Floor Statements

Mr. President, in the 12th century, in the Bay of Biscay, Basque sailors began to hunt right whales. The Basques melted the whales' blubber into oil to fuel their lamps. When the whales died out in Spanish waters, the Basques sailed north to Iceland pursuing the source of their lamp oil. By the 16th century, whalers hunted extensively in Icelandic waters to find the fuel for light.

As our former colleague Phil Gramm wrote in 1973, from American colonial times through the middle of the 19th century, whale oil provided the major source of artificial lighting in America and Europe. But in the middle of the 19th century, America faced an energy crisis. The price of whale oil was rising. From a low of 23 cents a gallon in 1832, it rose to $1.45 a gallon in 1865.

But then in 1859, people discovered petroleum oil in western Pennsylvania. The rising price of whale oil encouraged an engineer to invent a process to convert that western Pennsylvania black oil into a new fuel, kerosene.

The whale oil era was ending, and the petroleum era began.

One hundred fifty years later, at the turn of the 21st century, gasoline prices are rising. As late as December 2002, Montana gasoline prices averaged a little more than $1.30 a gallon. On September 5 of this year, the average price hit about $2.90 a gallon.

In the wake of Hurricane Katrina's disruption of oil refineries, many Montanans feel gouged by sky-high gasoline and diesel prices. High gas prices hit low-income Montanans particularly hard. Peggy Grimes, director of the Montana Food Bank Network, says: ``[P]eople are going without food more often and coming to visit local food pantries more often.'' Just think of people having to make choices such as that.

Rising natural gas and fuel oil prices have many Montanans concerned about how they will heat their homes this winter. And rising fertilizer costs will hit many Montana farmers hard.

In the short term, petroleum price increases are forcing painful adjustments. In the medium term, we need to invest in conservation, weatherization, and upgrading the efficiency of cars, appliances, and machines that use energy. And in the long term, we need to adjust intelligently to higher petroleum costs, systematically and purposefully diversifying our energy sources.

In the middle of the 19th century, America led the way to the next energy era, leaving the whale oil era behind. Now, at the beginning of the 21st century, America must once again lead the way to another energy era, an era that severs the world's dependence on Middle Eastern oil. Domestic oil and gas production will remain a critical part of our energy security for some time. But to lead the world to a new era, we will have to make major investments in new innovative forms and uses of energy.

Once again, we have cause to look again across the waters to Iceland.

Iceland is leaving the petroleum era behind. Iceland is entering the hydrogen era. The government has announced its intention to become a hydrogen-based economy by 2030.

In Iceland, icy water cascades down from massive glaciers. And in Iceland, boiling water bubbles up from just beneath the surface. Iceland already harnesses these renewable resources to generate virtually all of its electricity and heating from hydroelectric and geothermal sources.

But with no fossil fuel resources, Iceland relies heavily on imported oil to power cars, buses, and the fishing trawlers that provide 70 percent of Iceland's income.

To break that dependency, and to reduce greenhouse gases, Iceland is turning to fuel cells. Fuel cells use hydrogen and oxygen to generate electricity to power engines. And the vehicles powered by those engines emit only water as exhaust.

Iceland plans to use its cheap electricity to split water-- H2O--into its component parts--hydrogen and oxygen. Iceland uses the process of electrolysis. Electrolysis runs an electric

current through bonded elements to separate the elements.

Iceland's capital Reykjavik intends to replace its entire fleet of 80 buses with fuel cell buses. Next, Iceland hopes to convert private cars. And after that, Iceland hopes to switch the huge Icelandic fishing trawlers to hydrogen power.

Iceland thus hopes to convert its renewable hydroelectric and geothermal energy into a form that can power its transportation system, and, in the process, Iceland hopes to slash emissions and end its dependence on fossil fuels.

Maria Maack, the project director of Iceland New Energy, explained:

We are so reliant on our fisheries, and the fisheries are

totally dependent on oil. So we have a chance to be quite

independent of this. . . [I]t's being independent and relying

on ourselves to continue the way we live.

Bragi Arnason, a chemistry professor at the University of Iceland and a leader in hydrogen technology, beamed:

I think we could be a pilot country, giving a vision of the

world to come.

This is my sixth address to the Senate on competitiveness. Starting this summer, I spoke on competitiveness generally. I spoke on the role of education in meeting that challenge so we Americans can be more competitive in the future. Education at all levels--K through 12, continuing education, higher education, technology schools--is the long-term key for America to remain the biggest and strongest economic power in the world, given the challenges of China, India, and other countries that are taking advantage of the Internet and other technologies which are making other countries more competitive than they have been in the past.

I spoke on the role of trade, how we have to be more aggressive in trade to market our products overseas better and knock down trade barriers. I spoke on the role of controlling health care costs which make us less competitive worldwide. Our health care costs per capita are twice that of the next expensive country, and I doubt we are twice as healthy. I spoke on the role of capital and savings. We are not a net savings country, we are basically a net deficit country. Other countries save so much more than we save. That means capital that is available to develop new technologies, both technical technologies and human technologies.

Today I wish to speak about the role of energy in competitiveness. If we are to be a strong country and meet the foreign challenge, clearly, we need to be much more independent in energy production.

Iceland's Professor Arnason is not alone in his vision of a hydrogen future. At the University of Montana, Missoula College of Technology, Dean Paul Williamson has a similar vision. He is working to use hydrogen as the focal point to build a state-of-the-art college of technology and futures park. He wants to create something that folks in Geneva will get on a plane to come to America to see. So we are not always going overseas to see what they are doing, they will come to see what we are doing. It is a laboratory of excellence, to serve as a gateway to alternative technology in a much larger community.

Dean Williamson's vision is to marry Montana's resource base with the best trained workforce, and he is working to make the Missoula College of Technology a focal point to transform that vision into reality. Missoula College of Technology is creating the educational venue, and with it, they will match a business gateway to help to bring business and industry to the area, creating networks of microenterprises.

All around Montana and the Nation, people are working on renewable and alternative energy research and industry. Rising energy prices, combined with smart Government incentives, have spurred innovation, and we are already beginning to reap the benefits.

I have already talked about one example, hydrogen. Another example is coal conversion.

Coal gasification can be used to help produce hydrogen, and coal gasification can also be used to produce fertilizers, other chemicals, and diesel fuel. Our State's Governor, Brian Schweitzer, and I have targeted a process to turn Montana's coal into clean-burning diesel and jet fuel. The process is called Fischer-Tropsch, or F-T for the German scientists who developed it in the 1920s.

Energy technology firms in America and elsewhere are fine-tuning F-T to make it even cleaner. F-T fuels are relatively clean. The process can recover sulfur, mercury, and arsenic as marketable byproducts.

Jack Holmes, president of Syntroleum, extols the cleanliness of F-T diesel. He says it can be burned straight or blended with regular diesel fuel. He says:

It's like a single-malt scotch.

Not quite, but we get the drift of it.

Governor Schweitzer calculates:

It would cost less than $1 per gallon to make that diesel.

The break-even point for F-T comes when crude oil sells for more than $35 a barrel. These days, that looks like a pretty safe bet.

To develop processes such as these in the just-passed Energy bill, I worked to include an investment tax credit for the coal gasification technology used by the F-T process. In the highway bill, I worked to include a 50-cent-a-gallon tax credit for companies that generate fuel using an updated version of the F-T process. I also included a Federal loan guarantee so that companies can finance these capital investments.

We have real opportunity here. The coal-to-fuel technology can be a win for everybody if we do it right and if we make sure that any facility uses the cleanest and most advanced technology available-- again, if they do it right. It will help lessen our dependence on foreign sources of energy while creating thousands of jobs in America. I am proud to join our Governor in trying to bring a new investment in this technology to Montana and to the Nation.

A third example is renewable and alternative energy in the form of wind energy. They may call Chicago ``the windy city,'' but many say Great Falls, MT, is the windiest city in America. ``Wind is like water flowing out of the mountains,'' says Bob Quinn, a farmer from Big Sandy, MT. Big Sandy is a little bit east of what we call the eastern front. It is the Rocky Mountains and the Continental Divide. The eastern front falls off similar to a big cliff. That is why we call it the front. By the time it gets to Big Sandy, which is not too far away, it is similar to water flowing out of the mountains.

Closer to the mountains, the wind is turbulent, but across the prairie, it flows uniformly similar to a huge river, and that makes it attractive as a wind farm site.

Five years ago, Bob traveled to Germany to research his ancestry. He visited a distant cousin who had developed a wind project and was contemplating others in Chile or South Africa.

Bob asked him, Why are you thinking about going clear to Chile to build a wind farm when you can buy one in Montana, where we have this river of wind? The cousin reconsidered and chose Montana. Along with another partner and two cousins, they formed WindPark Solutions America and began looking for sites.

They settled on Judith Gap, a town of about 150 people in central Montana. Eventually, WindPark sold the project to Invenergy Wind, a Chicago-based company that will own and operate the project. Invenergy is now building a $150 million facility, the Judith Gap wind farm.

Billings resident Ludlow Howe manages the construction. His work crews erected 130 turbines in two phases. The wind farm will cover an area about 8 miles long and 5 miles wide, straddling Highway 191 between Judith Gap and Harlowton.

So far, workers have assembled at least 27 towers, colored white-gray to blend with the sky. Each tower is 260 feet tall. On top of each tower sits a generator box the size of a motor home. Seven-ton rotors with 122-foot blades sweep up to 387 feet into the air. Each turbine weighs more than 400,000 pounds. A system of 140 bolts secures each tower to its base.

The rotors come from Houston, the turbines come from North Carolina, and tower sections come from China, Korea, and Fargo, ND.

Ludlow says of the wind turbines:

They will actually seek out the wind at 9 miles per hour.

They will pitch their blades, just like a sailboat.

They will trim their sails.

The plant should be in full operation soon. NorthWestern Energy will buy power from the 150-megawatt wind

farm for customers in central and western Montana.

Wheatland County Commissioner Tom Bennett says admiringly:

It's environmentally friendly. It's renewable. It's

something we'll have forever. You tell me any negative on

this. We couldn't find any.

A fourth example of renewable and alternative energy is biomass and ethanol.

Energy competitiveness can also come from a clear commitment to the development of biomass and ethanol-based fuels. Currently, most alternative fuels are not profitable without a Federal subsidy, but if we continue to support the industry until it reaches profitability, much as with wind power, it will become a self-sustaining model in its own right.

A Pentagon-sponsored study called ``Winning the Oil Endgame,'' projects that biomass and ethanol-based fuels can create 750,000 new jobs. This effort could revitalize rural and agricultural areas of America. It could add tens of billions of dollars to farmers' revenue every year.

Rural America is at the center of the next age of domestic energy production. Rather than spending $50 billion a year overseas to buy oil from foreign countries, we could be buying into rural America. We must continue to support these new industries.

The man who headed the research team that created the hybrid Toyota Prius tells his young researchers:

Forget about concentrating on such things as trivial

increments in performance or cost cutting. If you restrict

yourself to refining the prevailing paradigm, you will never

come up with an earth-shattering idea or technology.

That is the guy who heads the team that formed the new hybrid Prius, which is doing very well.

America needs to follow that sage advice. We need to move beyond trivial increments in refining the prevailing petroleum paradigm. We need to move on to the next Earth-shattering ideas and technologies.

During World War II, America created the Manhattan Project in an effort to develop the first nuclear weapons and win the war against fascism. That important effort involved sites at Hanford, Los Alamos, Oak Ridge, and more than 30 locations in all. By 1945, the project employed more than 130,000 people. It cost nearly $2 billion, or $20 billion in 2004 dollars, that is, in current dollars.

Today, America needs a new Manhattan Project. As Tom Friedman put it in his book, ``The World is Flat,'' we need ``a crash program to . . . develop clean alternative energies.''

On May 25, 1961, President John F. Kennedy told the Congress:

I believe that this nation should commit itself to

achieving the goal, before this decade is out, of landing a

man on the Moon and returning him safely to the Earth.

Don't you remember that? That was a real challenge, an important and necessary challenge. It lifted us up, helped us develop technologies, and made America feel good about itself.

Today, America needs a new challenge. As Friedman puts it, we need ``a similar legacy project . . . a crash program for alternative energy and conservation to make America energy-independent in 10 years.''

Developing new energy sources in America will contribute to energy independence. Energy independence will contribute to national security, and energy independence will contribute to the stability of energy sources, allowing business to go forward without the jolts of supply disruptions. People facing the jolt of supply disruptions is a huge additional part of the problem of dependence.

As well, developing new energy sources in America has the potential to turn renewable and alternative energy development into comparative advantage for America, to gain an advantage for America. If we can figure out how to make clean, cheap energy before other countries, then those other countries will pay American companies to build energy production there.

Because of our early investments in the 1970s, America had an opportunity to become the world leader of the fossil alternative energy. With lower energy prices and decreased Federal support, however, our advantage dwindled.

Countries such as Denmark and Germany built on our initial research. Denmark and Germany have become the world leaders in wind generation. Danish companies are now the No. 1 provider of wind services in America, outnumbering even American companies.

The Danish became world leaders in wind power production by first growing the industry at home. According to the Danish Wind Industry Association, the Danish wind industry has created 20,000 new jobs. It exports 90 percent of the wind turbines it creates, and it supplies 20 percent of Denmark's electricity.

This is all because Denmark was the second country to reach the critical production level of 100 megawatts a year in 1987. That was 4 years after America. But we decided to end wind power subsidies for a time. That put them ahead.

There is a silver lining, however. America still has the resources to create technologies that could be turned into comparative advantages. Because of our wind power penetration, we are still fairly advanced compared to other nations. With a concerted effort for research, development, and production of wind generation--or solar power or other energy programs that we have been working on--we could easily become the world leaders in those industries if we put our mind and effort to it.

America has underinvested in research and development. This happens because firms invest in R&D based on the private return to their firms alone.

The social rate of return to investment, however, exceeds the private return. As economists put it, positive externalities exist. These external benefits come from knowledge spillovers, the creation of public goods, and economies of scale. The existence of these externalities--an awful word, but it is so powerful--counsels that the Government needs to subsidize R&D until the private rate of return matches the social rate of return. Traditionally, governments have used a few different policy tools to subsidize R&D: the first as government research grants to industry and educational institutions but, second, to provide tax incentives for R&D. A third tool is the increasingly popular and effective technique of offering prizes to spur innovation.

For example, in 1714, the British Government offered the longitude prize, a prize of 20,000 pounds, for precise determination of a ship's longitude. John Harrison solved the problem and eventually won the prize using precision clocks.

A year ago, SpaceShipOne won the Ansari X Prize competition. The X Prize Foundation offered $10 million to the first private venture to send a privately funded craft into space twice in a week.

The Clay Mathematics Institute of Cambridge, MA, offers a $1 million prize each for the solutions of seven Prize problems. The problems are classic mathematical questions that have resisted solution over the years.

Prizes like these involve little risk for the Government. And these prizes provide a very efficient, market-based approach to subsidy. For every success, there will be numerous failures. It is extremely difficult to predict who the winner will be. America needs to invest in a basket of potential technologies.

In 1874, it was a dream of science fiction: Jules Verne envisaged a world in which water would replace coal as the fuel of the future.

Now Icelanders believe they can do just that; they can turn that dream into science fact. And they have taken steps to create the world's first hydrogen society.

In old Icelandic sagas, whales were either good or evil. The evil whales swallowed boats and men. Just talking about such whales while on a boat would bring bad luck.

In contrast, the blue whale protected both boats and men. Blue whales would scare away all the evil whales. According to old Icelandic sagas, blue whales would warn fishermen by circling a boat three times in a row.

Sometimes energy sources can also appear to be good or bad. With hydrogen, Iceland hopes it has found the energy equivalent of a good blue whale.

Certainly, with the 1970s oil shocks and now the Katrina-related price spikes, we have been warned at least three times in a row to seek out safer seas.

In the 19th century, America plotted the course to a more productive energy future. In this new century, let us see that America once again leads the way.

Let us once again chart a course to more secure energy waters. And let us once again explore the uncharted oceans of possibilities and bring the energy that we need safely home.

Mr. President, I ask unanimous consent that the following detailees and interns with the Senate Finance Committee be granted the privileges of the floor during the Senate's consideration of the Transportation, Treasury, and HUD appropriations bill: Mary Baker, Jorlie Cruz, Brian Townsend, and Will Larson.

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

Mr. President, there are an estimated 1.5 million individuals who survived Hurricane Katrina who are now scattered across the Nation. The stories of what they have already experienced are harrowing. They are suffering deprivation beyond what many of us could imagine, and their needs, especially for health care services, are greater than most of us hope to ever know.

Today I come to the floor to share with you a few stories of those survivors and the problems they are facing in getting the health care services they need. Many are uninsured and without means to pay for food and shelter, let alone prescription drugs or a doctor's visit.

As I said when I spoke on the Senate floor on Wednesday night, one in three survivors who have applied for Medicaid in Louisiana have been turned away. Why? Because they do not meet Medicaid's traditional eligibility criteria.

These people need help. The Grassley-Baucus bill would deliver it to them without delay, without uncertainty.

As we consider moving forward on this legislation, I remind my colleagues of the faces of those we are trying to help. The survivors of Hurricane Katrina are people such as Eugene Johnson, age 57, a retired plumber and a diabetic who lost his home to Katrina. He, his wife, and four of his five children have moved from shelter to shelter. He needs eye medicine that he left behind in New Orleans, but he cannot afford the $119 cost of the prescription. Without his medicine, he will go blind.

An aid group, the Children's Health Fund, provided him with the medicine and responded with these words:

We're a stopgap. Nothing more.

Maude Jordan, who slept on top of her refrigerator for 3 days before being rescued in New Orleans, penniless and diabetic, was taken to a relief center in Baton Rouge. Her application was rejected by Medicaid. However, she was unable to establish eligibility because she could not establish categorical eligibility; that is, she was rejected because-- this is what Medicaid said--she

was ``unable to establish eligibility because cannot establish categorical eligibility.'' Give me a break. She needs help now. That is what our bill does.

Dwayne Russ, 44, who had lived independently in a specially outfitted apartment in New Orleans and maneuvered in an electric wheelchair, lost his wheelchair when he was evacuated to Georgia and was placed in a nursing home. The local director of advocacy at a specialty hospital and rehabilitation center helped him out but stated:

Dwayne is just one person but he demonstrates there's lots

of people out there in his same predicament who are not

getting the help they need.

Tom Leynes, age 49, was a carpenter with an apartment just off the beach, a happy family man. After Katrina, he found the bodies of his two little girls holding hands. Now he is struggling with depression, living in a tent, taking medication, and trying to deal with the pain. He needs help.

Theresa Bieller, 39, Gulfport, MS, was following a 15-pill regimen for a heart problem and other conditions before the storm. Most of her prescriptions were already low or empty. To make matters worse, she had no electricity to operate a nebulizer for her 2-year-old asthmatic daughter, Chloe. After a few days without medicine, her chest pain and weakness mounting, Bieller checked into a hospital. She came out the next day with a mere 3 days' supply, not 15. She has no insurance and little cash to buy the expensive drugs. She needs help.

``Precious'' is the name given by nursing home staff to an elderly woman evacuated from New Orleans to Tennessee who cannot remember her name. Precious can talk, but she is unable to tell staff who she is or what her health care problems are. She spent 4 days in a hospital before becoming a resident at Bordeaux Long-Term Care. Who and how her care will be paid for is unknown.

These survivors and hundreds of thousands like them are waiting for Congress to act to make sure they can get the health care services they need. They cannot afford to wait another moment for this assistance, and neither can we. I urge my colleagues to join me in supporting this motion which I will now offer by unanimous consent on the Grassley- Baucus Emergency Health Care Relief Act.

I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 214, S. 1716; that the Grassley-Baucus substitute bill which is at the desk be considered and agreed to; that the bill, as amended, be read a third time and passed; that the motion to reconsider be laid upon the table; and that all of this occur with no intervening action or debate.

Mr. President, I know the people in the State of Arkansas already know how much their Senator fights for them. I state my perspective: The Senator from Arkansas is one of the best. She is a believer. She fights

for her people and all are grateful for that.

I make a couple of points. One, this legislation to help the health care needs of evacuees and victims of Katrina is desperately needed. It will pass. It is a question of when that willful band of three or four Senators will finally recognize that so we can get on with it and help people who really need some people. That is what this comes down to.

I hear a couple of complaints about this legislation. Let me briefly explain what this is all about. Basically, this is an effort to help people. It is a modest effort. It is legislation designed by the chairman of the committee, Senator Grassley, a Republican, and myself, the ranking Democrat. We have worked with all the members of the committee. We have worked with staffs of the committees.

We have worked with Senators from States directly affected, asking their views. This has been scrubbed. This has been examined. This has been worked over many days in many ways. It is balanced. It is not nearly as extreme as some of the suggestions of some Senators. I might say, a couple of the Senators backed off and did not offer their legislation on the promise that we in the Finance Committee would come up with a bill, a balanced bill--Senator Grassley and myself--and bring that bill to the floor.

Well, here we are. It is a couple weeks later. We in the Finance Committee did our part. It is up to the Senate now to do its part and take up this bill and pass it, recognizing that this is only temporary. This is only temporary relief, only temporary assistance for the health care needs of the people in Louisiana, Arkansas, Alabama, the States affected. This is not permanent. By ``temporary,'' I mean about 5 months. My gosh, by the time we get this enacted, virtually a month will have already passed. We are talking about legislation which is 5 months in duration.

Some are concerned: Well, gee, this is an additional entitlement. It is more money. It is an entitlement.

Well, I think it is important to remind ourselves that in our country we have a program called Medicaid. What is Medicaid? Medicaid is our safety net. It is kind of the last resort for people to get health care if they cannot afford it otherwise, or do not have it otherwise--they cannot get it at their place of employment, or if they are not wealthy, they cannot buy health insurance.

So we have something called Medicaid. It is health care for low- income people, people who do not have much money whatsoever. It is kind of a safety net to catch people who otherwise would fall between the cracks. It is directly designed for people such as those who are affected by Katrina.

So many people in Louisiana and other States do not have health insurance. They do not have it. They do not have it for several reasons: One, they could not afford it; or they work for small businesses, which we know have a harder time providing health insurance; or their business has laid them off, so they do not have health insurance because they do not have the income. For whatever reason, they do not have health insurance and they need health care now--especially diabetics, especially people who need dialysis, especially seniors, or maybe not seniors, who have very definite, immediate, extraordinary health needs.

One out of three Medicaid applications in the States affected--at least in Louisiana--has been turned down because they did not meet the criteria. The criteria, as we know today, are pretty low. Or I might say it differently. It is difficult to get on Medicaid if you have significant income or just some income, if you have some assets. If you have some income and some assets, you do not get health care.

So we are saying, let's raise the eligibility criteria a little bit to the same measures we provided for victims of 9/11. It is the same provision. The income levels are increased only very modestly, very slightly, and the categories that are covered are virtually the same.

I ask my colleagues, if the survivors of 9/11 could get this kind of Medicaid health care insurance, why in the world can't people who are affected by Katrina get the same coverage? It is the same. The people of New York City got help right away. It was passed very quickly. Why can't the people of Louisiana, Arkansas, Mississippi, and Alabama get the same coverage? It does not make any sense to me.

Now, the catchall objection I heard earlier today was: Well, gee, this isn't quite right. It is not the best. Well, there is never going to be ``the best.'' We all know it is often important to not let perfection be the enemy of the good. Is it going to be perfect? No. Is it very, very good? Yes. Can we adjust it and change it if we need to make some changes? Certainly. But let's begin.

This is an emergency. It is a bit reminiscent--I do not want to be too melodramatic about this, but we have had crises in our Nation's past, whether it was Pearl Harbor, Sputnik, or whatever it might have been, and this Congress reacted very quickly to those crises. This, too, is a crisis for these people in that part of the country. We need to act quickly. It is a crisis for them. If we do not act, many people will not get the health care they need; or, looking at it differently, they are going to be burdened with an additional concern, whether they are going to get their health care, whether they are covered under Medicaid, whether it is going to be there. That will be added to all the other problems they have: Where are they going to live? Where are some of their lost loved ones? What is next for them? Are they going to be able to make their car payment or house payment? The problems the people in Louisiana and these other States are coming up with are incredible. Why can't we, then, in a small way, help with health care?

Now, I have heard the objection: Well, gee, Senator, your legislation does not allow a reduction in FMAP payments to 29 States. After all, 29 States is a lot of States. There are only about three or four or five or six or seven States that are most affected.

Let me explain this. Currently, there is a scheduled reduction in Federal payments to States. It is called FMAP. It is irrespective of Katrina. It is in the law. It is because certain States, a few years ago, had higher incomes. Because of averaging and data lags, the information is quite dated. But the point is, this legislation says, OK, for those 29 States that are going to have their Federal payments to cover Medicaid drop automatically, we are saying they will not drop--temporarily. We are not increasing the Federal payment to States. We are not increasing it at all. We are saying it will not drop for 29 States for which it otherwise is scheduled to drop. And this is only temporary. I think it is for a year's term.

Well, why is that so important? Why is it important not to let Federal payments drop to those States? It is pretty simple. These are States which have a lot of additional costs. A lot of evacuees are going to these States. Many are going to these States, which puts an additional burden on these States. Now, it is not just Medicaid burdens; these States are going to have to pay additional Medicaid costs or other social services costs, other education costs, to pay for the people who are now coming to their States and who need help.

Let me give you a little bit of a flavor of what that means in terms of dollars and cents. Let's take the State of Arizona. They are scheduled to have about a half a percent reduction. That is a drop of $30 million in payments to the State of Arizona for Medicaid, and that State is now going to pick up at least 2,000 more people. That does not make a lot of sense.

Let's take the State of Nevada: It is about a 1.14-percent drop in Federal payments under Medicaid. That is about $14 million less Nevada is going to otherwise receive. They have to pick up about 1,500 additional people.

Let's take the State of Oklahoma. It is almost a 2.25-percent reduction. That is about a $66 million reduction. There are about 4,000 people, at least who we know of, who are going to be living temporarily, at least, in Oklahoma, and they will have to pick up those other costs.

We are not asking for an increase. We are just saying: No reduction in Federal payments to States affected.

I might add that 25 of the 29 States on this list are States where the President has declared a public health emergency because of Katrina. Twenty-five of the 29 States are States where the

President has declared a public health emergency, indicating there are additional pressures on those States and additional pressures on the people in those States. We are trying to provide some temporary help.

Now, you hear sometimes: Well, the administration is suggesting a waiver. Senators mentioned the problems with the waiver. I will very briefly list them. One is that the waiver does not cover a lot of people who are going to need care. A major category is childless adults. If you are a single man or single woman, you do not get any assistance here. That does not make any sense. It does make sense to give assistance to women and children, but it does not make sense not to give any assistance to a single man or a single woman. That is an effect of the waiver that the administration is talking about.

Why create all these additional misconceptions? Let's say, as the legislation does: OK, we are going to utilize this Medicaid safety net, and I don't care whether you are single, you are a parent, you are old, or what; if you do not have the income, you are covered. We are going to help you out for 5 months. What is wrong with that? Doesn't that make sense? To me, it makes a lot more sense.

It is important to add, too, this legislation is strongly supported by the Governors in the States affected. It is bipartisan, supported by Republican Governors, Democratic Governors. Governor Riley of Alabama wants the legislation. Governor Barbour of Mississippi wants this legislation. Governor Blanco of Louisiana wants this legislation. It is supported by Republicans and Democrats.

A lot of Senators around here say: Well, gee, the local people know what the needs are. The local people know best. We in Congress are too top-down. We issue these ultimatums, we pass this legislation, but it is the local people who know.

It is important to note, the local people want this. It is the local people who are asking us for this. The Senators from Louisiana--from both sides of the aisle--want this. Senator Lott and Senator Cochran want this. It is the same with the Senators from Alabama, who are both Republicans. They want this legislation. It is the same with the Senators from Louisiana. One is a Republican and one is a Democrat. They want this. I mentioned the Governors want it. The House delegations want it. Again, I remind my colleagues, it is temporary. It is only for 5 months, this Medicaid help.

Now let's get into the question of uncompensated care to hospitals. This legislation--again, scrubbed, worked over--provides for $800 million of uncompensated care to providers in the States affected, to be administered by HHS, and grants for uncompensated care for those hospitals; whereas, the administration says: Well, we will give uncompensated care in waivers. But we are not saying how much. We are not saying how. It is only a promise. I am saying, it is deeds. It is not words. It is deeds.

I might also add the waiver process the administration talks about as an alternative has huge, big problems, to be honest about it. What are they? Well, the basic problem is this. The administration says: OK, we will make you States whole under Medicaid; that is, you have the charges, then you bill us, and we will pay you. There is a real question whether they have the authority under the law to do that. It is a huge issue. In fact, coming to work today, I heard a George Washington professor talk about this. She says under the law they cannot do that.

Do you know what I think is going to happen? Some are going to duck under this waiver ``idea'' saying: OK, it will make you whole, States. Then there will be a big debate whether legally the administration can do that. Then, well, it kind of fades away and--guess what--these States are not going to get it. These hospitals are not going to get that extra uncompensated care, either.

All I am saying is, this is a quick, certain way. It is Medicaid. We all know Medicaid. We know it works. The provider networks are set up. The process is set up. The people are there. So let's raise the income levels a little bit--just a little bit--temporarily, for 5 months. Let's get on with it, rather than this very uncertain administrative idea of waivers and what they are, what they can and cannot do.

We have already established under the law one thing they cannot do. They cannot give Medicaid assistance by picking and choosing in that picking and choosing, there is discrimination against who gets help and who does not.

Katrina survivors need to know, are they going to get any help or not? They do not need the additional worry of whether they are going to be discriminated against.

Finally, I would like to say, this question before us, to a large degree, tests us as a Nation, as a people, as a Senate, as a Congress. Who are we? What do we stand for? Are we going to stand here and bicker over minute details while people need help? Are we going to be kind of FEMA-like and be hesitant and not respond immediately? What signal does that send? What signal does that send to the people affected? What signal does that send to the rest of the country? What signal does that send to the world?

Here we are, the Congress is bickering over whether to provide health care benefits to the people who need them, people who are down and out because of a natural disaster.

We are supposed to be America, a big heart, model for the world. Sure, we have to make sure there is no waste. That is one of the reasons we should go through Medicaid. There are already antifraud provisions and protections set up under Medicaid today. That is already in existence. It is pretty simple. It doesn't take rocket science to figure this one out. Let's help these people. Let's do it now. We will take up other disaster assistance matters in subsequent weeks and days and have an opportunity then to make adjustments that may or may not seem necessary. But at the very least, let's pass this legislation now.

We are going to pass it. Obviously, if you are going to do something, you might as well do it earlier rather than later and get on with it so we can get on with other things. We are going to pass this. I hope Senators who are opposed to this, for reasons I can't fully understand, will finally sit down and say: OK, sometimes discretion is the better part of valor. Let's pass it and get on with it.

Mr. President, I ask unanimous consent that Janellen Duffy, a fellow with the Finance Committee staff, be granted the privilege of the floor today.

I suggest the absence of a quorum.

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

Mr. President, more than 10,000 years ago, on the eastern edge of the Mediterranean Sea, people became farmers. They started growing crops of emmer and einkorn wheat. They harvested the grain with curved, handheld sickle-blades.

And 5,000 years ago, Mesopotamian farmers yoked cattle to pull plows. The plows' bronze-tipped blades cut deeply, greatly increasing productivity.

Today, in Ethiopia, wheat farmers still harvest their wheat with oxen or by hand. They use tools much like those invented 5,000 years ago. An Ethiopian wheat farmer harvests an acre of wheat in a week.

A few weeks ago, in Montana, a wheat farmer whom I know near Fort Benton, in Chouteau County, finished harvesting this year's hard-red spring-wheat crop. He and his family drive a John Deere 60 series STS combine that they bought for more than $225,000, a couple of years ago. STS stands for the ``single-tine separator'' system that the combine uses for threshing and separating. The combine's rotor technology yields a smooth, free-flowing crop stream, giving the farmer higher ground speeds and increased throughput capacity. This Fort Benton wheat farmer harvests 5 acres and 220 bushels of wheat in half an hour.

What the Ethiopian farmer can do in a week, the Montana farmer can do in 6 minutes.

There are a lot of reasons for the difference: land, climate, seed quality, farming skills. But one big difference between the productivity of farmers in Ethiopia and the productivity of farmers in Montana is their tools--their physical capital.

Capital distinguishes the modern age. Capital is the most important reason why the average American earns about $40,000 a year and the average sub-Saharan African earns about $600 a year. Capital makes American workers more productive and more competitive.

This is my fifth address to the Senate on competitiveness. Starting this summer, I spoke on competitiveness generally. I spoke on the role of education in competitiveness. I spoke on the role of trade in competitiveness. I spoke on the role of controlling health-care costs in competitiveness. And today, I wish to speak about the role of capital and savings in competitiveness.

Capital means financial wealth--especially that used to start or maintain a business. Many economists think of capital as one of three fundamental factors of production, along with land and labor.

Capital and the productivity that it engenders set apart developed economies from the developing world. With capital investment, the construction worker uses a backhoe, instead of a shovel. With capital investment, the accountant uses a calculator, instead of an abacus. With capital investment, the office worker uses a personal computer, instead of a pencil.

In the late 1950s, there were about 2,000 computers in the world. Each of these computers could process about 10,000 instructions per second.

Today, there are about 300 million computers. Each of them can process several hundred-million instructions per second.

In less than 50 years, the world's raw computing power has increased four-billion-fold. This sustained increase in productivity is unparalleled in history. Capital investment in information technology made it possible.

In 1960, capital investment in information technology was about 1 percent of our economy. By 1980, investment in IT increased to 2 percent of our economy. By 2000, investment in IT increased to 6 percent of our economy.

These are slow, single-digit increases in investment. But look at the revolutions that they ignited.

This information technology investment contributed to a new era of American worker productivity and competitiveness. That productivity continues today. In the mid-1990s, when the benefits of IT investment kicked in, American workers began producing nearly 4 percent more per hour. As increased productivity surged through the economy, the standard of living improved for the Nation.

Capital made possible this unprecedented productivity. Investment made possible this capital. And savings made possible this investment. Savings is the seed corn for productivity growth.

National savings fuels investment. Investment provides capital to our workers. Capital ignites productivity. And productivity makes our economy accelerate.

Savings is what is left of income after consumption. National savings collects the surpluses of private households, businesses, and governments. When workers put part of their salaries into 401(k) plans, that adds to national savings. When companies hold on to their excess earnings and profits, that too adds to national savings. And when the government runs a budget surplus, that public sector savings adds to the national pool of savings, as well.

The three elements of national savings--household savings, corporate savings and public savings--are fundamental to economic competitiveness. Savings lets us invest in new factory equipment, machines, or tools. Savings lets us invest in high-technology innovations. Savings lets us invest in human, physical, and intellectual capital.

But America's level of national savings is dwindling. The decline of America's savings demands action.

At the end of last year, net national savings stood at just under 2 percent of gross domestic product. That is less than $2 for every $100 that our Nation earns. This is down more than 70 percent since 2000. No other industrialized country in the world has such a low national savings rate.

If we break down national savings into its component parts, we can see why national savings has fallen off. First the good news: Corporate savings has held steady--even increased--over the past decade. But the good news ends there.

Personal savings--what American households are contributing to the Nation's savings--has fallen dramatically. Just 10 years ago, Americans saved about $4 of every $100 that our economy produced. By the end of 2004, we were saving just 99 cents. And today? The recent data show that personal savings has fallen even further, below zero.

In July, for every $100 of disposable income that Americans generated, we spent that $100, plus 60 cents more.

Rather than saving, American households are borrowing. In the 1980s, total household debt equaled about 70 percent of a year's aftertax income. By 2004, household debt equaled 107 percent of aftertax income.

And the bad news gets worse. As American households fish pennies out of the Nation's piggy bank, there is a growing hole at the bottom. The public sector is draining national savings as the huge Federal budget deficits grow.

In just 4 years, the Federal Government's contribution to national savings has gone from a positive contribution of more than 2 percent of the economy, to a drain of more than 3 percent. Instead of contributing $2 for every $100 the economy earns, the Federal Government takes out $3 dollars. Government deficits are the chief cause of our abysmal national savings rate.

With national savings so low, how has America's economy remained an engine of growth?

We find the answer in Japan, Europe, China, and even the developing world.

Americans have stopped saving. But the rest of the world has not.

Today, Americans turn to foreign lenders for our savings. The rest of the world has become America's creditor, happily lending their savings to our Government, corporations, and households. Fully 80 percent of the world's savings come to America. The world's largest economy has become the world's largest debtor.

This is a big change. Between 1950 and the early 1980s, our foreign borrowing was balanced. Some years we borrowed from foreigners. And other years we lent. But for most years, we remained a net creditor.

Since then, our situation has dramatically reversed. We now depend on foreigners to fuel our economy.

Look at foreign and domestic investment flows. Last year, our net borrowing from foreign lenders totaled nearly $700 billion. This year, our net foreign borrowing could well exceed $800 billion.

This kind of borrowing adds up. As recently as 1985, America had zero net foreign debt. Today, America's net foreign debt is the size of nearly 30 percent of our economy.

The last time that we had this level of foreign debt, Grover Cleveland lived in the White House. The last time that

we had this level of foreign debt, 18 percent of Americans were unemployed, violent railroad strikes shook the Nation, and a deep depression gripped the world economy.

What is worse, soon, the ratio of foreign debt to GDP will hit 50 percent. In 7 years, the ratio will hit 100 percent.

This is unprecedented, not just for the United States. It is unprecedented for any modern industrialized country.

We welcome foreign investment in America. Our economy's openness to the world's capital has helped keep our economy strong. Foreign investment fuels our economy and creates good American jobs.

But if we continue to become increasingly dependent on foreign capital, then we will have to pay the piper.

First, continued borrowing means an ever-growing claim on our Nation's assets. The more that foreigners lend to America, the more dividend and interest payments they will collect--not Americans but them.

In 2005, for the first time since these data were recorded, America will pay more on foreigners' investments in America than American investors earn on their investments abroad. This year, these payments could amount to $30 billion. By 2008, these payments could rocket to more than $260 billion.

That would be a quarter of a trillion dollars paid out that would not boost our productivity. That quarter of a trillion dollars would increase foreign countries' standard of living, not ours.

That would be a quarter of a trillion dollars simply paying on our existing debt. More and more, we would have to borrow new amounts from foreign sources to pay back funds that we had already borrowed.

And that would be a quarter of a trillion dollars of behavior that one associates with a Third World economy, not the United States of America.

Second, foreigners are increasingly not investing their savings in America's productive sectors, but in U.S. Government securities. Foreigners are frequently buying our Government securities as part of schemes to manipulate currency markets and subsidize their exports. Those schemes further hurt our competitiveness and our future standard of living.

That is, they are not investing in plants and equipment, they are investing in our securities so they can accomplish other objectives and goals.

When 80 percent of the world savings flows to one country, the world economy is unbalanced. When 80 percent of the world savings flows to just the United States of America, that is a big imbalance.

This imbalance creates dangerous problems and distortions in the U.S. economy and throughout the world.

Eventually, the pendulum will swing back. The world economy will return to equilibrium. Foreign investors will decide to rebalance their portfolios. They will reduce their lending to America. America will have to pay more for its borrowing. Interest rates will rise. This rebalancing could cause severe dislocations in our economy.

We can steer clear of some of these costs. But we can do so only if we consider them now and do what we can to secure our economy from sudden and difficult adjustments later.

Where do we look for solutions?

America must increase its own national savings. We must finance more of our own investment.

We must create a reliable and stable pool of investment funding to fulfill our investment needs. This saving will also make us more profitable in the long run. We will gain the returns on capital investment here. We will not send them abroad.

We will continue to welcome foreign savings to our shores. But America will have a higher stock of self-financed investment.

How do we do this? First, we must plug the biggest leak in our national savings pool: the federal budget deficit. The federal government continues to run huge deficits. Prior to 2003, the record deficit was $290 billion in 1992. But in 2003, the government set a new record deficit of $375 billion dollars. In 2004, the government set an even higher record deficit of $412 billion dollars. This year, the government is projected to run a deficit of more than $300 billion dollars. The last 3 years have produced the 3 largest deficits in the Nation's history.

Now with the immense costs of Hurricane Katrina, Goldman Sachs now predicts that the deficits for the next 2 years will once again be about $400 billion. That would be 2 more years of deficits once again approaching record levels. Each year's deficit adds up.

These deficits increase our national debt. At the end of fiscal year 2001, the government's debt held by the public was $3.3 trillion. By the end of this month, economists project that debt held by the public will rise to $4.6 trillion. This would be an increase of 40 percent in just 4 years.

There are times when deficits are appropriate. If the economy is in a recession, net borrowing by the federal government can help to restore prosperity and job growth. But with the economy humming along now, huge deficits no longer serve Americans well. Instead, these large deficits divert domestic and international savings away from productive economic sectors. These productive sectors need savings to invest in innovative capital goods that can boost productivity, help our economy to grow, and improve our Nation's living standards.

We must be honest about our spending needs today and in the future. Budget forecasts for the near-term that neglect the costs of war and of neglect upcoming reductions in revenues--such as reform of the alternative minimum tax--serve no one but cynical political strategists. And the retirement of the baby boom generation beginning in 2008 will put enormous long-term pressure on the federal budget through increased Social Security, Medicaid, and Medicare spending. We must own up to these long-run problems.

Once we define the problem honestly, we must find ways to solve it.

First, we must restore the pay-as-you-go rules for both entitlement spending and tax cuts. We are stuck in a hole. We have to stop digging. We must pay for any new spending or tax cuts that we enact.

Until 2003, tough pay-as-you-go rules governed the Congressional budget process. But these rules expired in 2003. And a virtually meaningless alternative has taken their place. We must restore strong and meaningful pay-go rules.

Second, we must reduce the annual tax gap. As much as $350 billion of taxes went unpaid in 2001. Since then, the government has collected only $55 billion of that 2001 shortfall. These huge gaps occur every year. We cannot afford this tax gap.

Third, we must eliminate wasteful and unnecessary spending. For example, the Inspector General at the Department of Health and Human Services recently discovered that the government had paid nearly $12 million in benefits to recipients in Florida who had already died.

Fourth, we must eliminate wasteful and unfair tax breaks such as abusive tax shelters and corporate tax loopholes.

Finally, we must slow the growth in healthcare costs. We cannot rein in budget deficits without controlling the growth in healthcare costs. The private sector cannot sustain its current healthcare cost growth. And neither can the public sector. We cannot clamp down on healthcare costs in the public sector alone. Providers will just shift healthcare costs to the private sector. Fortunately, solutions that contain private sector healthcare costs will likely also help contain public sector healthcare costs, as well.

Taking these five steps would go a long way towards reducing Federal budget deficits and increasing national savings.

Increasing private savings is more complicated. We cannot adopt pay- as-you-go rules for families. Instead, we have to provide families with the tools that they need to develop their own growth plan.

The first tool is financial education. Too few Americans know how to develop a family budget. And too few know how to assess the risk of an adjustable rate mortgage when interest rates are rising.

We need to provide our children, and their parents and grandparents, with the tools that they need to make good financial decisions--to have more savings and less debt.

Programs such as ``Stash Your Cash''--a program to teach young people the basics of finance, saving, and investing--are a good start.

As part of ``Stash Your Cash,'' this summer, 15 pigs--each one 4 feet tall

and 750 pounds--appeared in the streets of Washington. And it was not just another political statement.

The colorful animals on street corners were oversized piggy banks. Local middle school students and artists painted each one.

``Stash Your Cash'' gets to kids early. It teaches them financial vocabulary, how to create a budget, and how and why they should save for the future. It teaches middle-school students that creating a budget helps them understand where their money goes, ensures that they do not spend more than they earn, finds uses for money to achieve goals, and helps them set aside money for the future.

We can all benefit from these lessons. Savings is vital for our children's and our families' financial future. And what is vital for our families is vital for our country.

Second, we need to make it easier to save.

The most successful savings programs are payroll-deduction savings through employer-sponsored 401(k) plans. We can make these programs even more successful by encouraging employers to enroll eligible employees automatically. Employees would opt out of saving instead of opting in. Without automatic enrollment, just two-thirds of eligible employees contribute to a 401(k) plan. With automatic enrollment, participation jumps to over 90 percent. The largest increases are among younger and lower-income employees.

Only half of private sector workers have a 401(k) or similar plan available to them. We need to bring payroll-deduction retirement savings to the other half.

Who is that other half? Part-time workers, those who put in less than 1,000 hours a year, do not have to be covered by 401(k) plans. Small employers are less likely to offer 401(k) plans, or similar arrangements, to their workers. And lower-income workers are less likely to have a plan available than moderate- and higher-income workers.

We have a voluntary pension system. We should not change that. But we can make savings opportunities available to more workers without forcing employers to provide more benefits.

Third, we need to make incentives for saving more progressive. Like many tax incentives, our current savings incentives give more bang-for- the-buck to those in the higher tax brackets. Our income taxes go to just the opposite.

In 2001, we took an important step toward fairness by creating the Saver's Credit. The Saver's Credit helps low-to-moderate-income taxpayers to save by providing a credit of up to half of the first $2,000 that they contribute to an IRA or 401(k) plan. More than 5 million taxpayers claimed this credit in 2001. It works. But it will expire after 2006. We must extend it and we must expand it to cover those with no income tax liability.

In ancient times, people viewed the toil of farming as a curse. The ancient text tells how when man left the Garden of Eden, he heard God say:

Cursed be the ground because of you;

By toil shall you eat of it

All the days of your life:

By the sweat of your brow

Shall you get bread to eat,

Until you return to the ground--

For from it you were taken.

But now, increased investment, capital, and productivity have made it so that we may hear the blessing with which Moses blessed the children of Israel on the plains of Moab, across the River Jordan:

The Lord will give you abounding prosperity in . . . the

offspring of your cattle, and the produce of your soil in the

land that the Lord swore to your fathers to assign to you.

The Lord will open for you His bounteous store, the heavens,

to provide rain for your land in season and to bless all your

undertakings. You will be creditor to many nations, but

debtor to none.

From ancient times, the sages recognized that the terms ``prosperity'' and ``debtor'' rarely apply to the same country.

Let us return to being a country whose saving provides the seed corn that brings those blessings of ``abounding prosperity.''

Let us seek the blessings of being ``creditor to many nations, but debtor to none.''

And let us do the work that we need to do to see that ``[t]he Lord will [continue]. . . to bless all [the] undertakings'' of this great Land.

I yield the floor.

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

Mr. President, I come to the floor once again to insist that the Senate act on the emergency health care needs of Katrina victims. They need help. They need help now--not tomorrow, not the next day, now. The Senate must pass the Katrina health package that Chairman Grassley and I put together. Why? Obviously, to help the victims of Katrina. That is why. They need the help now.

I might say, Senator Grassley and I have worked for weeks on this legislation. It has been 4 weeks since Katrina hit--4 weeks.

Now, some suggest the administration was slow to respond, that FEMA was slow to respond, that FEMA was inadequate in responding. We have heard these complaints. A lot of them are accurate.

Where is the Senate? Where is the Congress? Where? I ask Senators, where is the Senate? Where is the Congress? I will tell you where. We are poised to pass legislation, but the same people and the same political party that were slow with respect to FEMA and the administration are now here today slowing down and stopping this legislation from passing. The same group. The same group. I cannot believe it. I cannot understand it.

This legislation has very broad support. It has the support of Senator Grassley, the chairman of the Finance Committee, the Republican chairman of the Finance Committee, who, I might say, is a very good man. He is a good man. He cares. He puts people above politics. He puts the needs of the Katrina victims above politics. He wants to do the right thing. And I very heartily and soundly congratulate him. He has done such a wonderful job.

We have also consulted for weeks with the Senators from the States affected, working out the details of this legislation, crossing the T's, dotting the I's, making changes to make sure it works right. We have consulted with the Senators from the States affected, who are from both political parties. They want this legislation. They are from both political parties, and they want it.

We spent a lot of time working on this--a lot of time. We have done the right thing. We made changes, as Senators suggested. We are trying to make it balanced, trying to make it fair, trying to make it respond to the needs of the people in Louisiana, Alabama, Texas--the States affected. We have tried our very best to do this right.

I might repeat, not only the Senators of the States want this legislation, but the Governors of the States want this legislation. If we want to get to labels here, two of those Governors are Republicans. Today, publicly, I asked the question and Senator Grassley, the chairman, asked the question: Governors, what do you think of this legislation? Yes, they want it, they want it now.

Ask Governor Blanco of Louisiana. They know the needs. They are there. They know the stakes. They are the Governors. They want this legislation passed now.

Governor Riley of Alabama, he wants it now. Governor Barbour of Mississippi, he wants this legislation passed now. Governor Blanco of Louisiana, she would certainly like it passed now.

I might say, too, this is a compromise. There are Senators here who would like to offer more sweeping legislation and try to get that legislation up for a vote. I daresay, if that legislation were up for a vote, it would pass by a very large margin.

But there are Senators here who do not want to vote. They do not want to vote on that legislation. They do not want to vote on it. They do not want to vote on it. What is my evidence of that? Many times I have asked unanimous consent to bring up this legislation. Many times the chairman of the committee has asked to bring up this legislation. And we get objections from the other side of the aisle. We get objections from the other side of the aisle. Oh, it costs too much, I heard. That is one complaint.

I do not know. This legislation is temporary. It is only for several months. It is only basically until the end of the year. It is basically to help people get health care under Medicaid, to get health care now.

There are countless examples of people who cannot get health care today, victims of Katrina who cannot get health care today. Why in the world is the Senate, controlled by the same party as the White House, saying no? Oh, we hear: We want a compromise. Let me tell you this. What is the compromise I heard? The compromise I heard is: Take it all out of the $65 billion appropriated for Katrina. Take it out of that. That is what I have heard.

Can you believe that? Can you believe that? They say some of that money has been misspent. So people who need health care shouldn't get the dollars? They shouldn't get support? They shouldn't get their health care because some of the FEMA dollars might have been misspent? Give me a break. Give me a break.

What is going on here? What, in fact, is going on here? I don't understand it. I thought we were Senators. I thought we were elected to do the right thing, to rise up and help people who need help, particularly immediately. Sure, we should scrub this stuff and look at it closely. And we have. We have. Senator Grassley and I have. Our staffs have--very closely. We have tailored this down and cut it back down compared to what other Senators in the body want passed, some of the Senators in the committee wanted passed. We said: Oh, no, no, we are not going to go that far. We will take this a step at a time. We will pass limited legislation, only until the end of this year.

These provisions, the Medicaid provisions, the FMAP provisions, the eligibility requirements only apply for several months, to the end of this year. Then they stop.

Let me tell you, we met today, the Finance Committee, with experts-- one was George Yin, head of the Joint Tax Committee staff--trying to learn some lessons from New York that might be applied in this case. He made a very interesting point to us. He said: You must know, Senators, it is very hard to know the effectiveness of tax breaks because we don't have a lot of evidence. He also said something else. He said: Because these are of a short duration, the ones proposed in this bill, they probably will not be utilized very much because people don't know about them. People don't know they are there. It is hard to get the word out.

So those Senators should not be too concerned this bill will be ``too expensive.'' If they are concerned about fraud, FEMA fraud, if they are concerned about waste, if they are concerned about money not being properly spent under FEMA, and so forth, I suggest when the next appropriations bill comes up to spend more money at FEMA, to give more cash, that is the proper place to look at any potential waste, any problems, if any, that occur under FEMA. I don't know what occurs and does not occur, but the Senators I have heard don't want this bill passed because they say: Oh, it is wasteful. FEMA wasted money. If that is the case, don't take it out of the hides of poor people who need help. You take it out of the hide of FEMA. You take it out of the hide of additional appropriations.

I heard something else here tonight. I have heard the administration is opposed to this legislation. They quietly kind of are. I don't think they want to admit it. They sent this letter that the Senator from Arizona put in the Record. They say: Well, maybe we can do it with waivers. Maybe we can do it a little bit better. Come on. That is not going to work. Why isn't it going to work? It is not going to work because this waiver process is so vague, it is so amorphous. Nobody knows what it is. Nobody knows when it might go into effect.

Let me give you an example of that. Today at the Finance Committee hearing, I raised the question: Governor Barbour, Governor Riley, Governor Blanco, what about waivers?

Governor Barbour did not know anything about it. This is 4 weeks since Katrina. He said: I have to plead ignorance. I don't know. You would think if this waiver process is going into effect a little bit, if there has been discussion between the administration and some of these States, you would think the Governor of Mississippi, if this waiver program is worth anything, would know about it. No, he did not know anything about it. He wants this legislation passed.

Mr. President, I ask unanimous consent that the letter Senator Grassley and I wrote back to Secretary Leavitt in response to that White House letter be printed in the Record.

That letter points out the glaring defects of the waiver process the administration talks about.

First, the Government is amorphous, as I said. Second, the waiver kind of promises money to hospitals for uncompensated care. It does not say how it is going to happen. It is very unclear. It is very amorphous.

I might say, at that point, for 9/11 FEMA was billed for several items, and FEMA did not pay for it. In this case the administration, in the waiver process, says, well, there might be some money for hospitals for all the uncompensated care they have provided. It is a promise. Who knows if it is empty or not empty. There are no dollars behind it.

We have dollars in our legislation. It is $800 million. It goes for uncompensated care to hospitals. You talk to the administrators of the hospitals in these areas--Louisiana, New Orleans; other States, Arkansas, Texas--that are overwhelmed--and most of this is uncompensated care--they need help. We are providing it in this bill, $800 million.

We also provide help for people who need care, who do not have health insurance, who live up to 100 percent of poverty. They are not wealthy people: only up to 100 percent of poverty, and 200 percent of poverty for mothers who have children, pregnant women and children. That is not very much. But no, we cannot pass that. Senators say that is too much. That might be wasteful.

I don't get it. I don't get it. It reminds me of when I graduated from high school. This fellow sent me a congratulation card for graduating from high school. He said basically: Congratulations, and all this stuff. He said: Best of luck in those interstitial spaces when your brain runs against headlong perversity. This is one of those interstitial spaces in the sense that I don't get it. I can't fathom why people would not want to get this passed.

We can go to conference. We can modify this bill in conference if there are real problems. That is what we do around here. If something is not perfect--nothing is ever perfect--you don't let perfection be the enemy of the good

around here. We go to conference. By that time, little wrinkles crop up, little problems. We take care of them in conference. No, we can't do that. We can't even pass the legislation. Some Senators say: No, we can't pass it. Wrong. Take it out of FEMA. It won't work. For the life of me, I don't understand why we are here.

One small example, not so small for Tina. Who is Tina? Tina Eagerton is a lady who fled Louisiana 7 months pregnant but could not find a Florida doctor who would accept her Louisiana Medicaid card, wouldn't do it. With this legislation, Tina can get some help.

I can talk about Rosalind Breaux, who has colon cancer and was scheduled for her third round of chemotherapy on August 31, the day after the flooding began. Her husband has lost his job. There is no health insurance. Rosalind is in a real bind.

I mentioned the letter the administration has sent. The Senator from Arizona has mentioned that letter. I also mentioned the letter we sent in response, the chairman of the committee, Senator Grassley, and I. That letter from the administration says the administration claims it can provide relief without the need for congressional action. It can't. I must also say they do not have the authority. They do not have the authority to provide additional appropriations. That takes an act of Congress. They say, apparently, by implication, they do not need any dollars. That is the implication of that process. They don't appropriate dollars. It is against the law. We have to do that. They do not want us to do it.

The waivers, I might say, also limit eligibility for Medicaid coverage to only those groups of people traditionally eligible for Medicaid. Adults without children, no matter how poor they are, or how much they need health care, would not be covered under the administration's waiver policy suggested by the letter the Senator from Arizona mentioned.

The woman with diabetes would not be covered. She would not be covered. Diabetes is a very time-sensitive illness. Limiting access to benefits in the waiver would mean leaving tens of thousands of Katrina victims without aid.

After Katrina, Louisiana dispatched Medicaid eligibility workers to more than 200 shelters to enroll evacuees in Medicaid. Of the 4,000 potentially eligible families screened in these shelters, more than 1 in 5 were screened out as ineligible. They did not meet Louisiana's traditional eligibility rules--1 out of 5. No help there. One out of five: You do not meet the traditional screening test.

Our legislation would address that. One out of every three people who have applied for Medicaid in Louisiana following Katrina have been denied coverage. Let me repeat that. One out of every three people who applied for Medicaid in Louisiana following Katrina have been denied coverage. The waiver process is not going to help that out because the eligibility requirements are not raised. Most of these people are denied because they don't meet the eligibility criteria.

Adult Katrina survivors need access to health care. A recent study of Katrina evacuees in Houston shelters found that most of the adult evacuees without children were uninsured. Among those, more than 40 percent reported having a chronic condition. A third reported having trouble getting the prescription drugs they need. I can't believe it. What is going on here?

Differentiating among individuals during this time of need is not right. This isn't legislation that is usual; this is an emergency. People need health care right now. Katrina did not differentiate. Katrina hit all the residents of the gulf hard. We should not differentiate in our efforts to help those in need.

The second key difference between the administration's policy and what our bill does is the funds provided to defray the cost of uncompensated care that thousands of health care providers across our Nation are giving to Katrina survivors. I have already mentioned that. Let me repeat that point. The administration has said it will provide an uncompensated care fund. But the administration, in this waiver letter referred to on the floor a few minutes ago, has not given any further information about how much would be provided, not one iota, whether it be $1 or zero dollars. The administration has not even given information about how it will be spent.

By contrast, the Grassley-Baucus bill includes an uncompensated care fund of up to $800 million to be spent on compensating those health care providers--that is, hospitals--who have seen a dramatic increase or drop in their patient load as a result of Katrina. The administration promises, but under our bill, there would be no doubt. We would be there. It is not words but deeds. The administration is words. Our legislation is deeds. It is getting it done.

Third, our bill provides 100 percent Federal funding for all evacuees covered under Medicaid, wherever they are, and for the affected States. By contrast, the administration's waiver policy promises to make States whole. What does that mean? I have serious questions about how they can deliver on that without legislation, because it is unclear that the administration could, under its current statutory authority, provide these additional funds to States. I referred to that earlier. I don't think they have the legal authority to provide additional funds. I have no doubt they intend to do so. I am sure they do. Why wouldn't they? I just do not believe they have the legal authority to do so. So why should we get involved in this legal morass--do they have the authority; do they not have the authority? Are we going to sit down and argue about this, while the people need health care? I don't get it.

At the same time the administration has asked for the three most affected States to sign a memorandum of understanding making them financially responsible for paying the cost of evacuees' care in other States. Louisiana, Mississippi, Alabama need our help, not more bills to pay--not now. We could straighten that out later.

It is an outrage that a small number of willful Senators continue to stall this bill. Hurricane Katrina's health costs continue to spill in waves across the gulf coast region. Victims continue to suffer without proper medical care. Our bill will restore immediate access to basic health care. Our bill would relieve the financial burden health care providers have shouldered. We must act. Thus, at the appropriate time, I intend to join with my colleagues and ask unanimous consent for the Senate to pass our bill.

In fact, I do so now. I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 214, S. 1716; that the Grassley-Baucus substitute amendment which is at the desk be considered and agreed to, that the bill as amended be read a third time, passed, and that the motion to reconsider be laid on the table, and that all of this occur with no intervening action or debate.

Mr. President, I would like to speak a few moments about the need for health care assistance to Katrina-related victims. When I finish, I am then going to join with Senator Grassley, the chairman of the Finance Committee, in a unanimous consent request, and that is bring up and pass the bill.

Tina Eagerton fled Louisiana for Clearwater, FL, to escape Hurricane Katrina. As Tampa Bay's 10 News reported, Tina is 7 months pregnant. She has a high-risk pregnancy. Plainly she needs a doctor's care, but Tina could not find a Florida doctor who would accept her Louisiana Medicaid card. She said, ``I've called some doctors, [but they say] `We don't know what to do.' I guess nobody has gotten the memo.''

Congress needs to get the memo. We need to pass S. 1716, the Emergency Health Care Relief Act, and we need to do it today.

The last 4 weeks, we have seen terrible destruction, destruction that Katrina wrought as well as Rita has wrought; more than 1,000 people are dead, a million people displaced, hundreds of billions of dollars of damage. I went down there to the gulf to see it myself, and I must say it is worse than the pictures.

Katrina has exposed deep problems that plague American society: chronic poverty, stark inequality, strained race relations. We could not solve all of these problems today, but some are so pervasive, so severe, that a single bill cannot remedy them. It requires a sustained national debate and reexamination of what we as a nation hold dear.

We cannot fix everything today, but we can fix some things today. One thing we can fix is a lack of health coverage for tens of thousands of Katrina survivors. We can and must pass the Emergency Health Care Relief Act today.

This broadly supported legislation would provide victims of Hurricane Katrina with the health care services they urgently need. As we so often do, Chairman Grassley and I worked together on this bill. We worked together on the Katrina tax package which the President signed Friday and which is even now putting cash in the hands of Katrina victims.

And we worked together on this health bill as well. We spent a lot of time together--our staffers--consulting with Senators, especially with Senators in related States.

Our health bill would provide temporary Medicaid coverage for Katrina survivors, available through a streamlined application. It is that simple. These benefits would be available right away. Those eligible would get coverage for up to 5 months, with a possible extension of 5 months.

Pregnant women such as Tina Eagerton, as well as children, would be eligible for health care at higher income levels.

To support those who lost their jobs and income, our bill allows those individuals to keep their current coverage with assistance from the Federal Government. And our bill would set up a fund to help health care providers deal with their tremendous uncompensated care losses-- health care, hospitals, specialists. These funds would go to providers who experienced a surge in patient load from the evacuation of Katrina victims. These funds would go to those facilities that no longer have the patient base to make ends meet.

But this is not just health care providers who are incurring uncompensated care expenses. States are as well. Texas has taken in 200,000 Katrina evacuees. Katrina is adding $30 million a month in costs to the Texas Medicaid Program.

Our legislation provides Texas--and other States caring for Katrina evacuees--with the full Federal Medicaid funding for those evacuees.

The bill would also cover all the costs of Louisiana's and Mississippi's Medicaid and child health programs for 2006, with the same treatment being provided to a number of particularly ravaged counties in Alabama.

This legislation would give solid help to those who receive TANF and unemployment insurance.

In short, our bill does a great deal to help Katrina victims in commonsense ways.

As a result, our bill has broad support from consumer, health care, and business groups. Here is what some of the groups have to say about our bill.

The American Red Cross says:

As our nation faces the challenging task of ensuring that

the victims of Hurricane Katrina receive the care,

compassion, and support needed to reconstruct their lives,

legislation such as yours helps to ensure their health care

needs will be met.

The American Hospital Association says of our bill:

[It] is an important first step toward getting assistance

to the thousands of people who have been affected by the

storm, as well as those who are providing their care.

The National Governors Association says:

The Nation's Governors are very supportive of your relief

package. [The] additional investments in Medicaid and TANF

that your relief package provide will be critical to help

these individuals put their lives back together and regain

some sense of stability.

Congress has taken some steps to respond to the Katrina disaster. We have passed more than $60 billion in funding for FEMA. We have passed Katrina-targeted tax relief. These bills are helping us in what may be the biggest relief operation for a natural disaster in American history.

But we also must do more to help the victims of this natural--and national--disaster. We must provide Katrina victims with access to health care--not done in part of the legislation--and we must do it now.

Americans have responded generously. Americans have given of their time, through the efforts of tens of thousands of volunteers.

Americans have opened their homes. Web sites report offers for shelter totaling nearly 270,000 beds. And Americans have opened their wallets in an unprecedented fashion. In the 3 weeks following the hurricane, Americans contributed more than $1.2 billion to help victims.

But individual citizens can do only so much. At some point Congress needs to help. We need to help people such as Rosalind Breaux. Of Rosalind Breaux, the Chicago Tribune reported:

Diagnosed with colon cancer on May 1, Ms. Breaux was

scheduled for her third round of Chemotherapy on August 31, a

day after flooding began to wreck New Orleans and Charity

Hospital where she had been receiving care. Breaux and her

family ended up settling temporarily in Baton Rouge.

Nauseated with constant fatigue, profound weakness and

frequent pain, Breaux has been trying to survive the stress

of her situation as best she could. Meanwhile, her husband, a

policeman at Charity Hospital, has lost his job and there are

questions about whether his insurance will pay for her care.

``It's been so frustrating not knowing what's going to

happen,'' she said. ``I just pray I can make it through

this.''

We need to help. Congress needs to ensure that people such as Rosalind Breaux and Tina Eagerton have health care. That is the least we can do.

Let us rise to the level of caring and sympathy of the American people who have given so much to the victims of this disaster. Let us take action to meet the needs of those whom Katrina has displaced and disadvantaged, and let us do our part to help this region and its people get back on their feet.

We can do this today--this evening, now--by passing the Emergency Health Care Relief Act, legislation which the chairman of the committee, Senator Grassley, and I have worked on so vigorously, so assiduously and comprehensively. Talking to Senators, talking to groups, we have worked on this, and it is a balanced bill, a needed bill. Time is of the essence.

I urge the Senate to act tonight.

I am astounded by the statement made by the Senator who just spoke. This has nothing to do with the $62 billion, nothing whatever. If there are contract problems with FEMA dollars, we will discuss those and deal with them when this Senate deals with additional appropriations requests related to Katrina. This has nothing whatever to do with that. Those are FEMA dollars, contracts to repair roads and bridges.

Not at this moment, no.

It has nothing to do with FEMA. We will deal with legitimate points that the Senator from Nevada raised at another time and context when we deal with additional appropriations for FEMA. This has nothing to do with that.

We are talking about people. FEMA was projects, contracts. This is people. This is people's health care. This is Medicaid, that pays for people's health care. This is an emergency. It is people's health care--for people. That is what this is.

It has nothing to do with FEMA, nothing whatever.

I hope the Senators understand that. I hope the country understands and realizes that. I am astounded at the objection I just heard because it has nothing to do with the objection at hand.

I yield to the Senator from Arkansas.

I rise today to express my deep concern with the state of our Nation's food assistance programs. In recent weeks our Nation has seen first hand the critical importance of food assistance programs in helping our fellow Americans in times of need. After Hurricane Katrina, with Hurricane Rita bearing down on the Texas coast, and with rising fuel costs, our ability to provide the resources needed by Americans need of food assistance is threatened. This is a critical problem one I have seen in the gulf States but also seen in Montana where many of my fellow Montanans rely on food assistance.

I appreciate Chairman Cochran's understanding and concern. I have seen some of the devastation in the gulf and want to express my sympathy and pledge my support to help. Montanans have seen the devastation and like me, they have opened their arms and hearts to Gulf State evacuees. I hope that the chairman will join me in pledging his support for taking immediate action to help alleviate the critical needs faced by Americans in the gulf as well as citizens across the country regarding food assistance. The Senate should act, and act now to provide Americans relying on food assistance assurance that the resources they rely upon will be there when they need it.

Mr. President, I wish to read a quote from the Chicago Tribune, dated September 14, by Judith Graham, Tribune staff reporter commenting on the conditions of people needing medical care and needing it desperately on the heels of Katrina:

A New Orleans man with a brain tumor needed surgery fast--

but when he found himself stranded without health insurance

in Baton Rouge after Hurricane Katrina, it took the

intervention of Ruth Kennedy, Louisiana's deputy Medicaid

director, to get him help.

Yet this energetic state official can't possibly pull

strings for all of the people who need medical assistance

after the storm, such as an 89-year-old Louisiana man, now in

Los Angeles with family, who couldn't fill his prescriptions

because his Louisiana Medicaid card isn't good in California.

Or a displaced New Orleans woman with colon cancer who needed

chemotherapy but couldn't get an appointment in the city she

had fled to after the storm.

Meeting the medical needs of up to 1 million hurricane

evacuees scattered across the country looms as an enormous

challenge. Most of them are without their medical records or

any way to contact their physicians; many are suddenly

without jobs and at risk of losing their medical coverage;

and as a group, they're disproportionately likely to be needy

and sicker-than-average.

Senator Grassley, the chairman of the Finance Committee, and I have written a bill. We would like the swift passage of that bill. It is the Emergency Health Care Relief Act. This bill would provide victims of Hurricane Katrina with the health care they urgently need. We should pass this bill, and we should pass it immediately.

We have all seen the terrible destruction, the dead, the displaced, the hundreds of billions of dollars in damages.

Traveling down to the Gulf Coast last week, I saw the havoc Katrina had wreaked. It is stunning. It is like a war zone. It is worse than the pictures. It is worse than I had imagined.

At one stop, we went into what was left of a library. Muck and ruin covered books and other library materials. One shiny object caught my eye. I reached down to pick it up. What was it? It was a DVD of the film, ``The Perfect Storm.''

Among its many consequences, the hurricane inflicted countless blows to people's health. A third of Katrina evacuees in Houston had injuries or health problems, and more than half of those evacuees were seeking medical care.

The bill Senator Grassley and I introduced will provide that care. Our bill will provide temporary Medicaid coverage for Katrina survivors. It will provide for a streamlined application. It will make benefits available right

now. It will provide coverage for up to 5 months, with a possible extension of 5 months. It is emergency health care benefits for people who need it. Pregnant women and children will be eligible for help at higher income levels, and an extended package of mental health services under Medicaid will help survivors deal with the trauma of Katrina. To support those who have private health insurance, our bill will provide Federal assistance to help individuals keep their coverage. I say that with reference to the article I read, the reporter's comments about people who do not have health insurance anymore because they have lost their jobs. Our bill will help alleviate the burden of providing health care. I have been inspired by the sights and stories of health care workers who have done all in their power to help treat victims. To ensure these providers are compensated, our bill establishes a disaster relief fund to cover the uncompensated costs they incur because of Katrina.

There are millions of dollars of uncompensated health care costs. Katrina inflicted massive financial losses on the States of Mississippi, Louisiana, and Alabama. Our legislation calls on the Federal Government to pay 100 percent of Medicaid and children's health care costs for 2006. For Alabama, the Government will pick up 100 percent of those costs in several particularly ravaged counties.

Our bill postpones a scheduled decrease in Federal Medicaid payments for 2006 to ensure all States have the means to meet their health care needs in this trying time.

Our legislation provides immediate access to funds through the TANF program for Louisiana, Mississippi, and Alabama for 14 months and provides these States, as well as States providing services to evacuees, immediate access to the TANF contingency fund, which is a very important part of the 1996 welfare law. It has been difficult and hard to use until now. Our bill eases time limits on aid so people can get immediate help, and our legislation provides federally funded extension of unemployment benefits for unemployed workers in Louisiana, Mississippi, and Alabama. This law will go a long way toward helping Katrina survivors to get back on their feet.

We must act and act now to help those who have been harmed. This is an emergency. This is not time for the legislative process as usual. This is an emergency. People need help now, not tomorrow. We must do our part to help this region and its people, and we can do so today by passing the Emergency Health Care Relief Act.

This bill should be brought up now, today. Several of us have approached the leadership to try to get this bill up now and passed today. People need help. Many have no insurance. They have lost their jobs. Time is critical. Senator Grassley and I and our staffs have worked together for over a week. We have a good effort to help meet health care needs. The affected States agree. Senators from both sides of the aisle of the affected States have all worked with us. We have agreement. All Senators in the affected States, including Senator Grassley and myself, agree.

I cannot speak for the House of Representatives, but I can speak for us in this body. We have a very good package that I think should pass right now. I am very concerned that there are Senators here, on the other side of the aisle, who object. No one on this side of the aisle objects to this legislation coming up. I am informed there are Senators on the other side of the aisle who object to having this legislation coming up. The objection is we have not had time to read it. I understand that. It was brought up fairly quickly. We can give Senators time to read it. We can bring this legislation up tomorrow. Certainly they can read it over 24 hours--that is enough time to read this bill-- or the next 72 hours, over the weekend. Certainly there has to be some trust around here. Senator Grassley and his staff and I have fly- specked this bill. We worked very hard together over a period of almost 2 weeks. We worked with the Senators affected. They all agree, this is an emergency. This is not legislation as usual.

I call on my colleagues, let's bring up this bill and get it passed. I am very tempted to ask for unanimous consent to bring up this bill now, move us into legislative session, and bring this bill up now. Why? Very simply: It is the right thing to do. Very simply: These people need help. Very simply: It has been worked on for almost 2 weeks now. Very simply: I cannot think of any possible significant, legitimate exception.

I will not push for consideration at this point in deference to those who believe they need more time, but I very much hope when the time does come, maybe tomorrow, maybe on Monday, that this bill does come up, that we work our way through those objections so all Senators can unanimously pass this legislation. It is so important, it is so needed for so many people.

I yield the floor.

Mr. President, traveling down to the gulf coast region last week, I saw firsthand the havoc that Hurricane Katrina had wreaked. As colleagues who have been down there know, in many places, it is stunning. It is like a war zone. It is worse than the pictures.

At one stop, we went into what was left of a library. Muck and ruin covered books and other library materials. One shiny object caught my eye and I picked up. It was a DVD of the film, ``The Perfect Storm.''

The victims of Katrina have many immediate needs. The legislation that we pass today will address four of them.

One, they need cash. And they need it fast. Two, they need jobs. Three, they need housing. And four, charities need help from Congress so they can help the victims of the hurricane.

I am pleased that Congress could come together and act quickly on this emergency tax relief to address those needs.

First, victims of Katrina need immediate access to cash. The working poor should not lose government benefits that they currently receive. These benefits are an important supplement to low-income working families. A prolonged change in their living situation could affect their eligibility for these benefits, such as the earned income credit and the child tax credit. This bill will allow displaced individuals to use their 2004 income to calculate benefits on their 2005 tax return. It will further ensure that these working families do not lose deductions, credits or filing status because the family is displaced from their home.

We also allow victims of Katrina access to retirement accounts for immediate cash assistance. Under current law, there is a 10 percent penalty for early distributions of money in these accounts. We waive that penalty and allow displaced persons to recontribute to the retirement account over a 3-year period.

Victims also need tax relief if a commercial lender forgives their debt. When a commercial lender discharges debt--such as a cancellation of a mortgage--this amount is included as income for tax purposes. This legislation ensures that individuals affected by the hurricane are not taxed on this personal debt relief.

Second, victims of Katrina want to get back in the workforce. We provide businesses with the tools that they need to hire displaced workers. The Work Opportunity Tax Credit allows employers to claim a credit against wages paid to new workers that face barriers to employment. It applies to veterans, low-income families, and other targeted groups. We expand the Work Opportunity Tax Credit to cover all survivors of Hurricane Katrina who lived in the disaster zone no matter where they seek a job.

We also allow employers located in the disaster zone to take a $2,400 tax credit on wages paid to employees during the period the business was shut down. These employees have tapped into their savings to help out their employees.

Third, we address the housing needs of people dislocated by the hurricane. Many folks across the country have opened up their hearts and opened up their homes. These generous individuals now face increased living expenses--higher water, electric, and grocery bills. This is a considerable burden. We help defray these costs.

We create a special tax deduction for individuals who provide rent- free housing to dislocated persons for at least 60 days. The deduction is $500 for each dislocated person up to a maximum of $2,000.

Finally, the victims need the generosity of individuals and businesses across this country. There has been a surge in giving to charitable organizations. We should encourage this activity. Our bill provides incentives for corporations to increase gifts of cash, food, books, and other items sorely needed in the affected areas and communities.

We didn't get everything we wanted in this bill. I regret that my House colleagues did not accept our provision supporting ``pay protection'' for military reservists and guards and I will continue to work with my colleagues, Senators Landrieu and Kerry, to get this enacted. As passed by the Senate, employers in the disaster zone who continued to pay employees that were activated by the reserves or the National Guard would also be entitled to the employee retention credit. Over a third of the Guard members in Mississippi and Louisiana are currently serving in Iraq, and in Alabama, all major Guard units who have been activated for the disaster have already served in Iraq or are there currently. Around 500 of the 3,700 Louisiana National Guard members serving in Iraq lost their homes or their families were displaced due to Hurricane Katrina. If their loyal employers, who despite being hit by Hurricane Katrina, were continuing to help out these military families, why shouldn't Congress at a minimum extend this $2,400 employee retention credit? I am disappointed, but resolved to keep fighting on this matter.

In the coming weeks, I plan to work with my colleagues to draft a long-term tax relief package. We will draft legislation that will help rebuild homes and businesses, pump money into local economies, and help distressed working families.

I thank all Senators for allowing this emergency legislation to move forward today. Today, we have taken real steps, concrete steps, that will make a difference in the lives of people who can use the help. This is what we came here to government service to do. And I am glad that we have been able to do it.

I ask unanimous consent that Senators Lautenberg and Corzine be added as cosponsors.

Mr. President, I thank my colleague, Senator Grassley, the chairman of the Finance Committee. We believe that Congress must act quickly. We bypassed the usual committee process. Senator Grassley and I sat down with our staffs and said: What can we do right away to help Katrina victims? What can we do to help the States and get something passed very quickly?

Time is of the essence, clearly. We decided that people needed cash. So we have enacted several provisions in this legislation which allows people to have more cash or ways so they do not have to make payments that otherwise they would have to make.

Second, we are trying to help ease some of the dire housing conditions in the affected areas. We have provisions which allow people to take an exemption for taking in Katrina victims. We think that will help significantly.

We are also helping by giving incentives to employers so they can more quickly hire people and, if they cannot hire them, we are going to make sure we get more dollars into former employees' pockets.

This is a start. We clearly have to do more. I very much hope that later on today we can pass legislation with respect to Medicaid assistance. Senator Grassley and I have been working very hard in both these areas. In the not too long term, we obviously are going to bring up a package for long-term assistance--enterprise zones, increasing appreciation acceleration, bonding authority--to help rebuild the infrastructure.

I thank Senator Grassley very much for his help. I also thank him very much for helping clear some objections to this bill on the other side. There were two Republican holds on this bill today. I had hoped to bring this bill up this morning and get it passed. We did have some holds. I thank very much the Senator from Iowa for his help in getting those holds released so we can get this bill passed.

I also hope, as I mentioned, we can get the Medicaid bill passed today. This is the week. We have to pass this legislation. We, as Senators, cannot get too wrapped around the axle. We cannot be too concerned about how the I's are dotted or the T's are crossed. We have to act. Congress will meet another day. We can make up differences. We can amend legislation in future days if something is not quite perfect either today or in the next couple of days. Let's not let perfection be the enemy of the good here.

This is good legislation. We are getting this tax package passed. That is good. I very much hope we can get the Medicaid package passed. It is good, too.

I urge all of us to work together and rise to the occasion. This is an emergency. Let's get this legislation passed--not only this package but the Medicaid package as well.

Again, I thank Senator Grassley for working to get those holds on the bill removed so we could get this legislation passed.

I am proud to announce that Saturday is the Senator's birthday. So I hope this will be a good birthday present for the Senator, to get both of these bills passed today so we can, on this coming Saturday, know that a couple days earlier, the chairman of the Finance Committee got legislation passed that did some good for people in the affected area.

Mr. President, I thank the chairman for helping.