Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Madam President, I am speaking on an amendment I have offered to the debt limit. This amendment would simply require the Treasury Department to report on the economic and security implications of our debt to foreigners. Massive budget deficits are forcing America to borrow heavily. Last year, foreigners bought 96 percent of the Treasury bills that our Government sold to finance our debt--96 percent. That is an astounding statistic. The debt purchased last year, almost all of it, was purchased by foreigners, 96 percent. Foreigners are becoming our bankers. America is becoming a debtor to foreign powers. I think we need to understand this change. This amendment asks the Treasury to investigate what the full cost of our indebtedness will be, in higher interest rates, the value of a dollar, lower economic growth, less power to negotiate trade agreements, and diminished national security. We should let taxpayers know how big the cost of this foreign debt really is. This amendment will help to get the answers. Some will make breathless arguments that passing this amendment will endanger the full faith and credit of the U.S. Government. I say that is hogwash. If the Senate passes this amendment, the House of Representatives could pass it and have the bill on the President's desk before suppertime, on the President's desk this evening. The real reason some are opposing this amendment is to save the House of Representatives from having to vote on the debt limit even once--to save the House of Representatives, to save those folks on the other side of the body, on the other side of the Capitol, from having to vote on the debt limit. That is really what is going on here. I think if Senators vote on the debt limit, certainly House Members should vote on the debt limit, too. That is an embarrassingly poor reason to vote against a study that would help protect America's economic and security interests. Last year, foreigners bought 96 percent of the Treasury bills that our Government sold--actually 96 percent--just to remind everybody. I therefore urge my colleagues to adopt this amendment to help find out what our foreign debt really means for America.

Mr. BAUCUS

Mr. BAUCUS. Mr. President my colleagues are not being fooled. This is privatization of Social Security. Turn to page 29, paragraph 3. It so provides. We have already gone down the road on privatization of Social Security. The so-called surplus that the Senator referred to is just to privatize Social Security. The American public said no to privatizing Social Security. The President has realized that it is a bad idea. The Congress should realize it. It is a bad idea. The AARP sure knows it is a bad idea. I have a letter from the AARP. Let me read from it. They say: AARP strongly opposes this attempt to resurrect a proposal that the American public has soundly rejected. This is privatization of Social Security, pure and simple. The Senate should reject it as the American people have rejected it. I ask unanimous consent that the letter be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today with my colleague, the distinguished Senator from Oregon, to speak out against the administration's proposal to fund the Secure Rural Schools Program with a fire sale of our public land. It is vital to rural Montana and rural America that we reauthorize and fully fund the Secure Rural Schools Program, but we should not do it by putting a ``for sale'' sign on our prime hunting and fishing lands. The administration's padlock proposal to sell public lands to reauthorize the Secure Rural Schools Program sells rural America short. Montana and Oregon like many other States are outdoors States. We hunt. We fish. We take our kids hiking and camping. Our public lands are part of our recreational heritage as Americans. We should be increasing access for hunters and anglers, not putting more padlocks on more gates. The administration's land grab proposal is bad for sportsmen, an it is bad for our schools. Back in 2000, I was proud to be a cosponsor of Senator Wyden and Senator Craig's secure rural schools bill. The Secure Rural Schools Act has given counties more money, more certainty, and more flexibility. I would call that a pretty good solution. We should not be abandoning 6 years of success. It is vital to our rural communities that we reauthorize the Secure Rural Schools Act, and I will fight tooth and nail with Senator Wyden to protect our public lands, reauthorize the Secure Rural Schools Act, and stop the administration's misguided land grab. Mr. WYDEN, Mr. President, I am in full agreement with my friend and colleague from Montana. The idea to sell public lands to fund the secure rural schools reauthorization is a fundamentally flawed one. It pushes the debate over public lands and forestry back into the political briar patch despite the power of the legislation to bring traditional enemies together all across rural America in over 40 States and over 700 counties. It is because of the good work by my friend from Montana that this faulty idea is not assumed as part of this budget we debate today. As Senator Baucus and I continue our exhaustive search in the next weeks for offsets to pay for the reauthorization of the county payments legislation, he and I will continue our work to defeat the ill- conceived and divisive idea of selling off public lands to pay for the continuation of such a collaborative and locally successful program. From his position as the ranking member of the Senate Finance Committee, on which I am privileged to serve with him, I feel sure that he will come up with the winning solution to offset the costs of reauthorizing this vital national program.

Mr. BAUCUS. Mr. President, I regret that I was unable to vote in support of Senator Lieberman's amendment 3034 to the fiscal year 2007 congressional budget resolution. It is critically important to protect the American people from terrorist attacks. This amendment would have done so by providing $8 billion in additional funds for homeland security. These funds would have come from restoring cuts to vital first responder programs in the Departments of Homeland Security and Justice. It also would have provided an additional $1.2 billion for first responders, $1.7 billion for the Coast Guard and port security, $150 million for chemical security, $1 billion for rail and transit security, $456 million for FEMA, $1 billion for health preparedness programs, and $752 million for aviation security. At the time of this vote I was meeting with a group of Montana's high school students from Project Close-Up. This program introduces young people to Washington, DC and to the U.S. Government. I believe it is very important to give these students the unique opportunity to meet with their State's Senators in person--it is a tradition I have maintained for years. It is unfortunate that this vote to support homeland security occurred at the same time as the visit. For this reason, I must make it clear that I firmly believe in properly funding homeland security. I was one of the first Senators to visit New Orleans and the gulf coast after Hurricane Katrina and I recognize that FEMA needs more funding to improve their mission and ability to properly respond to disasters. Most importantly, our first responders in Montana are the backbone of emergency services in our State. We are a rural State, and our police and fire departments and hospitals call upon them to react across many miles to keep Montana's citizens safe. I have always voted in favor of these efforts in the past and I pledge to do so in the future.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I am introducing legislation to make America more competitive by increasing savings. The bill encourages savings at work, and requires that the Government consider the Nation's savings in the budget process. That great American philosopher Yogi Berra once said: ``If you see a fork in the road, take it.'' Well, we are at that fork in the road. Private savings are at an all time low. And the government just spoons out more and more red ink. If America does not change its ways, we will find ourselves on the wrong fork. For the past 10 months, I have been talking about competitiveness. I have been talking about the steps that we must take to keep this country strong. And I have been talking about the steps that we must take to make it stronger. One key component of my competitiveness agenda is savings. We must improve our national savings rate because capital is critical to growth. And continued deficits lead ultimately to a downward spiral. The 2005 personal savings rate was negative--minus 0.5 percent. Taxpayers have joined their government in engaging in deficit spending. We have to turn our savings rates around. The question is how to do it. With regard to Federal Government budget deficits, we have talked a lot over the last few days about the need for a pay-as-you-go process. We all know that it is important. The only question is whether we are willing to take the tough steps that pay-go requires, and not leave the burden to our children and grandchildren. Pay-go does not necessarily mean tax increases. It could mean collecting the taxes that are already owed. The most recent IRS estimate of the tax gap--the difference between what taxpayers owe and what they pay on time--is $350 billion each year. Collecting that difference would pay for a lot of the Government. Several times, the Senate has passed legislation that would close corporate loopholes and other abuses that contribute to the tax gap. Instead of looking for additional taxes, we should work with our Colleagues in the House to enact proposals like these that will simply get taxpayers to pay what they already owe. Today, I want to focus on the lack of personal savings for retirement. We all know it is inadequate. And we must address this problem if American workers are to be able to retire with confidence that they can maintain their living standards. The ``Savings Competitiveness Act,'' which I introduce today, will make it easier for millions of workers to save for retirement. It will create an automatic opportunity for workers to have savings withheld from their paychecks. We cannot improve the personal savings rate by providing tax incentives that simply shift savings from one type of account to another, or from one investment to another. We can improve the personal savings rate only by creating new savings, especially savings by workers who would otherwise not save. I believe that this bill will do just that. Data on retirement savings show that workers who can save at work through payroll deduction arrangements--such as 401(k) plans--usually take advantage of the opportunity to save. About two-thirds of eligible workers contribute to a 401(k) plan. That percentage jumps dramatically--to more than 80 percent--if eligible workers are automatically enrolled in these plans. Automatic enrollment makes saving the default. Workers can opt out. But those who do not opt out, start saving. In November, we passed the pension bill by an overwhelming margin-- 97-to-2. That bill included provisions to encourage opt-out 401(k) and 403(b) plans, instead of opt-in plans. This is a very important first step. Separate bills introduced by Senators Bingaman and Snowe, and Senators Conrad and Smith were the basis for the Senate provisions. And I applaud their efforts to move these ideas along. Since the House also included automatic enrollment language in its bill, I expect that the final conference bill will take this dramatic step toward increasing savings. That, however, is just a first step. Automatic enrollment in 401(k) and 403(b) plans will help only those who are eligible to join an employer-sponsored plan. That is about 60 percent of working Americans. Unfortunately, that leaves 40 percent of workers out in the cold. For small employers, the situation is worse. More than half of workers with small employers--those with fewer than 25 employees--have no employer- sponsored retirement plan. And for firms with fewer than 10 employees, only 16 percent of workers participate in an employer-sponsored plan. Those who have no employer-sponsored retirement program are far less likely to save for retirement than those who do; 85 percent of workers eligible for an employer-sponsored plan are actually earning benefits in those plans. But less than 20 percent of eligible taxpayers contribute to an IRA. Many more own IRAs--because funds from employer plans have been rolled over to an IRA. But the truth is, most retirement savings came from employer-based retirement plans. The high participation rates in employer-sponsored 401(k) plans, and the low rates for IRAs, leads to a clear conclusion. We can increase retirement savings--create new savings--by making payroll deduction retirement savings available to more workers. This is not a new idea. President Clinton's USA accounts were one attempt to bring retirement savings to all working Americans. Senator Bingaman first proposed universal access to retirement savings in his Secure Retirement for America Act in the 107th Congress. But it is time that we stopped talking. It is time that we started doing something to change the direction of the personal savings rate. Access to payroll savings is important, but it is not enough. The Savings Competitiveness Act that I introduce today will expand savings opportunities and more. This bill helps workers by providing an opportunity to save for retirement through payroll deduction at work. Employers are not required to contribute. Employers just withhold contributions and forward them to an IRA. We provide a modest credit to help small employers with the start-up costs. This bill helps children by allowing Young Saver's Accounts to be used for kid's savings. This bill helps small employers who want to contribute toward employees' retirement savings get started with a 3-year start-up credit for 50 percent of contributions to workers who are not highly compensated. And small employers who use ``SIMPLE'' plans can share the profits in a good year by making discretionary contributions to employees' SIMPLE IRAs. This bill helps lower-income taxpayers by replacing the current Saver's Credit with a refundable credit, deposited to the taxpayer's retirement savings account. Families earning up to $50,000 would be eligible for a 50 percent credit. Those earning up to $60,000 would be entitled to a portion of the credit. Low-income savers would not be penalized by losing eligibility for food stamps and other benefits. This bill helps retirees with modest savings by exempting $50,000 of their savings from minimum distribution requirements. This bill removes traps for the unwary by simplifying distribution rules. It would conform 401(k) and IRA penalties so that workers who do not have advisers to lead them through a series of hoops do not get hit with excise taxes that those with a guide can avoid. This bill takes some of the guesswork out of choosing an IRA. It would create a seal of approval for IRAs that have investment options similar to those in the Thrift Savings Plan and modest fees. The Senate's automatic enrollment provisions are not law yet. So I have also included them in this new legislation. I encourage my Colleagues to join with me to provide workplace savings opportunities for working Americans that now have none and to stop the unlimited growth of the deficit by adopting a pay-as-you-go requirement. I ask you to support the Savings Competitiveness Act.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, is there time to speak on the debt limit?

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I am introducing legislation to make America more competitive by increasing savings. The bill encourages savings at work, and requires that the Government consider the Nation's savings in the budget process. That great American philosopher Yogi Berra once said: ``If you see a fork in the road, take it.'' Well, we are at that fork in the road. Private savings are at an all time low. And the government just spoons out more and more red ink. If America does not change its ways, we will find ourselves on the wrong fork. For the past 10 months, I have been talking about competitiveness. I have been talking about the steps that we must take to keep this country strong. And I have been talking about the steps that we must take to make it stronger. One key component of my competitiveness agenda is savings. We must improve our national savings rate because capital is critical to growth. And continued deficits lead ultimately to a downward spiral. The 2005 personal savings rate was negative--minus 0.5 percent. Taxpayers have joined their government in engaging in deficit spending. We have to turn our savings rates around. The question is how to do it. With regard to Federal Government budget deficits, we have talked a lot over the last few days about the need for a pay-as-you-go process. We all know that it is important. The only question is whether we are willing to take the tough steps that pay-go requires, and not leave the burden to our children and grandchildren. Pay-go does not necessarily mean tax increases. It could mean collecting the taxes that are already owed. The most recent IRS estimate of the tax gap--the difference between what taxpayers owe and what they pay on time--is $350 billion each year. Collecting that difference would pay for a lot of the Government. Several times, the Senate has passed legislation that would close corporate loopholes and other abuses that contribute to the tax gap. Instead of looking for additional taxes, we should work with our Colleagues in the House to enact proposals like these that will simply get taxpayers to pay what they already owe. Today, I want to focus on the lack of personal savings for retirement. We all know it is inadequate. And we must address this problem if American workers are to be able to retire with confidence that they can maintain their living standards. The ``Savings Competitiveness Act,'' which I introduce today, will make it easier for millions of workers to save for retirement. It will create an automatic opportunity for workers to have savings withheld from their paychecks. We cannot improve the personal savings rate by providing tax incentives that simply shift savings from one type of account to another, or from one investment to another. We can improve the personal savings rate only by creating new savings, especially savings by workers who would otherwise not save. I believe that this bill will do just that. Data on retirement savings show that workers who can save at work through payroll deduction arrangements--such as 401(k) plans--usually take advantage of the opportunity to save. About two-thirds of eligible workers contribute to a 401(k) plan. That percentage jumps dramatically--to more than 80 percent--if eligible workers are automatically enrolled in these plans. Automatic enrollment makes saving the default. Workers can opt out. But those who do not opt out, start saving. In November, we passed the pension bill by an overwhelming margin-- 97-to-2. That bill included provisions to encourage opt-out 401(k) and 403(b) plans, instead of opt-in plans. This is a very important first step. Separate bills introduced by Senators Bingaman and Snowe, and Senators Conrad and Smith were the basis for the Senate provisions. And I applaud their efforts to move these ideas along. Since the House also included automatic enrollment language in its bill, I expect that the final conference bill will take this dramatic step toward increasing savings. That, however, is just a first step. Automatic enrollment in 401(k) and 403(b) plans will help only those who are eligible to join an employer-sponsored plan. That is about 60 percent of working Americans. Unfortunately, that leaves 40 percent of workers out in the cold. For small employers, the situation is worse. More than half of workers with small employers--those with fewer than 25 employees--have no employer- sponsored retirement plan. And for firms with fewer than 10 employees, only 16 percent of workers participate in an employer-sponsored plan. Those who have no employer-sponsored retirement program are far less likely to save for retirement than those who do; 85 percent of workers eligible for an employer-sponsored plan are actually earning benefits in those plans. But less than 20 percent of eligible taxpayers contribute to an IRA. Many more own IRAs--because funds from employer plans have been rolled over to an IRA. But the truth is, most retirement savings came from employer-based retirement plans. The high participation rates in employer-sponsored 401(k) plans, and the low rates for IRAs, leads to a clear conclusion. We can increase retirement savings--create new savings--by making payroll deduction retirement savings available to more workers. This is not a new idea. President Clinton's USA accounts were one attempt to bring retirement savings to all working Americans. Senator Bingaman first proposed universal access to retirement savings in his Secure Retirement for America Act in the 107th Congress. But it is time that we stopped talking. It is time that we started doing something to change the direction of the personal savings rate. Access to payroll savings is important, but it is not enough. The Savings Competitiveness Act that I introduce today will expand savings opportunities and more. This bill helps workers by providing an opportunity to save for retirement through payroll deduction at work. Employers are not required to contribute. Employers just withhold contributions and forward them to an IRA. We provide a modest credit to help small employers with the start-up costs. This bill helps children by allowing Young Saver's Accounts to be used for kid's savings. This bill helps small employers who want to contribute toward employees' retirement savings get started with a 3-year start-up credit for 50 percent of contributions to workers who are not highly compensated. And small employers who use ``SIMPLE'' plans can share the profits in a good year by making discretionary contributions to employees' SIMPLE IRAs. This bill helps lower-income taxpayers by replacing the current Saver's Credit with a refundable credit, deposited to the taxpayer's retirement savings account. Families earning up to $50,000 would be eligible for a 50 percent credit. Those earning up to $60,000 would be entitled to a portion of the credit. Low-income savers would not be penalized by losing eligibility for food stamps and other benefits. This bill helps retirees with modest savings by exempting $50,000 of their savings from minimum distribution requirements. This bill removes traps for the unwary by simplifying distribution rules. It would conform 401(k) and IRA penalties so that workers who do not have advisers to lead them through a series of hoops do not get hit with excise taxes that those with a guide can avoid. This bill takes some of the guesswork out of choosing an IRA. It would create a seal of approval for IRAs that have investment options similar to those in the Thrift Savings Plan and modest fees. The Senate's automatic enrollment provisions are not law yet. So I have also included them in this new legislation. I encourage my Colleagues to join with me to provide workplace savings opportunities for working Americans that now have none and to stop the unlimited growth of the deficit by adopting a pay-as-you-go requirement. I ask you to support the Savings Competitiveness Act.

Mr. BAUCUS. Mr. President, on March 1, 2006 Evert Meiners of Billings, MT pled guilty to distributing child pornography over the Internet. A search of his computer by the FBI turned up more than 12,000 images of child pornography. Mr. Meiners had the child pornography images on his website, which he operated from his home in Billings. But authorities across the world were able to access the pictures. Law enforcement in New York, Illinois, Maryland, and even Germany, reported that Mr. Meiners distributed and solicited pornographic images in their jurisdictions. The Internet has proved to be a powerful tool for both good and evil. Criminals operating from around the world can now prey on children in our own backyards. We used to worry what could happen to our kids on their way home from school. Now parents have to worry about their kids even in the safety of their own homes. Since 1995 the FBI has tracked down over 11,000 unique web addresses that solicit and market child pornography. The danger posed by these graphic web sites to our children demands action. That is why I will introduce the ``Cyber Safety for Kids Act'' today. As a general matter the legislation seeks to create a zone for all sexually explicit material that parents can easily block their children from visiting. Specifically, the bill would do the following: First, the Cyber Safety for Kids Act would require the Internet Corporation for Assigned Names and Numbers to designate a top level domain name for web sites with sexually explicit materials harmful to minors. The domain name would be titled dot XXX, rather than dot Com. Next, within six months of the launch of the .XXX domain name, all web sites that contain sexually explicit materials harmful to minors would be required to adopt the dot XXX domain name. Finally, if a web site that contains sexually explicit material harmful to minors fails to use the dot XXX domain name, the web operator would be subject to civil penalties set by the Department of Commerce. I know that some people believe that my legislation goes too far. Others believe that it does not go far enough. For example, some argue that all pornography over the Internet should be banned. That would certainly be effective, but would unquestionably be overturned by the Supreme Court. On numerous occasions, the Supreme Court has struck down laws that prohibit the broadcast of pornographic images. On the other hand, I have heard from some that believe my legislation is too restrictive. I am a strong defender of the Constitution's protection of speech. But we cannot bury our heads in the sand and pretend that the problem of children viewing harmful material over the Internet will go away. We must do what we can do to help parents protect their kids. My legislation aims to follow the successful efforts by States and localities to zone adult book and movie theaters in one part of a city or town. In Renton v. Playtime Theaters the Supreme Court specifically upheld a city zoning ordinance that prohibited adult motion picture theaters from locating within 1,000 feet of any residential zone, single- or multiple-family dwelling, church, park, or school. Likewise, my legislation creates a zone for all sexually explicit material that is harmful to minors on the Internet. Parents could easily install filters on their computer to keep their kids from visiting the dot XXX neighborhood. There is no silver bullet that will stop sick adults from trafficking and soliciting child pornography. But my legislation offers an important first step. I look forward to working with my colleagues to move this legislation forward. I am also appreciative of Senator Pryor's leadership on this issue in the Commerce Committee. I am glad to say that Senator Pryor has agreed to be the lead co-sponsor of my legislation. I urge Congress to support my legislation, and have it on the President's desk as soon as possible. American parents have asked for our help, it's our duty to act.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, on March 1, 2006 Evert Meiners of Billings, MT pled guilty to distributing child pornography over the Internet. A search of his computer by the FBI turned up more than 12,000 images of child pornography. Mr. Meiners had the child pornography images on his website, which he operated from his home in Billings. But authorities across the world were able to access the pictures. Law enforcement in New York, Illinois, Maryland, and even Germany, reported that Mr. Meiners distributed and solicited pornographic images in their jurisdictions. The Internet has proved to be a powerful tool for both good and evil. Criminals operating from around the world can now prey on children in our own backyards. We used to worry what could happen to our kids on their way home from school. Now parents have to worry about their kids even in the safety of their own homes. Since 1995 the FBI has tracked down over 11,000 unique web addresses that solicit and market child pornography. The danger posed by these graphic web sites to our children demands action. That is why I will introduce the ``Cyber Safety for Kids Act'' today. As a general matter the legislation seeks to create a zone for all sexually explicit material that parents can easily block their children from visiting. Specifically, the bill would do the following: First, the Cyber Safety for Kids Act would require the Internet Corporation for Assigned Names and Numbers to designate a top level domain name for web sites with sexually explicit materials harmful to minors. The domain name would be titled dot XXX, rather than dot Com. Next, within six months of the launch of the .XXX domain name, all web sites that contain sexually explicit materials harmful to minors would be required to adopt the dot XXX domain name. Finally, if a web site that contains sexually explicit material harmful to minors fails to use the dot XXX domain name, the web operator would be subject to civil penalties set by the Department of Commerce. I know that some people believe that my legislation goes too far. Others believe that it does not go far enough. For example, some argue that all pornography over the Internet should be banned. That would certainly be effective, but would unquestionably be overturned by the Supreme Court. On numerous occasions, the Supreme Court has struck down laws that prohibit the broadcast of pornographic images. On the other hand, I have heard from some that believe my legislation is too restrictive. I am a strong defender of the Constitution's protection of speech. But we cannot bury our heads in the sand and pretend that the problem of children viewing harmful material over the Internet will go away. We must do what we can do to help parents protect their kids. My legislation aims to follow the successful efforts by States and localities to zone adult book and movie theaters in one part of a city or town. In Renton v. Playtime Theaters the Supreme Court specifically upheld a city zoning ordinance that prohibited adult motion picture theaters from locating within 1,000 feet of any residential zone, single- or multiple-family dwelling, church, park, or school. Likewise, my legislation creates a zone for all sexually explicit material that is harmful to minors on the Internet. Parents could easily install filters on their computer to keep their kids from visiting the dot XXX neighborhood. There is no silver bullet that will stop sick adults from trafficking and soliciting child pornography. But my legislation offers an important first step. I look forward to working with my colleagues to move this legislation forward. I am also appreciative of Senator Pryor's leadership on this issue in the Commerce Committee. I am glad to say that Senator Pryor has agreed to be the lead co-sponsor of my legislation. I urge Congress to support my legislation, and have it on the President's desk as soon as possible. American parents have asked for our help, it's our duty to act.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I yield myself as much time as I consume. Thomas Jefferson once wrote: It is incumbent on every generation to pay its own debt as it goes. That is what today's debate is about. Will this generation pay its own debt as it goes or will this generation choose to shift the burden of paying for our consumption to our children and our grandchildren? Will this generation take responsibility for its own appetites or will this generation rob from the mouths of our children and our grandchildren? This question defines the very line between responsibility and irresponsibility. Today we debate legislation to memorialize the shifting of that burden to our children. Today we debate raising the Government's borrowing by $781 billion. That is more than three-quarters of a trillion dollars for 1 year. This follows on the heels of an increase of $800 billion in November of 2004, less than 1\1/2\ years ago. That followed an increase of $984 billion in May of 2003, less than 1\1/2\ years before that. That followed an increase of $450 billion in June of 2002, less than a year before that. This is the fourth time we have had to raise the debt ceiling in the 5 years of this administration. In contrast, prior to that the Government did not need to raise the debt ceiling for about 5 years. Moreover, as this chart shows, the cumulative increase during the 5 years of this administration has been a mammoth $3 trillion. That is the definition of irresponsibility. Look at this chart. In 2002 the debt limit increase is $450 billion; 2003, $984 billion; 2004, $800 billion; 2006, $781 billion. That totals over $3 trillion; that is a $3 trillion increase in just over the last 5 years. Look back at our history. What about American history prior to 5 years ago? The debt of the United States did not hit $3 trillion until 1990, a full 200 years after this country was founded. Now we have accumulated $3 trillion in new debt in just 5 years. That is the definition of irresponsibility. This debt increase will be the fourth largest debt increase in the history of our country. This chart shows the size of debt increases. As you can see from this chart, the record for a debt ceiling increase was $984 billion. That was in 2003. We can see it on the chart. The second highest record was $915 billion. That occurred in November of 1990. That is this big spike. The third largest increase was in 2004 when we raised the debt ceiling by $800 billion. That is not far from today's request, which is to increase it by $781 billion. During the time this administration has been in office--let's look at it from a little different perspective--the debt has gone up by about $10,000 for every man, woman, and child in America. Consider that. During the time this administration has been in office, the national debt has gone up by $10,000 for every man, woman, and child in America. For a family of four, that is an increase of $40,000 over the last 4 years. That is more than most Americans pay for a car. It is bad enough we have accumulated so much new debt during the 5 years of this administration, but there is a big difference between the debt increase during this period and the debt before. Before, most of the debt purchased from the U.S. Treasury was purchased by U.S. citizens and institutions. Let me repeat that. Up to 4 years ago, most debt was purchased by Americans and American institutions. At least the interest we paid on that debt, therefore, was paid to Americans. The wealth stayed in our country. That was up until about 4 years ago. It has changed. That is no longer the case. During the 1-year period--get this. You will be stunned by this next fact. During the 1- year period between December 2004 and December 2005, foreigners purchased 96 percent of the new debt held by the public. Almost all of the debt purchased in that 1-year period, December 2004 to December 2005, was purchased by foreigners, almost all of it; 96 percent of it in 1 year, the last year. Foreign citizens, foreign banks, foreign central banks, and other foreign institutions bought this debt. Not Americans, foreigners. The amount of public debt held by foreigners has doubled during the time that this administration has been in office; that is, just last year almost all of it. But when you add it with the prior years, now it has doubled since this administration has been in office. The interest on that debt is being siphoned out of our country. The foreigners buy the debt and the interest on that debt. Where does it go? The interest goes to those who own the debt--not Americans, people overseas. What is the consequence of that? That makes us less wealthy and it means the standard of living of our children and grandchildren will be lower than it ought to be. That is the definition of irresponsibility. The problem is not confined to our future standard of living. The problem is also today. Some of the foreign holdings of debt are in the hands of foreign central banks. Japan holds two-thirds of a trillion dollars of U.S. debt. China holds over a quarter of a trillion dollars of U.S. debt. Undoubtedly, the governments of these two countries hold a substantial portion of that debt. These large holdings of Treasury debts by foreign central banks are a risk to our homeland security and our economic security. Does anybody ask why is that? Suppose the President of the United States thinks another country is jeopardizing American security. Suppose--it could happen--the President would like to tell that country that America would take action against it if it did not eliminate the threat to America. But if that country's central bank held a large amount of our Treasury debt, that country could threaten to sell it quickly. That sale would drive up U.S. interest rates and cause the dollar to fall. That could cause a recession in America. I am not saying a foreign central bank would do that off the top, but it would hint it might. It doesn't have to sell it all off, just a little bit. But that clearly shifts the power over to that central bank from the United States. As a result, the President might have to back down because of threats or insinuations, and so America would therefore be at a greater risk. In the same vein, suppose the United States is involved in a trade dispute with a foreign country. It happens. If that foreign country's central bank held a lot of our debt, that country could threaten to sell that debt and force America to back down from its position on a trade dispute. America could be weaker in trade as a result. You could, obviously, apply that to almost any situation--not just trade or security but a whole host of areas where the United States has an interest with certain countries overseas. At a recent Council on Foreign Relations event, Stephen Roach of Morgan Stanley put the risk in concrete terms. He said: For a country that is more dependent on foreign capital than any country has ever been in the history of the world-- for us to try to dictate the terms on which that capital is provided telling Dubai, for example, you know, ``You can't buy our port facilities but keep on buying our Treasurys;'' and you keep telling China basically the same thing, I really worry about the potentially dangerous path our elected leaders are taking us down. The bottom line is simple. These massive increases in debt harm America. They are the very definition of irresponsibility. How did we get to this point? The Federal budget deficits drive up our debt, and these deficits have been huge during this administration. When this administration took office we were running large budget surpluses. Do you remember those days, not too many years ago? A $5.6 trillion surplus over the next 10 years was the projection back before the year 2000. In fiscal year 2000, the last year of the previous administration, we ran a surplus of $236 billion just for that 1 year. We ran a surplus of $86 billion even without counting Social Security. By fiscal year 2001, the surplus, counting Social Security, had dropped to $128 billion, down from $236 billion in the prior year. Then the tide of red ink began to flow. In fiscal year 2002 the Government ran a deficit of $158 billion. The following year, fiscal 2003, the Government ran a budget deficit of $375 billion. That was an all-time record just as recently as 2003. Think what happened a few years since. That record lasted just 1 year. The next fiscal year, 2004, the Government set a new record by running a deficit of $413 billion. The following year, fiscal year 2005, the Government ran a deficit of $319 billion. That was not a record, but it was still larger than the deficits run in any year before this administration took office. In the current year, the deficit will go up again. The administration predicts the deficit will rise to $423 billion. This will represent yet another all-time record. The fiscal policy of this administration has been the most irresponsible in the Nation's history. This fiscal policy has generated huge budget deficits, and in turn these deficits have contributed to massive increases in Federal debt. We clearly need to change course. Let us, therefore, return to the advice that Thomas Jefferson gave us. I repeat: It is incumbent on every generation to pay its own debt as it goes. Let us return to a fiscal policy that could be defined as responsible. Amendment No. 3131 Mr. President, I am now going to speak a little bit on an amendment I am offering on which we will vote, I suppose, tomorrow. I send that amendment to the desk.

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

Mr. BAUCUS. Mr. President, this amendment is quite simple. It directs the Treasury Department to study and report on the increase of foreign holdings of U.S. debt and what the consequences of that debt are for America. We all know that debts can add up. We all know that paying just the minimum payment on a credit card balance leads to years of payments and a much larger total of payments in the end. Most American families know that. As a result, we urge and sometimes require credit card companies and car companies to disclose to customers how long they will be paying those minimum payments. We require them to say how much the full balance will be when the consumer has paid off the loan. It is pretty basic stuff. This amendment is a lot like that. This amendment asks the Treasury Department to spell out the implications of our debt to foreigners. This amendment asks the Treasury to investigate what the full cost will be in higher interest rates, in the value of a dollar, in lower economic growth, in lessened power to negotiate trade agreements, and in diminished national security. We should let taxpayers know--that is our employers, the people we work for--how big the payment really is. This amendment will help get the answers. The Treasury is authorized to issue debt totaling a little more than $8 trillion. Last year's budget resolution generated an increase of $781 billion more, and that has led to the joint resolution before us today. This will be the fourth largest debt limit increase in our Nation's history. So the question needs to be asked: Who is loaning us this money? Some of it is internal, like borrowing from Social Security. Much of it is borrowed from American citizens and businesses. Now there is also an especially worrisome trend, a trend worrisome not only to me and my constituents in the State of Montana but also taxpayers across the country. That is the amount of U.S. Treasury bonds held by foreigners. Five years ago, foreigners held about $1.1 trillion. Today that number has doubled to $2.2 trillion. Japan holds about two-thirds of a trillion dollars; China holds a quarter of a trillion dollars. So the questions that inevitably follow are, first, how long can we continue to borrow more money? Second, what are the implications to our foreign policy as foreigners increase their holdings of U.S. debt? And, third, what share of America's taxes are being used just to pay interest on debt? These are some of the issues we should debate today. These are some of the issues addressed in my amendment. Every business has limits on the amount it can borrow. Banks say to businesses: Sorry, this is your loan limit. Financial institutions limit the amount that any individual or family may borrow. Every credit card has a maximum balance. As a business or a family increases its debt, lending institutions begin to monitor the situation. Creditors even increase the interest rate charged on the debt. At some point, America will face this economic reality. We cannot continue to accelerate our borrowing and ignore the consequences of increasing foreign held debt. As one conservative economist put it last year in the National Review: ``Growing nervousness in the bond market may be signaling an end to the free lunch Americans have enjoyed for the last 3 years, in which time foreigners have essentially financed our budget deficit.'' Indeed, we cannot count on that free lunch forever. So I am offering a simple amendment. It directs the Treasury Department to coordinate with appropriate Government agencies to study and report on the increase of foreign holdings of U.S. debt. The amendment asks Treasury to study any associated national security implications. The amendment also asks the Treasury Department to assess how this increase in foreign investment of our federal debt affects our trade policy. Do we want to put ourselves in the potentially precarious position of engaging in diplomacy with our Nation's creditors? What happens if those foreign central banks and foreign investors suddenly started selling their holdings of U.S. securities? Interest rates could rise dramatically. A recession could result. I bet that American manufacturers would like to know the answer to some of these questions. Next month, the Treasury Department is expected to rule on whether China is deliberately manipulating its currency in an effort to gain an unfair trade advantage. American businesses are awaiting this decision. But they would also like to know how any action on that decision might be affected by the level of our foreign debt. Five years ago, foreigners held about $1.1 trillion in U.S. debt. Today that number has doubled to $2.2 trillion. Last year, Federal debt held by the public increased by $297 billion. And the amount of public Federal debt held by foreign investors increased by $286 billion. I have said it before and I will say it again: It is a riveting statistic. Foreign investors financed 96 percent of our Federal debt last year. Almost all of it last year was financed by foreigners--not by Americans but by foreigners. We need to understand this change. This study will provide important information on this topic. The answers to these questions will help us to evaluate foreign purchases of American assets. The data thus far is quite startling. According to a report from the nonpartisan Congressional Research Service, in 1995, net foreign investment in America was about 1.2 percent of our economic output. In 2005, net foreign investment was roughly 6 percent of GDP. That's an increase of 400 percent in just 10 years. And we have just learned that our current account deficit for 2005 was the largest ever: $805 billion. As a percent of the economy, it was also a record, at 6.4 percent. That type of increase reflects the attractiveness of our national economy to foreign investors. But I think that we need to better understand what this means for our economy and our national security. Both sides of the Capitol, and many of our constituents, have spent a great deal of time over the last few weeks debating the effect of purchases or control of critical American infrastructure assets by foreign entities. It is time that we get all the facts out on the table. And this study will surely aid in this effort. And this amendment asks Treasury to evaluate how the increase of foreign-held debt affects taxpayers. Last year, Americans paid about $85 billion in interest payments on this foreign debt alone. This year, in 2006, that amount will likely increase to about $100 billion. And it will increase again in 2007. That is again the amount in interest payments on foreign debt alone, $85 billion last year. This year, in 2006, that amount will likely increase to $100 billion. And it will increase again next year in 2007. Since we collect about $2.5 billion a day from income taxes, this year taxpayers will be working and paying taxes for almost 2 months just to pay off those interest payments on foreign debt. Think of that. Let me say that again. Since we collect about $2.5 billion a day from income taxes, this year taxpayers will be working and paying taxes for almost 2 months just to pay off those interest payments on foreign debt. That is not paying off the principal. That is just paying the interest. Americans will pay 2 months of taxes to service the debt we owe to foreigners. I urge my colleagues to join me in supporting this amendment. We simply ask for more information, more disclosure, and more transparency relating to our federal debt. As guardians of the Federal budget, we should not be afraid to confront the facts and deal with them accordingly. Consumers should know the full cost of buying that car when they sign on the dotted line. Well, today, on behalf of the American taxpayer, the Senate is being asked to sign on the dotted line for the borrowing that the Government has done. The American people deserve full disclosure of the consequences. I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, nearly 50 years ago I, like the rest of the world, was mesmerized by a small metal sphere, no bigger than a basketball, no heavier than I or most of us. Hurtling through space at the speed of sound--I don't think it was faster than that, it goes about 18,000 miles an hour--this steel ball was Sputnik, the world's first satellite to circle the earth--in 98 minutes flat. It was a technological feat of the Soviet Union. Nikita Krushchev, the Soviet leader, had been intent on proving the Soviet Union's scientific superiority. He proved it that day in October 1957. News of Sputnik caught Americans off guard. We had been convinced of our own superiority, but here was undeniable evidence that others were leading the way. And of all people, it was the Soviet Union. Now we could only follow. We had been lulled into a slumber by past successes and had awoken to a harsh reality. Other shocking Soviet achievements followed. In 1959, Luna 2 became the first space probe to hit the moon. In 1961, Soviet cosmonaut Yuri Gagarin became the first person to orbit the Earth. But it was Sputnik that ultimately galvanized our great Nation. We came together to rediscover ourselves as a nation of thinkers, inventors, and dreamers. The shock of Sputnik caused us to not lower our expectations, but to raise them. Sputnik caused us to not ask less of ourselves but to demand more. Four years after Sputnik, President Kennedy summoned the spirit of America to banish the ghost of Sputnik. Content to follow no longer, he set the highest goal imaginable. He declared: We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to Win . . . Eight years later, American astronauts Neil Armstrong, Edwin ``Buzz'' Aldrin and Michael Collins landed on the Moon. Armstrong became the first man to walk on the Moon. America never looked back. To this day, America is peerless in space technology. Today, America faces a challenge no less daunting than the Soviet- American space race. We face no rival state. We face no organized military menace. Instead, we face a world more integrated, more interdependent, and more intensely competitive than ever in our history. We face an economy with fewer second chances. Smaller margins for error. In this new world, it is our challenge to succeed, and to leave our children and grandchildren an economy that is better than the one we inherited from our parents; an economy not laden with debt but bursting with opportunity; an economy whose workers are increasingly productive, and whose finances are prudent; an economy that plants the seeds of innovation and education today, knowing that generations far in the future will harvest their bounty. Our challenge is to create an economy in which universal health care coverage is its greatest asset, not its heaviest burden. The records it sets will not be for trade and budget deficits, or interest paid to foreign lenders, but for prosperity, productivity and progress. Its workers and companies will look to foreign shores with hope and ambition, not fear and trepidation. It is an economy where the strong are just and the wealthy are generous. It is an economy where the weak are secure and the struggling are given a hand. This challenge is far greater than that which America faced in 1957. To prevail, we must demand more creativity. We must summon more ambition. We must harness more resources. Yet we do not have a Sputnik moment that captivates us and calls us to action. No single moment crystallizes the urgency of action and the imperative of success. Today, we are still in August 1957--still complacent, still sure of our superiority. What will be our ``Sputnik moment?'' Will our Sputnik moment come when our trade deficits break unimaginable records, and our foreign debt exceeds that of any modern industrial economy? No, that moment has already passed. Will our Sputnik moment come after we neglect our basic research programs for three decades, while our competitors pour funds into research and development and lure our labs to their shores? No, that moment has already passed. Will our Sputnik moment come when 45 million Americans have no health insurance, while those who are so lucky must pay more to receive less? No, that moment too has come to pass. Perhaps our Sputnik moment will come when China becomes the world's largest economy. That may be just 10 or 20 years away. Perhaps our Sputnik moment will come when our foreign debt reaches such levels that each year, 2 percent of our Nation's income will go to paying interest on these loans. That may be fewer than 5 years away. Let us not wait for our generation's Sputnik. Let us awaken from our complacency before we are shaken from it. We must not act out of fear. But we must not fear to act. Most of all, we must act as a nation for the good of the entire Nation. As President Kennedy said of his vision 40 years ago: ``In a very real sense, it will not be one man going to the moon . . . it will be an entire nation. For all of us must work to put him there . . .'' We must all work to improve our Nation's competitiveness, and I am working to do my part at every opportunity. This week, I will introduce a number of amendments to the budget resolution that strengthen our economy at its very foundation and steel its every pillar. These amendments will strengthen our ability to educate our children, so that they may enter the workforce filled with confidence and innovative ideas. These amendments will foster innovative energy research that will make our children's world cleaner, safer, and more secure. These amendments will restore our commitment to basic research and development, a commitment that has served us well in the past and will serve us well in the future. These amendments will embrace technology to expand our access to quality healthcare, while making it more affordable, efficient, and accurate. These amendments will help grow our nation's pool of savings, which can foster investment. Investment that makes our economy more productive and innovative. Taken together, I hope that these amendments will create an economy that moves our Nation forward, and makes sure that no one is left behind. I hope my colleagues will join me in supporting them. I think they are very important. I think they are critical and, frankly, I think if we don't pass these and similar amendments, we are passing on to our children and grandchildren an immense disservice. I thank the Chair for listening. I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, I yield 15 minutes to the Senator from New Jersey.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for the quorum call be dispensed with.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the Book of Proverbs says: ``The borrower is servant to the lender.'' This is a sad week for America, for we have become servants to many nations. This week, we debate legislation to raise the Government's borrowing by $781 billion. That is more than three-quarters of a trillion dollars. This will be the fourth largest debt increase in the history of our country, and it will be the fourth debt limit increase enacted in this administration. In 2002, the Government raised the debt ceiling by $450 billion. The next year, 2003, the Government raised it by $984 billion--nearly a trillion dollars. That was an alltime record. And in 2004, the Government raised the debt ceiling by another $800 billion. This week, we consider legislation to raise the debt ceiling by another $781 billion. When added to the three other debt ceiling increases during this administration, the total increase in the debt ceiling will be a mammoth $3 trillion. That is servitude. When this administration took office, the limit on Treasury borrowing was about $6 trillion. It took us as a country 212 years to accumulate that much debt. Now, a mere 5 years later, this administration has added another $3 trillion. This one administration has added half again as much debt as all the other administrations that came before it put together. That is servitude. During the period that this administration has been in office, the debt has gone up by about $10,000 for every man, woman, and child in America. For a family of four, that is an increase of $40,000 just during the time this President has been serving as President. What would an average American family think of that amount of debt? Imagine an average American family sitting at the kitchen table. Imagine them looking at $40,000 in new debt. What would they think? Would they just call up the credit card company and ask for a higher limit? The right thing to do would be to turn over a new leaf. The right thing to do would be to balance the family budget. When your debt spins out of control, you cut up the credit card, you try to live within your means, and you stick to a budget for the future of your family. The question is, Will Congress show the kind of fiscal discipline that is necessary? Will Congress show that discipline that any American family should be expected to show? And to whom are we servants? We are servants to foreigners. Much of the Treasury debt is now owned by foreigners. That includes both foreign citizens and central banks in foreign countries. That means we pay interest to foreign citizens and foreign central banks. Over time, this will lower America's standard of living. How is debt like servitude? These large foreign holdings of our Treasury debt are a risk to our homeland security and our economic security. Suppose the President thinks that another country is jeopardizing America's security. Suppose the President would like to tell that country that America would like action from it and would take action against it if it did not change its actions. If that country's central bank owned a large amount of our Treasury debt, it could threaten to sell it quickly. That sale would drive up interest rates and cause the dollar to fall. That would cause a recession in America. As a result, the President might have to back down from threats against that other country. America would be at greater risk. Or take the situation where America has a trade dispute with a foreign country. Imagine that the foreign country's central bank owned a lot of our debt. Then that country could threaten to sell the debt to force America to back down from our position in a trade dispute. America would be weaker in trade. Foreigners own more than $2 trillion of Treasury debt today. This is double the amount they owned at the beginning of this administration. Mr. President, 96 percent of the increase in debt held by the public between December 2004 and December 2005 resulted from foreign purchases of that debt. The bottom line is simple. These massive increases in debt harm America. They make us the servants of foreign nations. How did we get to this point? Federal budget deficits drive up our debt, and these deficits have been huge during this administration. When this administration took office we were running large budget surpluses--not deficits, surpluses. In fiscal year 2000, the last year of the previous administration, we ran a surplus of $236 billion. We ran a surplus of $86 billion even without counting Social Security. By fiscal year 2001, the surplus, counting Social Security, had dropped to $128 billion, down from the $236 billion in the prior year. Then, the tide of red ink really flowed. In fiscal year 2002, the Government ran a deficit of $158 billion. The following year, 2003, the Federal Government ran a budget deficit of $375 billion. That was an all-time record. But that record lasted just 1 year. The next year, fiscal year 2004, the Government set a new record by running a deficit of $413 billion. The following year, fiscal year 2005, the Government ran a deficit of $319 billion. Although this was not a record, it was still larger than deficits run in any year before this administration took office. In the current year, the deficit will go up again. The administration predicts that the deficit will rise to $423 billion. This represents yet another all-time record. To make matters worse, these record deficits are occurring just at the time the retirement of the baby boom generation is about to begin. The retirement of the baby boom generation will put enormous stress on the Federal budget. It will lead to huge increases in the cost for Social Security, Medicare, and Medicaid, and this will drive up budget deficits. The fiscal policy of this administration has been the most irresponsible in the Nation's history. This fiscal policy has generated huge budget deficits, and these deficits, in turn, have contributed to massive increases in Federal debt. We need to change course. We must reenact the tough pay-go budget rule. The pay-go rule says if you want to increase entitlement spending or tax cuts, we have to pay for them. Senators Conrad and Feingold will offer an amendment to the budget and again to the debt limit legislation to restore tough pay-go rules. I will have more to say about that when the amendment is offered, but for now let me cut to the chase. Every Senator ought to vote for that amendment. We need to enact a tough pay-go rule. We need to work together to stop increasing the budget deficit. We need to vote against the hemorrhaging of debt that has afflicted us these last few years. That is what we need to do. The choice is clear. Will we fall further into debt to foreign powers or do we have the will to break the bonds of our debt servitude? All that is at stake is our freedom. I urge Senators to think deeply about the upcoming vote. The future of our country, in many deep senses of the term, depends on that vote, especially the future of our children and our grandchildren. I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following detailees and interns with the Senate Finance Committee be granted privileges of the floor during the Senate's consideration of the budget resolution: Mary Baker, Robin Burgess, Tiffany Smith, Tom Louthan, Margaret Hathaway, Laura Kellams, Leona Cuttler, Deidra Henry-Spires, David Schwartz, Richard Litsey, Stuart Sirkin, Zachary Henderson, Lesley Meeker, Britt Sandler, Lauren Shields, Jordan Murray, and Will Larson.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to offer my deep condolences to our good friend and colleague, Dan Inouye, and his family and to the people of Hawaii on the death of our friend Dan's wife, Maggie, who died this afternoon. The death of anyone is cause for grief. The death of a spouse is an even greater cause for grief. The death of the spouse of a good friend, Dan Inouye, is even more grievous to all of us. Knowing Dan Inouye as we do, we are all hard pressed to find anyone who is as wonderful and caring, a statesman, generous, as wise a man as Dan Inouye. A Japanese American under the most difficult of circumstances, he served his country--and served it with tremendous valor. His wife Maggie I did not know well. You can tell a lot about a person in the first 5 or 10 minutes of just meeting someone. Maggie was just like Danny--very wise, very deep, very caring, very generous, classy like Dan. I say to Dan, to his family, and to the people of Hawaii, you all have our hearts, you have our prayers, our thoughts are with you as well as with Maggie in this most difficult time. Know that we are thinking of you, we are praying for you and for your family.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in the years when I first began to serve in Congress, America faced severe problems with supplies of oil. For years, long gas lines, frustration, and questions about the security of our oil supply drove the public debate. Thirty years have passed. And, frankly, things have not changed all that much. We still use gasoline and coal at staggering rates. And we are still concerned about the security of our oil supply. We do not have lines at gas stations. But last year, prices rose to levels unimaginable just a few years ago. Prices for gasoline, heating oil, electricity, and natural gas have soared in recent years, hitting working families hard. In the past few weeks, we have seen a terrorist attack on Saudi Arabian oil facilities. We have seen oil workers kidnapped in Nigeria. We have seen Venezuelan President Hugo Chavez threaten that he would cut off our supply of oil from his country. And we have seen some question whether Iran's role as an oil supplier keeps other countries from properly addressing Iran's threat to nuclear proliferation. Energy provides one of America's greatest challenges for the 21st century. Our economy has been dependent on oil and coal for about 100 years. And since World War II, natural gas has become part of the equation. Will we continue this dependency for the next 100 years? The cost of energy will profoundly affect the future competitiveness of the American economy. As the Chinese and Indian economies grow, so will their demand for energy. And that will add further upward pressure to energy prices. To respond to the challenges of the new world economy, I am introducing legislation in seven key areas to build a foundation for a more competitive America. We must improve education, health care, trade law enforcement, the tax code, and savings. And we must bring a greater focus to energy research and development. Today, I introduce the Energy Competitiveness Act of 2006. We are trapped in an energy box. It is a box characterized by high imports, ever-increasing prices for oil and natural gas, and environmental danger. We must experiment with ways to break out of that box. To break out, we need an energy research effort modeled after the Manhattan Project, or the Apollo mission to the moon. America has a brilliant record of gathering the best minds. We meet challenges that may at first seem to be impossible. During World War II, the Manhattan Project brought together brilliant physicists and engineers to build an atomic bomb in 3 short years. And after President Kennedy described his vision to a joint session of Congress in May of 1961, the Apollo space program put a man on the moon in just 8 years. Looking back, these achievements were stunning. Both projects started out with no guarantee of success. Each could have ended in utter failure. Yet because of the talent, ingenuity, and focus of creative minds, they both succeeded. Breaking out of the energy box poses a similar challenge. Success is not guaranteed. But we have got to give it our best shot. Today I am introducing the Energy Competitiveness Act of 2006. My legislation would create a new energy research agency. It would extend key alternative energy tax relief. It would help our Nation face the challenges of a newly competitive global economy. It would help to move us into a new energy future. We have the greatest research scientists on the planet. We have the most technically talented workforce in the world. But we do not have the vigor that we need in energy research. Energy research is a backwater, compared to other research efforts in biotechnology, medicine, computers, and defense-oriented projects. With the Manhattan Project and the Apollo space program, America proved that we can gather the best talent for a focused mission and succeed. It is time that we begin a similar effort on energy. We need to create a new agency to initiate cutting-edge, innovative energy research and development aimed at taking us to a new energy future. Doing so is essential to our effort to improve our economic competitiveness. The new agency is modeled on DARPA--the Defense Advanced Research Projects Agency--in the Department of Defense. Among the revolutionary technologies that DARPA has developed are the internet and stealth technology for aircraft. DARPA has been a tremendous success. The National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine joined to form the Committee on Prospering in the Global Economy of the 21st Century. Norm Augustine chaired the Committee. Based on DARPA's achievements, last fall, the Committee recommended the creation of an ARPA-E: Advanced Research Projects Agency--Energy. This was one of a number of recommendations that the Committee made in its impressive report on the future competitive challenges that America faces. The Committee recommended that ARPA-E be designed to conduct transformative, out-of-the-box energy research. My bill proposes that ARPA-E be a small agency with a total of 250 people. A minimum of 180 of them would be technical staff. A director of the agency and four deputies would lead ARPA-E. I propose that ARPA-E be funded at $300 million in fiscal year 2007, $600 million in 2008, $1.1 billion in 2009, $1.5 billion in 2010, and $2.0 billion in 2011. We would require that the staff have a technical background. The agency would use the Experimental Personnel Authority designed for DARPA. That authority authorizes higher salaries than for typical Federal employees, and faster hiring, so that the agency could get to work quickly. To keep the intense, innovative focus that we want, technical staff would be limited to 3 to 4 years at the agency. Managers would be limited to 4 to 6 years. The director could give both groups extended terms of employment if the director so chose. For contracts, the agency would use the DARPA procedure. That procedure allows more flexible contracting arrangements than are normally possible under the Federal Acquisition Regulations. To ensure that ARPA-E would conduct innovative research, 75 percent of research projects initiated by ARPA-E would not be peer reviewed. The ARPA-E would be authorized to award cash prizes to encourage and accelerate energy research accomplishments. Finally, the bill would require a report by the end of fiscal year 2007 on whether ARPA-E would need its own energy research lab. The Energy Competitiveness Act would also increase our commitment to develop promising energy technologies. In the Energy Policy Act of 2005, last year's Energy bill, we established several important incentives to foster new forms of energy production and to encourage conservation. America's investment in alternative energy and conservation lags well behind that of other developed countries. The 2005 Energy bill put us on the right track by expanding the tax credit for electricity from renewable resources. It created incentives for coal gasification technologies. It encouraged investment in refineries that can handle North American feedstocks. And it established tax credits for energy- efficient buildings and equipment. Unfortunately, these provisions are either short-term or capped at insufficient levels. The Energy Competitiveness Act that I introduce today would bolster the first steps made in 2005. The bill that I introduce today would extend these important provisions and increase the amount of tax incentives available. The bill would extend through 2010 the tax credit for electricity produced from wind, biomass, geothermal, and other renewable sources. It would also increase the volume caps on Clean Renewable Energy Bonds and coal gasification tax credits. The bill would make permanent enhanced depreciation for new refining capacity that is capable of refining non-conventional feedstocks. North America has abundant energy resources that could ease our demand for oil from the Mideast. But today, many of our refineries are incapable of processing heavier feedstocks, such as oil from shale or tar sands. Making this provision permanent would provide the needed certainty for long-term investments in capital intensive refining projects. The Energy Competitiveness Act that I introduce today would encourage businesses to purchase alternative fuel and electric vehicles. And it would extend through 2010 many of the incentives from the 2005 bill that promote investment in energy-efficient buildings and equipment. We are seeing exciting new efforts in America to strengthen our energy competitiveness. We need to build on this foundation by creating an aggressive energy research agency that will push the limits of new technology and discover alternative energy sources. America has massive coal reserves. So coal gasification is receiving greater attention. Gasification involves breaking down coal under heat and pressure to create synthetic natural gas. We must address the environmental issues. But if this technology can be improved, then America will be able to take a huge step toward energy independence. There are exciting developments in wind energy. In Montana, the Judith Gap Wind Farm has been generating power at full capacity for several weeks. The farm includes 90 wind turbines. Each turbine can produce enough electricity for roughly 400 homes. The entire farm can produce the electricity needed to supply 300,000 customers. Montana was one of nine States that put in place more than 100 megawatts of wind power generation in 2005. And my State ranks in the top 15 States in the Nation for wind power capacity. Fusion is another possible area where aggressive research could lead to huge payoffs. Continuing research will help us to determine whether energy production through fusion is a practical option. Ethanol is also gaining as an alternative energy option. In 2005, Americans invested more than $850 million in ethanol plants. Ford Motor Company has plans for producing 250,000 vehicles in 2006 that will be able to use several different types of fuel, including ethanol. Brazil, with the help of ethanol, expects to become energy independent this year. Ethanol accounts for 20 percent of Brazil's fuel transport market. Seven out of every 10 cars in Brazil can run on ethanol, gasoline, or a mixture of both. In Iceland, all electricity generation is from renewable sources. Iceland is now taking the next step, and has started an initiative to replace the use of fossil fuels with hydrogen by 2050. To achieve this, in 1999, Icelanders founded a public-private partnership called Icelandic New Energy. This partnership is the main driver in hydrogen energy research and implementation in Iceland. Public hydrogen-fueled buses began service in December of last year. And experiments continue with hydrogen-driven consumer motorcycles, small cars, and fishing boats. We live in a much larger and more complex nation than Iceland or Brazil. But we can share their vision of a future fueled by alternative energy and improved conservation. There are also exciting developments in nanotechnology, solar power, energy-efficient materials, biomass, and green buildings. All of these are examples of possible directions for our Nation's energy future. But we need a more aggressive and focused research and development effort to push these alternatives. And we need an effort to create scientific breakthroughs to supplement existing technologies. We have got to give it our best shot. As President Franklin Roosevelt said, we must conduct ``bold, persistent experimentation.'' Our economic security is at stake. Our ability to compete in the new world economy is at stake. ARPA-E will help us move forward on existing technologies. It will help us to find new technologies that are not even imaginable today. And the tax incentives will keep us on the right track until more dramatic breakthroughs occur. I urge my colleagues to look closely at this legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to express my support for a fair and competitive rail system. Our agricultural economy cannot operate the way it should. We cannot receive the materials we need at a decent price and we cannot distribute our products at a fair price. We need to work on Federal rail policy that encourages competition. Farmers, businesses and consumers would all benefit from this policy. Montana's rail infrastructure is controlled by a single rail carrier controlling over 96 percent of all rail miles, over 95 percent all grain elevator and terminal sites, and moving more than 95 percent all wheat from the State. There is more control by a single railroad in Montana than any other State. The rail carrier controls and dictates the rail rates in all movements from Montana eastbound or westbound. As a result, agricultural shippers in some parts of the United States are paying the highest rail freight rates in exchange for sporadic and unreliable service. It's unacceptable. And it's not right that our Montana producers are expected to do business under these conditions. Our shippers need a clearly defined means for securing reliable service at a reasonable rate. It's fair. And it's the right thing to do. Agricultural shippers are unique because the party that bears the cost of rail transportation--the farmer--is not the party that negotiates the rate for that transportation--the grain elevator. Further, the farmer has no ability to pass on the costs associated with transportation to the customer. To ship a 26 car shipment of wheat from Medicine Lake, MT, to Portland is $3.42 per mile. To ship a 26 car shipment of wheat from Commerce City, CO, to Portland is $2.61 per mile and Atchison, KS, to Portland is $2.34 per mile. Montana rates are 31 percent higher than more distant points going to the same market because of lack of competition. Consider this example: A bushel of spring wheat sells for approximately $4.10. More than $1.00 of that amount, or up to one-third of the price a farmer receives, goes to pay for rail transportation. Stated another way, the average wheat farmer is working for the railroads up to four months out of the year. We need to establish a national rail policy that encourages competition that helps both producers and consumers alike. I'm committed to doing all I can to promote competition and to help our Montana producers. On Captive Rail Day, I urge my Senate colleagues to join together and work on legislation that will create a more fair and competitive freight rail system.

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, in Montana, we are as proud of Montana as Texans are of being from Texas; we just aren't as loud about it. Until today. I rise today to congratulate the University of Montana Grizzlies men's basketball team. For my colleagues who didn't stay awake last night, Montana's own Grizzlies, led by tournament MVP Virgil Matthews, upset the top-seeded Northern Arizona Lumberjacks 73 to 60 to win the Big Sky Conference tournament and earn an automatic bid to the NCAA tournament. This marks the second straight year that the Griz will join the ``big dance'' and could be the start of a dynasty for our very own Coach K. In only his second year, Coach Larry Krystkowiak has led his teams to conference titles in both years, and this marks the first time that the Griz have had back-to-back NCAA tournament appearances since 1991-1992. Coach K's achievements both on the court and off are phenomenal. As a player, he is the University of Montana's all-time leader in scoring and rebounding. He went on to a long and successful career in the NBA. He is a true Montana legend. And then the legend came home to lead his alma mater. And all the victories have been great. But the class and leadership of Coach K stands out much more. One example that sticks out in my mind happened just recently, when Coach K, along with several members of the Griz athletic department, all shaved their heads to both raise money for ``Coaches vs. Cancer'' and to show support for a friend who had recently been diagnosed with the disease. I can't say that Coach K looked very good, but his actions set an example throughout our State. Coach K is a class act, a great example of a dedicated Montanan, and I just wanted to take a moment to congratulate him and his team and wish them success with their upcoming March Madness. (The remarks of Mr. BAUCUS pertaining to the introduction of S. 2398 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in the years when I first began to serve in Congress, America faced severe problems with supplies of oil. For years, long gas lines, frustration, and questions about the security of our oil supply drove the public debate. Thirty years have passed. And, frankly, things have not changed all that much. We still use gasoline and coal at staggering rates. And we are still concerned about the security of our oil supply. We do not have lines at gas stations. But last year, prices rose to levels unimaginable just a few years ago. Prices for gasoline, heating oil, electricity, and natural gas have soared in recent years, hitting working families hard. In the past few weeks, we have seen a terrorist attack on Saudi Arabian oil facilities. We have seen oil workers kidnapped in Nigeria. We have seen Venezuelan President Hugo Chavez threaten that he would cut off our supply of oil from his country. And we have seen some question whether Iran's role as an oil supplier keeps other countries from properly addressing Iran's threat to nuclear proliferation. Energy provides one of America's greatest challenges for the 21st century. Our economy has been dependent on oil and coal for about 100 years. And since World War II, natural gas has become part of the equation. Will we continue this dependency for the next 100 years? The cost of energy will profoundly affect the future competitiveness of the American economy. As the Chinese and Indian economies grow, so will their demand for energy. And that will add further upward pressure to energy prices. To respond to the challenges of the new world economy, I am introducing legislation in seven key areas to build a foundation for a more competitive America. We must improve education, health care, trade law enforcement, the tax code, and savings. And we must bring a greater focus to energy research and development. Today, I introduce the Energy Competitiveness Act of 2006. We are trapped in an energy box. It is a box characterized by high imports, ever-increasing prices for oil and natural gas, and environmental danger. We must experiment with ways to break out of that box. To break out, we need an energy research effort modeled after the Manhattan Project, or the Apollo mission to the moon. America has a brilliant record of gathering the best minds. We meet challenges that may at first seem to be impossible. During World War II, the Manhattan Project brought together brilliant physicists and engineers to build an atomic bomb in 3 short years. And after President Kennedy described his vision to a joint session of Congress in May of 1961, the Apollo space program put a man on the moon in just 8 years. Looking back, these achievements were stunning. Both projects started out with no guarantee of success. Each could have ended in utter failure. Yet because of the talent, ingenuity, and focus of creative minds, they both succeeded. Breaking out of the energy box poses a similar challenge. Success is not guaranteed. But we have got to give it our best shot. Today I am introducing the Energy Competitiveness Act of 2006. My legislation would create a new energy research agency. It would extend key alternative energy tax relief. It would help our Nation face the challenges of a newly competitive global economy. It would help to move us into a new energy future. We have the greatest research scientists on the planet. We have the most technically talented workforce in the world. But we do not have the vigor that we need in energy research. Energy research is a backwater, compared to other research efforts in biotechnology, medicine, computers, and defense-oriented projects. With the Manhattan Project and the Apollo space program, America proved that we can gather the best talent for a focused mission and succeed. It is time that we begin a similar effort on energy. We need to create a new agency to initiate cutting-edge, innovative energy research and development aimed at taking us to a new energy future. Doing so is essential to our effort to improve our economic competitiveness. The new agency is modeled on DARPA--the Defense Advanced Research Projects Agency--in the Department of Defense. Among the revolutionary technologies that DARPA has developed are the internet and stealth technology for aircraft. DARPA has been a tremendous success. The National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine joined to form the Committee on Prospering in the Global Economy of the 21st Century. Norm Augustine chaired the Committee. Based on DARPA's achievements, last fall, the Committee recommended the creation of an ARPA-E: Advanced Research Projects Agency--Energy. This was one of a number of recommendations that the Committee made in its impressive report on the future competitive challenges that America faces. The Committee recommended that ARPA-E be designed to conduct transformative, out-of-the-box energy research. My bill proposes that ARPA-E be a small agency with a total of 250 people. A minimum of 180 of them would be technical staff. A director of the agency and four deputies would lead ARPA-E. I propose that ARPA-E be funded at $300 million in fiscal year 2007, $600 million in 2008, $1.1 billion in 2009, $1.5 billion in 2010, and $2.0 billion in 2011. We would require that the staff have a technical background. The agency would use the Experimental Personnel Authority designed for DARPA. That authority authorizes higher salaries than for typical Federal employees, and faster hiring, so that the agency could get to work quickly. To keep the intense, innovative focus that we want, technical staff would be limited to 3 to 4 years at the agency. Managers would be limited to 4 to 6 years. The director could give both groups extended terms of employment if the director so chose. For contracts, the agency would use the DARPA procedure. That procedure allows more flexible contracting arrangements than are normally possible under the Federal Acquisition Regulations. To ensure that ARPA-E would conduct innovative research, 75 percent of research projects initiated by ARPA-E would not be peer reviewed. The ARPA-E would be authorized to award cash prizes to encourage and accelerate energy research accomplishments. Finally, the bill would require a report by the end of fiscal year 2007 on whether ARPA-E would need its own energy research lab. The Energy Competitiveness Act would also increase our commitment to develop promising energy technologies. In the Energy Policy Act of 2005, last year's Energy bill, we established several important incentives to foster new forms of energy production and to encourage conservation. America's investment in alternative energy and conservation lags well behind that of other developed countries. The 2005 Energy bill put us on the right track by expanding the tax credit for electricity from renewable resources. It created incentives for coal gasification technologies. It encouraged investment in refineries that can handle North American feedstocks. And it established tax credits for energy- efficient buildings and equipment. Unfortunately, these provisions are either short-term or capped at insufficient levels. The Energy Competitiveness Act that I introduce today would bolster the first steps made in 2005. The bill that I introduce today would extend these important provisions and increase the amount of tax incentives available. The bill would extend through 2010 the tax credit for electricity produced from wind, biomass, geothermal, and other renewable sources. It would also increase the volume caps on Clean Renewable Energy Bonds and coal gasification tax credits. The bill would make permanent enhanced depreciation for new refining capacity that is capable of refining non-conventional feedstocks. North America has abundant energy resources that could ease our demand for oil from the Mideast. But today, many of our refineries are incapable of processing heavier feedstocks, such as oil from shale or tar sands. Making this provision permanent would provide the needed certainty for long-term investments in capital intensive refining projects. The Energy Competitiveness Act that I introduce today would encourage businesses to purchase alternative fuel and electric vehicles. And it would extend through 2010 many of the incentives from the 2005 bill that promote investment in energy-efficient buildings and equipment. We are seeing exciting new efforts in America to strengthen our energy competitiveness. We need to build on this foundation by creating an aggressive energy research agency that will push the limits of new technology and discover alternative energy sources. America has massive coal reserves. So coal gasification is receiving greater attention. Gasification involves breaking down coal under heat and pressure to create synthetic natural gas. We must address the environmental issues. But if this technology can be improved, then America will be able to take a huge step toward energy independence. There are exciting developments in wind energy. In Montana, the Judith Gap Wind Farm has been generating power at full capacity for several weeks. The farm includes 90 wind turbines. Each turbine can produce enough electricity for roughly 400 homes. The entire farm can produce the electricity needed to supply 300,000 customers. Montana was one of nine States that put in place more than 100 megawatts of wind power generation in 2005. And my State ranks in the top 15 States in the Nation for wind power capacity. Fusion is another possible area where aggressive research could lead to huge payoffs. Continuing research will help us to determine whether energy production through fusion is a practical option. Ethanol is also gaining as an alternative energy option. In 2005, Americans invested more than $850 million in ethanol plants. Ford Motor Company has plans for producing 250,000 vehicles in 2006 that will be able to use several different types of fuel, including ethanol. Brazil, with the help of ethanol, expects to become energy independent this year. Ethanol accounts for 20 percent of Brazil's fuel transport market. Seven out of every 10 cars in Brazil can run on ethanol, gasoline, or a mixture of both. In Iceland, all electricity generation is from renewable sources. Iceland is now taking the next step, and has started an initiative to replace the use of fossil fuels with hydrogen by 2050. To achieve this, in 1999, Icelanders founded a public-private partnership called Icelandic New Energy. This partnership is the main driver in hydrogen energy research and implementation in Iceland. Public hydrogen-fueled buses began service in December of last year. And experiments continue with hydrogen-driven consumer motorcycles, small cars, and fishing boats. We live in a much larger and more complex nation than Iceland or Brazil. But we can share their vision of a future fueled by alternative energy and improved conservation. There are also exciting developments in nanotechnology, solar power, energy-efficient materials, biomass, and green buildings. All of these are examples of possible directions for our Nation's energy future. But we need a more aggressive and focused research and development effort to push these alternatives. And we need an effort to create scientific breakthroughs to supplement existing technologies. We have got to give it our best shot. As President Franklin Roosevelt said, we must conduct ``bold, persistent experimentation.'' Our economic security is at stake. Our ability to compete in the new world economy is at stake. ARPA-E will help us move forward on existing technologies. It will help us to find new technologies that are not even imaginable today. And the tax incentives will keep us on the right track until more dramatic breakthroughs occur. I urge my colleagues to look closely at this legislation. I ask unanimous consent that the text of the bill be printed in the Record.