Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, how much time remains?

Mr. BAUCUS. Mr. President, I have the highest regard for the Senator from Arizona, as well as my very good friend from Iowa, Senator Grassley. They neglected to tell you about the pay-for. First of all, this amendment is moving in the right direction to extend the leasehold improvement. However, in the committee, we tried to get a balanced package that also extends provisions for WOTC and other provisions to get it balanced. This amendment addresses one side of the equation. It is not balanced because it doesn't extend for the other side of the equation, which is the work opportunity tax credit. The primary problem I have with this amendment is the pay-for. Essentially this amendment, offered by the Senator from Arizona, prevents, to a large degree, parents trying to get a good education for their kids. These are parents who work for various educational institutions. It could be kindergarten, high school. It could be a college. Under current law, a lot of people--janitors, cafeteria workers--take a cut in pay to work for institutions, knowing they will get a break in their tuition. This amendment takes that away. This amendment takes away a tax break for that person who has been working 8, 10, 15 years at an institution, knowing that his or her child, who may be a junior or sophomore in college, is there to get a good education. This amendment takes that incentive away. It cuts people off midstream. Again, these are not the children of professors. They tend to be the children of people who work, the plumbers who work at college universities, and so forth. This applies to all private education. It could be parochial, nonparochial. We all know examples of parents who sacrifice to get their kids through school. This amendment takes away that break that those parents are now getting. It is not a good thing. Earlier today, we were talking about ways to expand tax credits and incentives for people so they can get an education. This amendment takes away incentives for people to get a good education. It is the wrong amendment. The pay-for is not correct. We should, therefore, not agree to the amendment. At the appropriate time, I will move to table.

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

Mr. BAUCUS. Mr. President, I appreciate the admonition and good counsel of my good friend from Oregon. My mother used to say: If you can do it, do it now. My mother used to also say: If you are going to do it now, do it right the first time. This is not doing it right the first time. We rejected, about an hour ago, a similar amendment; that is, an amendment that was not offered in committee. I do not mean to be pejorative, but it is sort of a slapdash amendment, thought up, not considered in committee. This amendment is just too complex. It causes a big increase in the budget deficit. It is not paid for. I have a whole list of reasons why we should not adopt this amendment. Essentially, we will get to these issues in committee, and that will be the right time and place to deal with these issues. Mr. President, I raise a point of order that the pending amendment violates section 505(a) of H. Con. Res. 95, the concurrent resolution on the budget for fiscal year 2004.

Mr. BAUCUS. I yield back the remainder of our time.

Mr. BAUCUS. I am prepared to yield back the remainder of my time.

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

Mr. BAUCUS. Madam President, I suggest the absence of a quorum, to be charged equally to both sides.

Mr. BAUCUS. Madam President, we have two votes coming up shortly, and I would like to speak to a couple of points on my amendment. Essentially, my amendment is a sense of the Senate that we will, and must, work under the provisions we have been discussing in the last few minutes. It says we believe the taxpayers play such an important role making education more affordable, and it also says we should pay for it. That is something I must say, and I will say, as my good friend from Minnesota as well as other Senators have said, that there are a lot of ways to find the so-called pay-fors we should find, the so- called pay-fors, in closing tax loopholes. There is a lot of constructive talk--in fact, I initiated a lot of it--about the tax gap, about $350 billion of income taxes owed to the Government--owed but not collected--$350 billion every year owed but not collected--without raising any taxes, without passing any legislation that increases taxes. That is $350 billion that should be collected, and we are not collecting it. I am not saying we could get it all, but I am saying we should get a lot of it. Part of that is payroll taxes that is not collected. The estimates are $50 billion, $60 billion in payroll taxes that are not being collected. Well, adding $30 billion, $40 billion a year to the Social Security trust fund wouldn't hurt. Adding a few billion dollars to the hospital insurance Part A trust fund wouldn't hurt. We have to work hard to find that. My point is we can find the so-called pay-fors when we do the things we need to do. So this is not some big pipe dream: Sure, we are going to talk about this stuff. I am saying we are going to enact the kinds of provisions we are talking about. It could be up to $35 billion, which is the amount contained in this amendment but which is not paid for. As I mentioned, it is under the alternative amendment, that is the amendment offered by the Senator from Oregon, which doesn't address the complexity, it doesn't address a lot of real problems. I said, perhaps a bit unfairly, it is a slapdash amendment on the floor, but it is true it is an amendment of first impression. This is the first we have seen it. It never came up in the committee. I am trying, in a small way in this Congress, to try to anticipate subjects that are going to come up on the floor, anticipate major amendments that are going to come up on the floor, in the committee of jurisdiction, the Committee on Finance, and have hearings on them. Let's get experts to come and tell us about them so we can modify them and make them work, rather than seeing them for the first time on the floor and wondering what in the heck this is and what it is all about. So I would urge my colleagues to support the sense of the Senate amendment which I am offering. I think it is the right way to get at the problem. As I have said many times, I pledge to my colleagues that we on the Finance Committee are going to dig into this. We are going to find ways to make sure we have the best education tax provisions we can possibly get. Therefore, I urge a positive vote on my amendment. After that, I encourage Senators to vote against the Smith amendment. He means well, he is a good guy, but there is a time and place for everything. This is not the time and place for the Smith amendment. There will be a time and place later on this year for those subjects and the able Senator from Oregon is a member of the committee and I know we are going to hear from him on his amendments and he will be right. These provisions we can address and will address. So I am prepared to yield back my time. I know the Senator from Massachusetts was seeking time to speak, but apparently he no longer is.

Mr. BAUCUS. I don't see the Senator from Oregon on the floor. I don't know if other Senators wish to speak on the pending amendment. I don't see other Senators on the floor. I would ask my good friend for a little bit of assistance in this matter.

Mr. BAUCUS. Madam President, could I ask the time allotment on both sides?

Mr. BAUCUS. I would say to my good friend from Arkansas that I very much want to reassure her. She is such a tremendous member of our committee and such an able Senator from her State, and I know her State is very proud of her. But the answer is definitely totally 100 percent yes. Education is one of my passions. It is so important. It means so much to me, and I know it does for all of us. I love going to schools and seeing the teaching in schools. It is one of the best parts of this job. I also wish to make sure that our kids and grandkids have the same quality of life, the same standard of living that we have been able to enjoy, and that means, given the global competition we face from other countries such as China and India, and so forth, we need the best, and we are going to have the best. So I say to my good friend, in the Committee on Finance, Senator Grassley and I are a very close team on the committee and we are going to move aggressively on ways to boost the availability and to help people get the very best education, in conjunction with Senator Kennedy and Senator Enzi, when No Child Left Behind is brought up, and other authorizing legislation on education comes up, so that we can do something that makes us all on both sides of the aisle proud to address education.

Mr. BAUCUS. Madam President, I ask unanimous consent that the Senator from Arkansas and I be allowed to have a dialog without Senators losing the right to the floor.

Mr. BAUCUS. Madam President, I will speak for a few minutes. Clearly education is one of our country's highest priorities. I don't think there is anybody in this body or in the other body on the other side of this Capitol who will disagree with that statement. It is certainly one of the most important, if not the most important. The pending Smith amendment, however, is not the right way to address this issue. First, the Senator did not offer his amendment in the committee of jurisdiction. There have not been hearings on this amendment. The committee has not had a chance to work on the amendment, and it shows. First, the amendment is not paid for. It would increase the deficit by $35 billion over 10 years. No. 2, it leaves in place overly complex tax provisions. It needs simplification. We clearly need to consolidate the myriad different education credits and deductions with which the people in the country are faced and have an almost impossible time trying to figure out. This amendment does not do the job. It also includes controversial provisions such as the Coverdell tax cuts for K-12 education, provisions I personally favor but I know many Members of this body have deep public policy concerns with. We need to focus on education. As chairman of the Committee on Finance, I pledge that this committee will work aggressively to develop a comprehensive education package that includes simplification of all the myriad current tax provisions and hopefully will be much more effective--do what it is supposed to do--and will also address the various needs of various people in our society, especially low-income people who have a hard time getting to college or getting into a voc-ed school, a community college, a tribal community college, or whatnot. We in America are in sixth place in a competitive index in the world and most of that is due to a lower standing in higher education, clearly behind Nordic countries and Singapore. To compete in a global economy, we need to focus to improve our educational system. It is my goal, if I have anything to do with it, in 3 or 4 or 5 years it will be known in the world that it is in America where the action is, it is in America where they are starting to get it right, they are starting to address and to figure out ways to make sure their kids--and a little older kids--are very well educated; where we Americans are so proud of what we are doing and other countries will recognize what we are doing. It will take work to get there, but that should be the goal, and I am doing what I can to help us get there. We know about the increase in college tuition and all the problems that is causing. My State of Montana has an especially difficult time. More than two-thirds of the students in my State receive grant aid. Frankly, that is a nationwide figure. In my State it is even higher; it is 80 percent. We need education assistance. Mr. President, 14,000 individuals from my State claim more than $35 million in tuition fee deductions; nationwide, more than 4.5 million people together claimed about $10 billion in tuition fee deductions. Again, simplify, target them, make it work so we are doing what we should be doing. Let me talk for a few minutes about how complicated these education provisions are. First, we have the HOPE scholarships and the Lifetime Learning credits. I might say to my colleagues, there are nine other types of tax benefits for education. Here they all are. I am sure everybody knows all about these and I am sure everybody understands them completely. First, the student loan interest deduction; next, tax-free treatment of canceled student loans; tax-free student loan repayment assistance; Coverdell education savings accounts featuring tax-free earnings; qualified tuition programs which also feature tax-free earnings; penalty-free early distributions from any type of retirement account arrangement for education costs; allowing families to cash in savings bonds for education costs without having to pay tax on the interest on those; tax-free educational benefits for employers; business deductions for work-related education. We have over 11 that I can count, and I don't think anybody knows them, not one person--maybe one person. Not very many people. If we have a hard time in this body understanding those, think of the poor students. Think of the families. Think of the people trying to make some sense out of all this. To some degree, voters in November were saying to us in Washington and around the country: People in Washington aren't listening to us. We have problems. They are not listening to us. Congress is a bit dysfunctional. What are they doing about education? We all know the need. What are they doing? My goal in the committee, working very closely with Senator Kennedy of the HELP Committee, is, together with their authorizing legislation and our tax legislation, to get the ball rolling so we are focusing on education. It is so important to me. We also, I might say, need to focus on the neediest. Current tax credits and deductions don't help the neediest. They don't have any income to pay income tax on. It is not targeted, all these lifetime scholarships and HOPE scholarships, and so forth. We had a great hearing in the Committee on Finance. Maybe while we consolidate and simplify--a very strong recommendation, I might say, by all those who appeared before us, is combined Pell grants. So many students get their aid through Pell grants. That is certainly true in community colleges, it is true in tribal colleges. Those are lower income students. It is Pell grants that they need and we need to boost Pell grant levels even higher. Also, working with Pell grants, make a simplified tax credit--maybe refundable. Lower income people need the money upfront. It doesn't make any difference to have it later on, a year later when they are figuring out tax returns. It has to be upfront. That is another recommendation given by a very impressive, persuasive witness before our committee a short time ago. We also need to think about covering not only tuition but also other education expenses. What about books, room and board, and so forth? The current major provisions cover tuition, tuition only. I think it is true that some of this has to be increased. Which ones, that is the question. Frankly, as we are talking about helping teachers with greater deductions, my view is: Find a way to give teachers greater pay. That is the real solution here, rather than saying you have to get a deduction so you can help pay for your students' expenses. We need to get teachers better pay. Even though we don't have primary jurisdiction, we are certainly creative around here. We can figure out a way here in the Congress to help States pay better salaries to teachers so we get even better people teaching school than we have now. We have good teachers, but we need to also make sure they have the pay they need. The underlying minimum wage bill is paid for. This amendment is not paid for. The underlying total small business package is $8.3 billion and we pay for it. This is a $35 billion package, four or five times that, but it is not paid for. It was not discussed in committee. Slapdash here on the floor. That is not the way to do legislation. As I said many times, and I keep saying it because I believe it, in the Committee on Finance we are going to work as a committee because that is the best way to legislate. That means working with Democrats and with Republicans in a give and take to get a committee product. I pledge to my colleagues we are going to work mightily to get a very good education product from our committee in conjunction with the Senator from Massachusetts, Mr. Kennedy, so the right hand knows what the left hand is doing. I do believe the whole is greater than the sum of the parts. With the two of us working together in cooperation from both sides of the aisle--and Senator Enzi, I am quite certain, has the same views--we are going to do something about education here. I fully believe that will happen. Now I yield 10 minutes to the senior Senator from Arkansas.

Mr. BAUCUS. Madam President, I ask unanimous consent there be 40 minutes of debate to run concurrently on the Baucus amendment No. 206 and the Smith amendment No. 113, the time controlled as follows: 30 minutes under the control of Senator Baucus or his designee, 10 minutes under the control of Senator Smith; that no further second-degree amendment be in order to either amendment; that there be 2 minutes of debate equally divided between the votes; that upon the use or yielding back of the time, the Senate vote in relation to the Baucus amendment to be followed by a vote in relation to the Smith amendment, as amended.

Mr. BAUCUS. Mr. President, I oppose the Bunning amendment. It is a perfect example of why we do things in committee; namely, here we are on the Senate floor. This is an amendment that raises the budget deficit by $200 billion. It has never been discussed. We haven't taken it up in the Finance Committee. That is not a good way to legislate. Second, it has the adverse consequence of increasing the deficit by $200 billion. That is not a good thing to do, with all the ramifications that an increase of $200 billion in the deficit will have. I strongly oppose the amendment. Remember, the way to work legislation, generally, is through committees, as much as we possibly can. That way we will get a better product. My goal in the Finance Committee is to work as a committee. If we work as a committee, we are more likely to get better legislation rather than ad hoc legislation out here on the floor of the Senate. I urge opposition to the amendment. Mr. President, I raise a point of order that the pending amendment violates section 505(a) of H. Con. Res. 95, the concurrent resolution on the budget for fiscal year 2004.

Mr. BAUCUS. Mr. President, might I inquire, what is the regular order?

Mr. BAUCUS. I yield the remainder of our time to the Senator from Maryland, Mr. Cardin.

Mr. BAUCUS. Mr. President, how much time remains on my side?

Mr. BAUCUS. Mr. President, I urge my colleagues to support my amendment No. 207 which was just reported. This is essentially a substitute amendment to the Bunning amendment No. 119. My amendment is quite simple. It says that Congress should repeal the 1993 tax on Social Security benefits and eliminate wasteful spending such as spending on unnecessary tax loopholes--and I might say there are many of those--in order to fully offset the cost of such repeal. My alternative also explains that if we do not fully offset the cost of repeal, we will be paying substantially, among other things, more interest to foreign creditors because we will be not paying for it, essentially--and so increasing the deficit, essentially. This amendment of mine, the alternative, I think is the better amendment. Why? Because we have to be concerned about fiscal discipline. Unlike the underlying small business tax package reported out by the Finance Committee, the Bunning amendment is not paid for. Indeed, to repeal this provision now, as Senator Bunning proposes, would drain over $200 billion from the Treasury over the next 10 years. Furthermore, the Bunning amendment would eliminate a dedicated source of revenue for Medicare. As my colleagues on the other side of the aisle know, we recently set up a trigger to warn us when 45 percent of Medicare funding comes from general revenues and, of course, the Bunning amendment would move us closer to that trigger point. The dedicated funding source that would be eliminated by the Bunning amendment helps pay for hospitals, nursing care, home care services for the elderly, all paid for by Medicare. I think a drastic reduction in that funding source, that is $200 billion worth, would impair the Federal Government's ability to pay for hospital and nursing home care under Medicare. Furthermore, a loss of revenue such as that in the Bunning amendment will make it even more difficult for us because it fails to address long-term solvency and, in fact, makes long-term solvency of Social Security more in peril, not less. Such a change as Senator Bunning proposes is not paid for and would do great harm to both Social Security and to Medicare. I strongly urge my colleagues to think carefully. There is an option to vote for the Baucus amendment and an option to vote on the Bunning amendment. The first vote would be on the Baucus amendment. The Baucus amendment is more in the nature of a sense of the Senate, and I think it is the better course because, clearly, if we are to reduce the taxes Senator Bunning proposes in his amendment, we have to do it thoughtfully and not in a way that is not paid for, in a way that threatens and imperils not only the deficit but also Medicare and Social Security. Mr. President, I see my colleague on the floor now, and I yield the floor so my colleague can speak.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the time until 2:05 p.m. today be for the debate on the Baucus amendment No. 207 and the Bunning amendment No. 119 and that the time run concurrently on both amendments, with the time equally divided and controlled between Senators Baucus and Bunning; that at 2:05 p.m., the Senate proceed to vote in relation to the Baucus amendment, to be followed by a vote in relation to the Bunning amendment; with 2 minutes of debate equally divided between the votes; with no second-degree amendment in order to either amendment prior to the vote.

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

Mr. BAUCUS. Mr. President, I ask unanimous consent that the pending amendment be temporarily set aside and that I be allowed to call up my amendment No. 207.

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

Mr. BAUCUS. I ask unanimous consent that the pending amendment be temporarily set aside and I be allowed to call up my amendment, No. 206.