Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to join Chairman Grassley in introducing the Hospital Fair Competition Act of 2005. This bill, based primarily on recommendations of the Medicare Payment Advisory Commission (MedPAC), will improve the accuracy of Medicare's inpatient hospital prospective payment system (PPS); prevent the establishment of new specialty hospitals to which physician-owners can self- refer, while allowing existing physician-owned specialty hospitals to continue with restrictions; and allow ``gainsharing'' arrangements to foster improved physician-hospital efficiency. This legislation is important for patients, taxpayers, and the Medicare program, and I urge my colleagues to support it. About 17 months ago, Congress passed the Medicare Modernization Act-- the MMA. This 400-page bill included many important provisions, including long-awaited outpatient drug benefits under Medicare. The MMA also included a small provision--Section 507--related to the construction of physician-owned specialty hospitals. These facilities specialize in cardiac, orthopedic or general surgical care, and are partly- or wholly-owned by physicians. The provision was a response to growing concerns over physician self-referral, and placed a moratorium on the construction of new, physician-owned specialty hospitals, while ``grandfathering'' existing facilities and those in development. Having reviewed several independent analyses on this issue, I believe Congress was right to place a moratorium on specialty hospital construction. And I also believe that moratorium should effectively be extended permanently, while allowing existing facilities to continue operating in their current capacity. Some view specialty hospitals as innovative, focused factories for high-quality, specialized care. Advocates for these facilities say that by focusing on a limited number of services, specialty hospitals provide excellent care at a good price, while adding competition to the health care marketplace. Others say specialty hospitals flourish because they exploit a Medicare loophole allowing physician-owners to select patients who are healthier and, therefore, more profitable. For my part, I don't want to stand in the way of innovation or competition. For example, I'm glad that Congress brought innovation to Medicare in the form of outpatient drug benefits. That was long overdue. And hospitals and physicians should work together in innovative ways to improve efficiency in health care. The U.S. spends twice as much--or more--per-person on health care compared to any other developed country. And yet, our health outcomes are worse than theirs. We should get a better bang for our health-care buck, and we can take steps to that end by encouraging quality and accountability in health care. That's why I am pushing to advance incentives for quality improvement in Medicare, so patients--and taxpayers--get the most for their money. I introduced legislation last year to require that Medicare pay dialysis providers and Medicare managed care plans based on the quality of care they provide. And I am working on legislation to extend these principles of paying for quality to other parts of Medicare. As for competition, I'm all for it--as long as it's carried out on a level playing field. But when it comes to physician ownership of specialty hospitals, I'm not convinced the playing field is level. That's because physicians alone choose where patients go on the playing field--either to community hospitals or specialty hospitals. Some liken physician-owners of specialty hospitals to coaches who choose the starting lineup for both teams--in this case, the specialty hospital team and the community hospital team. And for the third time, a Federal agency has told us that the healthiest teams, that is, the most profitable patients, end up at physician-owned specialty hospitals. In 2003, the non-partisan Government Accountability Office (GAO) reported that, by and large, specialty hospitals care for relatively healthier patients than their community hospital counterparts. GAO surveyed 25 specialty hospitals, and found that 21 of the 25 had a less acute mix patients than community hospitals. GAO determined that of the hospitals studied, 17 percent cardiac patients seen by specialty hospitals could be classified as severe cases, compared with 22 percent in general hospitals. And about 5 percent of orthopedic cases in specialty hospitals were severe, compared with 8 percent in community hospitals. Earlier this year, on March 8, MedPAC issued its MMA-mandated report on specialty hospitals, and arrived at findings similar to those of the GAO. MedPAC found that despite shorter lengths of stay, physician-owned specialty hospitals are not more cost efficient than community hospitals. MedPAC found that specialty hospitals tend to treat lower shares of Medicaid patients than community hospitals. And, just as GAO did, MedPAC found that specialty hospitals treat patients who are generally less sick--and therefore, more profitable--compared to community hospitals. And while the Department of Health and Human Services has not officially issued its MMA-mandated report on the topic--but is expected to shortly--HHS reported on March 8 that, based on the small number of facilities it studied, specialty hospitals tend to care for a healthier patient population than their community hospital counterparts. I believe the phenomenon of specialty hospitals treating healthier patients is the result of a loophole in the Stark self-referral law. This loophole--related to the ``whole hospital exception''--is one that should be closed. If it is not closed, Congress will effectively sanction the practice of physician self-referral that has been prohibited for years. In 1989, the HHS Inspector General reported that patients of referring physicians who owned or invested in independent clinical labs received 45% more lab services than Medicare patients in general. In 1992, a study found that physical therapy visits per patient were 39% to 45% higher in facilities with physician ownership compared to those without. In short, the authors of the study found that utilization and charges per-patient were higher when facilities were owned by physicians with an ownership interest. In response to these studies and others like them, Congress passed the Stark laws, to prevent physician self-referral, first in the area of clinical labs, and subsequently in 10 other areas, including physical therapy and certain imaging procedures. But the Stark laws did not address the issue of physician self- referral to specialty hospitals. In part, that's because there weren't many specialty hospitals at the time. As the GAO pointed out in its 2003 report, the vast majority of specialty hospitals were built in 1992 or later. Instead, the Stark law included a provision that has come to be known as the ``whole hospital exception.'' While the Stark law prohibits physicians with ownership interest in only a hospital department from referring patients to that department, the law does allow physicians to refer to a facility they partially own, under two conditions. First, the physician must have admitting privileges in that hospital. Second, the physician must have a financial interest in the ``whole hospital,'' not just a department of the hospital. As the GAO explained in 2003: ``The premise [of the whole hospital exception] is that any referral or decision made by a physician who has a stake in an entire hospital would produce little personal economic gain because hospitals tend to provide a diverse and large group of services. However, the Stark law does prohibit physicians who have ownership interest only in a hospital subdivision from referring patients to that subdivision. With respect to specialty hospitals, the concern exists that, as these hospitals are usually much smaller in size and scope than general hospitals and closer in size to hospital departments, the exception to Stark could allow physician owners to influence their hospitals'--and therefore their own financial gain through practice patterns and referrals.'' The problem with the ``whole hospital'' loophole is that it treats a 10-bed surgical facility the same as a 500-bed community hospital, even though that 10-bed facility more resembles a department of the 500-bed hospital than it does the hospital itself. This loophole is unfair, and our bill closes it, by preventing the establishment of new specialty hospitals to which physician-owners can self-refer. Let me note that our bill does nothing to prevent the construction of new specialty hospitals--as long as self-referral is not part of the business model. Hospitals specializing in one type of care or another have existed in this country for years, and should be encouraged--as long as their owners and referrers are not one and the same. Opponents of this bill will likely make at least three claims. First, they will state that preventing the construction of new, physician-owned specialty hospitals is anticompetitive. Second, they will suggest that since the average physician-owner's share in a specialty hospital is small, economic incentives to self-refer are minimal. Third, they will claim the bill thwarts health care quality. Let me take these claims in turn. As I stated previously, I am all for competition--as long as it's fair. But I don't think it's fair to further a system in which physician-owners can send healthier and more profitable patients to facilities they own, while sending sicker, less-profitable ones to hospitals they don't own. There's a reason Congress acted to mitigate the effects of physician self referral over 15 years ago, and I see no reason why that principle should not be extended to the specialty hospital setting. On the issue of economic incentives, some argue that physician self- referral to specialty hospitals is a non-issue, since physicians typically own a very small share of a particular facility. In fact, MedPAC found that in about one-third of specialty hospitals they surveyed, the largest share owned by a single physician was just two percent. And as a group, physicians own just over a third of the typical heart hospital. But MedPAC also pointed out that about one- third of orthopedic and surgical hospitals were owned almost entirely by their physicians. Perhaps more important, MedPAC showed that even a relatively small ownership interest can reap large profits for an individual physician investor. Page 21 of MedPAC's March report on specialty hospitals says: What is the order of magnitude of physicians financial incentives to increase utilization when they own a hospital? What follows is a hypothetical example of the marginal profit associated with a group of cardiologists each referring just one additional patient (above the current patient load) for coronary artery bypass graft (CABG) surgery. In fiscal year 2002, the base payment for CABG surgery with cardiac catheterization (DRG 107) was roughly $24,000. Our examination of Medicare cost reports and hospital financial statements suggests that variable costs equal approximately 60 percent of the DRG payment, roughly $14,400. Hence the marginal profit--payments minus variable cost--would be $9,600 per patient ($24,000-$14,400). If 10 cardiologists owned a 3 percent interest each and they all induced one additional surgery per year, each cardiologist's income would increase by $2,880 ($9,600 3% 10).'' In other words, even a small ownership share--just three percent--can provide a strong profit motive--and a strong incentive toward self- referral. Finally, let me address the third claim that will likely be made against this bill--that it thwarts the provision of quality care. Specialty hospital advocates claim that due to the focused nature of their mission, physician-owned specialty hospitals provide better quality and outcomes than their community hospital counterparts. But recently the New England Journal of Medicine published a study showing that patients undergoing certain heart procedures in specialty hospitals were less likely to have coexisting conditions than those being treated at general hospitals. The authors of the study stated, ``. . . given that we found no significant differences in outcomes between specialty and general hospitals with similar volumes or between specialty cardiac hospitals and specialized general hospitals, it could be argued that the specialty-hospital model itself does not yield better outcomes.'' They also said, ``. . . our study provides no definitive evidence that cardiac specialty hospitals provide better or more efficient care than general hospitals with similar procedural volumes.'' In short, there is solid evidence that despite being less efficient, physician-owned specialty hospitals care for healthier, more-profitable patients, leaving community hospitals to care for sicker, less- profitable ones. Economic incentives toward physician self-referral in specialty hospitals are significant. And there is slim evidence that specialty hospitals provide better care than community hospitals. Given this evidence, it's clear that Congress should not facilitate the construction of more physician-owned specialty hospitals. And while we support ``grandfathering'' existing facilities, let me make clear that we do not intend to create another grandfathering period if the legislation is not enacted before June 8, 2005. The intent of this bill, even if it passes after June 8, is to effectively make permanent the MMA-mandated moratorium. But this bill does more than simply prevent the establishment of new, physician-owned specialty hospitals. It also takes steps to mitigate ill incentives in the inpatient PPS, by making the PPS more accurate for all providers of hospital care--community hospitals and `grandfathered' specialty hospitals alike. Medicare spends about $100 billion per year on inpatient hospital services, and it's important that this system be accurate. Accordingly, MedPAC recommended a number of steps to improve the accuracy of the Medicare inpatient payment system. These recommendations should mitigate incentives for all hospitals to choose healthy patients over sick ones, and to focus on some diagnoses at the expense of others. Medicare pays hospitals for inpatient services based on roughly 500 Diagnosis Related Groups (DRGs), which bundle services needed to treat a patient with a particular disease. DRGs cover most routine operating costs attributable to patient care, including routine nursing services, room and board, and diagnostic and ancillary services. Under current law, just over five percent of the base payment for all DRGs is set aside for inpatient outlier payments, even though some DRGs have almost no outlier cases. The Hospital Fair Competition Act directs the Secretary to adjust the DRG relative weights to account for differences in the prevalence of high-cost outlier cases, thereby removing their disproportionate impact on the payment system. The bill also improves accuracy of the DRG weights. Currently DRG weights are based on the national average of hospital charges for a particular DRG. The rate of growth for these charges may vary dramatically, depending on the service. For example, MedPAC has found that hospital markups for ancillary services (e.g., supplies, operating room time) tend to be higher than those of routine services (e.g., room and board, nursing care). As these ancillary and routine charges grow at different rates, the DRGs reflect that growth, gradually skewing the system away from the true costs of providing care. In short, a charge- based system causes Medicare to pay too much for some services, not enough for others. The Hospital Fair Competition Act directs the Secretary to substitute the charge-based system with one based on hospitals' costs, as well as base the DRG weights on the national average of hospitals' relative values in each DRG. Mind you, we believe that the Secretary currently has the authority to make the payment changes outlined above. The Hospital Fair Competition Act simply directs the Secretary to do so. We also believe the Secretary has the authority to promulgate regulations defining what a ``whole hospital'' is. When Congress passed the ``whole hospital exception'', it did not intend to allow self-referral to facilities that are effectively the equivalent of a hospital wing or department. We believe the Secretary can and should exercise his authority to close the ``whole hospital'' loophole by regulation. Mr. President, some say that the proliferation of physician-owned specialty hospitals is a function of physicians' desire for control over their workplace. They argue that physicians typically have no say in day-to-day hospital operations, and thus little incentive to improve the quality or efficiency of the care they provide in the hospital. MedPAC's recommendations for ``gainsharing'' stand to alleviate some of that concern, by giving physicians more control over their workplace. Gainsharing arrangements allow physicians and hospitals to improve hospital efficiency without the undesirable effects of physician self- referral. In a gainsharing arrangement, hospitals and physicians share cost-savings gained by means such as streamlining the purchase of medical devices, substituting less-costly items used in surgical procedures, and maximizing operating room efficiency. While gainsharing arrangements must be developed carefully so as not to compromise quality of patient care, gain sharing has the potential to align physician-hospital incentives so that care can be delivered in the most cost-effective manner. I realize that gainsharing arrangements are not a panacea toward improving physician-hospital relations. We can and should do more to give providers of all types a better stake in improving their workplace and the quality of care they provide. That's why I am pushing initiatives to tie Medicare payment to quality, so that--unlike the current system--the best providers are not paid the same rates as mediocre ones. This system of paying for quality stands to improve accountability across the spectrum of Medicare provider types, and give both patients and the government more for their money. We all know that Medicare's long-term fiscal future is much in doubt. Hardly a day passes without a warning about Medicare's finances and the retirement of the Baby Boom generation that will complicate the long- term financial picture of the program. Given these warnings, it's imperative that we make the most of the resources at hand, and--where possible--make Medicare a better more responsible buyer of health care. By leveling the playing field regarding patient referrals; improving the accuracy of Medicare's inpatient hospital payments; and giving physicians a larger stake in their hospital workplaces, this bill stands to do that. Chairman Grassley and I believe these changes will go a long way toward improving much of what ails hospital payment under Medicare, and we urge our colleagues' support for this important legislation.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am very pleased to join in offering the substitute amendment to this bill. This bill is called SAFETEA. It culminates many months of hard work. I commend the chairman, Chairman Inhofe, and Senator Bond, chairman of the transportation subcommittee, and especially the chairman and ranking member of the full committee, Senator Grassley and Senator Jeffords, for their hard work. I especially thank my good friend, Senator Grassley. He is a good man. He is good to work with. He is pragmatic, practical, he cares, he wants good solutions, and he wants to advance the ball. The people of Iowa are very lucky to have him as their Senator. Senator Harkin is another great Senator from Iowa, but I particularly enjoy working with Senator Grassley. We have a strong working relationship and it means a lot to me personally. This legislation is critical for Montana and also for the country as a whole. I cannot think of any other legislation that would have such a substantial effect on our Nation's economy. The current transportation program expired in September 2003. Since then, regrettably, Congress has had to enact extensions. We could not come up with a solid 6-year bill. We have had six extensions to the highway program--the most extensions in the history of the program. Frankly, in addition to all of the substantive good provisions of the bill, it is very important to enact a full 5-year bill rather than going down the road with more and more extensions. The current extension expires at the end of this month, about 3 weeks from now. If we fail to meet the deadline, the program lapses and States will no longer receive their funds. We should not let that happen. We can and should do our work right away. We have already seen an entire construction season go by without a long-term bill. In Montana, we have a very short construction season. Winter weather prevents us from working on our roads all year long. We cannot afford any more delays. Because Congress has not acted, States are letting fewer bids; it is that simple. Because Congress has not acted, contractors, suppliers, and other construction businesses have less business. Transportation projects are very complex. Any bumps along the way only compound them over time. Another extension is not a solution. We need to act; we need to act right away. We should act on this bill and head to conference. By approving the substitute amendment and adding funding to the bill, we can speed the process to complete the conference. While I supported reporting this bill out of the Environment and Public Works Committee because of a commitment made by others to the Republican leader, it was with the firm understanding I would offer an amendment to make substantial improvements to this bill, working in conjunction with other Senators. That is why we are here today offering this important amendment, which is part of the underlying bill, to increase the authorization and spending levels in this bill. Chairman Grassley and I have been working for 3 years to develop the financing for the Transportation bill. It is not a simple task. I am pleased to say the chairman and I have proposed a package that does several things. First, we shore up the highway trust fund to ensure solvency during the life of this bill by providing over $7 billion in additional receipts during the authorization period. Second, using these receipts, we increase investments in this Nation's infrastructure by $8.9 billion for the highway program and $2.3 billion for the transit program. Third, we fully pay for the additional highway spending in this amendment. Repeating that, we fully pay for highway spending in this amendment. We do so in a responsible manner. Let me take a couple moments to comment on the misperceptions and, frankly, outright distortions that I have heard about this amendment. First, we do not raise gas taxes in this amendment. I will repeat that. We do not raise gasoline taxes. We can increase resources to the highway trust fund without raising taxes. It is that simple. Don't be fooled by the hysteria of some who flatout oppose more funding for transportation and will say almost anything to defeat our efforts. I have also heard people say this amendment transfers general fund money to the highway trust fund. That, too, mischaracterizes our proposal. The other day, Secretary of Transportation Mineta made a very interesting statement. When he described our amendment to raise the investment in transportation, he said: ``There is a dark cloud looming on the horizon.'' But when his own Department estimated the unmet transportation needs in this country, the Transportation Department said there are more than $325 billion in unmet needs. That figure grows each and every day that we forego maintenance of the transportation system. This amendment is no dark cloud. Rather, adopting this amendment will part the clouds that others have created over this bill and allow the sun to shine on this bill. Let me lay out the facts. The President's 2006 budget submission increased the funding proposed for this bill. While I believe that those levels are still artificially low, I want to acknowledge that effort. Two efforts by the Finance Committee made possible the President's increased funding in its February budget. The administration's reliance on these developments then makes its criticism of this amendment now ring hollow. The first reason the President was able to increase his highway funding request was the Finance Committee's work last year on fuel fraud and the ethanol credit. The President's budget proposal depends on the increased dollars from the fuel fraud provisions and the volumetric ethanol credit that Congress enacted as part of the JOBS Act last year. Over the years, the Senate spent many hours debating the merits of ethanol incentives. I believe the incentives are good agricultural policy and good energy policy. But whether you favor the incentives or not, last year, Congress broadly agreed that the highway trust fund should not bear the burden of that subsidy. The volumetric ethanol tax credit in the JOBS bill eliminated that problem, and we do so here again today. The Finance Committee also developed proposals to reduce fuel tax evasion. We tightened the rules for fuel transfers and increased penalties for noncompliance with the tax laws. When Senator Grassley and I first introduced the ethanol changes and fuel fraud provisions, we heard some of the same comments and criticisms we hear today. Yet enactment of these provisions has added more than $17 billion to the highway trust fund for the years 2005 through 2009. The President and the House could not have funded their current $284 billion proposals without those dollars. Second, the President's 2006 budget submission also included what some call ``the refund proposal.'' This provision relates to the amount currently refunded to States, cities, and schools that are exempt from paying the Federal gas tax. States, cities, and schools do not pay the Federal fuel tax. They are exempt. That is appropriate. They should be. Right now, when a State, city, or school fills its vehicle with taxed fuel, the organization is entitled to get a refund of the Federal excise tax. They get that refund. Currently, the general fund pays that refund. Then the highway trust fund repays the general fund. That doesn't make sense. All we are saying in this amendment is that the highway trust fund should not have to reimburse the general fund for the amount of the refund. It is that simple. Those are vehicles traveling on the highways. We do not raise taxes on State and local governments, not one penny. Vehicles used by State and local governments still cause the same wear and tear on our roads as vehicles owned by entities that pay Federal gas taxes. So the highway trust fund should not have to bear the burden of the exemption. Some in the administration, and others, call this an ``accounting gimmick.'' That is flatly not the case. The administration uses the same refund mechanism to pay for the President's Transportation bill. If it was not an ``accounting gimmick'' in February, when the President submitted his budget, then it is not an ``accounting gimmick'' for Congress to use the same mechanism now. It is not a gimmick anyway. In addition to the elements contained in the President's budget, let me briefly describe the other provisions that increase receipts in the highway trust fund. The amendment will increase collections of present-law fuel taxes. The amendment will improve tax compliance with respect to blend stocks used in gasoline. The proposal prevents the blending of untaxed chemicals with gasoline by imposing the Federal excise tax when blendstocks are removed from the bulk system. We make sure that kerosene used on the highways is taxed as diesel fuel, and we improve the rules for tax-free fuel purchases by requiring appropriate certification that an entity is exempt from the fuel taxes. The amendment also dedicates the gas-guzzler tax to the highway trust fund. Today this transportation excise tax goes to the general fund. That does not make any sense. It belongs in the highway trust fund. After all, these are vehicles that travel on the highways. It belongs in the highway trust fund with the rest of the Federal excise taxes that are imposed on vehicles and fuels. This proposal does not take current dollars out of the general fund, but when the guzzler tax is paid in the future, it will go to the highway trust fund. The amendment maintains the integrity of the highway trust fund. The highway program will be paid entirely by transportation excise taxes to the highway trust fund. But because more transportation taxes will now rightfully go to the highway trust fund, there will be a gap to fill in the general fund. We make the general fund whole by including revenue-raisers that are not related to highways. These are good policy loophole closers. Everybody would want to vote for these regardless, just standing alone. They are the sort of provisions the Senate has passed before. All in all, it is a win-win situation. This bill pays for highways legitimately and replenishes the general fund legitimately. On April 27, the majority leader stood on the Senate floor and said this about the Transportation bill: I am confident by working together we can get this done, and we can demonstrate reasonable fiscal restraint. At the Finance Committee markup, I made that same statement that we would be responsible in this new funding amendment. We have done that. We have been responsible. I commend my colleagues who voted for the Talent-Wyden amendment to this year's budget resolution. That amendment firmly stated that new receipts to the highway trust fund should be available and spent in this bill. Eighty-one of us supported that amendment. That is an overwhelming majority of the Senate supporting additional transportation funding in this bill, all paid for. Mr. President, I say to my colleagues, this amendment provides the funding they voted for in the budget resolution. Each of the 81 Senators who supported the budget resolution amendment should support this new money. Why are we working so hard to increase the funding in this bill? Let me explain why we have not just given in and gone along. Every billion dollars in infrastructure investment creates nearly 47,500 jobs--every billion dollars. That is important. Over the life of the bill, we will sustain more than 2 million good-paying jobs. Highway jobs are jobs that stay in the United States. You cannot export highway jobs. You cannot outsource highway jobs. They are not shipped overseas. This bill will affect all Americans whether they build the road or drive on the road. Our economy could sure use a boost, and one certain way is to produce jobs through this bill. It is a jobs bill. This bill is an economic engine for my State of Montana. The last Transportation bill, TEA-21, provided more than $1.2 billion in my State and helped sustain more than 11,000 jobs. With the increased funding in this substitute amendment, Montana and every other State in the country will receive a much needed increase in economic growth and development, all paid for. This amendment will also allow us to make some modest changes to the formulas in the SAFETEA bill. We made changes for both donor and donee States. For the donee States, we have increased the guaranteed funding from 110 percent of TEA-21 levels up to 115 percent each year of the bill--each and every year. From a 110-percent increase to a 115-percent increase--that is for the donee States. For the donor States, we have provided funding to bring every donor State to 91 cents on the dollar beginning in 2006, with an additional guarantee of 92 cents in 2009. I know this is not what everybody wanted, but we have limited funds. We cannot do everything for everyone. I hope that as this debate continues, my colleagues will understand the very difficult task of drafting a national formula. We must work together. Prior transportation bills have never been partisan fights. It is very important. There is no such thing as a Republican road or a Democratic road; they are American roads. I remember fondly working with Senator Daniel Patrick Moynihan on ISTEA in 1991. We had good debates on the future of transportation policy. He had such vision, and ISTEA reflected that vision. In 1998, I worked closely with two dear friends developing TEA-21-- the late Senator John Chafee of Rhode Island and Senator John Warner of Virginia. We worked side by side through many long nights and hours of discussions. Each of us brought a different perspective to the table. I represented the needs of rural and Western and Midwestern States, Senator Chafee represented the Northeastern States, and Senator Warner represented the donor States, generally Southern States. Each of us recognized that with a national transportation program, we had to balance the needs of each constituency. I believe we put together a good product in TEA-21. Was it perfect? Of course not, but it moved our country forward. Did I get everything I wanted for my State? No. We did not get to write legislation in a vacuum. We had to work together. The bill before us is balanced. We have worked hard to balance the needs of the various States, each with different interests but with a common purpose. We have worked hard to balance the needs of highways and transit. It is time for us to finish the job. We have substantial differences with the House. We need to get this bill to conference so we can iron those differences out. Legislating is the art of compromise. I have been fortunate to represent the people of Montana in this Capitol for the last 30 years. In that time, I have worked on hundreds of pieces of legislation that have become law. To craft these measures, I have worked with Members on both sides of the aisle--with Members on my side and Members of the other side--because, after all, we all are Senators. I have not received everything I wanted. I have had to give a little bit. That is what we all do around here. We are a nation of 50 States with different needs. I hope my colleagues will continue to work with us on the Senate floor with that in mind. There are small States, there are large States, there are urban States, there are rural States, there are donor States, and there are donee States. We have done our very best to balance the various needs. Our ability to address many of the outstanding issues depends on the added funding this amendment provides. We could not balance them without this added funding. Without additional funding in this bill, we cannot make further changes. It is that simple. To my friends who have come to me over these past weeks asking for more money for their States, I simply say: Now is the time to stand and be counted. Now is the time to complete action on this bill and invest in our future. Let us not allow gridlock in Congress to cause gridlock on the main streets of America. Let us adopt this amendment and provide the funding our transportation system needs. Let us move this bill to help get our economy moving. Mr. President, I again thank all those concerned. I yield the floor.

Mr. BAUCUS. Mr. President, I move to reconsider the vote.

Mr. BAUCUS. Mr. President, I understand there is no further debate on the amendment. I see the Senator from Texas wishing to urge the adoption of this amendment. We have no objection. It is a good amendment and I urge its passage.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my colleague from Montana for doing something about this problem. It is a huge problem. He has identified it. He has some solutions, he has some ideas, and we will work with him, as I am sure other Senators will in States also affected by this problem. I compliment him for raising the issue and finding a solution.

Mr. BAUCUS

Mr. BAUCUS. I ask unanimous consent the following fellows of the Finance Committee be granted the privilege of the floor for the duration of the debate on the Transportation reauthorization bill: Mary Baker and Stuart Sirkin.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, inscribed on the Justice Department building are the words: ``No free government can survive that is not based on the supremacy of law.'' Aristotle said: ``Where the laws are not supreme, there demagogues spring up.'' And Balzac wrote: ``The soul of liberty is love of law.'' It is a free and independent judiciary that ensures the supremacy of law. It is a free and independent judiciary that guards against the demagogue. It is a free and independent judiciary that protects the soul of liberty. As Montesquieu wrote in The Spirit of the Laws: ``There is no liberty if the judiciary power be not separated from the legislative and the executive.'' And as George Washington wrote to John Jay in 1789, when Washington invited Jay to be Chief Justice: ``The Supreme Court must be recognized as the keystone of our political fabric.'' The effort by some to abridge the Senate's role in the confirmation of judges is nothing less than an effort to diminish the independence of the judiciary. That is the bottom line. The Senate's rules and its paramount value of unlimited debate are central to preserving that independence of the judiciary. The Senate's involvement in the confirmation of judges helps to ensure that nominees have the support of a broad political consensus. The Senate's involvement helps to ensure that the President cannot appoint extreme nominees. The Senate's involvement helps to ensure that judges are more independent. The Framers wanted the courts to be an independent branch of government, helping to exercise the Constitution's intricate system of checks and balances. The Senate's involvement in the confirmation of judges helps to ensure that the judiciary can be that more independent branch. And that independence of the judiciary, in turn, helps to ensure the protection of personal rights and liberties. Just witness the Bill of Rights and the Constitution and the degree to which the court protects the Bill of Rights against improper encroachment by the legislative branch and in some cases by the executive branch. The current fight over allowing the President to more easily gain confirmation of Supreme Court Justices and Appellate Court judges recalls another such effort by a President to affect the independence of the judiciary. It was in 1937, when President Franklin Roosevelt tried to pack the Supreme Court. Roosevelt's effort to pack the Court failed in 1937 because enough Senators from his own party stood up to their President. They stood up for the Constitution that they loved. One of those Senators was Montana's Burton K. Wheeler. Until then, Burt Wheeler, a Democrat, had been an ardent champion of New Deal causes. But that changed with Roosevelt's effort to pack the Court. In his book about Lyndon Johnson, Master of the Senate, the historian Robert Caro recounts what happened: Burton K. Wheeler of Montana, long a leader in Senate fights for liberal causes, was coming to see that the Court plan implied an alteration in the whole balance of governmental power in favor of the White House. What, he wondered, would come next? He refused to fight for this cause. Wheeler was a senator other senators followed. Roosevelt sent his aide Thomas G. Corcoran to him with an offer. Its details would be a matter of dispute; at a very minimum, Wheeler would be allowed to give `advice' on the nominations of two of the six justices. Wheeler had accepted other offers from Corcoran before, but he refused to do so on the Court-packing plan. I'm going to fight it with everything I've got,' he told Corcoran. The President hurriedly invited his old friend Burt to dine at the White House that evening; the Senator replied that the President had better `save the plate for someone who persuaded more easily'. And on the Senate floor, Senator Wheeler said: I am saying to the Senator now that those connected with the administration have said that they wanted six men upon the Supreme Court whom they could trust, that they wanted men on the Court who would decide cases as they wanted them to be decided. That is the issue. It can be camouflaged as much as one wants to attempt to camouflage it, but the truth is that it is impossible to get away from the fact that this is a proposal to make the Supreme Court of the United States subservient to the executive branch of government. Similar words could be said about the current effort to abridge the Senate's involvement in securing the independence of the Court. There are those connected with the current effort who want people ``on the Court who would decide cases as they want them to be decided.'' And it is impossible to deny that the effect of the current proposal would be ``to make the Supreme Court of the United States [more] subservient to the executive branch of government.'' There is no doubt about it. That is the intent. That is the result. On the Senate floor, Senator Wheeler also said: I say the step proposed is one of the most dangerous ever suggested, and it will set the most dangerous precedent of which I can conceive. You can bring political pressure to bear on me, you can say, `You you have to go along because of the fact that the administration wants it.' You can say that the privilege of appointing postmasters will not be accorded me; you can say that I will get no more projects for my State, worthy or unworthy; you can say what you please; but I say to Mr. Farley [the Postmaster General and Chairman of the Democratic National Committee] and to everyone else that, so far as I am concerned, I will vote against this proposal because it is morally wrong, morally unsound. It is a dangerous precedent, . . . it gets us nowhere, it is an expedient, it is a stopgap and dictatorial, and so far as I am concerned, if I am the only man in the Senate to do so, I shall vote against it. Once again, similar words could be said about the current effort to abridge the Senate's involvement in securing the independence of the Court. ``[T]he step proposed is one of the most dangerous ever suggested.'' ``[I]t will set the most dangerous precedent . . . .'' ``[I]t is morally wrong, morally unsound.'' ``[I]t gets us nowhere . . . .'' ``[A]nd so far as I am concerned, if I am the only man in the Senate to do so, I shall vote against it.'' I only hope that enough Senators from the majority will have the courage that Burt Wheeler had, to stand up to their President, and stop this effort to undermine our Nation's cherished checks and balances. In the latter half of the 19th Century, James Bryce was the Ambassador of the United Kingdom to the United States. In 1888, he wrote of America's independent judiciary: The Supreme Court is the living voice of the Constitution . . . . It is the guarantee of the minority who, when threatened by the impatient vehemence of the majority, can appeal to this permanent law, finding the interpreter and enforcer thereof in a Court set high above the assaults of faction. For two centuries, the Senate's rules have protected the rights of the minority party, Democrats and Republicans alike, and thereby protected the independence of the judiciary. After two centuries, it would be a mistake to change those rules. As the Senior Senator from Tennessee, the Majority Leader, wrote in a forward to a book published last year entitled Senate Procedure and Practice, and I quote: [A]bove all, together the Senate's rules and practices form a whole. It is a whole that faithfully reflects the Framer's design and ambition for the body. It is a whole that remains true to the Senate's two paramount values: unlimited debate and minority rights. [U]nlimited debate and minority rights. That is what the leader wrote just a year ago: unlimited debate is one of the paramount values in the Senate's rules. Minority rights is the other one. ``[U]nlimited debate'' allows Senators to protect ``minority rights.'' The Senate's rules help to protect the independent judiciary. The Senate's rules help to ensure that no one party has absolute power. The Senate's rules help to give effect to the Framer's conception of checks and balances to protect the rule of law. John Locke wrote in The Second Treatise on Government: Wherever law ends, tyranny begins. John F. Kennedy said: Law is the strongest link between man and freedom. And the Greek philosopher Heraclitus of Ephesus wrote: The people should fight for their law as for their city wall. I urge my Colleagues on the other side of the aisle to fight for this city wall. I urge them to defend the independence of the judiciary. One hallmark that sets the United States apart from most countries in the world is a strong, independent judiciary: not bullied by the legislative branch, not bullied by the executive branch; an independent judiciary. I urge my colleagues to defend that independence and I urge them to reject this effort to overturn the Senate's rules. Mr. President, I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following fellows and interns of the Democratic staff of the Finance Committee be allowed on the Senate Floor for the duration of the debate on the Transportation Reauthorization Bill. Brian Townsend, Cuong Huynh, Richard Litsey, Jorlie Cruz, Waylon Mathern, Emily Meeker, Rob Grayson.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to oppose the conference report on the budget resolution. This budget moves the country in the wrong direction. This budget resolution would worsen our fiscal situation. This budget resolution would increase Federal budget deficits rather than decrease them. On its face, this budget resolution would add $168 billion to Federal deficits and almost $1.5 trillion to Federal debt held by the public over the next 5 years. This includes $70 billion in reconciled tax cuts over 5 years that are completely unpaid for, and an additional $36 billion of unreconciled tax cuts over 5 years that are not paid for either. All of these additions to the deficit and debt held by the public are disconcerting on their own. But that is not the full story. This resolution leaves out enormous budgetary costs in order to make the budget picture look rosier than it is. It provides no money to fix the alternative minimum tax. It assumes levels of nondefense discretionary spending for the next 5 years that are unrealistically way too low. It also leaves out funding that will undoubtedly be needed for our efforts in Iraq, Afghanistan and the war on terror. Furthermore, the budget resolution includes cuts in spending that are targeted to the wrong policy areas: toward low-income families, vital safety net programs, farmers, and ranchers. If the three omitted items were presented honestly, and the wrongly targeted spending cuts were removed, the resolution would increase deficits and debt held by the public by much larger amounts over the next 5 years than it does on its face. And I would hasten to add that not a dime of the nearly $750 billion for the President's Social Security privatization proposal over the next 10 years is included in this budget resolution. Not to mention the trillions of dollars this proposal would cost in later years. I am particularly disappointed to see that the conference committee includes a reconciliation instruction to the Finance Committee to cut spending in our jurisdiction. Senator Gregg's budget included $15 billion in Medicaid cuts over 5 years. The successful amendment offered by Senators Smith and Bingaman reduced the Medicaid cut to zero. But now, the cut is back up to $10 billion. There is widespread agreement that Medicaid should not be subject to arbitrary budget cuts. A majority of the Senate voted for the Smith- Bingaman amendment. An overwhelming majority of the House, 348 Members, voted Tuesday to adopt a motion instructing budget conferees not to cut Medicaid. Four out of five Americans also believe that cutting Medicaid is a bad idea. The Governors are also united in their opposition to having a budget number drive policy in Medicaid reform. And more than 135 advocacy and provider groups have urged Congress to reject the cuts. But despite the chorus of opposition to cuts in Medicaid, the budget resolution reinstates $10 billion. Now, some say that the Medicaid number is less than $10 billion, because cuts can be made from other programs within the Finance Committee's jurisdiction. I fail to see how $10 billion represents a victory. Cuts to important programs like TANF will affect vital work supports, like child care, for low-income working families who are struggling to make ends meet. And I understand that some on the House side are looking to the EITC for additional cuts. Another important program, and cuts here would essentially mean tax increases for hard-working Americans. Some claim that the cuts to Medicaid are ``small'' and represent less than 1 percent cut in spending growth over 5 years. But $10 billion over 5 years probably means that, over 10 years, the cuts range from $25 to $35 billion. That is close to the $39 billion that Congress allocated to coverage for millions of uninsured children during the 10 year lifetime of the Child Health Insurance Program. And it is impossible to ignore that this $10 billion in cuts represents nearly one-third of the total spending cuts in this budget, putting this burden on our nation's poorest and most vulnerable Americans. Let's not kid ourselves into thinking that the cuts are minimal or that they won't have an effect. These cuts would tear the fabric of our Nation's safety net at a time when Medicaid is needed more than ever. They would increase the number of uninsured Americans at a time when we should be working on ways to cover more people not making the problem worse. When the budget was being debated back in March, I said that it made more sense to establish a bipartisan Medicaid commission like the one recommended in the Smith-Bingaman bill than to have the budget cuts drive our policy discussion on Medicaid. The Smith-Bingaman amendment struck the cuts and recommended a bipartisan commission to study the program and advise Congress on how we can improve and sustain Medicaid well into the future. The majority of the Senate agreed with this approach and we struck the Medicaid cuts from the budget. Now we are voting on a final budget that appears to promise both cuts and a Medicaid commission. While I do not believe this is the right approach, to the extent that we are considering a Medicaid commission, it must be credible to have any value in this debate. To be credible, any commission should be independent, bipartisan, and comprised of experts who truly understand Medicaid and its role in our health care system. The scope of the commission's work should be broadly focused on maintaining Medicaid's viability over the long term and should not be limited just to considering cuts to the program. And the commission must be given a reasonable time to consider these weighty matters and should not be rushed. The commission must be above the fray of partisan politics, but it must be responsive to the voices of the many stakeholders affected by this critical program. A commission that does not meet this standard will not have our Nation's trust, and its findings will not carry weight in the halls of Congress. I want to commend my colleague Senator Smith for his efforts to ensure the Medicaid commission is fair. I agree with Senator Smith's view that having an independent research institution, such as the Institute of Medicine, oversee the commission would be a good approach to ensure a fair and balanced outcome. But any commission must look at the whole picture with Medicaid--a short-term focus on cuts is not the right approach. Reforming Medicaid is an important debate to have. But the debate should be driven by policy, not an arbitrary budget target. Medicaid deserves its own policy debate, just as we did with Medicare. These cuts are short-sighted. I predict that Medicare, including changes to the new Medicare law, will be on the table if this budget passes. We should not be penny wise and pound foolish when it comes to Medicaid--America's most vulnerable citizens deserve better from us. And we should not be adding to our already large Federal deficits and debt. That is why I will oppose this budget resolution. And I urge my colleagues to do the same.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the theme of this year's World Intellectual Property Day, which we commemorate today, is ``Think, Imagine, Create.'' Think, imagine, create, these simple words are at the center of what makes America great and what continues to drive our progress. American thought produced our Constitution and our system of government. American imagination put a person on the moon. And American creativity has made U.S. culture the envy of the world. It is astounding how important intellectual property has become in our everyday life. It is even more astounding how much we take human creativity and intellectual property for granted. Just think about it for a moment and imagine what a world would be like without intellectual property rights. Without copyrights, who would want to write the books we read, produce the movies we watch, or compose the music that fills our ears? Without trademarks, who would want to invest the enormous time, energy, and resources required to develop a brand name synonymous with quality and reliability? And without patents, who would have the incentive to innovate and produce inventions that change our world and save our lives? Intellectual property rights are not just some abstract legal concept the sole province of lawyers and judges. They are an essential motor of our economy. Look at the copyright industry. These are the folks who produce newspapers, books, movies, computer software, and radio/TV broadcasting. This industry alone accounts for 12 percent of our gross domestic product. That's $1.25 trillion. If these numbers don't impress, then let's look at the impact the copyright industries have on U.S. jobs. They alone employ roughly 11.5 million workers. That is nearly 8.5 percent of total U.S. employment. Believe it or not, that number approaches the level of employment in the heath care sector or the entire manufacturing sector. And between 1997 and 2002, the rate of job growth in the copyright industry exceeded that of the U.S. economy as a whole. That is why protecting intellectual property rights worldwide is critical. It is not just a concern for the overall health of the U.S. economy. And it is not just a concern of this or that company. It is a concern of each and every worker that the intellectual property industries employ. And it is a concern of each and every one of us that enjoys going to see the latest movie, likes wearing a hip new pair of Nike shoes, or needs the most innovative life saving drug. Unfortunately, while we have a robust IPR regime here in America, some of our trading partners do not. In certain countries, IPR theft is rampant. China is probably the most notorious example. USTR reports that counterfeiting and piracy in China are at ``epidemic levels and cause serious harm to U.S. businesses in virtually every sector of the economy.'' In fact, as USTR pointed out, one U.S. trade association claims that counterfeiting and piracy in China exceeds 90 percent. Estimates of the value of counterfeit and pirated goods in China are between $19 billion and $24 billion in 2001. That translates into losses of $2.5 to $3.8 billion to U.S. industry. Russia is also a serial IPR violator. The scale of intellectual property rights infringement there is vast and growing. Russia's legal framework has huge gaps, and the enforcement of existing laws is lax. This has real costs. Estimated losses to U.S. copyright industries due to piracy of films, videos, sound recordings, books, and computer software continue to exceed $1 billion annually. Over 80 percent of all DVDs on the Russian market are estimated to be pirated. Pirated music is estimated at 66 percent of sales, and software piracy is estimated at about 88 percent. IPR violations in Brazil are also very troubling, particularly given that Brazil is both a WTO member and receives benefits from the United States under the Generalized System of Preferences. USTR reports that estimated losses in Brazil due to piracy of copyrighted materials totaled over $930 million in 2004 alone. An estimated 75 percent of audiocassettes sold in Brazil are pirated. These violations run counter to the entire spirit and purpose of World Intellectual Property Day. Rather than foster an environment that encourages thought, imagination, and creativity, IPR violations in China, Russia, Brazil, and other countries stifle creativity and innovation. They send the chilling message that the short-term profit of pirates, counterfeiters, and other IPR thieves matter more than the long term gains of society. We need to crack down on countries that fail to protect and enforce intellectual property rights. We should use all tools at our disposal to address barriers to thought, imagination, and creativity. In my view, we are long overdue in initiating a WTO case with China for its failure to comply with its obligations under the WTO's TRIPS agreement, particularly in the area of copyrights. In my view, we should not give a green light to Russia's bid to join the WTO until Russia makes visible and sustained improvements to its legal regime as well as a demonstrable commitment to long-term enforcement. And in my view, we should not continue to give countries with serious intellectual property deficiencies, like Russia and Brazil, GSP benefits until they clean up their act. That is why I am today cosponsoring with Senator Lugar a sense-of- the-Senate resolution on the importance of protecting intellectual property. Among other things, this resolution urges the administration to use all effective remedies to address the lack of intellectual property protection. It also urges the administration to take action to ensure that China, Russia, and our other trading partners comply with their international trade obligations. Think, imagine, create, that is the theme of this year's World Intellectual Property Day. I hope that next year we can celebrate an improved global environment that truly fosters these important aspirations.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my colleagues, Senators Hatch and Grassley, in introducing legislation that will allow associations to make health insurance available to employers without either wondering if the full premium is deductible, or holding minimal reserves. Across this country, many associations sponsor health insurance plans for member employers--plans that provide health coverage for thousands of working Americans. These arrangements allow smaller employers to get a better deal on insurance than they could on their own. As we struggle to improve the number of Americans who have health insurance coverage, we surely want to encourage an arrangement that provides cost-effective health benefits. In order to smooth the cost of these medical benefits, these plans often hold reserves that are more than is necessary to cover unpaid claims that have been incurred at the end of the year. We should encourage that practice. But current law discourages these plans from holding more than the bare minimum in reserve. The problem is that these plans use welfare trusts as a vehicle to fund the benefits. Under current law, if a state trade association sponsors a health welfare trust, and that trust does not charge every participant the same premium, then that plan may have to go back to employers after the end of the year and say ``Sorry. You can't deduct all of that premium we asked you to pay last year.'' Either that, or the association has to keep premiums low enough to avoid non-deductible contributions, and risk under-funding the benefits. That is not a good outcome. So we have a simple solution here. This bill allows these association health plans to maintain reserves of thirty-five percent of annual costs without jeopardizing the deductibility of employer contributions to the trust. With current technology, claims are usually processed in a matter of days, not months, so thirty-five percent of annual costs is more than is normally needed to cover unpaid claims at the end of the year. That will leave a cushion to cover adverse experience, and help smooth future premium fluctuations. This simple change will allow bona fide associations all over this country to not only continue providing health benefits, but to secure those benefits with adequate reserves. Plans like the State Bankers Association Group Benefits Trust that has been operating out of my home town of Helena, Montana, since 1978. This Trust provides health insurance to employees of banks in Montana, Wyoming, and Idaho. Forty- nine Montana banks provide coverage for nearly 3,000 Montanans through this program. This bill is important to the employers and employees who get health insurance coverage through the State Bankers' trust, and the many other association health trusts in Montana and around the country. We encourage our colleagues to join us in helping associations continue to provide health benefits to tens of thousands of American workers and their families.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my colleagues, Senators Hatch and Grassley, in introducing legislation that will allow associations to make health insurance available to employers without either wondering if the full premium is deductible, or holding minimal reserves. Across this country, many associations sponsor health insurance plans for member employers--plans that provide health coverage for thousands of working Americans. These arrangements allow smaller employers to get a better deal on insurance than they could on their own. As we struggle to improve the number of Americans who have health insurance coverage, we surely want to encourage an arrangement that provides cost-effective health benefits. In order to smooth the cost of these medical benefits, these plans often hold reserves that are more than is necessary to cover unpaid claims that have been incurred at the end of the year. We should encourage that practice. But current law discourages these plans from holding more than the bare minimum in reserve. The problem is that these plans use welfare trusts as a vehicle to fund the benefits. Under current law, if a state trade association sponsors a health welfare trust, and that trust does not charge every participant the same premium, then that plan may have to go back to employers after the end of the year and say ``Sorry. You can't deduct all of that premium we asked you to pay last year.'' Either that, or the association has to keep premiums low enough to avoid non-deductible contributions, and risk under-funding the benefits. That is not a good outcome. So we have a simple solution here. This bill allows these association health plans to maintain reserves of thirty-five percent of annual costs without jeopardizing the deductibility of employer contributions to the trust. With current technology, claims are usually processed in a matter of days, not months, so thirty-five percent of annual costs is more than is normally needed to cover unpaid claims at the end of the year. That will leave a cushion to cover adverse experience, and help smooth future premium fluctuations. This simple change will allow bona fide associations all over this country to not only continue providing health benefits, but to secure those benefits with adequate reserves. Plans like the State Bankers Association Group Benefits Trust that has been operating out of my home town of Helena, Montana, since 1978. This Trust provides health insurance to employees of banks in Montana, Wyoming, and Idaho. Forty- nine Montana banks provide coverage for nearly 3,000 Montanans through this program. This bill is important to the employers and employees who get health insurance coverage through the State Bankers' trust, and the many other association health trusts in Montana and around the country. We encourage our colleagues to join us in helping associations continue to provide health benefits to tens of thousands of American workers and their families.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to support the efforts of my friend and colleague Senator Mikulski to protect payments to the families of our brave Americans serving and dying for this country. There are currently 1,254 Montanans deployed overseas in Iraq and Afghanistan with one-third of those deployed coming from our guard and reserve forces. We have lost seven service members since the war on terrorism began and with each sacrifice I am made more aware of the strength and commitment of our military families. Senator Mikulski has wisely offered an amendment to ensure that the additional death gratuity benefits would not be subject to taxes, just as other death gratuity benefits for military families are tax-free. It is certainly my hope that such an amendment is not needed. However, I have promised to work with Senator Mikulski and my good friend, Chairman Grassley, to clarify that this is the case, should there be any question in the future about the tax-free status of these payments. Certainly, for these families who have already given so much to this country, it is the right thing to do.

Mr. BAUCUS. Mr. President, I wish to address several amendments offered to the emergency supplemental appropriations bill this week. We are debating this emergency appropriation primarily to see to the needs of the men and women who are serving on the front line in Iraq and Afghanistan. That's because it's our job to make sure that our troops get the support and the resources they need when they need them. But there is another front line we should not forget about, and that includes the home front. And serving on the home front are the men and women of the National Guard, Border Patrol, Immigration and Customs agents, as well as the police forces who serve in big and small communities alike. They, too, need resources and support from Congress. And while we have a process by which Congress determines on a yearly basis what those needs are, I am not content to just wait and see. I am concerned about the fate of important legislation that was passed last fall that authorized putting more border patrol agents on our front line--which more and more often is up on the highline of Montana, and not only across desert stretches on the Southern border. That legislation, which was negotiated as part of the National Intelligence Reform Act of 2004 and signed by President Bush, recognized for more personnel patrolling our borders. Now, while the administration's fiscal year 2006 budget did not propose the funding called for in that legislation, it is up to all of us in Congress to make sure that the border patrol gets the help it needs. That is why I am a cosponsor of Senator Byrd's amendment to deliver the funds our border security personnel deserve. But we have to do more. We need to help the border patrol and other Federal and State law enforcement agencies get their workload under control and focus on the most serious threats to our Nation's security. Surely, we all want to know who the millions of undocumented aliens are who cross our borders each year. And many of these people live and work amongst us. The vast majority of these undocumented workers are here because there are jobs--in the service, agricultural or other sectors--for which employers cannot find willing American workers. As long as tough standards are in place for (1) proving that no willing American workers could be found, (2) documenting the background of the worker and the nature of the work, and (3) consequences for breaking the law, I think we are a safer Nation when we encourage illegal migrants and their employers to come out from the shadows and show themselves. Encouraging employers and foreign workers to work within the bounds of law will allow our border agents to better focus their efforts on those who would enter the country to do our citizens harm. And up on the Northern border, what used to be our nation's backdoor and is quickly becoming the front door, we face that more unlikely threat precisely because all eyes are on the southern border. I'm not talking about amnesty, and I'm not talking about rushing into some sweeping immigration reform. I think that requires broader and more considered deliberation by Congress. But it does make sense to begin to document and track the movement of illegal migrants who would otherwise pay taxes and abide by our laws if they could earn the chance to do so. This in turn helps our small and seasonal businesses maintain a reliable, screened and legal workforce, and it allows us to focus our attention on stopping would-be terrorists from crossing our borders.

Mr. BAUCUS

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

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

Mr. BAUCUS. Madam President, I feel very strongly that we must increase our border security. The resources of our National Guard, law enforcement, and Customs and Border Patrol agents are stretched way too thin and they need our help, especially along the northern border. Their ability to successfully carry out their daily duties is of critical importance to the safety of all Americans. We must protect our borders better and work to increase the apprehension of illegal aliens crossing into the United States. The Intelligence Reform and Terrorism Prevention Act we passed in 2004 authorized the hiring of 2,000 new Border Patrol agents. Yet the President's budget only proposed 210 new agents--about 10 percent of what is authorized. The Border Patrol has been dangerously underfunded. That is why I cosponsored Senator Byrd's Border Patrol amendment, which passed yesterday, and why I supported Senator Ensign's amendment today. I recognize we are fighting the war on terrorism overseas, but we need more agents, investigators, detention, and deportation officers at home. Additional funding will ensure that more illegal aliens will be detained and our borders will be tightened against all threats, especially terrorism. The best way to prevent terrorism in the United States is to prevent terrorists from entering the United States. In my State of Montana, we deal with the vast northern border and the terrain is not easy to patrol. As you can imagine, as the southern border is tightened, our northern border, which used to be America's back door, is quickly becoming the front door. We need more agents; it is that simple. That border is long. Agents can only cover so much territory. The agents need training and facilities. In addition to personnel and training, we must also employ the latest technologies. The Border Patrol conducted successful tests using unmanned aerial vehicles--around here known as UAVs--along the southwest border in Arizona for surveillance and detection of individuals attempting to enter the U.S. illegally. Unfortunately, those operations were ceased at the end of January of this year. Thankfully, the funds provided in Senator Byrd's amendment will allow for the immediate resumption of these surveillance and detection operations. UAVs are a safe alternative to placing civilians in harm's way. It is up to all of us in Congress--not just today, but in future days and weeks and months--to make sure the Border Patrol gets the help it needs. We must deliver the funds our border security personnel deserve to continue their work of apprehending illegal aliens, fighting the war on terrorism, and keeping the homefront safe. I might add, it also applies to methamphetamines. There is a lot of that coming into our country across our borders. It is a huge problem. I daresay virtually every State in the Nation has a significant methamphetamine problem, and too much is being used by citizens in States. A lot of it is manufactured locally, but a lot is also imported. So more Border Patrol agents will help us fight not only terrorism, but the scourge of methamphetamines. I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Madam President, engraved in stone on the panel behind the Presiding Officer are the words ``E pluribus unum''--``Out of many, one.'' The words also appear on the seal of the Senate, which appears on the flag the Senators see to the right of the Presiding Officer. It is one of my favorite mottos. It is the motto of the United States of America. The words mean, ``One unity, formed from many parts.'' They represent the Senate well. For it is here in the Senate our Nation has been brought together. It is here in the Senate our Nation's leaders have worked out many of the great compromises that have bridged the issues of the day. It is here in the Senate that disparate interests in our Nation have become one. The Senate is a place of unity, a place of compromise, and a place of consensus, because of its rules. The Senate works to force unity, not because its rules make it easy to get things done, but because the rules make it so hard. Because the Senate's rules require Senators to assemble majorities of three-fifths, and sometimes two-thirds, the rules force Senators to find policy positions that appeal more broadly, that transcend party, that bring more Senators together. Because its rules make it so hard to get things done, the Senate does much of its work through the ultimate expression of unity--through unanimous consent. Because the Senate's rules make it hard to get things done, Senators must work together to get things done. Because the Senate's rules make it hard to get things done, no Senator may completely disrespect a second Senator because a second Senator might hold up the first Senator's legislation. Because the rules make it harder to get things done, the Senate has collegiality and comity. It is that simple. The rules make it harder to get things done, and that forces us together. Because the Senate rules make it harder to get things done, Senators of one party must reach out to the moderates of another party. Let me state for the record, as my colleagues already know, I am one of those moderates. Since 1978, I have worked in this Chamber to put Montana first, to use common sense, to be effective, and to get things done. Because of the way the Senate works and because of the way I work, that has meant working together with other Senators, often across the aisle. I have worked together with Republicans to cut taxes, to reform environmental laws, to open international markets to American trade, and to update Medicare to provide prescription drugs. Why? Because all those are important, and it is important to work together to get those things done. One of the reasons moderates, like me, of both parties can move compromises and consensus legislation is because the rules of the Senate require getting more than a simple majority. Contrast that with the House of Representatives. There the rules make it easy to get things done. But there, it is a rare exception when Members craft legislation to appeal broadly, across party lines. There the majority passes the legislation that represents the strongest achievable expression of the majority party's position. Unity is not their goal. One might call the result majority rule, but the reality is that the product of the House of Representatives often represents an even smaller fraction. The rules of the House of Representatives often encourage a majority of those in the majority party to decide policy and then to enforce that policy within the majority caucus. Because its rules make it so easy to get things done, Representatives of one party steamroll the moderates of their own party, let alone of the other party. Thus, the rules of the House of Representatives foster sharper partisan division between the two parties. The rules of the Senate lead to the result: ``Out of many, one.'' The rules of the House lead to the result: ``Out of many, two.'' The Senate's rules are particularly important to a State with a small population, such as my home State of Montana. This is particularly true in light of the small House delegation that such small States have. Montana, as several other States, has one Representative in the House. States such as Montana rely on their Senators to allow their relatively greater influence to protect their interests. Without the Senate rules, rural America would have a much harder time getting heard. Sometimes it is good that the Senate's rules require more than a thin majority, in order to make sure that every part of the country is truly represented. Fundamental to the Senate's rules, for two centuries, has been the right to extended debate. In the First Congress, Senators debated at length the permanent site for the Capitol. In 1811, the House of Representatives provided that a motion for the previous question could cut off further debate. But the Senate rules have not included such a motion since the 1806 codification of the rules. We cannot summarily cut off debate, as the House can. And even after the Senate adopted rule XXII of cloture in 1917, the Senate rules have required a supermajority to bring debate to a close. Since its revision in 1979, rule XXII has required the affirmative vote of 60 Senators to limit debate. Thus, for two centuries, Democrats and Republicans alike have used the Senate's rules to protect the rights of the minority party. After two centuries, it would be a mistake to change those rules. Extended debate allows Senators to protect minority interests. Extended debate gives life to the traditional story that Washington told Jefferson that, like pouring coffee into a saucer, ``we pour legislation into the senatorial saucer to cool it.'' Extended debate makes the Senate, in Aaron Burr's words, ``a sanctuary; a citadel of law, of order, and of liberty.'' The Senate's rules thus help to protect personal rights and liberties. The Senate's rules help to ensure that no one party has absolute power. The Senate's rules help to give effect to the Founder's conception of checks and balances. The Senate's right of extended debate is particularly important in the context of nominations for the lifetime jobs of Federal judges. At the Constitutional Convention, the Founders debated different ways to appoint judges. On June 13, 1787, James Madison of Virginia proposed that the Senate make the appointments to protect the integrity, the independence of the third article; that is, the judges of the United States of America. On June 15, William Paterson of New Jersey proposed that the President make the appointments. On July 18, Nathaniel Gorham of Massachusetts proposed a compromise, that the President make the appointment with the advice and consent of the Senate. That is, they both decide; not just the President, not just the Senate, they both do, again, to protect the integrity of the independence of our Federal judiciary. The history of the Constitutional Convention thus demonstrates that the Founders hoped that both the President and the Senate could be involved in the process. In its application, the Senate's involvement in the confirmation of judges has helped to ensure that nominees have had the support of a broad political consensus. The Senate's involvement has helped to ensure that the President could not appoint extreme nominees. The Senate's involvement has thus helped to ensure that judges have been freer of partisanship and, in fact, more independent. The Founders wanted the courts to be an independent branch of Government, helping to exercise the Constitution's intricate systems of checks and balances. The Senate's involvement in the confirmation of judges has helped to ensure that the judiciary can be that more independent branch. And that independence of the judiciary, in turn, has helped to ensure the protection of personal rights and liberties in our country. It is important that we get good judges. Over the years, this has been one of the issues of greatest importance to me as a Senator. That is why I worked to set up a merit selection system that is truly apolitical to select judges that I recommend to the President from my State of Montana. The Senate's rules help to make a merit selection possible. I invite my colleagues to read the inscription in the marble relief over the Senate's door to my left. There is inscribed a single word: ``Courage.'' That is what preserving the Senate's rules will require: courage to stand up to the extremists; courage to stand up to the majority of one's party; courage to save the institution itself. For Senators of either party, the simplest thing is usually to vote with the party. Voting with the party makes it easier to go to the party caucus lunch. Voting with the party makes it easier to hang on to a committee chairmanship. To preserve this Senate will take the courage of at least six Senators in the majority party who are willing to vote for the institution first before their comfort at party lunches. It will take the courage of six Senators in the majority party who are willing to risk their chairmanships to protect the Senate--indeed, the country itself. Let me offer this encouragement. I recall a decade ago in 1995, Senator Mark Hatfield from Oregon, who was then the chairman of the Appropriations Committee, told his majority leader, Senator Bob Dole, that he would rather resign from the Senate than vote for the constitutional amendment to require a balanced budget. Luckily, Senator Dole did not accept Senator Hatfield's offer, and Senator Dole later wrote: While I strongly disagreed with his position, I also respected any Senator's right to vote their conscience. In retrospect, Republican Senators should see it was lucky for them that Senator Hatfield voted as he did. For if the Constitution required a balanced budget, it would have required the majority party to make massive cuts in Government services during the 5 years of deficits and, thus, if the Constitution required a balanced budget, the voters would have long ago punished Republican Senators for the cuts they would have made. They should thank Senator Hatfield that it did not pass. In the end, the sacrifices of these times ask that six Senators of the majority party stand up. The sacrifices that these times ask of six Senators from the majority party pales next to those of an earlier generation. Benjamin Franklin, John Adams, and Thomas Jefferson selected the words ``e pluribus unum'' as the Nation's motto on August 10, 1776. That was barely a month after they had published the document, the Declaration of Independence, in which they had written: We mutually pledge to each other our Lives, our Fortunes and our sacred Honor. Just think of the courage of our Founding Fathers when they wrote the Declaration of Independence to break away from England knowing if they were apprehended, they would all be hanged. They knew that. Just think of their courage. On the occasion of signing the Declaration, Benjamin Franklin is said to have warned: We must all hang together or surely we will all hang separately. Our Founders sought unity from the very beginning. For unity, they were willing to risk their fortunes. For unity, they were willing to risk their lives. How many here can say that? Today, to preserve the rules of the Senate that so foster unity, six Senators will be asked to risk much less. To preserve this Senate, they need not offer their fortunes. To preserve this Senate, they need not offer their lives. But to preserve this Senate, they will need to offer their courage. I call on my colleagues in the majority to follow the exhortations engraved on the west door. I call on my colleagues to recall the courage of our Founders who risked their lives to give us this sacred inheritance of checks and balances. I call on my colleagues to summon the courage to vote against the effort to change the rules that make the Senate the place we love so much, that would change the Senate so much so that it will dramatically undermine the protection of liberties and the protection of our rights that so many Americans look to us to enforce. I yield the floor, and I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. The National Guard is proving to be the backbone of our efforts to protect America overseas, as they continue to play a pivotal role in homeland security. I saw this first hand 3 weeks ago when I spent a day working on the flight line with the 120th Fighter Wing of our Air National Guard in Great Falls, MT. While doing pre-flight checks on F-16s and helping the ground crew with their maintenance tasks, I gained a new appreciation for the Guard's contribution to our communities. Two-thirds of Montana's Air National Guard is made up of part-time citizen soldiers and their sacrifice is not going unnoticed. I am proud that I have the opportunity to reemphasize their contribution here today, in particular, since the Air Guard has recently made us very proud in Montana. Under the leadership of Colonel Mark Meyer, our 120th Fighter Wing has been honored with three national awards for 2004--the Air Force Outstanding Unit Award, the Outstanding Security Forces Squadron of the Year Award, and the Maintenance Group Effectiveness Award. The Air Force Outstanding Unit Award recognizes the exemplary achievements of the entire 120th Fighter Wing. On short notice the Wing deployed more than 200 airmen to the 332nd Air Expeditionary Wing at Balad Air Base, Iraq, in support of Operation Iraqi Freedom, and at home they activated 185 people to fight Montana's second largest wildfire season on record. The Air Force also bestowed an award on the Wing's Security Forces squadron, under the direction of Squadron Commander Major Donald Mahoney. They were honored with the Air National Guard Security Forces Unit Award. Among their standout achievements was the logistical support they provided to the South Dakota Air National Guard Security Forces while their members conducted field training exercises at Fort Harrison in Helena. And, once again, our guardsmen operated on short notice. Their Combat Arms Specialists performed weapons qualifications for over 300 personnel in support of Operation Iraqi Freedom. They completed these tasks while protecting the Northern border between Montana and Canada and collaborating with Montana's local, civil, and military emergency services agencies. Under the leadership of Maintenance Commander Lieutenant Colonel Kendall Switzer, the members of the 120th Fighter Wing Maintenance Group earned the Air National Guard's Maintenance Effectiveness Award for their extraordinary aircraft maintenance. Their hard work and expertise supported three important missions: Operation Iraqi Freedom, the Alert Detachment at March Air Reserve base in California, and the Combat Air Patrol Missions of Operation Nobel Eagle. I offer a tremendous ``Well Done'' to the Air National Guard. Thank you to your families, friends, employers and communities. The nation appreciates you and in Montana we are proud of our 120th Fighter Wing. Congratulations!

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I have a modification to my amendment. It changes the effective date. I ask unanimous consent that the amendment be modified with the text I send to the desk.

Mr. BAUCUS. Mr. President, this is an amendment which I think is agreeable all the way around. It addresses the basic problem we are facing where the U.S. Government is essentially changing the rules of the game. I hope the Senate will adopt this amendment so we can overturn the Treasury Department ruling. This is for farmers, this is for ranchers, this is for agricultural cooperatives, and this is for shipping companies and port authorities around our country. It is not only my State of Montana but Mississippi, Alaska, Alabama, and others. Farmers in all of our States are looking for new markets. That is clear. They are asking Congress to expand current markets and open up new markets overseas, including the country of Cuba. Last year alone, Cuba was worth $400 billion of U.S. agricultural exports, making it the 25th agricultural export market. This amendment I worked on with Senator Chambliss and Senator Craig would overturn a recent Treasury Department rule that restricts the payment terms of agricultural sales to Cuba. That rule cuts across $200 million worth of open contracts, including sales of Montana wheat and beans. These contracts are now on hold. The shipments cannot be made. Why? Because of the recent Treasury ruling which we all think has gone way beyond the intent of legislation. I do not think we should sit idly by as Government bureaucrats down at Treasury try to shut down a promising export market that, again, Congress purposely opened. Congress, in the 2000 act, opened trade to Cuba for agriculture and medicine on a cash basis. This amendment does nothing to change that. It makes sure we live up to that intent. Congress purposely opened the market of Cuba to U.S. exporters when it passed the Trade Sanctions and Export Enhancement Act of 2000. While I think there is a lot more we can do and should do to make our exporters more competitive in the Cuban market, this amendment does nothing more than deal with the emergency they are now experiencing. Agricultural trade with Cuba will remain on a one-way cash basis only. We do not seek to change that here. But why should we turn down opportunities to sell even on a cash basis from Cuba? We should not. Producers, port authorities, and shipping companies alike urgently need this rule overturned if they are going to remain competitive in the Cuban market. I remind my colleagues, every other country in the world freely ships products to Cuba. We are the only country in the world that is restricted. Other countries' trade is some indication we should perhaps trade as well. This amendment does not deal with lifting the travel ban. It does not deal with the embargo or anything else, except it makes clear the act we passed in the year 2000 is lived up to. That is all this is. Our farmers and ranchers face mounting pressures of a tricky trade surplus. We should be working to open, not close, export markets with them. I thank my colleagues for working this out. I see Senator Chambliss in the Chamber. I thank him and I thank Senator Craig. I thank the chairman of the Appropriations Committee, Senator Cochran, and others who are trying to make sure our agricultural producers are able to get markets they justly deserve. I yield the floor.

Mr. BAUCUS. I object.

Mr. BAUCUS. I object.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, not too many years ago, Senator Mike Mansfield, a great former Senator from Montana, would have breakfast every morning with Senator George Aiken of Vermont. That helped develop a strong relationship between the two of them. It helped bridge party differences. In addition to the goodwill of Senator George Aiken of Vermont, those daily breakfasts contributed to the collegiality in the Senate. I like to think that there is something about Vermont, about the people of Vermont, that is basic. They are down to earth. They know their roots. Their rudder is well set. They are good people, commonsense people. That is why they elected George Aiken to come to the Senate. It must also be why they elected Jim Jeffords because Jim Jeffords is a real person. What he says is true. He doesn't speak in long paragraphs or long treatises because he doesn't have to. He gets straight to the point. He is a man of few words because he doesn't have to equivocate, doesn't have to qualify, doesn't have to dissemble. He just gets straight to the point. I have found that in my relationship with that wonderful man, Jim Jeffords. We work together on the Environment and Public Works Committee. Time and time again he turns to me, defers to me, and says: Max, whatever you want to do, that is fine with me. I know that he is also saying: Just keep me informed of what you are doing. And I do. It is a wonderful personal relationship. We know each other. We trust each other eminently, immediately. We don't have to ask questions such as: What do you really mean? We don't question assumptions. We just know. That is Jim Jeffords. It has been said that he believes strongly in a few issues, and he does. The environment certainly is one. There are other issues in which my friend from Vermont believes. If you will pardon the overworked phrase, one might possibly disagree with Jim, but he does so in such an agreeable manner that you don't know that there is really a disagreement. It has been said on the floor of the Senate not too long ago that it is hard to name a Senator who could walk into a restaurant and get the same applause, stand-up applause, as Jim Jeffords has so many times around this country. It is true, he does and he did. It is because people recognize his intestinal fortitude. It took a lot of courage for him to decide he was, after all, an Independent and not a Republican. It was a very difficult decision. But he did it. He did it on the basis of principle. People know that. They see that. They sense that, and they understand that. That is why they stand and applaud Jim Jeffords. It is not just the United States, it is in other cities around the world, where people would stand up and applaud when the U.S. Senator from Vermont would walk into the room. In his usual way, Jim would be very humble about it, and it would not go to his head. He would not take it seriously. Obviously, it was not something he disagreed with, but it didn't go to his head. I am hard-pressed to think of any man I know who is as wonderful as my good friend and colleague from Vermont. I am sad to see him retire. The Senate needs more people like Senator Jeffords. I hope whoever replaces him as Senator from Vermont is in the mold of Jim Jeffords. I yield the floor.