Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I thank the Chair. I thank the leader very much for the allocation of time.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, on December 29 of last year I received a letter from the Secretary of the Treasury, John Snow, asking that Congress increase the Federal deficit. This is extremely important, obviously; that is, whether we should and the degree to which we should increase the Federal debt limit. But we don't have any scheduled debate on this and I don't think, frankly, the leadership wants to schedule debate on whether we should and the degree to which we should increase the Federal debt. I think the reason is pretty clear. It is because it is embarrassing. It is an embarrassment that our Federal debt is growing so much and at a rapid rate. I say that in part because the Secretary says the United States will hit the limit in the middle of this month. That is not too many days away. I hope very much this body exercises its responsibility to do what it should do and let's have a discussion on our fiscal situation: How great is the debt? What should be done about it? How big is the deficit and what should be done about that? Where are we? Where are we headed? What are the implications? These are very real questions that affect the financial security of the United States and which affect very greatly individual Americans. I very much hope we have that debate of the points I think we should consider. It is our responsibility to address the implications of our huge Federal debt and deficits. We have a responsibility to do that. That is our job. It is much more our job to address that than it is some other things I think we do here in the Senate, and I am going to do what I can to urge my colleagues and urge, frankly, anybody listening and watching to begin to think about what is going on here because this is critical. Let's review some of the facts about the debt limit. Currently, our Treasury, the U.S. Treasury, is authorized to issue debt totaling over $8 trillion. That is the current statute. Last year's budget resolution proposed an increase in that authorization of $781 billion. That is an increase. That would be the fourth largest debt limit increase in the Nation's history. If I might briefly indicate in a graphic way literally what that means. This basically is a chart showing the amount of Federal debt limit increases the Congress has enacted over various years going back not too long ago--1986 up to the present. The red bars here indicate the amount of the debt increase Congress has enacted because our Federal debt was going up so quickly. You can see there was a big increase back in 1990. That was the time when, frankly, our country was under a little bit of pressure and the debt was going up. Between 2000, 2001, we did not have any debt increases. But what has happened lately? You can see all these huge increases in the last 4 years. In 2002, the Congress increased the national debt by $450 billion. Here is a whopper. In 2003, Congress increased the Federal debt by close to $1 trillion. The next year it increased the Federal debt by $800 billion, four-fifths of a trillion dollars in 1 year. Last year it did not have to increase the debt because the $800 billion carried us over through 2005, but here again we have to increase the Federal debt by $781 billion. The debate point is that in the last years there have been big increases in the Federal debt. Why? Because we have been borrowing so much in this country, Congress has authorized and the President has proposed very large expenses. More striking, though, is that total increase has occurred since the year 2002. During this administration, America's debt, the total deficit, has increased by $3 trillion. You can imagine. Since 2002, if you add up all the increases in the Federal debt, our Federal debt has increased by $3 trillion. That is not the level now; it is close to $9 trillion if it is increased further. But this is the increase--and those increases have occurred only in the last 4 years. That is a 40-percent increase in the entire Federal debt accrued by our country in its entire history. Forty percent of the increase in the Federal debt has occurred in the last 4 years. Who is lending the Federal Government these funds? Ask yourself that question. That is a lot of debt out there. Some of it is internal. The U.S. Government borrows from Social Security, and we all know that pretty soon those chickens are going to come home to roost. We can't do that much longer. We will have to start paying back all that is due to Social Security--and that is an awful lot. Much of the borrowing is from American citizens and businesses. But what is more alarming is the trend where much more of the debt is held by foreigners and central banks in foreign countries; that is, the amount of debt held by foreign governments is much worse. Five years ago foreigners held about $1 trillion of our Federal debt. What is that number today? It is double. In over 5 years the amount has doubled. The number held by foreigners has now doubled to $2.2 trillion. Today, Japan holds two-thirds of a trillion dollars of our foreign debt. China holds a quarter of a trillion dollars. China's reserve is scheduled to be about $1 trillion by the end of this year. The rate of increase in Federal debt held by foreigners--simply by foreign banks, central banks--is alarming. I tend not to be an alarmist. In fact, sometimes people say: Max, you are kind of easy going, you don't get too upset, and so on. But I am quite concerned about these trends. They are worse. I might also add that the debt held by foreigners after World War II was extremely high, too. It was. But the composition of that debt-- investments held by foreigners--was just that: investment in infrastructure in the United States and capital assets; that is, investments foreigners made in the United States after World War II. The composition was not much debt. It is securities to finance the borrowing by Uncle Sam, and we have to pay back the interest on that borrowing. The question is, How long can we continue to borrow all of that money? That is the basic question. What are the implications to our foreign policy as foreigners increase their holdings of U.S. debt? What does that mean? What might happen? Try to be wholly analytical about this. What does that mean? What percentage of the American taxes are being used to pay interest on that debt? How much are American taxpayers paying to foreigners directly through interest on the national debt? I think that should be debated. That is something I think is quite concerning, particularly with the large numbers. These are just some of the issues I think we should debate. We also should remember--this is not rocket science--that ordinarily there are limits on debt. Ordinarily, credit card companies or businesses or banks just do not automatically increase debt, which is happening in this country in the last 4 years as I showed in that chart. It has been automatic. We have increased the debt. Think a little bit about the limits an institution holds on a family and what the family wants to borrow. What about a credit card and a maximum balance. Most Americans have credit cards. Most Americans know there is a maximum balance on that credit card. You can only borrow so much. After a certain limit, you can't borrow any more. That is it. Wouldn't it be great if each individual could say: We are going to ask the credit card company to increase the debt, and do it as the Congress is doing right now. We will just increase the debt limit. A person can't ask a bank willy-nilly to increase the maximum allowance on a credit card. There is a good reason for that. There have to be limits. We have to live within our means. Take an ordinary business, a bank loan to a business. The bank pays a lot of attention to how that business is being run, whether it is being run well. It pays a lot of attention. One could ask: Is the Treasury or foreigners or someone who holds the debt asking how well we are running our business? I urge the majority leader to schedule time to hold a thorough debate on this issue. This is real. This is really real. We all know this cannot continue. We really do not know at what point, if we continue to increase the debt, there might be some cataclysmic event. We just don't know that. But we do know that with every debt limit increase we are accelerating the time when something nasty or bad might happen economically. Already, some countries are starting to move out of dollars into other currencies. China is on the margin of looking at holding currencies other than the dollar. Many countries worldwide are becoming more self-sufficient. They don't need the United States as much now as they once did. They are becoming more independent. They are going more in their own direction. They are doing what they think makes sense for them economically. Clearly, the bottom line is we have to live within our means. Every time we increase the debt limit we are not within our means. I urge us to have a debate so we can know what we really should be doing. I thank the Chair.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I--along with Senator Hatch and Senator Stabenow--introduce the Trade Competitiveness Act of 2006, a bill that will provide the administration with additional tools, resources, and accountability to enforce international trade agreements. This bill is the first in a comprehensive package of legislation that I will introduce during the next few weeks to bolster American competitiveness. The United States is still a world leader in almost every way imaginable. But we need a bold agenda to maintain America's economic leadership and preserve high-wage American jobs here at home. I just got back from China and India, and that trip only underscored the challenges we face in the global economy. To rise to this challenge, my bills will address trade and all other keystones of America's competitiveness--education, energy, health, savings, research, and tax policy. But today, we start with international trade. Trade and investment in international markets is a challenge that I have asked U.S. companies to embrace. I want American companies to get aggressive about getting their products and their people into foreign markets to bolster the U.S. presence around the world and bring jobs and dollars back home. But when American companies embrace these new market opportunities, they need to know that the American government will back them up. They need to know that we will do all that we can to make sure our trading partners play by the rules. That is why trade enforcement is critical. And this bill will step up trade enforcement in five ways. Number one: Under my legislation, every year, the USTR will be required to identify the biggest trade barriers hurting the U.S. economically. The USTR will have to get Congress's input. And the USTR will be required to act, through the WTO or in some other way, to break those barriers down. Number two: My bill will create a ``Chief Trade Enforcement Officer'' at the USTR. This person will be confirmed by the Senate. His or her entire job will be to investigate enforcement concerns and recommend action to the USTR. This person will also answer to Congress when it has concerns about enforcement. Number three: This new Trade Enforcement Officer is going to have some backup. My bill will create a ``Trade Enforcement Working Group'' in the Executive Branch. It will be chaired by the USTR, and include representatives of the Departments of Commerce, State, Agriculture, and Treasury. They will help the Chief Trade Enforcement Officer get the job done. Number four: This new Trade Enforcement Officer will need resources to get the job done. My bill provides $5 million additional to the USTR for enforcement. Right now, the President's Fiscal Year 2007 budget effectively cuts enforcement funds. Number five: This bill will send a strong message to the International Monetary Fund. It will urge our Administration to tell the IMF to get aggressive with countries that manipulate their own currency to obtain a trade advantage. It will also urge the IMF to undertake reforms so it becomes more transparent and more representative of the emerging economies in Asia. Senator Hatch wanted to make sure that the Federal Government does not lose sight of Federal and State sovereignty when negotiating, implementing, and enforcing trade agreements. That's an important issue to consider, and I'm glad it's in this bill. The bottom line is that improving enforcement of our trade agreements will allow American companies to play hard and win big in the global marketplace. A level playing field is the foundation of American competitiveness on trade. This bill will help to provide it.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to support one of our Nation's most important domestic policy issues--national security. I understand that some would expect me to say competitiveness or health care or farms or the environment or education, but what is happening with national security today greatly concerns me. In the future, I will continue to address different aspects of this issue of national security. I will address the war on terror and future threats to our Nation. But today I will focus on the primary point of failure in keeping the United States safe: how we are meeting our responsibility to the troops. The support of our troops is at the core of every national security issue we face. I urge Members of Congress from both sides of the aisle to join me in providing our troops with the tools they need to succeed. We are so fortunate to have such a vast number of Americans who are committed to fighting for our country, to laying their lives on the line every day to protect the freedoms we enjoy. The first thing we must do for our warfighters is to keep them safe. I want to know why, after 4 years of fighting the war on terror, our soldiers do not have the very best that they need to get the job done. Last week, President Bush presented his fiscal year 2007 budget to the Congress. Even though the defense budget accounts for most of the discretionary budget, we still have service members without the equipment they need. Last month, a Pentagon study revealed that dozens of American lives, soldiers' lives, would not have been lost in Iraq if soldiers had the proper side body armor. To make matters worse, the military is already operating with an equipment shortage. When troops deploy overseas, often most of their equipment is left behind, left in the theater and not replaced at armories and air wings. This leaves us vulnerable at home and dangerously affects national security. How will we be protected if our soldiers are not? The administration proposes to spend $439 billion on national security this year. That is 45 percent more Pentagon funding than when President Bush took office 5 years ago. There is a war supplemental on the way--more money. Let me make it clear that I do not oppose the defense budget. I respect that it is the job of the Secretary of Defense to assess the needs of the military in the coming year. I commend him. For example, I commend him on increasing the funding for special operations. But despite this vast budget, our troops are still taking a hit. The funding for high-tech weapons systems doubled in current dollars from $42 billion in 1996 to $84 billion in 2007. In order to pay for these big-ticket items, the 2007 budget reins in personnel costs. The military pay raise is only 2.2 percent. Previous years, it has been between 3 and 4 percent. During the Clinton administration, we saw military pay raises as high as 4.8 percent. It is unacceptable to me that the President proposes an increase in pay for our military that is less than the current rate of inflation, which is 3.4 percent. Our military personnel are losing ground with this so-called increase, and this at a time when we are asking so much of them--a time when we are at war. Troops have had multiple and lengthy deployments. Haven't we all heard the stories of 18-year-olds swiftly driving humvees down the roads of Iraq, praying that they will avoid roadside bombs and shoulder-fired missiles? Some of these young men and women joined the military after 9/11 seeking retribution; others joined intent on finding a way to college. They are all patriots who should be honored. I am concerned that we are in a fight right now between force structure and weapons systems. Our troops are caught in the crossfire. If they lose, we lose--at a time when we desperately need boots on the ground, particularly here at home. We are well aware that our National Guard has risen to the challenges of the war on terror in an unprecedented way. Our national security, however, is compromised on the homefront. Our States do not have the ability to respond with sufficient combat structure to domestic security missions, natural emergencies, and disasters. Former Secretary of Defense Melvin Laird noted last week: When you call out Guard and Reserve units, you call out America. Our Active-Duty Forces have fought bravely on our behalf, and the Guard has fought with them. Montana is just one of the States with an infantry battalion that is facing major changes due to the Army's proposal to reduce 34 combat brigades to 28. We have based much of our State's military strategy on the capabilities and equipment our infantry battalion provides. The combat brigades provide a balance of combat force structure to the combat service support units already in the State. This balance is essential to ensure that we have the full spectrum of capabilities within Montana for homeland defense and national security. I am introducing a bill today which will ensure that each adjutant general will have the resources of 50 percent of their National Guard troops available to them at all times in the State. Deployments overseas will not be allowed to exceed that number. This bill recognizes the national security contribution of the Air National Guard and the Army National Guard, in particular the brigade combat teams and their subordinate units. This will help the country to achieve a standard level of emergency preparedness. When those troops come home, Active and Reserve, they must come home to jobs and veterans' benefits. That is the only right thing to do. In its 2007 budget for the Department of Veterans Affairs, the administration calls for a 6-percent increase in total veterans spending to $36 billion. Much of this increase, however, depends on the adoption of new health care fees. For example, the budget proposes a $250 enrollment fee and an increase in prescription drug copayments to $15, from $8, for higher income, less disabled veterans. If these new fees are adopted, they would dissuade 200,000 veterans from even enrolling in the VA health care system. The veterans themselves are paying for the increase to the veterans budget. That is what is happening. I frequently hear that questioning issues of national security undermines the missions of our troops and that some Members of Congress just criticize and do not have a plan. Well, here is the plan: It is imperative that we provide everything possible for our troops in order to keep the United States safe. We have a responsibility to speak up on their behalf because I firmly believe that when we neglect our troops-- including our National Guard men and women--we are gambling with the national security of our Nation. We have the best soldiers, airmen, marines, and sailors in the world. I have tremendous respect for all of them, and I am committed to helping them succeed. We are engaged in a war now, and we must give our troops the tools to win overseas while simultaneously protecting our homefront. I urge my colleagues to pay close attention to this bill I am introducing. I hope that at the appropriate time, we can get it enacted, basically get some more balance to our force structure, and also make sure our National Guard and Army and Air Guard have the support they need, not only for themselves but to keep our country safe and secure.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to support one of our Nation's most important domestic policy issues--national security. I understand that some would expect me to say competitiveness or health care or farms or the environment or education, but what is happening with national security today greatly concerns me. In the future, I will continue to address different aspects of this issue of national security. I will address the war on terror and future threats to our Nation. But today I will focus on the primary point of failure in keeping the United States safe: how we are meeting our responsibility to the troops. The support of our troops is at the core of every national security issue we face. I urge Members of Congress from both sides of the aisle to join me in providing our troops with the tools they need to succeed. We are so fortunate to have such a vast number of Americans who are committed to fighting for our country, to laying their lives on the line every day to protect the freedoms we enjoy. The first thing we must do for our warfighters is to keep them safe. I want to know why, after 4 years of fighting the war on terror, our soldiers do not have the very best that they need to get the job done. Last week, President Bush presented his fiscal year 2007 budget to the Congress. Even though the defense budget accounts for most of the discretionary budget, we still have service members without the equipment they need. Last month, a Pentagon study revealed that dozens of American lives, soldiers' lives, would not have been lost in Iraq if soldiers had the proper side body armor. To make matters worse, the military is already operating with an equipment shortage. When troops deploy overseas, often most of their equipment is left behind, left in the theater and not replaced at armories and air wings. This leaves us vulnerable at home and dangerously affects national security. How will we be protected if our soldiers are not? The administration proposes to spend $439 billion on national security this year. That is 45 percent more Pentagon funding than when President Bush took office 5 years ago. There is a war supplemental on the way--more money. Let me make it clear that I do not oppose the defense budget. I respect that it is the job of the Secretary of Defense to assess the needs of the military in the coming year. I commend him. For example, I commend him on increasing the funding for special operations. But despite this vast budget, our troops are still taking a hit. The funding for high-tech weapons systems doubled in current dollars from $42 billion in 1996 to $84 billion in 2007. In order to pay for these big-ticket items, the 2007 budget reins in personnel costs. The military pay raise is only 2.2 percent. Previous years, it has been between 3 and 4 percent. During the Clinton administration, we saw military pay raises as high as 4.8 percent. It is unacceptable to me that the President proposes an increase in pay for our military that is less than the current rate of inflation, which is 3.4 percent. Our military personnel are losing ground with this so-called increase, and this at a time when we are asking so much of them--a time when we are at war. Troops have had multiple and lengthy deployments. Haven't we all heard the stories of 18-year-olds swiftly driving humvees down the roads of Iraq, praying that they will avoid roadside bombs and shoulder-fired missiles? Some of these young men and women joined the military after 9/11 seeking retribution; others joined intent on finding a way to college. They are all patriots who should be honored. I am concerned that we are in a fight right now between force structure and weapons systems. Our troops are caught in the crossfire. If they lose, we lose--at a time when we desperately need boots on the ground, particularly here at home. We are well aware that our National Guard has risen to the challenges of the war on terror in an unprecedented way. Our national security, however, is compromised on the homefront. Our States do not have the ability to respond with sufficient combat structure to domestic security missions, natural emergencies, and disasters. Former Secretary of Defense Melvin Laird noted last week: When you call out Guard and Reserve units, you call out America. Our Active-Duty Forces have fought bravely on our behalf, and the Guard has fought with them. Montana is just one of the States with an infantry battalion that is facing major changes due to the Army's proposal to reduce 34 combat brigades to 28. We have based much of our State's military strategy on the capabilities and equipment our infantry battalion provides. The combat brigades provide a balance of combat force structure to the combat service support units already in the State. This balance is essential to ensure that we have the full spectrum of capabilities within Montana for homeland defense and national security. I am introducing a bill today which will ensure that each adjutant general will have the resources of 50 percent of their National Guard troops available to them at all times in the State. Deployments overseas will not be allowed to exceed that number. This bill recognizes the national security contribution of the Air National Guard and the Army National Guard, in particular the brigade combat teams and their subordinate units. This will help the country to achieve a standard level of emergency preparedness. When those troops come home, Active and Reserve, they must come home to jobs and veterans' benefits. That is the only right thing to do. In its 2007 budget for the Department of Veterans Affairs, the administration calls for a 6-percent increase in total veterans spending to $36 billion. Much of this increase, however, depends on the adoption of new health care fees. For example, the budget proposes a $250 enrollment fee and an increase in prescription drug copayments to $15, from $8, for higher income, less disabled veterans. If these new fees are adopted, they would dissuade 200,000 veterans from even enrolling in the VA health care system. The veterans themselves are paying for the increase to the veterans budget. That is what is happening. I frequently hear that questioning issues of national security undermines the missions of our troops and that some Members of Congress just criticize and do not have a plan. Well, here is the plan: It is imperative that we provide everything possible for our troops in order to keep the United States safe. We have a responsibility to speak up on their behalf because I firmly believe that when we neglect our troops-- including our National Guard men and women--we are gambling with the national security of our Nation. We have the best soldiers, airmen, marines, and sailors in the world. I have tremendous respect for all of them, and I am committed to helping them succeed. We are engaged in a war now, and we must give our troops the tools to win overseas while simultaneously protecting our homefront. I urge my colleagues to pay close attention to this bill I am introducing. I hope that at the appropriate time, we can get it enacted, basically get some more balance to our force structure, and also make sure our National Guard and Army and Air Guard have the support they need, not only for themselves but to keep our country safe and secure.

Mr. BAUCUS. Mr. President, today I--along with Senator Hatch and Senator Stabenow--introduce the Trade Competitiveness Act of 2006, a bill that will provide the administration with additional tools, resources, and accountability to enforce international trade agreements. This bill is the first in a comprehensive package of legislation that I will introduce during the next few weeks to bolster American competitiveness. The United States is still a world leader in almost every way imaginable. But we need a bold agenda to maintain America's economic leadership and preserve high-wage American jobs here at home. I just got back from China and India, and that trip only underscored the challenges we face in the global economy. To rise to this challenge, my bills will address trade and all other keystones of America's competitiveness--education, energy, health, savings, research, and tax policy. But today, we start with international trade. Trade and investment in international markets is a challenge that I have asked U.S. companies to embrace. I want American companies to get aggressive about getting their products and their people into foreign markets to bolster the U.S. presence around the world and bring jobs and dollars back home. But when American companies embrace these new market opportunities, they need to know that the American government will back them up. They need to know that we will do all that we can to make sure our trading partners play by the rules. That is why trade enforcement is critical. And this bill will step up trade enforcement in five ways. Number one: Under my legislation, every year, the USTR will be required to identify the biggest trade barriers hurting the U.S. economically. The USTR will have to get Congress's input. And the USTR will be required to act, through the WTO or in some other way, to break those barriers down. Number two: My bill will create a ``Chief Trade Enforcement Officer'' at the USTR. This person will be confirmed by the Senate. His or her entire job will be to investigate enforcement concerns and recommend action to the USTR. This person will also answer to Congress when it has concerns about enforcement. Number three: This new Trade Enforcement Officer is going to have some backup. My bill will create a ``Trade Enforcement Working Group'' in the Executive Branch. It will be chaired by the USTR, and include representatives of the Departments of Commerce, State, Agriculture, and Treasury. They will help the Chief Trade Enforcement Officer get the job done. Number four: This new Trade Enforcement Officer will need resources to get the job done. My bill provides $5 million additional to the USTR for enforcement. Right now, the President's Fiscal Year 2007 budget effectively cuts enforcement funds. Number five: This bill will send a strong message to the International Monetary Fund. It will urge our Administration to tell the IMF to get aggressive with countries that manipulate their own currency to obtain a trade advantage. It will also urge the IMF to undertake reforms so it becomes more transparent and more representative of the emerging economies in Asia. Senator Hatch wanted to make sure that the Federal Government does not lose sight of Federal and State sovereignty when negotiating, implementing, and enforcing trade agreements. That's an important issue to consider, and I'm glad it's in this bill. The bottom line is that improving enforcement of our trade agreements will allow American companies to play hard and win big in the global marketplace. A level playing field is the foundation of American competitiveness on trade. This bill will help to provide it.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I join the chairman of the Finance Committee, Senator Grassley, in commending our Finance Committee staff on the report that we release today. This report deals with an important public safety matter. The Food and Drug Administration approval process has long been considered the gold standard in this country. We rely on the FDA to review drugs and to review medical devices. We rely on the FDA to tell us, by providing a seal of approval, that drugs and devices are safe and that they are effective. While all drugs and devices carry some risk, some are more risky than others. But if the FDA determines a drug or device is safe to bring to the market, Americans generally feel we can use the treatment without undue concern. We Americans rely on the FDA to ensure that manufacturers provide sufficient warnings of their products' risks so that health care providers and patients can make informed health care decisions. The FDA has a complex approval process. A review team, including scientists, doctors, and specialists, surveys all the data and makes a recommendation regarding whether to approve a drug or device. The review team then forwards its recommendation to management for review. This process can be lengthy and intense. Last year, concerns were brought to the Finance Committee regarding how the review process had unfolded in the case of a device known as the VNS Therapy system. Cyberonics makes the VNS system and was seeking approval of the device for use in patients with treatment-resistant depression. Chairman Grassley and I asked our committee staffs to look into what had gone on. The Finance Committee has the responsibility for the Medicare and Medicaid Programs and the millions of Americans who receive health care, including the use of safe and proper medical devices. Medicare and Medicaid only pay for drugs and devices which FDA has approved. So approval affects patients' budgets and the Federal budget, as well. In the case of the VNS Therapy system, the FDA review team was comprised of more than a dozen FDA staff, including doctors, scientists, safety officers, and statisticians. This review team unanimously recommended against FDA approval. The team argued that the data were insufficient to justify approval and that additional premarket testing was in order. Three levels of management concurred with the team's recommendation. The uppermost manager--the Director of the Center for Devices--disagreed. With the stroke of a pen, he overruled the analysis and conclusions of his staff, and he approved the device. Now the FDA seal of approval has been attached to that VNS Therapy system by one person, over the objections of several technical experts who studied the device. Without this report from the Finance Committee, the public would not know that the team of scientists and doctors who reviewed this device did not believe it should be approved. Without this report, there would be no way for providers and patients to make fully informed health care decisions because they would not be aware of all of the risks. In short, we present this report out of a concern for public safety. We believe that doctors and patients considering this device should know that it was approved over the objection of a team of seasoned scientists. It is important for the public to know what the FDA scientists and doctors thought about the risk to which patients would be exposed. The FDA has not made public any information regarding the level of scientific dissent. So I am glad we have this report. I am greatly concerned about this unusual turn of events at the FDA. I hope this is not a sign of things to come. I hope that FDA approval can remain the gold standard, and I hope Medicare and Medicaid can continue to pay for FDA-approved products knowing they are safe. I thank Chairman Grassley for his work. He has worked diligently, as he always does, particularly when wrongs should be exposed. I appreciate it when we can work together to improve the efficacy and safety of American health care. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the list of motions to instruct that we have thus far are in this order: No. 1 is the Grassley motion regarding AMT asking for both AMT relief and tax cuts. No. 2 is the Kennedy capital gains motion, which is in opposition to the former. No. 3 is the Lott motion on AMT. No. 4 is Senator Menendez's AMT capital gains. No. 5 is Senator Santorum with respect to tuition deduction. No. 6 is Senator Schumer with respect to tuition deduction. No. 7 is Senator Hatch's motion with respect to R&D. No. 8 is Senator Stabenow's motion with respect to R&D and capital gains. That is where we are at this point. That is eight. There are a total of 16 on my list, and it is my hope that by the time we get through the eight maybe Senators will be a little less inclined to insist on recorded votes. But those are the first 8, with a total of 16 motions to instruct, which I understand will all be in order this morning. I yield the floor. Motions to Instruct Conferees

Mr. BAUCUS. Mr. President, I would like to give a list of pending motions, and I ask unanimous consent that the time not be charged against the 2 minutes allocated to explaining the motion.

Mr. BAUCUS. Mr. President, I urge my colleagues to oppose this motion. Why is that? Essentially, we must choose between extending protection from the AMT tax increase this year for 17 million working families or extending $50 billion in investor tax breaks which do not expire until 3 years from now, after the next Presidential election. That is the choice. This motion says you can have it all. This motion says there is no deficit problem. This motion says: Don't worry, be happy. Our Senate bill, supported by 66 Senators, chose to protect millions of working families from the 2006 AMT hit rather than extending 2009 tax breaks for investors. The truth is, we cannot have it all. There is a deficit problem. Something will have to give, and I wish we could realistically hope the House will be willing to agree to a significant amount of offsets, crackdowns on tax shelters, so we could do more on this tax bill, but I am not optimistic. I have deep experience with the House, and they will not do so, and that is forcing us to choose. That is why we must choose. Is it the R&D credit? Is it incentives for businesses to hire the hard-to-employ? Is it a true AMT hold-harmless? Those are our choices. The House made their choice. They chose not to protect 17 million families threatened by the AMT. Some items can wait until 2007, 2008, or even 2009. Capital gains can wait. AMT cannot wait. Protection from that tax increase--that is, the AMT--which expires now, must be extended this year, not capital gains. That AMT protection expired in December, and 17 million working families are waiting to hear our choice. I urge my colleagues not to embark on this dangerous course. I urge them to reject this motion. We have to choose. We cannot have it all. I urge my colleagues to be responsible.

Mr. BAUCUS. Mr. President, I yield the 1 minute on our side 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, I rise today to speak to you again about a special place in my state, Libby, MT. It is important for my colleagues to know that the vote on the budget point of order affects the lives of Libby residents dramatically. It affects the thousands of people who are sick and the hundreds more who will die. I ask my colleagues to vote on the merits of this bill. Budget points of order should not be misused. They should not impede consideration of this important legislation. The budget point of order should not be used to hurt the folks in Libby. They have suffered enough. The situation in Libby is unique. The asbestos in Libby is different. It is a much different asbestos than other parts of the country. It is much more pernicious. It is wicked, awful stuff. Libby is different because we are talking about community exposure to asbestos--not a few workers. The entire Libby community was exposed to asbestos because of the vermiculite mine and mill. Until the mid-1970s in Libby, W.R. Grace milled vermiculite from a mountain in Libby. W.R. Grace exposed the entire community to this deadly disease. I have been up there. I have been at that site. It is an unbelievably dusty mess. This asbestos bill will make W.R. Grace pay Libby residents for the intentional harm this company caused these people. I do not use the word ``intentional'' loosely because it was intentional. Documents show it was intentional. Documents show the company knew it was harmful, that it was sending this stuff out to the people in Libby, and that many of them would become very ill and would die. Not only were mine workers employed by W.R. Grace exposed to high levels of asbestos, but the mill's ventilation stack released 5,000 pounds of asbestos every day. Mill workers swept dust outside. Often, they could not even see their broom handles because it was so dirty with asbestos. They dumped it down the mountainside. White dust covered the entire town. The layers of rock where people found the vermiculite contained harmful asbestos and this vermiculite in Libby is laced with a particularly dangerous type of asbestos, called tremolite. Asbestos in Libby is tremolite asbestos rather than the more common, chrysotile asbestos. Tremolite asbestos is a significantly more toxic than chrysotile asbestos. The Libby tremolite disease process is different. It's far more disabling and deadly than ordinary asbestos, as bad as ordinary asbestos is and 76 percent of diagnosed patients progress to serious disease or death in Libby, MT. Just compare this to chrysotile asbestos, where 25 percent of diagnosed patients progress to serious disease or death. People in Libby are uniquely affected by asbestos related disease. They are sick. They suffer from asbestos-related disease at a rate 40- to-60 times the national average. And people from Libby suffer from the asbestos cancer, mesothelioma, at a rate 100 times the national average. The asbestos has contaminated the whole town. In addition to the mines and the mill, extensive asbestos contamination is found in homes, in ball fields, and in schools. It's found in the playgrounds and in the gardens. A recent study even found asbestos contamination in the tree bark. I have worked very hard with the Judiciary Committee and my colleagues, the chairman of committee, Senator Specter, and Senator Leahy, ranking member, to tailor a solution that addresses the unique problems in Libby. We are extremely grateful to Chairman Specter and Senator Leahy for all their work to protect Libby. They have worked very hard. They have sent staffers to Libby, MT. They have seen it. I am thankful for the staff they have sent to Libby to see how bad this stuff is. I urge my colleagues not to use this point of order to kill the bill and to kill all this hard work. Many Senators have worked very hard for years to try to find a solution, a way to get compensation to people who otherwise will not get compensation and who desperately deserve it. The people who suffer from asbestos-related diseases need our help. Let's stand up for the people of Libby, MT. Let's not turn our backs on them. If this bill goes down, this Senate will be turning its back on the people of Libby, MT. I urge my colleagues to oppose the point of order and vote on the merits of this bill. Senators can always decide later to oppose this bill. There are many opportunities for Senators to reexamine their positions on this bill and offer amendments. We should not kill this bill simply on a technical point of order. It will undermine months and months of very hard work of well-meaning people to try to find justice for people who are suffering from asbestos. Let's stand up for the people of Libby and not turn our backs on them. I urge my colleagues to oppose the budget point of order and vote on the merits of the bill. The people of Libby have been through enough. They need our help. They need it now. If you do not support the bill, say so, but do not hold the people of Libby and the community of Libby hostage. We cannot do that. That would be grossly unfair. I will do whatever it takes to continue fighting for the people of Libby and fighting for the justice they deserve. I wish all Members of this Senate were able to sit in the living room of Gayla Benefield--when I first learned how bad things are in Libby-- and look in the eyes of Les Skramstad. He is a great guy. He is dying from asbestos. He worked on the mine. He is not old. He is not an old man at all. He is a middle-age guy. He would go home, embrace his wife, the kids would jump in his lap. They now all have asbestos-related diseases. That is common. I ask my colleagues, please, vote to waive this point of order so we can stay on the bill, work on it, and help the people of Libby. Let's work our will so these folks in Libby can get justice. W.R. Grace is bankrupt. People in Libby cannot get justice from them. W.R. Grace has turned its back on these people. Let's say yes to the people of Libby and find a way for this to work. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I will yield my time. I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, even though the hour of 8 is about to arrive, I yield whatever time the Senator from Texas requires.

Mr. BAUCUS. Mr. President, I ask unanimous consent that 2 minutes be allocated to explaining these motions and that 2 minutes be equally divided.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Grassley motion for Senators Talent and Snowe be the Grassley amendment for Talent, Snowe, and Lincoln.

Mr. BAUCUS. Mr. President, I ask that the pending motions be set aside so the Senator from New Jersey can offer his motion. Obviously, under the rules, he has at least a half hour, maybe even longer. Senator Schumer from New York is coming over. Under the rules, he would have the same length of time. We are going to vote about 8 o'clock, but, of course, that can slip a little to accommodate the Senators from New Jersey and New York. I counsel my friends from New Jersey and New York to not use all of their time unless they really want to. I admire the Senator from New Jersey. He is concise and to the point in his presentation. Motion to Instruct Conferees

Mr. BAUCUS. Mr. President, I strongly support extending the deduction for tuition costs through December 31, 2009, as provided for in the Senate bill. To compete successfully in the world today, America must make education a priority--not only a priority but a very top priority. Why? I think it is pretty obvious. For one thing, our competitors certainly are. Let's talk about, for example, training engineers. Engineers develop new jobs and new industries. Yet Japan and Europe train twice as many engineers as we do. China trains three times as many. In fact, I think the statistics are even more alarming than that. We are missing the boat. We are missing the boat. Let's just stop for a minute. If China, Europe, and Japan train many more times than we, especially China, and add Indians to the mix-- Indians are training lots of engineers--just think of what that means for the next 5 or 10 years based only on the size of those countries. If they are training many times more than we--and I think the population of India is close to 1 billion, and China is 1.3 billion. In about 10 years, it is going to be somewhat more than 1 billion. And our population is about 280 million, 290 million, something like that. I would say we are way behind the eight ball. We need to spend much more time than we are on education. Congress has responded with a number of income tax benefits for higher education financing. Tax incentives such as the HOPE scholarship and lifetime learning credits, the Coverdell education savings account and prepaid tuition and college savings plans help American families pay for college. The deduction for qualified higher education tuition and related expenses, section 222 of the Tax Code, was first added as part of the 2001 Economic Growth and Tax Relief Reconciliation Act. Let me explain more. We cannot allow America's workforce to be left behind. To remain the most competitive and innovative country in the world, we need to make education affordable. Let me state a small anecdote. I was in Bangalore, India, not too long ago, about 3 or 4 weeks ago, and I asked the head of the research center there, the Jack Welch Research Center, which, frankly, is one of the two or three state-of-the-art research centers General Electric has, I asked the manager of it: Why are you here? Why are you here in Bangalore? Guess what he said. He said: Because this is where the greatest talent pool is. I asked: Where is the next greatest talent pool for your top-flight scientists and engineers here? He said: China. I asked: Well, where is the United States in terms of ranking for the best talent pool? Frankly, he said it was way down on the bottom. Not the very bottom. He said: You are down there. So I asked him: What can we do in America to be more competitive than we are today, to make sure we have the best jobs for our kids, and, more importantly, for our kids and grandkids so that we in America can pass on to our kids and grandkids the same standard of living we have today, which our parents gave to us? His answer: You guys have to spend more on education, and you have to make it less expensive so more students can get the quality education they want and need. Also, you have to lower your education costs. It is too costly in America to get a good education. He said: You also have to lower your health care costs. Your health care costs are way, way too high compared to every other country in the world. Sure, we have high-quality health care, he said, but we spend twice as much per capita on health care in America as does the next most expensive country. Are we twice as healthy as the next most expensive country? I doubt it. But right off the top, the manager of that technology center in Bangalore, India, made it very clear to me that we Americans have to spend a lot more time boosting our talent pool so we have more scientists and engineers than we currently have in the United States. We have a lot of them, and they are good, but it is also very clear that we are slipping or, to put it differently, other countries are catching up and are going to pass us soon if we don't get our act together. It costs today almost $43,000 a year for tuition, fees, and room and board in a 4-year public college. Just think of it: $43,000 a year; that is a public college. At a 4-year private college, it costs more than $100,000. That is just ridiculous, that it costs that much for a college education in America today. It is outrageous, and it puts education far out of reach for so many students. From 1981 to 1995, tuition at a 4-year public college/university increased by 234 percent. That is right. From 1981 to 1995, tuition increased by 234 percent. That is three times the growth in median household income and more than three times the increase in the cost of living over this same period. That is unsustainable, clearly unsustainable. That is wrong. I don't know why this country doesn't start to address that more directly, more frontally, because the earlier we do, the more jobs and the more high-paid jobs we are going to have for Americans. For tax years 2002 and 2003, taxpayers with adjusted gross incomes of less than $65,000--or say $130,000 for married couples filing jointly-- are allowed to deduct $3,000 for qualified higher education tuition and related expenses. Three thousand dollars. Remember how costly education is, the figures I just gave you a moment earlier. For tax years 2004 and 2005, the maximum deduction is $4,000 for those same families and $2,000 for Americans with adjusted gross incomes of $65,000 to $80,000 for a single person or from $130,000 to $160,000 for married couples filing jointly. Unfortunately, this important deduction expired at the end of 2005. Critics of extending the deduction for tuition costs ask why we have both this deduction and the HOPE and lifetime learning tax credits. It is true that the current system can be complicated, and it is complicated. Families that qualify for tax credits are sometimes better off with a deduction. Unfortunately, families don't always know which tax choice is best for them. So we are looking at whether the tax incentives for education should be combined or should they be simplified. But until we do, I wish to put the deduction on the same timetable as the tax credits which are in effect until 2010. Let us look at the House. The House only extends this deduction for 1 year--clearly not enough. Senators on both sides of the aisle have agreed that this deduction is important to working families trying to get their children a good education. We must, therefore, preserve this deduction and, as proposed in the Senate bill, extend this important deduction for 4 years. If America is going to be competitive in the global economy, it must make education a top priority. Extending the deduction for tuition costs through December 31, 2009, does exactly that by helping provide our children with affordable education. Therefore, I will work hard to ensure the deduction for tuition costs is extended through December 31, 2009, as provided for in the Senate bill, and I urge my colleagues to support this extension. I may sound like a broken record, but every fiber in me, my bones and my muscles, my blood and whatever is in me, I just know that we have to work a lot harder, a lot more effectively to address American competitiveness, and most of that comes down to education. It is making sure that our kids and we ourselves are educated as best as we possibly can. Education is a lifetime effort; it is not just K through 12. It is lifetime. It also begins at very early ages--Prestart, Head Start, K through 12, college. It also includes votech training for job skills. It is continuing education. It is bringing us more up to date. For those of us who graduated a long time ago, it is making sure we are continuing to be up to date with what is going on and are able to translate new ideas into jobs. I have traveled a lot overseas and I have seen a lot of countries, especially in Asia. I can tell you, they are on the march. Speaking primarily of the Chinese and the Indians--clearly Japan is a very large country, with the second largest economy in the world, but it will not be long before China is the largest economy in the world. I am guessing by the year 2030 China will be the largest economy in the world. That is not far away. It is only 24 years from now. I may be off by 10 years; it may be 10 later or 10 earlier. But 24 years is now, in terms of the time it takes to get us up to speed, the time it takes to get education programs in place, the time it takes to make sure we are graduating more scientists and engineers and have a tax and health care policy that makes more sense, and an energy policy that makes more sense. We are a wonderful, big country. We are extremely lucky. We are the luckiest people in the world to be Americans. We don't see people heading for the door to live in other countries. Rather, people want to live in America. They want to come to America because of our values, et cetera. It is true in the last couple of years our image overseas has been greatly tarnished. The image of America today is not what it was several years ago. That is due, I think, primarily to the foreign policy of this country. But nevertheless, overall most people would rather live in America than some other country. We Americans certainly would. We want that to continue as long as it possibly can, not just for ourselves but, more importantly, for our children and for our grandchildren. That is the legacy we want to pass on to them. To do that, you have to have some kind of plan. You can't let these go helter-skelter. Other countries have plans. They definitely have plans. It is clear, China has a plan. I don't know if they are going to be successful, but they have a plan. They know what they want to do. They know that they have to boost and are boosting their science and engineering education. They know they have to develop the interior provinces, not just the eastern coastal provinces. What are they doing about it? They are doing something about it. They have a plan. They are spending a lot of money and building big superhighways out in western China. There is a big, fancy airport in western China. I was in Chunking 4 or 5 weeks ago, at a huge, massive, fancy, wonderful airport in western China. That is government policy. They have plans to deal with unemployment. They have plans, frankly, to put on what they think will be the world's best Summer Olympics in 2008. I bet they have a plan to win more gold medals than any other country, too. They have plans. You have to take your hat off to them because they are doing what they think they have to do to progress and bring themselves out from the lower living standards they have had for so many years. It is true many Chinese live in poverty. It is true many Indians live in poverty. That is also true. But they have plans to address that. I remember not too many years ago I was in Shanghai. I was talking to the mayor of Shanghai about all these wonderful, fancy buildings in Shanghai. I said: You must be proud of all you are doing in Shanghai. The mayor turned to me and said: We have problems. I said: What do you mean? We have high unemployment by China's standards. This is what we are doing to retrain people. Some of these jobs are old jobs. As the Chinese Government works to downsize these state-owned enterprises, Government-owned enterprises that are all subsidized, they know as they enter the World Trade Organization they have to get rid of a lot of these state trading enterprises. Man, oh, man, they know as that happens they are going to have huge unemployment problems. So they have details, all they are trying to do, in their plan to address that job loss in China. Then he pointed to the river there in Shanghai and he said: Pollution; this river is polluted. We have a 10-year plan to clean up this river so it is no longer polluted. I don't know whether it has been successful or not. That was 5 years ago. I assume the river is probably polluted. But you could tell, talking to him, he had plans to address the problems that we have. India certainly is the same. When I was in India a couple or 3 weeks ago, they have plans how they are going to build up India. I went to the subway in Delhi. That is a fancy subway. That makes our subway in Washington, DC--it is comparable. But guess what. In the Indian subways you can use your cell phone because they make sure when they tunnel under they have the radio stations there, the towers, so you can use your cell phones. They are building 18 more subways in India, fancy ones. Other countries are building them. It is not us. When I was there, I heard constantly from all over India: Where are the Americans? Where are you? Australians are here and Malaysians, other countries are here, Germans and French. The subway was 60 percent Japanese financed. Where are the Americans? They want us there, but we are not there. What I am saying is things are happening in this world. We have to get with it. Much of that is education. Much of that is learning what is going on. Much of that is forming partnerships where both countries do well. We can't stick our heads in the sand. Things are happening and I think a large part of this is education. Let me say this again, about that same point. When Tom Friedman's book came out, ``The World Is Flat,'' I took it on myself to travel around the United States by myself and ask CEOs, What do you think of this book? Have you read this book? They all read it, of course. I said: What do you think? Do you agree? They all agreed. Some said: This is scary. Some said: Yes, this is a challenge. Then I asked the next set of questions: What do we do about all this? Sure, it is true, largely true. Sure, it is a little scary. Sure, it is a challenge. What do we do about it? That kind of set them back a little bit. They hadn't thought a lot about solutions; a little bit. But the solution they all tended to gravitate to was education. We Americans have to focus much more on quality education, quality teachers. We are doing a good job. I got a great education when I grew up in Helena, MT, in Missoula, MT. The teachers, I thought, were excellent. They were tough and they were good. Current teachers are good. But all I am saying is whoever we are, we know we have to keep moving and progressing. You know when you tread water you are likely to sink. You can't keep treading water. You have to go ahead. I am often reminded of the former head of Intel, Andy Grove, who wrote a book, ``Only The Paranoid Survive.'' That is probably true in the semiconductor industry, but I think it is partly true in life. That is not to say we all have to be paranoid. Clearly not. But it is to say you have to be vigilant, and really vigilant. Frankly, if I were President, what I would do is change this budget around massively. I would put a lot more in this budget for education. I would put a lot more into making sure we can solve our health care cost problems in this country; more coverage. I would make sure we tackled and made America energy independent. This thing about independent 25 years from now is way too tepid, way too weak. We have to get started now. I suggest developing DARPA for energy. DARPA, in the Defense Department, developed lots of great technologies, military technologies, applicable in the private, civilian sector. We can do the same on energy. That will attract bright minds. It will help us be more energy independent, make us less hostage to events overseas. It is so clear to me. I may be wrong, but I tell you it is clear to me, anyway, what we need to do. I think in my gut most Americans sense that, this sort of sense we have to get moving here. I think a lot of Members of this body would be surprised, if we were to be much more bold, as to the gratitude Americans would show to Congress for finally taking the lead and doing something. We have to get organized somewhat, not seen to be prescriptive, not seen to pick winners and losers, but I am saying harness the energy that is in America and help focus it a little more on where we should be going. After all, that is why many of us sought these jobs. We sought these jobs to represent our people in the best way we could. We sought these jobs because we thought, many of us--most of us think we have pretty good judgment and priorities and common sense. If that is the case, I urge us to get out of our little boxes, get out of our little cubbyholes, get out of our daily routines, get out of the stuff that pulls us apart from our real job here, just a little bit--maybe for 30 percent of our time--and work more on long-term strategic measures and do what is right and address the core of some major issues that face us, rather than getting caught up in the routines around here, our series of meetings. Meetings are good. Seeing constituents is great. We serve our employers back home. But we are also here as a body, 100 of us, and I think it is time for us, working with the other body and the executive branch, to truly put partisan politics aside and get something done that makes some sense. I yield the floor.

Mr. BAUCUS. Mr. President, I don't want to be too picky here, but don't we have to ask consent to put these motions aside? If that is proper, whatever is the routine here, so we have some consistency.

Mr. BAUCUS. Mr. President, I first commend my friend and colleague from Utah. I agree with him. I think it should be permanent. I urge my colleagues to support the motion to instruct making it permanent. We will have a little more certainty and help in research and development in our country. It helps us be more competitive. I compliment him for offering that motion to instruct. I also speak in favor of the Stabenow motion to instruct with respect to the R&D tax credit which will be coming up shortly, essentially because we have to move ever more aggressively to invest more in research and development in our country. And the current temporary nature of the credit just makes no sense. The Senate-passed bill is a credit extension for 2 years. I remind my colleagues that the current credit is expired. It expired at the end of last year. We are now in February. The Senate bill extends it for calendar years 2006 and 2007, and the House bill just has 1 year, 2006. I am for more predictability, more certainty, especially with expect to the R&D tax credit. I also received a letter from the R&D Credit Coalition, a group representing 85 trade associations and more than 1,000 small, medium, and large companies. In the manufacturing sector alone, which performs nearly 60 percent of all private and industrialized R&D in the United States, there are 14 million manufacturing employees who get the benefit of this credit. The coalition in their letter said: The Coalition believes the Senate-passed provision will help make the credit a more powerful incentive to undertake long-term, high-risk R&D projects in the United States. Consistent with the provision you and 45 of your Senate colleagues have taken as sponsors of a permanent and strengthened R&D credit, extending this credit for an additional year will better enable the intended incentive effect of the tax credit to be realized. I ask unanimous consent that the letter be printed in the Record.

Mr. BAUCUS. Mr. President, we next expect to hear from the Senator from Connecticut, Mr. Dodd, to have a motion to instruct on veterans and military personnel. We anticipate thereafter we will hear from the Senator from Rhode Island. He will have a motion to instruct on defense needs. I yield the floor so the Senator from Connecticut may send his motion to the desk.

Mr. BAUCUS. Mr. President, spending for R&D will increase in 2006, but America has challenges to face, such as major increases in the funding of offshore operations. The total amount of foreign direct investment, including R&D, is shifting heavily towards India and China, and competition for qualified researchers will increase markedly over a short period of time. Most important is to keep American jobs. Keep them here, keep them at home. R&D has some of the most highly paid and intellectually stimulating jobs. With offshore operations and foreign R&D investment shifting to India and China, jobs for U.S. workers will decrease in this area. I strongly urge support of both the motion to instruct by Senator Hatch and also the motion to instruct that will be presented later, I assume, by the Senator from Michigan, Ms. Stabenow. I suggest the absence of a quorum.

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

Mr. BAUCUS. I yield such time as the Senator from Arkansas may use.