Floor Statements

Mr. President, I ask unanimous consent that the Senator from Arkansas be allowed to speak for as long as she would like. She is making a good statement, and there is no other Member on the floor. I make that request.

Mr. President, we are now awaiting the arrival of the chairman of the committee. Pending his arrival, 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 President, I ask unanimous consent that the order for the quorum call be rescinded.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 rise today in support of the Armed Forces Tax Fairness Act of 2003. On February 5, 2003, the Finance Committee favorably reported the bill by unanimous voice vote.

As the conflict in Iraq continues, our thoughts are with the men and women who are leading America's response and serving our country. Whether it be the Marines deployed in Iraq, the National Guard supporting our troops, or the Foreign Service Officers serving in dangerous diplomatic posts.

I think in particular of the many men and women in Montana. These men and women have been called to service to defend our Nation. In fact, on September 11 of 2002, the members of the 120th Fighter Wing of the Montana Air National Guard were called on to secure the skies of the no-fly zone over Iraq.

For these dedicated public servants, we are considering the Armed Forces Tax Fairness Act. This bill will not only correct inequities in the current Tax Code that our military men and women are subject to but it will also provide incentives for our dedicated forces to continue their service to America.

These are the men and women who put their lives on the line for our freedom on a daily basis. We need to ensure that the tax laws we pass do not negatively impact them.

It is with these principles in mind that I have moved forward with the introduction of this military tax package and that the Finance Committee favorably reported the bill.

I would now like to describe the provisions included in this critical piece of legislation:

Why is the death gratuity payments provision so important? Under current law, death gratuity benefits are excludable from income only to the extent that they were as of September 9, 1986. In 1986, the death gratuity benefit was $3,000.

In 1991, the benefit was increased to $6,000 but the Tax Code was never adjusted to exclude the additional $3,000 from income. Because of this oversight, the U.S. government has been taxing families for the death of a family member who died in combat.

Just 2 weeks ago, one of our soldiers from Montana, PFC Stryder Stoutenburg, was killed during a Blackhawk helicopter crash. A native of Missoula, Private First Class Stoutenburg was only 18.

His mother will receive the death benefit payment, but will be taxed on half of it. She has already lost so much. It is unfair to also take away part of the small compensation she is receiving.

In 1997, Congress passed legislation revising the taxation of capital gains on the sale of a person's principal residence.

The new law provides that up to $250,000 or $500,000 for a married couple is excluded on the sale of a principal residence if the individual has lived in the house for at least two of the previous five years.

However, when enacted, Congress failed to provide a special rule for military and foreign service personnel who are required to move either within the U.S. or abroad.

Our proposal would permit service personnel and members of the foreign service to suspend the 5-year period while away on assignment. That means that those years would not count toward either the two years or the five year periods.

Senators McCain, Graham, and Lincoln proposed a bill in the last session to correct this.

The Department of Defense provides payments to members of the Armed Services to offset diminution in housing values due to military base realignment or closure.

For example, if a house near a base was worth $140,000 prior to the base closure and $100,000 after the base closure, DoD may provide the owner with a payment to offset some, but not all, of the $40,000 diminution in value. Under current law, those amounts are taxable as compensation.

We should ensure that those men and women losing value in their homes due to a federal government decision are not adversely affected financially.

The proposal would provide that payments for lost value are not includible into income.

Under current law, military personnel in a combat zone are afforded an extended period for filing tax returns.

However, this does not apply to contingency operations. This proposal would extend the same benefits to military personnel assigned to contingency operations.

It cannot be easy trying to figure out our complicated tax system while you are overseas and protecting our nation's freedom. Those men and women who are sent to uphold democracy and freedom in other countries are confronted with the same filing complications as combat zone personnel.

Contingency operations are just as demanding as combat zone deployment, although not always in the same manner. For example, in our current war on terrorism, this proposal would help members of our Special Forces in the Philippines supporting Operation Enduring Freedom who are just as focused on accomplishing their critical mission as our troops in the Iraqi combat zone.

Some reservists who travel one weekend per month and two weeks in the summer for reserve duty incur significant travel and lodging expenses.

For the most part, these expenses are not reimbursed. Under current law, these are deductible as itemized deductions but must exceed 2 percent of adjusted gross income.

For lower income reservists, this deduction does not provide a benefit, because they do not itemize. For higher income reservists, the 2 percent floor

limits the amount of the benefit of the deductions.

In my home state of Montana, we have approximately 3,500 reservists, 800 of whom travel each month across the state for their training. These 800 reservists pay travel and lodging expenses out of their own pocket.

Montana ranks 48th in the nation for per capita personal income. So, that $200 expense for reserve duty every month means a lot to the Montana reservist. Yet, they continue selflessly to provide their services to our country at their own expense. For those reservists who travel out of state for their training, this expense is even higher.

This proposal would provide an above the line deduction for overnight travel costs and would be available for all reservists and members of the National Guard.

Currently, qualified veterans' organizations under section 501(c)(19) of the tax code are tax-exempt. In addition contributions to the organization are tax-deductible.

In order to qualify under 501(c)(19), the organization must meet several tests, including 75 percent of the members must be current or former military, and substantially all of the other members must be either spouses, widows, or widowers of current or former military.

The proposal would permit lineal descendants and ancestors to qualify for the ``substantially all'' test.

It is important that our veterans' organizations continue the good work that they do. But, as the organizations age, they are in danger of losing their tax-exempt status. This bill helps ensure the vitality of these organizations.

I want to ensure that parents in the military can continue their dedicated service once they enter parenthood, with the knowledge that their children are being well taken care of.

The military provides extensive childcare benefits to its employees. Employees at DoD-owned facilities provide childcare services while other areas with non-DoD owned facilities contract out their childcare.

When Congress passed the Tax Reform Act of 1986, we included a provision stating that qualified military benefits are excluded from income. It is not absolutely clear whether childcare provisions are covered under this provision.

The proposal would clarify that any childcare benefit provided to military personnel would be excludible from income.

This bill permits penalty-free withdrawals from Coverdell education savings accounts and qualified tuition programs made on account of the attendance of the account holder or beneficiary at any of the service academies. The amount of the funds that can be withdrawn penalty-free is limited to the costs of advanced education in that calendar year.

Under current law there is no procedure for the IRS to suspend the tax-exempt status of an organization.

This proposal would suspend the tax-exempt status of an organization for any period during which the organization is designated or identified by Executive Order as a terrorist organization.

Current law provides for income tax, estate tax and death benefit relief to soldiers who are killed in a combat zone, victims of the September 11th attacks, the Oklahoma City bombing victims, and the victims of the anthrax attacks.

The crew of the Space Shuttle Columbia was heroic in every sense of the word. We have a duty to those who lost their lives for the advancement of science and increasing our knowledge of the world we live in. This legislation makes all of the above benefits available to the families of the Columbia crew.

In addition, this bill includes three revenue offsets. First, we improve the collection of unpaid taxes from people who have renounced their American citizenship in order to avoid U.S. taxes.

Second, we extend certain IRS user fees.

Third, we restore the ability of the IRS to permit partial-pay installment agreements with taxpayers.

The Military bill passed by the Senate Finance Committee fixes some of the inequities in our tax code and, more importantly, acknowledges the men and women who are making sacrifices and risking their lives to defend us all.

I thank all of the Members who have contributed to the development of the bill: Senators Levin and Warner of the Armed Services Committee, Senator Landrieu for the childcare provision, Senator Johnson for the contingency operation provision, Senator DeWine for the above-the-line deduction, and Senator Harkin for the Veterans and Expatriation provisions.

I especially thank the Chairman of the Finance Committee, Senator Grassley, who has once again been a partner in the development of important bipartisan tax legislation.

Mr. President, it is important that we continue to show members of the armed forces our support and solidarity during this time of conflict. The War on Terrorism and the conflict with Iraq have brought to light the essential role the armed services play in upholding freedom throughout the world.

I hope to see this military tax equity bill passed by the Senate today, and signed into law by the President swiftly.

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

I suggest the absence of a quorum.

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

Mr. President, thousands of men and women from Montana are currently stationed overseas, be it in Iraq, Afghanistan, South Korea, Southeast Asia or in other supporting missions throughout the United States and the rest of the world.

These brave and dedicated soldiers have chosen to join the Armed Forces and protect our country, which is one of the highest forms of service there is. They are putting their lives on the line to protect the freedom and security of the United States. I take my hat off to them.

To date, Montana has sent almost 700 Reserve forces into Active Duty. Malmstrom Air Force Base has 105 airmen deployed overseas, including 50 members of the 819th Red Horse Squadron. Earlier this month 114 members of the Red Horse Squadron came home after being deployed in southwest Asia for five and a half months. The airmen are supporting six different operations around the world in southwest Asia, supporting no- fly zones in Iraq or in Afghanistan.

About 390 Army Reservists from Montana have been deployed. From Great Falls, the 889th Quartermaster Company unit--with 119 members--recently received mobilization orders along with 100 members of the 4225th U.S. Army Hospital.

From Missoula, 58 soldiers from the 279th Engineer Battalion and 16 soldiers from the 823rd Transportation Detachment have been activated. And out of Billings, 161 members of the 592nd Ordnance Company recently received their orders. Most of these army Reservists will take part in Operation Enduring Freedom.

Montana's Air National Guard has also contributed significant human resources. 210 members of the 120th Fighter Wind have been activated flying in the no-fly zone over Iraq.

Montana's Army National Guard has contributed about 125 Army Guard members, many of which are at other bases throughout the United States taking part in Homeland Security measures.

Thirty-five members of the 443rd Petroleum, Oil and Lubricants Supply Company have been mobilized to assist

with base security at the 120th Fighter Wing unit on Gore Hill outside of Great Falls, MT. Forty-five soldiers from the 495th Transportation Battalion are taking part in Operation Enduring Freedom. Eight ground- air liaison teams are in Fort Sill, OK, and 2 UH60 Helicopter pilots are in Fort Benning, GA.

Most certainly, I do not want to forget the thousands of Active Duty Army, Navy, Air Force and Marines from Montana stationed elsewhere throughout the Nation and overseas.

These soldiers are sons and daughters, brothers and sisters, fathers and mothers. And like you and I, they have families to take care of and worry about. They have personal lives to attend to, bills to pay and tax forms to fill out. As they are stationed far away, they are worried about how their children are doing in school and how their husbands or wives are coping with the distance. It is not easy.

Every day they are putting their lives back here on hold and instead putting their lives on the line to protect the rights we hold so dear.

With all of the worries they are facing, I am urging for passage of the military tax bill so we can take one, or two, burden off of their minds.

These men and women should not have to worry about whether or not their deployment changes their residency for tax purposes. They should not have to worry about whether or not they can afford their weekend training, nor should they ever have to worry about whether their death could result in an undue tax burden to their family.

One of the best ways we can support our troops is by doing everything we can to ensure that they and their families are taken care of. As a tribute to our Armed Forces, I cannot think of a better way to support them than by passing the military tax bill and allowing them to focus on their mission rather than their finances.

I encourage my colleagues to show their support for our troops today by voting in favor of the Armed Forces Tax Fairness Act.

I share the sentiments of Chairman Grassley. I would support tax treatment for our Guardsmen and Reservists like that proposed by Senators Landrieu, DeWine, and Allen. S. 351 is not the appropriate venue, but the reconciliation package should achieve the goals of S. 442. The junior Senator from Louisiana is correct that the $350 billion tax package should contain both tax cuts to promote growth and benefit the quality of life for the men and women in the United States Armed Forces.

I suggest the absence of a quorum.

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

Mr. President, earlier I paid tribute to Senator Daniel Patrick Moynihan. There is a provision in the legislation we are considering which was very near and dear to the heart of Senator Moynihan, and that is the expatriation provision contained in this bill. It was actually developed by Senator Moynihan and Senator Roth several years ago. That is the genesis of this provision.

As we know, there are many men and women overseas fighting for our country. For example, there are currently about 300,000 in Iraq. At the same time, there are individuals who attempt to escape their patriotic duty. While we have 300,000 men and women over in Iraq, other individuals are attempting to escape their patriotic duty. They relinquish their U.S. citizenship. Why? One basic reason: In order to avoid supporting the United States through taxes.

Between 1991 and 2002, approximately 6,500 U.S. citizens have expatriated; that is, they gave up their U.S. citizenship. In 1966, as part of the Foreign Investors Tax Act, Congress created an alternative tax regime for U.S. citizens who expatriated in order to avoid paying taxes. The alternative tax regime taxes a former citizen on U.S. property for 10 years after expatriation.

These tax rules were strengthened in 1996 following press reports and congressional hearings indicating that very wealthy individuals expatriated while maintaining significant contacts with the United States.

Unfortunately, these changes to the law have not deterred citizens from expatriating to avoid paying U.S. taxes. The changes simply never worked as Congress intended.

This year, the Joint Committee on Taxation published a study on individual expatriation. According to the Joint Committee, there is virtually no enforcement of the special tax and immigration rules applicable to tax-motivated citizenship relinquishment and residency termination.

The Joint Committee also said that present law has been highly ineffective. Present law continues to provide tax incentives for individuals to expatriate. It also is difficult to collect U.S. taxes on former citizens who are no longer physically present in the United States.

Additionally, a study conducted by the General Accounting Office concluded that the IRS did not have a systematic compliance effort. That means that we are not even enforcing the alternative tax regime that is on the books.

That means a former citizen could avoid the alternative tax regime by holding foreign assets--which are not taxed. Or by waiting until the 10-year period expires before disposing of U.S. property.

The Armed Forces Tax Fairness Act includes a new system to address tax-motivated expatriation. Under this legislation, any U.S. citizen or long-term resident who relinquishes their U.S. citizenship or residency will be subject to an exit tax on the gains attributable to property owned during their U.S. citizenship.

Under this proposal, if the gain exceeds $600,000, then a former citizen will be taxed on the net unrealized gain on property--as if it were sold at fair market value 1 day prior to expatriation. The Treasury Department believes that this new system will greatly improve the administrability of the tax on expatriates. The new system imposes the tax at the time the individual leaves the U.S. jurisdiction.

Additionally, by including foreign assets within the regime, this eliminates a significant incentive for tax-motivated expatriation.

This expatriation provision will raise $700 million. The military bill uses that $700 million to provide tax benefits to military personnel.

In contrast, the House version of the military bill is simply a modification of the current alternative tax regime. It raises $328 million. The House version will not go far enough. It simply adds more provisions for the IRS to enforce. This strikes me as odd considering none of the current provisions is being enforced.

Sometimes the laws just do not work the way Congress intended. So, we must change the laws to ensure they are effective and administered as Congress intended.

The current system to tax expatriates does not work. We have had nearly 40 years to make the system work. We should not wait any longer to collect taxes on those who do not value the freedoms our nation provides.

The new proposal does not seek to tax expatriates on income earned after expatriation. It just says they have to

pay tax on the income earned while they were a U.S. citizen. While our military protected them.

I thank former Senator Bill Roth and the late Senator Daniel Patrick Moynihan, who developed this proposal several years ago. And I thank Senator Harkin and others who have continued to work on this in the 107th Congress and this year.

Amendment No. 433

(Purpose: In the nature of a substitute)

On behalf of Senator Grassley and myself, I call up amendment numbered 433.

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

Mr. President, I yield whatever time the Senator from Arkansas desires.

Mr. President, that is a very important statement and request that the Senator from Arkansas has made. I can speak on behalf of myself, and I am sure Senator Grassley, that we would be more than honored to join with the Senator from Arkansas in making that request. It is a very timely request. It is one that is very important. Frankly, I am a little bit surprised none of us made that same request that he has made because it is so important, and it is going to give us a lot better idea of the financial condition of our armed services. It is a good idea.

Mr. President, when the space program began in 1959 there were only seven astronauts in the entire country. They all were or had been in the Armed Forces.

That was only 44 years ago and since then, much has changed. Today, astronauts are comprised of Americans from every race, creed, color and gender.

While many still come from the military, the astronaut corps now includes civilian doctors, scientists, and engineers. They are our best and our brightest. They risk their lives to advance our knowledge and understanding of the world.

On February 1, 2003, seven men and women aboard the space shuttle Columbia lost their lives. LTC Michael P. Anderson, U.S. Navy CAPT David Brown, U.S. Navy CDR Laurel Clark, Dr. Kalpana Chawla, U.S. Air Force COL Rick Husband, Naval CDR William McCool, and Israeli Air Force COL Ilan Ramon will be remembered forever.

Five of the six Columbia crew members, from the United States, had military backgrounds. They were national heroes who are deeply missed by their family and friends. Through their dedication to space exploration, they lived their lives to the fullest and made long lasting contributions.

In honor of their sacrifice, I along with 13 of my Senate colleagues, introduced S. 298, the Assistance for Families of Space Shuttle Columbia Heroes Act.

I am pleased that the legislation was included by the Senate Finance Committee as part of the Armed Forces Tax Fairness Act of 2003.

Under the legislation, the families of the Columbia heroes would receive the same benefits as families of military personnel who die in the line of duty.

The provisions are similar to legislation passed in 2001 that provided relief to victims of the September 11, anthrax and the Oklahoma City attacks.

Specifically, the bill expands the class of those eligible for these benefits to include astronauts killed in the line of duty.

The legislation provides income tax relief. Current law generally excludes from tax income received in the year of death or in a previous year for soldiers killed in combat zones, and victims of September 11, anthrax and Oklahoma City.

The legislation expands this benefit to apply to astronauts who die in the line of duty.

The legislation provides death benefit relief. Current law excludes from income any death benefit paid by the U.S. Government to a soldier killed in a combat zone or paid by an employer to the families of the victims of September 11, the anthrax attacks, or the Oklahoma City bombing.

The legislation expands this benefit to apply to death benefits paid to the families of astronauts killed in the line of duty.

The legislation provides for estate tax relief. Current law provides estate tax relief that effectively lowers the estate tax rate to 20 percent for the estates of soldiers killed in combat zones, the victims of September 11, the anthrax attacks or the Oklahoma City bombing.

The legislation expands this benefit to apply to the estates of any astronaut killed in the line of duty.

The best way to honor Columbia's fallen heroes is to promptly pass this legislation and pledge that the goals and missions of NASA will live on in the years to come.

I urge my colleagues to support the Armed Forces Tax Fairness Act of 2003 which includes tax relief for the families of the Space Shuttle Columbia heroes.

Mr. President, since September 11, significant progress has been made to disrupt and dismantle the financial components of terrorist organizations.

Special agents from the IRS and other law enforcement agencies have successfully investigated numerous terrorist related entities-- including tax exempt organizations that have engaged in terrorist fundraising.

The Armed Forces Tax Fairness Act of 2003 contains a provision that would suspend the tax-exempt status of any organization designated by U.S. authorities as a terrorist organization or supporter of terrorism.

There is no procedure under present law for the IRS to suspend the tax-exempt status of an organization.

The IRS can revoke an organization's tax-exempt status only after conducting an examination of the organization.

Even then, the IRS must issue a letter proposing revocation and allow the organization to exhaust its administrative appeals rights.

The provision in this legislation is simply common sense. It is an important weapon in our war on terrorist financing.

An organization that has been designated by the Federal Government as a terrorist organization should not be exempt from Federal income tax. Moreover, contributions to such organizations should not be tax deductible.

Once the Federal Government determines that an entity is a terrorist organization pursuant to certain authority--for example, the International Emergency Economic Powers Act--a separate investigation by the IRS is not necessary.

Further, because a terrorist organization may challenge the Federal government's designation under the law authorizing the designation, recourse to the declaratory judgment procedures of the Tax Code is not appropriate.

If a tax-exempt organization's suspension is determined to be erroneous, the provision would allow tax refunds for any overpayments.

Lastly, the IRS will be required to update its listings of tax-exempt organizations to take into account organizations that have had their exemption suspended. This will give notice to taxpayers that contributions to these organizations are no longer deductible.

I urge my colleagues to support the Armed Forces Tax Fairness Act of 2003.

Mr. President, this bill includes many important changes in the tax treatment of income and benefits received by members of our armed forces. One provision is particularly important for members that face the dual challenge of serving their nation while raising a family. The bill explicitly states that child care subsidies that members of the military receive shall not be subject to income tax.

In 1986, we passed a law which stated that military benefits should not be included in income for tax purposes. The statute lists a number of benefits received by members of the military--

housing allowances, medical benefits, education assistance, and many others. But child care subsidies do not appear on the list.

When we passed this law, the Department of Defense did have a program to assist members of the military in caring for their children. But the importance of this program has increased as the demographics of the members of the military have changed.

There was a time when our forces were primarily young single men. However, times have changed. Twelve percent of the forces are women. Over half of the active duty members are married. Two-thirds of military spouses work outside the home. Six percent of members are married to another member of the military. And 6 percent are single parents.

Young single soldiers are no longer the norm. Recognizing these changes, the Department of Defense has placed a reinforced importance on assisting military families.

The Department of Defense recognizes the additional challenges faced by military families as they raise children. The average military family moves every two and a half years, making it difficult for them to find quality child care, or friends and neighbors to look to for help with child care responsibilities. And with work schedules that are often long and unpredictable, help is often necessary. In addition, members of the military face the possibility of deployment anywhere in the world at any time.

They now operate over 800 child care centers in the U.S. and abroad. These include child development centers for young children, after- school centers for older children, and other family care programs. They provide night and weekend services as well, to accommodate the often hectic schedules that military families face. All in all, these programs provide care for over 200,000 children every day.

The cost of these programs varies depending on the income of the parents--on average, it is about $7,700 per child. This cost is shared by the military parents and the government, with each paying about half the cost.

The law is unclear about whether these benefits are subject to income tax. A provision in this bill ends that confusion. It states that these child care subsidies, shall not be included in income, for tax purposes.

As the demographics of the members of the military have changed, so has the policy of the Department of Defense. Now it is time that we follow with these changes to the tax code.

I compliment Senator Landrieu of Louisiana, who developed this proposal, and insisted on its inclusion in this military tax bill.

It is one more reason the Senate should pass this legislation today.

I yield the floor.

Mr. President, this is a time to honor our men and women fighting for us overseas. I am here honoring PFC Stryder Stoutenburg from Missoula, MT, who died in the current conflict. Each of my colleagues knows personnel who have died in Iraq. We honor them. We grieve for their families. We are working hard to give the best benefits we can for them.

This bill is not going to heal wounds. It is not going to bring people back. It is not going to bring our loved ones back home right away. It is a small token of something we can do in honor of the men and women, mothers and fathers, brothers and sisters who are fighting for America.

I strongly urge us to give a resounding vote in favor of the men and women, this small token, to help them. It shows we care. I urge a very strong vote.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

I support estate tax repeal. But I am forced to vote against Senator Kyl's amendment for permanent repeal because of two concerns. First, I am concerned about mounting deficits, and second, I believe that this amendment would result in payment reductions to rural providers under Medicare.

The budget resolution we are debating today includes tax cuts that total $1.3 trillion. The budget also proposes that $725 billion of these tax cuts be enacted immediately, under the reconciliation process.

Two years ago, we passed a $1.3 trillion tax cut. I supported that tax cut. But those were different times. We had a surplus. We did not foresee the significant decline in revenues. Or the deficits that followed.

This is not the time to reduce revenues by $725 billion. It would hurt our budget and our economy.

In order to prevent the passage of tax cuts that would drive up the deficit and hurt our economy, I believe that we must reduce the size of this tax cut.

While Senator Kyl has stated that he intends to pay for his amendment, I am concerned that his offset would have a negative impact on rural providers in Montana. The cost of his amendment is estimated to be $46 billion. And when asked how he proposed to offset this cost, he stated that it should come from a general fund for Finance Committee action.

According to the Senate Budget Committee, this amendment would result in a negative allocation to the Finance Committee in 2009 through 2013. More specifically, the committee's allocation for these years would be negative $22 billion. That's minus $22 billion. Quite a deficit to overcome, and those savings would be difficult to find.

Those of us who were here when the Balanced Budget Act of 1997 passed recognize full well that these savings would come from Medicare. An estimated 90 percent of the savings passed by the Finance Committee in the 1997 law came from the Medicare Program, through reductions in payments to providers.

I would hesitate to cut the program a year before the baby boom generation starts to retire to finance a tax cut that we pass in 2003. Providers are currently facing severe reductions in Medicaid payments. They are coping with an uninsured rate that continues to climb, which means that they must shoulder an increasing burden of uncompensated care. These problems may worsen by the time these cuts take effect. They may also improve. But we cannot know for sure. And looking at the current state of our health care system, I am simply not prepared to take the chance that providers can sustain these cuts.

Mr. President, let me reiterate that I support estate tax repeal, and I will continue to support thoughtful and responsible changes to tax policy. But I cannot support this amendment at this time.

Mr. President, it has been said that, ``Good health and good sense are two of life's greatest blessings.'' Senators Hatch, Rockefeller, Jeffords and I hope to further the cause of good health and good sense today, through introduction of the Health Care Safety Net Oversight Act of 2003.

Currently no entity oversees America's health care safety net. This means that safety net providers--including public and teaching hospitals, emergency departments, community health centers and rural health clinics--are laboring on their own. They are like master musicians performing without a conductor. Each is trying their hardest and performing their part--but no one is coordinating their efforts.

This Act changes that, by creating the Safety Net Organizations and Patient Advisory Commission--SNOPAC--an independent and nonpartisan commission to monitor the health care safety net.

Safety net providers are often the last resort for patients unable to afford the health care they need. For example, in my State of Montana, we have eight community health centers, serving about 44,000 Montanans per year. Without these health centers, many of these uninsured and underinsured Montanans would have no place to turn.

According to a recent report, nearly 75 million Americans lacked health insurance at some time in the past two years--amounting to almost one-third of all Americans younger than 65. Of these 74.7 million individuals, about 30 percent had no coverage at some time in 2001 and 2002 while 65 percent had no coverage for at least six months.

And who are these people? In Montana, about 80 percent of uninsured individuals are in working families. And self-employed workers-- including owners of small businesses--and their dependents account for about one-fifth of the uninsured in our State. Montana has one of the lowest rates of employer-sponsored insurance in the Nation, with about 46 percent of Montanans receiving health insurance through their employers.

So what do we do about this problem? How do we ensure that all Americans, irrespective of color, creed, gender, or geography, have access to qualify health care?

About 10 years ago Congress and the Administration worked on the problem of the uninsured. A tremendous amount of time and effort went into the Health Security Act, on both sides of the issue. As we know, passage of that bill failed. Since then, Congress has taken a more incremental approach to the uninsured. Congress passed legislation in 1996 to ensure portability of health insurance. A year later, the CHIP program was signed into law, bipartisan legislation to cover children of working families. And last year, we worked together to provide health coverage for workers who lost their jobs because of increased international trade.

While these incremental steps have helped, we need to do more. Last year I introduced bipartisan legislation to provide employers with tax credits so they can offer their employees health insurance. And I am hopeful that the Baucus-Smith, OR bill can be enacted into law.

But the fact remains, for most uninsured and underinsured Americans, the safety net is still the only place to turn.

Yet, the safety net has been seriously damaged in recent years. According to report a few years ago by the Institute of Medicine, the health care safety net is ``intact but endangered.''

And according to a report I requested of the General Accounting Office, issued today, emergency departments across the nation are facing severe overcrowding problems, forced to send patients to other hospitals. The GAO found that about two-thirds of hospitals reported asking ambulances to be diverted to other hospitals at some point in fiscal year 2001. And about 10 percent of hospitals reported being on diversion status for more than 20 percent of the year.

September 11 taught us that we need to be ready. Our emergency response systems must be prepared to manage an unexpected terrorist attack. But based on the GAO's findings, it seems that we are far from prepared. If emergency departments cannot care for all the patients they are sent under current conditions, how can we expect them to manage a terrorist attack of potentially catastrophic proportions?

We need an entity responsible for recommending changes to our safety net, including our emergency departments. And though SNOPAC will not solve the problems of America's uninsured, it will work to ensure that safety net is not further frayed. An independent, non-partisan commission, modeled on the Medicare Payment Advisory Commission (MedPAC), SNOPAC will include professionals from across the policy and practical spectrum of health care. And like MedPAC, SNOPAC will report to the relevant committees of Congress on the status of its mission: tracking the well-being of the health care safety net.

SNOPAC is not a panacea. But it is a positive step toward a coordinated approach in caring for the uninsured. Absent large-scale improvements in the number of insured Americans, we should at least work to monitor and care for what we already have--an intact, but endangered, health care safety net.

I urge all my colleagues to join me in this effort towards good health and good sense.

Mr. President, it has been said that, ``Good health and good sense are two of life's greatest blessings.'' Senators Hatch, Rockefeller, Jeffords and I hope to further the cause of good health and good sense today, through introduction of the Health Care Safety Net Oversight Act of 2003.

Currently no entity oversees America's health care safety net. This means that safety net providers--including public and teaching hospitals, emergency departments, community health centers and rural health clinics--are laboring on their own. They are like master musicians performing without a conductor. Each is trying their hardest and performing their part--but no one is coordinating their efforts.

This Act changes that, by creating the Safety Net Organizations and Patient Advisory Commission--SNOPAC--an independent and nonpartisan commission to monitor the health care safety net.

Safety net providers are often the last resort for patients unable to afford the health care they need. For example, in my State of Montana, we have eight community health centers, serving about 44,000 Montanans per year. Without these health centers, many of these uninsured and underinsured Montanans would have no place to turn.

According to a recent report, nearly 75 million Americans lacked health insurance at some time in the past two years--amounting to almost one-third of all Americans younger than 65. Of these 74.7 million individuals, about 30 percent had no coverage at some time in 2001 and 2002 while 65 percent had no coverage for at least six months.

And who are these people? In Montana, about 80 percent of uninsured individuals are in working families. And self-employed workers-- including owners of small businesses--and their dependents account for about one-fifth of the uninsured in our State. Montana has one of the lowest rates of employer-sponsored insurance in the Nation, with about 46 percent of Montanans receiving health insurance through their employers.

So what do we do about this problem? How do we ensure that all Americans, irrespective of color, creed, gender, or geography, have access to qualify health care?

About 10 years ago Congress and the Administration worked on the problem of the uninsured. A tremendous amount of time and effort went into the Health Security Act, on both sides of the issue. As we know, passage of that bill failed. Since then, Congress has taken a more incremental approach to the uninsured. Congress passed legislation in 1996 to ensure portability of health insurance. A year later, the CHIP program was signed into law, bipartisan legislation to cover children of working families. And last year, we worked together to provide health coverage for workers who lost their jobs because of increased international trade.

While these incremental steps have helped, we need to do more. Last year I introduced bipartisan legislation to provide employers with tax credits so they can offer their employees health insurance. And I am hopeful that the Baucus-Smith, OR bill can be enacted into law.

But the fact remains, for most uninsured and underinsured Americans, the safety net is still the only place to turn.

Yet, the safety net has been seriously damaged in recent years. According to report a few years ago by the Institute of Medicine, the health care safety net is ``intact but endangered.''

And according to a report I requested of the General Accounting Office, issued today, emergency departments across the nation are facing severe overcrowding problems, forced to send patients to other hospitals. The GAO found that about two-thirds of hospitals reported asking ambulances to be diverted to other hospitals at some point in fiscal year 2001. And about 10 percent of hospitals reported being on diversion status for more than 20 percent of the year.

September 11 taught us that we need to be ready. Our emergency response systems must be prepared to manage an unexpected terrorist attack. But based on the GAO's findings, it seems that we are far from prepared. If emergency departments cannot care for all the patients they are sent under current conditions, how can we expect them to manage a terrorist attack of potentially catastrophic proportions?

We need an entity responsible for recommending changes to our safety net, including our emergency departments. And though SNOPAC will not solve the problems of America's uninsured, it will work to ensure that safety net is not further frayed. An independent, non-partisan commission, modeled on the Medicare Payment Advisory Commission (MedPAC), SNOPAC will include professionals from across the policy and practical spectrum of health care. And like MedPAC, SNOPAC will report to the relevant committees of Congress on the status of its mission: tracking the well-being of the health care safety net.

SNOPAC is not a panacea. But it is a positive step toward a coordinated approach in caring for the uninsured. Absent large-scale improvements in the number of insured Americans, we should at least work to monitor and care for what we already have--an intact, but endangered, health care safety net.

I urge all my colleagues to join me in this effort towards good health and good sense.

Mr. President, I ask unanimous consent that Mark Kirbabas, Tyler Garrett, and Shawn White of my staff be granted the privilege of the floor for the consideration of H.R. 1307.

Mr. President, I rise today to explain why I had to oppose Senator Corzine's amendment to increase funding for environmental and natural resource programs in the budget resolution.

Let me be clear that I fully support the goals of Senator Corzine's amendment. While it is true that we are facing a tight budget situation, protecting our environment and the health and well-being of our citizens should remain a top priority. That includes setting aside adequate funding for programs such as the Superfund and Brownfields programs.

But I was forced to vote against Senator Corzine's amendment because of another concern. My concern with mounting deficits. The budget resolution brought before us includes tax cuts that total $1.3 trillion. The budget also proposes that $725 billion of these tax cuts be enacted immediately, under the reconciliation process.

Two years ago, we passed a $1.3 trillion tax cut. I supported that tax cut. But those were different times. We had a surplus. We did not foresee the significant decline in revenues. Or the deficits that followed.

This is not the time to reduce revenues by $725 billion. It would hurt our budget and our economy.

Why is $725 billion in tax cuts inappropriate at this time? The most crucial problem is that it is not paid for. The budget resolution brought before us forecasts enormous deficits for almost the next decade. Reducing revenues by $725 billion adds to the already mounting deficits. In order to prevent the passage of tax cuts that would drive up the deficit and hurt our economy, I believe that we must reduce the size of this tax cut.

I joined three of my colleagues in a letter that laid out these concerns--we pledged that we would not agree to tax cuts above $350 billion. This is crucial. The Budget Committee approved $725 billion in tax cuts, and brought it to the Senate floor. Along with my colleagues, I promised to vote to bring this number down by $375 billion.

In a narrowly divided Senate, it is important that both parties work together to come up with the appropriate spending and revenue targets for the budget. That is why I worked with both Democrats and Republicans. Together, we came up with a target of $350 billion for this tax cut, and we agreed that we would all stick to that number.

As part of our commitment to try to reduce the size of the tax cut approved by the Budget Committee, we also agreed that we would not try to reduce the size of the tax cut below $350 billion. That means I am forced to make difficult decisions. In order to keep my commitment to a more responsible tax cut, I have to vote against funding priorities.

During tough times, we must make tough choices. I chose to commit to a responsible tax cut. A tax cut that will prevent worsening deficits that would hurt our economy.

Mr. President, I am in support of Senator Lautenberg's amendment to replenish the superfund trust fund, by reinstating the superfund taxes that expired in 1995. The trust fund is running dangerously low, and that is just not acceptable.

As I've stated before, I remember very clearly when Congress debated the original superfund law, and I remember thinking what an incredible legacy Congress could leave the Nation by enacting that historic legislation.

Seeing how successful superfund has been over the last 25 years, particularly in Libby, MT, reinforces my belief that we did the right thing for the people of this country when we created the superfund program.

The superfund program brought millions of dollars to Montana for clean up activities, to protect the health and well being of Montana's citizens and create good paying jobs in the local communities left with a contaminated site. For example, more than $34 million has been spent in Libby alone in an effort to remove asbestos contamination caused by the now defunct WR Grace vermiculite mine, as well as to provide health screenings for Libby residents. Hundreds of millions have been spent in the Clark Fork basin to remedy decades of industrial pollution. Millions more will be spent to clean up the Berkeley Pit and other sites in the State.

Some of this money will come from an identifiable, solvent responsible party, but much of it will not, as companies go out of business or declare bankruptcy. And, Montana is not alone. That is why maintaining the integrity of the superfund trust fund is so important.

I'm extremely concerned that the more we fall behind in securing the funding necessary for clean-up activities at sites in Montana and around the country, the worse off we're going to be in future years. This has serious implications for the future stability of the superfund program.

I don't believe it's fair to solve this problem by forcing the average taxpayer to pick up the tab for the clean up of toxic sites that were created by private entities, and which threaten our health and our children's health. That's why I strongly support reinstating the superfund tax, and why I support Senator Lautenberg's amendment.

A Superfund designation is not a trivial event for the communities involved--it invokes real fear and uncertainty in people about the future, about the future economic health of their community, and about the future effects of any contamination on their health or their children's health. These communities cannot shoulder the immense burden of cleaning up highly contaminated sites by themselves, or forcing a responsible party to pay for the clean-up. The Federal Government is a necessary and important partner in this effort through the Superfund program.

Superfund is a success; we should build on that success, not allow it to fall apart.

Mr. President, I call up amendment 348.

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

Mr. President, I ask I be notified when I have consumed 1 minute.

The administration's drug plan essentially abandons the 89 percent of senior citizens who are now on fee-for-service. How? By providing that seniors who stay in fee-for-service get catastrophic benefits and a discount card but they do not get additional drug benefits. However, if you are a senior and enroll in managed care, you are going to get a drug benefit, therefore, forcing seniors out of fee- for-service, into managed care.

I might add this will also not save money. The managed care programs we have in our country are costing more than fee-for-service. They are costing more than the Federal Employees Health Benefit package. And seniors are dropping out of managed care because they are not getting the benefits they deserve.

I urge Members to vote for this amendment which provides all seniors get the same drug benefit.

Mr. President, I have an additional minute, I believe?

Mr. President, I rise today to comment briefly on my vote against Senator Harkin's amendment this afternoon. I do so because I was faced with a very difficult decision. I care very deeply about the education programs that would be funded through this amendment, programs that include afterschool programs and vocational education programs. These are

critical programs in schools across my State, and I hope we find a way to fund them.

But I am forced to vote against this amendment because of another concern--my concern with mounting deficits.

The budget resolution brought before us includes tax cuts that total $1.3 trillion. The budget also proposes that $725 billion of these tax cuts be enacted immediately, under the reconciliation process.

Two years ago, we passed a $1.3 trillion tax cut. I supported that tax cut. But those were different times. We had a surplus. We did not foresee the significant decline in revenues, or the deficits that followed.

This is not the time to reduce revenues by $725 billion. It would hurt our budget and our economy.

Why is $725 billion in tax cuts inappropriate at this time?

The most crucial problem is that it is not paid for. The budget resolution brought before us forecasts enormous deficits for almost the next decade. Reducing revenues by $725 billion adds to the already mounting deficits.

In order to prevent the passage of tax cuts that would drive up the deficit and hurt our economy, I believe that we must reduce the size of this tax cut.

I joined three of my colleagues in a letter that laid out these concerns--we pledged that we would not agree to tax cuts above $350 billion. This is crucial. The Budget Committee approved $725 billion in tax cuts, and brought it to the Senate floor. Along with my colleagues, I promised to vote to bring this number down by $375 billion.

In a narrowly divided Senate, it is important that both parties work together to come up with the appropriate spending and revenue targets for the budget. That is why I worked with both Democrats and Republicans. Together, we came up with a target of $350 billion for this tax cut, and we agreed that we would all stick to that number.

As part of our commitment to try to reduce the size of the tax cut approved by the Budget Committee, we also agreed that we would not try to reduce the size of the tax cut below $350 billion. That means I am forced to make difficult decisions. In order to keep my commitment to a more responsible tax cut, I have to vote against funding priorities like the one presented by Senator Harkin.

During tough times, we must make tough choices. I chose to commit to a responsible tax cut. A tax cut that will prevent worsening deficits that would hurt our economy.

Mr. President, today I re-introduced the Rural Heritage Conservation Act, along with my good friend Senator Grassley from Iowa. I would like to say a few words about why this bill is so important to my home state of Montana and to the Nation.

We are losing precious agricultural and ranch lands at a record pace. Farming and ranching are the backbone of my state, comprising the largest sector of my state's economy. Not only do these farms and ranches provide Montana and the Nation with the highest quality food and fiber, they also provide wildlife habitat, open space and peace of mind. It is imperative that we help our hard-working farmers and ranchers preserve this precious heritage and their way-of-life.

Conservation easements have been tremendously successful in preserving open space and wildlife habitat. Unfortunately, the way current tax law is structured makes it difficult for farmers and ranchers, who generally don't have much income, to take advantage of the tax benefits associated with donating conservation easements. They've been left behind by this important conservation tool. That's why I introduced the Rural Heritage Conservation Act. My bill will provide targeted income tax relief to small farmers and ranchers who wish to make a charitable contribution of a qualified conservation easement.

The Rural Heritage Conservation Act would allow eligible farmers and ranchers to increase the amounts of deduction that may be taken currently for charitable contributions of qualified conservation easements by raising the Adjusted Gross Income limitations to 100 percent and extending the carryover period from 5 years to 15 years. In the case of all of the landowners, the AGI limitation would be raised from 30 percent to 50 percent.

This is a win-win situation--farmers and ranchers will be able to preserve their important agricultural and ranching lands for future generations, while continuing to operate their businesses and stay on their land. It's a purely voluntary, incentive-based way to promote conservation. It will allow us to bring people together. Landowners, conservationists, the federal government, and local communities all can work together to preserve our precious natural resources.

This legislation is vitally important to Montana, and to every other state in

the Nation where important agricultural or ranching lands are being lost to rapid development, and a way-of-life is disappearing. I ask my colleagues to join with me and Senator Grassley to pass this bill as soon as possible and send it to the President's desk. We have to act now.

Mr. President, today I re-introduced the Rural Heritage Conservation Act, along with my good friend Senator Grassley from Iowa. I would like to say a few words about why this bill is so important to my home state of Montana and to the Nation.

We are losing precious agricultural and ranch lands at a record pace. Farming and ranching are the backbone of my state, comprising the largest sector of my state's economy. Not only do these farms and ranches provide Montana and the Nation with the highest quality food and fiber, they also provide wildlife habitat, open space and peace of mind. It is imperative that we help our hard-working farmers and ranchers preserve this precious heritage and their way-of-life.

Conservation easements have been tremendously successful in preserving open space and wildlife habitat. Unfortunately, the way current tax law is structured makes it difficult for farmers and ranchers, who generally don't have much income, to take advantage of the tax benefits associated with donating conservation easements. They've been left behind by this important conservation tool. That's why I introduced the Rural Heritage Conservation Act. My bill will provide targeted income tax relief to small farmers and ranchers who wish to make a charitable contribution of a qualified conservation easement.

The Rural Heritage Conservation Act would allow eligible farmers and ranchers to increase the amounts of deduction that may be taken currently for charitable contributions of qualified conservation easements by raising the Adjusted Gross Income limitations to 100 percent and extending the carryover period from 5 years to 15 years. In the case of all of the landowners, the AGI limitation would be raised from 30 percent to 50 percent.

This is a win-win situation--farmers and ranchers will be able to preserve their important agricultural and ranching lands for future generations, while continuing to operate their businesses and stay on their land. It's a purely voluntary, incentive-based way to promote conservation. It will allow us to bring people together. Landowners, conservationists, the federal government, and local communities all can work together to preserve our precious natural resources.

This legislation is vitally important to Montana, and to every other state in

the Nation where important agricultural or ranching lands are being lost to rapid development, and a way-of-life is disappearing. I ask my colleagues to join with me and Senator Grassley to pass this bill as soon as possible and send it to the President's desk. We have to act now.

Mr. President, I rise to pledge my continued support for the Individuals with Disabilities Education Act. Fully funding the Federal Government's share of special education costs is one of the most important investments we can make in our children and our schools. Funding IDEA to the full 40 percent will lift the burden of rising special education costs off the backs of our schools and enhance their ability to deliver a quality education to all students.

I have consistently fought to make full funding of IDEA a reality, and I will continue to build on the progress we have made.

But I am forced to vote against this amendment because of another concern, my concern with mounting deficits.

The budget resolution brought before us includes tax cuts that total $1.3 trillion. The budget also proposes that $725 billion of these tax cuts be enacted immediately, under the reconciliation process.

Two years ago, we passed a $1.3 trillion tax cut. I supported that tax cut. But those were different times. We had a surplus. We did not foresee the significant decline in revenues, or the deficits that followed.

This is not the time to reduce revenues by $725 billion. It would hurt our budget and our economy.

Why is $725 billion in tax cuts inappropriate at this time?

The most crucial problem is that it is not paid for. The budget resolution brought before us forecasts enormous deficits for almost the next decade. Reducing revenues by $725 billion adds to the already mounting deficits.

In order to prevent the passage of tax cuts that would drive up the deficit and hurt our economy, I believe that we must reduce the size of this tax cut.

I joined three of my colleagues in a letter that laid out these concerns. We pledged that we would not agree to tax cuts above $350 billion. This is crucial. The Budget Committee approved $725 billion in tax cuts, and brought it to the Senate floor. Along with my colleagues, I promised to vote to bring this number down by $375 billion.

In a narrowly divided Senate, it is important that both parties work together to come up with the appropriate spending and revenue targets for the budget. That is why I worked with both Democrats and Republicans. Together, we came up with a target of $350 billion for this tax cut, and we agreed that we would all stick to that number.

As part of our commitment to try to reduce the size of the tax cut approved by the Budget Committee, we also agreed that we would not try to reduce the size of the tax cut below $350 billion. That means I am forced to make difficult decisions. In order to keep my commitment to a more responsible tax cut, I have to vote against funding priorities.

During tough times, we must make tough choices. I chose to commit to a responsible tax cut. A tax cut that will prevent worsening deficits that would hurt our economy.

Mr. President, I have two additional points: One, we have never reduced taxes in a time of war. That is not the American way. We do not reduce taxes in a time of war. I ask you to just look at the TV screens. We are going to be over there for quite a while, in one way or another.

Two, there are many ways to stimulate the economy, not only through tax reductions. It is also by spending. We are spending dollars on homeland security. I urge my colleagues to vote for this amendment.

This is a solemn day for our Nation. I rise today to add my voice to the chorus of support and prayers that are being sent from this Chamber to our brave and heroic troops in the deserts of Iraq. The men and women who are serving the country on the front lines are sons and daughters, brothers and sisters, and mothers and fathers. Their heroic military service is helping bring an end to a brutal regime and reducing terrorist threats by stopping those who provide assistance to terrorist operations. I know they will be successful in their mission.

While many differences of opinion were expressed about the way this war came to be, the time for debate has ended. We now remain steadfast in support of our troops. And we must look to tomorrow and the massive rebuilding that will be needed following military actions. It is important that we continue to work with our allies to build a stronger coalition of support. We will need our friends in the coming days and weeks.

And we must also focus on providing our troops with all the assistance and

resources they need. With that in mind, I would like to take a moment to urge support of the ``Armed Forces Tax Fairness Act of 2003.'' The House passed this important bill today. And it passed smoothly out of the Finance Committee weeks ago. It very much ties in with the remarks of the Senator from Alaska, that our valiant men and women overseas don't get overtime pay. And the very least we can do is voluntary work and other ways to help our troops this bill fits into that suggestion.

In this time of war, I can think of nothing more appropriate than passing a bill that is dedicated to providing assistance to those who serve in our armed forces. In addition, our bill encourages more women and men across the country to join our armed forces.

There are many, many brave men and women from my state of Montana who are playing a pivotal role in Iraq. Following the events of September 11, members of the 120th Fighter Wing of the Montana Air National Guard were called to secure the skies of the no-fly zone over Iraq. Their bravery will once again be seen in the current operation.

I want to help members of 120th Fighter Wing, and every other member of our armed forces. We can do this by passing the Armed Forces Tax Fairness Act.

Let me describe some of the key provisions.

Under our current tax code, if a member of the armed forces dies while on active duty, the federal government pays the surviving spouse a small death benefit of $6,000. The entire amount should be excluded from taxable income. However, because of a glitch in the law, only half is excluded. Our legislation corrects this by excluding the entire $6,000 payment.

Just last week, one of our soldiers from Montana, Private First Class Stryder Stoutenburg, was tragically killed during a Blackhawk helicopter crash. A native of Missoula, Private First Class Stoutenburg was only 18 years old. His mother will receive the death benefit payment, but will be taxed on half of it. She has already lost so much. It is unfair to also take away part of the small compensation she is receiving.

Another provision of this bill would ensure that military members who are frequently required to move from town to town and country to country, are not punished with capital gains taxes when they sell their homes. Under current law, an individual must live in their house for 2 of 5 years in order to qualify for capital gains taxes exclusion. This isn't feasible for many in the armed forces and our bill would eliminate the 2-year requirement.

A third provision seeks to take a financial burden off of our men and women who serve in the National Guard and the Reserves. Many reservists must travel away from home for weekend drills and wind up spending a substantial amount of money for overnight travel and lodging.

In fact, for many of our younger, more junior reservists, the expenses exceed their take home pay for the weekend. Our bill would allow them to deduct these expenses from their taxes, even if the expenses do not exceed the 2 percent floor.

In addition to providing financial assistance, this bill will not add to the deficit since it's completely offset in two ways. First, we improve the collection of unpaid taxes from people who have renounced their American citizenship in order to avoid future U.S. taxes. Second, we extend certain IRS user fees. These are modest, sensible changes. In fact, in the case of expatriates, the offset seems especially timely.

There is no better time than today to pass legislation that will allow our military personnel to fight for our country, not have to fight the tax code. I know that the thoughts of every single Member of Congress go out to the troops who are risking their lives. We pray for their fast and safe return home. I'm hopeful for quick passage of this bill that will provide needed tax relief for our troops.

I thank Members who contributed to the development of the bill: Senators Levin and Warner of the Armed Services Committee, Senator Landrieu, Senator Johnson, Senator Harkin. And especially I thank Chairman Grassley of the Fiance Committee who I have enjoyed working with and who, once again, in this case has helped us to develop an important piece of bipartisan tax legislation.

I yield the floor.

I make that request.

I thank the Senator.

Mr. President, I rise today to join my fellow colleagues, Senators Breaux, Snowe and Voinovich, in support of this important amendment that works to reach a middle ground.

This is a bipartisan amendment and will allow Congress to pass a responsible economic stimulus package, a package that will provide a real boost to the economy while not burdening our future generations with skyrocketing deficits.

The budget resolution we are debating today includes a ``reconciliation'' instruction for the Finance Committee to reduce revenues by up to $725 billion over 10 years.

This is the same amount of the President's economic stimulus package. And while I support tax cuts and have worked closely with the President in the past to enact tax cuts, I am very concerned by the size of his current package.

First, we are at war and the immediate and long term costs of the conflict and reconstruction are unknown. Our economy is sluggish and we face rising unemployment. This is not the time to enact a package of tax cuts as large as the President has suggested.

I recognize that the economy needs a shot in the arm. So I have joined my fellow Senators in offering this amendment to keep a stimulus package at $350 billion. And ensure that the $375 billion which is saved goes toward deficit reducing measures.

Our amendment does not dictate what tax cuts should be passed out of the Finance Committee. It simply reduces the size of the tax cut. And I believe if this amendment is not passed, the Federal budget and the U.S. economy will be hurt significantly.

As my colleagues know well, ``reconciliation'' instructions ensure that any legislation that is reported out by a Committee pursuant to those instructions enjoys special privileges when it is brought to the Senate floor.

That means that the legislation only needs a simple majority of 51 votes to pass. In contrast, without reconciliation protection, legislation takes a supermajority of 60 votes to pass.

Legislation under reconciliation instructions is also protected from non-germane amendments. Such amendments can create serious obstacles to the passage of legislation. But passage of a non-germane amendment to reconciliation legislation requires a supermajority of 60 votes. And this is usually difficult to achieve.

What these special privileges really mean is that reconciliation legislation is more likely to pass the Senate.

Unfortunately, passing legislation to reduce revenues by $725 billion would hurt our budget and our economy. I believe the budget resolution should not instruct the Finance Committee to make $725 billion of tax cuts.

Why do I believe $725 billion of tax cuts is inappropriate? The most serious problem is that this enormous tax cut is not paid for. The Federal budget is facing huge annual deficits.

This is happening at the worst possible time. In a few short years, the huge baby boom generation will begin to retire. The added costs for Social Security, Medicare and Medicaid will put a huge amount of additional stress on our budget. And on our economy too.

With these budgetary and economic pressures looming, we should be running surpluses--not deficits--as soon as the economy returns to full employment in the near-term. We should be retiring debt, not creating it when the economy is at full employment.

If this amendment does not pass, we are going to add an additional $375 billion in debt and deficits during the next ten years. This is during a period when the economy should be at full employment.

What difference does it make if we run large deficits when the economy is at full employment?

The answer is that large deficits eat up savings that would otherwise be used by businesses to invest in new plant and equipment. Without these investments, the economy will grow more slowly. And our future standard of living will be reduced. As well as the standard of living of our children and grandchildren.

Once the economy is at full employment, large deficits will also cause long-term interest rates to go up. This will increase the cost of mortgages. And car loans. This will hurt the consumer. But it also will hurt the economy. Because people will buy fewer homes and cars.

The simple truth is this. We cannot afford to increase Federal budget deficits by an additional $375 billion. If anything, we should reduce deficits, not add to them.

With the concerns about the costs of a war and growing deficits, many of you may be asking why aren't we trying to eliminate the entire $725 billion package?

The answer is that right now, the economy is not at full employment. That means that we need to encourage more spending. More spending will stimulate more production. And that will increase employment and return economic growth to its full potential.

The $350 billion of tax cuts that we are leaving intact, therefore, should be used for tax cuts and program initiatives that would increase spending right now.

And, the incentives to encourage more spending must also be temporary. Once the economy returns to full employment, the decrease in savings that would result from the increase in consumption will reduce investment. And that will lower our standard of living in the long-run.

Again, I want to emphasize that we do not dictate what the tax cuts should be--we simply say the amount should be lower. But I believe there are three specific areas we should consider to effectively stimulate the economy in the short-run.

First, probably the best short-run stimulus is increasing aid to state governments on a one-time basis. The recession and subsequent weak economy has severely reduced state revenues. States are facing budget deficits in the upcoming fiscal year of $70 to $85 billion.

Unlike the Federal Government, almost all states have annual balanced budget requirements. So even though the economy is weak, States must lay off workers, cut spending programs, and increase taxes in order to balance their budgets.

These actions make the economy even weaker. They also reduce important services that state governments provide.

There is a remedy, however. By increasing Federal aid to states, states can avoid layoffs. Avoid cutting programs. And avoid increasing taxes. In contrast, any attempts by Congress that lack a state relief component will ultimately fail to stimulate the economy. Because efforts to spur the economy will fail if, at the same time, states are forced to raise taxes, cut spending, and eliminate jobs.

Increased aid to state governments should only be made on a temporary basis, however. Once the economy improves, the increased aid must stop.

Second, cutting taxes on households who are likely to spend those tax cuts quickly effectively stimulates the economy. The President's plan includes an acceleration of many of the tax cuts that were enacted in 2001.

I fully support acceleration of some of the tax cuts that are primarily directed to those taxpayers who will spend most of the tax cuts they receive. Such as accelerating the reductions in the marriage penalty or the increases in the child tax credit.

But, a portion of America's households will not receive any benefit at all under the President's plan. Therefore, I believe we also need to accelerate the reduction of marriage penalties for households receiving the earned income tax credit. And we also need to accelerate the refundable portion of the child tax credit from the 2001 tax cut.

Acceleration of these tax cuts will give the economy a boost in the short run. But without increasing deficits in the long-run. Because the revenue losses are in the years when the acceleration takes place. There is no revenue loss in the years after that.

Third, we can stimulate the economy by completely eliminating the income tax on the first $3,000 of wages. This proposal also puts money into the hands of taxpayers who will spend it. Especially if we make it refundable. Which will provide a tax cut to the 30 million Americans who are left out of the President's program.

These are just three ways to stimulate the economy--aid to the states, acceleration of some tax cuts, and elimination of income tax on the first $3,000 of wages. Needless to say, there are other proposals that we should consider. Some of these other proposals include increased funding for highway construction, health insurance tax credits for businesses, and allowing small businesses to deduct more of their investments in plant and equipment.

A reconciliation instruction of $350 billion of tax cuts to the Finance Committee can be used for several types of economic stimulus without increasing long-run deficits. But we cannot add to that a larger tax cut that will increase long-run deficits. That would weaken our economy. We cannot let that happen.

Therefore, I urge my colleagues to support this amendment.

Mr. President, while I have the floor, I also want to say that I will be proposing another amendment this evening, or tomorrow.

My amendment is a very simple amendment. It would clarify the Medicare reserve fund language to say that beneficiaries who choose to remain in the current fee-for-service program which, I might add, is 89 percent of all seniors right now should get the same drug benefit as those who choose to enroll in a private plan.

Let's put aside the question of whether $400 billion is enough for an adequate drug benefit. Having spent a lot of time reviewing the cost of different benefit levels, I know that $400 billion buys a rather paltry benefit.

But whatever benefit level we can afford with that amount, we should make sure that the same benefit is available to seniors who choose to stay in the fee-for-service program as those who enroll in an HMO, a PPO or any other sort of private plan in Medicare.

I believe that is the commitment many of us have made to our seniors, and that is the commitment we ought to fulfill.

Earlier this month, President Bush unveiled his vision for Medicare reform. I am pleased that he doubled the amount of money he is willing to spend on a prescription drug benefit over what he proposed last year.

But I am concerned that the President's vision for reform is to privatize the program. He would give a comprehensive drug benefit to seniors who enroll in private plans. But those who choose to stay where they are now, in the fee-for-service program, would get only a discount card and catastrophic coverage.

That is not something I am willing to support. Let me explain why.

First, we already know that private plans have had difficulties serving the Medicare population. Many of my colleagues may recall that the reason Medicare was created in the first place was because so many seniors were ill-served by the private market. About half of the elderly were uninsured in 1965. Because of Medicare, now nearly all elderly are covered.

More recently, since Medicare+ Choice was created in 1997 to expand private plan options in Medicare, we have seen a dramatic drop in the number of HMOs participating in the program. And as a result, an estimated 2.4 million beneficiaries have lost their health plan.

As you can see by this chart, only 875 counties across the country currently have a Medicare managed care plan. That is out of a total of 3,200 counties. So more than 2,300 counties don't have access to managed care plans or PPOs.

Looking at this map, I might add that the counties without these plans are predominantly rural.

And it is not that plans are underpaid, as some might try to argue. The average payment to Medicare+Choice plans is currently 104 percent of local fee-for-service costs. That figure doesn't tell the whole story, but it does suggest that simply increasing payments will not draw private plans into rural areas.

My own state of Montana is a good example. The floor payment for Medicare+Choice plans in Montana is 128 percent of local fee-for- service costs. Yet, we don't have any HMOs or PPOs in my state.

Let me repeat that: despite a payment rate that is 28 percent higher than traditional Medicare, private health plans are still not serving Montana seniors.

All this leads me to the second reason I do not support the President's proposal it doesn't save any money. Moving beneficiaries into private plans will not save the program for the next generation and will do nothing to address Medicare solvency.

We can all talk about coordination of care, disease management, and the potential efficiencies private plans might be able to achieve. But at the end of the day, private health plans are subject to the same cost pressures affecting the entire health care system. Just look at the Federal Employees Health Benefits Plan, FEHB. This plan serves federal employees, retirees, and their dependents and has been held up as a model for Medicare reform. Yet we find that FEHB premiums have increased, on average, by more than 10 percent each year in the last 5 years. Far faster than Medicare's per capita costs.

Third, and finally, I don't support a differential drug benefit, because it is just not fair to make beneficiaries move into a private plan to get a drug benefit. In Montana, virtually all beneficiaries are in traditional Medicare. That means, in order for them to get a drug benefit, they would need to drop their supplemental coverage and enroll in a private plan accepting all the restrictions, preferred networks, and coverage limitations that come along with the plan.

For a senior who may be older, used to what she currently has, and to anyone with a chronic health condition, this is a frightening proposition.

As the chairman of the Energy and Commerce Committee, Mr. Tauzin so aptly said recently, ``You couldn't

move my own mother out of Medicare without a bulldozer. She trusts it, believes in it. It's served her well.''

That is the case with millions of seniors around the country. They like what they have now, and they want to stay there. They need a drug benefit, they have been pressing Congress to act for months, years now, and they don't believe they should have to swallow such far-reaching reforms to get the help they need. And the more we delay, the more expensive it gets to provide this benefit.

In the 4 years that Congress has been seriously debating Medicare prescription drugs, we have considered a range of options. And we've seen the CBO scores for these proposals go up and up as we've taken longer and longer to act.

While there are differences in the bills we have debated, they all have one thing in common. They would offer all seniors the same level of drug benefit if they chose to enroll in the new benefit. Not just private plan or HMO enrollees, but all beneficiaries.

In closing, I would like to point out that 90 Members of the Senate who are here today voted in favor of legislation last summer that would uphold this principle.

I think we should keep the commitment we made last summer. I am happy to work with the administration and my colleagues across the aisle on ways to improve and increase private plan participation in Medicare. But we need to make sure that the benefit is provided in full to fee- for-service beneficiaries as well as private plan enrollees.

For the sake of America's seniors, particularly the oldest, the sickest, and the most frail, and for the sake of America's rural seniors, I urge adoption of this amendment.

Mr. President, I yield the floor.

Mr. President, I rise today to support the amendment to increase highway and transit spending levels in the budget resolution.

Increasing transportation spending is an important objective. Highway investments create jobs, increase the productivity of our economy, and improve the quality of life for all Americans. In Montana, its our lifeblood. We count on highway money for our economic development and we count on transit money to give our rural areas access to goods and services and people.

In 1998 Congress passed one of the most successful and bipartisan bills in recent memory--the ``Transportation Equity Act for the 21st Century'', better known as ``TEA-21.'' I am honored to have been an author of that piece of legislation and I look forward to working on the next reauthorization act.

TEA-21 passed overwhelmingly in 1997 because there was a 40 percent increase, on average, in funding. So, even if some states got a lower percentage of funds than their neighbor, everyone brought home more dollars than under ISTEA. That 40 percent increase was primarily derived by the transfer of the 4.3 cent gas tax from the general fund to the Highway Trust Fund, the new budgetary treatment for highways and the ``protected'' status of the Highway Trust Fund.

We are hoping to build on the success of TEA-21 by ensuring that our Budget Resolution can accommodate higher levels of spending for highways and transit. These higher levels of spending will enable the successor to TEA-21 to become law.

In order to pass a TEA-21 reauthorization bill, we will need more money. Increasing funds into the Highway Trust Fund is the sole responsibility of the Senate Finance Committee. Senator Grassley and I have been working very hard to find ways to increase funding for both highways and transit. We are absolutely committed to growing the programs without raising taxes.

I can't emphasize enough that the single principal feature of any new highway reauthorization bill has to be its increased funding for the program, something that will help all States and all citizens. Our first step is this blueprint for our budget.

The Finance Committee believes that the levels included in this amendment to the Budget Resolution can be reached. $255 billion for Highways and $56.5 billion for transit over 6 years can be achieved without raising taxes. I know this because over the past 3 months finding this money has been a priority for myself and my chairman, Senator Grassley.

Let me sum up by saying that the Senate Finance Committee has the responsibility to figure out how to grow the highway and transit programs. We believe that we can come up with increased funding for both highways and transit. We can do it without raising taxes. This amendment gives us the room to achieve that.

I urge all my colleagues on both sides of the aisle to vote yes for increased investment in infrastructure. I say both sides of the aisle because, as I've said in the past, there are no Democratic roads or Republican bridges. We will all benefit from this investment. We should all support it.