Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Yes.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, virtually everyone supports tax simplification. But for some reason, it is awfully hard to accomplish. Today, I am pleased to join my friend and colleague from Mississippi, Senator Lott, in introducing tax legislation that is non-controversial and a clear tax simplification measure. Further, the bill we are filing today has been supported in the past by the Joint Tax Committee and the U.S. Treasury. Normally, corporations are taxed on distributions of property to shareholders as if sold at fair market value. However, section 355 of the tax code provides corporations with the flexibility to distribute one or more of their businesses to their shareholders, such as in a spin-off, without triggering tax consequences if the transaction meets important requirements. Through this exception in section 355, corporations may make strategic business decisions without imposing tax burdens on their shareholders, but only if both the distributing and distributed businesses continue as an active trade or business. The regulatory structure that has evolved over the years under section 355 has created very different ``active trade or business'' tests depending on whether the distributing corporation operates as a holding company or whether it holds the business assets directly. There is no rationale to support that distinction. Both the staff of the Joint Tax Committee and the Clinton Treasury Department recommended that the rules be conformed as a tax simplification measure. The Senate has passed legislation similar to what we are proposing today on three occasions. And, on one of those occasions, it passed the House as well in legislation that was later vetoed for other reasons. I have heard of no opposition to this change, which would simply apply a ``look through'' rule for the ``active trade or business'' test on an affiliated group level, so that parent holding companies could count the active businesses of its subsidiaries. And it would eliminate hours of wasted time and resources in tax planning activities that serve no function other than to try and conform corporate ownership structures to satisfy the literal language of current tax requirements. Again, I should emphasize that this proposal does not bring wholesale change to section 355. Spin-off requirements dealing with the continuity of historical shareholder interest, continuity of business enterprises, business purpose, and absence of any device to distribute earnings and profits all remain. With a cost of less than $10 million a year, this is an affordable step we can take now to simplify the Internal Revenue Code. I am pleased to join with Senator Lott in working for passage of this important simplification bill, and I urge my colleagues on the Finance Committee and in the Senate give our bill every consideration.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that Adam Elkington, Julie Golder, and Jorlie Cruz be granted the privilege of the floor during consideration of the CAFTA implementation bill.

Mr. BAUCUS

Mr. BAUCUS. President, I wish to explain my climate change votes. This is an important debate, and I appreciate the efforts of my colleagues to contribute substantively to our understanding of the issue and to offer solutions. First, let me be clear that although I voted for Senator Hagel's amendment relating to the promotion of climate change technology at home and abroad, I do not think that amendment goes far enough to address the issue of rising greenhouse gas emissions. At the very least, I would like to see more aggressive timetables and proposals for Federal action than are contained in Senator Hagel's amendment. At the same time, I am still not comfortable supporting the approach of Senator Lieberman and Senator McCain. I admire their hard work and dedication in advocating for immediate action to control U.S. emissions of greenhouse gases. They have helped to educate their colleagues, and have kept the issue on the front-burner in the Senate and made it impossible for us to ignore. And, as they have so often pointed out, the evidence that manmade greenhouse gas emissions are impacting our climate system is growing every year. However, I am still not ready to support the mandatory cap and trade called for in their amendment that would freeze U.S. emissions of greenhouse gases at 2000 levels in 2010. I still have questions about the costs this proposal would impose on our economy, and in particular on my state that has the largest coal reserves in the lower 48. Projections vary widely, which makes it difficult to weigh costs and benefits. I also have concerns about whether we currently--or will in the immediate future--have the technological capabilities to meet the challenges of the McCain-Lieberman bill, without imposing significant costs on our economy or creating greater volatility in natural gas markets than already exists. Perhaps not in the short term, but beyond 2010, this concern only grows. These are not trivial questions, particularly when some of our friends in the developing world will soon eclipse the industrialized nations as the largest emitters of greenhouse gases. We cannot ignore that fact, particularly as we contemplate placing a burden on our own economy that could impact our international competitiveness, while at the same time, will have little impact on overall global greenhouse gas concentrations. I also was unable to support Senator Bingaman's sense of the Senate, calling on Congress to implement a mandatory program to reduce emissions of greenhouse gases soon. While I do agree that Congress should take this issue seriously and act sooner rather than later, I can't agree at this point that we are ready to enact a purely mandatory program in the short term. Crafting truly bipartisan, comprehensive legislation to address greenhouse gas emissions will take a great deal of work that this Congress to date has avoided, except for the concerted efforts of individual Senators, like Senators McCain, Lieberman, Bingaman, Byrd and Hagel. Unfortunately, individual efforts generally are not enough on legislation this complex and far-reaching without the structure and support of a committee-led process, and encouragement from the leadership and the administration. This must happen, and I have been encouraged to hear many of my colleagues express similar sentiments about pursuing a broader approach to developing climate change legislation, rather than on an ad hoc basis on the Senate floor, particularly the Chairman of the Senate Energy Committee, Senator Domenici. This is a positive development. Congress must act, and act in a concerted, thoughtful way. That's how we have addressed complicated environmental legislation in the past, including the Clean Air Act. But, we're talking about a potential regulatory scheme that could dwarf the scope and impact of even the Clean Air Act and is directly related to our future economic growth. We're also talking about controlling a gas--CO2--for which we currently have no widely available, proven control technology. Implementing mandatory controls now looks to a certain extent like stepping off a cliff and hoping something breaks our fall. We need to take the time to do it right. I pledge my assistance to make this happen. I also continue to believe that this administration must re-engage with the international community in a meaningful way. The best way to move forward in this body is concurrently with an international effort that encompasses all of the major greenhouse gas emitters--and those that will soon become the major emitters. Not only will this accelerate the technology development curve, but it will level the economic playing field. The fact that Kyoto left out much of the developing world, including China and India, was that treaty's fatal flaw. We don't need to go down that path again, and I think the world is ready to step beyond Kyoto. As the current number one emitter of greenhouse gases, it is incumbent on the U.S. to lead, not follow, in this effort. That's why I supported Senator Kerry's sense of the Senate.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I must respond to that gracious statement by my good friend from Iowa. No member of this body can be more blessed to have a partner to work with in such cooperation and good spirit than I. I am lucky--more importantly the Senate is lucky--to have the chairman of the Finance Committee. He is a wonderful person to work with. We work very closely together. We are a real team and we think that our States are better for it. We also think that the country is better served as well. For whatever reason, whether it is true or not, I want to very much give my utmost thanks and compliments to the senior Senator from Iowa.

Mr. BAUCUS. Mr. President, I yield myself such time as I may consume. Tonight the Senate begins its consideration of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act, more commonly known as CAFTA. I will be speaking in some detail on this trade agreement tomorrow, but for tonight I want to open the debate with some observations about the process that brought us here. CAFTA has proved itself to be the most controversial trade agreement to come before the Congress since the North American Free Trade Agreement a decade ago. It did not have to be this way. When the story of CAFTA is written, whether it passes or fails, the theme will be the politics of the last minute because even as we bring this bill to the floor parts of the CAFTA package are still being negotiated. In fact, they are being negotiated as we speak. We need to do better. The Founding Fathers, in their wisdom, assigned primary responsibility for trade policy to the legislative branch. Article I, section 8, clause 3 of the Constitution states: The Congress shall have the power . . . to regulate Commerce with foreign Nations. It quickly became obvious, however, that Congress is a body ill- suited by structure to negotiate trade agreements. So our predecessors quickly figured that the actual negotiating would have to be delegated to the executive branch. Still, the constitutional responsibility for trade remains with the Congress. That is why under U.S. law no trade agreement is self-executing. Trade agreements such as CAFTA have no force or effect on domestic law until Congress passes implementing legislation. A system where one branch of the Government negotiates trade agreements and another must approve them and turn them into domestic law presents many challenges. To work well, it requires the highest degree of coordination between executive and legislative priorities. Over the years, this system of shared responsibilities has been formalized into Senate procedures commonly called fast trade, or more recently, trade promotion authority. These procedures require the executive to negotiate agreements that meet a long list of congressional priorities, and they require very close consultation between the executive and Congress at every stage of the process. I am sure that Ambassador Portman, our current USTR, and his staff can document that they followed these statutory procedures to the letter for CAFTA. I do not disagree. Their problem is that process for the sake of process does not work if there is no true spirit of cooperation. A statute can require a meeting, but a meeting of the minds cannot be mandated by law. A true meeting of the minds is what we need to make the consultive process work the way it is intended to work. Congress and the executive need to be working closely together at every stage of a trade negotiation to make sure that everyone's priorities are being addressed, maybe not all agreed to but certainly all addressed. Unfortunately, that is not what happened with CAFTA. Early on in the CAFTA negotiations, I could see that sugar was going to be a difficult issue so I asked former USTR Ambassador Zoellick to meet with the Senate sugar caucus. That meeting was not required by trade promotion authority, but it made sense to try to address a difficult issue as soon as possible. The meeting took place and views were exchanged, but there was no meeting of the minds and little attempt to continue the dialogue. Not surprisingly, CAFTA's sugar provisions were unacceptable to many Members, but CAFTA sat unchanged for more than a year. Suddenly, last week, there began a series of around-the-clock sugar negotiations. Those negotiations were ongoing this morning when the Finance Committee marked up CAFTA. They are still ongoing as we speak. So those of us who have sugar producers in our States still do not know for sure what CAFTA means for our constituents. This would have been resolved and should have been resolved months ago. We should not be on the floor debating an implementation package that is not final. The story is similar for the labor provisions. From the beginning, it was clear that labor rights were going to be a contentious issue in CAFTA. So I, together with a number of colleagues, began a dialogue with Ambassador Zoellick. We sought assurances that CAFTA's labor provisions would be stronger than those in other recent free-trade agreements, but little progress was made. Suddenly, within the past few weeks, there began a series of around-the-clock meetings between Ambassador Portman and several Democratic Senators and Members of the House. Just this morning, as the Finance Committee came together to vote on CAFTA, brandnew labor and capacity-building provisions were revealed. We should not be on the floor debating CAFTA when the ink is not yet dry on these provisions and nobody really knows what they mean. I know that there is another way. I have seen it work. In the fall of 2003, I put out a series of proposals for strengthening CAFTA's environmental chapter. Ambassador Zoellick and I had a productive yearlong dialogue on these issues. It was very constructive, very rewarding. He was engaged; I was engaged. With commitment on both sides, we agreed on key improvements that are included in the text of this agreement. This is the model I want to follow in the future, not the last minute dealmaking but the long, thoughtful dialogue working to find accommodation, find agreement, which builds a greater consensus for trade, let alone the agreement in question. Trade promotion authority expires in 2007. At that time, Congress will consider whether there are ways to improve the process. The truth is, the process is only as good as the goodwill of the people using it. I do not say this to lay blame. We are all responsible. Members of the Senate are caught up in the press of business and do not always focus on their priorities early enough in the trade negotiation process. The executive hears but does not always follow the advice or pay attention to the advice it receives from Members of the Senate. The same would be the case for House Members. Still, in the end our trade policy is only successful when it reflects the priorities of both the Congress and the executive. In the coming months and years, let us rededicate ourselves to the purpose behind the process. Let us work together and truly mean it. That is the way we get things done. Again, under the Constitution, Congress has primacy in trade, but because we are not a parliamentary form of government but a constitutional form of government with separate branches we, by necessity, have to delegate the negotiating of trade agreements to the executive. But to make this work and to continue to have a consensus and to build a consensus on trade agreements, the administration must consider the wishes of Congress much more seriously in the future. Otherwise, it runs the real risk of losing, perhaps, trade promotion authority for other similar agreements. I say this also because we stand at a moment in history, at a time when the United States has to work much more aggressively, much more cooperatively among ourselves, different sectors of the country, to meet the competitive challenges that we face overseas. Whether it is China, Japan, Europe, the flattening of the Earth, or changes in telecommunications technologies, we have to work a lot harder, invest more in education, address the high health care costs that put our American companies at competitive disadvantage, and be much more aggressive in enforcing our trade laws. There are many more actions we must take. When that happens, the more the President and the Congress in good faith can totally put politics aside because this is an American issue. This is not a partisan issue. This is an issue for America. If they were to do so, and we were to do so, we will fulfill the responsibilities we have, and it will help our people at the same time. At the appropriate time, I will later yield time to the senior Senator from Connecticut, Mr. Dodd. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to join Senator ENZI in introducing the Fair and Reliable Medical Justice Act of 2005. We have debated the medical liability issue in this chamber for years now. But the Senate has failed to take action to make the situation better. We need to deal with the issue of rising liability costs, and I think this bill is a good place to start. One of my top priorities in the Senate is ensuring appropriate access to affordable, quality health care. In a rural State such as Montana, where health care providers are often few and far between, that is a tall order. It is a job that is made all the harder by rising medical liability insurance premiums. To ensure proper access to care, we need to make certain that our health care providers can afford their medical liability insurance. We also need to make sure that patients who are harmed by medical mistakes have access to timely, reasonable compensation for their injuries. The Fair and Reliable Medical Justice Act promotes the testing of alternatives to current medical tort liability litigation. It aims to increase the number of injured patients who receive compensation for their injuries, and make such compensation more accurate and more timely, all at lower administrative costs than current systems. The bill also encourages patient safety by promoting disclosure of medical errors, unlike the current system which does not encourage disclosure. The Fair and Reliable Medical Justice Act would establish State-based demonstration programs to help States test alternative systems of health care-related dispute resolution under three different models: early disclosure and compensation; administrative determination of compensation; and special health care courts. Under the bill, states may develop other alternative plans for resolving health care related disputes as well. The first model involves a system of early disclosure, which encourages providers to disclose medical errors that harm patients and offer just compensation for injuries. This model would maintain patients' access to the traditional legal system if claims cannot be resolved by early disclosure, or in cases resulting from criminal or intentional harm or fraud. The second model would establish a board made up of providers and health care organizations, advocates, and attorneys. The board would establish classes of avoidable injuries and determine compensation rates for each, including economic and non-economic losses, and attorneys' fees. The third model involves special health care courts, presided over by judges with special health care expertise, and assisted by independent experts. The judges would be subject to the same criteria as other State judges and sit on the court voluntarily. These models are based on innovative efforts currently underway in the private sector and in some States, where success is already being achieved. I think it is time for us to try to encourage more innovation and expand the range of options being considered. State-based demonstrations provide a great setting for experimentation and learning. The Institute of Medicine suggested as much in its 2002 report entitled ``Fostering Rapid Advances in Health Care: Learning from System Demonstrations.'' I thank Senator Enzi for his leadership on this issue. I am proud to have worked with him to develop legislation that I believe will enhance patient safety. It is unacceptable that around 100,000 Americans die annually as a result of medical errors. And it is unacceptable that many patients hurt by medical errors receive no compensation for their injuries This bill is a good opportunity for us to make progress on both fronts--to look at the medical liability issue from a new perspective, through a set of commonsense pilot projects centered on improving patient safety. I urge my colleagues to support this important effort.

Mr. BAUCUS. Mr. President, virtually everyone supports tax simplification. But for some reason, it is awfully hard to accomplish. Today, I am pleased to join my friend and colleague from Mississippi, Senator Lott, in introducing tax legislation that is non-controversial and a clear tax simplification measure. Further, the bill we are filing today has been supported in the past by the Joint Tax Committee and the U.S. Treasury. Normally, corporations are taxed on distributions of property to shareholders as if sold at fair market value. However, section 355 of the tax code provides corporations with the flexibility to distribute one or more of their businesses to their shareholders, such as in a spin-off, without triggering tax consequences if the transaction meets important requirements. Through this exception in section 355, corporations may make strategic business decisions without imposing tax burdens on their shareholders, but only if both the distributing and distributed businesses continue as an active trade or business. The regulatory structure that has evolved over the years under section 355 has created very different ``active trade or business'' tests depending on whether the distributing corporation operates as a holding company or whether it holds the business assets directly. There is no rationale to support that distinction. Both the staff of the Joint Tax Committee and the Clinton Treasury Department recommended that the rules be conformed as a tax simplification measure. The Senate has passed legislation similar to what we are proposing today on three occasions. And, on one of those occasions, it passed the House as well in legislation that was later vetoed for other reasons. I have heard of no opposition to this change, which would simply apply a ``look through'' rule for the ``active trade or business'' test on an affiliated group level, so that parent holding companies could count the active businesses of its subsidiaries. And it would eliminate hours of wasted time and resources in tax planning activities that serve no function other than to try and conform corporate ownership structures to satisfy the literal language of current tax requirements. Again, I should emphasize that this proposal does not bring wholesale change to section 355. Spin-off requirements dealing with the continuity of historical shareholder interest, continuity of business enterprises, business purpose, and absence of any device to distribute earnings and profits all remain. With a cost of less than $10 million a year, this is an affordable step we can take now to simplify the Internal Revenue Code. I am pleased to join with Senator Lott in working for passage of this important simplification bill, and I urge my colleagues on the Finance Committee and in the Senate give our bill every consideration.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to join Senator ENZI in introducing the Fair and Reliable Medical Justice Act of 2005. We have debated the medical liability issue in this chamber for years now. But the Senate has failed to take action to make the situation better. We need to deal with the issue of rising liability costs, and I think this bill is a good place to start. One of my top priorities in the Senate is ensuring appropriate access to affordable, quality health care. In a rural State such as Montana, where health care providers are often few and far between, that is a tall order. It is a job that is made all the harder by rising medical liability insurance premiums. To ensure proper access to care, we need to make certain that our health care providers can afford their medical liability insurance. We also need to make sure that patients who are harmed by medical mistakes have access to timely, reasonable compensation for their injuries. The Fair and Reliable Medical Justice Act promotes the testing of alternatives to current medical tort liability litigation. It aims to increase the number of injured patients who receive compensation for their injuries, and make such compensation more accurate and more timely, all at lower administrative costs than current systems. The bill also encourages patient safety by promoting disclosure of medical errors, unlike the current system which does not encourage disclosure. The Fair and Reliable Medical Justice Act would establish State-based demonstration programs to help States test alternative systems of health care-related dispute resolution under three different models: early disclosure and compensation; administrative determination of compensation; and special health care courts. Under the bill, states may develop other alternative plans for resolving health care related disputes as well. The first model involves a system of early disclosure, which encourages providers to disclose medical errors that harm patients and offer just compensation for injuries. This model would maintain patients' access to the traditional legal system if claims cannot be resolved by early disclosure, or in cases resulting from criminal or intentional harm or fraud. The second model would establish a board made up of providers and health care organizations, advocates, and attorneys. The board would establish classes of avoidable injuries and determine compensation rates for each, including economic and non-economic losses, and attorneys' fees. The third model involves special health care courts, presided over by judges with special health care expertise, and assisted by independent experts. The judges would be subject to the same criteria as other State judges and sit on the court voluntarily. These models are based on innovative efforts currently underway in the private sector and in some States, where success is already being achieved. I think it is time for us to try to encourage more innovation and expand the range of options being considered. State-based demonstrations provide a great setting for experimentation and learning. The Institute of Medicine suggested as much in its 2002 report entitled ``Fostering Rapid Advances in Health Care: Learning from System Demonstrations.'' I thank Senator Enzi for his leadership on this issue. I am proud to have worked with him to develop legislation that I believe will enhance patient safety. It is unacceptable that around 100,000 Americans die annually as a result of medical errors. And it is unacceptable that many patients hurt by medical errors receive no compensation for their injuries This bill is a good opportunity for us to make progress on both fronts--to look at the medical liability issue from a new perspective, through a set of commonsense pilot projects centered on improving patient safety. I urge my colleagues to support this important effort.

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, in the book of Isaiah, the prophet wrote, ``[M]y people have gone into captivity, because they have no knowledge.'' Francis Bacon wrote, ``Knowledge itself is power.'' And when H.G. Wells summed up his history of the world, he concluded: ``Human history becomes more and more a race between education and catastrophe.'' In the next two decades, America's history will become more and more a race for economic leadership. For more than a century, America's economy has set the pace. We have led all competitors. Year after year, we have become used to winning the race. But now, over our shoulder, we can hear the footsteps of another runner. That competitor is China. And it is gaining fast. If we wish not to go into economic subservience, if we wish to maintain our economic power, if we wish to avert economic misfortune, the answer is education. America's economic leadership has been a remarkable achievement. We Americans are just 4.6 percent of the world's people. More than a fifth of the world's people live in China. There are nearly 4\1/2\ times as many Chinese as there are Americans. Yet America produces 60 percent more goods and services than China. That is how Americans can enjoy one of the world's foremost standards of living. The average American's share of our economic output is $37,610 a year. The average Chinese's share of theirs is $1,100 a year. But from a slow start, China has picked up the pace. Starting with Deng Xiaoping in the late 1970s, China began to reform its economy. Deng was eminently practical, when it came to economic philosophy. He said: ``It doesn't matter whether the cat is black or white, as long as it catches mice.'' Today, you can find those capitalist cats everywhere in China. Over the last two decades, China's economy has been growing at an average of 9.5 percent, nearly three times as fast as America's. And some project that within 20 years, China's could become the world's largest economy, ending more than a century of American leadership. You can see how they do it at an American or Japanese factory in Shanghai. You see rows and rows of hardworking workers, in colorful uniforms, at well-lit work stations. The company pays them about $2,000 a year, plus food and housing benefits. But that is good money in a country with an average income of $1,100 a year. The workers there want to keep their jobs. And 200 million other workers stand ready to take their jobs if they do not. The challenge for America in the decades to come will be: How can America compete with that factory in Shanghai? How can we get paid $37,000 a year or more to make goods and perform services, when there are Chinese workers willing to work hard for $2,000 a year? The answer is not protectionism. We cannot build a wall around America. We cannot lift the drawbridge and flood a moat around our Country. If American companies do not employ those willing workers at the Shanghai factory, companies from Japan and Italy and China itself will. Then Japanese and Italian and Chinese companies will sell products more cheaply into America. And American consumers will gladly buy those products at lower prices. American consumers will insist on buying those products at lower prices. If America raises tariffs on goods made in China, then American consumers will pay more for their cost of living than will people in other countries. Americans will have less money to spend on other things that they want, less money to spend on other things in America. The American economy will be smaller, if America raises tariffs. If America raises tariffs, then American businesses will pay more for their industrial inputs than will businesses in other countries. American businesses will become less competitive, lose sales, and lose jobs. Once again, the American economy will be smaller, if America raises tariffs. No, the answer to how America can compete with that factory in Shanghai is not protectionism. The way that we can get paid $37,000 for our work--when Chinese workers are willing to work for $2,000--is for Americans to add more value. Americans earn more because we produce better. Americans produce smarter. And that means that for us to remain economic leaders of the world, Americans need to stay smarter. We need to educate our children and our workers so that American workers can add more value in an hour of work than workers in any other place in the world. Knowledge will be economic power. Ensuring that we continue to have more knowledge than the Chinese will not be easy. China has worked on its education system. Nine out of ten Chinese can read. It is very Chinese to take the long view. More than 2,600 years ago, the master Kuan Chung said: If you plan for a year, plant a seed. If for 10 years, plant a tree. If for a hundred years, teach the people. When you sow a seed once, you will reap a single harvest. When you teach the people, you will reap a hundred harvests. We need to plant those seeds of education and tend those young saplings, in our public schools. In 1835, the Supreme Court Justice Joseph Story wrote: Every successive generation becomes a living memorial of our public schools, and a living example of their excellence. Ensuring that our schools are a living example of excellence will take more than just money. But ensuring that our schools are a living example of excellence will take money, as well. We need to ensure that children can come to school ready to learn. We need to ensure that children have modern and well-equipped schools. We need to ensure that children have small classes. And most importantly, we need to ensure that children have good teachers. In the next decade, America will need to hire 2 million new teachers. One in five new teachers leave teaching within three years. In urban schools, half of teachers leave the profession within 5 years. Nearly two out of five low-income children are taught by teachers without a college degree in their primary instructional field. Low- income students are taught by more teacher's aides than credentialed classroom teachers. Four out of five aides do not have a 4-year college degree. Columnist Tom Friedman wrote recently: We are heading into an age in which jobs are likely to be invented and made obsolete faster and faster. The chances of today's college kids working in the same jobs for the same companies for their whole careers are about zero. In such an age, the greatest survival skill you can have is the ability to learn how to learn. The best way to learn how to learn is to love to learn, and the best way to love to learn is to have great teachers who inspire. And the best way to ensure that we have teachers who inspire their students is if we recognize and reward those who clearly have done so. We need to give good teachers the recognition that they deserve. Friedman told how every year, Williams College honors four high school teachers who made a difference. Every year, members of its senior class nominate their best high school teachers. A committee at Williams then goes through the nominations, does its own research, and chooses the four most inspiring teachers. Williams gives each of the teachers $2,000, plus a $1,000 donation to the teacher's high school. And Williams flies the winners and their families to the college to honor them at graduation. Williams's president, Morton Schapiro, told Friedman: ``We take these teachers, who are not well compensated and often underappreciated, and give them a great weekend.'' Said Shapiro: ``Every time we do this, one of the teachers says to me, `This is one of the great weekends of my life.' '' It's a great idea. Each of us can do our part. I have started a program that will recognize Montana teachers acknowledged for excellence. This is something that all Senators can do in their home States. A little recognition can go a long way. But if knowledge is power, then we must also devote the resources necessary to maintain that power. Columnist Matt Miller argues: ``The answer is to think bigger.'' He suggests that we make the best teachers millionaires by the time that they retire. Miller proposes a ``grand bargain'' where we raise salaries for teachers in poor schools by 50 percent. And in return, teachers would agree to change their pay scale so that we could raise the top performers and those in math and science another 50 percent. Miller, who used to work at the Office of Management and Budget, calculates that his plan would cost about $30 billion a year. That would provide a 7 percent increase in the nation's K-through-12 spending. I ask my colleagues: Why don't we invest $30 billion for top teachers, and pay for it by closing abusive tax shelters? And we need to help students to learn math and science. Companies are moving jobs offshore to China, India, and Eastern Europe not only because workers there work for less, but also because they are well educated in math and science. Sadly, American high school students now perform below most of the world on international math and science tests. Most have little interest in pursuing scientific fields. Only 5.5 percent of the high school seniors who took the college entrance exam in 2002 planned to pursue an engineering degree. We have to do more to encourage students to love to learn math and science. And we need to help students to learn geography and languages. Visit a primary school in a middle-sized Chinese city. Bright, enthusiastic children will greet you in English. Chinese schools are preparing students to compete in a multinational, multilingual world economy. The coming generation of Chinese businesspeople will do business around the world. Americans need to broaden our linguistic and geographic abilities, or Chinese businesspeople will cut the deals before us. As our former Colleague Bill Bradley said in 1988, ``If we are going to lead the world, we have to know where it is.'' And after school, almost 6 million latch-key children go without access to after-school learning opportunities. More than seven in ten mothers of children under 18 are in the workforce. America can no longer afford a school day based on 1950s family structures. Quality after-school programs can both keep children safe and improve academic achievement. We need to ensure that children have quality after-school programs. Similarly, we continue to have a school year that reflects the harvest schedule of an agrarian economy that America long ago left behind. Long summer vacations mean reading levels drop and other learning is lost. Schools like Des Moines's Downtown School point to another way. They have a six-week summer break. And that means less time to forget. Besides six weeks in the summer, students also have week-long breaks in October, February, and May. Jan Drees, the principal of the Downtown School, says: ``The research is becoming more and more clear that students retain more learning and need less review with shorter summer breaks.'' The Downtown school is popular, too. More than 800 children are on a waiting list to get into the school. Iowa law requires schools to provide a minimum of 180 instructional days a year. But the Downtown School teaches students for 192 days a year. They are getting more learning in, every year. For Americans to stay smarter, students should spend more of the school year in school. China's increasing competitive strength is also fueled by its growing population of college graduates. Last year, nearly 3 million Chinese entered the workforce from 3- and 4-year colleges and graduate programs. This is one-third more than the year before, and double the year before that. America's college system is the finest in the world. And the work of the 21st century increasing demands good college education. But rising college costs increasingly bar Americans from getting the college education for which they are qualified. We must make college affordable for all. We need to ensure that young Americans are not discouraged from obtaining post-secondary education because of costs. Tuition costs have risen considerably in recent years. And federal assistance programs have not kept pace. Pell Grants help to make college education affordable for 5 million students, a third of American undergraduates. But students receive grants averaging just $2,500 a year, while the average annual cost of tuition at a public college in-state averages more than $9,000 a year, and private college averages more than $23,000 a year. The most that a student can get in Pell Grants is $4,050 a year. Expanding Pell Grants would increase the ability of low-income young Americans to prepare for the 21st century. As well, we should improve, consolidate, and expand the government's education tax incentives to make them more effective. We could expand and extend the deduction for tuition expenses. We could expand the Hope and Lifetime Learning credits. We could craft targeted incentives for students pursuing science and engineering careers. We could do more to make it possible for non-traditional students to obtain an education. There are many good options. As with elementary school students, we need to help encourage college students to learn the subjects needed in the 21st century. In 1975, America ranked third in the world in the share of 24-year- olds who held a science or engineering degree. By 2000, we had slipped to 15th. By 2004, we were 17th. And in the future, the Department of Labor projects that new jobs requiring science, engineering, and technical training will increase four times faster than the average national job growth rate. Last year, China produced 220,000 new engineers, while America educated just 60,000. And America trains only half as many engineers as Japan and Europe. In a recent report, McKinsey Global Institute found that there are already twice as many young university-trained professionals in low- wage countries as in high-wage countries. China has twice as many young engineers as America. Engineers play a critical role in the development of new jobs and new industries. We should increase scholarships and loan forgiveness for engineering students to entice more people to love to learn engineering. At that Shanghai factory, American and Japanese research and development stand behind many of the products being built. But ask the American or Japanese company their plans, and they will tell you that they plan to move R&D work closer to the plant, there in China. And Shanghai's government hopes to lure more R&D to town. Chinese business understands that innovation is the source of American value-added. And they want part of that action, too. Clive Cookson reported in the Financial Times about a bioscience park outside Beijing. A firm there called CapitalBio is emerging as a world leader in the new technology of biochips. Biochips are cutting-edge devices that combine biotechnology and electronics for biological testing and medical diagnostics. The 4-year-old company is already selling instruments to American drug companies. Last month, CapitalBio entered into a partnership with Affymetrix in California, the world's largest biochip producer. CapitalBio's chief executive said: ``Affymetrix had never imagined that there was such a big research effort in biochips in China, working to such a high standard.'' Dozens of similar examples exist. Already, several Asian countries boast of such science and technology centers. They are following in Japan's wake as world-class centers for research and development. Asia's R&D investment and scientific output have both surged rapidly. Between 1998 and 2003, China's research and development spending roughly tripled. You can judge a scientific paper's effect by how often other researchers cite it. The number of frequently-cited Chinese research papers has risen from just 21 in 1994 to 223 in 2003. And China's contribution to the world's scientific journals has increased from less than half a percent in 1981 to more than 5 percent in 2003. And Chinese researchers will do research for less cost. Newly- graduated researchers in China generally earn about a quarter of what Americans do. For more senior staff, salaries are usually at least half American salaries. And in exceptional cases, they can sometimes exceed ours. Chinese scientists who have returned after studying and working in the west are playing an important role. In Beijing, CapitalBio's CEO said that he ``made a special effort at the beginning to attract [Chinese expatriates] from abroad, with salary and stock options. We offered at least to match the salaries that senior scientists were receiving; the highest we offered was $120,000 a year,'' he said. So far, Asia has been able to make a global mark only in a few new areas of the life sciences where western expertise is not entrenched. Stem cell technology is an example. South Korea, China, Singapore, and India are racing ahead on stem cell research. Those countries accept human embryo research in a way that the American government has not. But America still has an advantage in innovation. And America also benefits from a risk-taking entrepreneurial culture. You can see it in the venture capital that funds companies spun out of American research laboratories or universities. America's capital markets remain the envy of the world. We can help to maintain that edge in innovation by supporting research. American universities and research institutes do much of the most innovative research in the world. But over the last 20 years, Federal research funding in the physical sciences and engineering has declined by nearly a third as a share of the economy. We should reverse this trend and increase Federal spending on basic research. The money we spend will come back to us many times over in the creation of new jobs in new industries making products yet to be invented. We should support the National Science Foundation. The NSF funds research and education in science and engineering through a variety of successful programs. It accounts for a fifth of all Federal support to academic institutions for basic research, a crucial engine of innovation. NSF funds have helped discover new technologies that have led to multi-billion dollar industries and millions of new jobs. NSF-funded work in the basic sciences and engineering made possible fiber optics, radar, wireless communication, nanotechnology, plant genomics, magnetic resonance imaging, ultrasound, and the Internet. Each year, the NSF helps fund over 200,000 students, teachers, and researchers. Many of them take their NSF-supported work into industry. They found start-up companies selling new products and new technologies. In addition, we should make it easier--consistent with the requirements of national security--for foreign students to study in America. America has traditionally poached many of the best and brightest students from around the globe. Well over a third of American science and engineering doctorate holders were born abroad. Since 9/11, however, many students are having a difficult time getting visas to study in America. In 2004, foreign applications to American graduate schools declined by 28 percent. Enrollments of foreign students at all levels of college declined for the first time in 30 years. Foreign students are increasingly studying in Europe and elsewhere. That is a terrible loss. It will affect our economic health in the long-term. We need to do a better job balancing security and economic health. America must not compromise on its security needs in hosting foreign businesspeople or foreign students. But there must be ways to streamline visa procedures and otherwise lighten the burden. We need to make it easier for foreigners to study and conduct business in America. We should support community colleges, and strengthen the link between them and the workforce. That will allow schools to develop training programs relevant to jobs in the real world. That is a primary goal of the Enzi-Baucus Higher Education Access, Affordability and Opportunity Act. And when American jobs are lost to trade, we need to retrain people and help them to get back into the workforce. The philosopher and educator John Dewey said, ``Education is not preparation for life; education is life itself.'' We can no longer afford to think of education as something just for the young. We need to help displaced workers to receive the retraining that they need to succeed in a changing economy. Jobs will change. We should help workers to get the educational tools to change with those jobs. That is why I joined with Senators Wyden and Coleman to introduce legislation to expand Trade Adjustment Assistance to service workers who lose their jobs because of trade. TAA is a vital means of helping displaced workers get the education to change careers and stay productive. When Plato envisioned the ideal society in his work The Laws, he wrote of the importance of education, through the course of life. He wrote: [N]owhere should education be dishonored, as it is first among the noblest things for the best men. If it ever goes astray, and if it is possible to set it right, everyone ought always to do so as much as he can, throughout the whole of life. And so, through advancing education, America can compete with that factory in Shanghai. Through advancing education, America can respond to competition, without erecting harmful barriers to trade. And through advancing education, America can respond to a growing China, without forcing confrontation with China. University of California economist Brad DeLong wrote of the choice that we face in how we address the challenge of China. He wrote: A world 60 years from now in which Chinese schoolchildren are taught that the U.S. did what it could to speed their economic growth is a much safer world for my great- grandchildren than a world in which Chinese schoolchildren are taught that the U.S. did all it could to keep China poor. Through advancing education, America can seek that safer world. But perhaps most importantly, America should seek to advance education not just to preserve our economy, but also to preserve our freedom. As Senator Daniel Webster said in a speech in 1837, ``On the diffusion of education among the people rest the preservation and perpetuation of our free institutions.'' As Thomas Jefferson wrote in 1816, ``If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.'' And as the Phrygian philosopher Epictetus said, ``Only the educated are free.'' And so, let us advance education to preserve our economic power. Let us advance education to win the race for economic leadership. And most importantly, let us advance education to help preserve our American democracy. Mr. President, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to address an amendment that is very important to me and my State relating to Montana's magnificent Rocky Mountain front. I filed the amendment to the Energy bill and, even though we are not on the bill at the moment, I will talk about the amendment. I will speak about what it would have accomplished because I will not press for action on this amendment. Rather, I will offer it at a later time. So what is the front? The front, as we call it back home, is one of the largest and most intact wild places left in the lower 48 States. We call it a front because that is what it is. It is a front. Anybody driving across the State of Montana westward, coming in from the east, first encounters open plains and prairies; they are vast. And then, suddenly, out in the distance the Rocky Mountains, the Continental Divide, jumps out of the plains. That is what we call the eastern front. It is amazing and it astounds me every time I drive across the State and see it from a distance. It is special to Montanans and it is sacred to the Blackfeet Indian tribe. It is home to the Nation's largest population of big horn sheep, and the second largest population of elk, as well as deer, grizzly bear, and countless other species of fish and wildlife. In fact, the front is the only place in the lower 48 where grizzly bears still roam the plains, just as they did when Lewis and Clark passed through the area 200 years ago. Because of this exceptional wild space, which includes Glacier National Park, millions of acres of wilderness and the Blackfeet Indian Reservation, the front offers unsurpassed hunting, fishing, and recreational opportunities. Sportsmen, local landowners, local elected officials, hikers, Tribal leaders, local communities, and many other Montanans have worked for decades to protect and preserve the front for future generations. I have hiked in the front many times, including to the top of Ear Mountain. It's special to me personally. Most Montanans believe very strongly, frankly, that oil and gas development and the front just don't mix. The front is too wild and too precious to subject it to roads, pipelines, noise and other such development activities. In addition, surveys of the area indicate that there just isn't that much oil and gas in the front, certainly not enough to justify disturbing this pristine area. That is why it has been well over a decade since any development activity occurred there at all, and why this administration last year halted an environmental impact study in the Blackleaf Area of the Front. The administration conceded that the time and expense associated with evaluating drilling options in the front was not the best use of taxpayer dollars. They conceded that this area might indeed be one of those special places where the benefits of oil and gas development do not outweigh its costs. Even the administration understands that it's highly unlikely that any leaseholder will ever be able to drill in the front. I couldn't agree more. That's why I filed an amendment to the energy bill that offers a permanent solution to the century-long conflict over development on the front. My amendment would establish a voluntary program allowing leaseholders in the Badger-Two Medicine or Blackleaf Areas of the front to cancel their leases. In exchange, leaseholders could receive rights to drill elsewhere in Montana, or bidding, rental or royalty credits for existing leases in Montana, or a tax credit. Any canceled lease would be permanently withdrawn from future leasing and oil and gas development activity. This withdrawal provision would also apply to a lease canceled for any other reason, including as the result of a private buy-out. To encourage leaseholders to take advantage of the program, it would expire at the end of 2009. Finally, it would provide economic development grants to Teton County, Montana, to compensate the county for the loss of any potential revenue from these leases. This is a win-win proposal that provides leaseholders value for their investment, while providing permanent protections for the front. Because it's a purely voluntary program, leaseholders don't have to participate, but there will be a strong incentive for them to do so-- they know that their leases will probably never be developed, given the intense local opposition and the expense and time involved with trying to drill in the front. Unfortunately, Mr. President, the time was not right for me to call for a vote on ame mendment, but I thought it was very important to share it with my colleagues. I will work hard in the coming months to build support for my proposal, which I think is critical to ending the conflict over the front and preserving its beauty and wildlife for future generations.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, a little less than 2500 years ago, in Athens, Pericles the king looked out from the Acropolis. In the bay beyond the port city, he saw some of Athens's 200 ships, which brought peace, commerce, and Athenian pottery to a free-trade area of more than 100 Greek city-states. Pericles boasted: ``The wares of the whole world find their way to us.'' Pericles stood astride one the wealthiest, most culturally-advanced states of his time. Greeks had vanquished the evil empire of Persia to the east. Pericles had transformed the Delian League, a defensive alliance formed to contain Persia, into an Athenian empire. And Pericles advanced the world of ideas, advocating the new idea of democracy. Said Pericles: ``Athens alone, of the states we know, comes to her testing time in a greatness that surpasses what was imagined of her. . . . Future ages will wonder at us, as the present age does now.'' Pericles had every reason to believe that Divine Providence had smiled on him and on his city. A little less than 500 years ago, in Aachen, Charles V looked up to receive the crown of Germany. Charles had become the most powerful ruler in Christendom: Holy Roman Emperor and sovereign over what is now Spain, Central Europe, southern Italy, and Spain's new overseas colonies. Sir Walter Scott said: ``The sun never sets on the immense empire of Charles V.'' Charles sought to unite his empire into a universal, multinational, Christian empire. His motto was: ``Even further.'' Charles had every reason to believe that divine providence had smiled on him and on his empire. A little more that 150 years ago, in London, Queen Victoria, adorned in pink, silver, and diamonds, escorted by a troop of the Household Cavalry, road in a closed carriage from Buckingham Palace to Hyde Park to see the Great Exhibition at The Crystal Palace. Trumpets flourished, and a thousand voices greeted her, singing Handel's Hallelujah Chorus. She walked through the Exhibition, a world's fair, and saw exhibits displaying the riches of Britain's far-flung colonies: carved ivory furniture from India, furs from Canada, hats made by convicts from Australia. The theme of the Exhibition was one word: ``Progress.'' Victoria saw exhibits representing an England that was industrially supreme. England controlled one-third of the world's international trade. The English merchant navy handled three-fifths of the world's oceangoing tonnage. Senator Daniel Webster called the English empire: ``A power which has dotted over the surface of the whole globe with her possessions and military posts, whose morning drum-beat, following the sun, and keeping company with the hours, circles the earth with one continuous and unbroken strain of the martial airs of England.'' Victoria had every reason to believe that Divine Providence had smiled on her and on her empire. The citizens of Periclean Athens, Habsburg Spain, and Victorian England each could feel that their nation had reached the zenith of human endeavor. From where they stood, Pericles, Charles, and Victoria were the most powerful leaders of their time. Their centuries belonged to them. Pericles looked to ``future ages.'' Charles envisioned going ``even further.'' And Victoria saw ever more ``progress.'' But within a century, each nation had been eclipsed. Periclean Athens fell victim to war. Not long after Pericles's death, the devastating Peloponnesian War with Sparta weakened Athens. Within a hundred years, the great city was dominated by a little known northern country called Macedonia. Charles V, seeking to harness a new technology of shipbuilding and royal navies, incurred spiraling defense costs. Charles's wars caused him to pledge his revenues to bankers for years into the future. By 1543, two-thirds of his ordinary revenue went to pay interest on past debts alone. Not long after Charles' death, dynastic division rent his empire apart. And within a hundred years, Europe had become a continent of many roughly- equal powers. Not long after Victoria's death, England found itself surpassed by American economic growth and mired in World War. And within a hundred years, Britain's once-great empire had spun off into a splintered commonwealth. And so began what Henry Luce called ``the American Century.'' At the beginning of the 20th century, America's economy was already 40 percent larger than China's and more than twice as big as Britain's. And in the wake of World War II, America was the only major power whose homeland had not suffered massive devastation. America's economy dominated the world. At mid-century, America's gross domestic product was 5 times Britain's, 5\1/2\ times China's. Look out today at the ships docked in the port of Seattle. Count the containers that bring grain and beef from Montana to the world. Count the containers that bring ``the wares of the whole world . . . to us.'' On behalf of a great and powerful nation, on February 2, President Bush could look out over lawmakers assembled in the House of Representatives and say: ``[W]e've declared our own intention: America will stand with the allies of freedom to support democratic movements in the Middle East and beyond, with the ultimate goal of ending tyranny in our world.'' America's is a great promise. Ours is the leading nation. We live in the preeminent country on earth. Americans have every reason to believe that Divine Providence has smiled on us and on our Nation. Today, Americans account for fewer than 1 in 20 of the world's people. But Americans produce more than a fifth of the world's economic output. Today, America has a $12 trillion economy, three times the size of Japan's, fives times the size of Germany's. But China's economy, when measured on a purchasing power parity basis, is now $7.3 trillion. And it is growing fast. Like Athens or Spain or England in their day, America is the greatest power of our time. But our lease on greatness is no more certain than those of the great powers of the past. We, no more than they, cannot maintain our leadership of the world without effort. The next two decades will challenge America. We face competition from rising economic powers, powers with vast populations with nowhere to go but up. And foremost among those competitors will be China. We cannot blithely sit back and rest on our laurels. We must energize ourselves anew to maintain America's place in the world. Over the last two decades, China's economy has grown an average of 9.5 percent, roughly three times as fast as America's. And although America is a populous country of almost 300 million people, China is home to 1.3 billion people. India is not far behind, with just over a billion people. Starting in the late 1970s, China and India began to reform their economies. And in the late 1980s, Communism collapsed in Eastern Europe. In the last two decades, these transformations have led to nearly half the world's population--about 2.6 billion people--entering the global workforce. The world has only just begun to feel the effects of this awakening. Visit export-zone China, and you will see that corporate America and corporate--Japan are already well in evidence. The international corporations already understand that China will fuel this century's economy. Much of America, however, still has a shock ahead of it. Before 2020, China may surpass America as the world's largest economy. Superpower America has competition, after all. And we had better hustle, too, or the Chinese will eat our lunch. Well-educated young people in China, India, and Eastern Europe increasingly have the skills to compete with Americans for high-value- added jobs. Companies are moving jobs offshore to workers in these countries not only because they work for less, but also because they are well educated in math and science. An old Chinese proverb says: ``What you cannot avoid, welcome.'' Dramatic Chinese growth appears unavoidable. China has drunk the Kool-Aid of capitalism and it is not looking back. Big city China hustles, bargains, and works hard for a better life. Skylines soar in Shanghai and Beijing. Big city Chinese public street signs come in Chinese and English. Western and Japanese companies' neon signs dominate the skyline. Western commerce is well represented, half a world from the West. China is no longer as foreign as you might expect. You can see one district of Beijing that still sports Cyrillic billboards and shop signs. But this Russian enclave sells furs, not ideas. You can see which economic system won the cold war. They call it ``market socialism.'' And the European economic tradition is full of the melding of the two systems, so we cannot necessarily say that the term is a contradiction. But plainly the Maoist state-controlled economy is on the descent, and free-enterprise, self-interested capitalism is on the rise. Chinese government officials smile as they explain, quote, ``Communism.'' The bargaining economy now permeates China. Chinese merchants love to haggle over sales great and small. The change began with Deng Xiaoping, who ruled from 1978 to 1997. But the change has now firmly taken root. Some will explain, in muffled tones, that in the wake of the 1989 Tiananmen massacre, the government made a concerted effort to demonstrate that China was ``open for business.'' China, India, and Eastern Europe are now actively seeking to move underemployed populations into more productive occupations--occupations that America and other developed countries once dominated. Millions of jobs in high-tech manufacturing, software development, and services are moving to these growing labor markets. More than 700 million workers live in China. Half of them still work in agriculture and forestry. More than three out of every five Chinese still live in the countryside. As many as 200 million underemployed Chinese workers in rural areas could move into the cities and industrial jobs. This huge pool of surplus labor presents China with a vast opportunity to modernize its economy, continue rapid growth, and move its people up the value-added ladder into more productive employment. Tour an American or Japanese company plant in Shanghai. You will see rows of diligent, uniformed workers filling rows of clean, well-lit work stations. The plant manager will tell you how he pays these workers $1 an hour--+about $2,000 a year-plus food and housing benefits. That is a good wage in a country with an average income of $1,100 a year. Compare that to America's average income of $37,600. Plants like this boast of a 90-percent retention of employees. The plant manager will complain, however, that for the less- sophisticated operations, still-lower-cost centers are already nipping at their heels. Even within China, competitive businesses need to profit from innovation and new ideas, or fall victim to even-lower-cost competition. In the long-term, Chinese labor rights must advance to help lift Chinese wages. But with 200 million job seekers at the door, substantial wage increases still appear a ways off. For the near future, China appears to own the role of the world's low-cost manufacturer. And China's workers are not all unskilled laborers. China has focused on its education system. It is quite good for a country its size. The literacy rate tops 86 percent. Visit a primary school in a middle-sized Chinese city. Bright, enthusiastic, charming children will greet you and win your heart. Happy first graders will greet you in English. Chinese schools are preparing students to compete in an intertwined, multinational, multilingual world economy. Are American schoolchildren learning Mandarin? Are they even learning Spanish? The coming generation of Chinese businesspeople will do business around the world. Americans need to broaden our linguistic abilities, or Chinese businesspeople will cut the deals before us. China's growing population of college graduates also fuels its increasing strength in high tech. Last year, nearly 3 million Chinese entered the workforce from colleges and graduate programs. That was one-third more than the year before and double the year before that. Last year, China produced 220,000 new engineers. America educated only 60,000. China now has an unusually open economy. Foreign investment in China is more than a third of its economy, compared with only 2 percent in Japan. In 2004, the sum of exports and imports is likely to reach three-quarters of China's GDP, far more than in other large economies. In American, Japan, India, and Brazil, the figure is 30 percent or less. China has allowed foreigners to participate in its growth and development. China has stoked the engines of its economic development through means both fair and foul. China promotes its domestic high-tech industry at the expense of foreign firms. World Trade Organization commitments prohibit discriminatory taxation of foreign products. But China applied a 17 percent value added tax on all semiconductor sales, and then rebated 11 percent of this for semiconductors produced in China and 14 percent for semiconductors designed and produced in China. The United States had to bring a WTO case to challenge the policy. China agreed to drop the policy last year. And China does an abysmal job of protecting patents and intellectual property. Walk into an open-air market in Shanghai, and you can buy ties that bear less than credible labels: well-known brand names, ``Made in Italy.'' And it is not just ties that Chinese businesses knock off. A red sign festooned a Shanghai market: Respect ``trademark law,'' it cajoled. But as you walk under the sign, literally dozens of men hawk DVDs and watches of plainly dubious vintage. And China also uses its currency exchange rate to distort the market. China has set, or pegged, its currency to the dollar, with an exchange rate of 8.28 renminbi to the dollar. Critics argue that as China's economy has grown, its currency should have appreciated against the dollar, making Chinese goods more expensive relative to American goods. The renminbi has not appreciated--and Chinese goods have not gotten more expensive--because of the peg. Many argue that China keeps the peg in place to support its manufacturing sector. The reality may be more complex. But there is no denying that China does not have a free-floating currency. And there is no denying that a free-floating currency would be better for China and its trading partners, over the longer term. How to get there, especially with China's badly insolvent banking system, is what the debate is about. China's economy could easily stumble, as America's did during the booms and busts of the 19th century. But barring any truly devastating crisis, China's economy will likely continue its upward trajectory. China will become the world's largest economy. The only question is when. Faster growth in China should mean faster growth elsewhere. If China's real income grows by 8 percent per year--and it is--income distribution remains unchanged, then by 2020, China's top 100 million households will have an average income equal to the current average in Western Europe. That is a giant new market for consumer goods. China's boost to global growth could exceed even those that the world economy has recently enjoyed from the spread of computers. Like that IT revolution, China's growth may lead to the loss of some jobs in the United States. But it will also likely lead to the creation of different jobs in greater numbers. Notwithstanding the pervasive influence of American and Western culture even in once-isolated China, one senses a love-hate relationship with America. Chinese officials will note how our two nations had once been sworn enemies in a war that Americans, with our short memories, forgot long ago. On Chinese streets, men will walk up to you, asked you if you are American, and debate you about American foreign policy. The Chinese Government maintains power through two tools: One, an improving standard of living, and two, nationalistic sentiment. In furthering the latter, China often paints America as the enemy keeping China from reuniting with Taiwan. The U.S. is thus second only to the Japanese in unpopularity in China. It need not be so. Together, America and China accounted for half the world's economic growth in recent years. We are economic partners. We share interests in a non-nuclear Korean peninsula. And we share a common concern with radical terrorists. But many Chinese appear put off by the swagger of current U.S. foreign policy. We still have work to do to thaw U.S.- Chinese relations. No American Government can prevent the challenges to the American economy posed by the increasing sophistication of labor markets in China, India, and Eastern Europe. We must accept the reality of these challenges. The ancient Persians looked with disdain at the Athenian marketplace, the Agora. It was a proverb among the Persians that there: ``Greeks meet to cheat one another.'' But we can no more prevent the spread of the world's commerce than Persia could stop the spread of Hellenism. Some may seek to avoid the unavoidable future. But we would do better to learn how to embrace it. We must adjust our policies to meet the challenge. The American Government cannot stop international companies from hiring overseas workers instead of American workers, without inflicting great harm on the American economy. American companies compete in a global environment. If an American company cannot hire those hard- working but low-wage Shanghai workers, a foreign company will. That other company will sell the products of that factory at lower cost. Consumers worldwide will buy them. And the American company will lose the business and jobs. Neither can we erect tariff barriers that wall off foreign competition. Higher tariffs are taxes that harm both the foreign sellers trying to sell into America and the American buyers who seek to buy foreign products. Tariffs impose a dead-weight loss on both sides. And protectionist measures invite retaliation. Protectionism thus ultimately harms a country's economy. Protectionism puts at even greater risk the jobs the politicians seek to protect. Rather, to help prepare America to meet the challenges of the next 2 decades, we need to ensure that Americans develop the skills needed to continue to compete in higher-value-added fields. We need to continue our tradition of rewarding innovation and risk-taking. We need to fight to open new markets around the world. And we need to remove burdens that hinder our international competitiveness, like the high cost of health care in America. Engineers play a critical role in the development of new jobs and new industries. In 1975, the United States ranked third in the world in the percentage of 24-year olds who held a science or engineering degree. By 2000, we had slipped to fifteenth. By 2004, we were seventeenth. At the same time, the Department of Labor projects that new jobs requiring science, engineering, and technical training will increase four times faster than the average national job growth rate. Only a little more than 1 in 20 high school seniors who took the 2002 college entrance exam planned to pursue an engineering degree. The United States trains only half as many engineers as Japan and Europe, and less than a third as many as China. We should increase scholarships and loan forgiveness for engineering students to entice more young Americans to study engineering. We should support community colleges, and strengthen the link between them and the workforce. Schools can then develop training programs relevant to jobs that actually exist in any given community. We should make it easier, consistent with the requirements of national security, for foreign students to study in America. America has benefited from our ability to attract and to retain the best and brightest students from countries all over the world. Yet, since 9/11, many students are having a difficult time getting visas to study in America. Foreign applications to American graduate schools fell 28 percent in 2004. And enrollments of foreign students at all levels of college declined for the first time in 30 years. Foreign students are increasingly studying in Europe and elsewhere. We are losing a generation of foreign minds, minds that in another time would have come to our shores. These declines are due in large part to the difficulties foreign students now face in getting a visa to study in America. We must not compromise our security needs to host foreign businesspeople or students. But there must be ways to streamline visa procedures and otherwise lighten the burden to make it easier for foreigners to study and conduct business here. American universities and research institutes do much of the most innovative research in the world. But over the last 20 years, Federal research funding in the physical sciences and engineering has actually declined by nearly one-third as a share of the economy. Money invested in Federal research programs pays dividends many times the investment. For example, National Science Foundation funding of research in the basic sciences and engineering has helped discover new technologies that have led to multi-billion dollar industries and created countless new jobs. These include jobs in fiber optics, radar, wireless communication, nanotechnology, plant genomics, magnetic resonance imaging, ultrasound, and the Internet. We should invest in our future by fully funding research support organizations such as the National Science Foundation, National Institutes of Health, and the Office of Science at the Department of Energy. Without Government support, private investment in research and development would be less than it should be. The society as a whole needs to foster the research that will build a better nation in the future. The R&D tax credit has helped. But we can improve the R&D tax credit by simplifying it and making it permanent. The Government has expended a tremendous amount of time, money, and manpower negotiating trade agreements with countries like Bahrain, Morocco, and Colombia. None of these small economies offers much to American exporters. By contrast, last year, American companies lost more than $3.8 billion to business software piracy in China alone. Putting more resources toward defending American intellectual property rights would have a real effect on the bottom line for many American companies. American companies sold $626.6 billion in copyrighted products in 2002, 6 percent of American GDP, and employed 5.5 million workers, or 4 percent of the American workforce. Their foreign sales and exports amount to $89 billion, more than most other export sectors. Our intellectual property is among our most valuable assets. Some would say it is now the American comparative advantage. We must do a better job protecting it. The political bargain that has kept a consensus in support of liberalized trade has long been that in exchange for labor market flexibility, those hurt by trade would have help finding new jobs. That bargain has eroded. America spends less on labor-adjustment assistance than any major industrialized country. Japan spends nearly twice the share of GDP, Canada nearly three times, and Germany more than eight times as much. Trade adjustment assistance provides retraining, income support, a health insurance tax credit, and other benefits to workers who lose their jobs due to trade. TAA is not a handout for idle workers, but a means to retrain them for competitive employment and help them through the transition. We should expand trade adjustment assistance to service workers and emphasize, and possibly expand, the wage insurance program. And we need to do more to keep jobs in America. For most American companies, health care costs are the single biggest disincentive to hiring new workers. The costs are enormous, increasing at a double- digit pace, far outstripping health care costs in other countries. America spends more on health care than any other country in the world. Per capita spending on health care in America is nearly 2\1/2\ times the average in the industrialized world. Employers in America also bear much of the cost of the rising number of uninsured Americans through cost-shifting by hospitals and other health care providers. Last year, employers paid an average of nearly $2,900 for single employee coverage and more than $6,500 for family coverage. By contrast, most employers in other industrialized countries do not pay anything for their employees' health care. A Government-sponsored universal health program bears those costs. The difference is hurting America's competitiveness. We can take several small, practical steps to help lessen health care's burden on American companies. We could provide tax credits to small employers, fund employer-based group-purchasing pools, increase funding for high-risk pools, expand Medicaid and the State Children's Health Insurance Program, and permit a Medicare buy-in for the near- elderly. But we cannot keep kidding ourselves. We need real change to address the problem of American health care costs. We need to do so, to meet the challenge to America's place in the world. In reality, the economic reforms in China, India, and Eastern Europe that cause the challenge to American leadership are a good thing. We should want China, India, and Eastern Europe to educate their people, open their markets, and trade with us. Since World War II, there has been no greater advocate for free markets around the world than America. America has much to gain in a world of free markets. When foreign workers move into more productive work, their incomes will rise. As foreign workers become more prosperous, they will become better able to buy American goods and services. And by keeping our markets open to foreign products, consumer prices fall on everything from footwear to electronics, making the American consumer's dollar go further. Everyone can be better off. Trade is not a zero sum game. Increasing competition from China, India, and Eastern Europe does not mean that America will suffer. Remember, after World War II, America prospered as it helped to rebuild a shattered Europe. Competition from recovering European economies did not hurt America. Rather, as Europe emerged from the devastation of war, the American economy grew along with Europe's. With the right policies, much the same can happen perhaps with much larger positive effects with the growth in China, India, and Eastern Europe. Remember, in 1957, when the Soviet Union launched Sputnik, the first man-made satellite to orbit the Earth. The challenge of Sputnik gave America the political will to devote the resources needed to become the world's premier space power. In the same vein, the economic challenge of the next 2 decades presents its own opportunities. The challenge posed by economic development in China, India, and Eastern Europe could help create a political consensus in favor of change and growth. The former Librarian of Congress Daniel Boorstein wrote: ``The most important lesson of American history is the promise of the unexpected. None of our ancestors would have imagined settling way over here on this unknown continent. So we must continue to have a society that is hospitable to the unexpected, which allows possibilities to develop beyond our own imaginings.'' We cannot rest on our laurels. But if we remain open to the unexpected, if we allow the possibilities to develop, we can maintain America's leadership in the world. It will take work. But if we redouble our education, if we open more markets, if we better manage our healthcare, then we can face the challenges of the decades to come. We must get to work. But if we do, we can make an America that, in Pericles's words, ``comes to her testing time in a greatness that surpasses what was imagined of her.'' If we do, America can continue to ``stand with the allies of freedom'' throughout the world. And if we do, ``Future ages will wonder at us, as the present age does now.''

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent to speak for such time as I may consume.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment Assistance Equity for Service Workers Act. Frankly, I am disappointed to be here introducing this bill yet again. Just last week, the substance of the bill was adopted by a majority of members of the Finance Committee as an amendment to the implementing legislation for the United States-Central America-Dominican Republic Free Trade Agreement. But today, the administration sent us the final implementing bill with the amendment stripped out. President Bush likes to say that trade is for everyone. That we all share the benefits, including workers. And he claims to care a lot about having a skilled workforce that can keep American businesses competitive in global markets. This amendment presented the President with the perfect opportunity to put his money where his mouth is. He could have said to the American people--as President Clinton did when Congress considered the NAFTA--that just as all Americans share in the benefits of trade, we all bear a responsibility for its costs. Trade liberalization and trade adjustment go hand in hand. And then he could have provided America's service sector workers with access to the one program designed to make that happen--Trade Adjustment Assistance. But by submitting the CAFTA implementing bill stripped of the Trade Adjustment Assistance amendment passed by the Finance Committee, he chose not to. Since 1962, Trade Adjustment Assistance--what we call ``TAA''--has provided retraining, income support, and other benefits so that workers who lose their jobs due to trade can make a new start. The rationale for TAA is simple. When our government pursues trade liberalization, we create benefits for the economy as a whole. But there is always some dislocation from trade. When he created the TAA program, President Kennedy explained that the Federal Government has an obligation ``to render assistance to those who suffer as a result of national trade policy.'' For more than 40 years, we have met that obligation through TAA, which is principally a retraining program designed to update worker skills. The TAA program has not been static over time. Congress periodically revises the program to meet new economic realities. Most recently, in the Trade Act of 2002, Congress completed the most comprehensive overhaul and expansion of the TAA program since its inception. I am proud to have played a leading role in passing this landmark legislation. But I am also the first to admit that our work is not done. Economic realities continue to change, and TAA must continue to change with them. One fundamental aspect of TAA that has remained unchanged since 1962 is its focus on manufacturing. We only give TAA benefits to workers who make ``articles.'' Excluding service workers from TAA may have made sense in 1962, when most non-farm jobs were in manufacturing and most services were not traded across national borders. But today, most American jobs are in the service sector. And the market for many services is becoming just as global as the market for manufactured goods. In 2002, the service sector accounted for three quarters of U.S. private sector gross domestic product and nearly 80 percent of non-farm private employment. Trade in services is a net plus for the U.S. economy. Although trade in goods continues to dominate, services accounted for 29 percent of the value of total U.S. exports in 2002 and the service sector generated a trade surplus of $74 billion. Just as we have seen with trade in manufactured goods, however, there are winners and losers from trade. Trade in services will inevitably cost some workers their jobs. Indeed, there have been some well-publicized examples in the papers. Software sign. Technical support. Accounting and tax preparation services. Not long ago, a group of call center workers in Kalispell, MT saw their jobs move to Canada and India. Examples abound of service sector jobs--even high tech jobs-- relocating overseas. A series of studies estimate that between a half million and over 3 million U.S. service sector jobs would be moved offshore in the next 5 to 10 years. That doesn't mean the total number of jobs in the U.S. economy is shrinking. But the fact that jobs may be available in a different field is cold comfort to a worker whose own skills are no longer in demand. That is why this legislation is so important. It is a simple matter of equity. When a factory relocates to another country, those workers are eligible for TAA. But when a call center moves to another country, those workers are not eligible for TAA. They should be. The benefits service workers will receive under this legislation would be exactly the same as those that trade-impacted manufacturing workers now receive. They include retraining, income support, job search and relocation allowance, and a health coverage tax credit. Hard working American service workers deserve this safety net. These benefits will always be second best to a job. But they can really make a difference in helping workers make a new start. Truthfully, I am mystified by why the President so cavalierly dropped the TAA for Services amendment and let this opportunity pass him by. His actions are entirely inconsistent with his stated desire to make trade benefit all Americans. But, sadly, this has become a pattern. Despite the obvious benefits of the TAA program, the Bush Administration fought tooth and nail against every penny, and against every provision in what became the Trade Adjustment Assistance Reform Act of 2002. Extending TAA to service workers was one of many needed improvements that was struck in the final version of the bill. Again in the last Congress, the extension of TAA to service workers was offered as an amendment to the JOBS Act and opposed by the Administration. It garnered 54 votes from both sides ofthe aisle-- failing only on a technicality. The world is changing and TAA must keep up with the times. Last year's Senate vote and this year's Finance Committee vote make clear that there is wide support for extending TAA to service workers. I truly believe this bill's time has come. I will work hard to move this legislation this year. I want to thank Senators Coleman and Wyden for co-sponsoring this legislation. They have been stalwart supporters in the fight to bring equity to service workers. I look forward to working with them to make TAA for service workers a reality. I ask unanimous consent that the text of this bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment Assistance Equity for Service Workers Act. Frankly, I am disappointed to be here introducing this bill yet again. Just last week, the substance of the bill was adopted by a majority of members of the Finance Committee as an amendment to the implementing legislation for the United States-Central America-Dominican Republic Free Trade Agreement. But today, the administration sent us the final implementing bill with the amendment stripped out. President Bush likes to say that trade is for everyone. That we all share the benefits, including workers. And he claims to care a lot about having a skilled workforce that can keep American businesses competitive in global markets. This amendment presented the President with the perfect opportunity to put his money where his mouth is. He could have said to the American people--as President Clinton did when Congress considered the NAFTA--that just as all Americans share in the benefits of trade, we all bear a responsibility for its costs. Trade liberalization and trade adjustment go hand in hand. And then he could have provided America's service sector workers with access to the one program designed to make that happen--Trade Adjustment Assistance. But by submitting the CAFTA implementing bill stripped of the Trade Adjustment Assistance amendment passed by the Finance Committee, he chose not to. Since 1962, Trade Adjustment Assistance--what we call ``TAA''--has provided retraining, income support, and other benefits so that workers who lose their jobs due to trade can make a new start. The rationale for TAA is simple. When our government pursues trade liberalization, we create benefits for the economy as a whole. But there is always some dislocation from trade. When he created the TAA program, President Kennedy explained that the Federal Government has an obligation ``to render assistance to those who suffer as a result of national trade policy.'' For more than 40 years, we have met that obligation through TAA, which is principally a retraining program designed to update worker skills. The TAA program has not been static over time. Congress periodically revises the program to meet new economic realities. Most recently, in the Trade Act of 2002, Congress completed the most comprehensive overhaul and expansion of the TAA program since its inception. I am proud to have played a leading role in passing this landmark legislation. But I am also the first to admit that our work is not done. Economic realities continue to change, and TAA must continue to change with them. One fundamental aspect of TAA that has remained unchanged since 1962 is its focus on manufacturing. We only give TAA benefits to workers who make ``articles.'' Excluding service workers from TAA may have made sense in 1962, when most non-farm jobs were in manufacturing and most services were not traded across national borders. But today, most American jobs are in the service sector. And the market for many services is becoming just as global as the market for manufactured goods. In 2002, the service sector accounted for three quarters of U.S. private sector gross domestic product and nearly 80 percent of non-farm private employment. Trade in services is a net plus for the U.S. economy. Although trade in goods continues to dominate, services accounted for 29 percent of the value of total U.S. exports in 2002 and the service sector generated a trade surplus of $74 billion. Just as we have seen with trade in manufactured goods, however, there are winners and losers from trade. Trade in services will inevitably cost some workers their jobs. Indeed, there have been some well-publicized examples in the papers. Software sign. Technical support. Accounting and tax preparation services. Not long ago, a group of call center workers in Kalispell, MT saw their jobs move to Canada and India. Examples abound of service sector jobs--even high tech jobs-- relocating overseas. A series of studies estimate that between a half million and over 3 million U.S. service sector jobs would be moved offshore in the next 5 to 10 years. That doesn't mean the total number of jobs in the U.S. economy is shrinking. But the fact that jobs may be available in a different field is cold comfort to a worker whose own skills are no longer in demand. That is why this legislation is so important. It is a simple matter of equity. When a factory relocates to another country, those workers are eligible for TAA. But when a call center moves to another country, those workers are not eligible for TAA. They should be. The benefits service workers will receive under this legislation would be exactly the same as those that trade-impacted manufacturing workers now receive. They include retraining, income support, job search and relocation allowance, and a health coverage tax credit. Hard working American service workers deserve this safety net. These benefits will always be second best to a job. But they can really make a difference in helping workers make a new start. Truthfully, I am mystified by why the President so cavalierly dropped the TAA for Services amendment and let this opportunity pass him by. His actions are entirely inconsistent with his stated desire to make trade benefit all Americans. But, sadly, this has become a pattern. Despite the obvious benefits of the TAA program, the Bush Administration fought tooth and nail against every penny, and against every provision in what became the Trade Adjustment Assistance Reform Act of 2002. Extending TAA to service workers was one of many needed improvements that was struck in the final version of the bill. Again in the last Congress, the extension of TAA to service workers was offered as an amendment to the JOBS Act and opposed by the Administration. It garnered 54 votes from both sides ofthe aisle-- failing only on a technicality. The world is changing and TAA must keep up with the times. Last year's Senate vote and this year's Finance Committee vote make clear that there is wide support for extending TAA to service workers. I truly believe this bill's time has come. I will work hard to move this legislation this year. I want to thank Senators Coleman and Wyden for co-sponsoring this legislation. They have been stalwart supporters in the fight to bring equity to service workers. I look forward to working with them to make TAA for service workers a reality. I ask unanimous consent that the text of this bill be printed in the Record.

Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment Assistance for Firms Reorganization Act. The Trade Adjustment Assistance for Firms program assists hundreds of mostly small and medium-sized manufacturing and agricultural companies in Montana and nationwide when they face layoffs and lost sales due to import competition. Qualifying companies develop adjustment plans and receive technical assistance to become more competitive, so that they can retain and expand employment. The program is very cost effective. It requires the firms being helped to match the Federal assistance with their own funds, and it pays the government back in federal and State tax revenues when the firms succeed. For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its safflower oil. And it is helping Porterbilt Company of Hamilton to expand its product line. Currently, TAA for Firms clients receive assistance preparing petitions and adjustment plans from twelve Trade Adjustment Assistance Centers, which are Commerce Department contractors. Program and policy decisions are made by a small headquarters staff in the Commerce Department's Economic Development Administration. In the Trade Act of 2002, Congress voted to reauthorize this important program for seven years and to increase its authorized funding level. The program seemed headed toward some years of smooth sailing. But it turns out that is not the case. For reasons unrelated to TAA for Firms, EDA began more than a year ago to move all its headquarters programs to its six regional offices. For TAA for Firms, that means clients will still get the same local services from the TAACs, but decisions will be made in six regional offices plus a national policy office. The likely result is more personnel needed to run the program, more layers of government, less centralized and consistent decision making, and less accountability-- all without any likely improvement in customer service. In preparation for this reorganization, EDA transferred or otherwise eliminated most of its experienced TAA staff in the Washington office. But to date it has not completed the transfer and hired or trained the necessary regional staff. So the program is in limbo. Meanwhile, the President recently announced a multi-agency consolidation of economic development programs that will eliminate EDA and its regional offices. Not surprisingly, the latest word from EDA is that plans to complete the move of TAA for Firms to the regional offices are now on indefinite hold. The President's fiscal year 2006 budget zeroes out TAA for Firms, even though Congress has authorized the program through fiscal year 2007. With funding in doubt and the Washington-based management structure for TAA for Firms already largely dismantled, this program is on the verge of a crisis. TAA for Firms was not broken until someone decided to fix it. Now it is doomed to stay in limbo unless Congress acts to clean up the mess. The bill I am introducing today solves these problems by moving administration of the TAA for Firms program from EDA into a different part of the Commerce Department--the International Trade Administration. I introduced this same bill last year with 15 co- sponsors. Relocating the program to ITA makes sense. ITA has experience running this program, which was located there prior to 1990. Relocating TAA for Firms to ITA will result in fewer lays of government and more centralized and accountable program management than running it through EDA's regional offices or some new economic development agency. Relocating the program also creates synergies by allowing better coordination of the TAA for Firms program with other trade and trade remedy programs administered by ITA. And it enhances the ability of the Finance Committee to carry out its oversight responsibilities for this program and for trade policy in general. I do not want to see this important TAA program die of neglect. This legislation is a simple matter of good, sensible government. I encourage my colleagues to lend it their support. I ask unanimous consent that the text of this bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I introduce the Trade Adjustment Assistance for Firms Reorganization Act. The Trade Adjustment Assistance for Firms program assists hundreds of mostly small and medium-sized manufacturing and agricultural companies in Montana and nationwide when they face layoffs and lost sales due to import competition. Qualifying companies develop adjustment plans and receive technical assistance to become more competitive, so that they can retain and expand employment. The program is very cost effective. It requires the firms being helped to match the Federal assistance with their own funds, and it pays the government back in federal and State tax revenues when the firms succeed. For example, TAA for Firms is helping Montola Growers from Culbertson, Montana, to develop cosmetic applications for its safflower oil. And it is helping Porterbilt Company of Hamilton to expand its product line. Currently, TAA for Firms clients receive assistance preparing petitions and adjustment plans from twelve Trade Adjustment Assistance Centers, which are Commerce Department contractors. Program and policy decisions are made by a small headquarters staff in the Commerce Department's Economic Development Administration. In the Trade Act of 2002, Congress voted to reauthorize this important program for seven years and to increase its authorized funding level. The program seemed headed toward some years of smooth sailing. But it turns out that is not the case. For reasons unrelated to TAA for Firms, EDA began more than a year ago to move all its headquarters programs to its six regional offices. For TAA for Firms, that means clients will still get the same local services from the TAACs, but decisions will be made in six regional offices plus a national policy office. The likely result is more personnel needed to run the program, more layers of government, less centralized and consistent decision making, and less accountability-- all without any likely improvement in customer service. In preparation for this reorganization, EDA transferred or otherwise eliminated most of its experienced TAA staff in the Washington office. But to date it has not completed the transfer and hired or trained the necessary regional staff. So the program is in limbo. Meanwhile, the President recently announced a multi-agency consolidation of economic development programs that will eliminate EDA and its regional offices. Not surprisingly, the latest word from EDA is that plans to complete the move of TAA for Firms to the regional offices are now on indefinite hold. The President's fiscal year 2006 budget zeroes out TAA for Firms, even though Congress has authorized the program through fiscal year 2007. With funding in doubt and the Washington-based management structure for TAA for Firms already largely dismantled, this program is on the verge of a crisis. TAA for Firms was not broken until someone decided to fix it. Now it is doomed to stay in limbo unless Congress acts to clean up the mess. The bill I am introducing today solves these problems by moving administration of the TAA for Firms program from EDA into a different part of the Commerce Department--the International Trade Administration. I introduced this same bill last year with 15 co- sponsors. Relocating the program to ITA makes sense. ITA has experience running this program, which was located there prior to 1990. Relocating TAA for Firms to ITA will result in fewer lays of government and more centralized and accountable program management than running it through EDA's regional offices or some new economic development agency. Relocating the program also creates synergies by allowing better coordination of the TAA for Firms program with other trade and trade remedy programs administered by ITA. And it enhances the ability of the Finance Committee to carry out its oversight responsibilities for this program and for trade policy in general. I do not want to see this important TAA program die of neglect. This legislation is a simple matter of good, sensible government. I encourage my colleagues to lend it their support. I ask unanimous consent that the text of this bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. I agree with my colleague that lean-burn diesel is promising technology. We did include the diesel lean-burn credit in the energy conference measure in 2003. As you know, in the Senate bill, we have included similar incentives for the purchase of other energy- efficient vehicles--hybrids, alternative fuel vehicles and fuel cell vehicles. We often start out with different positions than our House counterparts, and typically we merge together the best pieces of each bill in conference. I think any new technology warrants serious consideration if it can help make U.S. vehicles more fuel efficient and lessen our dependence on foreign oil.

Mr. BAUCUS. I believe we should, and I believe we will. I am confident that the clean diesel credit will get very careful consideration by the Senate conferees.

Mr. BAUCUS. First, let me compliment my friend for his thoughtful discussion of this issue. The Senator from Delaware has obviously done a fair amount of homework on automotive technology, and I appreciate his insights on the benefits of clean diesel technology. Let me also congratulate the Senator on his work with Senator Voinovich and others on the recently introduced legislation to clean up heavy-duty diesel engines through retrofitting. We adopted that measure as an amendment to the energy bill earlier this week, and I think it is an important addition, so I thank the Senator for his work in that regard. Now, to respond to the Senator's question concerning the diesel lean- burn provision from the House bill. Under the House provision, the tax credit would be available for the purchase of diesel vehicles meeting certain fuel efficiency and emissions standards. As long as a vehicle met those standards, it would be considered a ``lean burning'' vehicle and thereby merit the tax credit to the purchaser.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, on rollcall No. 149 I voted ``nay'' but intended to vote ``yea.'' I ask unanimous consent that my vote be changed, as it will not affect the outcome.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I strongly support the Finance Committee's energy tax language. Why are the incentives proposed in this language so important? First and foremost, they are important because of the energy challenges facing the Nation. Energy is critical to our Nation's economy and security. Our continuing dependence on foreign oil increasingly threatens our vital national interests. As the world's demand for oil continues to grow at a record pace, the world's oil producers strain to meet consumption. Today, OPEC is pumping close to full capacity. Even so, refined products remain scarce. The price of oil has soared to more than $55 a barrel. The price of gas at the pump is a daily reminder of the scarcity of energy. Increasing energy prices stifle economic growth. Folks in my home State of Montana are hit hard by rising energy prices. High gas prices particularly hurt folks who have to drive great distances. And high energy prices hurt small businesses, ranchers, and farmers by raising the costs of doing business. We can do more to provide reliable energy from domestic sources. That is our first challenge. Our next great energy challenge is to ensure safe, clean, and affordable energy from renewable resources. Energy produced from wind, water, sun, and waste holds great potential. But that energy cannot currently meet our national energy demands. Technology is helping to bridge the gap. But further development requires financial assistance. The energy tax incentives take an evenhanded approach to an array of promising technologies. We do not yet know which new technologies will prove to be the most effective. As we go forward and provide the needed incentives to develop these new technologies, we also need appropriate cost-benefit assessments to guide future investments. The energy tax language reflects the incentives endorsed by the Finance Committee last Thursday. These incentives make meaningful progress toward energy independence. They provide a balanced package of targeted incentives directed to renewable energy, traditional energy production, and energy efficiency. These incentives would encourage new energy production, especially production from renewable sources. They would encourage the development of new technology. And they would encourage energy efficiency and conservation. To encourage production, the tax language provides a uniform 10-year period for claiming production tax credits under section 45 of the Tax Code. This encourages production of electricity from all sources of renewable energy. It would not benefit one technology over another. In Judith Gap, MT, wind whips across the wheat plains. Wind is a great and promising resource in Montana. But future development of wind projects needs support, like that provided in the tax language. The tax language recognizes the value of coal and oil to our economy. It provides tax incentives for cleaner-burning coal and much-needed expansion of refinery capacity. The lack of refinery capacity is driving up the price of oil. And our lack of domestic capacity increases our vulnerabilities. A new refinery has not been built in the U.S. since 1976. The tax language would encourage the development of additional refinery capacity domestically by allowing the development costs to be expensed. The tax language also rewards energy conservation and efficiency, and encourages the use of clean-fuel vehicles and technologies. It provides an investment tax credit for recycling equipment. These incentives are environmentally responsible. They reduce pollution. And they improve people's health. The energy tax provisions would make meaningful progress toward energy independence. They are balanced and fair. I encourage my colleagues to support this legislation. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to briefly explain why I support Senator Cantwell's oil savings amendment to H.R. 6, the Energy bill. First, Senator Cantwell's amendment sets a goal for the United States of reducing our dependence on foreign sources of oil by 4 percent by 2025. I do not understand how anyone could argue that it is not in this Nation's best interests to increase our domestic energy security and reduce our dependence on unreliable and undemocratic regimes abroad. We all like to talk about energy independence, but our efforts in that direction are lacking, as evidenced by the rapid growth in our dependence on oil imports that is projected to continue well into the future. I think Senator Cantwell's amendment sets a worthy target that we can all work together to achieve. Second, we--the world' s greatest economy--can certainly achieve this goal in a way that not only reduces our reliance on foreign oil but spurs new innovation and economic growth, without penalizing any sector of our economy. This amendment is not a back-door effort to dramatically increase Corporate Average Fuel Economy standards, which I would not support. As modified it allows the President the flexibility to achieve the oil savings goal with existing authorities, or with new authorities that he or she requests from the Congress. Thus, the goal could be reached through a variety of means, including increased investments and incentives for hybrid vehicles and other transportation technologies or increased use of biofuels like ethanol and biodiesel. Additionally, if the President is having difficulty reaching the goal, he or she need only reduce our depenence on foreign oil to the maximum extent practicable, and must ensure reliable and affordable energy for the country, and maintain a healthy economy with strong job growth. This is a fair and sensible amendment, and I support it.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I rise to pay tribute to Jesse R. Nichols, Sr. Mr. Nichols, who passed away on February 15, was the first African-American clerk for the Senate Finance Committee and one of its longest serving staff members. He worked with the committee from 1937 to 1971. Born in Clarksdale, MS, Mr. Nichols came to the Finance Committee at a time early in the building of its staff. Back then, there were few, if any, African-Americans on staff with the Senate. At Finance, there were just three staff members with the committee and no standing subcommittees. Today, there are 70 staff members and 5 standing subcommittees. During his more than 30 years with the committee, he created the committee's archival system and became our resident historian. He also contributed to the history of the Senate as a whole. In 1994, he generously participated in an extensive oral history for the Senate Historical Office. In it, he describes some of his most memorable moments during his long tenure. Mr. Nichols rubbed elbows with some of the most important leaders of the day--but he was excluded from eating in the Capitol's restaurant and cafeterias because of his race. On the day that Mr. Nichols celebrated his 30th anniversary with the committee, several Senators paid him homage on the Capitol floor. They noted that Mr. Nichols outranked every member of the Finance Committee in terms of length of service. Senator Long in particular called Mr. Nichols a ``senior member'' of the committee and ``one of God's best people.'' When Mr. Nichols finally retired in 1971, the committee had to hire two people to carry on his extensive work. I salute Mr. Nichols for his long and trusted service to the Senate and send my heartfelt condolences to the Nichols family.