Floor Statements

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

Mr. President, I ask unanimous consent that the following staff be allowed on the Senate floor for the duration of the debate on S. 493: Lucy Emerson and Shannon Olberding.

Mr. President, shortly a UC request will be made to ask that the nomination of David Cohen to be Under Secretary for Terrorism, and Financial Crimes, U.S. Department of Treasury, be referred to the Committee on Banking, Housing and Urban Affairs after that nomination is reported by the Committee on Finance. I want to make it clear this action in no way should be taken to negate or diminish the jurisdiction of the Committee on Finance over this nomination. The Office of Terrorism and Financial Intelligence is a very important part of the Treasury Department, and the Committee on Finance has a fundamental interest to conduct oversight over that office, along with the entire department. I respect the interest my colleagues have in this important position, and in the interest of thorough oversight do not plan to object to the UC request. However, I want to stress that this UC request will only cover the specific nomination of David Cohen currently before the Committee on Finance, and does not apply to any other nomination of Mr. Cohen or of any person, including Mr. Cohen, to the Office of Under Secretary for Terrorism and Financial Crimes.

Mr. President, this is a bill to appropriate funds for pay and allowances and support for members of the Armed Forced, their families, and other personnel critical to national security during a funding gap.

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

Mr. President, this is a bill to appropriate funds for pay and allowances and support for members of the Armed Forced, their families, and other personnel critical to national security during a funding gap.

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

Madam President, I rise today to speak to amendment No. 236 to exempt farmers, ranchers, and small businesses from EPA regulation of greenhouse gases.

The science is clear: greenhouse gas pollution is causing climate change. Climate change is here, it is real, it is human caused, and it will hurt our economy and the health of our kids and grandkids.

In Montana we are already seeing the effects. According to Dr. Steve Running at the University of Montana, the duration of the wildlife season in the western United States has increased by 78 days since the 1970s. This trend is driven by earlier snowpack melt and less summer precipitation due to climate change. And this trend costs jobs in Montana's tourism and timber industry.

Climate change also endangers our national security. According to a report recently authored by retired Navy ADM Frank Bowman, ``Even the most moderate predicted trends in climate change will present new national security challenges.'' That is why the Pentagon included climate change among the security threats identified in its Quadrennial Defense Review.

I believe that we all have a moral responsibility to leave this world to our kids and grandkids in better shape than we found it. That means we ought to deal with climate change by reducing our emissions of greenhouse gas pollution. But we must do so in a manner that does not hurt the economic recovery.

Small businesses and agriculture are the drivers of our economic recovery and job creation. Of the 200,000 jobs added in March, over half were created by businesses with 50 or fewer employees. And over 90 percent of the 200,000 jobs created last month were created by businesses with 500 or fewer employees. My amendment ensures that these businesses can continue to add jobs.

My amendment is very simple. It exempts farmers, ranchers, and small businesses from EPA's greenhouse gas pollution regulations.

Under my amendment only about 15,000 of the more than 6 million stationary sources that emit greenhouse gases in the country would be regulated by EPA. These 15,000 sources are large plants run by big corporations. And over 96 percent of these 15,000 sources already have to get permits under the Clean Air Act for emissions of criteria pollutants. Moreover, these 15,000 polluters account for 70 percent of greenhouse gas emissions from stationary sources in the country. So under the Baucus amendment, small businesses would be protected, while the biggest polluters that account for the vast majority of emissions would have to comply with the law.

EPA is going forward with regulations to reduce greenhouse gas pollution. We ought to ensure these regulations preserve our outdoor heritage, protect our children's health, promote our national security, and protect small businesses, farmers, and ranchers. My amendment does just that, and I urge my colleagues to support it.

I suggest the absence of a quorum.

Will the Senator yield?

I ask unanimous consent to speak for 2 minutes prior to the vote on my amendment.

Before the vote, yes.

That would be fine.

I ask unanimous consent that in addition to my being able to speak for 2 minutes and Senator Inhofe 1 minute, that Senator Boxer also be allowed to speak for 1 minute on this amendment.

Mr. President, I have a very commonsense amendment. It basically says: The general rule makes sense, but there should be a couple exceptions. The general rule is that we should have regulations on greenhouse gas emissions, but not for agriculture. I am talking about agricultural producers, not processors, the regulations which would still apply to processors.

We are talking about producers, agricultural producers. They should be exempt. Currently, there are not regulations. EPA may or may not pass regulations that affect agricultural producers. I think we should make clear to agriculture they are exempt. They are not the big greenhouse gas polluters.

Second, this amendment puts in place and codifies EPA's attempt to deal with small business with its tailoring rule. It may or may not be upheld in the courts. Passage of this amendment would allow this to be upheld in the courts.

Essentially, there are 15,000 emitters of greenhouse gas emissions that are the big ones. The other 6 million basically are the very small ones. What about the big ones, the 15,000? Those are large plants run by big corporations. They essentially produce most of the greenhouse gas emissions. Ninety-six percent of these 15,000--the big ones--are already subject to EPA criteria. They have to get permits. Moreover, they emit 70 percent of the greenhouse gas emissions.

So I am just saying, for small businesses--there are a lot of them-- it is very important they be exempt from EPA regulations. It is common sense. In general, it is OK, but it exempts agriculture and it exempts small business.

I thank the Chair.

I ask for the yeas and nays.

Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on April 6, 2011.

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on April 6, 2011, at 9:30 a.m., to conduct a hearing entitled ``The Role of the Accounting Profession in Preventing Another Financial Crisis.''

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on April 6, 2011, at 9:15 a.m. in Dirksen 406 to hold a hearing entitled, ``State and Local Perspectives on Transportation.''

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on April 6, 2011, at 10 a.m., to hold a hearing entitled, ``Perspectives on the Crisis in Libya.''

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on April 6, 2011, at 2:30 p.m.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on April 6, 2011, at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate, on April 6, 2011, at 10 a.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``The Electronic Communications Privacy Act: Government Perspectives on Protecting Privacy in the Digital Age.''

Mr. President, I ask unanimous consent that the Committee on Veterans' Affairs be authorized to meet during the session of the Senate on April 6, 2011. The Committee will meet in room 418 of the Russell Senate Office Building beginning at 10 a.m.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security be authorized to meet during the session of the Senate on April 6, 2011, at 1:30 p.m. to conduct a hearing entitled ``Census: Learning Lessons from 2010, Planning for 2020.''

Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs' Subcommittee on Financial Institutions and Consumer Protection be authorized to meet during the session of the Senate on April 6, 2011, at 3 p.m., to conduct a hearing entitled ``The State of Community Banking: Opportunities and Challenges.''

Mr. President, I ask unanimous consent that the Subcommittee on Strategic Forces of the Committee on Armed Services be authorized to meet during the session of the Senate on April 6, 2011, at 2:30 p.m.

Mr. President, my colleague from New Jersey proposed what I think is a very reasonable amendment to the revenue provision of the repeal of this 1099 provision. I plan to support that. It is a good amendment.

One of the key provisions in the Affordable Care Act is the tax credit that will be available to millions of low- and middle-income Americans to purchase health insurance if their employer doesn't make coverage available. That is a credit. It goes to middle- and low-income Americans. The provision that will pay for 1099 repeal will increase the amount that many Americans will have to pay at the end of the year if they receive a credit to purchase their health insurance and their income ends up being higher than the income on which their credit was based.

I share Senator Menendez's concern that this will cause an undue burden.

This could increase premiums that people pay under health insurance, or reduce the benefits of their health insurance coverage, especially in the small business community, and he believes his amendment would reverse the provision--and it does in fact do that--if the HHS Secretary determines it will increase premiums or if it will reduce coverage, that is on health insurance coverage for small businesses.

The 1099 repeal is all about small businesses. That is primarily why we are going to repeal 1099. We don't want to turn around and hurt small businesses in the same bill. There is a real possibility that that would happen with a straight repeal, without the Menendez perfecting amendment.

I urge my colleagues to join me in supporting the Menendez amendment. In effect, that amendment would repeal 1099, which virtually every Member of the body wants to do, but also will make sure the consequences do not hurt small businesses, which will otherwise find their premiums increased or their coverage diminished.

Senator Menendez very wisely anticipates that potential problem with his amendment by essentially providing that the increase would not occur as a premium--that is, the 1099 repeal would not occur if the HHS Secretary determines that it will increase premiums or also reduce coverage for small businesses. I urge my colleagues to support the Menendez amendment.

Mr. President, how much time is remaining on each side?

Mr. President, I first wish to correct the record. I stated earlier that if the Menendez provision is triggered, the 1099 repeal will not go into effect. That is not correct. What I meant to say is if the Menendez provision is triggered, then the new true-up rules in H.R. 4 will not go into effect. That is an important distinction. No matter what the result, 1099 will, in fact, be repealed. That is the main point.

I commend all Senators, including Senator Johanns and others, who want to repeal 1099. It is very much the view of this body--I, myself, want to repeal 1099, but I also think the provision offered by Senator Menendez is an improvement on repeal, even though repeal will actually go into effect.

I will also say that there are a lot of statistics bandied about regarding health care reform. The Fidelity company does an analysis of how much it costs people age 65 and older to pay for their health care. That is their premium cost as well as their insurance costs or out-of- pocket costs. Fidelity company has just concluded in the last week or so that as a consequence of health care reform, the number of dollars that seniors will have to pay for health care will actually be lower-- not higher, but lower--than what it otherwise would be on account of passage of that bill.

Budget Proposal

I want to say a couple words about the budget proposal offered by the House, the Ryan budget proposal. It is important for people to know what is in that budget. What is in it basically? Let me tell you. That budget cuts $2.2 trillion in health care costs over 10 years--$2.2 trillion in cuts in health care costs over 2 years. It repeals health care reform. That is what the Ryan resolution does. His budget resolution repeals health care reform.

What else does it do? It dismantles Medicare. It dismantles Medicare as we know it. Health care reform extends the life of the Medicare trust fund by another 12 years. The Ryan House Republican budget proposal repeals Medicare as we know it. It turns into a voucher program. Basically, it says this: There have been reports that it costs about $15,000 to pay for seniors under Medicare for 1 year. There are reports that the Ryan proposal says we are just going to give people $6,000 and give it to a health insurance company. First, that is a big cut, 15 down to 6 and, second, it is to a health insurance company. So the net effect of the Ryan proposal is very simple. It transfers wealth from seniors, from children--because of Medicaid and people in nursing homes--it transfers wealth from them to whom? Health insurance companies. The Medicare proposal is a transfer of wealth from seniors to health insurance companies.

Health care reform did the opposite. We extended the life of Medicare. How did we do it? In part, by cutting health insurance payments. So we helped seniors in health care reform and we cut health insurance companies. The Ryan House Republican budget proposal does the opposite; it cuts benefits to seniors by a whopping amount and it takes that wealth and transfers it over to health insurance companies that will get higher premiums, higher bonus payments, their stock returns will go up, and their administrative expenses will go up. I don't think that is what we want to do. But make no mistake, that is the effect of the Ryan proposal.

Also, I might say, it reduces income taxes by about $1.2 trillion. So the real net of the effect of the Ryan proposal is, take money away from people and give it to the health insurance companies and the wealthy. That is what the Ryan proposal does. That is exactly what it does. The Ryan proposal takes money, about $5.8 trillion roughly, over 10 years--takes it away from people, especially seniors and kids on Medicaid, elderly who happen to be on Medicaid--there are big reductions further in discretionary spending--and lowers income taxes by about $1.2 trillion. It lowers them. That is how it achieves budget savings of $5.8 trillion. He cuts,

cuts to the bone, and then cuts about $1.2 trillion more than he has to because $1.2 trillion is reductions in income tax.

I want the public to know what is in the Ryan budget. That is what it is. Let me say it one more time, clearly, simply. It is a transfer of money away from seniors and from kids on Medicaid and elderly on Medicaid over to health insurance companies--higher bonuses, higher salaries, stock goes up, and in addition it transfers money away from people to pay for tax cuts for the wealthy--not tax cuts for the unwealthy but tax cuts for the wealthy.

How did he do that? He lowers the top rate to 25 percent so the wealthy pay less taxes. He lowers the corporate down to 25 percent, so the bigger companies pay less taxes. That is how he does it. While we are talking about a short-term CR around here, and we are talking about a longer term CR around here, when we start talking about budgets, let's look closely at what is actually in that Ryan proposal.

Of course, we have to lower our budget deficits. Of course, we have to significantly lower our budget deficits. But, of course, we have to do it fairly, so all Americans are part of the solution, so health insurance companies are also part of the solution, so the most wealthy are also part of the solution. All Americans have to be part of the solution. The Ryan budget does not do that. It says only the seniors-- we get the budget deficit reduction on the backs of seniors, on the backs of people who otherwise receive medical care under Medicaid and some other things, but also we shift income to the most wealthy by lowering their taxes.

I hope when we are voting on the Menendez amendment, which is important to do, also in the background we understand what is going on in the other body. They may bring this up and try to pass it this week. They may try to pass it on the floor next week--I don't know. But we should recognize it for what it is and come up with a deficit reduction proposal that is fair, fair to all Americans, not on the backs of the seniors for the benefit of health insurance and not on the backs of average Americans for the benefit of the most wealthy, by lowering their income taxes by $1.2 trillion over 10 years. That is not fair.

I yield the floor.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on April 5, 2011, at 9:30 a.m.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on April 5, 2011, at 2:30 p.m. in room 253 of the Russell Senate Office Building.

The Committee will hold a hearing entitled, ``Closing the Digital Divide: Connecting Native Nations and Communities to the 21st Century.''

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on April 5, 2011, at 12 p.m. in S-216.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on April 5, 2011, at 10:15 a.m.

Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on April 5, 2011, at 2:30 p.m.

Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on April 5, 2011, at 2:30 p.m.

Mr. President, I ask unanimous consent that the Subcommittee on Airland on the Committee on Armed Services be authorized to meet during the session of the Senate on April 5, 2011, at 2:30 p.m.

Mr. President, I ask unanimous consent that the Subcommittee on Competitiveness, Innovation, and Export Promotion of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on April 5, 2011, at 10 a.m. in room 253 of the Russell Senate Office Building.

The Committee will hold a hearing entitled, ``Tourism in America: Removing Barriers and Promoting Growth.''

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

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

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, I rise today to highlight the importance of agriculture and celebrate National Agriculture Week.

President Dwight D. Eisenhower once said:

Farming looks mighty easy when your plow is a pencil and

you're a thousand miles away from a cornfield.

This week reminds us that it is our job to bridge the gap between plowing fields and crafting laws and make sure our ranchers and farmers have the tools they need.

In my home State of Montana, agriculture is the heart and soul of our economy. It is an essential part of who we are. In Montana, agriculture is not simply a livelihood, it is our way of life. Growing up on a ranch outside of Helena taught me firsthand the values of hard work, faith, family, and doing what is right--values I try to bring with me to work every day.

Fifty percent of Montana's economy is tied to ranching and farming, and one in five Montana jobs is tied in some way to agriculture. It is our No. 1 industry. Each year, Montana ranchers and farmers produce nearly $3 billion of the highest quality agricultural goods produced anywhere in the world.

As a nation, we are blessed with a safe, affordable, and abundant food supply. Our farmers and ranchers in our country put food on the tables of families around the world, and they help create good-paying jobs here at home. Every year, the average American farmer feeds 155 people worldwide.

While agriculture stands in the spotlight this week, it is critical to remember the words of President Eisenhower and recognize the needs of our ranchers and farmers every day throughout the year.

Next week, I will be holding a series of listening sessions across Montana to discuss the next farm bill. I did that last time around and they were terrific. I learned so much by having these listening sessions all across our State. I will be starting Monday in the eastern part of Montana--in towns such as Forsyth and Miles City--and over the next year I will work my way across the State collecting ideas and information from Montana's farmers and ranchers to make sure the next farm bill works for them.

I am lucky to represent so many ranchers and farmers in our State who have dedicated their life to the land. It is so important, and it roots us in our State. It grounds us. I am proud to honor these folks today during National Agriculture Week.

Mr. President, I was concerned over what the effect of H.R. 1 would be on Medicare beneficiaries. I wrote a letter to HHS Secretary Sebelius asking that question, what effect passage of H.R. 1 would have on Medicare beneficiaries. I got the answer a couple days ago. Frankly, it spent a couple days going through the White House, OMB, and so forth, but I received the letter last night. What does that letter say?

I ask unanimous consent that this letter be printed in the Record.

According to the Secretary of HHS, the consequences for Medicare beneficiaries of H.R. 1 are dire, to say the least. I don't have the calculations for the number of Medicare beneficiaries who would be affected nationwide, but I can give my colleagues the effect it would have on Montana, and that way they can extrapolate that into what the effect would be nationwide.

Essentially, according to the Secretary's letter, she says that because the health care reform bill repealed certain provisions in Medicare and then replaced them with other provisions to address quality and help provide better health care especially for seniors, that H.R. 1, because it repeals the provisions in the health care law put in place to provide benefits for seniors, would have the effect of cutting health care to seniors.

For example, essentially the House amendment would eliminate private Medicare coverage under Medicare Advantage. That is the effect of H.R. 1. If one is a Medicare recipient under a Medicare Advantage plan, under H.R. 1 they would no longer be allowed to receive benefits.

In my State of Montana, Medicare Advantage covers about 26,000 seniors. That is only the State of Montana. But nationwide, of course, it would be hundreds of thousands, probably close to in the millions of seniors who would no longer be able to benefit under Medicare Advantage. They would be thrown off. That is what the HHS Secretary says.

I will read the significant sentence. I am reading one sentence from the letter, dated March 8:

This would seem to mean that payments to MA organizations

would have to be suspended, risking a significant disruption

in services to beneficiaries enrolled in Medicare Advantage.

They would be suspended, according to the interpretation of the HHS Secretary of the effect of H.R. 1 on Medicare beneficiaries.

Second, it would have virtually the same effect with respect to the part D prescription drug benefits; that is, health care reform began to close the doughnut hole. Earlier, seniors received $250 in assistance for prescription drugs. Under the health care reform bill, they would be eligible for a 50-percent discount for brand-name drugs. That, too, would be suspended. That is the effect of H.R. 1--to suspend. Let me see if I can find the operable sentence in the letter. I do not see it at the moment. In a few minutes, I will find it and I will give it to you.

Add to that the payments for preventive benefits. They, too, would be suspended--wellness programs, such as for colonoscopies, mammographies, et cetera. She says ``[c]laims could no

longer be paid for any of these benefits'' as a consequence of H.R. 1.

Add to that rural health care.

Without available CR funding, CMS would no longer be able

to provide the bonus to primary care and general surgery

physicians for eligible services.

There are other areas. In the nature of fraud prevention, those efforts would be suspended. Of course, some of the proponents who want to kill health care reform do not mind some additional provisions I might mention--namely, moving more toward delivery system reform and toward improving the quality of health care and also reducing costs.

I do not think the authors of H.R. 1 knew what they were doing. I think they were a little quick in writing their legislation. I do not think they realized the effect of H.R. 1 would be to deny Medicare beneficiaries these payments. Especially, I point out that the Medicare beneficiaries, under Medicare Advantage--according to the HHS Secretary, those payments to those persons under Medicare Advantage would have to be suspended.

I have a hunch that if we were to look more deeply into the actual provisions of H.R. 1, we would find other similar consequences. Maybe it would be in the Medicare Program. It might be in some other health care program. But I just asked the Secretary to focus in on the effects to Medicare, and that is the response she gave.

I urge all Senators, please let's not cut Medicare Advantage payments. That is just not the right thing to do. Innocent seniors are getting caught in this crossfire here. I am sure we have to begin to cut Federal spending. There is no question about that. But let's not be so foolhardy and unintelligently cut Medicare beneficiaries the way H.R. 1 does.

I yield the floor.

Mr. President, I want to take a few minutes to explain in detail the tax strategy patent provision in the pending patent reform legislation that was drafted jointly by Judiciary Committee Ranking Member Chuck Grassley and me. As chairman of the Senate Finance Committee, I am concerned by the growth in the number of patents that have been sought and issued for tax strategies for reducing, avoiding, or deferring a taxpayer's tax liability. Section 14 of S. 23 would prevent the granting of patents on these tax strategies so that the Internal Revenue Code can be applied uniformly while balancing the critical need to protect intellectual property.

Let me explain. Our Federal tax system relies on the voluntary compliance of millions of taxpayers. In order for the system to work, the rules must be applied in a fair and uniform manner. To that end, everyone has the right to arrange financial affairs so as to pay the minimum amount legally required under the Internal Revenue Code.

Patents granted on tax strategies take away this right and undermine the integrity and fairness of the tax system. These patents have been on ideas as simple as funding a certain type of tax-favored trust with a specific type of financial product or calculating the ways to minimize the tax burden of converting to an alternative retirement plan. Rather than allowing these tax planning approaches to be available to everyone, these patents give the holder the exclusive right to exclude others from the transaction or financial arrangement. As a result, they place taxpayers in the undesirable position of having to choose between paying more than legally required in taxes or paying a royalty to a third party for use of a tax planning invention that reduces those taxes.

The patentability of tax strategies also adds another layer of complexity to the tax laws by requiring taxpayers or their advisors to conduct patent searches and exposing them to potential patent infringement suits. And, in situations where a patent is obtained on a tax shelter designed to illegally evade taxes, the fact that a patent was granted may mislead unknowing taxpayers into believing that the strategy is valid under the tax law.

Section 14 of S. 23 addresses these concerns by providing that any strategy for reducing, avoiding, or deterring tax liability, whether known or unknown by anyone other than the inventor at the time of the invention or application for patent, will be deemed insufficient to differentiate a claimed invention from the prior art for purposes of evaluating an invention under section 102 or under section 103 of the Patent Act. Applicants will not be able to rely on the novelty or nonobviousness of a tax strategy embodied in their claims in order to distinguish their claims from prior art. The ability to interpret the tax law and implement such interpretations remains in the public domain, available to all taxpayers and their advisers.

Under the provision, the term ``tax liability'' refers to any liability for a tax under any Federal, State, or local law, or law of any foreign jurisdiction, including any statute, rule, regulation, or ordinance that levies, imposes, or assesses such tax liability.

Generally, tax strategies rely on tax law to produce the desired outcome; that is, the reduction, avoidance, or deferral of tax liability. Tax law can include regulations or other guidance, as well as interpretations and applications thereof. Inventions subject to this provision would include, for example, those especially suitable for use with tax-favored structures that must meet certain requirements, such as employee benefit plans, deferred compensation arrangements, tax- exempt organizations, or any other entities or transactions that must be structured or operated in a particular manner to obtain certain tax consequences. The provision applies whether the effect of an invention is to aid in satisfying the qualification requirements for the desired tax-favored entity status, to take advantage of the specific tax benefits offered in a tax-favored structure, or to allow for tax reduction, avoidance, or deferral not otherwise automatically available to such entity or structure.

Inventions can serve multiple purposes. In many cases, however, the tax strategy will be inseparable from any other aspect of the invention. For example, a structured financial instrument or arrangement that reduces the after-tax cost of raising capital or providing employee benefits is within the scope of the provision, even if such instrument or arrangement has utility to issuers, investors, or other users that is independent of the tax benefit consequences. No taxpayer should be precluded from using such an instrument or arrangement to obtain any reduction, avoidance, or deferral of tax that attends it.

At the same time, there may be situations in which some aspects of an invention are separable from the tax strategy. For example, a patent application may contain multiple claims. In this case, any claim that encompasses a tax strategy will be subject to the provision and the novelty or nonobviousness of the tax strategy will be deemed insufficient to differentiate that claim from the prior art. However, any other claim that does not involve a tax strategy would not be subject to the provision. In such a case, if the invention includes claims that are separable from the tax strategy, such claims could, if otherwise enforceable, be enforced.

The mere fact that any computations necessary to implement an invention that is a strategy for reducing, avoiding, or deferring tax liability are done on a computer, or that the invention is claimed as computer implemented, does not exclude the strategy from the provision. In such a case, the claims, if separable from the tax strategy, would be evaluated under sections 102 and 103

without regard to the tax strategy. If those nontax related and separable claims still met the requirements for patentability, a patent would issue, but not on the tax strategy.

The provision is not intended to deny patent protection for inventions that do not comprise or include a business method. For example, an otherwise valid patent on a process to distill ethanol would not violate the rule set forth in this provision merely because a tax credit for the production of ethanol for use as a fuel may be available. Similarly, the mere fact that implementation of an otherwise patentable invention could result in reduced consumption of products subject to an excise tax would not make the invention subject to this provision.

The provision is also not intended to deny patent protection for tax return preparation software that is used solely for preparing a tax or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing. Similar to the review of computer-implemented strategies, such software would still be entitled to patent protection to the extent otherwise patentable. Such patents, however, could not preclude non-users of such software from implementing any tax strategy. No inference is intended as to whether any software is entitled under present law to patent protection as distinct from copyright protection. Nor is an inference intended as to whether any particular strategy for reducing, avoiding, or deferring tax liability is otherwise patentable under present law.

In general, the U.S. Patent and Trademark Office may seek advice and assistance from Treasury and the IRS to better recognize tax strategies. Such consultation should help ensure that patents do not infringe on the ability of others to interpret the tax law and that implementing such interpretations remains in the public domain, available to all taxpayers and their advisors.

The practical result of this provision is that no one can be granted an exclusive right to utilize a tax strategy. The provision is intended to provide equal access to tax strategies.

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

I move to lay that motion on the table.

The motion to lay upon the table was agreed to.

Mr. President, I ask unanimous consent for 1 minute equally divided for each side to explain this next amendment.

Mr. President, the next amendment is Vitter amendment No. 112, which potentially says the United States must pay its interest debt and Social Security benefits before it makes any other government obligations. I think that is a bad idea. That would bring economic chaos to our country. If we default, we default.

Just because the bondholders in China would get priority over our troops overseas or get priority over tax refunds does not mean we are not in default. Besides, it is bad policy anyway. This amendment would bring chaos. If we were ever to get to the point of being unable to raise our debt, it would bring chaos to pay the Chinese bondholders first before we pay anybody else. That is the wrong thing to do.

I do not think we want to get into a situation where we are going to tell the American people they are second to foreign investors. I strongly urge that this amendment be defeated. At the appropriate time I will move to table the amendment.

Mr. President, I move to table the Vitter-Toomey amendment No. 112, as modified, and ask for the yeas and nays on my motion to table.