Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, what is pending business?

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, on October 1, Senator Grassley and I introduced a bipartisan Medicare package, the Beneficiary Access to Care and Medicare Equity Act. Our bill would address a number of Medicare payment changes--primarily reductions--that went into effect at the start of the fiscal year. At the beginning of the fiscal year, Medicare payment reductions automatically went into effect in many areas. What were they? Cuts to home health services. Cuts to nursing homes. Cuts to hospitals. One of the most damaging cuts of all, for Medicare physician payments, is scheduled to take place beginning January 1, 2003. This is the second year in a row such physician payment cuts would occur. Mr. President, these cuts threaten access to care for tens of millions of seniors across America. Sadly, since this bill was introduced, the Administration has indicated that preventing these cuts from going into effect is simply not a priority. Tom Scully, the administrator of the Center for Medicare and Medicaid Services made this clear last Tuesday. He said: It would be fine with the Bush administration if Congress does not pass Medicare provider payment legislation this year. If I had to guess right now--I guess there won't be any give-back bill. The White House Office of Management and Budget Director, Mitch Daniels, also said he thinks ``the Federal Government cannot afford to pass a Medicare provider give-back bill.'' Mr. President, the Administration says it cannot afford, after all the billions that have been spent elsewhere, to restore some of the cuts that have already gone into effect. The chairman of the House Ways and Means Committee has been equally unenthusiastic about addressing these cuts. The Administration and the chairman of the House Ways and Means Committee may believe this legislation is not a priority. I respectfully disagree. This bill is a priority. It is a priority for every senior who receives home health care. It is a priority for every senior who receives nursing home care. It is a priority for all Americans of all ages who depend on our teaching hospitals. And it is a priority to anyone who cares about ensuring our seniors receive access to physician services. Again, a large cut goes into effect for physician services after January 1. Last January, physicians saw their payments cut by 5.4 percent. Already some doctors are talking about leaving Medicare. Why? Because they are concerned that Medicare payments may not be enough to allow them to pay for the costs of caring for seniors. If this legislation I have introduced with Senator Grassley does not pass, physician payments will be cut again by over 4 percent. This must be changed. Our bill also is a priority for our children. Under current law, funds for the Children's Health Insurance Program that have not yet been spent are scheduled to be returned to the Federal Treasury. I think this money should remain where it belongs--with the States, helping children. It is helping children who need health insurance benefits. We have about 9,500 Montana kids, and many more children in many other States, who are currently receiving coverage through CHIP. If our bill does not pass, America's kids stand to lose as much as $2.8 billion. This bill is also a priority for States. We have all heard about the budget problems threatening States in every corner of our Nation, about the possibility of deep cuts to important programs and services, such as Medicaid. Our bill will send an extra $5 billion in fiscal relief to the States to forestall these cuts. This bill is a priority for rural America. From Montana to Maine, the Medicare payment system continues to discriminate against rural patients and rural providers. Our bill takes strong steps to address these regional inequities. This bill is a priority. I cannot imagine the administration saying this is not a priority, given all the other areas where we spend dollars. Defense, homeland security, and other issues are vitally important. But our Nation's health is also important, and we should invest in it accordingly. I cannot believe this administration is saying it is not a priority to prevent these cuts from taking effect. I cannot believe that. Nevertheless, that is what they say. This legislation tries to address that situation so those cuts do not go into effect. I said this bill is a priority. It is a priority for our seniors. It is a priority for our children. It is a priority for our State governments and rural areas in our country, for anyone who cares about preserving access to quality care in America. I might add, this is a bipartisan bill. Senator Grassley and I have worked very hard on this legislation. Senator Grassley is the ranking member of the Finance Committee. We worked together at every point to craft this bill. We sought input from our colleagues on both sides of the aisle. We met with our respective caucuses. We worked closely with members of the Finance Committee. When the Senator from Oklahoma objected to my unanimous consent request almost two weeks ago, he suggested this bill appeared out of nowhere on the Senate floor. That could not be further from the truth. The Senator also objected to this bill because we lack official CBO scoring. That issue has been cleared, as we received an official estimate of the bill on Friday. CBO estimates this bill would cost about $43.8 billion over 10 years. We guessed it would cost about $43 billion. CBO said our guess is pretty close; it is $43.8 billion. I believe that is the minimum investment we should make to address the priorities I mentioned. So today as the Medicare payment cuts go into their 16th day, and as many more cuts loom on the horizon in January, I will again ask unanimous consent to pass S. 3018. Mr. President, I ask unanimous consent that the Senate proceed to the consideration of S. 3018, a bill to amend title 18 of the Social Security Act; that the bill be read a third time and passed; that the motion to reconsider be laid upon the table; and that any statements relating to the bill be printed in the Record.

Mr. BAUCUS. To be honest, I think if all Members of the Senate were like the Senator from Maine, we would have an agreement. The Senator well knows there are a lot of other Senators in this body who were dug in and who very much wanted their points of view. We had the last meeting. We were working on five issues: Assets test, benefit design, Medicare reforms, consumer protections, and how to design a viable fallback mechanism, which would take effect in the event of private plans not entering a particular market. Roughly speaking, we were working off the basis of the so-called tripartisan view, but is it not also true at that time that was very loose and there were an awful lot of issues to work out?

Mr. BAUCUS. It was my judgment after that meeting and checking with Senators on both sides of the aisle, that discussions were going backwards on prescription drugs. I basically made a decision that Senators were digging in so much that they were not going to agree.

Mr. BAUCUS. I am sorry, I was distracted.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I join the Ranking Republican Member of the Finance Committee, Senator Grassley, in introducing bipartisan legislation to further address the increasing problem of U.S. corporations reincorporating to tax haven countries to avoid taxes, a practice also known as a corporate inversion. I am pleased to cosponsor the Reclaiming Expatriated Contracts and Profits, RECAP, Act which prohibits the most egregious inverted corporations from receiving Federal Government contracts. Last March, Senator Grassley and I announced our intention to introduce legislation to curb the proliferation of U.S. corporations changing their Articles of Incorporation to become a corporation of a foreign tax haven country. On April 11, 2002, we introduced legislation to address this problem. S. 2119, the Reversing the Expatriation of Profits Offshore, REPO, Act, was designed to put the brakes on the potential rush to move U.S. corporate headquarters to tax haven countries. On June 18, 2002, the Senate Finance Committee sent a strong message to corporate America by passing S. 2119 by unanimous vote. But the REPO Act was just the first step to curb inversions. Senator Wellstone led the effort to eliminate another incentive for these corporations by restricting them from qualification for government contracts. The idea is simple. If a corporation wants to, in essence, renounce their U.S. citizenship, then they shouldn't be entitled to compete for U.S. government contracts. I applaud Senator Wellstone for his leadership and willingness to press ahead with restricting inverted corporations from winning government contracts. Today, Senator Chuck Grassley and I cosponsor legislation focused on the same goal as that of Senator Wellstone. The legislation we introduce today will prevent the most egregious of these inverted corporations from receiving any U.S. government contracts. These companies have placed tax avoidance as their first priority and their U.S. identity as their second priority. The reduction in taxes for inverted corporations allows them to underbid those corporations that choose to remain U.S. corporations. This is wrong. I welcome the opportunity to support RECAP and I urge Congress to act quickly on this legislation, as it will go a long way toward restoring public confidence in corporate America.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I join the Ranking Republican Member of the Finance Committee, Senator Grassley, in introducing bipartisan legislation to further address the increasing problem of U.S. corporations reincorporating to tax haven countries to avoid taxes, a practice also known as a corporate inversion. I am pleased to cosponsor the Reclaiming Expatriated Contracts and Profits, RECAP, Act which prohibits the most egregious inverted corporations from receiving Federal Government contracts. Last March, Senator Grassley and I announced our intention to introduce legislation to curb the proliferation of U.S. corporations changing their Articles of Incorporation to become a corporation of a foreign tax haven country. On April 11, 2002, we introduced legislation to address this problem. S. 2119, the Reversing the Expatriation of Profits Offshore, REPO, Act, was designed to put the brakes on the potential rush to move U.S. corporate headquarters to tax haven countries. On June 18, 2002, the Senate Finance Committee sent a strong message to corporate America by passing S. 2119 by unanimous vote. But the REPO Act was just the first step to curb inversions. Senator Wellstone led the effort to eliminate another incentive for these corporations by restricting them from qualification for government contracts. The idea is simple. If a corporation wants to, in essence, renounce their U.S. citizenship, then they shouldn't be entitled to compete for U.S. government contracts. I applaud Senator Wellstone for his leadership and willingness to press ahead with restricting inverted corporations from winning government contracts. Today, Senator Chuck Grassley and I cosponsor legislation focused on the same goal as that of Senator Wellstone. The legislation we introduce today will prevent the most egregious of these inverted corporations from receiving any U.S. government contracts. These companies have placed tax avoidance as their first priority and their U.S. identity as their second priority. The reduction in taxes for inverted corporations allows them to underbid those corporations that choose to remain U.S. corporations. This is wrong. I welcome the opportunity to support RECAP and I urge Congress to act quickly on this legislation, as it will go a long way toward restoring public confidence in corporate America.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGA INNOVATE ACT. Maximum Economic Growth for America through Innovative Financing. MEGA Innovate is part of a series of bi-partisan bills that Senator Crapo and I have introduced that serve as our proposals for TEA 21 Reauthorization. I was privileged to have been an author of TEA 21, and I look forward to working with my fellow Finance Committee members, EPW Committee members, as well as members on other Committees, as we craft the next highway bill under the leadership of Senator Jeffords. The Finance Committee has held hearings that examined how to provide funding for our highway system. We heard about projections for Trust Fund income over the next 10 years. As successful as standard financing has been, our transportation needs far outweigh our resources. The MEAGA INNOVATE ACT is about increasing financing to the Highway Trust Fund without raising taxes. I am looking at additional means of financing to supplement the Highway Trust Fund in order to meet our Nation's transportation needs. In recent years there has been increased recognition, throughout the country, of the important contribution that a strong highway program makes to our nation's economic prosperity and quality of life. In Montana it is our economy's ``golden egg'' so to speak. As we prepare to reauthorize the highway program next year, a fundamental question for the Congress is how to increase the level of investment, for the benefit of all citizens and all States. Earlier this year Senator Crapo and I introduced bi-partisan legislation with 12 co-sponsors, S. 2678--the MEGA TRUST Act, Maximum Economic Growth for America through the Highway Trust Fund. This bill laid out some ways to increase investment in the highway program without raising taxes. That legislation would allow the Highway Trust Fund to be properly credited with taxes either paid or foregone with respect to gasohol consumption. It would also reinstate the principle that the highway and mass transit accounts of the Highway Trust Fund should be credited with interest on their respective balances. Those are important reforms that I believe we must enact as soon as possible. But we must continue to work to find additional ways to enable a stronger level of highway investment, because that investment is so important and beneficial to the country. Today I am introducing the MEGA INNOVATE Act--Maximum Economic Growth for America Through Innovative Financing. Under this legislation the Secretary of the Treasury would sell Tax Credit Bonds with the proceeds being placed in the Highway Account of the Highway Trust Fund. The Treasury would be responsible for the principal and interest. The bond proceeds will enable the basic highway program to grow and would help the citizens of every state. Administration of this initiative will be simple. No new structures are required. This is a new idea that does not raise taxes, but would advance our national interest in a strong highway program. As this is a new idea for highways, the bill introduces this concept at a very modest level, in the range of $3 billion annually in bond sales. However, when combined with the provisions of the MEGA TRUST Act, and the continuation of current sources of revenue, this legislation should enable the highway program to achieve an obligation level of approximately $41 to 42 billion by fiscal year 2009. Many other officials and organizations have shown interest in both MEGA TRUST and MEGA INNOVATE, such as the State DOTs of Montana, Idaho, North and South Dakota and Wyoming. Highway Advocate groups, such as the Highway Users Alliance have also shown support for both bills. I very much appreciate the support of these groups, as well as the support of others for these two important initiatives. A well-funded highway program is certainly essential to the economic future of my State of Montana and to other States. So, I look forward to working with my colleagues on the MEGA INNOVATE ACT, on the MEGA TRUST ACT, and all my other MEGA bills. I also look forward to looking at other ways to help our citizens benefit from increased levels of highway investment.

Mr. BAUCUS. Mr. President, I rise to strongly speak in favor of the legislation introduced today by Senators Feinstein and Gregg titled ``The Social Security Number Misuse Prevention Act of 2002,'' indeed, I am an original cosponsor of this legislation. If enacted, this bill will reduce the misuse of individuals' Social Security numbers, SSNs, by others. As you well know, the Social Security number is increasingly being used for purposes not related to the administration of the Social Security program, because it is, in many cases, our national identification number. As a result, many people can gain access to the number, and this facilitates its use as a tool for illegal activity, most significantly for the crime of identity theft. In a report issued by the Social Security Administration's Office of the Inspector General, OIG, in May 1999, investigators concluded that most identity- related crimes involved the fraudulent use of a Social Security number. Additionally, the introduction of the SSN into the arena of electronic commerce has been accompanied by a dramatic increase in SSN misuse. Given the upward trend in SSN misuse, I feel that the Congress must take a fresh look at options for safeguarding Social Security numbers. I believe that the bill introduced by Senators Feinstein, Gregg and myself today is an important development in that effort. However, I want to make it clear that this bill will not eliminate all misuse of Social Security numbers. There are many legitimate and necessary uses of Social Security numbers and this bill does not prohibit such uses. Unfortunately, the absence of such prohibitions makes it easier for those who seek to misuse Social Security numbers. The legislation being introduced today is very similar to a bill, S. 848, that was introduced by Senators Feinstein and Gregg during the first session of the 107th Congress. Although S. 848 was referred to the Judiciary Committee, the bill deals extensively with sections of the US Code concerning Social Security numbers, legislative changes to these sections are in the jurisdiction of the Finance Committee. Therefore, Senator Grassley and I expressed our concern that S. 848 should have been referred to the Finance Committee and we initiated a successful unanimous consent request, with the support of Senators Leahy, Hatch, Feinstein, and Gregg, to sequentially refer the bill to the Finance Committee. The Judiciary Committee favorably reported the bill on May 16th of this year and it was immediately referred to the Finance Committee. We at the Finance Committee examined the problems which this legislation tries to address and found potential solutions to these problems to be very complex. In addition, as the legislation could potentially affect all of the uses and availabilities of SSNs many interested parties contacted the Finance Committee to express their views. Given the complexity of the issues and the large number of stakeholders involved, the Finance Committee decided to schedule a subcommittee hearing in advance of a mark-up in order to better inform Committee members and their staffs about these issues. Special attention was focused on the core set of solutions embodied in the bill reported by the Judiciary Committee. After a long series of discussions, we reached agreement with Senator Feinstein on legislation which makes a number of changes to the reported version of S. 848. We then scheduled a mark-up of this substitute for S. 848, but were unable to proceed with the mark-up because some members of the Committee planned to offer amendments that were extraneous and controversial. As a result, in order to move this legislation forward expeditiously, I asked Senators Feinstein and Gregg to introduce the substitute for S. 848 as new legislation with me as an original cosponsor. Moreover, I intend to use procedures in Rule XIV of the Senate to have it placed on the calendar, rather than have it referred to Committee. Once on the calendar, the bill is eligible to be brought up for debate on the Senate floor. As reported by the Judiciary Committee, S. 848 would: Prohibit the sale, purchase, or display of a Social Security number to the general public without the individual's consent, with exceptions for legitimate business and government activity; prohibit the release of certain key public records to the general public unless Social Security numbers are first redacted, this provision applies only to records created after the bill is enacted; require Social Security numbers to be removed from government checks, drivers' licenses, and motor vehicle registrations; prohibit the employment of prisoners in any capacity that would give them access to Social Security numbers; make it a crime to obtain an SSN for the purpose of locating or identifying a person with the intent to physically harm that person; give consumers the right to refuse to give out their Social Security numbers when purchasing a good or service from a commercial entity, unless the entity has a legitimate need as specified in the law; and create new civil monetary penalties, criminal penalties, and civil actions to help prevent misuse of Social Security numbers; requires all new credit card payment processing machines to truncate the credit card account numbers to the last five digits on the printed receipt. The substitute for S. 848 that is being introduced today retains the basic structure and objectives of the Judiciary Committee-reported bill, but makes several substantive changes that improve the bill. The substitute bill: makes clear that it is permissible to sell, purchase or display Social Security numbers for any legitimate use required, authorized or excepted by any Federal law. Stops new public records containing Social Security numbers from being posted on the Internet and calls for a study by the General Accounting Office of issues pertaining to the display of Social Security numbers on any public records. Permits State Attorneys General to enforce the new ``right to refuse'' to provide a Social Security number, but prohibits class action lawsuits to enforce this new ``right.'' Sunsets the ``right to refuse'' after six years, and calls for a report by the Attorney General, six months after the sunset regarding the effectiveness of this ``right to refuse'' and whether it should be reauthorized. To conclude, I think that the introduction of this revised version of S. 848 and the placement of it on the calendar are two very important steps in our fight to reduce the misuse of Social Security numbers and reduce the theft of identities. I look forward to working with my colleagues to enact this important piece of legislation.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to speak out on the issue of Iraq. This conceivably is one of the most important issues that we as a governing body will address in what remains of the 107th Congress. Let me start by saying that Saddam Hussein is a dangerous man. As many of my colleagues have already pointed out, he has actively engaged in attacking Americans in the region. He has actively engaged in deploying chemical and biological weapons against his own people. He has participated in genocide against his own people. He has continually deceived U.N. weapons inspectors. He has failed to comply with U.N. resolutions to disarm his weapons of mass destruction. He was involved in an assassination attempt against former President George Bush senior. He has committed serious acts of aggression against his neighbors. These are all acts of a man that cannot be trusted. Back in 1998, the Senate passed the Iraqi Liberation Act that declared it should be the policy of the United States to seek to remove Saddam Hussein from power in Iraq and replace him with a democratic government. I supported this bill and believe that Saddam continues to be a detriment to his people. The Iraqi people deserve a chance to be free from a vicious dictator. Our actions today go far beyond declaring Saddam a danger to his people and to the rest of the world. Our actions today will authorize the use of force in the case Saddam refuses once again to defy U.N. resolutions and disarm. Our actions today could send our sons and daughters to battle. And, our actions today, if not handled cautiously, could erupt into a conflict we as a nation are not prepared to address. This is not something we can take lightly. Last week, a bipartisan group of Congressmen and Senators brokered an agreement with the President and produced a resolution that strikes a good balance between diplomacy and force. The resolution supports exhausting diplomatic means to disarm Saddam prior to engaging in the use of force. It also provides the President with adequate flexibility to do what needs to be done in the case that Saddam refuses to disarm. I have cosponsored this bipartisan agreement and believe that the focus of the resolution is appropriate. I believe that a strong resolution is necessary to protect the American people from threats posed by Saddam Hussein. And while I believe we should strive to garner the support of the U.N. and our allies around the world, we must ensure that we don't limit our ability to act to protect American lives.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGA INNOVATE ACT. Maximum Economic Growth for America through Innovative Financing. MEGA Innovate is part of a series of bi-partisan bills that Senator Crapo and I have introduced that serve as our proposals for TEA 21 Reauthorization. I was privileged to have been an author of TEA 21, and I look forward to working with my fellow Finance Committee members, EPW Committee members, as well as members on other Committees, as we craft the next highway bill under the leadership of Senator Jeffords. The Finance Committee has held hearings that examined how to provide funding for our highway system. We heard about projections for Trust Fund income over the next 10 years. As successful as standard financing has been, our transportation needs far outweigh our resources. The MEAGA INNOVATE ACT is about increasing financing to the Highway Trust Fund without raising taxes. I am looking at additional means of financing to supplement the Highway Trust Fund in order to meet our Nation's transportation needs. In recent years there has been increased recognition, throughout the country, of the important contribution that a strong highway program makes to our nation's economic prosperity and quality of life. In Montana it is our economy's ``golden egg'' so to speak. As we prepare to reauthorize the highway program next year, a fundamental question for the Congress is how to increase the level of investment, for the benefit of all citizens and all States. Earlier this year Senator Crapo and I introduced bi-partisan legislation with 12 co-sponsors, S. 2678--the MEGA TRUST Act, Maximum Economic Growth for America through the Highway Trust Fund. This bill laid out some ways to increase investment in the highway program without raising taxes. That legislation would allow the Highway Trust Fund to be properly credited with taxes either paid or foregone with respect to gasohol consumption. It would also reinstate the principle that the highway and mass transit accounts of the Highway Trust Fund should be credited with interest on their respective balances. Those are important reforms that I believe we must enact as soon as possible. But we must continue to work to find additional ways to enable a stronger level of highway investment, because that investment is so important and beneficial to the country. Today I am introducing the MEGA INNOVATE Act--Maximum Economic Growth for America Through Innovative Financing. Under this legislation the Secretary of the Treasury would sell Tax Credit Bonds with the proceeds being placed in the Highway Account of the Highway Trust Fund. The Treasury would be responsible for the principal and interest. The bond proceeds will enable the basic highway program to grow and would help the citizens of every state. Administration of this initiative will be simple. No new structures are required. This is a new idea that does not raise taxes, but would advance our national interest in a strong highway program. As this is a new idea for highways, the bill introduces this concept at a very modest level, in the range of $3 billion annually in bond sales. However, when combined with the provisions of the MEGA TRUST Act, and the continuation of current sources of revenue, this legislation should enable the highway program to achieve an obligation level of approximately $41 to 42 billion by fiscal year 2009. Many other officials and organizations have shown interest in both MEGA TRUST and MEGA INNOVATE, such as the State DOTs of Montana, Idaho, North and South Dakota and Wyoming. Highway Advocate groups, such as the Highway Users Alliance have also shown support for both bills. I very much appreciate the support of these groups, as well as the support of others for these two important initiatives. A well-funded highway program is certainly essential to the economic future of my State of Montana and to other States. So, I look forward to working with my colleagues on the MEGA INNOVATE ACT, on the MEGA TRUST ACT, and all my other MEGA bills. I also look forward to looking at other ways to help our citizens benefit from increased levels of highway investment.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to strongly speak in favor of the legislation introduced today by Senators Feinstein and Gregg titled ``The Social Security Number Misuse Prevention Act of 2002,'' indeed, I am an original cosponsor of this legislation. If enacted, this bill will reduce the misuse of individuals' Social Security numbers, SSNs, by others. As you well know, the Social Security number is increasingly being used for purposes not related to the administration of the Social Security program, because it is, in many cases, our national identification number. As a result, many people can gain access to the number, and this facilitates its use as a tool for illegal activity, most significantly for the crime of identity theft. In a report issued by the Social Security Administration's Office of the Inspector General, OIG, in May 1999, investigators concluded that most identity- related crimes involved the fraudulent use of a Social Security number. Additionally, the introduction of the SSN into the arena of electronic commerce has been accompanied by a dramatic increase in SSN misuse. Given the upward trend in SSN misuse, I feel that the Congress must take a fresh look at options for safeguarding Social Security numbers. I believe that the bill introduced by Senators Feinstein, Gregg and myself today is an important development in that effort. However, I want to make it clear that this bill will not eliminate all misuse of Social Security numbers. There are many legitimate and necessary uses of Social Security numbers and this bill does not prohibit such uses. Unfortunately, the absence of such prohibitions makes it easier for those who seek to misuse Social Security numbers. The legislation being introduced today is very similar to a bill, S. 848, that was introduced by Senators Feinstein and Gregg during the first session of the 107th Congress. Although S. 848 was referred to the Judiciary Committee, the bill deals extensively with sections of the US Code concerning Social Security numbers, legislative changes to these sections are in the jurisdiction of the Finance Committee. Therefore, Senator Grassley and I expressed our concern that S. 848 should have been referred to the Finance Committee and we initiated a successful unanimous consent request, with the support of Senators Leahy, Hatch, Feinstein, and Gregg, to sequentially refer the bill to the Finance Committee. The Judiciary Committee favorably reported the bill on May 16th of this year and it was immediately referred to the Finance Committee. We at the Finance Committee examined the problems which this legislation tries to address and found potential solutions to these problems to be very complex. In addition, as the legislation could potentially affect all of the uses and availabilities of SSNs many interested parties contacted the Finance Committee to express their views. Given the complexity of the issues and the large number of stakeholders involved, the Finance Committee decided to schedule a subcommittee hearing in advance of a mark-up in order to better inform Committee members and their staffs about these issues. Special attention was focused on the core set of solutions embodied in the bill reported by the Judiciary Committee. After a long series of discussions, we reached agreement with Senator Feinstein on legislation which makes a number of changes to the reported version of S. 848. We then scheduled a mark-up of this substitute for S. 848, but were unable to proceed with the mark-up because some members of the Committee planned to offer amendments that were extraneous and controversial. As a result, in order to move this legislation forward expeditiously, I asked Senators Feinstein and Gregg to introduce the substitute for S. 848 as new legislation with me as an original cosponsor. Moreover, I intend to use procedures in Rule XIV of the Senate to have it placed on the calendar, rather than have it referred to Committee. Once on the calendar, the bill is eligible to be brought up for debate on the Senate floor. As reported by the Judiciary Committee, S. 848 would: Prohibit the sale, purchase, or display of a Social Security number to the general public without the individual's consent, with exceptions for legitimate business and government activity; prohibit the release of certain key public records to the general public unless Social Security numbers are first redacted, this provision applies only to records created after the bill is enacted; require Social Security numbers to be removed from government checks, drivers' licenses, and motor vehicle registrations; prohibit the employment of prisoners in any capacity that would give them access to Social Security numbers; make it a crime to obtain an SSN for the purpose of locating or identifying a person with the intent to physically harm that person; give consumers the right to refuse to give out their Social Security numbers when purchasing a good or service from a commercial entity, unless the entity has a legitimate need as specified in the law; and create new civil monetary penalties, criminal penalties, and civil actions to help prevent misuse of Social Security numbers; requires all new credit card payment processing machines to truncate the credit card account numbers to the last five digits on the printed receipt. The substitute for S. 848 that is being introduced today retains the basic structure and objectives of the Judiciary Committee-reported bill, but makes several substantive changes that improve the bill. The substitute bill: makes clear that it is permissible to sell, purchase or display Social Security numbers for any legitimate use required, authorized or excepted by any Federal law. Stops new public records containing Social Security numbers from being posted on the Internet and calls for a study by the General Accounting Office of issues pertaining to the display of Social Security numbers on any public records. Permits State Attorneys General to enforce the new ``right to refuse'' to provide a Social Security number, but prohibits class action lawsuits to enforce this new ``right.'' Sunsets the ``right to refuse'' after six years, and calls for a report by the Attorney General, six months after the sunset regarding the effectiveness of this ``right to refuse'' and whether it should be reauthorized. To conclude, I think that the introduction of this revised version of S. 848 and the placement of it on the calendar are two very important steps in our fight to reduce the misuse of Social Security numbers and reduce the theft of identities. I look forward to working with my colleagues to enact this important piece of legislation.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I also ask unanimous consent that Ryan Montgomery, an intern in the Finance Committee staff, be accorded floor privileges for the day.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I first compliment my good friend from Michigan. He is one of the more thoughtful Members of this body, addressing a very grave issue. Armed Forces Tax Fairness Act of 2002 Mr. President, as we debate the degree to which the United States and the Congress should be giving authorization to the President of the United States to commit military action, a decision which affects all of us as Americans, I also want to point out there is another group of people whom we have neglected, and that is our armed services personnel, in many of the provisions of the Tax Code. I am now going to explain several provisions of a tax bill we passed last night which will have a very direct, positive effect on millions of Americans individuals, and those are our men and women serving in our Armed Forces and our Foreign Service. For several months, the Finance Committee has been working on tax legislation that would affect the individuals who fight our country's wars. As our Nation responded to the attacks on 9/11, as military personnel went through Afghanistan to fight the Taliban and to break apart the al-Qaida network, Senator Grassley and I began looking at how the Tax Code affects those who defend our national security. We consulted first with Senator Cleland, who chairs the Personnel Subcommittee of the Armed Services Committee. He and his staff pointed out several areas where the tax law had not kept up with changes in military compensation. We reviewed military tax legislation that was introduced by various Senators, including Senator McCain and Senator DeWine. We listened to the problems that other Senators had identified through discussions with their constituents. I went back home to my State, Montana, to Malmstrom Air Force Base in Great Falls, to meet with military leadership there. I also worked with Major General Prendergast of the Montana National Guard. He provided a great deal of assistance as we crafted this package. The Finance Committee met with the Armed Services Committee leadership, Senator Levin and Senator Warner, to discuss these proposals. The result is, last night the Senate unanimously passed the Armed Forces Tax Fairness Act of 2002. I come to the Chamber today to explain this bill in a little more detail, to pay tribute to the men and women who serve in our military and Foreign Service, and to pay tribute to the Senators who helped shape this legislation. I will begin with military death gratuity payments. In 1986, the U.S. Government paid death gratuity payments to the families of military personnel who died in the line of duty. That was $3,000. Prior to 1991, none of that was taxable income to the estate. In 1991, the Congress increased the gratuity death benefit to $6,000, and, regrettably, we failed to exclude all of that from taxable income. So $3,000 of that death gratuity was treated as taxable income. So the proposal we passed last night is one that restores the full tax exclusion of the death benefit gratuity. So now when the $6,000 is paid to the family of the deceased military personnel, all $6,000 is paid tax free. Another provision applies to the exclusion-of-gain on the sale of a principal residence. The general rule, prior to 1997, for most taxpayers, is that they would have the gain on their home excluded, so long as they replaced their home within 2 years after its sale, so long as the principal place of their residence was established 2 years after the sale. We provided a break for the military at that time, prior to 1997, and that is, the military personnel could replace their home within up to 8 years. They were given an additional 6-year period within which to replace their home and still get the full exclusion from the gain on their home. In 1997, Congress changed the law with respect to exclusion of gain on the sale of a principal residence. The new law provided that the taxpayer must live in a home for at least 2 years of the 5 years preceding the sale of that home. That has been the standard rule since 1997. The Congress, however, neglected to make this special change for our military personnel, neglecting to recognize that military personnel travel a lot more, which is not of their choice, because of their military orders as to where they are stationed. So the general rule has been the same for them, and it has made it very difficult for them, because sometimes they cannot live in their principal residence, their home, for 2 years of the preceding 5 years to get the full exclusion. So what we have done is this, essentially. We have suspended the 2 years out of 5 rule for military personnel when they are on active duty or when they are in the line of duty, stationed someplace else around the world, someplace different from their principal residence. It is suspended during that period. So when they come back to their principal residence, then the 2 out of 5 years begins to apply. So it is much more fair to military personnel now, so they will also, in effect, as with other taxpayers, be able to get the full exclusion from the sale of their principal home so long as they live there 2 of the 5 years. Another change is the Military Homeowners Assistance Program. Under current law, the homeowners in the military, who stay at a base that has changed because of BRAC--the Base Realignment and Closure Commission--sometimes experience a loss in the value of their home. The results of BRAC recommendations--they either close a military installation or substantially change a military installation--have the effect of changing the value of the home of someone in the military. Here is an example of what happens today. Let's say the value of a home prior to the BRAC decision was $140,000. Then the sale price, after the announcement of the BRAC decision, fell to $100,000; the loss, obviously, being $40,000 on that home. Currently, the U.S. Government, the military, in what is called the Military Homeowners Assistance Plan, will reimburse that person in the Army, the Air Force, the Navy. It is a formula. In this example, the reimbursement would be $30,000 out of the $40,000 loss. Unfortunately, under current law, that $30,000 law is fully taxable income to someone in the military. So what we have done is said: No, none of that military reimbursement is taxable. It is not taxable. Another change is this. We have extended the filing delay rules to contingency operations. So now it will not only be for combat zones but also for contingency operations. What does that mean? That means, when someone in the military is overseas, currently, if he or she is in a combat zone, that person gets to file a delayed filing date of 180 days after departure to file his or her tax return. We are extending this to apply to not only combat zones but also to contingency operations when military personnel are sent overseas. Next we are changing the tax treatment with respect to our Reserve officers--Army Guard, Air Guard,--when they are on reserve, when they are off in training, so that they are not penalized for the expenses they have incurred when they were in training. This is above-the-line deductions for overnight travel expenses of National Guard and Reserve members. For example, let's say Reserve Sergeant Jones--basically the rank would be E-5--is on a weekend drill. His take-home pay would be $200. His weekend drill expenses might be $65 for travel, roughly $110 for lodging, and meals for $25, also totaling $200. That is not reimbursed. That is an expense that the reservist or the person in the National Guard has to incur him or herself. That is not reimbursed. So we are saying, OK, we will take that full cost of overnight travel expenses, and that will be an above-the-line deduction from that person's taxable income. That is an above-the-line deduction. The expenses are deducted above the line. We have two more items. Another change in legislation that passed last night, essentially, is to extend the definition of Qualified Veterans' Organizations. Today, the membership test is 75 percent of the members--let's say, the American Legion or the Veterans of Foreign Wars,--75 percent of the membership has to be present or past military personnel. That is current law. In addition, substantially all of the members must be military or spouses or widowers of the members. The trouble is, a lot of military organizations, a lot of these organizations, veterans organizations, would like to expand the definition of membership to include ancestors and lineal descendants, and we have done that with the law that was passed last night. Finally, we are clarifying the treatment of childcare subsidies. Currently, the military reimburses half the childcare expense. That is basically a subsidy. Let's say on average a subsidized benefit for two children is $7,700. The current exclusion for childcare subsidies today is $5,000. That is the limit. No more than $5,000 can be excluded from a person's income to date generally. We are now clarifying the law so that for military personnel, the childcare subsidy portion of 50 percent is fully excluded from taxable income. I believe these changes will go a long way. I thank my colleagues for making tax law more fair to military personnel. We have neglected them over the years. This makes the laws much more fair to them. After all, they are serving us, helping make this country continue to be the greatest country on earth. We are deeply indebted to all of them. I thank Senators who helped with this legislation, provided ideas, who worked with us to make sure these are in a form that should be enacted into law. I yield the floor.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Senate proceed to the consideration of S. 3018, a bill to amend title 18 of the Social Security Act; that the bill be read a third time, passed, the motion to reconsider be laid on the table, and that any statements thereon be printed in the Record at the appropriate place. I might say before I put the question to the Chair, as Senator Harkin has said, there are no Members of the body on the other side, the Republican side, who I know, if here, would object. This has been cleared on the Democratic side. This is the Medicare give-back bill. It has been cleared on the Democratic side. I might say in all fairness--here he is. I was going to say, the failure of someone to appear is tantamount to an objection from the other side. I will repeat the request for the benefit of my good friend and colleague from Oklahoma. I ask unanimous consent that the Senate proceed to the consideration of S. 3018, a bill to amend title 18 of the Social Security Act, the bill be read a third time, passed, the motion to reconsider be laid on the table, and that any statements thereon be printed at the appropriate place in the Record. Before putting that request to the Chair, again, I add, this has been cleared on this side. Nobody on the Democratic side objects to this unanimous consent request. So I put the request to the Chair.

Mr. BAUCUS. Mr. President, there are so few days ramaining in this session that in order to help American hospitals, American doctors, beneficiaries who desperately need this bill, and with so little time remaining, as chairman of the committee I feel I have an obligation to the people of Montana to get this legislation up and passed. There are so few days remaining. We are on the Iraq resolution, which is going to take a lot of time. We are on homeland security, which is not passed. We have all the appropriations bills not passed. As a service to the people of the State of Montana, as a service to the American people, and because this is a bill Senator Grassley, the ranking member of the Finance Committee, and I have worked out together, working with all Members of the committee, trying to find an agreement, which Senator Grassley and I do have, an agreement to the provisions of this bill, this is by far the most efficient and best way to get the help to the people in our States who need this legislation passed.

Mr. BAUCUS. In answer to the question, my good friend knows that October 1 has come and gone. That means 15 percent of home health care provisions that we have to address--large nursing home cuts--the so- called ``cliff'' that we have to address--and teaching hospital provisions, and after October 1, we have to move. I also say to my good friend from Oklahoma that the ranking Republican on the committee and I spent a lot of time talking with staffs of Senators on both sides, including that of the Senator from Oklahoma--all Senators on the committee and their staffs. This is the bill we all agree on, Senator Grassley agreed to. This has been worked out very thoroughly, and it has been around a long time. The Senator well knows the provisions of the bill. There was a selective error on one--that is, we do address the wage index factor. Most importantly, this has to pass quickly to help our people. The cost of the bill is $43 billion over 10 years.

Mr. BAUCUS. I don't have that estimate because we have been dealing with 10-year figures here. So it is calculated over 10 years. They are very good provisions. When this comes up for a vote, in whatever form, it is going to get a large vote.

Mr. BAUCUS. Madam President, I know the Senator is concerned about a couple provisions, and I would like to clarify what the costs are. There are provisions here with respect to wage index for rural hospitals. We clearly want to do the best we can, and all these provisions cost a little bit of money. The provisions suggested by Senator Sessions would cost about $10 billion over 10 years. That will be in addition to the $43 billion that is already there. For the Senator's information, we did rough calculations for 2 years, and it would be about $10 billion for the cost of the bill.

Mr. BAUCUS. Yes.

Mr. BAUCUS. Madam President, I thank my friend. We are down to the last several days. It is important we all work together. As we all know, under Senate rules, that number 60 means a lot, particularly with so few days remaining, not knowing exactly how many days remain, but we all know there are not many of them. It is important we all work together. I thought it unfortunate the Senator used the words ``gross ineptitude'' in managing the budget process and the appropriations process. I am sure he did not really mean that because, in the spirit of comity, in working these issues out, the Senator well knows both sides are trying to work out solutions, and sometimes there are Senators on both sides who have their particular views which tend to impede or slow down the work of the majority. That happens on both sides of the aisle. I urge we work together and find ways. Honey attracts more than vinegar, we all know that. I am trying to figure out a way to get more honey around here and a little less vinegar so we can do what we all want to do. I know the Senator agrees with that.

Mr. BAUCUS. Will the Senator yield for a question?

Mr. BAUCUS. I wonder if the Senator can make a telephone call to the other body and have them send over appropriations bills so we can pass them over here--they have not sent over appropriations bills yet--in the spirit of comity.

Mr. BAUCUS. That is the point I was going to make, revenue bills, yes. Appropriations bills are not required in the Constitution. However, it has been a matter of tradition for years.