Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I call up amendment No. 549, an amendment in the second degree.

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

Mr. BAUCUS

Mr. BAUCUS. Madam President, I rise today to memorialize the life and accomplishments of Dr. Maurice Hilleman, a renowned microbiologist and native son of Montana. Dr. Maurice R. Hilleman dedicated his life to developing vaccines for mumps, measles, chickenpox, pneumonia, meningitis and other diseases, saving tens of millions of lives. He died on Monday at a hospital in Philadelphia at the age of 85. Raised on a farm in Montana, Dr. Hilleman credited much of his success to his boyhood work with chickens, whose eggs form the foundation of so many vaccines. Much of modern preventive medicine is based on Dr. Hilleman's work, though he never received the public recognition of Salk, Sabin or Pasteur. He is credited with having developed more human and animal vaccines than any other scientist, helping to extend human life expectancy and improving the economies of many countries. According to two medical leaders, Dr. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, and Dr. Paul A. Offit, chief of infectious diseases at Children's Hospital in Philadelphia, Dr. Hilleman probably saved more lives than any other scientist in the 20th century. ``The scientific quality and quantity of what he did was amazing,'' Dr. Fauci is quoted as saying. ``Just one of his accomplishments would be enough to have made for a great scientific career. One can say without hyperbole that Maurice changed the world with his extraordinary contributions in so many disciplines: virology, epidemiology, immunology, cancer research and vaccinology.'' Dr. Hilleman developed 8 of the 14 vaccines routinely recommended: measles, mumps, hepatitis A, hepatitis B, chickenpox, meningitis, pneumonia and Haemophilus influenzae bacteria. He also developed the first generation of a vaccine against rubella, also known as German measles. The vaccines have virtually vanquished many of the once common childhood diseases in developed countries. In addition, Dr. Hilleman overcame immunological obstacles to combine vaccines so that one shot could protect against several diseases, like the MMR vaccine for measles, mumps and rubella. He developed about 40 experimental and licensed animal and human vaccines, mostly with his team from Merck of Whitehouse Station, NJ His role in their development included lab work as well as scientific and administrative leadership. And as a sign of his humility, Dr. Hilleman routinely credited others for their roles in advances, according to his colleagues. Vaccine development is complex, requiring an artistry to safely produce large amounts of weakened live or dead microorganisms. Dr. Offit once said, ``Maurice was that artist: no one had the green thumb of mass production that he had.'' The hepatitis B vaccine, licensed in 1981, is credited as the first to prevent a human cancer: a liver cancer, known as a hepatoma, that can develop as a complication of infection from the hepatitis B virus. One of Dr. Hilleman's goals was to develop the first licensed vaccine against any viral cancer. He achieved it in the early 1970s, developing a vaccine to prevent Marek's disease, a lymphoma cancer of chickens caused by a member of the herpes virus family. Preventing the disease helped revolutionize the economics of the poultry industry. Dr. Hilleman's vaccines have also prevented deafness, blindness and other permanent disabilities among millions of people, a point made in 1988 when President Ronald Reagan presented him with the National Medal of Science, the Nation's highest scientific honor. Because scientific knowledge about viruses was so limited when he began his career, Dr. Hilleman said that trial and error, sound judgment and luck drove much of his research. Luck played a major role in the discovery of adenoviruses. Dr. Hilleman flew a team to Missouri to collect specimens from troops suffering from influenza. But by the time his team arrived, influenza had died out. Fearing that he would be fired for an expensive useless exercise, Dr. Hilleman seized on his observation of the occurrence of a fresh outbreak of a different disease. His team discovered three new types of adenoviruses among the troops. In the early 1950s, he made a discovery that helps prevent influenza. He detected a pattern of genetic changes that the influenza virus undergoes as it mutates. The phenomenon is known as drift--minor changes--and shift--- major changes. Vaccine manufacturers take account of drift in choosing the strains of influenza virus included in the vaccines that are freshly made each influenza season. Shifts can herald a large outbreak or pandemic of influenza, and Dr. Hilleman was the first to detect the shift that caused the 1957 Asian influenza pandemic. He read an article in the New York Times on April 17, 1957, about influenza among infants in Hong Kong--cases that had escaped detection from the worldwide influenza surveillance systems. At the time, he directed the central laboratory for worldwide military influenza surveillance and was sure that the cases represented the advent of an influenza pandemic. So he immediately sent for specimens from Hong Kong and helped isolate a new strain of influenza virus. He also demanded that breeders keep roosters that would otherwise have been slaughtered so they could fertilize enough eggs to prepare 40 million doses of influenza to protect Americans against the 1957 influenza strain. Standing tall at six-foot-one and wearing reading glasses that rested on the tip of his nose, Dr. Hilleman described himself as a renegade. He often participated in scientific meetings, where he could be irascible while amusing his colleagues with profane asides. At one of many meetings with this physician-reporter, a Thanksgiving Day dinner during a conference at the World Health Organization in Geneva in the 1980s, Dr. Hilleman said he was driven by a goal to get rid of disease and by a belief that scientists had to serve society. Maurice Ralph Hilleman was born on Aug. 30, 1919, in Miles City, MT. His mother and twin sister died during his birth. In 1937, he went to work in the local J. C. Penney's store where he helped cowpokes, as he described his customers, pick out chenille bathrobes for their girlfriends, and he was well on the way to a career in retailing until his oldest brother suggested that he go to college. After graduating from Montana State University in 1941, he received his Ph.D. in microbiology from the University of Chicago and then joined E. R. Squibb & Sons. There, he developed a vaccine against Japanese B encephalitis to protect American troops in the World War II Pacific offensive. In 1948, he moved to the Walter Reed Army Medical Center and stayed until 1957, when Vannevar Bush, then chairman of Merck and a former director of the Federal Office of Scientific Research and Development in World War II, persuaded him to direct a virus research program for the drug company. After retiring as senior vice president for Merck research laboratories in 1984, Dr. Hilleman continued to work on vaccines, saying they were needed for at least 20 diseases, including AIDS. Dr. Hilleman is survived by his wife, Lorraine, a retired nurse; two daughters, Jeryl Lynn of Palo Alto, CA., and Kirsten J. of New York City; two brothers, Victor, of Fontana, CA., and Norman, of Santa Barbara, CA.; and five grandchildren. His daughter Jeryl Lynn is at least in part responsible for the mumps vaccine. In 1963, when her salivary glands started to swell with the disease, Dr. Hilleman swabbed her throat and went on to isolate the virus. He then weakened it and within 4 years had produced the now-standard mumps vaccine. The weakened strain bears her name. Mr. President, it is an honor for me to pay my respects to such a great and accomplished man as Dr. Maurice Hilleman. And it is an honor for me to call him a fellow Montanan.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today, we will pass legislation in the Senate that provides tax relief to all Americans receiving disaster mitigation grants from the Federal Emergency Management Agency, FEMA. I am pleased that my good friend, Senator Grassley, and I, along with my colleagues, Senators Landrieu, Bond, Feinstein, Lott, Martinez, Nelson, and Vitter could work together to add a necessary and important amendment to H.R. 1134, which exempts disaster mitigation payments from taxation. For 15 years, FEMA has awarded natural disaster mitigation grants that assist citizens, businesses and communities to take steps to prevent or mitigate damages from future natural disasters. The grants go towards elevating buildings in floodplains, flood proofing, seismic reinforcement, acquisitions or relocations, wind protections for roofs and strengthening of window protections. These grants provide a long- term benefit to society by reducing future loss of life and increasing public safety. In addition to these life-saving benefits, mitigation grants also provide a net cost benefit to society. FEMA conducts a cost-benefit analysis prior to awarding a grant that ensures the cost of funding a project is less than the damages expected to occur in the event of a disaster. FEMA estimates that for every dollar spent on mitigation, an average of eight dollars is saved in the long run. Let me take a minute to explain the history of the tax issue at hand. Prior to June of last year, recipients of FEMA mitigation grants generally excluded them from income. The tax code states clearly that post-disaster grants were not taxable. But the tax code doesn't specifically describe the tax treatment of mitigation grants. FEMA assumed mitigation grants were treated the same as post-disaster relief grants. However, on June 28, 2004, the Internal Revenue Service issued a legal memorandum stating these mitigation grants were taxable as income. That means that someone who took advantage of mitigation opportunities to prevent future losses would face a significant tax liability. The average mitigation grant is $83,000. That means the average tax on a grant is tens of thousands of dollars. That isn't fair. It was never intended that taxes be collected under these mitigation programs, but under the legal memorandum issued by the Internal Revenue Service thousands of taxpayers may have to file amended tax returns and pay additional tax. Moreover, the Federal Government changed the rules and never made the recipients aware of the potential tax consequences. I compliment the House for taking up this issue and passing legislation that helps taxpayers who receive mitigation grants after the date of enactment. However, there is a flaw in the House bill. The bill clearly provides tax relief to ``amounts received after the date of enactment.'' What about taxpayers who received mitigation grants in 2004 or 2003 and before? The chairman of the Finance Committee and I have added an amendment that provides absolute certainty for all taxpayers who received grants in past years. Some have argued that the Department of the Treasury can provide tax relief for those who received grants prior to the date of enactment by using the intent gleaned from floor statements and letters from Members of Congress. Let me be clear, Congress writes laws and the clearest intent is in the letter of the law. If our intent is to provide tax relief for those who received grants before the date of enactment, we should write it into the law. And that is what the amendment my good friend Senator Grassley and I have offered. Before I finish, I want to thank Senators Landrieu, Nelson and Feinstein for their tireless work. I can tell you firsthand there was a significant amount of pressure to pass this bill as it was sent from the House. We all wanted to pass this bill as quickly as possible, but we also wanted to be sure we got it right the first time. This bill does that. I sincerely hope the House will do the right thing and pass this bill with the Senate amendment before the tax filing deadline on Friday.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, first I thank the chairman of the committee, second my good friend from Idaho, Senator Craig, and other Senators who have cosponsored this amendment. There are at the present moment about 30 cosponsors of this amendment. It is bipartisan. I might say there is tremendous interest in this legislation also in the other body. To review where we are, back in the year 2000, not too many years ago, we in the Congress approved legislation called the Trade Sanctions Reform and Export Enhancement Act, otherwise known as TSREEA. What was the point of that legislation? It was legislation which authorized cash-in-advance food and medicine sales to Cuba. That is, the Congress carved out a substantive area of food and agricultural sales to Cuba. It did not provide a broad-brush authorization for trade with Cuba; rather, it narrowed it to food and to medicine for humanitarian reasons. It just made sense for the United States to be able to send its medicine and its food products, its agriculture, to Cuba. Clearly this made a lot of sense. Food should never be used as a weapon, and surely no dictator has ever missed a meal. Second, big government has no business telling the U.S. farmers and ranchers to whom they could sell their products, for a lot of reasons. One is agriculture is facing such dire straits in many parts of our country. In addition, U.S. agriculture is facing a shrinking trade surplus. It used to be agriculture products exported overseas were the one big bright spot in the trade imbalance. That is no longer true. Agricultural programs are under tremendous pressure from budget cuts-- more so now than has been the case in the past. We should be looking around for new markets for American products, not cutting out export markets for American agricultural products. Cuba certainly presents a promising market for Montana and for American agriculture. Yet, unbelievably, the Treasury Department has recently issued a new rule. That rule makes it harder, it makes it much more difficult, for U.S. farmers and ranchers to sell agricultural products to Cuba. It makes it much more difficult in spite of the intent of the law we passed in 2000. This rule by Treasury requires Cuba to pay for goods before shipment instead of before delivery, as was the case in the last 3 years after the act was passed. For some reason, here in 2005, a few years after the act has been in operation and working, the Treasury Department passes new regulations, just out of the blue, which make it much more difficult for American farmers to sell their products to Cuba. If Cuba pays for the goods while they are still on U.S. soil, these goods, under this new rule, become Cuban assets, which make them vulnerable to seizure to satisfy unrelated claims. What is the effect of that? That has a very chilling effect. Treasury says it issued this rule as a ``clarification'' of the intent of Congress in the bill we passed in the year 2000. Let me be clear. My colleagues and I did not vote for a bill to enhance exports to Cuba that contained payment restrictions so severe as to render U.S. exports uncompetitive or worse. Clearly we did not pass a bill, we did not vote for a bill which makes it more difficult to sell agricultural products to Cuba rather than less difficult, and this regulation makes it more difficult. That was not the intent of Congress. We pass the laws. We decide what the laws of the Nation should be. It was our intent that agricultural sales should proceed unimpeded on a cash basis to Cuba. When Treasury proposed this rule, I and colleagues on both sides of the aisle in both Chambers made our point very clear that we did not intend this. It was not our intent to have this interpretation. Why is this so important? Cuba, the largest island in the Caribbean, was worth $400 million to U.S. agriculture exporters in the year 2004. Since 2001, Cuba has purchased more than $800 million in agricultural products from 35 States in our Nation, making that island the 25th largest export market for agricultural products. A year and a half ago, I led a trade mission to Cuba, and I walked away with what I think is a pretty good deal for my State of Montana: $10 billion in agricultural products on a cash basis; and the fact is they bought $10.4 million of agricultural products from my State of Montana. I went back last December and signed a new agreement, this time worth $15 million for Montana agricultural products. Unfortunately, that agreement is now in jeopardy because of the new rule. In the interim, Treasury passed this new rule. It also applied this new rule even to sales completed months earlier on a retroactive basis, which is totally unfair. The rule is wrong in the first place. It makes it doubly wrong when it is retroactive. We have $3 million worth of wheat and pea shipments lined up, and now they have to be renegotiated or abandoned because of this Treasury rule. That is wrong, just dead wrong. I, in this body, have worked hard to sell agricultural products to Cuba and will not stand idly by while Government bureaucrats try to undo all that hard work. First, this reverses that Treasury rule and clarifies the intent of Congress for Cuba to pay cash for delivery of U.S. goods before delivery, not before shipment. This will ensure that cash sales continue as they have without interruption. Second, the amendment gives general license to producers and port authorities to travel to Cuba whenever they have agreements to negotiate. This is a big point. Very often, the United States makes it very difficult with a huge amount of bureaucracy and paperwork to go through when the American agricultural exporter wants to go to Cuba to negotiate an agreement. It makes it difficult to do so if we can't go to Cuba to put the deal together. Third, it requires greater transparency in visa processing for the Cuban buyers and inspectors who have legitimate itineraries in the United States related to the sale or inspection of TSREEA-authorized products. Again, if a State has sales to Cuba, it only makes sense if the State Department can allow a representative for the Government of Cuba or the representative of agriculture, the purchaser, to come visit that State to see what products that State has in mind. So far the Government is making it very difficult for that to happen. Fourth, this authorizes direct banking relations for authorized agricultural sales only. We are not talking about any other product. We are talking just about authorized agriculture sales--direct banking relations which would have the effect that U.S. banks can deal directly on this matter rather than as currently is the case where they would have to go through a third party, where European banks are making money off the U.S. agricultural sales. Finally, this amendment repeals an obscure trademark law that benefits no U.S. company, but puts at risk thousands of U.S. trademarks, including those branded food products sold to Cuba in the past 3 years. Section 211's supporters say it protects confiscated trademarks but in fact makes very clear no government--not even Fidel Castro's--can expropriate legally registered trademark rights. It is impossible to do. That is why this provision must be enacted. The truth is, section 211 was enacted to interfere in an ongoing rum label dispute. The fight is not my concern. But what concerns me is unless we fully repeal section 211, Cuba has the right, under international trademark law, to deny U.S. trademarks reciprocal recognition. That does not make any sense. In conclusion, I am here to urge us to pass this amendment. It allows American farmers and ranchers a break. More importantly, let them do what we intended them to do when we passed that law in the year 2000. Let us send a message to Treasury that when we pass laws, we mean it. It is not for Treasury. They are the executive branch, and they are supposed to implement the laws, not make new laws, which in effect Treasury is doing by changing its regulations. They are being totally irresponsible. There comes a time when, frankly, it is up to us to put a stop to it and say this is not right and we are going to change it. I see many of my friends on the floor. I thank my good friend from North Dakota, Senator Dorgan, who cosponsored this amendment. I say also that I support the trade amendment offered by Senator Craig, a perfecting amendment which will help implement the major underlying amendment which I described. I yield the floor but reserve the time we have.

Mr. BAUCUS. Mr. President, I thank the chairman of the Foreign Relations Committee. I ask that the pending amendments be temporarily set aside so I might offer an amendment.

Mr. BAUCUS. I might tell the chairman that is certainly fine with this Senator.

Mr. BAUCUS. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

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

Mr. BAUCUS. Mr. President, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, it is with great pleasure that I join my colleagues Senators Bunning, Johnson and Talent today in introducing legislation that will repeal the special occupational tax on taxpayers who manufacture, distribute, and sell alcoholic beverages. The special occupational tax is not a tax on alcoholic products, but rather operates as a license fee on businesses. The tax is imposed on those engaged in the business of selling alcohol beverages. Believe it or not, this tax was originally established to help finance the Civil War. That war is over, and this inequitable tax has outlived its original purpose. Repealing the SOT will also simplify the tax code for thousands of small businesses. The SOT on alcohol dramatically increased during the budget process in 1988 and has unfairly burdened business owners across the country since. From Thompson Falls to Sidney, from Chinook to Billings, small businesses are burdened with yet another tax in the form of the SOT. According to the Alcohol and Tobacco, Tax and Trade Bureau, there are 426,193 locations nationwide that pay the SOT every year, including 399,657 retailers. These retail establishments account for $99 million out of $103 million collected in SOT revenues. In Montana, there are 2,969 locations which together pay nearly $1 million in the SOT every year. Seasonal resorts in Whitefish and Yellowstone, ``mom and pop'' convenience stores in Butte, and bowling alleys, flower shops, and restaurants across Montana, and the United States, pay the Federal Government over $100 million per year for the privilege of running businesses that sell beer, wine, or alcoholic beverages. The SOT is extremely regressive. Retailers must annually pay $250 per location; wholesalers pay $500; vintners and distillers pay $1,000. Because the SOT is levied on a per location basis, a sole proprietorship must pay the same amount as one of the nation's largest retailers, and locally-owned chains having to pay per location, would have to pay as much as, if not more than, the nation's largest single site brewery. This is not what Congress had in mind 150 years ago, and I don't believe it's a situation we want today. Repealing the SOT on alcohol is supported by a broad-based group of business organizations and enjoys wide-spread bipartisan support on Capitol Hill. Last year, we made progress in ending this burdensome tax on small businesses. We repealed the tax for three years. More can be done. Business owners across the United States deserve assurance that they won't be hit with this antiquated tax down the line. The legislation preserves the TTB's record-keeping requirements, while removing the agency's enforcement burden, and will save over $2 million per year. The GAO examined SOT efficacy several times, and found it fundamentally flawed. The Joint Committee on Taxation called for the elimination of SOT in its June 2001 simplification study. More than 90 percent of all SOT revenue comes from retailers--a great majority of those are small businesses. Our small business sector is a great strength of our economy. President Bush has said that the best way to encourage job growth is to let small businesses keep more of their own money, so they can invest in their business and make it easier for somebody to find work. Repealing the SOT would provide an immediate and visible tax cut to small business owners. In recent months, there has been much talk of tax reform inside the beltway. President Bush has made tax reform one of his key priorities and established a panel that will make recommendations to the Department of Treasury for a better tax system. Getting rid of a tax that has outlived its original purpose is one small step toward reform that makes sense for Montana and our country. We urge our colleagues to join us in this endeavor. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, it is with great pleasure that I join my colleagues Senators Bunning, Johnson and Talent today in introducing legislation that will repeal the special occupational tax on taxpayers who manufacture, distribute, and sell alcoholic beverages. The special occupational tax is not a tax on alcoholic products, but rather operates as a license fee on businesses. The tax is imposed on those engaged in the business of selling alcohol beverages. Believe it or not, this tax was originally established to help finance the Civil War. That war is over, and this inequitable tax has outlived its original purpose. Repealing the SOT will also simplify the tax code for thousands of small businesses. The SOT on alcohol dramatically increased during the budget process in 1988 and has unfairly burdened business owners across the country since. From Thompson Falls to Sidney, from Chinook to Billings, small businesses are burdened with yet another tax in the form of the SOT. According to the Alcohol and Tobacco, Tax and Trade Bureau, there are 426,193 locations nationwide that pay the SOT every year, including 399,657 retailers. These retail establishments account for $99 million out of $103 million collected in SOT revenues. In Montana, there are 2,969 locations which together pay nearly $1 million in the SOT every year. Seasonal resorts in Whitefish and Yellowstone, ``mom and pop'' convenience stores in Butte, and bowling alleys, flower shops, and restaurants across Montana, and the United States, pay the Federal Government over $100 million per year for the privilege of running businesses that sell beer, wine, or alcoholic beverages. The SOT is extremely regressive. Retailers must annually pay $250 per location; wholesalers pay $500; vintners and distillers pay $1,000. Because the SOT is levied on a per location basis, a sole proprietorship must pay the same amount as one of the nation's largest retailers, and locally-owned chains having to pay per location, would have to pay as much as, if not more than, the nation's largest single site brewery. This is not what Congress had in mind 150 years ago, and I don't believe it's a situation we want today. Repealing the SOT on alcohol is supported by a broad-based group of business organizations and enjoys wide-spread bipartisan support on Capitol Hill. Last year, we made progress in ending this burdensome tax on small businesses. We repealed the tax for three years. More can be done. Business owners across the United States deserve assurance that they won't be hit with this antiquated tax down the line. The legislation preserves the TTB's record-keeping requirements, while removing the agency's enforcement burden, and will save over $2 million per year. The GAO examined SOT efficacy several times, and found it fundamentally flawed. The Joint Committee on Taxation called for the elimination of SOT in its June 2001 simplification study. More than 90 percent of all SOT revenue comes from retailers--a great majority of those are small businesses. Our small business sector is a great strength of our economy. President Bush has said that the best way to encourage job growth is to let small businesses keep more of their own money, so they can invest in their business and make it easier for somebody to find work. Repealing the SOT would provide an immediate and visible tax cut to small business owners. In recent months, there has been much talk of tax reform inside the beltway. President Bush has made tax reform one of his key priorities and established a panel that will make recommendations to the Department of Treasury for a better tax system. Getting rid of a tax that has outlived its original purpose is one small step toward reform that makes sense for Montana and our country. We urge our colleagues to join us in this endeavor. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. I wonder if I can impose upon the very gracious generosity of the Senator from New Hampshire and ask if perhaps he could give a little time on this side.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following Senators be added as cosponsors to my amendment: Harkin, Stabenow, Dayton, Pryor, Lincoln, Salazar, and Conrad.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to support the United States Tax Court Modernization Act. I am pleased to be an original cosponsor of this important legislation along with Senators Hatch, Grassley and Lincoln. In 1969, Congress elevated the U.S. Tax Court as a Federal court of record under Article I of the Constitution of the United States. Congress created the Tax Court to provide a judicial forum in which affected persons could dispute tax deficiencies determined by the Commissioner of the Internal Revenue Service prior to payment of the disputed amounts. That means that the Tax Court's jurisdictional requirements are, in part, a recognition that lower and middle income taxpayers cannot necessarily pay the tax deficiency before taking their dispute to court. Congress also closely linked the legislation governing the Tax Court with the laws governing the Article III District Courts. Unfortunately, the Congress did not include the Tax Court in the changes made for Article III courts. This legislation is designed to restore parity between the Tax Court and Article III courts, and to modernize their personnel and pension systems. I thank Senator Hatch for sponsoring the legislation. I also want to thank former Senator Breaux, who sponsored the legislation in the last Congress and who was a strong advocate for the Tax Court as well as this package of modernization provisions. This modernization package is non-controversial and long overdue. In the 108th Congress, the Finance Committee passed the Tax Court legislation three times: as a stand alone bill, as part of the National Employee Savings and Trust Equity Guarantee Act, and as part of the Tax Administration Good Government Act. The Finance Committee intends to mark-up the United States Tax Court Modernization Act next month. I fully expect the Committee to once again unanimously pass the legislation. I also hope that, soon after Committee action, Majority Leader Frist and Minority Leader Reid will bring the United States Tax Court Modernization Act to the floor for swift passage. The Finance Committee and the House Ways & Means Committee fought to retain jurisdiction over the Tax Court as an Article I, rather than an Article III court. The Committees recognized the benefit to the American taxpayer of having a court composed of technical tax law experts. History has proven the wisdom of this decision. The Tax Court is composed of dedicated, talented, nonpartisan tax experts. Their commitment to public service is noble. We should recognize the commitment of our Tax Court judges by acting upon the responsibility that the Members before us, our predecessors on the Finance Committee and the House Ways and Means Committee, fought to retain by ensuring that the Tax Court modernization provisions become law during the 109th Congress.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, this is very simple. It is to restore a cut in the HIDTA funding. HIDTA is called the High Intensity Drug Trafficking Administration. This is the major law enforcement mechanism. It covers lots of different law enforcement agencies, in the west, particularly rural areas, to fight methamphetamine. We need the resources to fight methamphetamine. Methamphetamine is probably the largest scourge in many rural parts of America. This is designed to enable us to have the resources to fight methamphetamine in our country.

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

Mr. BAUCUS. Mr. President, I rise today to speak to an amendment with my good friend and colleague, Senator Grassley, expressing the sense of the Senate on the High Intensity Drug Trafficking area, or HIDTA, program. My amendment assumes that the HIDTA program will be fully funded at $227 million in fiscal year 2006 and that the HIDTA program will remain with the Office National Drug Control Policy, ONDCP, where it was last authorized by Congress to be. Additional cosponsors are Senators Leahy, Bingaman, Murray, and Talent. I would also like to add Senators Gordon Smith and DeWine as cosponsors to this amendment. I thank my colleagues for their strong support. I am proud to offer this much-needed amendment. The proposed budget would cut the HIDTA program by 56 percent, assuming only $100 million for HIDTA. The President's Budget also proposes to shift the program from ONDCP to the Organized Crime Drug Enforcement Task Force program within the Department of Justice. Both of these proposals could derail the highly successful HIDTA program. As many of my colleagues know, methamphetamine is a powerful and highly addictive central nervous system stimulant that is associated with violence and crime. It can cause paranoia, aggression, and mood swings. The byproducts of making meth are highly toxic and flammable and require costly clean ups. They also endanger many children who are exposed when their parents cook meth within the home. Since its inception in 1990, HIDTA has become one of the most effective and comprehensive programs we have to fight meth. Specifically, a HIDTA designation provides states like Montana with increased resources, information and intelligence to fight methamphetamine use and production. The Federal funding and increased cooperation among Federal, State and local law enforcement frees up state resources that allow, for example, the Montana Department of Justice to better support Montana's rural communities. It provides law enforcement officials with new technology to coordinate their efforts at the local, State, and Federal level. Montana fought hard and successfully to join the Rocky Mountain HIDTA in 2002. Since that time, Montana has successfully cut the number of meth labs it busts in half. I have been told by law enforcement across my State that the proposed cuts to HIDTA, combined with cuts proposed by the President to other Justice assistance programs like the Byrne and COPS programs, would be a disaster for Montana. It would effectively end drug enforcement in rural Montana and would set the clock back years in our efforts to fight the rapid spread of meth in our state. Yesterday, I was proud to cosponsor and support Senator Stabenow's amendment to restore funding for our first responder programs, Byrne and COPS. Sadly, that amendment failed. I also proudly supported Senator Biden's amendment to fully fund the COPS program. That amendment unfortunately also failed. We must do everything we can to make sure these programs survive and so far Congress is not holding up their end of the bargain. Although my amendment specifically focuses on the HIDTA program, let me list again what the Montana Board of Crime Control has told me would happen to Montana if the President's fiscal year 2006 budget is enacted: 1. Montana will lose its multi-jurisdiction drug enforcement capacity, including seven multijurisdictional drug task forces. This means that already stretched local law enforcement agencies will have to do what they can to address drug enforcement at the local level, without broader support from the drug task forces. 2. Montana will lose 33 drug enforcement offices throughout the State. 3. Montana will experience a significant increase in drug availability, manufacturing and trafficking and drug-related crime. 4. Montana would experience an increase in clandestine labs that manufacture methamphetamine. 5. Montana would experience a reduction in the amounts of illegal drugs and guns removed from our communities. 6. Montana would experience the elimination of funds for rural law enforcement agencies' manpower, equipment and training. Again, the above scenario is only the tip of the iceberg. The manufacturing, trafficking, drug addiction and crime will have a ripple effect throughout the State in our public health and correction systems and the courts, negatively affecting public safety and the quality of life in Montana and across the United States. As the findings in the Baucus-Grassley amendment explain, the HIDTA program encompasses 28 strategic regions, 355 task forces, 53 intelligence centers, 4,428 Federal personnel, and 8,459 State and local personnel. In 2004, HIDTA efforts resulted in disrupting or dismantling over 509 international, 711 multi-State, and 1,110 local drug trafficking organizations. In 2004, HIDTA instructors trained 21,893 students in cutting-edge practices to limit drug trafficking and manufacturing within their areas. The HIDTAs are successful drug enforcement coalitions that include equal partnership among Federal, State, and local law enforcement leaders. This is what Congress created the HIDTA's to do--to provide coordination of drug enforcement efforts in critical regions of the country. That's why full funding for the HIDTA's is so important, and that's what the first part of the Baucus-Grassley sense of the Senate addresses--assuming that Congress will fully fund the HIDTA program at fiscal year 2005 levels. The second part of the Baucus-Grassley Sense of the Senate on HIDTA would address the administration's decision to shift the HIDTA program from ONDCP to the Organized Crime Drug Enforcement Task Force, OCDETF, program within the Department of Justice. Moving the program from ONDCP to OCDETF is a mistake. The OCDETF program has a different mission and purpose than ONDCP and the HIDTA's. The HIDTA program has worked well at ONDCP and is a complement to the OCDETF mission. I do not understand why the Administration would want to shift it from its Congressionally authorized home within ONDCP. Montana law enforcement tell me that moving the HIDTA program to OCDETF will do nothing to improve law enforcement capabilities and will undermine the unique partnerships and innovation that the HIDTA program has helped to create nationwide and that have been so successful in curbing the spread of meth in Montana. HIDTA's are about coordination and collaboration. OCDETF is more centrally managed, with an assumed Federal lead, and with a focus on investigation and prosecution--an important mission, but not the same as the HIDTA mission. Additionally, according to the National Narcotics Officers Association, the vast majority of OCDETF's cases originate within HIDTA funded operational task forces. The current organization works; why change it? I urge my colleagues to support this important amendment. I also hope that we can adopt one of the many amendments that would actually increase funding for all Justice assistance programs, like Byrne and COPS, but this amendment is an important step in the right direction. Amendment No. 193

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the Senator from West Virginia is not here at this moment, so I yield myself a couple of minutes for the proponents of the amendment. I strongly support this amendment. There are many Senators who are very distressed with the very low level in the amount of transportation obligation funds passed out of the Environment and Public Works Committee the other day. There are donor States that are very upset with the donor levels not being high enough, and the so-called donee States are concerned that they are not properly taken care of. There are States that believe the minimum obligation should be higher. In my experience, I have never experienced such consternation among so many Senators so concerned we are not paying enough for our infrastructure and our highways as is the case now, compared with the previous highway bill we passed a few years ago; that is, with TEA-21, which was passed about 6 years ago. In the meantime, the Finance Committee is working on a provision to administer money to the highway bill. Chairman Grassley and I are working diligently to find a way to administer money to the highway bill. We hope to bring that amendment to the floor. We will not raise gasoline prices. We will not raise gasoline prices. There will be offsets, so it will be budget neutral. The offsets will be in the nature of fuel fraud, to prevent fuel fraud, and close corporate or tax loopholes which we all agree should be closed. I strongly urge Members to recognize we do need more money. We all know that. We are finding ways in the Finance Committee to find more money. I do not know the exact amount, but it will not be a significant amount. It will help solve the problems that Senators have in meeting their legitimate concerns as we try to meet the formula and have enough money in the highway program to build our roads and streets. This amendment will not be a huge amount, but it will be helpful. I urge Members to support the amendment that is offered by the senior Senator from West Virginia. Senator Byrd is in the Senate, and I highly compliment the Senator for his work. He has been a champion over the years. I am so impressed with the efforts he undertook about 6 years ago when they got TEA-21 up and passed. I thank the Senator.

Mr. BAUCUS. Mr. President, could we have order, please?

Mr. BAUCUS. Mr. President, this amendment strikes the cuts in the budget resolution with respect to agriculture. Two main points: Today, agricultural spending constitutes 1 percent of total Federal spending. These cuts here constitute 16 percent of the cuts in the budget resolution. It is just not right to single out agriculture 16 times more than other cuts in this resolution. No. 2, the Europeans today spend $37 billion a year on agricultural price supports. We spend about $17 billion, half of what they spend. We should not unilaterally disarm now, before the Doha WTO talks. Two points why the amendment should be agreed to. We should not make these cuts.

Mr. BAUCUS. I ask for the yeas and nays.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to support the United States Tax Court Modernization Act. I am pleased to be an original cosponsor of this important legislation along with Senators Hatch, Grassley and Lincoln. In 1969, Congress elevated the U.S. Tax Court as a Federal court of record under Article I of the Constitution of the United States. Congress created the Tax Court to provide a judicial forum in which affected persons could dispute tax deficiencies determined by the Commissioner of the Internal Revenue Service prior to payment of the disputed amounts. That means that the Tax Court's jurisdictional requirements are, in part, a recognition that lower and middle income taxpayers cannot necessarily pay the tax deficiency before taking their dispute to court. Congress also closely linked the legislation governing the Tax Court with the laws governing the Article III District Courts. Unfortunately, the Congress did not include the Tax Court in the changes made for Article III courts. This legislation is designed to restore parity between the Tax Court and Article III courts, and to modernize their personnel and pension systems. I thank Senator Hatch for sponsoring the legislation. I also want to thank former Senator Breaux, who sponsored the legislation in the last Congress and who was a strong advocate for the Tax Court as well as this package of modernization provisions. This modernization package is non-controversial and long overdue. In the 108th Congress, the Finance Committee passed the Tax Court legislation three times: as a stand alone bill, as part of the National Employee Savings and Trust Equity Guarantee Act, and as part of the Tax Administration Good Government Act. The Finance Committee intends to mark-up the United States Tax Court Modernization Act next month. I fully expect the Committee to once again unanimously pass the legislation. I also hope that, soon after Committee action, Majority Leader Frist and Minority Leader Reid will bring the United States Tax Court Modernization Act to the floor for swift passage. The Finance Committee and the House Ways & Means Committee fought to retain jurisdiction over the Tax Court as an Article I, rather than an Article III court. The Committees recognized the benefit to the American taxpayer of having a court composed of technical tax law experts. History has proven the wisdom of this decision. The Tax Court is composed of dedicated, talented, nonpartisan tax experts. Their commitment to public service is noble. We should recognize the commitment of our Tax Court judges by acting upon the responsibility that the Members before us, our predecessors on the Finance Committee and the House Ways and Means Committee, fought to retain by ensuring that the Tax Court modernization provisions become law during the 109th Congress.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to speak in support of the amendment of my friend and to express my support of the Community Development Block Grant Program, the Economic Development Administration, and the 16 other economic and community development programs that are dramatically underfunded in this budget. It is no surprise to see this amendment coming from my distinguished colleague from Maryland. I thank him for his work on this issue, both now and in the past. Throughout his career in the Senate he has been a powerful advocate for CDBG and similar community development programs. The CDBG Program has for 31 years provided vital funding to communities all over the United States and throughout my home State of Montana. CDBG is especially valuable to economically distressed communities that often lack basic public infrastructure. It funds a diverse range of projects. Just last year, CDBG dollars helped fund head start facilities in Havre and Kalispell, and money to help Dodson modernize their wastewater system. A CDBG grant helped Big Horn County renovate Memorial Hospital. In Anaconda, where we have a Jack Nicklaus-designed golf-course, a CDBG loan helped renovate the Old Works Hotel, dramatically improving the region's tourism industry. These CDBG investments leveraged millions of State and local dollars. In Montana, CDBG dollars are primarily administered at the State level, so local officials can direct the funding to the areas of greatest need. CDBG is a program that works. It is a good investment of taxpayer money that communities leverage to fund vital projects they could not complete on their own. And the CDBG Program has been supporting community development for the past 30 years with great success. Providing small infusions of Federal funding to jumpstart projects, CDBG has touched hundreds of Montana communities, and thousands of lives. Unfortunately, CDBG isn't the only program on the chopping block. The Economic Development Administration is a small but crucial program that invests to help communities--particularly economically distressed communities--get ready for new businesses. EDA has a documented record of success. Since its inception in 1964, the EDA has created more than 4 million jobs and leveraged more than $18 billion in private sector investment in thousands of communities all across the country. EDA investments in Montana have helped Montana farmers, suffering from years of draught. The Bear Paw economic development district in northern Montana used an EDA planning grant to help farmers study the feasibility of growing carrots and other vegetables in a region dominated by wheat growth for more than a century. The study demonstrated the viability of these crops, and farmers are excited to have a variety of crops to choose amongst. Why, then, does this budget propose to eliminate it? At a time when it is critical for our country to maintain competitiveness in the global economy a proposal to eliminate a successful catalyst for economic growth is a mistake. The growing budget deficit is a concern. But continued economic growth is central to everyone's plan to reduce the deficit. Why then are we cutting programs that spur economic growth? EDA creates jobs, more than 4 million in its history. It is essential that we preserve this job creating agency. Our economy is in recovery, and as this recovery continues, EDA is working to make sure that all of America recovers. EDA targets its funding at economically disadvantaged communities. Areas that have recently experienced a factory closure, or a military base closure. The people who benefit the most from EDA are those who have been hurt the most by outsourcing. States, counties, and cities are experiencing ever greater demands on their budgets. The choices they make, just like the choices we make here in the Senate, are tough, and getting tougher. The rising costs of health care, education, and other investments programs are straining local budgets to the breaking point. In some communities they have been forced to raise local taxes so high the benefits from recent tax cuts are all but gone. We are robbing Peter to pay Paul. And it doesn't make sense to do it with agencies that have the ability to leverage their funds and ripple through their communities. For us here in Washington to eliminate Federal programs like the CDBG and EDA would devastate communities. Cities will be forced to choose between school for our children or housing for our seniors, between improving decaying infrastructure needed to create new jobs and providing health coverage for our children. This amendment doesn't solve all of these problems, but it is a giant step to improving our communities. Once again, I thank my colleague from Maryland, as well as all of our other cosponsors. I urge my colleagues to support this amendment. These programs create jobs and improve lives and communities all over our country. Let's not shortchange our communities that need this help the most.

Mr. BAUCUS. Mr. President, I strongly support the Smith-Bingaman- Coleman amendment to strike the reconciliation instruction to the Finance Committee to cut Medicaid by $15 billion. Some say this amendment is not important because the budget is just a blueprint and the Finance Committee would never make these cuts. That is just not true. A vote for this budget is a vote for cuts, plain and simple. If the reconciliation instruction is to cut, the Finance Committee is under instruction to cut. Once we pass this budget, the reconciliation instructions are binding. The Finance Committee would be bound to find the $15 billion in savings. Although it would be difficult for the committee to reach agreement on these cuts, the committee would make the cuts. The Finance Committee has never failed to comply with reconciliation instructions. I do not believe that it would start this year. Those who say it is just a blueprint, that is a smokescreen. It is not accurate. The administration says we need to address waste and abuse in Medicaid. They say these cuts will end the abuse of intergovernmental transfers. I urge my colleagues to not be swayed by these allegations. The administration has been negotiating reform of intergovernmental transfers on a State-by-State basis for the past 2 years. They have already squeezed significant savings through this new policy, and there will not be much further savings if Congress goes down this road. How do I know this? Because Montana is one of the States that was required to revise its intergovernmental program to comply with new State rules last year. Keep in mind that the change in policy has never been published. There has been no notice, no invited comments, no rulemaking--never; no State Medicaid director's letter, none. So how much in savings remains in reform of intergovernmental transfers? The Congressional Budget Office says zero, no savings. So let's not fool ourselves into thinking we are really cutting fraud and abuse in Medicaid with these cuts. Rather, these cuts will hurt people. In fact, in Montana, the proposed cuts would mean a loss of health coverage for 2,800 seniors or more than 12,000 children. These cuts are definitely shortsighted. If Congress simply starts cutting Medicaid without considering the overall effects, it would force people to seek care in emergency rooms, and even higher spending would result, or even more people could lose coverage altogether. Some say these are small and represent only a 1-percent cut in the program's growth over 5 years. But the President's $45 billion net Medicaid cut over 10 years is more than the $39 billion Congress has allocated to CHIP coverage for millions of uninsured children during the 10-year lifetime of that program. I applaud the leadership of Senators Bingaman, Smith, and Coleman. I urge my colleagues to join me in supporting this important amendment. This is important. I strongly urge our colleagues to do what is right, to not make these cuts. It is going to directly affect people. Support the Smith amendment.