TAS program has been that it does nothing to make sure there are jobs for workers at the end of the retraining process.

There are a number of Federal programs out there that might offer some help. They are all over the map--in Commerce, Treasury, Labor, Agriculture, HUD and the SBA, just to name a few. But these communities have no way to start, no go-to person or resource to guide them through this maze of potential help. And the Federal Government doesn't make it any easier. There is very little coordination of response among the various agencies. Finally, even if communities can find

these Federal resources, most existing programs are not tailored to the special needs of trade-impacted communities.

This bill tries to make Federal economic assistance work better for trade-impacted distressed communities in a few simple ways.

It creates a single office responsible for coordinating the Federal response.

It creates a simple trigger process to identify potentially eligible communities and bring appropriate resources to their attention.

It gives communities the technical assistance they need to develop a strategic plan--basically a roadmap for economic recovery. That helps ensure that Federal resources are being used in the most coordinated and cost-effective way possible.

Finally, it makes sure that there are expertise and resources tailored to the special needs of trade-impacted communities.

I am pleased to be a cosponsor of this bill. I hope we will be able to consider it in the Finance Committee this year.

Mr. President, I rise today to 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 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.

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 Commerce's Economic Development Administration. This organizational structure is efficient and has served the program well for many years.

For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its rapeseed oil. The program is helping Pyramid Mountain Lumber of Seeley Lake, MT to upgrade its production process and train employees to use new process controls. And it is helping Porterbilt Company of Hamilton to expand its product line.

Last year, in the Trade Act of 2002, a bipartisan majority of 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 is about to move all its Headquarters program operations to its six regional offices, with a policy office in Washington. For TAA for Firms, that means clients will get the same local services from the TAACs, but decisions will be made in six regional offices and the national policy office--a net increase in layers of government. The likely result is more personnel needed to run the program, less centralized and consistent decision making, and less accountability--all without any likely improvement in customer service.

The organizational structure of TAA for Firms is not broken and it doesn't need to be fixed. This bill preserves the existing efficient management structure of the TAA for Firms program. Instead of moving the program out of Commerce Headquarters entirely, it simply moves the program to a different part of the Commerce Department. That way it can continue to be centrally managed with a minimal staff.

Under this bill, administration of TAA for Firms will move from the Economic Development Administration at the Department of Commerce to DOC's International Trade Administration.

Relocating the program to ITA makes a lot more sense that dividing it up among seven different EDA offices, for several reasons. First, ITA has experience running this program, which was located there prior to 1990. Second, relocating TAA for Firms to ITA will result in fewer layers of government and more centralized and accountable program management. It 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 want to thank Senators Rockefeller, Bingaman, Dayton, and Murray who have joined me in co-sponsoring this bill. This is a simple matter of good, sensible government and I encourage more of my colleagues to lend it their support. I urge Chairman Grassley to take up this bill in the Finance Committee as soon as possible.

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

Mr. President, I rise today to introduce, on behalf of my self and Senator McCain, the Middle East Trade and Engagement Act of 2003.

For more than a thousand years, the most important trade route in the world ran through the heart of the

Middle East. The Silk Road that linked the Western world with China wound its way through what is today Egypt, Iraq, Jordan, Turkey, and a host of other countries in the Middle East.

Merchants who traveled either direction along the Silk Road brought with them not only their goods for sale, but also their ideas and culture. In this way, all peoples from the West through the East were enriched with both money and knowledge.

But in modern times, the countries of the Middle East have retreated from their historically critical role in world trade. Today, few countries in the Middle East engage fully in the global trading system.

Many are not members of the World Trade Organization. Many have high barriers to international trade and investment. Their economies have suffered as a result. A declining share of world trade and investment has led to decades of deepening poverty and slow job creation in the countries of the Middle East.

At the same time, they have been experiencing population growth rates among the highest in the world. That means that a growing number of young people will be entering the workforce to look for jobs that don't now exist.

The United States cannot stand idly by as a generation of young people in the Middle East grows up to discover that there is no meaningful work for them, and that they have no way to provide for a family of their own.

The problem will only get worse if we don't act now. As the rest of the world continues to liberalize its trade, the countries of the Middle East will only be left further behind.

That is why we're today introducing the Middle East Trade and Engagement ACt of 2003. Under this Act, countries in the Middle East will be given preferential access to the U.S. market.

This is not a one-way street. Countries must meet certain conditions. They must support our war on terrorism, and they must pursue economic reforms. Only then will they reap the benefits of this legislation.

Our proposal can have an immediate impact. Opening our markets to the countries of the Middle East will encourage higher levels of trade and direct investment in those countries. And we know it can be a success because if has worked before in other regions. Our bill is modeled on successful programs that increased economic development in sub-Saharan Africa and the Andean countries.

This legislation will do the same for the countries of the Middle East. Increased economic development in that region means jobs for the young and the unemployed, some of whom may otherwise be recruited by our enemies in the war on terrorism.

By helping to strengthen these economies, we also increase the number of people who can afford to purchase American products and services. That means increased export opportunities for American businesses and more jobs for American farmers and workers.

President Bush recently announced an initiative to create a free trade area for the United States and the countries of the Middle East by the year 2013. This is a good long-term goal. But the people in the Middle East need our help now. They need jobs now, not ten years from now.

The Middle East Trade and Engagement Act would bring the benefits of trade to the people of the countries in the Middle East in a much shorter time. It would also help those countries make the economic reforms they'll need to make before a free trade area can become a realistic option.

And just as trade in the time of the Silk Road allowed the exchange of ideas and culture as well as goods, increased trade now can strengthen ties between the United States and the countries in the Middle East.

Now, in the Aftermath of the war in Iraq, the whole world's attention is focused on the Middle East. It is the ideal time for the United States to engage these countries in a comprehensive way and help bring them more fully into the global trading system.

I hope that my colleagues will join Senator McCain and me in cosponsoring this important legislation, and I hope we will have a change to consider this in the Finance Committee this year.

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

Mr. President, has the proponent of this amendment any time remaining? Have we completed the time remaining to speak in favor of the amendment?

Is there any time remaining to speak for the amendment?

Mr. President, I am going to vote for this amendment. I think all Senators should realize this is really a cover amendment. This is an amendment which allows Senators to not do the real thing. What is the real thing? The real thing is a vote for the Dorgan amendment which is next. The Dorgan amendment provides that Social Security taxes on 85 percent of Social Security benefits are not taxable. That is the real thing. The current amendment before us is a sense of the Senate. It is a cover amendment. I am going to support it. I think all Senators should support it. But the real test is the next amendment. If Senators vote for this amendment, if they want to reduce Social Security taxes, they should vote for the Dorgan amendment because that is the real amendment. That is the one that counts.

I yield the remainder of my time.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 555

Mr. President, obviously this is a good amendment. Also, when I finish speaking, I will offer an amendment in the second degree, which has been cleared on the other side, essentially to bring the criminal provisions in the Tax Code up to date with the Sarbanes-Oxley criminal provisions. The Sarbanes-Oxley bill did not address the criminal tax provisions because that was not a tax bill. We do address it here.

I urge adoption, by voice vote, actually, of both amendments.

I yield back the remainder of my time.

Amendment No. 624 To Amendment No. 555

Mr. President, I ask unanimous consent to call up my second-degree amendment.

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

Again, this is the amendment I earlier referred to, and I urge all Senators to vote for it.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 569

Mr. President, I think it is a good idea to set up some kind of a body or commission to see if we can simplify the code, knowing that it is a daunting task. Nevertheless, we should try, including looking at the flat tax proposal that has been suggested by several Senators and other observers over the years. But at least let's give it a try. We can certainly improve upon the code we now have.

I urge its adoption.

Mr. President, this is essentially what I call a ``more stimulus now'' amendment. It has two provisions. One, it accelerates the year in which the dividend exclusion is effective. Under the committee bill, the dividend exclusion does not come into effect until 2004, which basically means most taxpayers are not going to receive the benefit until 2005 when they file their tax returns. All this takes effect in 2003 in my amendment, as well as the 10 percent. We are going to stimulate the economy.

In addition, there is acceleration of the child tax credit. The amendment provides the full $400 be sent to those who qualify for the additional child tax credit, and that is based on the 2002 returns. If they qualify in 2002, they are entitled to the full $400 check in 2003. To avoid the problem we faced in the 2001 bill, where sometimes they got $300 and sometimes not, this will speed that up.

Mr. President, pursuant to section 904 of the Congressional Budget Act, I move to waive the applicable section of that act in the budget resolution for the consideration of the pending amendment and ask for the yeas and nays.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 544

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 578

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 577

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, I rise today to speak in favor of the Medicare amendments offered by both Senator Grassley and Senator Harkin.

Many of the provisions included in both amendments were part of legislation that Senator Grassley and I offered last year. And many of the provisions were included in the Senate Rural Health Caucus bill, which I support. Several of these Medicare provisions in these amendments have also been recommended by the Medicare Payment Advisory Commission, which advises Congress on Medicare payment policy. And they have the support of the American Hospital Association. Taken together, these changes mean a lot to rural providers and, by extension, rural seniors. They represent a significant leveling of the Medicare reimbursement playing field that my colleagues and I have sought to address.

I would also like to add, however, that some of the offsets in the Grassley amendment have generated some controversy.

For example, the proposed changes to Medicare payment for Part B covered drugs are of great concern to many cancer patients and oncologists, among others.

Ideally, we would be legislating on these issues in the Finance Committee so that the committee has a chance to weigh in on these issues. But I believe that the changes on the whole are positive for the Medicare program, and so I intend to support both amendments.

Mr. President, I yield to the Senator from Iowa, Mr. Harkin.

Mr. President, I ask unanimous consent the Harkin amendment be withdrawn.

Mr. President, I ask unanimous consent that the next amendment we vote on be the Murray amendment.

Mr. President, what is the regular order?

I ask unanimous consent that the Burns amendment be set aside.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

The next amendment is the Warner amendment. The Senator from Iowa.

I understand the regular order is the Voinovich amendment. The Senator from Ohio has the right to speak.

Mr. President, might I ask the Senator from Ohio if the modification is the one that changes the ratio of the membership?

I have no objection.

Mr. President, I move to reconsider the vote.

I understand the next amendment is the Graham of Florida amendment.

I ask unanimous consent that the Warner amendment and all relevant amendments be temporarily set aside so we can next proceed to the Graham of Florida amendment.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 550 Withdrawn

Mr. President, I thank the Senator from Virginia for asking the question. All I can say at this point is we will do the very best we can.

Mr. President, I yield to the Senator from Louisiana.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 619

Mr. President, I ask unanimous consent that relevant pending amendments be temporarily laid aside so that Senator Landrieu's amendment can be voted on.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Mr. President, my understanding is there are pending votes that require unanimous consent to be set aside. I make that request so that the next Landrieu amendment can be in order.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 621 Withdrawn

Mr. President, I ask unanimous consent that the votes on the various amendments next up be temporarily laid aside so we can proceed to the Landrieu amendment No. 621.

Mr. President, I, too, have spoken with the Senator and understand her concerns and will do my utmost to help resolve the issue.

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 ask unanimous consent that the votes on the earlier amendments be temporarily laid aside so we can now proceed to amendment No. 557 by the Senator from New York.

I move to reconsider the vote.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Amendment No. 611

Mr. President, my understanding is the next amendment is the amendment offered by the Senator from North Dakota, Mr. Conrad.

Mr. President, I have two housekeeping matters that have to be cleared up.

Amendments Nos. 593 and 612 Withdrawn

Mr. President, I ask unanimous consent that the pending McCain and Burns amendments be withdrawn.

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

Mr. President, I ask unanimous consent that the next amendment in order be that offered by the Senator from Minnesota, Mr. Dayton.

On behalf of the Senator from Minnesota, pursuant to section 904 of the Congressional Budget Act, I move to waive the applicable sections of that act, and I ask for the yeas and nays.

Mr. President, I think the clerk should read the entire amendment. That is a pretty hefty amendment.

Mr. President, as we await the scoring for the Nickles amendment, I ask unanimous consent that the Senator from Maryland be recognized for the purpose of offering her amendment.

Mr. President, I object.

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

I ask unanimous consent that the next amendment be that from Senator Sessions.

Mr. President, this amendment sunsets offsets not in this decade but in the next decade. Many of the provisions in this bill should be permanent; that is, corporate inversion legislation, shelters, provisions that should change the law. That is good public policy. Not all of the provisions in this bill are offsets just to make the budget numbers work. Rather, they are provisions which make good public policy and should continue.

Also, it violates the Byrd rule because it raises an extraneous matter in a reconciliation bill.

I make a point of order that the amendment violates section 313 of the Budget Act.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

If the Senator will yield, this is probably the most important amendment of the night. I ask consent each side be allowed 2 minutes instead of the customary 1 minute.

Mr. President, let me read a quote of American Enterprise Institute, conservative economist, commenting on this amendment:

Clearly, this proposal is one of the most patently absurd

tax policies ever proposed.

That is AEI, Republican economist, commenting on this amendment. Why say that? First, this amendment goes far beyond any other attempt to eliminate double taxation of dividends. What is the effect of this amendment? The effect of this amendment is in many cases to not only eliminate double taxation of dividends but to also eliminate single taxation of dividends.

In many cases, as a consequence of the way this amendment is written--which we saw just for the first time half an hour ago--is to say there is no taxation on many dividends offered by corporation shareholders, not the shareholder paying any tax, and not the corporation paying any tax.

Second, who subsidizes this if that is the nontaxation of dividends under this proposal? Americans are subsidizing this. Who? Americans today who otherwise would receive the relief under the marriage penalty contained in this bill are going to be subsidizing and paying for, in effect, these tax-free dividends. That is because that is the pay-for in this bill.

In addition, this bill increases the budget deficit so our children will be paying for many of those tax-free dividends contained in this bill.

Next, this is a huge yo-yo tax provision. Now you see it, now you don't; 50 percent 1 year, 100 percent the next year, 100 percent another year, then zero. Tell me if any corporation will be able to plan on whether or not to pay dividends with a tax policy like that. Clearly, they will wait for the 100 percent and they will not know if it will be continued in law.

This is absurd and irresponsible to enact tax legislation like this. I strongly urge Senators to consider what they are doing tonight if they support this amendment. This is an outrage.

Mr. President, I ask unanimous consent the Reid amendment be temporarily laid aside to occur after the Santorum amendment. Is the next amendment in order the Breaux amendment? Is that the next amendment?

I ask 4 minutes total, 2 minutes on each side, on the Breaux amendment.

Mr. President, I ask unanimous consent that it now be in order to go to the amendment offered

by the Senator from California, Mrs. Boxer.

Mr. President, I think sometimes discretion is the better part of valor. We have been on this bill for 2 full days. I have amendments which I would like to offer. I am willing to forego those amendments.

As the Senator from Nevada said, there are about 14 amendments left. That means in 5 more hours we will be here on this bill, before we get to the global HIV/AIDS bill.

I urge Senators on both sides of the aisle--and I guess I particularly appeal to Senators on my side of the aisle--that there are a couple here that probably could and should be voted on but some of them probably not.

There will be another day. There will be another tax bill. There will be other opportunities for us to offer amendments. I think, frankly, after a couple, three or four or five more amendments, it is about time to wrap up this bill. We know what the conclusion is going to be on all the amendments. As the Senator has said, some of the subjects have already been addressed. Some have not, but some of the subjects already have been addressed. I have been working with the chairman of the committee throughout this bill to try to work out a good process. My judgment is that we should whittle down the list.

The answer to the question is, we have not agreed to a list. Technically people are still able to add.

We do have a list. We have 14--12 on our side at least.

If I might respond, the answer is no, not formally. I suggest that after about 15 minutes or so, we put the request again. At least we can go through a couple amendments now, then renew the request in 15 minutes.

I ask unanimous consent that the next amendment in order be the amendment offered by the Senator from Massachusetts, Mr. Kennedy.

Mr. President, I ask unanimous consent that we now proceed to the amendment offered by the Senator from Connecticut.

Mr. President, I ask unanimous consent that the pending amendments be set aside so we can consider the Hollings amendment.

Mr. President, I ask unanimous consent that the pending amendments be set aside so we can consider the Dorgan amendment that Senator Reid of Nevada will call up.

Mr. President, I ask unanimous consent that the pending amendments be set aside so we can consider the Durbin amendment.

Mr. President, I ask consent that the pending amendments be set aside so we can consider the Rockefeller amendment.

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

I ask unanimous consent that the pending amendments be set aside so the Senator from Michigan and I can enter into a colloquy----

Concerning the amendment he might otherwise have.

Mr. President, the Senator from Michigan raised a very good point. There are provisions in the bill which address corporations that invert--that is, 100 percent invert--in tax shelters in Bermuda or other tax havens. That was shut down in March of this year. The next category is of companies with 50-percent or 80-percent ownership that also are inverted overseas. The Senator from Michigan makes a very good point that this, too, should be addressed.

I will work with the Senator in the committee to address this windfall that these companies get from existing inversions. I will work with the Senator to try to shut that down.

I ask unanimous consent the pending amendment be set aside to consider the Dayton amendment.

Mr. President, I ask unanimous consent that the pending amendments be set aside to consider the Santorum amendment.

Mr. President, the next amendment is that of the Senator from New Mexico.

Amendment No. 603 Withdrawn

Mr. President, I ask unanimous consent that we now proceed to the Edwards amendment.

Mr. President, I ask unanimous consent that we now go to the amendment of the Senator from Rhode Island.

Amendment No. 672

Mr. President, I ask unanimous consent that we now go to the amendment by the Senator from Pennsylvania, Mr. Santorum.

Mr. President, we will next turn to the amendment of the Senator from North Dakota, Mr. Dorgan.

amendment No. 666

Mr. President, I suggest that the Senate now vote by voice on this amendment.

Mr. President, I suggest that the Chair put the question a second time.

Mr. President, I now urge the Chair to recognize the Senator from Massachusetts for the purpose of a colloquy.

Mr. President, I, too, pledge to work with the Senator from Massachusetts. Last year the Senator from Ohio and myself introduced legislation in the Medicare providers bill to address this very issue. It is called the DSH cliff, essentially. The Medicaid payments are scheduled to go off a cliff--that is, dramatically lowered--and we had extended the level of payments for a couple years last year to avoid the cliff, the point being that we are very cognizant of the problem facing the large public hospitals, particularly in urban areas that serve a disproportionate number of low-income people.

We will certainly work very hard to deal with this when we take up the Medicare legislation in the next couple of months.

I agree with the distinguished chairman of the Finance Committee, Senator Grassley. The disputes resulting from any uncertainty regarding the proper application of the income forecast method are extremely unproductive and wasteful. To avoid further waste, resolution of any disputes must be resolved in a manner consistent with the clarifications contained in the bill.

Mr. President, earlier today my colleague on the Finance Committee, Chairman Grassley, offered an amendment to S. 1054, the pending tax bill, to improve Medicare funding for rural patients and providers. I supported the amendment, which passed, 86-12.

Many of the Grassley amendment's provisions were taken from S. 3018, Medicare legislation Senator Grassley and I introduced legislation last year. Many of those provisions were also included in the Senate Rural Health Caucus bill, which I support. And several of the provisions have been recommended by the Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare payment policy.

Taken together, these changes--including an equalization of the hospital base payment amount, changes to the Critical Access Hospital program, and language to improve access to physician care in rural areas--will go a long way toward ensuring greater geographic equity in Medicare reimbursement.

That said, I believe the way in which the Senate passed these provisions--as an amendment to tax legislation--is far from perfect. A Medicare bill, debated in the Finance Committee, is the proper vehicle for changes to the Medicare law, and I would have preferred that these provisions be considered in that manner.

A full debate in the Finance Committee will allow senators to exchange views and advocate changes they believe are important for Medicare. A debate in the Finance Committee will allow Medicare stakeholders an opportunity to share their views as well. Whether with respect to spending or offsets, the Committee should have the opportunity to consider all of those views fully.

For example, while the provisions in the Grassley amendment are important, they do not represent a full list of Medicare changes I would like to see. Most notably, the amendment does not address Medicare's most severe inadequacy: the lack of an outpatient drug benefit. Further, the amendment does not address many concerns facing Medicare's various payment systems, including payments for physicians, nursing homes, teaching hospitals and hospital outpatient departments, to name a few.

As for offsets, the Grassley amendment included three: a freeze in Medicare DME payments; establishment of copayments and deductibles for Medicare outpatient laboratory services; and reductions in payment for Medicare Part B-covered drugs. These offsets are not without controversy.

For example, while independent experts agree that Medicare overpays providers for Part B drugs, agreement is less apparent on the proper payment providers should receive for the administration of these drugs. And while it is true that lab services are nearly unique in not requiring coinsurance under Medicare, it's also true that lab services are less discretionary than many other Medicare-covered services.

Debate in the committee--as we recently had on the tax bill--is important to the legislative process. I urge Chairman Grassley to hold a markup on Medicare legislation, so that changes to Medicare-- including enactment of a Medicare drug benefit--can be considered in the appropriate manner.

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

Mr. President, I very much thank my friend and colleague, Senator Grassley, chairman of our committee. He has done an excellent job working on this bill. As he said, I do not support the bill but I do support the process and the will of the Senate to proceed; let Senators vote as they wish. That is, frankly, why we are standing here--to get things done, although we may not always agree.

I now yield to the Senator from Illinois 15 minutes from the time on our side.

Mr. Chairman, I yield 5 more minutes to the Senator from Illinois.

I yield 5 minutes off the amendment to the Senator from Illinois.

Mr. President, I ask unanimous consent that the pending amendment be temporarily laid aside and that the amendment to be offered by the Senator from North Dakota be in order.

Mr. President, I ask unanimous consent that the following staff of the Joint Committee on Taxation be granted the privilege of the floor, and I send the list to the desk. We worked out an arrangement so they rotate.

I thank the Senator.

The amendment the Senator from North Dakota is offering, that I cosponsor, is a tax cut amendment. Most Members of this body like to cut taxes. That is what this amendment is all about. It is cutting taxes.

Second, which group is getting the benefit of the tax cut under this amendment? Under the amendment offered by the Senator from North Dakota, cosponsored by myself, it is senior citizens who get the benefit of the tax cut.

I join the Senator in offering this amendment. It repeals the 1993 tax of Social Security benefits, the tax this body imposed on certain senior citizens in 1993.

We are currently debating a $350 billion tax cut reconciliation bill. This bill is about priorities, about values. That is what budgets are about. Part of the budget is $350 billion in tax cuts. The budget we are working under that was adopted by the Congress set those numbers. I am pleased there was a commitment to limit that reconciliation bill through conference to $350 billion. That was the commitment made by certain key Senators on this side.

It is within this tax reconciliation bill we debate and decide how the changes in revenues and outlays affect our constituents. The debate is about who the $350 billion benefits: do we give more money to some taxpayers or others? The choices are real. We are here to make decisions. We are here to decide.

We need to make sure our Nation's seniors receive a significant benefit. If this bill before the Senate will allocate benefits to certain groups, certainly senior citizens in our country should be a main beneficiary of a tax reduction. This amendment offered by the Senator from North Dakota is just that, a tax reduction for senior citizens. It repeals the 1993 provision which imposed taxes on certain senior citizens.

The bill reported by the Finance Committee provides a tax break for taxpayers with dividend income. That proposal costs $81 billion over 10 years out of the $350 billion. That proposal provides a few seniors, not very many, a few with a small amount of tax relief; 77 percent of seniors in our country will receive no relief, no tax reductions, under the Finance Committee bill on dividends; 77 percent of Americans do not receive any of the $81 billion that will go to very few Americans, the most wealthy, the least in our country.

In contrast, our amendment will provide 8 million seniors with a significant tax cut. All the cost of this goes back to America's seniors. That means $150 billion over 10 years is put back into the pockets of our senior citizens.

The current law enacted in 1993 has two significant flaws. First, in 1993 we changed the rules in the middle of the game for people receiving Social Security benefits. I will never forget. Suddenly that was enacted. It came out of the blue, an additional tax on our senior citizens and their benefits. We began to tax Social Security benefits at a higher rate for individuals at certain income levels.

The second flaw in 1993, we failed to adjust the income levels for inflation. For the past 10 years, there has been no adjustment. This means more and more seniors will be subjected to this tax as each year passes. We need to correct those flaws.

Again, this debate is about choices. We make choices here. Life is making choices. We think the choice here is clear. If we have $150 billion to spend, spend it on seniors. As such, we offset the cost of our amendment to repeal the tax to Social Security benefits. That is the purpose of the underlying amendment by striking the dividend proposal in the bill and also striking reductions in the top rates.

Again, this is a tax cut amendment. Those seniors I mention are currently paying that tax. We are proposing that tax be repealed. That is a tax cut amendment. It is being paid for by a promise to the future. Those provisions of the Finance Committee dealing with dividends are not currently in effect. They are future promises, we suggest, to be repealed so our seniors get the benefit of the repeal of the taxes imposed upon them in 1993.

A couple of numbers: Repealing the 1993 tax of Social Security benefits gets an average of $1,500 into the hands of 8 million seniors. Contrast that with the dividend proposal in the Finance Committee bill. The dividend proposal in the bill gets an average of $19,000 to fewer than 5,000 seniors. Again, what is better: $1,500 in the hands of 8 million seniors or $19,000 in the hands of the most wealthy, only 5,000 seniors? And fewer than 1 million taxpayers, regardless of whether they are 65 or 25, would benefit from the top rate reductions. Remember, there are 130 million filers in America. Fewer than 1 million taxpayers who are not seniors, who are between 65 and 25 get reductions from the top rate reductions.

Members on the other side of the aisle have supported this in the past. Repealing the 1993 Social Security tax is a better choice for our constituents than enacting dividend proposals in the top rate reductions contained in the underlying bill.

Mr. President, how much time is remaining on both sides?

Mr. President, there isn't anybody in this body for whom I have higher respect and more affection than the Senator from Iowa. I must say when I listened to his arguments against this amendment, virtually nothing was said that addressed the merits. In fact, there were some statements which were a little bit misleading. Lawyers like to call them red herrings. That is when you say something to try to get people off track so they don't think about the subject at hand. It is called a red herring.

One of the red herrings we heard was that Democrats voted against this amendment in the past, and it was Democrats who voted for this increase in Social Security taxes back in 1993. That was 10 years ago. That is a different time, a different situation, different circumstance. Back then the Congress voted to reduce deficits, and that was part of a large deficit reduction package. This is 10 years later, 2003. We are faced with the question, within a $350 billion tax bill, how should the tax cuts be allocated. That is the question before us.

Many of us believe it is a far wiser policy that seniors receive more of the tax benefit as a result of the cuts than is the case under the Senate Finance Committee bill. That is why we think the 1993 provision should be repealed

because then seniors will receive significant benefits if it is repealed, and we believe that is a higher priority than giving a lot more dollars to very few Americans who are the elite, the extremely wealthy Americans.

Repealing the 1993 tax on Social Security benefits gets an average of $1,500 in the hands of 8 million Americans. Eight million seniors will receive, on average, a benefit of $1,500 under our amendment. Otherwise, if this amendment does not pass, then by contrast, under the committee bill, which gives dividends to all Americans tax free, a few seniors, 5,000 seniors, will get $19,000.

We are saying there should be a better priority; that is, the money should be given to people who are going to spend it. It should be spread out more evenly rather than have the benefits, as in the Finance Committee bill, so heavily skewed to the Nation's elite. This should not be an elite bill. This should be an American bill. This should be a bill for Americans, and American seniors should be included as the rest of America.

There are other provisions of the bill that give tax benefits other than to seniors. We believe seniors should get a significant part of the benefit. I strongly urge passage of the amendment.

The Senator from Iowa also said there is a difference in philosophy: One party wants to put money in the pockets of people; the other does not.

That, too, is not a valid argument. We are talking about whose pockets this money should be put into, if you want to put it in those terms. We on our side are suggesting that the people whose pockets should receive the money are the seniors, that they should receive the benefits, much more than is the case in this bill. In this bill, the people who receive the money, whose pockets get the money, are the elite, the wealthy elite of America generally. That is not right. That doesn't work. It is not fair. It is not American. We believe this should be a bill that is more evenly balanced for all Americans.

For all those reasons, I urge my colleagues to support the amendment. It is good for America.

Madam President, I yield myself 5 minutes off the bill. For the record, I want to make a correction. I know it was an oversight by the Senator from Iowa when he mentioned that the Medicare trust fund will be somewhat in jeopardy in future years.

That is true, but I know it was an oversight when he failed to state that, under the terms of our amendment, the trust fund will be made whole through transfers from the general fund over to the Medicare trust fund, so it will be made whole or kept whole and held harmless under this amendment.

I know that was an oversight, but I wanted to say that for the record.

Madam President, I ask unanimous consent that the pending amendments be temporarily laid aside so the Senator from Nevada may offer an amendment.

Madam President, I yield whatever time the Senator from Louisiana would desire to have.

Yes.

Madam President, it is my understanding the Senator from Pennsylvania wishes to offer an amendment. I ask unanimous consent that the pending amendments be set aside so the Senator from Pennsylvania may offer his amendment.

Madam President, besides being willing to accept the amendment offered by the Senator from Pennsylvania, I add that there are some portions of this bill which further make the Tax Code more complex. We often do that as we are trying to, on the one hand, balance the budget or fit within certain budget restrictions and, on the other hand, help a certain tax policy which, in effect, adds a lot more complexity to the code. Regrettably, the code is going to be much more complex after this legislation is passed, and it will be passed, than is the code today.

We did, however, include one measure of tax simplification at my behest. It is small, but it is important, I think. There are many definitions in the code. There is a definition of a child for the purpose of the child tax credit or the earned-income tax credit or as an exemption as a dependent or for purposes of a head-of-household exemption. It depends on how many children the household has in terms of what additional credits or exemptions that head of household has. There are five definitions in the code, each different for each of the conditions I mentioned. We simplified that situation.

We said, whether it is earned-income tax credit, the child credit, a dependent for the purpose of exemption or head-of-household exemption, the definition of child is the same. That will make the code a bit easier for taxpayers and practitioners.

I appreciate the amendment offered by the Senator from Pennsylvania. It is helpful always to look for ways to simplify the code. I am not terribly encouraged we are going to get the code simplified very much in the next several years. It would be great if we could. We should make those efforts. If history is any guide, regrettably the President and the Congress together are making the code more complex every year.

Some day the straw will break the camel's back. The code, in my judgment, is going to collapse. It is going to get so complex and finally people are going to get fed up and make significant changes. We are not there. I do not think that will occur for several years.

The amendment offered by the Senator from Pennsylvania is a step in the direction toward forcing us in the Congress to grapple with the undue complexity of the code, whether the flat tax, consumption tax, value-added tax--who knows what is the right approach; that is to be decided another day--or just stay with our current code and make a lot of simplifications. For example, phasing out so-called Peps and Peases. That is the section of the code that says we will give you a tax break on the one hand but take them away on the other. We will give a tax break, but it phases out in a few years. There are lots of provisions in the code like that. One major simplification would be to get rid of those provisions.

I compliment the Senator for advancing the ball and thinking more about simplification. I thank him for offering the amendment.

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

Madam President, I ask unanimous consent that the pending amendments be temporarily set aside so I might offer an amendment.

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

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

Madam President, this amendment is designed to take effect earlier rather than later and provide substantially more benefits than the tax bill that is presently before us. It is designed to help stimulate the economy with more wallop, more punch, earlier rather than later.

How does it do that? Two ways. First, it would speed up the dividend tax relief. It would make it take effect earlier rather than later. Second, it would simplify the mechanism that will be sending checks out to people who qualify for the child tax credit. So, there are two ways that this amendment will help provide more income relief, more quickly, to more Americans, than what

is contained in the bill. It is an improvement upon the bill.

First, with respect to speeding up the dividend relief, the dividend proposal in this bill is not effective until the year 2004. Many provisions of this bill take effect in 2003, but the dividend provisions of the bill do not take effect in 2003; rather, a year later, in 2004. I suspect it is to save revenue. There will be no dollars injected into the economy, as a consequence of the dividend proposal, in the year 2003. It will be later, in 2004, and even then it is going to take some time for Americans to change their tax returns to take advantage of this change.

As I stated earlier, we are here today because the economy demands that we act quickly to help our anemic economy. Let's see what we can do to help create more jobs. To rebuild the economy. To rebuild America.

In my State of Montana, we desperately need jobs. Many of our high school and college graduates are leaving Montana. Why? Because they cannot find a job in the State. They go elsewhere. There is a better chance of finding a job in one of the larger cities. But, even that is difficult. Lack of jobs is a national problem, it is not just a problem in Montana. I think over 2 million jobs have been lost in the last couple of years because of an anemic economy. We want to get moving quickly. We want to get moving earlier than we otherwise would. We should seek policies to help the economy grow as soon as possible.

I disagree with the current dividend proposal for several reasons. One, it creates a three-tiered regime. It makes the Tax Code even more complex. It creates a three-tiered regime for investment income. Interest income would be fully taxed, as it is today. Capital gains would be taxed at about half the rate of ordinary income, as it is today. But we now add a third complexity of taxation of investment income, and that is dividend income which would fall to the new regime; that is, the first $500 of dividend income would be excluded from one's income tax, and then, beginning in later years, in 2004, the next 10 percent of dividend income would be excluded, and then in the year 2008, 20 percent of dividend income would be excluded. A new layer, a new complexity, certainly with respect to investment income.

My point is, if we are going to include a dividend proposal in this bill, why not make it take effect earlier? Our economy needs the boost right now, not when taxpayers file their returns in 2005. The dividend provision takes effect in 2004 but, frankly, it does not really take effect until 2005 when people file their tax returns. The dividend proposal has no stimulative effect in the year 2003. Most people do not even get the benefit in 2004. Most individual taxpayers will have to wait until they file their tax returns in 2005 to reap the benefit of a dividend exclusion in the bill.

My amendment will advance the effective date of the dividend provision in the bill to January 1, 2003--this year. This means taxpayers will get relief for dividends they receive this year.

I have my doubts whether the dividend tax relief has much stimulative effect generally, but some will praise the economic virtues of dividend tax relief. I ask, if there are virtues, why wait? Make the proposal effective for 2003 at least to provide the possibility that the economy will see some benefit.

The second provision in my amendment will get more dollars to families by simplifying the distribution of the increased child credit that we passed this year. The President has proposed accelerating the full $1,000 child credit to 2003. It is currently $600. The President has proposed accelerating that, the full $1,000 to take effect this year, 2003. Instead of making taxpayers wait until next spring when they file their tax returns to get the credit, the President has proposed sending the checks out this summer for the $400 increase in the credit. That is the same provision which is included in the Finance Committee bill. I support the acceleration of this credit for working families. It is the right thing to do. I think sending this increase out to taxpayers right away also makes good economic sense. Why wait? This gets money into the people's hands immediately so they can spend it. This will spur consumption and boost the economy, which is exactly what we should be doing in this bill.

My concern, however, deals with the millions of families who will not receive the full $400 check due to refundability limits. I might remind our colleagues that a couple of years ago, when we sent out the so- called $300 check for individuals and the $600 check for married couples, a lot of people did not get the $300; married couples did not get the $600. Why? Because of the tax brackets the taxpayer happened to fall into when they did the calculation to find out what portion of the $300 an individual might receive. If the taxpayer had a lower income, the taxpayer might not receive the full $300. It was a mess. Some got the full $300, some did not. It was a mess.

Under current law, the credit is partially funded. Families can take part of the credit if they pay payroll taxes but do not have income tax liability. Not the whole credit, but part of it. The amount that a low- income family can get refunded is to increase in 2005. The President's proposal did not accelerate the refundability of the credit. Fortunately, during consideration of the bill, the Finance Committee adopted an amendment offered by Senator Lincoln. Her amendment was to accelerate the refundability of the credit. This will allow many low- income families to see some benefit from the increased tax credit. However, even with the inclusion of the refundability amendment, many low-income families will not be eligible to receive the full $400. Millions of working families who have incomes between $10,000 and $20,000 will not get the full $400 check. They will receive a partial check. Again, people are not getting what they are promised.

We are increasing the child tax credit from $600 to $1,000 to take effect in 2003 and telling people they get an additional $400 in 2003 and many will not get it. We tell them that is the law, but they will not get it because their incomes are in certain brackets. Those whose incomes are between $10,000 and $20,000 will get less than the full $400 and receive only partial checks, and they will not know how much unless the IRS tells them how much the following year.

That does not make sense. The families who are most likely to spend the check, those who spend most of their income, will not get the full amount.

My amendment guarantees each and every working family eligible for the child credit would get the full $400 check. This fulfills two of the goals of the stimulus package, getting more money out of the door immediately and getting it to the people who will spend it, lower income people. These two changes to the bill will inject an additional $15 billion into the economy in 2003 and 2004, more than provided for in this bill. That makes sense. The additional dollars in the next 2 years will help create more jobs, help boost demand, and help rebuild the economy.

To pay for the modifications, my amendment merely eliminates the increase of the dividend exclusion from 10 percent to 20 percent in the year 2008. To repeat, in the bill, the 10 percent exclusion is increased to a 20-percent exclusion, and does not take effect until 2008. I say that is too far off. Let's repeal the increase that is scheduled to take effect in 2008 and take that $15 billion and dedicate it to the working families. That will take effect in the early years, 2003 and 2004. We could make the dividend proposal, therefore, effective now, not later.

The current provisions in the bill provide that the dividend exclusion does not take effect until 2004, not 2003. This amendment leaves in place the 10-percent exclusion that is still in place but takes effect a year earlier; that is, 10 percent above the $500 goes in. We are simply saying that the exclusion in 2008 will still be 10 percent. That is so far off. Why schedule an increase that does not take effect until 5 years from now?

I urge my colleagues to support this amendment. Briefly, it moves money upfront. It does not change the total amount of the bill but moves it upfront a little more so there is more stimulative effect in the short run. Thus, the bill does what it is purported to do, which is to create more jobs.

I yield the floor.

I see Senator Dodd ready to speak. I suggest that he speak, and I will speak after him.

Mr. President, I ask all Senators to heed the words of the Senator from Connecticut. I think he is accurate. I think he is on target.

The amendment before us, of which I am a cosponsor, is very simple. The answer of whether it should be adopted is also very easy.

Getting to the point, the question is, Should we extend unemployment benefits to those millions of Americans who do not have jobs and whose unemployment insurance is about to expire?

The provisions in Federal law that give unemployment insurance benefits will expire in a few weeks. The number of unemployed people is rising. These are people who have lost their jobs not because of their fault but because they have been laid off, because the economy is anemic. They lost jobs because their employers are laying them off.

The question is, Should the Congress extend unemployment benefits? Should they extend unemployment benefits to these hard-working men and women who are not making a lot of money? They are basic wage earners. Should we extend unemployment benefits? To ask the question is to answer it: Of course, we should.

I hear from the other side that maybe they will not look for jobs because they are getting additional benefits. They are not getting more dollars in benefits, they are just getting more weeks during which they can receive about $200 a week while they are looking for a job. The obvious answer to that charge is these are not good times. Two-hundred dollars a week is not a lot of money. I daresay no Member of this body can live on $200 a week. We are so used to living on more than $200 a week. I see the Presiding Officer smiling, knowing there is probably a little truth in that. I am suggesting we should do the obvious and extend unemployment benefits.

Another argument I hear against this proposal is that it is not a stimulus to extend the period during which people get unemployment benefits. Of course it is a stimulus. Those people are going to spend that $200-a-week check. Of course, they are going to spend it. Economists will tell us that for every $1 of unemployment benefits, there is a multiplier effect of $2.15 to the economy; that is, for every $1, an additional $2.15 is spent in the economy. It is pretty simple.

I also think it is pretty simple because we are paying for this by repealing the top bracket, repealing the acceleration of the reduction of the top tier. Some people say: That is a small business bracket. Those people are all small business people. We should do this to stimulate the economy.

That is totally wrong. It is totally incorrect. Less than 5 percent-- probably 2 or 3 percent--of the people who receive benefits in the top bracket are small businesses. Let me put it differently; 2 to 3 percent of small businesses in America are in that top bracket. Just 2 to 3 percent. Most of the people in the top bracket are not small business. They are other people. They are very wealthy people. I have nothing against wealthy people getting a tax break. Everybody should get a tax break. It would be wonderful if we all could get a tax break.

We are elected to make choices and set priorities. The economy today is not in great shape. This bill before us is designed and intended to stimulate the economy by reducing taxes. I suggest the right course would be, instead of giving the elite a tax break right now--a lot of them tell me they do not want it; they do not need it--take some of that money and extend unemployment benefits.

Mr. President, I have the highest regard for my friend from Iowa, but for him to characterize this as a job-killing amendment is just beyond the pale. The fact of the matter is that less than 5 percent of small businesses are in the top bracket that will be repealed under the amendment. That is a very conservative estimate.

Second, when we are talking small businesses under terms of this amendment, we are talking about law firms, we are talking about partnerships of all kinds. We are talking about dental partnerships and doctor partnerships. When people use the word ``small business,'' it conjures up a 15 or 20-person operation that is working hard to make ends meet. When we talk about small business, however, we must be clear as to which small businesses are in that top rate. Less than 5 percent of all small businesses pay that top rate, so we are not hurting small business with this amendment, by any stretch of the imagination.

Second, this roughly 5 percent of small businesses includes the mom- and-pop small businesses we have all talked about, but also the partnerships like law firms and dental partnerships. I do not think the latter really conjures up what we are talking about when we talk about helping a small business. Maybe we are, but I think most Americans are not. That is a fact I want to get in the record, that really so few small businesses are in that top rate.

I ask unanimous consent that the pending amendments be temporarily set aside so that the Senator from Arkansas may offer her amendment.

This is the first I have heard this. I don't know what this is all about. Pending a better understanding of the request, I respectfully object.

I ask unanimous consent that the pending amendment be set aside and the Senator from Arkansas be recognized to offer her amendment.

Madam President, I ask unanimous consent that the pending amendments be temporarily set aside so the Senator from Washington can offer an amendment.

Will the Senator from Washington yield me 10 minutes?

Madam President, the R&D tax credit has been an issue before us for quite some time, almost as long as I can remember since I have been in the Senate. The basic questions are, Should we extend the R&D tax credit and, second, should we make it permanent? Much too often the Congress has decided, yes, to extend the credit, which I agree with, but not to make it permanent. For the life of me, I cannot understand why we have not made this credit permanent.

I have introduced legislation, bipartisan legislation, which Senator Hatch and myself introduced, to make the R&D tax credit permanent. Similar legislation has also been introduced in the other body by Congresswoman Nancy Johnson and Congressman Robert Matsui, along with other members of each of their parties. This is bicameral. It is bipartisan. We believe very strongly that the research and development tax credit should be made permanent. In fact, there are about 28 sponsors of our legislation in the Senate. It is about evenly divided between both sides.

I would like to make a couple of points. The very bottom line is, this amendment will very much help the American economy. Making the R&D tax credit permanent will give U.S. businesses, particularly in the technology sector, the confidence that those companies can invest in research and development and not have to keep guessing whether Congress is going to extend or not extend this tax credit.

I can remember years past, sometimes we would extend it and other times the Congress would not extend the R&D tax credit. There would be a hiatus. I have forgotten how long those gaps were, but, as I recall, they were in the nature of 8 months, 10 months, something like that. Technology companies were wondering, is Congress going to extend the credit? They have in the past. Maybe they will in the future--but will they? This causes great uncertainty in the business world.

The R&D tax credit has a proven track record. It lays the foundation for technological innovation which in turn is an extremely important driving force in the American economy.

Most economists look to productivity gains. When there are productivity gains in the economy, the economy grows. When we have had high productivity gains, our economy has done quite well. In fact, it is important to recall the words of Chairman Alan Greenspan of the Federal Reserve who said, the reason why our economy has continued to grow so well is because of advances in technology that occurred in America and also in the world, which dramatically increased productivity in our country. This is one of the main reasons the economy grew at such a rapid rate in the 1990s.

Granted, some of that was, as the Chairman would say, irrational exuberance. There was a bubble in effect at the time. There were too many people investing because the idea sounded good, without looking closely and directly at the bottom line, whether it was a good investment or not. Nevertheless, it is very clear that technology was a driving force in the 1990s.

There is extensive research showing that tax credits are a very cost- effective way to promote research and development. The General Accounting Office, the Bureau of Labor Statistics, the Congressional Research Service, the National Bureau of Economic Research, and many others have found significant evidence that the R&D credit stimulates additional domestic R&D spending by U.S. companies. Perhaps more importantly, the R&D investment tax credit benefits American companies and American workers.

A full 75 percent of the R&D credit dollars are used for salaries of employees associated with R&D activities. These are good paying jobs. These are not service industry jobs at the local fast food store. These are very high paying jobs.

Seventy-five percent of the R&D tax credit dollars are used for salaried employees associated with R&D activities. R&D activity creates some of the most intellectual, stimulating, high-paying, high-skilled jobs in the country, encouraging individuals to pursue advanced science and math degrees in order to obtain these job opportunities. That clearly is a big plus for our economy. They create more disposable income for employees which provides additional indirect returns to the economy.

There are ripple effects. Innovations achieved through R&D make a company much more productive, enhances its competitiveness. Downstream companies are also helped. Once a company develops a new product because of research, in most cases, downstream companies get benefits as well--to say nothing of the national security benefits. The more our technology companies engage in research and development, the more likely it is that we are going to have technological advances and developments that help our national security. That, too, is a given.

There is no doubt that if R&D is going to decrease generally, national security is also going to decline. Did you know that the United States lags far behind other countries in giving incentives to businesses to invest within its own borders? Most of our trading partners offer very generous tax and nontax incentives to encourage companies in their countries to invest in R&D. These incentives lower the cost of investing in R&D outside of the United States and give companies receiving these benefits outside the United States a competitive advantage over U.S. companies that don't benefit from similar incentives.

In 2000, the United States ranked ninth behind other nations, in terms of the amount of tax credit allowances for business R&D spending at large manufacturing firms. Countries that provide more generous R&D tax benefits than the United States include Spain, Canada, Portugal, Austria, Australia, the Netherlands, France, and Korea.

This disparity encourages U.S. companies to locate more R&D activities offshore, resulting in a permanent loss of technology advancements, loss of jobs, and a loss of industrial innovation in the United States. Once R&D moves offshore because of other countries giving a tax comparative advantage, then what happens? Then companies tend to manufacture in those same locations and often use available labor in those markets, rather than American workers. Once you are in a location for a period of time, you are more likely to stay. You learn the procedures and the ropes and you feel comfortable. The country starts to be comfortable with you and they start giving you more incentives to stay there. It starts to cascade and go downhill.

I remember years ago, in Saudi Arabia, I was talking to officials there, and the big question was, Who is going to provide the technical advice in setting up a phone system in Saudi Arabia? Is there going to be a big German company, such as Siemens, or an American firm? Which firm will provide the technological specifications for a telephone system in Saudi Arabia? Well, guess what happened. A U.S. company lost; the big German company won. What is even more important about that? Guess who built the telephone system? You got it, the German company.

In this case, I am talking generally about R&D going offshore. Once your foot is in the door offshore, there is a strong likelihood that there are going to be other benefits that will accrue to those other countries, not to the United States.

The timing of this proposal is very important. There is new data compiled for R&D Magazine that projects that U.S. companies spending on R&D will be mostly flat this year, 2003. This makes for flat growth for the second year in a row. This compares with 2001, when R&D spending grew by 5 percent over the previous year. Investment in R&D is not a function of simply economic uncertainty. Businesses often invest less in R&D because of the expense and the long-term planning requirements and the difficulty of capturing all or some of the returns from the investments.

Many economists generally agree that without government support, private sector investment in R&D often falls short of the optimal level of spending necessary to provide maximum benefits to the U.S. economy. There has to be some government assistance. I might add that other countries certainly provide a lot more government assistance to their companies than we Americans do for our own U.S.-based companies--at least in the area of R&D.

One can debate the degree to which there should be any government support to the private sector. I believe there should be support in some cases. In this case, when it comes to R&D, it is clear that we want to maintain productivity advantages, technological advantages, and good jobs for American workers. We want to be as competitive as we can be in the world because that benefits the United States not only in the short term, but very much in the longer term.

Investments by U.S. businesses in research and development can prove very costly over time. Leading edge competitors in Europe and Japan continue to gain ground.

To sum up, we are presented with a great opportunity. What is it? That opportunity is to make our current R&D tax credit permanent--at least as much as we can under the constraints of the bill; second, we also have an opportunity to modify the tax credit to include the additions suggested by the Senator from Washington that will make the credit even more meaningful, including the incremental changes in the credit rates and the addition of a third credit option that is in this legislation.

Madam President, this is a no-brainer. I cannot, for the life of me, understand why this amendment won't pass. That is not just a glib statement that rolls easily off my tongue into the Senate Chamber. I just think that if the tradeoff is between research and development on the one hand, and helping American companies with more incentives to do more R&D on the other hand, compared with the accelerating reduction of the top rate or, in the alternative, of the dividends proposal, we have to make choices as to which is more likely to help this country get more jobs in the short term and in the long term.

I think the answer to that question is pretty easy and clear, and that answer is by making the R&D tax credit permanent. So I argue very strongly in favor of this legislation and this amendment offered by the Senator from Washington. She is on the right track. I think we should pay attention to what she says. She is from Washington. The State of Washington is the home to a lot of high-tech companies.

I thank the Chair and I thank my good friend from Washington.

I ask for the yeas and nays on the amendment.

Madam President, I ask for the yeas and nays on the amendment.

Mr. President, what is the parliamentary situation?

I thank the Chair.

Mr. President, I understand Senator Bunning yields back his time.

Mr. President, I yield 10 minutes on the amendment to Senator Rockefeller.

Mr. President, under the rules, as I understand them, the author of the amendment has control of her time, which is 1 hour.

I ask unanimous consent that the pending amendments be laid aside so that the Senator from Iowa, Mr. Harkin, may offer an amendment.

Mr. President, I inform the Senator from Iowa that he has 1 hour.

Yes.

Amendment No. 595

Madam President, if I might ask the Senator to yield just for the sake of orderly process here in the Senate, as I understand it, the Senator means to offer her amendment. Is that correct?

Technically, as I understand it, we should put aside pending amendments.

I ask unanimous consent the Harkin amendment and the amendment by Senator Grassley be temporarily set aside, as well as the other amendments, so the Senator from Maine can offer her amendment.

Madam President, I yield such time as the minority leader himself may use.

Madam President, I, too, am pleased we are going to be voting to increase aid to the States. Earlier this year, I offered legislation to cut taxes, but its centerpiece was aid to the States. In fact, I suggested $75 billion in aid to the States. That sounds like a pretty large sum, but I suggested in the introduced legislation to provide up to $75 billion because, in my judgment--and I think it is the judgment of most economists--dollars that are spent to help States to balance their budgets will significantly help the economies in those States. Unfunded mandates by the U.S. Federal Government has caused some of the problems the States are facing. No Child Left Behind has been mentioned, and there are others, such as IDEA and special education. There are various unfunded mandates.

We in the Congress have said that the States must provide these services, but the President and the Congress have not provided the money to the States so they can provide these services. So the States have had to figure out how to pay for these services because that is Federal law, they must do so.

In the meantime, as we all know, States have suffered dramatic reductions in revenues because the economy has been down. States all across the country have not received near the amount of revenues they expected in their last budgets. When you add to that rising health care costs in the country, which are averaging 12 to 13 percent higher each year, this is a huge increase to the States' Medicaid budgets and other health care budgets. So it is very important to give increased aid to the States. I am disappointed, frankly, that this bill provides only $20 billion when the need is so great.

I remind our colleagues also, as the occupant of the chair knows well--particularly because her father is Governor of a State--States have to balance their budgets. That is not true for the Federal Government. When States face all these unfunded mandates and a reduction in revenue, they have huge budget deficits, which they have to somehow solve, and they can only do so by raising taxes or by cutting various State services, such as Medicaid--their share--and whatnot.

So that is why we are here today and why so many Senators have spoken out in favor of aid to the States. We are soon to have an amendment offered by the Senator from Washington, which I support. She is going to suggest even more aid to the States. This $20 billion is merely a drop in the bucket. As we all know, the budget deficit in California is $35 billion alone. This bill provides just $20 billion. One State alone is much more than that. My State of Montana is running a budget deficit of about $260 million. We are a small State, but $260 million in deficit is a lot for my State with a population of 19,000 people.

So I join in the chorus, and I particularly thank the Senator from Maine and the chairman of the committee. I also thank the other Senators who are working to put this together. I must say I will support it, but I wish we were a little wiser, frankly, and providing more aid to the States. Certainly $20 billion is low, but if that is all we can get, that is what we face. I thank all my colleagues who have worked on this.

Madam President, I now yield 3 minutes to the Senator from New York.

Madam President, it is my understanding that all Senators who wished to speak on the Collins amendment have spoken.

I ask unanimous consent that all pending amendments be temporarily laid aside so the Senator from Washington can offer her amendment.

I yield whatever time the Senator from Washington desires.

Madam President, I ask unanimous consent all pending amendments be temporarily set aside and the Senator from Michigan be recognized for the purpose of offering an amendment.

Madam President, I ask unanimous consent that the pending amendments be temporarily laid aside so the Senator from Ohio may offer an amendment.

Madam President, I think the Senator from Ohio is on target. It makes excellent sense for the United States to set up some kind of a tax commission to take a good, hard look at our tax structure. As I listened to the Senator's amendment being read, one thought came to my mind, though. That is, commissions sometimes work and sometimes they don't work. And the goal here, clearly, if we do this, is to make it work.

That begs the question, how do you make it work? How do you make it worthwhile, not just some outfit drawing conclusions that are put on the shelf to gather dust. Most commission recommendations are put on the shelf to gather dust.

The one commission that comes to my mind that really has worked--and I can think of many that have not--is the commission on Social Security back in the early 1980s, when President Reagan nominated Chairman Greenspan to head the commission on Social Security. Various Senators were on the commission. Senator Dole was on the commission, and Senator Moynihan. They had a job to do, and they did a pretty good job. It was not political. The President, both bodies of Congress, both political parties, all got together and worked with members on the commission to come up with recommendations to save Social Security.

Two points: One is, the membership is people who really want to do a good job. They work together. There is not any political sniping, no partisan rhetoric. They work together. And it is very important that the composition of the commission be people who do want to work together; that is, the commission not be stacked.

The second point is at that time there was a crisis. Social Security was about to go belly up. A crisis generally creates solutions and results. The complexity of the U.S. Tax Code and the increasing complexity of the Tax Code may have become a crisis in the nature of Social Security back in the early 1980s; I don't know.

I am saying to the Senator from Ohio: It is a good amendment. As most things in life, it is the followthrough that counts, the followup that counts. It is making sure that if we do this, the right people are appointed. I say that in part because when I listened to the Senator, he mentioned two members appointed by the majority leader, one by the minority leader, three by the President, and also the House. It has the possibility of being a stacked deck, possibility of being a partisan commission. That is the last thing we need around here is a partisan commission on tax reform.

I would like to work with the Senator, and I know other Senators would like to work with him, to do the very best we can to make sure this is not a stacked deck, and it is not therefore a commission whose recommendations collect dust on some shelf somewhere but rather something that makes good sense.

One other point I might mention while the Senator from Ohio is here. I know the Senator is wondering, just as I think most Senators in this body are wondering, what is the real effect of dividend exclusion. What effect does it really have. There are a lot of people who have lots of ideas. A lot of economists have spoken on the effect of excluding dividends from income. I think in theory most of us agree there is some inequity between the taxation of equity and the taxation of debt with respect to companies' decisions as to whether to invest or investor decisions as to whether to invest.

One point that often rises in the debate is the wealth effect. What is the wealth effect of a significant reduction in dividend income? Who knows, really? There are all kinds of analyses; different people have different points of view. We are trying to do our best to try to get opinions of people who really don't have an axe to grind, of people who really, as far as we can tell, are pretty straight, who have their heads screwed on straight and they are trying to give us the right recommendation rather than spoon-feed us some political agenda from any side.

I am trying to do the best I can by trying to find people who are probably neutral. The three organizations I looked at that have analyzed the wealth effect of the President's dividend proposal are Brookings Institute, McKinsey & Company, and Goldman Sachs is the third. Let me go through first the Brookings analysis briefly. I think it is instructive.

The total value of equities held by households in the United States is $10 trillion. That is, the total value of all equities held by households is $10 trillion. I will get to institutional investors in just a moment.

The reasonable estimate of the stock price increase due to the President's dividend proposal, according to Brookings' analysis, is 5 percent. The increase in value effect of equities held by households as a result of the stock price increase is about $500 billion. The next question is what is the wealth effect, how much effect of that increase, if it is 5 percent, is going to be translated into spending in the economy.

The Brookings analysis is that the wealth effect--that is, the percent of wealth increase that is consumed rather than saved by households--will be 3 to 5 percent. So that means the increase in consumption as a result of the wealth effect is about $15- to $25- billion, which is about .14 percent to .23 percent of GDP. We all know that usually to have a real stimulus in the economy you need somewhere between 1 and 1.5 percent; and .14 and .23 is certainly very small compared with 1 percent or 1.5. That is the Brookings analysis.

The McKinsey Company's analysis is very similar. I want to read a quote from the McKinsey analysis. I think it is instructive. It says:

But the proposed tax cut (eliminate tax on dividends) isn't

likely to have a major lasting effect on US share prices,

primarily because the key investors who drive them are

already exempt from taxes. What little impact the proposal

may have was probably reflected in the 2.2 percent gain in

the S&P 500 the day before it was announced.

Continuing on to quote:

Those who believe otherwise draw on classic finance theory.

In a world without taxes, theory suggests, shareholders would

be indifferent to whether a corporation paid dividends, since

the funds to do so would come at the shareholders' own

expense. In a world with taxes, shareholders may face

different tax rates on, for example, dividends as opposed to

capital gains. They would care whether a company retained its

earnings or distributed those earnings as dividends, because

this would affect how much they got to keep. If all investors

paid taxes on dividends, yes, share prices probably would

rise if the tax were eliminated.

The fact, however, is that tax-paying US individual

shareholders own a minority of all US shares--

That is, about 28 percent. That is, individuals own about 28 percent.

whereas tax exempt US institutions and individuals who hold

shares in tax-exempt accounts own 61 percent. (The remainder

was

in foreign hands.) For the most part, tax-paying individual

shareholders don't drive share prices, whereas nontax-paying

institutional investors do: the trading activity of a

company's top 40 to 100 investors--again, usually big

institutional investors--accounts for 70 percent of its stock

price movement.

Since these investors are indifferent to the issue of taxes

on dividends [because they are tax exempt] they are unlikely

to set in motion the kinds of changes in their portfolios

that would drive up share prices.

I will soon yield to the Senator from Ohio.

The third reason Goldman Sachs gave in their review is that it would generate no more than a 5 percent increase in stock prices. That is the Goldman Sachs view.

Madam President, I appreciate what the Senator said, and he is correct. We have had all kinds of theories, and it is hard to tell what is the most accurate. Maybe we should just not pass this bill because we are going to make the Code that much more complex by passing this legislation, and so we will at least be giving the commission a bit of a break. I appreciate what the Senator has said.

Madam President, I ask unanimous consent that the pending amendment be temporarily laid aside so the Senator from Florida may offer an amendment.

Mr. President, I ask unanimous consent that all pending amendments be temporarily set aside so the Senator from Louisiana can offer an amendment.