Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Madam President, we have a few hours left on this side. I believe the Senator from California, Mrs. Boxer, is on her way to the Chamber and will be here momentarily. Until that moment arrives, I suggest the absence of a quorum.

Mr. BAUCUS. I yield 1 minute to the Senator from Rhode Island.

Mr. BAUCUS. Mr. President, I yield the 1 minute allocated to our side to the Senator from Connecticut.

Mr. BAUCUS. Mr. President, I yield 1 minute allocated to my side to the Senator from Florida.

Mr. BAUCUS. Mr. President, what is the regular order?

Mr. BAUCUS. That means the next amendment is the amendment of Senator Grassley on the Medicare prescription drug program.

Mr. BAUCUS. Mr. President, we are making a lot of progress. I think if we just keep operating in the sense of comity we can do quite well. In that spirit, I ask unanimous consent the Grassley AMT amendment and the Mendendez AMT amendment be moved down the amendment list in the time of offering.

Mr. BAUCUS. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. BAUCUS. Mr. President, the next amendment on the list is to be offered by the Senator from North Dakota, Mr. Conrad. He should be here at any moment now. Until he is here, I suggest the absence of a quorum.

Mr. BAUCUS. On behalf of Senators Byrd, Rockefeller, and Santorum, I send an amendment to the desk and ask for its immediate consideration.

Mr. BAUCUS. Mr. President, I believe we have 1 minute each. I yield 1 minute to the Senator from West Virginia.

Mr. BAUCUS. It is my understanding we could start early if Senators have amendments. We do not have to wait a full half hour. I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, I don't see any Member wishing to speak at this moment. I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, if it is helpful to all Senators, especially the Senator from Tennessee and the Senator from Nevada, we have a total of about 20 amendments on this side. I don't know how many are on the other side, but I guess maybe we could finish by around 7 o'clock or 8 o'clock tonight. That is a rough estimate. Maybe earlier.

Mr. BAUCUS. Yes. I think the Senator from West Virginia would like to defer to the Senator from Michigan at this point.

Mr. BAUCUS. Madam President, if I may ask the Senator from California, how much time does she desire?

Mr. BAUCUS. I will do this. Why don't I yield to the Senator from Michigan 5 minutes and then the Senator from West Virginia. Is that all right with the Senator from California?

Mr. BAUCUS. I appreciate the Senator speaking on short notice. Madam President, I yield 5 minutes to the Senator from Michigan.

Mr. BAUCUS. Madam President, I yield 20 minutes to the Senator from California.

Mr. BAUCUS. I will then subsequently yield to the Senator from New Jersey.

Mr. BAUCUS. Mr. President, I support the pending substitute amendment. I encourage my colleagues to support it as well. I almost need a flow chart to explain how we got here. But because of several events, there is now more room for tax cuts. Yes, you heard right: more tax cuts. We should tread carefully, though, rather than dive in. We have an opportunity to show responsibility. And I think that this substitute does just that. Let me first explain how we got here. As my colleagues will recall, the tax reconciliation bill that we passed last November included much- needed relief for the Gulf States affected by Hurricane Katrina. Congress passed and enacted those incentives separately in December. Further, our tax bill allocation was limited by the fact that the spending reconciliation bill had not been enacted. The House is expected to pass that bill today, clearing it for the President. The bottom line is that this bill can accommodate $18 billion more in tax cuts. We have an opportunity here to show some responsibility. And the responsible thing to do is to pass another year of extenders. Otherwise, we will be right back here in a few months to pass those extenders. Or since it is an election year, we will be back during a lame duck session considering the same set of expiring provisions. These are very popular, bipartisan tax cuts we extend year after year. But we never have the resources in any given year to make them permanent. This list of annual extenders includes several proven tax incentives. Businesses are encouraged to do more U.S.-based research and create high-paying jobs. Long-term welfare recipients and others who are hard to employ are given job opportunities through an employer credit. And teachers who reach into their pockets to pay for classroom supplies can get a small deduction for their expenses. These tax incentives were all part of the original Senate reconciliation bill. But in that bill, they were limited to one year. Now, Chairman Grassley and I are pleased to offer this amended version today to extend these provisions through the end of next year. We will thus provide certainty to businesses, workers, and teachers. We know we will all vote to extend these provisions, if pressed at the end of the year to do so. We should take this opportunity now to provide these tax incentives through the end of 2007. It is the responsible thing to do. Individual and business taxpayers will be thankful. Mr. President, before us now are a series of amendments. I have a list of 21 Democratic amendments. I have a list of eight Republican amendments, with promises of more amendments on that side of the aisle, depending upon the course we take today. Pending a few moments ago, first was an amendment by the majority leader to permanently extend the child tax credit. That is a very popular amendment. I support--I think most of my colleagues do-- extending the child tax credit. I daresay that most Senators on both sides of the aisle would probably strongly support extension of the child tax credit. Senator Talent, the author, however, has expressed his will to convert his amendment to a sense of the Senate. The majority promises to offer the full version later. Because of the Nation's record on budget deficits, I would prefer that we paid for the pending amendment. But because of the procedural posture in which we find ourselves, we will not have that choice. So we will be faced with an unattractive choice of voting for an appealing tax cut without paying for it or voting against an appealing tax cut. After this amendment from the other side, we have been promised similar votes on measures to extend marriage penalty relief, estate tax relief, Social Security tax relief, 10 percent tax bracket relief, and so on. At the end of the day, this could become a fiscally very irresponsible exercise. I wish to propose a different path. I propose that we address a limited number of amendments--just six--and then go to third reading. I propose that these six amendments be Senator Talent's sense of the Senate on the child tax credit, Senator Bingaman's prescription drug benefit, a Republican alternative to the prescription drug amendment, a modified Schumer-Menendez-Grassley sense of the Senate on AMT relief, a modified Rockefeller-Santorum mine safety amendment, and a paid-for substitute by Senator Conrad, and then go to third reading. The Republican manager has conveyed to me that he would find this procedure acceptable. This procedure would require, obviously, many Senators to forgo their opportunity to offer amendments. That is clear. It would have that consequence. But this procedure would also do the most to maintain fiscal responsibility. This procedure would also allow Senators to get back to their States and their constituents in much shorter order. I implore my colleagues, let us choose the path of reason. Let us choose the path of moderation. Let us end this bill this afternoon. I have given deep thought to this issue. I know there are many on both sides of the aisle who have conflicting emotions and views on this basic prospect we find ourselves facing. It is my considered judgment that the path I am outlining is probably the best course for the Senate and, more importantly, the best course for the Nation. After all, we are here representing our constituents. We should go the extra mile to do whatever we possibly can to represent the people back in our home States as well as we possibly can.

Mr. BAUCUS. Mr. President, the Senate is not in order.

Mr. BAUCUS. It is. Amendment No. 2729 to Amendment No. 2707

Mr. BAUCUS. Madam President, several on our side wish to make statements before we get to offer amendments and vote. It is my understanding that it will begin at about 2:15. There will be a series of amendments then offered which, obviously, we will vote on. There are a good number on this side and a few on the other side of the aisle. I encourage Senators to quickly firm up those amendments so we can line things up as expeditiously as we possibly can. In the meantime, I remind the Senate where we are. We are on the House deficit reduction bill. Later today, I expect that the majority leader will offer a substitute amendment. That will be the Senate amendment; that is a Senate-passed bill to the House bill. The Senate- passed bill will include a perfecting amendment. The perfecting amendment will modify the Senate-passed bill that previously passed in the Senate by extending the so-called tax extenders, R&D tax credit, the WOTC tax credit, tuition reduction, and savers' credit, for an additional year. Those provisions expired at the end of 2005. The Senate bill extended all those provisions, so-called extenders, for 1 more year, until the end of 2006. The perfecting amendment that will be offered will then add another year to all those, so that those provisions, if that amendment passes, will not expire; they will have 2 more years of life. That is the major change that will be in the perfecting amendment to the Senate substitute, which the majority leader, I assume fairly quickly, will offer. To remind Senators, the main difference between the House and Senate bill is this: The House bill includes the extension of the lower taxes--the dividend tax and capital gains taxes--for 2 more years. Currently, taxation on dividends and income taxation on capital gains enjoys a lower rate that was put into effect several years ago. That provision or lower rate is in current law and will extend under current law for 2 more years, until the end of 2008, December 31. The House- passed bill extends that provision 2 more years, so it would be in effect for not only 2006, 2007, and 2008, but the House bill would be 2009 and 2010, the full calendar years. The House-passed bill doesn't, however, include any relief for alternative minimum taxes, which about 17 million Americans will have to pay this year, 2006. Actually, it is about 20 million because 3 million taxpayers had to pay for 2005, and 17 million more taxpayers will have to pay an additional tax under the so-called stealth tax, the alternative minimum tax in 2006. So the House bill extends provisions that need not be extended because the law doesn't change, but it does not reduce taxes for people who are going to pay more for taxes in 2006. Contrast that with the Senate-passed bill, which would be the substitute for the House bill. If it passes, it will send that back over to the House. They, presumably, will disagree with the Senate and ask for a conference. We will appoint conferees and begin a conference on the two separate bills. That will happen next week probably. Again, the Senate bill doesn't extend dividend reduction, capital gains taxation reduction, for 2 more years. It maintains current law, which provides the current low rate in existence for not only this year but also next year and also the following year, through December 31, 2008. We did, however, in the Senate bill, say, OK, those 17 million people--Americans who are going to have to pay AMT--that is additional tax for 2006--should not have to pay that additional tax. We, in the Senate bill, said we are going to extend the provisions, the so-called AMT patch, so those Americans will not have to pay additional tax under the alternative minimum tax. That is a major difference between the House and Senate bill. I hope that we in Senate can do what I think most Americans want. Most Americans would say, OK, 17 million Americans--let's not raise their taxes; let's make sure those taxes are not raised. And then we will worry about 2009 and 2010, when we may or may not want to extend more favorable tax treatment on capital gains income and on dividend income. We can cross that bridge when we get there. Because the budget resolution says we cannot lower taxes by more than $7 billion over 5 years, we just can't do it all. We have to make choices. If you add up all the provisions that people want--the tax extenders and other extensions of tax breaks--it is forcing us in the Congress to begin to make a choice as to what is more important: prevent the additional taxes people have to pay next year under the AMT, or is it more important that they should pay those taxes but, more for the sake of principle than anything else, extend that dividend and capital gains preferential treatment for years 2009 and 2010. Again, the House bill only addresses 2009 and 2010. Why? Because under current law, capital gains income and dividend income enjoy favorable tax treatment. That is the basic posture we are in here. It should not take too long. After various amendments are brought up and Senators vote on them, we will send the bill over to the House. The House will probably disagree and request a conference. We will have a conference when we come back next week and finally work out passage of this bill. I see the Senator from West Virginia is on the floor. I turn to the Senator from West Virginia and yield to him whatever time he desires.

Mr. BAUCUS. I move to lay that motion on the table. The motion to lay on the table was agreed to.