Max Baucus

Mr. BAUCUS

Mr. BAUCUS. If I might have 1 more minute.

Mr. BAUCUS. Mr. President, I thank the Senator. I repeat, workers 25 to 35 years old will have total retirement income; that is, Social Security benefit cuts, plus their income from the private accounts--that is income, not the principal reduced by 3 percent--cut by about a quarter below what current law promises. Those with average earnings born in this decade who retire at age 65 will have their total retirement income cut in half--again, their total retirement income cut in half. For those who participate in private accounts, their total income will be cut in half. That is all based on CBO's assumption that the private account will get a rate of return of 3 percent over and above inflation. It could get more, but it could get less. Let me remind people that what goes up may also come down. In the late 1920s in America, people might have expected their stocks to go up at least 3 percent a year after inflation. As this chart shows, stocks went down nearly 90 percent between 1929 and 1932. From its high in 1929 of 381, the Dow fell to 41 in 1932. Under the President's plan, what would happen to your Social Security benefit if the stock market crashed? You would still need to pay the full privatization tax on all the contributions to the worker's private account plus 3-percent interest above inflation. That is even if you did not earn that much. Under the President's plan, you still have to pay all that. So under the President's privatization plan, your Social Security check will be reduced by more than what you have put in your private account. The only thing that would be guaranteed would be this little green bar at the end of $3,276 a year. I challenge anyone to explain to me how they can live on $3,276 a year. Under the President's plan, that is all you would be guaranteed. Under current law, you are guaranteed $23,000. If the stock market crashes and you are in a private account, your guarantee will only be $3,000. Come on, I do not think people want to do that. I do not think Congress wants to do that. As Frederick from Great Falls, MT, asked: [I]f the bottom falls out of the market, who takes care of them then? Some say we cannot sustain Social Security's current promises anyway. But the Commission's cuts would be deeper than if we did absolutely nothing to Social Security. If we did nothing to extend the life of Social Security--and no one is recommending that--but if Congress did nothing--again, no one is recommending we do nothing; we have to do something that makes sense--if we did nothing, then according to the Congressional Budget Office, in 2052, we would still be able to pay 80 percent of promised benefits. In contrast, under the Commission's plan--that is the President's probable plan--benefits would be cut before 2052 and benefits would be cut deeper than that in 2052 and after. This chart puts it together. For that typical worker born in 1990, current law promises Social Security benefits to be $23,300, as I mentioned earlier. But even if we do nothing--again, I do not advocate doing nothing; we have to do something--Social Security would be able to pay that worker $18,100 a year. The Commission's plan would cut that to $13,104, and the President's privatization tax cut would cut the guaranteed benefit to $3,276. In all likelihood, the worker would get a total package of benefits--their Social Security plus their private account--in the neighborhood of $13,104. We do not know how much the rate of return is going to be. That is why it is red with a question mark. It could go up; it could go down. It has to be a high level annual rate of return to equal, frankly, what one would get in total benefits, even after the cuts. As I said, this chart puts it altogether. That is why the President's privatization plan does not make any sense. From the perspective of typical beneficiaries, it would leave them worse off than if we did nothing. Worse off than if we did nothing--let that sink in a little bit. The President's plan would leave people worse off compared to if we did nothing, at least over the next 40 to 50 years, through 2052. That is roughly the next 60 years-- worse off. That is before we take into account the $5 trillion in new borrowing that the President's plan requires in its first 20 years. I did not talk about that. Let me summarize. We have demonstrated conclusively why people would be worse off under the President's plan than they would be under current law. Now we add another huge problem with the President's plan. What is that? That is the $5 trillion of new borrowing the President's plan would require in its first 20 years; $5 trillion of additional borrowing. We are already deeply in debt. Jack from Kalispell, MT, wrote me of his suspicion on this: President Bush is proposing a gimmick to take attention away from plans to reduce future benefits. I believe the Federal Government should solve its own solvency problems and either stop borrowing from the Social Security trust [fund] or actually pay back its loan with market rates for interest. Jack may have a point. The private accounts are a gimmick, and the benefit cuts are bad enough that anyone associated with them might want to divert their attention away from them. The reason why the cuts are so deep is because the Commission's plan would place all of the burdens of securing solvency on benefit cuts-- all of the burden of solvency on benefit cuts, all of it, all. Within benefits cuts, the Commission's plan would place all the burdens of securing solvency on today's young people and future beneficiaries. He is passing the buck. First he says, OK, all of the solvency solution is on the back of the beneficiaries in terms of benefit cuts. And the $5 trillion, who is going to pay for that? That is going to be young people in future generations, future taxpayers. They are going to have to pay back that $5 trillion. That is the effect of switching from wage indexing to price indexing, and I do not think that is fair. Look at this chart again. The President's plan would change Social Security from a guaranteed $23,300 in earned benefit to a guaranteed $3,000--23 down to 3, plus a gamble. That is a benefit you would get from the President's plan. You are guaranteed $3,000 and you are guaranteed a gamble. It may pay off and be big. The gamble may not pay off. You may lose your shirt. No wonder people wonder whether the President's plan is more about, as Bobby from Eureka, MT, put it, ``only the first step to dismantling Social Security altogether.'' She is concerned about that. When you look at the effect of the President's plan, you begin to think that maybe Bobby is on to something here. That is why Democrats have called upon the President to disavow his plan for private accounts funded out of Social Security. We ask him to do so, why? Because we want to make sure these private accounts are not, in Bobby's words, ``the first step to dismantling Social Security altogether.'' Democrats want to address Social Security's solvency. You bet we do. There is a problem here. It is not a crisis. It is a problem we should address now rather than later. We want to strengthen and protect Social Security for the future. We do think there is a problem. But in order to do that, we need reassurance that the changes we agree to will strengthen Social Security, not dismantle it. The President needs to disavow privatizing Social Security. That is a necessary first step. He needs to state he does not want to dismantle Social Security and has to do that before we can agree on how to fix it. If he makes that statement, boy, you bet there would be a big rush in the Congress, on both sides of the aisle, to fix the solvency problem in Social Security. That is the problem Americans worry about, solvency of Social Security. That is their concern, so let's address their concern. Mary from Belgrade, MT, summed it up pretty well. She wrote: The American Social Security system is one of the most cost-effective pension plans ever devised. It costs a pittance to administer, it is thoroughly honest, and it works flawlessly. ``Privatizing'' it will almost certainly ruin it. Privatizing will almost certainly ruin it. It would add hugely to the crushing burden of national debt, it would mean smaller retirement pensions for millions of retiring Americans, and it would cost 20 to 30 times more to administer. Congress has a duty to the American people to protect this popular, inexpensive, highly effective program. I implore you, Senator Baucus, to tell the President you oppose privatization, and to legislate only a plan that will fix long-term problems without changing the basic structure and function of our Social Security system. Nobody could have said it better. Mary knows what is going on here. She figured it out. I think a lot of Americans are also beginning to figure it out. And when more figure it out, we have no choice but to address solvency and to take privatization totally off the table. Mr. President, you can help us a lot if you were to make that statement. Mary has it right. We need to get beyond plans to privatize Social Security. And once we do, we can get about the business of ``fix[ing its] long-term problems'' and securing it for generations to come. That is why I will support the amendment by the senior Senator from Florida, Mr. Nelson.

Mr. BAUCUS. If I may have a few more minutes, I would appreciate it.

Mr. BAUCUS. Mr. President, I thank my good friend from North Dakota and also say that I hope we can make some good sense out of this budget resolution. It is not the first time we have had a budget resolution, but I hope we can show that we are exercising leadership in getting one that makes sense. I rise to speak about something that I hear more about at home than any other subject. It is astounding, frankly. I was home last weekend, home prior weekends. I hear more and more on this one subject than any other, and that is Social Security. People in Montana walk up to me and say: Senator, please save Social Security. Don't adopt the privatization plan. It doesn't make sense. In my experience as a public servant, I have never experienced such a broadside of reaction on Social Security compared to any other issue I have ever faced. It is that great. Let me tell a little about what I think Montanans are really thinking. Here is what Montanans are telling me about Social Security. A man from Helena, MT, put it this way: I have been an employee and employer for 55 years. The Social Security system is the only solid, dependable program that I and everyone I have been involved with can rely on. Laura from Baker, MT, says: It seems to me that our Social Security system has worked well for many, many years. I cannot understand the President's desire to reform it. Well, when it comes to trying to understand why the President wants to privatize Social Security, Laura is not alone. Let me talk a little bit about the President's plan to privatize Social Security and what it would mean in practical terms. The first thing we have to do is to put aside the notion that privatizing Social Security has anything to do with strengthening Social Security and preserving Social Security for the long run. It does not. Privatization has nothing to do with preserving Social Security for the long run--nothing. In fact, it undermines Social Security. Social Security's actuaries-- these are the Congressional Budget Office folks, and we all agree they are totally nonpartisan, straight shooters--agree that privatizing Social Security does not improve the solvency of the Social Security. In fact, they believe it makes it worse. Bobby from Eureka, MT, put it this way: I strongly oppose President George Bush's proposal to privatize Social Security or any part of it. I feel this is only the first step to dismantling Social Security all together. She is concerned about the first step to dismantle Social Security, and there is a real basis for her beliefs because the private accounts have nothing to do with solvency. Many of us are wondering whether Bobby might be right. We have to start with the proposition that President Bush is looking somewhere else besides private accounts for the real answer to extending Social Security solvency. To be candid, none of us know exactly how the President wants to pay for extending Social Security solvency. He hasn't given us a specific proposal. In the State of the Union speech, however, he mentioned five possibilities. What are they? One was limiting benefits for wealthy retirees. Another one he mentioned is indexing benefits to prices rather than to wages. He also mentioned increasing retirement age. Further, he mentioned discouraging early collection of Social Security benefits. Five, changing the way benefits are calculated. All of those options the President has mentioned have one thing in common: they all cut benefits. Even if we do not know for sure how the President wants to cut Social Security benefits, the administration has not been all that subtle about their druthers. For months, President Bush and many in the administration hinted that their preference is one of the plans put forward by the President's Commission on Social Security. What is that? That plan would divert Social Security payroll taxes into new private savings accounts. As I said, that has nothing to do with solvency. I will come back to that later. But that plan would also deeply cut Social Security benefits for future beneficiaries by changing the way the benefits are calculated. The President's plan would cut benefits, in the President's words, by indexing benefits to prices rather than to wages. What does that mean? What is the effect of that? Let me explain. Under current law, when the Government calculates a worker's initial Social Security benefit, the Government adjusts the worker's past earnings for the growth in wages and the economy. Under the President's plan, the Government would adjust the worker's past earnings for the growth in prices, not in wages but in prices. What is the effect of that? Most people don't realize it, but wages actually grow faster than prices. Wages actually grow faster in the long run. People see prices rising all the time, but folks do not always focus on how much their wages increase. Wages generally keep up and surpass the increase of prices. On average, over time, wages grow faster than prices. Why is that? That is largely because workers today are more productive than workers used to be. Workers today produce more than workers did years ago. Economists call that productivity. They are more productive, so workers today demand higher wages. They are more productive, so they have higher wages, even after adjusting for inflation. Even though inflation goes up, workers are more productive, so wages rise faster than inflation, even though prices are going up. So adjusting the initial benefits to a growth in wages makes sense. It is current law. It makes sure Social Security will replace roughly the same share of future retirement incomes as it did for previous generations of retirees. What does the Commission plan to do about that? Their plan to move from wage indexing to a price index means initial benefits for retirees in the future would gradually start to get smaller and smaller than they would under current law. Because these reductions in benefits would accumulate over time, each new group of retirees would get that much more of a cut in their benefits relative to what the current law promises them. This chart shows the story. It is very illustrative. I hope people pay attention to this. I daresay that every American concerned about Social Security would take a good long hard look at this chart and they would realize the deeper problems in the President's proposal. This chart shows under current law--talking about what the law is today-- succeeding generations of retirees can expect Social Security to replace a relatively constant amount of their income. This yellow line shows for people who start to retire today--when they retire, their Social Security benefits are going to be about 40 percent of their previous wages. As wages go up over time and people retire, they get about 40 percent of their wages just before they retire. That is called replacement income. That is the law, and it stays at about 40 percent out into the future. On average, Social Security promises to replace about 40 percent of income year after year, represented by the yellow line. If we adopt the Commission's plan, what happens? That means the share of income Social Security replaced would go down. That is the red line here. So over time these cuts become very deep. For workers now in their midthirties, benefits will be cut by about 25 percent. For somebody born about now-- one of our children or grandchildren--benefits will be cut in half. You see this red line comes about half of where the yellow line is. So somebody who enters the workforce about now, under the President's plan, when he or she retires, is going to receive almost 20 percent of wages, not 40 percent. That is a 50-percent cut. So a person would get much less under the President's plan in the future. I am looking at some of these pages on the floor. When they work, and if this plan goes into effect, their Social Security benefits will be half when they retire compared to what it would be today under current law if they could retire. I don't know if they would want that. If the Commission's plan had been in place when Social Security began to pay benefits in 1940--reverse that. Say the President's plan was in effect then; benefits for average earnings would be 60 percent less than today. If the President's plan had been in effect in 1940--I was born in 1941--then the benefits I would receive today, or anybody my age, would be, under the President's plan, much less than I would get today if I retired. How much less? You can tell by this chart. Today I would get about $1,278 a month. Under the President's plan, if I retired today, and this were in effect since 1940, I would get $515 a month. Let me state that again. Under current law, a worker with average wages who retires in 2005 will get about a $1,278 monthly Social Security check. Had the Commission's plan been in effect since 1940, that average worker would get only $515 a month in Social Security. That is $515 a month instead of $1,278. Remember, this is kind of a startling statistic. For one-fifth of our seniors, Social Security is their total source of income. For 20 percent of seniors today, Social Security is all of their income. So no matter where you live, this is what you get in Social Security. If this plan had been in effect in 1940, seniors would be receiving $515 a month now, a lot less than they receive. That kind of cut in benefits would mean that a lot more seniors would be living in poverty. Had the Commission's plan been in effect since 1940, 7 million more seniors would be living in poverty today. Today, about 3.6 million seniors are living in poverty. That is not good. That is bad, but that is a fact. If the President's law had been in effect since 1940, then 10.5 million seniors would be living in poverty--more than three times that. Someone might say: This isn't going to happen to me under the President's plan. Why? Because I am not going to participate in those private accounts. I will stay away from that. I will just do nothing and keep my payroll tax, which will still go into the Social Security trust fund. I don't have a private account, so this should not affect me. Then I won't have my benefits cut. Guess what. That is not right. Under the Commission's plan, the President's proposed plan, these cuts would apply even if you did not choose to participate in private accounts. That may not seem fair, but that is a fact. These are the cuts you get irrespective of whether you participate in a private account. It makes no difference whether you do or do not participate in a private account. Another question people might ask is, Will these cuts apply to people with disabilities, to survivors? To be candid, none of us knows for sure, but the Commission's numbers show that savings of people with disabilities and survivors were included. That means they are going to get cut, too. We are talking about widows or orphans here. Listen to the words of Linda from Great Falls, MT: My father died when I was 13 years old. My mom went to work as a bookkeeper making a little over $200 a month. Our entire lives changed, and without the assistance of Social Security benefits, I would never have been able to attend college. Social Security is a vital lifeline for millions of Americans. We have to be very careful about how we change it. In addition to the cuts about which I have been talking so far, the President has a plan. It includes a second set of cuts; that is, a second set of cuts for anybody who signs up for the privatized accounts. Remember, I talked about the first round of cuts and benefits. There is a second round. Under the plan, when workers retire, the Social Security benefits would be further reduced by, first, all of the contributions to the worker's private account. That amounts to an additional reduction in benefits. Then there is another reduction, and what is that? That is the interest that those contributions would have earned had they earned a 3-percent rate of return above inflation. Some people call it a ``clawback.'' I call it a privatization tax. This next chart, number 4, shows the story. It shows a case of a typical worker born in 1990. So a person born in 1990 retires in 2055. I suppose that would probably apply to a lot of our younger people. After all, this has been pitched for our younger people. Under current law, that person would get $23,300 each year from Social Security. So under current law, someone who is born in 1990 and retires in 2055, at age 65, that person will get about $23,300 in benefits from Social Security. Let's talk about the cuts. The first cut under the President's plan is in benefits, due to changing from wage indexing to price indexing, as I mentioned earlier. What is the effect of that? That would cut a worker's Social Security payments to $13,104 a year. That change alone--cutting all benefits of all retirees under the President's plan by moving from wage indexing to price indexing--means the benefits that person will receive in 2055, born in 1990, would not be $23,000, but a whole whopping roughly $10,000 a year less, a cut down to $13,000 a year. Then there is a second cut. That is the cut due to the privatization tax. That would cut a worker's Social Security benefits further. How much further? Down to a mere $3,276 a year. Just think of this for a minute; suspend judgment and let this sink in. This is what is happening under the President's plan. Today, that person would get $23,000 in Social Security benefits. The first cut applies to everybody in the President's plan irrespective of whether you have a private account. So everybody will get a cut by $10,000 a year, down to $13,000 a year. What about those folks who say: Gee, I am going to beat the system and I am going to divert 3 or 4 percentage points of my payroll tax into my private accounts. I am going to beat the system. Wrong. What is really the fine print of the President's probable plan? What is the effect? It is a further deep cut of another $10,000. So the benefit that a person is going to receive is going to be not $23,000 but, rather, only $3,000 a year. The proponents tell us that: Gee, if they keep their private account, that will be made up by the income they will get from the private account, earnings they will get from the private accounts. Let me just say what the Congressional Budget Office says about this part here, the red part on the chart about earnings. What do they say? They say workers with average earnings will be back to where they were in this middle bar, up to close to $13,000. So that means that after all the shouting, workers who are now 25 to 35 years old will have total retirement income cut--Social Security benefits plus income from the private accounts--total income cut by about a quarter below what current law promises. Think of that for a moment. What did people think when they learned about all this? Some know about this, but a lot do not. Do you want to know something, Mr. President? I found something very startling about 2 weeks ago. I hope you will listen to this point because it is pretty important. The point is this: I asked a Senator on the other side of the aisle about 2 weeks ago: Senator, I wonder, does your side understand the fine print of the President's proposal? Does it really understand it? His answer--this was a private conversation--his answer was: Not really. I said to the Senator: Do you mind if I explain what it does, what the practical effect of all this is? I do not want to be pedantic about it. He said: Sure; what is it? So I explained all this to him. He was amazed. He did not know all that. I take him at his word. He said most of the other side did not understand it. Maybe he was being very generous and actually they did. But I was startled by this conversation. He said most do not understand it. Second, it was a revelation to him when I explained what it actually does. I mention all this because I think it is important for the facts to get out. Facts often speak louder than words. I hope the facts get out.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to commend John Gilliland, who worked for me on the trade staff of the Finance Committee for the last 2 years. He left to go work for the law firm of Miller and Chevalier, where I know he will be a great success. We were lucky to have John with us on the Committee for 2 years. But he has been working hard on public policy issues for much longer than that. John began his Senate career in the office of my good friend and colleague, Senator Blanche Lincoln. John worked for 2 years as her legislative counsel on trade and agriculture issues. Senator Lincoln, of course, was instrumental in helping us pass the 2002 farm bill and the Trade Act of 2002, and John was her key staffer on both pieces of legislation. My staff worked closely with John on these issues, and everyone was so impressed by him that I hired him to help us on the Finance Committee. I am glad we did. John has been a tremendous asset. He knows agriculture and trade inside and out. I am always amazed that I can ask him almost anything, and he not only knows that answer, but can give me all of the history, politics, and nuance. His knowledge of agriculture was particularly important for Montana, where farming and ranching are the engine of our export income. John is somebody who I trusted to represent me in Montana, and someone who I trusted to represent Montana here in Washington. That alone is saying a lot. John worked on some difficult and important issues while on the Finance Committee. He played a key role in the Australia free-trade agreement and was responsible for oversight of WTO negotiations. He was also a strong advocate for our work to end the embargo against Cuba, and he helped negotiate the first ever Montana-Cuba agriculture trade deal. In fact, John traveled with me on several of my trade missions, including to Cuba, Asia, Australia, and New Zealand. John is also someone who is very dedicated to his family. He is lucky to have a wonderful wife, Rebecca, and three great kids-Will, Hudson, and Rebecca Jane. And they are fortunate to have a hard-working and talented husband and father. Now, all of this is not to say that John doesn't have his faults. Most of his colleagues give John a hard time for not being able to match his clothes. Their criticism is warranted. In fact, on a trip to Thailand last year, we finally forced him to buy a new suit and some dress shirts. I am confident that we have now set him on the right path. Having visited John at his desk, I can also say that I am happy that OSHA never paid him a visit. I heard someone describe John and his office best when they said that he combines southern charm with northern efficiency and third-world desk organization. All of that said these are about the worst things you can say about John. In fact, you would be hard pressed to find a person who does not like John. He is truly one of the nicest and most genuine people you will ever meet. There are a lot of people in this town with substantive knowledge, but there are few who can put together the substance, personality, and strategy and be truly exceptional. John is one of those people. I always say that public service is one of the most noble things a person can do. John Gilliland embodies the best in public service. He is aces. And I wish him the best.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my colleague, Senator Santorum, in introducing legislation to permanently extend and improve upon the Work Opportunity and the Welfare-to-Work tax credits. Last year, I was pleased to successfully add a permanent a extension of these credits to the Senate passed JOBS bill, which combined the credits and made certain improvements. When the expiring tax provisions were considered last year as part of the Working Families Tax Relief bill, I offered an amendment to combine both credits and make them permanent. While this provision was not retained in conference, I was successful in securing an extension of the current program through December 31, 2005. This extension expires at the end of this year so immediate action is needed to make these credits permanent and make several reforms in the programs to improve their effectiveness. These recurring lapses and extensions make administration of this credit burdensome both for the taxpaying employer, who cannot keep track of who is or isn't qualified, and for the IRS, which needs to ensure taxpayers are complying with the ever-shifting law. Over the past decade, the Work Opportunity Tax Credit, WOTC, and the Welfare-to Work, W-t-W, have helped over 2.2 million public assistance dependent individuals enter the workforce. Both of these important programs are scheduled to expire on December 31, 2005. These hiring tax incentives have clearly demonstrated their effectiveness in helping to level the job selection playing field for low-skilled individuals by providing employers with additional resources to help recruit, select, train and retain individuals with significant barriers to work. Many vulnerable individuals still need a boost in finding employment, and this is particularly critical during periods of high unemployment. The weak economy and rising unemployment give employers many more hiring options because of the larger pool of experienced laid-off workers. Without an extension of these programs, the task of transitioning from welfare-to-work will become even harder for individuals who reach their welfare eligibility ceiling. Because of the costs involved in setting up and administering a WOTC/ W-t-W program, employers have established massive outreach programs to maximize the number of eligible persons in their hiring pool. The States, in turn, have steadily improved the programs through improved administration. WOTC has become an example of a true public-private partnership design to assist the most needy applicants. Without the additional resources provided by these hiring tax incentives, few employers would actively seek out this hard-to-employ population. WOTC provides employers with a graduated tax credit equal to 25- percent of the first $6,000 in wages for eligible individuals working between 120 hours and 399 hours and a 40-percent tax credit on the first $6,000 in wages for those working over 400 hours. The W-t-W tax credit is geared toward long-term welfare recipients and provides a 35- percent tax credit on the first $10,000 in wages during the first year of employment and a 50-percent credit on the first $10,000 for those who stay on the job a second year. In my own State of Montana, many businesses take advantage of this program, including large multinational firms and smaller family-owned businesses. Those who truly benefit from the WOTC/W-t-W program, however, are low-income families, under the Food Stamp Program, the Aid to Families with Dependent Children, AFDC, and Temporary Assistance for Needy Families, TANF, programs, and also low-income U.S. Veterans. In Montana, more than 1,000 people were certified as eligible under the WOTC program during an 18-month period, October 2001 through March 2003, including 476 Food Stamp recipients, 475 AFDC/TANF recipients, and 52 U.S. veterans. The bill we are introducing provides for a permanent program extension of the two credits. After a decade of experience with WOTC and W-t-W, we know that employers do respond to these important hiring tax incentives. Permanent extension would provide these programs with greater stability, thereby encouraging more employers to participate, make investments in expanding outreach to identify potential workers from the targeted groups, and avoid the wasteful disruption of termination and renewal A permanent extension would also encourage the state job services to invest the resources needed to make the certification process more efficient and employer-friendly. The bill also includes a proposal to simplify the programs by combining them into one credit and making the rules for computing the combined credits simpler. This would be accomplished by creating a new welfare-to-work target group under WOTC. The minimum employment periods and credit rates for the first year of employment under present work opportunity tax credit would apply to W-t-W employees. The maximum amount of eligible wages would continue to be $10,000 for W-t-W employees. In addition, the second year 50-percent credit under W-t-W would continue to be available for W-t-W employees under the modified WOTC. Finally, there are other changes in the bill that would extend these benefits to more people and help them find work. Because of the program's eligibility criteria, over 80 percent of those hired are women leaving welfare. Since men are not eligible for TANF benefits unless they are parenting their kids, the fathers of children on welfare receive little help in finding work, even though they often face barriers to work just as women on welfare do. We propose to help absentee fathers find work and provide the resources to assume their family responsibilities by opening up WOTC eligibility to anyone 39 years old or younger in families receiving food stamps or residing in enterprise zones or empowerment communities. Raising the eligibility limits in these two categories will extend eligibility to hundreds of thousands of at-risk men. I urge my colleagues to support this important piece of legislation.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my colleague, Senator Santorum, in introducing legislation to permanently extend and improve upon the Work Opportunity and the Welfare-to-Work tax credits. Last year, I was pleased to successfully add a permanent a extension of these credits to the Senate passed JOBS bill, which combined the credits and made certain improvements. When the expiring tax provisions were considered last year as part of the Working Families Tax Relief bill, I offered an amendment to combine both credits and make them permanent. While this provision was not retained in conference, I was successful in securing an extension of the current program through December 31, 2005. This extension expires at the end of this year so immediate action is needed to make these credits permanent and make several reforms in the programs to improve their effectiveness. These recurring lapses and extensions make administration of this credit burdensome both for the taxpaying employer, who cannot keep track of who is or isn't qualified, and for the IRS, which needs to ensure taxpayers are complying with the ever-shifting law. Over the past decade, the Work Opportunity Tax Credit, WOTC, and the Welfare-to Work, W-t-W, have helped over 2.2 million public assistance dependent individuals enter the workforce. Both of these important programs are scheduled to expire on December 31, 2005. These hiring tax incentives have clearly demonstrated their effectiveness in helping to level the job selection playing field for low-skilled individuals by providing employers with additional resources to help recruit, select, train and retain individuals with significant barriers to work. Many vulnerable individuals still need a boost in finding employment, and this is particularly critical during periods of high unemployment. The weak economy and rising unemployment give employers many more hiring options because of the larger pool of experienced laid-off workers. Without an extension of these programs, the task of transitioning from welfare-to-work will become even harder for individuals who reach their welfare eligibility ceiling. Because of the costs involved in setting up and administering a WOTC/ W-t-W program, employers have established massive outreach programs to maximize the number of eligible persons in their hiring pool. The States, in turn, have steadily improved the programs through improved administration. WOTC has become an example of a true public-private partnership design to assist the most needy applicants. Without the additional resources provided by these hiring tax incentives, few employers would actively seek out this hard-to-employ population. WOTC provides employers with a graduated tax credit equal to 25- percent of the first $6,000 in wages for eligible individuals working between 120 hours and 399 hours and a 40-percent tax credit on the first $6,000 in wages for those working over 400 hours. The W-t-W tax credit is geared toward long-term welfare recipients and provides a 35- percent tax credit on the first $10,000 in wages during the first year of employment and a 50-percent credit on the first $10,000 for those who stay on the job a second year. In my own State of Montana, many businesses take advantage of this program, including large multinational firms and smaller family-owned businesses. Those who truly benefit from the WOTC/W-t-W program, however, are low-income families, under the Food Stamp Program, the Aid to Families with Dependent Children, AFDC, and Temporary Assistance for Needy Families, TANF, programs, and also low-income U.S. Veterans. In Montana, more than 1,000 people were certified as eligible under the WOTC program during an 18-month period, October 2001 through March 2003, including 476 Food Stamp recipients, 475 AFDC/TANF recipients, and 52 U.S. veterans. The bill we are introducing provides for a permanent program extension of the two credits. After a decade of experience with WOTC and W-t-W, we know that employers do respond to these important hiring tax incentives. Permanent extension would provide these programs with greater stability, thereby encouraging more employers to participate, make investments in expanding outreach to identify potential workers from the targeted groups, and avoid the wasteful disruption of termination and renewal A permanent extension would also encourage the state job services to invest the resources needed to make the certification process more efficient and employer-friendly. The bill also includes a proposal to simplify the programs by combining them into one credit and making the rules for computing the combined credits simpler. This would be accomplished by creating a new welfare-to-work target group under WOTC. The minimum employment periods and credit rates for the first year of employment under present work opportunity tax credit would apply to W-t-W employees. The maximum amount of eligible wages would continue to be $10,000 for W-t-W employees. In addition, the second year 50-percent credit under W-t-W would continue to be available for W-t-W employees under the modified WOTC. Finally, there are other changes in the bill that would extend these benefits to more people and help them find work. Because of the program's eligibility criteria, over 80 percent of those hired are women leaving welfare. Since men are not eligible for TANF benefits unless they are parenting their kids, the fathers of children on welfare receive little help in finding work, even though they often face barriers to work just as women on welfare do. We propose to help absentee fathers find work and provide the resources to assume their family responsibilities by opening up WOTC eligibility to anyone 39 years old or younger in families receiving food stamps or residing in enterprise zones or empowerment communities. Raising the eligibility limits in these two categories will extend eligibility to hundreds of thousands of at-risk men. I urge my colleagues to support this important piece of legislation.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I want to explain my decision to oppose closure on the Bankruptcy bill. I have offered an amendment to this bill modeled on legislation I have introduced to set up a permanent health care trust fund for current and former Libby residents, and former workers at the W.R. Grace vermiculite mine in Libby, MT. The trust fund will help pay for medical costs associated with treating asbestos-related disease or illness caused by exposure to deadly tremolite asbestos and other fibers released by Grace's mining operations. I offered this amendment to this bill because it presented an opportunity to make whole the people of Libby, who have suffered, while preventing a company like W.R. Grace, which has filed for bankruptcy, from emerging from that bankruptcy without setting up a health-care trust fund for its victims. I have worked very hard to make sure the people of Libby, MT, are protected in any asbestos legislation to come before Congress; to include special provisions in an asbestos bill for Libby residents that take into account the unique kind of health impacts associated with exposure to the deadly asbestos fibers from the W.R. Grace vermiculite mine. For years, I have been committed to securing a common sense solution for the residents of Libby. I strongly believe that too many people have suffered, and they deserve fair compensation. I will do everything in my power to help Libby make their community whole again and to make sure their long-term health care needs are met. Passing bankruptcy legislation, with consideration of my asbestos amendment is essential. I will fight to get additional protections for Libby residents and then work to pass the bill. Unfortunately, we have not had an opportunity to vote on this amendment, and it has been judged to be non-germane. The bankruptcy bill is all about responsibility and accountability. This amendment tries to hold W.R. Grace accountable for its actions. Because we were not able to vote on this amendment, I can not support limiting debate on this bill.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the ancient text teaches: ``Honor your father and your mother so that you may live long and that it may go well with you in the land the Lord your God is giving you.'' And Paul noted that `` `Honor your father and mother' is the first commandment with a promise--`that it may go well with you and that you may enjoy long life on the earth.' '' That's what Social Security is about. It is about honoring our fathers and our mothers. And like the commandment, Social Security also carries with it a promise. Social Security benefits not just our elders. It also benefits their children, and us all. Families throughout history have faced uncertainties, old age, disability, and death of the breadwinner. Before Social Security, the extended family provided what economic security they had. President Franklin Roosevelt described those times: In the early days of colonization and through the long years following the worker, the farmer, the merchant, the man of property, the preacher, and the idealist came here to build, each for himself, a stronghold for the things he loved. The stronghold was his home the things he loved and wished to protect were his family, his material and spiritual possessions. His security, then as now, was bound to that of his friends and his neighbors. In the 18th and 19th centuries, most Americans lived and worked on farms. Before 1840, 9 out of 10 Americans lived in rural areas. And as late as 1880, 7 in 10 did. This chart on my right shows the degree to which Americans lived in rural America and over time moved to cities. Back in 1790, about 95 percent of Americans lived in rural areas. Right now, the trend line is down to 1990, where about 20 percent lived in rural areas. Everybody else moved to the cities. Back then, in the early days, life was hard and often short. A boy born in the year 1850 could expect to live 38 years. That is all. By 1900, the male life expectancy rose to about 46 years. As this chart shows, things changed with the Industrial Revolution. America changed from an agricultural to an industrial economy. People moved away from the family farm into the city, and by 1920, most Americans lived in urban areas. The extended family and family farm failed to provide the security they once did. At the same time, the people of a more prosperous nation began to live longer. As this chart shows, around 1930, a baby boy could expect to live 59 years--13 years longer than in 1900. And a 60-year-old man could expect to live to age 75. More and more Americans had to address the challenges of living into old age. This chart shows the male life expectancy at birth has risen significantly, from 39 in 1850 to 68 years of age 100 years later, in 1950. Of course, today the lifespan is longer. Senator Robert Wagner of New York described how the burdens of supporting those growing numbers of seniors fell heavily through a patchy safety net and onto their grown children. He said: In truth . . . every civilized community does and must support its old and dependent people in some way. In this country, we have been doing it largely by inefficient relief methods, by shabby pension systems, and by imposing burdens upon millions of younger members of families, with consequent impairment of their industrial efficiency, their morale, and their own opportunities for future independence. And President Roosevelt looked back on those times, saying: Long before the economic blight of the depression descended on the Nation, millions of our people were living in wastelands of want and fear. Men and women too old and infirm to work either depended on those who had but little to share, or spent their remaining years within the walls of a poorhouse. Fatherless children early learned the meaning of being a burden to relatives or to the community. President Roosevelt saw America's social changes as grounds for a change in government's role. In his June 1934 message to Congress, he said: [S]ecurity was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security. Therefore, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it. The Great Depression triggered government's response. As this chart shows, the American economy in 1933 produced barely more than half the output that it did in 1929. And as the next chart shows, by 1933, a quarter of the American labor force was unemployed. Look at this next chart. From its 1929 high of 381, the Dow Jones Industrial Average fell to a trough of 41 in 1932. That's nearly a 90 percent drop in the Dow, in just 3 years. Lifetimes' worth of private accounts evaporated into thin air. Senator Royal Copeland of New York recounted: [T]here are thousands of families, I suppose millions, who thought they had prepared for the rainy days, but by reason of the Depression, and the circumstances involved in it, they have come to be almost as bad off as many who were born and have lived all their lives in poverty. State governments found themselves under an increasing burden. This chart shows unemployed men in line. Senator Daniel Hastings of Delaware said, [T]he individual States are laboring under a strained financial condition; with many of them believing that they cannot take care of their own. As with economic hardship throughout history, the Depression hit widows and orphans particularly hard. This chart shows a careworn 32- year-old woman's face. Congressman William Sirovich of New York painted the picture, in 1935: Death, through the loss of the breadwinner, has broken many a home. For centuries the widows, orphans, and dependent children have cried aloud for help and assistance in their tragic periods of economic insecurity. In the past the only recourse for orphaned children was the poorhouse, alsmhouse, and the orphan asylum. The twentieth century of civilization has awakened our citizens to the duty and obligations they owe to these unfortunate orphans. And Congressman Fred Crawford of Michigan spoke of children with disabilities: One only needs to come in contact with a home which is unable to provide any means of relief for a little child who has been stricken with paralysis to appreciate what this will mean to those homes so darkened with the suffering that follows such a catastrophe. Remember what happened back then. I am not saying we are going to again suffer the same cataclysmic and dire consequences of the Depression. I don't think we will. But we could suffer bad times in the future. The stock market could fall precipitously. Two speakers ago on the floor, the Senator from Alaska was talking about the economy, saying it would be devastated if there was an oil embargo; that would be the end of the American economy. The stock market would clearly fall. We don't know. We live in times that are a little more precarious, uncertain, and it is harder to predict the future. We just don't know. I am presenting these charts and this information to remind us that we don't know. Again, I doubt we will have another depression that severe--we may, but I doubt it. But things can go south sometimes. Things don't always go well all the time. President Roosevelt sought a comprehensive solution. To that end, in June of 1934, he issued an Executive Order creating the cabinet-level Committee on Economic Security. He charged them to, ``study problems relating to the economic security of individuals.'' Labor Secretary Frances Perkins chaired the committee, which also included the Treasury Secretary, the Attorney General, the Agriculture Secretary, and the Federal Emergency Relief Administrator. Secretary Perkins relied heavily on her assistant secretary, Arthur Altmeyer, who would become the first Social Security Commissioner. And to address the need, President Roosevelt and other leading thinkers turned to the idea of ``social insurance.'' President Roosevelt said of social insurance: ``This is not an untried experiment. Lessons of experience are available from States, from industries and from many nations of the civilized world. The various types of social insurance are interrelated; and I think it is difficult to attempt to solve them piecemeal. Hence, I am looking for a sound means which I can recommend to provide at once security against several of the great disturbing factors in life--especially those which relate to unemployment and old age.'' Social insurance programs began in Europe in the 19th century. By the time America adopted Social Security as a national social insurance program in 1935, 34 European nations and several States in the Union already operated some form of social insurance program--34 nations before 1935. I am very proud to say my home State of Montana played a leading role when, in March of 1923, it enacted its old age pension law. Montana's was the first State law to stand the test of constitutionality for an old age pension law. Its sponsor was Lester Loble of Helena, MT. I would like to show a picture of Lester Loble, who later became a State judge, Judge Loble. I knew him. He was a wonderful, wise man. Frankly, I did not know of his history until I did a little research into Social Security and was delighted to find Judge Loble played a prominent role in developing Social Security. He had been a delegate to the 1921 national convention of the Fraternal Order of Eagles, which had devoted a special focus to pension laws for seniors. Mr. Loble's old age pension law provided each county's fund would pay a modest monthly income--up to $25 a month--to the poorest of Montana's seniors, those earning less than $300 a year. In a legislative session torn by struggle over taxes on mining property, the bill passed, and Governor Joseph Dixon, a Republican, signed it into law, saying: You Eagles have planted this seed and you can no more stop the progress of old age pensions than you can stem the tide of the Pacific Ocean. In November of 1934, on behalf of President Roosevelt's Committee on Economic Security, Secretary Perkins invited Mr. Loble to Washington, saying: We are extending this invitation to you because you have the honor of having been the author of the first old age pension law in this Country. The committee set to work on the idea of social insurance. Like all insurance, social insurance protects against a defined risk. The insurance pays beneficiaries when they need to bear a large expense, often at times when they would otherwise not be able to provide for themselves. Like all insurance, social insurance spreads the burdens of the risk broadly across a large pool of those who may encounter the risk. When the risk does occur to one beneficiary, the sharing of the risk makes it easier to bear. Social insurance spreads these risks over the largest possible pool of potential beneficiaries--society as a whole. And social insurance is shaped by broader social objectives, helping to promote the Nation's overall economic security. President Roosevelt's Committee on Economic Security made its recommendation to Congress in January 1935. The committee reported: At least one-third of all our people, upon reaching old age, are dependent upon others for support. . . . There is an insecurity in every stage of life. They went on: Children, friends, and relatives have borne and still carry the major cost of supporting the aged. . . . [T]his burden has become unbearable for many of the children. . . . They responded to that challenge with a proposal for Social Security, and they concluded: The measures we suggest should result in the long run in material reduction in the cost to society of destitution and dependency and we believe will immediately be helpful in allaying those fears which open the door to unsound proposals. The Finance Committee held hearings on the proposal. At one hearing, Senators watched as several elderly gentlemen who were totally blind were led into the committee room by their guide dogs and told of their life of need. This is before Social Security. Finance Committee Chairman Pat Harrison of Mississippi said: I do not know of any committee that was ever moved more than was the Finance Committee. During the Senate's floor debate on the bill, Senator Wagner from New York said: The social security bill embraces objectives that have driven their appeal to the conscience and intelligence of the entire Nation. We must take the old people who have been disinherited by our economic system and make them free men in fact as well as in name. We must not let misfortune twist the lives of the young. We must tear down the house of misery in which dwell the unemployed. We must remain aware that business stability and prosperity are the foundation of all of our efforts. In all of these things we are united, and in this unity, we shall move forward to an era of greater security and happiness. This chart shows the signing of the Social Security Act. In signing the Social Security Act in August 1935, President Roosevelt said: Today a hope of many years' standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. That was in 1935. Think how insecure now. Young people have come to wonder what will be their lot when they came to old age. The man with a job has wondered how long that job would last. This Social Security measure gives at least some protection to . . . millions of our citizens who will reap direct benefits through unemployment compensation, through old-age pensions and through increased services for the protection of children and the prevention of ill health. President Roosevelt continued: We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. The law established two social insurance programs on a national scale to help meet the risks of old age and unemployment: a Federal system of old age benefits for retired workers and a Federal-State system of unemployment insurance. President Roosevelt saw the 1935 Social Security law as an economic foundation. He said: This law . . . represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and inflation. It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness. President Roosevelt justly concluded: If the Senate and House of Representatives in this long and arduous session had done nothing more than pass this bill, the session would be regarded as historic for all time. President Roosevelt's prophecy that Congress would build on Social Security was soon proved true. The Old-Age Insurance Program had not yet come fully into operation when Congress enacted significant changes. In 1939, Congress added benefits for dependents of retired workers and surviving dependents of deceased workers, and Congress made the first benefits payable in 1940 instead of 1942, as originally planned. In the 1950s, Congress broadened Social Security to cover many jobs that previously had been excluded. In 1956, Congress added disability insurance. Benefits were provided for severely disabled workers aged 50 or older and for adult disabled children of deceased or retired workers. Two years later, in 1958, Congress provided benefits for dependents of disabled workers similar to those already provided for dependents of retired workers. In 1960, Congress removed the age-50 requirement for disabled worker benefits. And in 1967, Congress provided disability benefits for widows and widowers aged 50 or older. There used to be a yearly annual ritual in Congress to provide cost- of-living increases to Social Security beneficiaries. This sometimes happened right before an election. In 1972, Congress did away with this uncertainty and provided for automatic cost-of-living increases in benefits tied to increases in the consumer price index. The 1972 amendments also increased benefits for workers who retired after full retirement age. In 1977, Congress changed the method of benefit computation to ensure stable replacement rates over time. Earnings included in the computation were to be indexed to account for changes in the economy from the time they were earned. In 1983, as a consequence of the Greenspan Commission, to strengthen and extend the life of Social Security, Congress made coverage compulsory for employees of the Federal Government and nonprofit organizations. State and local governments were prohibited from opting out of the system once they had joined. The amendments also gradually increased the age of eligibility for full retirement benefits from 65 to 67, beginning with persons who reach the age of 62 in the year 2000. For certain higher income beneficiaries, benefits became subject to income tax. In 1996, Congress relaxed earnings limits for seniors who reached the full retirement age. In 1999, Congress reformed certain provisions under the disability program to create stronger incentives and better supports for individuals to work. And in 2000, Congress eliminated the earnings for seniors who have reached the full retirement age. What we now know is Social Security touches almost every American. Social Security covers 96 percent of American workers and their families. In 2003, Social Security provided $471 billion in benefits to 47 million people. One in six Americans collects Social Security benefits today. In my home State of Montana, 164,000 of our 927,000 residents, or about 18 percent of all Montanans, receive Social Security benefits. Nearly 7 percent of all Montana personal income comes from Social Security payments. Montana ranks fifth among the 50 States in terms of the share of our State's income that comes from Social Security. Social Security is, in effect, three programs: an earned retirement benefit, a disability insurance policy, and a life insurance policy. Most people think of Social Security as a retirement program, but 3 in 10 beneficiaries collect survivors' or disability insurance benefits. Of today's 20-year-olds, 28 percent will become disabled. That is quite startling when one stops to think about it. Of today's 20-year- olds, 28 percent will become disabled, and 17 percent will die before reaching retirement. Look around the room in any college classroom: 3 in 10 students will become disabled, and 2 in 10 will die before retirement. But if a young worker should experience a period of disability, Social Security will provide for the worker and the worker's family. In the same vein, Social Security will provide for the worker's family if the worker experiences an untimely death. For a young married worker with two children, Social Security provides the equivalent of a $400,000 life insurance policy and a $350,000 disability policy. Think of that. For a young married worker today with two children, Social Security provides the equivalent of a $400,000 life insurance policy and a $350,000 disability policy. Only about 3 in 10 workers have access to long-term disability benefits, aside from Social Security. Social Security provides retirement benefits for retirees who worked at least 10 years. President Roosevelt said: There are other matters with which we must deal before we shall give adequate protection to the individual against the many economic hazards. Old age is at once the most certain, and, for many people, the most tragic of all hazards. There is no tragedy in growing old, but there is tragedy in growing old without means of support. Social Security provides the primary source of income for two-thirds of America's seniors. Stop and think about that a moment. Social Security provides the primary source of income for two-thirds of America's seniors. For one-fifth of our seniors, it provides the only source of income. For one-fifth of our seniors in our country, Social Security is the only source of income. The average retiree benefit is $822 a month, or about $10,500 a year in my State of Montana, and about $900 per month, or about $11,000, nationally. This is hardly a king's ransom, but as President Roosevelt said on the third anniversary of the law's enactment: The act does not offer anyone, either individually or collectively, an easy life--nor was it ever intended to do so. None of the sums of money paid out to individuals in . . . insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold; and that is the kind of protection Americans want. Before Social Security, poverty and dependency threatened all who could no longer work, but with its guarantee of benefits to seniors for life, progressive benefit structure, spousal and survivor benefits, and annual cost-of-living adjustments, Social Security provides a solid foundation of economic security for all workers and retirees. Look at the effects of this chart. Because of Social Security, poverty among American seniors has fallen from roughly half of seniors in 1935 to roughly a third of seniors in 1959 to 1 out of 10 seniors now. Just think of that. Before Social Security, half of America's seniors were in poverty. That is this bar off to the left. Gradually, fewer of America's seniors were living in poverty. Social Security brought them out of poverty, and so today only 1 in 10 is living in poverty. Just think what would happen if they did not have those current Social Security benefits. Think what would happen to future retirees who had benefits reduced by 50 percent, as would be contemplated under the President's proposal. Social Security provides a guarantee of economic security for America's workers, for current workers and for retired workers. Social Security protects all Americans, whether they are fortunate and living a long and healthy life or unfortunate and facing early disability or death. Social Security benefits are adjusted for inflation, so the buying power of beneficiaries does not erode over time. Social Security benefits increase with family size, and they are progressive to ensure that even low wage earners have sufficient income. Beneficiaries cannot outlive their benefits. This is an insurance policy. It is a life insurance policy. Seniors cannot outlive their benefits. Seniors keep getting those monthly benefits as long as they live. Social Security uses a common system to administer all three programs--retirement, survivors, and disability--resulting in administrative costs of less than 1 percent. Administrative costs of all three, since they are combined with the same administration, are just 1 percent. Think of the administrative and other costs associated with other forms of retirement payments, particularly in the private sector, which we must have, which are important and critical. It is important also to note the factual difference of the administrative costs of some systems compared with some others. These unequaled benefits make Social Security invaluable for individual workers, retirees, and all Americans. In future statements I hope to go further into other aspects of Social Security. It is somewhat complicated, but it is somewhat simple--very important. I hope to address how the President's plan would cut benefits, not increase benefits, not stabilize benefits but cut them, and what benefit cuts would mean for Americans. I hope to address the concerns caused by the mounting debt and how the President's plan would make that mounting debt problem worse, not better but worse, much worse--much, much, much worse. I hope to address why we should be concerned about the savings and what changes we should be considering to increase savings in America, both public and private savings. Yes, Social Security faces long-term challenges. We all know that. We should work hard to address those. We should work together to strengthen Social Security for the long term. We all know we must do that. We want to do that, but we need to do it right. We should no longer endanger the valuable legacy we have built over so many years. It is important, to say the least. Privatization plans would cut Social Security's funding, weaken the program, and make its problems worse, not better. Plans like option 2 of the President's Social Security Commission would cut benefits by one-third or more for future retirees, even for those who choose not to have a private account. That is important to note. Under the President's plan as we know it so far, Americans who do not choose to have a private account would find their benefits out in the future cut by one-third or more, even if they do not want to participate in the private or personal accounts--whatever one wants to call them. Those investing in those accounts--personal accounts or private accounts--will be hit twice. Those who do invest, who choose to opt to invest, would be hit twice, as their benefits would be subject to a substantial privatization tax. I am not going to go into great detail, but if one chooses to participate in the President's plan, their total benefits when they retire are going to be less than they would be if there is no change in Social Security, just as long as we find ways to keep it going. Cuts of this magnitude would leave many seniors in poverty, requiring more taxpayer assistance, not less, and the President's privatization plan would cause the Government to borrow $5 trillion in additional debt in the next 20 years. Five trillion dollars additional of publicly held debt in the next 20 years. Today the publicly held debt is about $4 trillion or $5 trillion. It will practically double over the next 20 years. We cannot do that. That does not make sense. This is not the legacy we should be giving to our kids and grandkids. Yes, clearly, we should address Social Security. We should stop using Social Security surpluses for other Government purposes. We should save more as a nation. We should address the Government's record budget deficits by restoring fiscal discipline and avoiding massive new debt. We should reinstate enforceable budget restrictions such as the pay-as- you-go rules, and we should work to develop new and innovative ways to help Americans save separate and apart from Social Security. We should honor the words of Congressman Joseph Monaghan of Montana, who said in April of 1935: When the sun of life begins to set upon the aged of our country, the . . . Government should extend to them a relief from the weary toils of the day and to bring relief, comfort, and security to them when the burdens of life are hardest to bear and when the darkening shadows of approaching night begin to fall upon his path to make further toil impossible, to make further travel insecure, a just reward which their toil has merited; an adequate old-age pension and not a pauper's dole. We should also honor the words of President Roosevelt, who said to Congress in 1934: We must dedicate ourselves anew to a recovery of the old and sacred possessive rights for which mankind has constantly struggled: homes, livelihood, and individual security. The road to these values is the way of progress. Neither you nor I will rest content until we have done our utmost to move further on that road. We should honor our fathers and our mothers. We should honor this important social insurance, honor this protection that keeps our fathers and mothers from these darkening shadows of approaching night. We should do so not just for them, we should do so also because it will help their children. It will help the economy to go well for us. It will help us to live better lives, all the days we are on this good land that the Lord has given us. I yield the floor.

Mr. BAUCUS. Mr. President, I rise to speak on my pending amendment, amendment No. 50, to the bankruptcy reform bill. This is an amendment to correct an enormous injustice in my home State. And that is not an understatement. That is accurate. It is very accurate. It is not an overstatement. It is dead on. My amendment is based on a bill I have introduced in past Congresses to set up a permanent health care trust fund for current and former Libby residents, and former workers at the W.R. Grace vermiculite mine in Libby, MT. The trust fund would help pay for the costs of treating asbestos-related illness caused by exposure to deadly tremolite asbestos and other fibers released by Grace's mining operations. This amendment would require a company such as W.R. Grace--which has willfully harmed the innocent citizens of Libby, MT--to set up a health care trust fund for its victims before it can emerge from bankruptcy. As a result of this amendment, W.R. Grace cannot emerge from bankruptcy until it has established a trust fund of at least $250 million to cover the cost of health care for the people of Libby. The people of Libby, the Libby community, and the State of Montana face an immediate health care crisis. This crisis was caused by alarming rates of asbestos-related exposure, disease, and illness. Former Libby residents face their own personal health care crisis because they are denied access to private health insurance. Why? Because they have been diagnosed with an asbestos-related disease or illness, or show signs that they have been exposed to asbestos. They have been denied insurance for that reason only. Projected health care costs to treat all sick people in Libby, MT, run into the hundreds of millions of dollars. This dire situation was created because the responsible party in this case, the W.R. Grace Company, which had the mine in Libby, MT, willfully harmed the people of Libby--willfully harmed the people of Libby. There is immense documentation showing that the company knew the mine operations were causing illness, asbestos-related diseases, in the form of tremolite, which is the worst kind of asbestos disease, and caused the death of many people in Libby and the very serious illness of very many people in Montana. The company knew that. They willfully knew that. The documents prove it. After harming Libby, Grace ignored its responsibility for Libby's health care needs. Grace ignored the harm it inflicted on Libby. They turned their back to it. They showed no accountability. They ignored it even though they knew they were the cause of the disease in Libby. More than that, the actions of W.R. Grace were criminal. The U.S. Attorney General's Office has filed a historic indictment against current and former W.R. Grace executives for knowingly concealing information about asbestos pollution in Libby. This pollution led to the death of more than 200 people in Libby, and made hundreds of others sick. Mr. President, I wish you could go to Libby, MT. Go see it. Any Member of this body who would visit Libby, MT, would know exactly what I am talking about and understand why this amendment is needed. Seeing is believing. I know we hear lots of stuff around here. We hear lots of Senators stand up and talk about problems they see. I tell you, Mr. President, I tell my colleagues, if you were to visit Libby, MT--just to see it, spend a couple hours--you would know exactly what I am talking about and you would support this amendment. It is one of the most tragic situations I have ever seen in my life. That is not an overstatement. It is one of the most tragic situations I have seen in my life. That is why this amendment is so important. It is also very unfortunate that my amendment is so necessary, but it is. It is vital. It is just. And the people of Libby should not have to hope they will be treated fairly in the Grace bankruptcy. They should know they will be treated fairly and that at the very least they will not have to worry about how to pay for costly medical care. These costs should not be borne by Grace's victims, nor should the taxpayers have to pick up the tab through Medicare or Medicaid or through other publicly funded programs. The responsibility lies squarely with the company that caused the sickness in the first place--W.R. Grace. Mind you, this is not a company that is struggling. According to Grace's recent financial results, issued in January, W.R. Grace reported that 2004 fourth quarter sales were up 15 percent over the fourth quarter of 2003. And for the full year of 2004--a full year-- Grace reported sales of over $2.2 billion, which is a 14-percent increase over the previous year. That is right. As Libby's economy struggles, and people are waiting for health care, and dying, W.R. Grace's business is booming, with operations in nearly 40 countries. And Libby residents are left to die. They are left to die because of Grace's actions. A Grace spokesman once boasted, as this was happening, ``We are very pleased with our business progress and results for 2004.'' Ask those who died or who fell ill last year because of W.R. Grace whether they are pleased with the progress and results of 2004. I suspect you will get a different answer. The Congress cannot make right what happened to Libby. No amendments, no legislation, no resolutions will bring back those who died or prevent the afflicted from getting sicker. But we can ensure that those afflicted do not have to pay health care costs incurred through no fault of their own. And we can ensure that the party responsible--in this case W.R. Grace--does. I urge my colleagues to support this amendment. It is so important, it is a matter of accountability, it is a matter of fairness, and it is a matter of time before more folks from Libby, MT, get sick as a result of W.R. Grace.

Mr. BAUCUS. Mr. President, I ask unanimous consent to speak as in morning business.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following fellows and interns be granted floor privileges during the discussion of the bankruptcy bill: Ashley Fingarson, Serena Maxwell, Richard Litsey, and Cuong Huynh.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my friend from North Dakota. This is obviously an extremely important matter because it affects the consumption of one of the most valuable staples in the American diet, and that is meat. It also affects the livelihood of so many Americans, the cattle ranchers, and other producers of meat and red meat products in the United States. Agriculture is our No. 1 industry in Montana, so this is an extremely important matter. We also very much want people in the United States and around the world to be confident that the beef produced in the United States is free of BSE and is the best beef in the world. Now is not the time to open the border to receive Canadian beef down to the United States. There may be a time--I hope there is a time--in the not too distant future when we can do that. I think the North American market makes sense, where beef can be eventually traded freely between the United States and Canada. After all, we are so close in so many ways. We have the same heritage, the same language. The Canadians and Americans are very similar in their outlook on life, with same values, so forth. But we in the United States are a little concerned--many of us are-- with the direction the U.S. Department of Agriculture has taken on this matter; that is, the Department has been quite secretive, that the Department, in announcing its first rule to open the border for Canadian beef, did not tell us something they knew at that time. What is that? They knew at that time that BSE was just discovered in Canada. It turned out even after USDA made their announcement of the rule, another case of BSE was found in Canada. There have been several cases of BSE found in Canada. The one case of BSE found in the United States was a Canadian cow, recently imported from Canada. So we are rightfully a little concerned. We are concerned because we want to make sure that the beef produced in both the United States and Canada meets the highest standards. We have pretty good standards in the United States now to protect against BSE. Probably the best evidence is, to my knowledge, no BSE has been reported south of the border in Native American cattle. I think there are four cases involving Canadian cattle. The Canadians are clearly concerned about their production; they are clearly concerned about their consumers. The Canadian people want the very best beef. They think their beef is the best beef in the world, just like we think our beef is the best beef in the world. That is fine. Now is not the time to open the border. We have too many questions that are not yet answered. One is the new science, new research is going on with BSE which USDA is not incorporating at all in its final rule; that is, the rule that is the subject of this resolution. Even with that, we know that our beef is safe. There is no BSE found in the United States, but it probably makes sense for that new research to be incorporated in the final rule so we are all better assured we have the best beef that we want our consumers to have. This is also important with respect to one of our major trading partners, and that is Japan. About 10 percent of American beef production is exported overseas. About 37 percent of those exports generally go to Japan. But Japan just said, no, and they closed their borders to American beef. It is because of that Canadian cow which had BSE that was found in the United States. Many times many of us have been over to Japan talking with the Japanese, saying our beef is safe; there is no BSE reported in United States cows. Because BSE has been discovered in Japan in the last several years, the Japanese are very sensitive to the dangers, the hideous dangers of BSE. I ask the USDA to withdraw this rule. I ask the USDA to make the best use of the new research that is available. There is an evidentiary hearing coming up soon because a judge in Montana ruled the border should be closed. With regard to that investigative hearing the judge has ordered, now is the time to take a long hard look at this issue and to be transparent, to open up to the public, open up to cattle producers, open up to beef packers who have been denied thus far the application of their comments as the Department makes its final determination. Now is just not the time. I hope there will be a later time. Now is not it. I thank the Chair for his indulgence.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to share some observations on my recent trade mission to Australia and New Zealand. In May 2004, the United States and Australia signed a historic free- trade agreement. That agreement went into force on January 1, 2005, lowering trade barriers and opening new markets for goods, services, and agriculture. This agreement opens the door to a greater relationship with one of the most vibrant and promising economies in the world. For Australia, it offers integration with the world's largest economic power. For the United States, it offers a link to an Australian market that has one of the highest standards of living in the world--and one of the few large economies with whom the U.S. enjoys a trade surplus. Further benefits will accrue to U.S. exporters from using Australia as a platform for more efficient access to Asian markets. Australia has for years pursued a strong policy of economic engagement in the Asia-Pacific region. It has completed, or is currently negotiating, trade agreements with several key countries in the region. This network of trade relationships will increase the value of the free trade agreement to U.S. exporters and investors in Australia. The free-trade agreement further cements the relationship between the United States and one of its strongest allies in the world. Australia is a major partner with the U.S. in global antiterrorism efforts. It is a significant partner in Iraq. It is also one of our most important partners within the WTO. As a leader of the Cairns Group, a loose association of major agriculture exporting countries, Australia has been a reliable ally in our fight for reform of global agriculture markets. I believe in economic engagement and in trade. Reducing barriers and opening markets creates opportunities and jobs. It helps spread the values of democracy and international cooperation. But the benefits of trade do not come without challenges. In the case of Australia, it is our agriculture sector that was initially concerned about the challenges a free trade agreement might pose. This is particularly true in Montana, where agriculture makes up about one half of the State's economy. That is why I worked hard to make sure the United States-Australia Free-Trade Agreement was a good deal for the United States and a good deal for Montana. By working with negotiators from both Governments, I was able to include strong provisions that leveled the playing field for Montana's agriculture industry in the deal, while also assuring Montana's businesses access to tremendous new market opportunities. With a strong deal in place, it was a good time to see for myself what new opportunities are available in Australia and to start making the free-trade agreement work for Montana. Joining me were a group of nine Montana business and agriculture leaders--representing the full range of our State's economy, including manufacturing, agriculture, tourism, and services. They were: Montana Chamber of Commerce president Webb Brown, from Helena; Greg Dumontier of St. Ignatius, general manager of S & K Technologies; David Cameron of Bozeman, a rancher and retired biologist with Montana State University; Steve Holland, director of the Montana Manufacturing Extension Center in Bozeman; Fraser McLeay, senior manager with the Montana World Trade Center in Missoula; Lillian Ostendorf of Powderville, State Women's Committee chair with the Montana Farm Bureau; Mike Overstreet of Billings, chairman of the board and vice president of international relations for Corporate Air; Jeff Ruffner of Butte, senior vice president and general manager with MSE Technology Applications; and Kathy Brown, property manager with Project Management in Helena. Also joining the delegation were several representatives of some of our largest national companies with operations in Australia and the Asia-Pacific region. They were: David Beier, senior vice president for global government affairs for Amgen, Inc.; Lionel Johnson, vice president and director, International Government Affairs, for Citigroup, Inc.; Thomas Quinn, partner with the law firm Venable, representing U.S. Tobacco; and Elizabeth Schwartz, vice president for legislative affairs for the Boeing Company. The goal of our trade delegation was to meet with business and government leaders, build relationships, find opportunities, and discuss solutions to common challenges. We met with great success. A highlight of the visit was a meeting of the entire delegation with Australian Prime Minister John Howard at Parliament House in Canberra. I was very pleased to have the opportunity to personally thank Prime Minister Howard for working with me to address Montana's interests in the free-trade agreement. We also explored ways Australia and the United States can work together to advance our mutual interests in the World Trade Organization, the Asia-Pacific Economic Forum, and the Asia-Pacific region. In Sydney, members of the delegation were able to benefit from the experience of AmCham members doing business in Australia and of the U.S. Commercial Service. Many participated in individual business meetings with counterparts or potential customers in Sydney, Melbourne, and Brisbane. Our thanks go out to the U.S. Embassy and Consulate staffs in Canberra, Sydney, and Melbourne for all their hard work making this such a productive and meaningful trip for me and for each member of the delegation. I particularly want to thank U.S. Ambassador to Australia J. Thomas Schieffer for his hospitality and assistance. I also thank Australian Ambassador to the United States Michael Thawley and his staff in Washington for all their help in making the trip such a success. During the negotiations of the United States-Australia Free-Trade Agreement, Ambassador Thawley and Adam McCarthy from his staff made several trips to Montana. They met with our state officials, business and agriculture groups, and were able to contribute to their own negotiators' sensitivity to Montana's goals in the negotiations. The results were, I believe, in the best interests of both Montana and Australia. I am excited about future prospects for trade and cooperation with Australia. Australia is a large market for American manufactured goods and services and promises to become an even larger one. For example, Australia is fast becoming a major market for Montana's growing high tech and services industries, including medial products, environmental consulting, and engineering. In addition, from Montana's perspective, one of the most important aspects of the new trade agreement goes beyond its market access provisions: it is Australia's commitment to support the United States in its efforts to negotiate disciplines on state trading enterprises in the WTO Doha Round. State trading enterprises like the Canadian Wheat Board and the Australian Wheat Board give agricultural producers in those countries unfair advantages when competing with our world class Montana agricultural products in global markets. I also used the visit as an opportunity to promote cooperation between Australia and the United States on a broader range of multilateral and regional trade and economic issues. Australia and the United States have a mutual interest in promoting a broad vision of Asia-Pacific economic integration. We are both Pacific powers, but not Asian. If we neglect our ties with Asia, we risk a narrow Asian economic integration that deprives our businesses of the most preferential access to these growing markets. I challenged the Government and the private sector in Australia to be our partners in broadening that vision. Our trade efforts also led us to New Zealand. While not as big a country as Australia, New Zealand is an important trading partner for the United States. In 2003, merchandise trade between the two countries exceeded $4 billion. There was an additional $2 billion in trade in the service sector. Exports of Montana products to New Zealand increased more than sevenfold over the last 5 years. Equally important to Montana, New Zealand kept a cool head and did not overreact to the recent BSE scare with a ban on U.S. beef--a major product in my State and critical to our economy. More importantly, New Zealand is a vital piece in the Asian puzzle. Just as with our relationship with Australia, an enhanced commercial relationship between the United States and New Zealand would offer yet another platform for increased exports to the growing markets in places like China, Thailand, Taiwan, and Malaysia. That is why I have long been an advocate for closer economic ties between our countries. In fact, back in 2001, I introduced legislation to authorize fast-track consideration of a free-trade agreement with New Zealand. The New Zealand Government has been actively pursuing a free-trade agreement with the United States for several years. Up until recently, they have been rebuffed by the Bush Administration for reasons having nothing to do with the potential economic merits of such an agreement. I disagree with that approach. I believe that trade agreements should be pursued or not pursued primarily on the basis of their economic merit. I thought it was time to allow the Government of New Zealand to make its case. And so I brought my trade delegation to New Zealand to meet with Government officials and business representatives, to explore market opportunities, and to build new relationships. As in Australia, a highlight of the visit was my meeting with New Zealand Prime Minister Helen Clark. Prime Minister Clark and I discussed prospects for a bilateral free-trade agreement and also exchanged views on how the United States and New Zealand can cooperate on regional and multilateral trade issues. I told the Prime Minister that I think a free-trade agreement between the United States and New Zealand makes sense--so long as it is the right agreement. And the Australia Free-Trade Agreement--with its strong protections for Montana agriculture--is the right model to follow. Australia and New Zealand share a common market. For that reason, it would have made sense to include New Zealand in the United States- Australia Free-Trade Agreement in the first place. The Administration settled for 80 percent of the Australia-New Zealand market, when it could have had 100 percent. But that is in the past, and Prime Minister Clark and I agreed that we need to look forward. During my visit, I was also privileged to meet, along with members of my delegation, with New Zealand's Minister of Agriculture and Trade Negotiations Jim Sutton and Minister of Foreign Affairs and Trade Phil Goff. I appreciate the useful and wide-ranging discussions that we shared. In New Zealand, the trade delegation was able to visit several cutting-edge agricultural facilities, including a revolutionary robotic milking station, an advanced agricultural research station, and an agricultural technology incubator. Many of the Montanans who participated in the trip have gone home with new ideas that will help them both emulate and compete with their New Zealand counterparts. My sincere thanks go out to our hosts, the Government of New Zealand, for their great hospitality. I also thank the U.S. Embassy and Consulate staffs in Wellington and Auckland for all their hard work putting together a fantastic schedule for a whirlwind 2-day visit. I particularly want to thank U.S. Ambassador to New Zealand Charles Swindells for his advice and assistance. Finally, I thank New Zealand Ambassador to the United States John Wood as well as Ian Hill and Janette Malcolm from the New Zealand Embassy in Washington for all their help in making the trip such a success. After all the government meetings, tours of agricultural facilities, and discussions with business groups, I came away believing that the right free-trade agreement with New Zealand makes sense for the United States and makes sense for Montana. Like Australia, New Zealand is a strong market for American manufactured goods and services. Like Australia, New Zealand can serve as a launching pad for reaching Asian markets. And New Zealand is a developed country with a strong legal system, which sets the stage for a high-standards agreement. You may not guess this, but from Montana's standpoint, New Zealand is a more important market, relatively speaking, than it is for the United States as a whole. While New Zealand is the United States' 49th largest trading partner, it is one of Montana's top 25 export markets--not far behind Malaysia, and more important than Thailand or the Philippines. That doesn't mean it would be easy. I know that negotiating a free- trade agreement with New Zealand would raise sensitive issues for Montana's farmers and ranchers, several of whom joined me on the trip. But I also know that facing difficult trade issues pays off in the end. That is because--in the end--trade means jobs. There are tremendous opportunities in the Australia and New Zealand markets awaiting those Americans intrepid enough to seek them out. Increased trade will generate jobs and good-paying ones at that. I want Montana to participate in and benefit from an enhanced trading relationship with these countries. Yet, in a more general sense, these enhanced relationships are about openness. While historians like to talk about the past 100 years as the ``American Century,'' Americans are anxious about the challenges facing our country. We wonder whether our children and grandchildren will enjoy the same standard of living we have known. Faced with this uncertainty, some Americans look at the Pacific Rim and see danger. They see the rise of China's and Asia's economic prowess as a threat to American prosperity. But we have never been a nation that succeeds only by the economic failure of others. We used the Marshall Plan to help pull Europe out of economic distress--and have benefited enormously. We believed that capitalism would win the Cold War--and it did. Now China, Vietnam, Russia, and others are beginning the transition to a free market economy. This is a positive development--not one to fear. To me, the challenge is elementally about whether we will meet the future with open minds and open arms, or whether we will turn inward and seek shelter from the inevitable storms that change always brings. America has never shied away from engagement with the rest of the world. We have been successful because we are confident, innovative, positive, and open. We can only lose our place in the world if we forget who we are and forget how we got here in the first place. That is why I will continue to work for an open trade policy. It is why I will continue to fight hard for Montana's place in the world. It is also why I think it is so important to take these trade missions abroad. In the past couple of years, I have led missions to Cuba, Japan, China, and Thailand. This time, we went to Australia and New Zealand. Every trip has brought success. Each trip has opened doors for Montana business. And discovering the potential in any market or relationship ultimately is what makes trade work for Montana, as well as for the United States.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my good friend Senator Grassley, the Chairman of the Senate Finance Committee, in introducing the National Employee Savings and Trust Equity Guarantee Act. Senator Grassley and I have attempted put together a bipartisan bill to improve the security of the pension plans that cover America's workers. The Finance Committee approved similar legislation in the last Congress. Some of the provisions in this bill that provide participant protections were in a bill we introduced in the 107th Congress--a bill designed to help us avoid another Enron retirement plan debacle. We all remember Enron. Thousands of workers lost their jobs. Because their 401(k) accounts were heavily invested in company stock, these workers lost most of their retirement savings as well. While the story of Enron's employees is no longer new, others companies unfortunately have risen up, or fallen down, to take Enron's place. This country is in the middle of a discussion about retirement security. The administration is recommending that we introduce investment risk into the Social Security system--a system that is the sole source of retirement income for one-fifth of our senior citizens, and the primary source for almost two-thirds of seniors. Before we introduce risk into Social Security, the bedrock of our retirement system, we need to take a hard look at how we can reduce risk to participants in the private retirement system. That is what this bill is about. Pension legislation is challenging. Companies offer plans voluntarily. If we value employer-sponsored retirement plans--and I do--we need to be careful not to make them so burdensome that companies will stop offering them. At the same time, workers have the right to basic protections to make sure that the money that they are counting on for retirement is really there when the time comes. I believe that this bill strikes that balance. It phases out the ability companies have to keep workers locked into company stock in their retirement plans. But it does not limit those workers' ability to invest in that stock if they decide that doing so is best for them. To help make that decision, we give workers tools to make good decisions, and really understand the consequences of their actions. We require the issuance of benefit statements so workers know how much their accounts are worth and how much company stock they already own. And we provide a safe harbor to make it easier for employers to make independent investment advice available if they want to. The challenge inherent in legislating for a voluntary pension system is particularly sensitive when the subject is defined benefit plan funding. When we discuss and debate funding proposals, we need to consider the health of PBGC, the participants who are counting on defined benefit pensions and the employers who have been willing to promise these benefits. The Pension Benefit Guaranty Corporation insures defined benefit plans covering forty-four million Americans. As recently as 2001, PBGC had a projected surplus. Now PBGC has a projected deficit of $23 billion. And this deficit represents unfunded guaranteed benefits. Sadly, many participants were promised benefits in excess of those guaranteed by PBGC. These participants planned their retirement around a benefit promise, only to have the rug pulled out from under them. We must strengthen the funding of defined benefit pension plans so promises made can be kept. This bill takes some important steps toward this goal. First, this bill provides a permanent replacement for the 30-year Treasury rate used to calculate minimum funding requirements for defined benefit plans. Congress passed a temporary substitute last year, but our temporary fix expires at the end of this year. This bill would extend the current corporate bond rate for an additional year, and then begin phasing in the yield curve--a set of rates that recognizes that you will get a different interest rate on a 5-year loan than on a 15-year loan. This bill increases the deductible limit on company contributions to defined benefit pension plans. This is so critical. We must allow companies to contribute more in good times, to build a cushion for bad times. Under this bill, plans of financially-distressed companies that are less than 50 percent funded would not be allowed to continue promising additional benefits until either the funding improves, or the company's financial footing is more solid. This is a tough provision. But we have to make sure that employees receive benefits that they have earned. We have to do our best to make companies pay for promises they have made. But when a company cannot pay for more promises, we must be willing to step in and say ``No more promises.'' This bill has a number of other provisions that will make it easier for a worker to move retirement plans from employer to employer, or from an employer plan to an IRA. There are also provisions that make it easier to administer retirement programs. I look forward to continuing to work with the Chairman of the Finance Committee, Senator Grassley, to see the National Employee Savings and Trust Equity Guarantee Act through to enactment. I urge my colleagues to join us in working toward a more secure retirement for millions of Americans.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join my good friend Senator Grassley, the Chairman of the Senate Finance Committee, in introducing the National Employee Savings and Trust Equity Guarantee Act. Senator Grassley and I have attempted put together a bipartisan bill to improve the security of the pension plans that cover America's workers. The Finance Committee approved similar legislation in the last Congress. Some of the provisions in this bill that provide participant protections were in a bill we introduced in the 107th Congress--a bill designed to help us avoid another Enron retirement plan debacle. We all remember Enron. Thousands of workers lost their jobs. Because their 401(k) accounts were heavily invested in company stock, these workers lost most of their retirement savings as well. While the story of Enron's employees is no longer new, others companies unfortunately have risen up, or fallen down, to take Enron's place. This country is in the middle of a discussion about retirement security. The administration is recommending that we introduce investment risk into the Social Security system--a system that is the sole source of retirement income for one-fifth of our senior citizens, and the primary source for almost two-thirds of seniors. Before we introduce risk into Social Security, the bedrock of our retirement system, we need to take a hard look at how we can reduce risk to participants in the private retirement system. That is what this bill is about. Pension legislation is challenging. Companies offer plans voluntarily. If we value employer-sponsored retirement plans--and I do--we need to be careful not to make them so burdensome that companies will stop offering them. At the same time, workers have the right to basic protections to make sure that the money that they are counting on for retirement is really there when the time comes. I believe that this bill strikes that balance. It phases out the ability companies have to keep workers locked into company stock in their retirement plans. But it does not limit those workers' ability to invest in that stock if they decide that doing so is best for them. To help make that decision, we give workers tools to make good decisions, and really understand the consequences of their actions. We require the issuance of benefit statements so workers know how much their accounts are worth and how much company stock they already own. And we provide a safe harbor to make it easier for employers to make independent investment advice available if they want to. The challenge inherent in legislating for a voluntary pension system is particularly sensitive when the subject is defined benefit plan funding. When we discuss and debate funding proposals, we need to consider the health of PBGC, the participants who are counting on defined benefit pensions and the employers who have been willing to promise these benefits. The Pension Benefit Guaranty Corporation insures defined benefit plans covering forty-four million Americans. As recently as 2001, PBGC had a projected surplus. Now PBGC has a projected deficit of $23 billion. And this deficit represents unfunded guaranteed benefits. Sadly, many participants were promised benefits in excess of those guaranteed by PBGC. These participants planned their retirement around a benefit promise, only to have the rug pulled out from under them. We must strengthen the funding of defined benefit pension plans so promises made can be kept. This bill takes some important steps toward this goal. First, this bill provides a permanent replacement for the 30-year Treasury rate used to calculate minimum funding requirements for defined benefit plans. Congress passed a temporary substitute last year, but our temporary fix expires at the end of this year. This bill would extend the current corporate bond rate for an additional year, and then begin phasing in the yield curve--a set of rates that recognizes that you will get a different interest rate on a 5-year loan than on a 15-year loan. This bill increases the deductible limit on company contributions to defined benefit pension plans. This is so critical. We must allow companies to contribute more in good times, to build a cushion for bad times. Under this bill, plans of financially-distressed companies that are less than 50 percent funded would not be allowed to continue promising additional benefits until either the funding improves, or the company's financial footing is more solid. This is a tough provision. But we have to make sure that employees receive benefits that they have earned. We have to do our best to make companies pay for promises they have made. But when a company cannot pay for more promises, we must be willing to step in and say ``No more promises.'' This bill has a number of other provisions that will make it easier for a worker to move retirement plans from employer to employer, or from an employer plan to an IRA. There are also provisions that make it easier to administer retirement programs. I look forward to continuing to work with the Chairman of the Finance Committee, Senator Grassley, to see the National Employee Savings and Trust Equity Guarantee Act through to enactment. I urge my colleagues to join us in working toward a more secure retirement for millions of Americans.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I appreciate those remarks and agree with them. I rise today to support also the nomination of former Utah Governor and current EPA Administrator Michael Leavitt to be the 20th Secretary of Health and Human Services. As Utah's longest-serving Governor, Governor Leavitt earned the reputation as an innovator and consensus builder. He is best known for his work in Utah to expand health care coverage. While he and I may disagree on policy grounds about the Utah approach, Governor Leavitt has spoken at length about the importance of transparency, the importance of fairness and open debate, all of which are crucial to creating sound public policy. He is a consensus builder, something that is very much needed not only in this town but in the new position he is about to have. Governor Leavitt's leadership and social policies stretch beyond health care. He also has championed welfare reform. The Utah program fulfills many of the goals of the 1996 welfare bill, which I am proud to have helped write. It provides support for low-income families, addresses barriers faced by welfare recipients, provides education and training opportunities to support moving into sustainable employment, and ensures that struggling families receive child support. As EPA Administrator, Governor Leavitt came out to visit my State. He came out to visit the Superfund site at Libby, MT. We are having a very difficult time in Libby. It is a huge Superfund site, one of the largest in the country. I tell Governor Leavitt, as I have many times, his visit meant a lot to me personally and to the people of Libby who have suffered a great deal because of asbestos sickness. In short, Mr. Leavitt is a very capable leader and excellent candidate to lead this Department. We are fortunate to have his leadership, because the challenges he will face are tremendous. This year, as Secretary, Mr. Leavitt will implement the new Medicare drug benefit and managed care reforms--no small task but an extremely important one. The final rule to implement major provisions of the new Medicare drug law were published last week, 2 days after the confirmation hearing, I might add. I am still in the process of reviewing those regulations, but at first read, I remain concerned about the transition rule for dual eligibles and for consumer protection standards. The final rule included much needed improvements in both areas. For example, beneficiaries who are dually eligible for Medicare and Medicaid will be automatically enrolled into a drug plan. However, the timeframe for doing so is short, and it may still cause problems for many low-income, vulnerable beneficiaries. While the final rule includes expedited timeframes for coverage decisions, it still appears drug plans will write their own appeals process. In addition to Medicare, as HHS Secretary, Governor Leavitt will tackle Medicaid reform. Many of us in Congress anticipate an aggressive reform proposal will be included in the President's budget. It is true, as many claim, that Medicaid costs are growing, but the cost growth is due to an increase in enrollment during our recent economic downturn and for the same health care cost of inflation that affects every insurance plan. In fact, Medicaid growth is lower on a per capita basis than is Medicare growth or private insurance growth. It is lower. We should also bear in mind that Medicaid covers long-term care, something which is quite expensive. Also, I disapprove of the administration's use of its 1115 waiver authority. The 1115 waiver authority was not intended to achieve wholesale reform of Medicaid. We have a Medicaid law. The waiver authority was not meant to undermine that law. It was meant to grant flexibility to the States but not to undermine the law. It was not intended to undermine the fundamental nature of the Medicaid Program. I suspect the administration will want to consider Medicaid waivers, State flexibility, and Medicaid funding as part of any formal discussion. Reauthorizing TANF is another task to add to Mr. Leavitt's growing list. We cannot continue to extend the program on a 3-month or 6-month basis, as these short month extensions have undermined the stability of the program. We have to enact and reauthorize welfare reform. We must work together on a longer term reauthorization, one that builds on the 1996 reform law. Finally, I hope we can work together to address rising health care costs and the uninsured. The United States health system is the most expensive in the world, by far. Spending on health care in 2003 reached $1.7 trillion, which calculates out to $5,670 per person. That is about twice the next highest level in the world, which is Switzerland, and they spend half per capita than what we spend. Yet 45 million Americans, even though we spend so much more than any other country, lack health insurance. What can we do about lack of insurance and rising health care costs? With respect to the uninsured, every major poll suggests covering the uninsured should be at the top of the congressional agenda. Yet this issue always seems to take a backseat. I think, however, that we can make progress--maybe not sweeping reform but we can address the problem incrementally, starting with areas first of general agreement. I believe there is a consensus, for example, that we ought to start by covering low-income children and the poorest adults below 100 percent of poverty. I have every hope Governor Leavitt, as HHS Secretary, will keep working on this, and I pledge to help him. With respect to rising health care costs, I believe we can take important steps this year to improve health care quality and the way we pay for health care in our country. I am counting on the administration's support. I am counting on them to back up their statements and goals with funding and actions. I have no doubt Governor Leavitt is up to the task. He has an excellent reputation, not just as Governor of Utah, not just as EPA Administrator, not just as a political leader, but as someone who is creative, who can think outside the box, and who can work with folks from all perspectives. Governor Leavitt has my very strong support. He has my vote. I look forward to working with him as Secretary Leavitt and with the administration to address the many challenges that lie ahead for our country. I yield the floor.

Mr. BAUCUS. Madam President, I thank the chairman.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I also rise--in fact, it is the primary reason I am here--to recognize and thank a remarkable individual, a member of my team who has served our State of Montana in the Senate for more than 9 years, Zak Andersen. Zak is leaving the post as my chief of staff to go to work for a government affairs firm that represents folks in Montana and the Northwest, The Gallatin Group. Zak is a huge fan of that American icon Bruce Springsteen, who once said: ``The door's open but the ride ain't free.'' The same could be said of Zak's last 9 years. A graduate of the University of Montana, Zak first started working for me during my 1996 reelection campaign as a door-to-door canvasser. As a sign of things to come, he was quickly bumped up to field coordinator. After the people of Montana, in 1996, decided to return us to represent them in the Senate, Zak came to work here in my Washington office, where he quickly moved from legislative correspondent, to assistant to the chief of staff, to legislative assistant, to legislative director, and finally chief of staff. Zak also played a pivotal role in my 2002 reelection campaign, where again the people of Montana decided to return us, at that time with more than 60 percent of the vote. Zak, of course, is a Montanan. He has an uncanny ability to read, follow, and know Montanans' real values--our hopes, our wishes, our fears, and our desires. And he uses that almost constantly to help our State. Zak worked his way from field staff to chief of staff in 9 years' time. He likes to joke that he ``went from garbage band to broadband'' in less than a decade. That he did. In the process, he racked up a list of achievements too long to do justice here, but I will name just a few. Recognizing the need for action on improving our State's economic well-being, Zak spearheaded my economic development efforts and helped me organize the first ever Montana economic development summit in 2000. That meeting drew more than 1,000 people to Great Falls. That might not sound like a lot of folks back here, but in Montana it is. After that, he helped organize two more economic summits, both of which were huge successes and helped the people in our State get more good high-paying jobs. Zak also helped me bring new businesses to Montana, companies like National Electric Warranty. He helped Montana businesses grow and expand, businesses like Zoot Enterprises and Summit Design. He should know that his efforts are not lost on the people who found good-paying jobs because of his work. Zak led the appropriations efforts in our office, during which time we got important Montana economic development projects funded, projects such as the Mariah II wind tunnel in Butte; the Fort Peck Interpretive Center, MonTec in Missoula and Tech Ranch in Bozeman. Recognizing that methamphetamines have become a scourge in our close- knit Montana communities, Zak helped me wage a 2-year campaign--and boy it was tough; we worked very hard to get that done--to help me get five of our counties with the worst meth problems included in what is called the high density drug trafficking area, otherwise known as HIDTA. That is one of our great accomplishments, something of which I am proud, to help fight the scourge of methamphetamines. That has helped law enforcement officials in our State crack down on meth. Zak also helped me work in this Chamber to pass big ticket legislative items such as tax cuts, Medicare improvements, and new Healthy Forest legislation. These are just a few of Zak's outright achievements. But it is the intangible abilities that I will remember most in Zak. I dare say most in our office will remember those best, too. In particular is his amazing ability to quickly analyze an issue and break it down into pros and cons, both from the standpoint of policy and of politics. There are a lot of quick minds on Capitol Hill but Zak, to me, stands out as one of the very best, one of the brightest. Undoubtedly, that quickness of mind contributes to his sense of humor: a bit dark, extremely dry, ever present. Zak's sense of humor is rare. It is remarkable. He has used it to build bridges with the Montana delegation, to keep my office train on the tracks during some of the more bumpy times, and to mentor younger staffers as they learn the ways of working in this remarkable place. We will also remember him for his elaborate practical jokes that often involve the whole office. But beyond that, we will remember Zak for his uncanny ability to get things done and his relentless commitment to Montana. His no-nonsense style, his can-do attitude helped me and others accomplish great things for our State and most especially for our people. A humble guy from Helena, Zak embodies Montana--a very bright, talented, committed guy, hard working, genuine, and astute, and ever mindful of the fact that he is very lucky to be from and advocate for the greatest State in the Union. He is extremely loyal. Zak loves his microbrews, Mr. Bruce Springsteen, a gin-clear trout stream, the Oakland Raiders, record stores, and University of Montana football. Most of all, he loves his native State of Montana. Fittingly, one of his favorite authors is Cormac McCarthy. Many of the McCarthy books are about the American West and therefore not for the faint of heart. But they are also very real, sparsely punctuated, light on frills, heavy on matters of depth and critical thought--in other words, a lot like Zak. As the pages of his life open to endless opportunity, we will all remember Zak: His remarkable abilities, his devotion to the State he loves; and his commitment to excellence in all that he does. We will miss you, Zak. We will miss you in our office, but we are going to find you very quickly. You are still part of our team. And I thank you, Zak, so very much. Montana thanks you and a grateful nation thanks you for your service. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, first, I congratulate the present occupant of the chair on his election to serve the State of Louisiana in the Senate. I look forward to working with him, as all my colleagues do, and wish him luck while he is in the Senate. I know the people of Louisiana will be well served.

Mr. BAUCUS

Mr. BAUCUS. I thank the Senator.

Mr. BAUCUS. No. If the Senator will yield, I ask him how much time he might use?

Mr. BAUCUS

Mr. BAUCUS. I would be pleased to engage in such a colloquy.

Mr. BAUCUS. I agree completely with my colleagues. As suggested, a NAFTA dispute panel is requiring that the Commerce Department issue today yet another revised version of the original 2002 lumber-subsidy determination. Given the panel's pattern of overreaching, it may be a relatively low subsidy estimate. If so, this will be trumpeted in headlines across Canada as a victory for Canada's lumber policies. Before all those editorial writers seize on this supposed ``victory,'' they should understand that this determination will have absolutely no legal effect. It is the Commerce Department's December 2004 findings of a subsidy of over 17 percent and dumping of 4 percent that controls. Hyping the January 24 decision as having any meaning performs a disservice to Canadian interests, which lie in a mutually beneficial negotiated settlement. Nothing can change the facts. The Canadian provinces provide timber to their lumber companies for a fraction of its value. This harms not only U.S. sawmills, millworkers and family forest landowners, but also the Canadian forest. Environmental groups have long decried the overharvesting of timber caused by undervaluing the resource.

Mr. BAUCUS

Mr. BAUCUS. Mr. President. I rise today to say a few words of thanks to Steve Beasley, an outstanding agriculture economist at USDA who recently completed a year-long fellowship on the Senate Finance Committee. Steve's service to the committee, and by extension to the State of Montana, will be remembered fondly and with great appreciation. A year ago I was able to snag Steve away from his job at the Foreign Agriculture Service at the Department of Agriculture. He brought to us years of experience in foreign market development and capacity- building. During his time with the committee, his expertise proved invaluable as he worked on calculating the effects of the North American Free Trade Agreement on Montana agricultural products, analyzing the effect of agricultural trade liberalization on crop prices over the past few years, as well as helping prepare me for trade missions to Australia, New Zealand, China, Japan, and Thailand. Half of my State's economy is based on agriculture, and the work Steve did for us will serve us for the next several years as we examine the effects of trade on our economy's largest sector. I am sad to see him go, but I know the USDA is eager to get him back. I thank him for his hard work over this past year, and I wish him all the luck in the future.