Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Madam President, I want to take a few minutes today to discuss the trade negotiations that are currently taking place with Chile. Let me get straight to the point. We worked tirelessly this year to reinvigorate our trade agenda by passing the Trade Act of 2002. This legislation includes, as most people know, an extension of fast track negotiating authority-- something which was stalled for nearly a decade. We were able to pass that legislation only after agreeing on a delicate balance for new trade negotiations--particularly on the issues of labor and environment, investment, trade laws, and congressional consultations. The first test of this new legislation will likely be the U.S.-Chile Free Trade Agreement. Those negotiations are in the final stages--and they are down to some of the most controversial issues. Let me say at the outset--I have been an advocate for trade negotiations with Chile for several years. And as recently as several weeks ago, I felt confident about this agreement. Most importantly, the President had just signed the Trade Act, which lays out Congress's goals regarding new agreements. That legislation passed with bipartisan support, particularly in the Senate. At the same time, an agreement with Chile makes sense--it is, first and foremost, an important trading partner. Last year we exported over $3 billion worth of goods to Chile. And with an agreement, our opportunities should increase. Completing an agreement with Chile will also increase pressure on other countries in the region, particularly Brazil, to let go of their protectionist tendencies, and instead work toward their own agreements with the United States. Because a free trade agreement with Chile seemed substantively promising, I really viewed it as a major opportunity. Here is a chance, I thought, to take this great trade bill we passed, and use it to regain some momentum on trade--to move beyond the arguments of the past. I now fear that some in the administration, and frankly some of my colleagues, may be squandering this opportunity. On issues that were critical to passing this bill--congressional consultations, labor, environment, and investment--some seem bent on clawing back the progress that has been made. Let me begin with consultations, and by that I mean real congressional participation in trade policy an equal partnership. During negotiations of the trade bill, there was a clear understanding that congressional trade advisors would be able to observe negotiations. Yet just last week I sought to send one of my staff to observe--simply observe--negotiation between the U.S. and Chile. Ambassador Zoellick declined this request. The argument the administration makes is separation of powers. But, as Justice Jackson famously remarked, the Constitution ``enjoins upon its branches separateness but interdependence, autonomy but reciprocity.'' We need some reciprocity to make the fast track deal work. The administration when criticized about consultations seems fond of recounting a list of times they have met with Congress. But these statistics have little meaning. The test of consultations is not the number of meetings; it is the willingness to hear substantive input and have that input reflected in trade negotiations. Similarly, we in Congress certainly expect that the administration will allow us to see negotiating documents far enough in advance to have a meaningful opportunity to comment. That means there must be enough time for reasonable congressional suggestions to be incorporated into U.S. negotiating potions. In the first test, the results were mixed. On the highly charged issue of investment, a proposal was shared, but only one day before the latest round of negotiations with Chile were to begin. That is clearly not enough time to provide Congress with the opportunity to carefully consider and suggest revisions. These actions undermine confidence. Why would the administration be so concerned about Congress merely observing negotiations? Why are they reluctant to share documents with Congress that they plan to share with foreign governments? It suggests, perhaps unnecessarily that there is something to hide. The bottom line is this: There is no substitute for first-hand information. There is no substitute for seeing and evaluating events through your own eyes. And having this greater transparency in the process could have many benefits--better relations between the Hill and the White House, better agreements, and, I believe, a better likelihood that agreements will pass. Given the benefits, I cannot for the life of me understand why the administration would not make more of an effort to engage Members of Congress early in the process. In the trade act we also hammered out a clear direction to the administration to follow the so-called Jordan standard on labor and environment issues--that is, non-derogation from existing laws and equal access to dispute settlement. Senator Grassley and I agreed on this--it was key to moving forward-- and we spelled this out very clearly in the Finance Committee report. In fact, just so everyone understands this point, let me read the exact provision in the report that Senator Grassley and I authored: The provisions on labor and environment standards are ``based upon the trade and labor and trade and environment provisions found in articles 5 and 6 of the United States- Jordan Free Trade Agreement. Those provisions (including their coverage by the Agreement's general dispute settlement procedures) have come to be known as the ``Jordan standard.'' They seek to ensure that a country does not promote exports or attract investment by lowering or relaxing the enforcement of its environmental and labor laws. The agreement with Jordan accomplishes this through several commitments, which the present bill directs negotiators to pursue in ongoing and future trade negotiations. To me, this is not ambiguous. Yet there are indications that both the administration and some of my colleagues would now like to ignore this clear direction in the Trade Act. They do so at the risk of losing support--including my support--for future agreements. Finally, let me address the issue of investment. As many will recall, this was one of the most contentious issues in the Senate debate on the trade bill. The question is, in setting rules for arbitration between investors and governments, how do we balance the interests of U.S. investors abroad with the interests of Federal, State and local regulation here at home? In the trade act, we laid out a blueprint for achieving that balance. The objectives we set in this area include: Mechanisms for prompt dismissal of frivolous claims; Clearer definitions of key terms--such as ``expropriation''--based on U.S. legal principles and practice; and The establishment of an appellate body to review arbitration decisions in investment disputes and bring coherence to the interpretation of investment provisions. I am cautiously optimistic about the administration's approach to implementing these objectives. Early consultations suggest that Congress's instructions were understood. The one issue on which I have particular concern is the appellate body. It is perhaps the most important aspect of the objective on investment. An appellate body will help ensure that erroneous conclusions of law are corrected and that text is interpreted consistently from one case to the next. Given the potential for investor suits to challenge legitimate policies designed to promote the public welfare, it is crucial that the decisions in these cases ``get it right.'' I realize that establishing an appellate body is a big task. It is something new. The closest analogy under current investor-state dispute settlement rules is what is known as ``nullification.'' In certain circumstances, a party may ask to have an arbitration award ``nullified'' by a court or other competent body. However, the standard for nullification is extraordinarily high. The question is not whether the arbitrator got it right, but rather, whether the arbitration process itself was fundamentally tainted. We need something more than nullification review. We need an institution that will take a fresh look at arbitrators' conclusions of law and decide whether they got it right. It may be that we will not be able to build a new appellate body for investor-state dispute settlement in the context of the Chile agreement over the course of the next few months. However, it is my expectation that our negotiators will continue this endeavor beyond the formal initialing of that agreement, and that they will secure Chile's commitment to that endeavor. I want to make it clear that any first steps short of true appellate review included in the U.S.-Chile Agreement should be understood as just that--first steps. The trade act's objective requires that we go further. An agreement with Chile can be one of two things--if supported by a large bipartisan majority, it can put us on the right track for other agreements--agreements with Singapore and Morocco, agreements for hemispheric free trade. It can even help us achieve success in the WTO. Or this agreement can become a political battleground--where those in Congress who were promised a partnership of equals in trade policy feel duped. Where commitments to agreements that reflect strong labor and environmental standards go unrealized. I hope that I can strongly support an agreement with Chile--I want to. And I know many of my colleagues who voted for the trade act also want to. But I would caution the administration that they have responsibilities to Congress under this Act. And so far, they seem willing to play fast and loose with those responsibilities. I say respectfully that they continue that path at their peril.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce a bill to provide for the use and distribution of judgment funds awarded to the Assiniboine and Sioux Tribes of the Fort Peck Reservation in northeast Montana. In 1987, the Assiniboine and Sioux Tribes of the Fort Peck Reservation brought suit against the United States to recover interest earned on their trust funds while those funds were in Special Deposit and IMPL-Agency accounts. The case was filed in the United States Claims court, and docketed as No. 773-87-L. After the Court ruled that the United States was liable to the Fort Peck Tribes and individual Indians for interest on those funds, the Tribes and the United States reached an agreement for settling claims in the case, for the sum of $4,522,551.84. The court approved the settlement agreement. The settlement agreement further provided that the judgment be divided between the Fort Peck Tribes and those individual Indians who are found to be eligible to share in the judgment. On January 31, 2001, the court approved a stipulation between the parties that defined the procedures by which the Fort Peck Tribes' and individual Indians' respective shares in the judgment would be determined and distributed to them. Pursuant to the Court-approved stipulation in the case, on February 14, 2001, a portion of the Tribe's share of the judgment was deposited into an account in Treasury for the use of the Fort Peck Tribes. As provided by the Court-approved stipulation, those funds are to be available for immediate use by the Tribe pursuant to a plan adopted under the Indian Tribal Judgment Funds Use or Distribution Act, 25 U.S.C. 1401 et seq. The Court-approved stipulation further recognized that the Tribe will most likely receive additional payments from this settlement once the work identifying all individuals eligible to share in the judgment is completed and the pro rata shares are finally computed. Those funds, too, are to be available for use by the Tribe in accord with a plan adopted under the Tribal Judgment Funds Use or Distribution Act. As required by the stipulation and the Tribal Judgment Funds Use or Distribution Act, the Tribe developed a plan for the use of the Tribe's share of the settlement. Under the plan, the Tribe's share of the judgment will be used for tribal health, education, housing and social services program. The Tribe submitted its plan to the Department of the Interior for review and approval. Public hearings were held during which the views and recommendations of Tribal members were heard regarding the plan. The Tribe has been advised that the Department of Interior has no objection to the Tribe's plan and can approve it. However, although the plan was developed and public hearing held during 2001, the Interior Department did not complete its review of the plan, nor submit the approved plan to Congress within the one-year deadline imposed by the Tribal Judgment Funds Use or Distribution Act. As a result, in order for the Fort Peck Tribe to make use of the judgment awarded to the Tribe, it is necessary for Congress to formally adopt legislation approving the Tribe's plan. The proposed bill language, would serve this purpose. This judgment is based on money that rightfully belongs to the Fort Peck tribes and should be moved expeditiously through Congress. I look forward to working with the Committee on Indian Affairs to move this legislation forward.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce a bill to provide for the use and distribution of judgment funds awarded to the Assiniboine and Sioux Tribes of the Fort Peck Reservation in northeast Montana. In 1987, the Assiniboine and Sioux Tribes of the Fort Peck Reservation brought suit against the United States to recover interest earned on their trust funds while those funds were in Special Deposit and IMPL-Agency accounts. The case was filed in the United States Claims court, and docketed as No. 773-87-L. After the Court ruled that the United States was liable to the Fort Peck Tribes and individual Indians for interest on those funds, the Tribes and the United States reached an agreement for settling claims in the case, for the sum of $4,522,551.84. The court approved the settlement agreement. The settlement agreement further provided that the judgment be divided between the Fort Peck Tribes and those individual Indians who are found to be eligible to share in the judgment. On January 31, 2001, the court approved a stipulation between the parties that defined the procedures by which the Fort Peck Tribes' and individual Indians' respective shares in the judgment would be determined and distributed to them. Pursuant to the Court-approved stipulation in the case, on February 14, 2001, a portion of the Tribe's share of the judgment was deposited into an account in Treasury for the use of the Fort Peck Tribes. As provided by the Court-approved stipulation, those funds are to be available for immediate use by the Tribe pursuant to a plan adopted under the Indian Tribal Judgment Funds Use or Distribution Act, 25 U.S.C. 1401 et seq. The Court-approved stipulation further recognized that the Tribe will most likely receive additional payments from this settlement once the work identifying all individuals eligible to share in the judgment is completed and the pro rata shares are finally computed. Those funds, too, are to be available for use by the Tribe in accord with a plan adopted under the Tribal Judgment Funds Use or Distribution Act. As required by the stipulation and the Tribal Judgment Funds Use or Distribution Act, the Tribe developed a plan for the use of the Tribe's share of the settlement. Under the plan, the Tribe's share of the judgment will be used for tribal health, education, housing and social services program. The Tribe submitted its plan to the Department of the Interior for review and approval. Public hearings were held during which the views and recommendations of Tribal members were heard regarding the plan. The Tribe has been advised that the Department of Interior has no objection to the Tribe's plan and can approve it. However, although the plan was developed and public hearing held during 2001, the Interior Department did not complete its review of the plan, nor submit the approved plan to Congress within the one-year deadline imposed by the Tribal Judgment Funds Use or Distribution Act. As a result, in order for the Fort Peck Tribe to make use of the judgment awarded to the Tribe, it is necessary for Congress to formally adopt legislation approving the Tribe's plan. The proposed bill language, would serve this purpose. This judgment is based on money that rightfully belongs to the Fort Peck tribes and should be moved expeditiously through Congress. I look forward to working with the Committee on Indian Affairs to move this legislation forward.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Friday, October 4, 2002, at 11 a.m., to conduct a hearing on the nomination of Mr. Philip Merrill, of Maryland, to be president of the Export-Import Bank of the United States.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Friday, October 4, 2002, at 10 a.m., to hold a nomination hearing. Agenda Nominees: The Honorable John R. Hamilton, of North Carolina, to be Ambassador to the Republic of Guatemala; Mr. John F. Keane, of Virginia, to be Ambassador to the Republic of Paraguay; and the Honorable David N. Greenlee, of Maryland, to be Ambassador to the Republic of Bolivia.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Friday, October 4, 2002, at 11 a.m., to hold a closed hearing on intelligence matters.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today in support of the Armed Forces Tax Fairness Act of 2002. On September 12, 2002, the Finance Committee favorably reported the bill by unanimous voice vote. This bill will not only correct inequities in the current tax code that our military men and women are subject to, but it will also provide incentives for our dedicated forces to continue their service to America. On July 9, 2002, the House passed a bill, HR 5063, that provided limited relief to military personnel. The bill would provide a special rule for members of the armed forces in determining the exclusion of gain from the sale of a principal residence and would restore the tax- exempt status of death gratuity payments to members of the armed forces. I support the efforts of the House, but I believe we should go farther. These are the men and women that put their lives on the line for our freedom on a daily basis. We need to ensure that laws that we here in Congress pass do not negatively impact them. We should also develop sound policy that serves as an incentive for our youth to follow in the steps of the men and women that went before them to defend our country. It is with these principles in mind that I have moved forward with this military tax package and incorporate additional provisions already introduced by my colleagues. I would now like to describe the provisions that we have chosen to include in this critical piece of legislation: Death Gratuity Payments: On July 24, 2002, Senator Carnahan introduced S. 2783, which would restore the tax exempt status of all death gratuity payments. This proposal is similar to the provision included in house version of HR 5063. Why is this provision so important? Under current law, death gratuity benefits are excludable from income only to the extent that they were as of September 9, 1986. In 1986, the death gratuity benefit was $3,000. In 1991, the benefit was increased to $6,000, but the Tax Code was never adjusted to exclude the additional $3,000 from income. Because of this oversight, the U.S. Government has been taxing families for the death of a family member who died in combat. This is just wrong. We support the provisions of the House version of H.R. 5063 and S. 2783, therefore we have included them in this piece of legislation. Exclusion of Gain on The Sale of a Principal Residence: In 1997, Congress passed legislation revising the taxation of capital gains on the sale of a person's principal residence. The new rule states that up to $250,000, or $500,000 per couple is excluded on that sale of a principal residence if the individual has lived in the house for at least two of the previous 5 years. However, when enacted, Congress failed to provide a special rule for military and Foreign Service personnel who are required to move either within the U.S. or abroad. Senators McCain and Graham both have introduced legislation to address this oversight. I agree that we should adjust the rule for our service men and women. We shouldn't penalize them for choosing to serve our country. Our proposal would permit service personnel and members of the Foreign Service to suspend the 5-year period while away on assignment, meaning those years would count toward neither the 2 years nor the 5 year periods. This is also similar to provisions in the House-version of H.R. 5063. Exclusion of Amounts Received Under Military Housing Assistance Program: The Department of Defense provides payments to members of the Armed Services to offset diminution in housing values due to military base realignment or closure. For example, if a house near a base was worth $140,000 prior to the base closure and $100,000 after the base closure, DOD may provide the owner with a payment to offset some, but not all, of the $40,000 diminution in value. Under current law, those amounts are taxable as compensation. There will be another round of base closures in the near future. That fate was decided in the fiscal year 2002 Defense Authorization bill. We should ensure that those men and women losing value in their homes due to a Federal Government decision are not adversely affected financially. The proposal would provide that payments for lost value are not includible into income. Recently, Senator Cleland introduced a package that included this provision. I thank him for his unending pursuit to provide military personnel with the best quality of life available. And I am happy we have included this provision in our legislation. Expand Combat Zone Filing Rules To Include Contingency Operations: Under current law, military personnel in a combat zone are afforded an extended period for filing tax returns. However, this does not apply to contingency operations. This proposal would extend the same benefits to military personnel assigned to contingency operations. It can't be easy trying to figure out our complicated tax system while you are overseas and protecting our nation's freedom. Those men and women that have been sent to uphold freedom in other countries are confronted with similar circumstances, such as in Operation Just Cause in Panama, 1989, or in Operation Restore Hope in Somalia in 1992 and 1993, or in Operation Uphold Democracy in Haiti, 1994. Contingency operations are just as demanding as combat zone deployment, although not always in the same manner. For example, in our current war on terrorism, this proposal would help members of our Special Forces in the Philippines supporting Operation Enduring Freedom who are just as focused on accomplishing their critical mission as our troops in the Afghanistan combat zone. I would like to thank Senator Johnson for introducing S. 2785. It is important that we support all our troops when they are deployed overseas. Above-The Line-Deduction For Overnight Travel Expenses of National Guard and Reserve Members: Some reservists who travel one weekend per month and two weeks in the summer for reserve duty incur significant travel and lodging expenses. For the most part, these expenses are not reimbursed. Under current law, these are deductible as itemized deductions but must exceed 2 percent of adjusted gross income. For lower income reservists, this deduction does not provide a benefit, because they do not itemize. For higher income reservists, the 2 percent floor limits the amount of the benefit of the deductions. In my home State of Montana, we have approximately 3500 reservists, 800 of which travel each month across the State for their training. These 800 reservists pay out of their own pocket the expense for travel and hotel rooms. In Montana we rank 48th in the Nation for per capita personal income. I know it can't be easy for Montanans to incur approximately $200 in expenses each and every month. Yet, they continue selflessly to provide their services to our country at their own expense. For those reservists that travel out of State for their training, this expense is higher on average. This proposal would provide an above the line deduction for overnight travel costs and would be available for all reservists and members of the National Guard. This issue is currently addressed in S. 540, which Senator DeWine introduced back in March of 2001. I can't tell you just how many people have contacted our office in support of this bill. I support what this bill does and I am glad that we can include this provision in our military tax package. Expansion of Membership For Veterans' Organizations: Recently, Senator Harkin introduced S. 2789, which would expand the membership for Veteran's organizations. Currently, qualified veterans' organizations under section 501(c)(19) of the Tax Code are both tax- exempt and contributions to the organization are tax-deductible. In order to qualify under 501(c)(19), the organization must meet several tests, including 75 percent of the members must be current or former military, and substantially all of the other members must be either spouses, widows, or widowers of current or former military. The proposal would permit lineal descendants and ancestors to qualify for the ``substantially all'' test. It is important that our veterans' organizations continue the good work that they do. But, as the organizations age, they are in danger of losing their tax-exempt status. I support Senator Harkin's bill, as does the American Legion. We have included it in our tax package. Clarification of Treatment of Child Care Subsidies: Finally, I want to ensure that parents in the military can continue their dedicated service even once they have entered parenthood knowing that their children are being well taken care of. The military provides extensive childcare benefits to its employees. DoD employees at DoD-owned facilities provide childcare services while other areas contract out their childcare. When Congress passed the Tax Reform Act of 1986, we included a provision stating that qualified military benefits are excluded from income. It is not absolutely clear whether child care provisions are covered under this provision. The proposal would clarify that any childcare benefit provided to military personnel would be excludible from income. Senator Landrieu has introduced S.2807, a similar measure. I support this measure and am proud we have included it in this piece of legislation. In addition, this bill includes three provisions that raise revenue, to offset the revenue loss. First, we improve the collection of unpaid taxes from people who have renounced their American citizenship in order to avoid U.S. taxes. Second, we extend certain IRS user fees. Third, we restore the ability of IRS to permit partial-pay installment agreements with taxpayers. These are modest, sensible changes. In fact, in the case of expatriates, the offset seems especially fitting. All told, this bill does a small part to improve our Tax Code and, more importantly, pay respect to the men and women who are making sacrifices and risking their lives to defend us all. I thank all of the Members who have contributed to the development of the bill, including the support by Senators Levin, Warner and Cleland of the Armed Services Committee. I especially thank the ranking member of the Finance Committee, Senator Grassley, who has once again been a partner in the development of important bipartisan tax legislation. Mr. President, it is important that we continue to show members of the armed forces our support and solidarity during this time of conflict. The War on Terrorism has brought to light the essential role the armed services play in upholding freedom throughout the world. I am happy to see this military tax equity bill passed by the Senate today, and signed into law by the President before Congress adjourns.

Mr. BAUCUS

Mr. BAUCUS. Mr President, I rise today to introduce the MEGA STREAM ACT. Maximizing Economic Growth for America through Environmental Streamlining. Moving goods and moving people is what this Nation's transportation system is all about. The backbone of our economy. But delays in completing transportation projects threaten our economy. These delays add to the cost of projects and deny the public the benefits of the projects. And those benefits are substantial, improving our economy, our competitiveness, and our quality of life. Unfortunately, there are delays for many projects, not only for controversial or complex projects, and those delays sometimes result from the environmental review process. My goal is to advance a common sense approach that will both strengthen our transportation system and support for our environmental laws. I doubt that there is a member in this chamber that has not heard complaints about delays in developing transportation projects. I was privileged to be one of the authors of TEA 21 a revolutionary transportation law. I helped write sections 1308 and 1309. These are the sections that direct the Secretary of Transportation to find ways to expedite the project approval process and get construction underway faster. I remember working with Senators Warner, Graham, Wyden and Chafee and with the House members to come to a compromise on the environmental streamlining provisions included in TEA 21. At the time, I had heard from my Department of Transportation and from others about how cumbersome a process it is to come to completion on a highway project. Everyone who worked on TEA 21 both the House and Senate, wanted to include a direction to the USDOT to streamline the planning and project development processes for the states. We were very clear, the environment and the environmental reviews should NOT get short shrift! But, we needed to find a way to make it easier to get a project done, eliminate unnecessary delays, move faster and with as little paperwork as possible. I cannot over-emphasize that the planning and environmental provisions of TEA-21 need to be implemented in a way that will streamline and expedite, not complicate, the process of delivering transportation projects. These projects that we're trying to expedite provide good paying jobs for the folks in Montana and for every State. Contracts must be met in a timely manner. That is why Congress directed the USDOT to include certain elements in their regulations on streamlining. We included concepts to be incorporated--like concurrent environmental reviews by agencies and reasonable deadlines for the agencies to follow when completing their reviews. Certainly we did not legislate an easy task to the USDOT. Trying to coordinate so many separate agencies is like trying to herd cats. The whole concept of environmental streamlining, that is, to make the permit and approval process work more smoothly and effectively, while still ensuring protection of the environment, is one of the more- difficult challenges of TEA-21. So I waited for the rules to come out. And waited. And two years after the passage of TEA-21 I finally got them. I have to tell you, I was very disappointed when those rules came out in May of 2000. I believe those regulations hit very far from the mark. Those regulations were supposed to help the State DOTS get their jobs done better and more efficiently--not make their jobs harder. They were supposed to answer questions--but what is contained in those documents raises even more questions than before because they were vague where they needed to be precise. Those proposed rules would make it even harder, if not impossible to come to a decision. It would have been even more difficult for States to deliver their programs. Contracts wouldn't get met and jobs would be lost. So the DOT solicited comments, which I understand were overwhelmingly negative, and went back to the drawing board and we never heard from them again. Even when a new President took over. New administration. No new rules. And today we have nothing. We're exactly where we were in 1998. As for sections 1308 and 1309. Nothing has been done to implement them. Its just as cumbersome today to bring a highway project to completion. The Senate Environment and Public Works Committee held 4 hearings on the subject of environmental streamlining since the passage of TEA 21 in 1998. A few weeks ago, on the eve of the fourth EPW hearing, the President signed an Executive Order calling for a handful of projects to be supervised by the heads of USDOT and CEQ. The highest levels would personally make sure that there were timely environmental reviews. That would have been a good start in 1998. But, its too little too late now. We are on the verge of reauthorization of TEA 21. This time, I would like to see us specifically legislate environmental streamlining. No waiting for regulations or more executive orders. Congress needs to be clear about what they want to see and put it into law. To that end, along with Senator Crapo and others, I am introducing a proposal on environmental streamlining. It is part of a series of bills that we are introducing on highway reauthorization. This bill will address three issues. First, the USDOT needs to be the lead agency on at least two requirements, ``Purpose and Need'' for a project and ``Scope of Alternatives.'' This will make sure that any stalemates are resolved quickly. Second, we should allow States to take over the role of the USDOT if they can meet certain requirements and if they choose to take on that role. This will eliminate another step of bureaucracy. Last, we must ensure that resource agencies act in a timely manner. When it comes time for an agency like Fish and Wildlife to assess the extent of damage (if any) to a wetlands or the Army Corps of Engineers to issue a permit, these agencies shouldn't be able to take years to make these decisions. We need to legislate specific time limits for them to follow. No answer at all is not acceptable. It is unacceptable for agencies to sit on their decision for years. We can't make them issue the permit and we don't want to, but we can make them make a decision in a timely manner. The rest of the world works on deadlines. They can too. These three things will help to expedite the planning and project development processes. These three things are not meant to be comprehensive streamlining, but I believe that they will be a big help and a great start. The bill we will introduce will be a solid beginning to Congress setting some specific guidelines for expediting the planning and environmental review processes. Once again, I want to reiterate that I want to make sure that environmental laws and policies are obeyed to the letter. But, there's got to be a faster, easier way to do the work that needs to be done on our surface transportation system, while continuing to protect the environment. I believe our bill will be a means to those ends.

Mr. BAUCUS

Mr. BAUCUS. Mr President, I rise today to introduce the MEGA STREAM ACT. Maximizing Economic Growth for America through Environmental Streamlining. Moving goods and moving people is what this Nation's transportation system is all about. The backbone of our economy. But delays in completing transportation projects threaten our economy. These delays add to the cost of projects and deny the public the benefits of the projects. And those benefits are substantial, improving our economy, our competitiveness, and our quality of life. Unfortunately, there are delays for many projects, not only for controversial or complex projects, and those delays sometimes result from the environmental review process. My goal is to advance a common sense approach that will both strengthen our transportation system and support for our environmental laws. I doubt that there is a member in this chamber that has not heard complaints about delays in developing transportation projects. I was privileged to be one of the authors of TEA 21 a revolutionary transportation law. I helped write sections 1308 and 1309. These are the sections that direct the Secretary of Transportation to find ways to expedite the project approval process and get construction underway faster. I remember working with Senators Warner, Graham, Wyden and Chafee and with the House members to come to a compromise on the environmental streamlining provisions included in TEA 21. At the time, I had heard from my Department of Transportation and from others about how cumbersome a process it is to come to completion on a highway project. Everyone who worked on TEA 21 both the House and Senate, wanted to include a direction to the USDOT to streamline the planning and project development processes for the states. We were very clear, the environment and the environmental reviews should NOT get short shrift! But, we needed to find a way to make it easier to get a project done, eliminate unnecessary delays, move faster and with as little paperwork as possible. I cannot over-emphasize that the planning and environmental provisions of TEA-21 need to be implemented in a way that will streamline and expedite, not complicate, the process of delivering transportation projects. These projects that we're trying to expedite provide good paying jobs for the folks in Montana and for every State. Contracts must be met in a timely manner. That is why Congress directed the USDOT to include certain elements in their regulations on streamlining. We included concepts to be incorporated--like concurrent environmental reviews by agencies and reasonable deadlines for the agencies to follow when completing their reviews. Certainly we did not legislate an easy task to the USDOT. Trying to coordinate so many separate agencies is like trying to herd cats. The whole concept of environmental streamlining, that is, to make the permit and approval process work more smoothly and effectively, while still ensuring protection of the environment, is one of the more- difficult challenges of TEA-21. So I waited for the rules to come out. And waited. And two years after the passage of TEA-21 I finally got them. I have to tell you, I was very disappointed when those rules came out in May of 2000. I believe those regulations hit very far from the mark. Those regulations were supposed to help the State DOTS get their jobs done better and more efficiently--not make their jobs harder. They were supposed to answer questions--but what is contained in those documents raises even more questions than before because they were vague where they needed to be precise. Those proposed rules would make it even harder, if not impossible to come to a decision. It would have been even more difficult for States to deliver their programs. Contracts wouldn't get met and jobs would be lost. So the DOT solicited comments, which I understand were overwhelmingly negative, and went back to the drawing board and we never heard from them again. Even when a new President took over. New administration. No new rules. And today we have nothing. We're exactly where we were in 1998. As for sections 1308 and 1309. Nothing has been done to implement them. Its just as cumbersome today to bring a highway project to completion. The Senate Environment and Public Works Committee held 4 hearings on the subject of environmental streamlining since the passage of TEA 21 in 1998. A few weeks ago, on the eve of the fourth EPW hearing, the President signed an Executive Order calling for a handful of projects to be supervised by the heads of USDOT and CEQ. The highest levels would personally make sure that there were timely environmental reviews. That would have been a good start in 1998. But, its too little too late now. We are on the verge of reauthorization of TEA 21. This time, I would like to see us specifically legislate environmental streamlining. No waiting for regulations or more executive orders. Congress needs to be clear about what they want to see and put it into law. To that end, along with Senator Crapo and others, I am introducing a proposal on environmental streamlining. It is part of a series of bills that we are introducing on highway reauthorization. This bill will address three issues. First, the USDOT needs to be the lead agency on at least two requirements, ``Purpose and Need'' for a project and ``Scope of Alternatives.'' This will make sure that any stalemates are resolved quickly. Second, we should allow States to take over the role of the USDOT if they can meet certain requirements and if they choose to take on that role. This will eliminate another step of bureaucracy. Last, we must ensure that resource agencies act in a timely manner. When it comes time for an agency like Fish and Wildlife to assess the extent of damage (if any) to a wetlands or the Army Corps of Engineers to issue a permit, these agencies shouldn't be able to take years to make these decisions. We need to legislate specific time limits for them to follow. No answer at all is not acceptable. It is unacceptable for agencies to sit on their decision for years. We can't make them issue the permit and we don't want to, but we can make them make a decision in a timely manner. The rest of the world works on deadlines. They can too. These three things will help to expedite the planning and project development processes. These three things are not meant to be comprehensive streamlining, but I believe that they will be a big help and a great start. The bill we will introduce will be a solid beginning to Congress setting some specific guidelines for expediting the planning and environmental review processes. Once again, I want to reiterate that I want to make sure that environmental laws and policies are obeyed to the letter. But, there's got to be a faster, easier way to do the work that needs to be done on our surface transportation system, while continuing to protect the environment. I believe our bill will be a means to those ends.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to speak in my capacity as Chairman of the Congressional Executive Commission on China. This commission was created in the China PNTR legislation two years ago and has the mandate to monitor human rights and developments in the rule of law in China. Today, we transmitted the first annual report to the Congress and to the President. With passage of PNTR the Congress, and the country, declared that economic engagement was important--in terms of our own economic and strategic interests and in terms of our ability to promote and encourage change inside China. The commission was created to ensure that concerns about human rights and rule of law issues in China would continue to have a high priority in our government--in Congress and in the administration. That is why it includes members from both branches nine Senators, nine House members, and five Administration representatives appointed by the President. The commission membership itself reflects the broad range of views of China within the Congress. Yet we were able to develop a report that is supported by an overwhelming majority of our members. The vote in the commission was 18 to 5 in favor of the report. Let me turn to the report itself. This is the most comprehensive document produced by Congress on human rights in China. It pulls no punches in describing current human rights conditions in China. And it recommends actions to Congress and to the Administration that we believe will help promote change in China. The underlying assumption of the report is that human rights cannot be enjoyed without a legal structure to protect those rights. Although China protects many rights on paper, this is often not the case in practice. This is a time of uncertainty in China as they adjust to their WTO membership, go through a political transition with the senior leadership of the Chinese Communist Party and the government, and face increasing demands from their citizens for greater economic, social, religious, and political freedom. In fact, the last 20 years has seen a period of profound change inside China--economic reform and the development of a market economy, decentralization of power, individual Chinese citizens gaining more individual autonomy and personal freedom. Yet the government continues to resist political liberalization and suppresses any threat to the Communist Party's grip on power. There are no free labor unions; all religious groups must register with the government and submit to its control; the media and Internet are restricted; there is tight control in minority ethnic regions. The United States has limited means to influence change within China. The Chinese people, ultimately, must determine how they want to be governed and under what conditions. But we can help contribute to improving the situation inside China. Let me stress that the commission is not seeking to impose American standards on China. But, from the Universal Declaration on Human Rights, to the International Labor Organizations' Declaration on Fundamental Principles, China has agreed to respect internationally recognized human rights for its citizens. Our desire is that the Chinese government abide by the terms of these international commitments, as well as the guarantees enshrined in China's Constitution and laws. That is the standard we, and others around the world, need to encourage--constantly. Our report stresses that the United States must take a dual approach. First, we need to pursue high-level advocacy on core human rights issues and cases of individuals who are denied their fundamental rights. The President, senior Administration officials, and members of Congress, should raise these issues at every opportunity. It also means multilateral advocacy. The United Nations Commission on Human Rights has many tools at its disposal. The International Labor Organization is becoming increasingly involved in labor rights issues in China. We need to work with other nations to pressure China in these areas. Second, we need to provide increased technical and financial assistance to help build a legal system in China that protects human rights. Elements of this include training lawyers and judges to build a more professional legal system; promoting grassroots legal aid so Chinese women, workers, and farmers will understand their rights and how they can try to assert them; assisting with the drafting of new laws and regulations; teaching about experiences in other countries in the West, in Asia, in the former Soviet states, regarding how they dealt in a non-authoritarian way with some of the economic, social, and political problems that confront China today; providing currently unavailable information to the average Chinese using radio, cable, and the Internet; and working with nascent Chinese NGOs who are trying to deal with the staggering social and economic challenges in China. The range of issues is huge. This past year, our commission examined some of the major areas of human rights and rule of law, including religious freedom, labor rights, free press and the Internet, Tibet, and the criminal justice system. Next year, we will continue to pursue these problems and address many others, including the role of foreign companies in Chinese society, women's rights which includes the one- child policy, HIV/AIDs, and the 2008 Olympics and human rights, to name just a few. I am pleased with the scope and quality of this report. It adds to our understanding of human rights and legal reform in China and provides a useful action plan for the Congress and the administration. I am sending each of my colleagues a copy and urge you all to read it. For others, you can find the report on the commission's website at www.cecc.gov.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today, along with Senator Grassley, to introduce the ``Beneficiary Access to Care and Medicare Equity Act.'' This legislation is critical to ensuring access to quality, affordable health care for the 40 million Medicare beneficiaries nationwide. Medicare is one of America's great success stories. Since its inception 36 years ago, Medicare has provided millions of elderly and disabled Americans with insurance coverage they would not have otherwise had. When Medicare was enacted, about half of America's elderly lacked health insurance. Now nearly all are covered by Medicare. Over the past three decades, Medicare has undergone significant changes, including changes in the way that health care providers are reimbursed. In response to rising Medicare expenditures, Congress has responded with complex cost-containment mechanisms: diagnosis related groups, or DRGs, for hospital inpatient services in the early 1980s, a fee schedule for physicians' services in 1989. And in 1997, Congress passed the Balanced Budget Act, which mandated prospective payment systems for hospital outpatient departments, home health agencies, and skilled nursing facilities. Gradually, Medicare has changed from a cost-based system to one of prospective, flat-rate payment. The significant changes in payment policy have resulted in a few bumps along the way, particularly those enacted as part of the Balanced Budget Act of 1997. The BBA was a well-intended attempt to get our Nation's fiscal house in order and extend the life of the Medicare trust fund. And in that regard, the goal of the legislation was achieved. Solvency of the Part A Trust Fund was extended by almost 30 years. But in some instances, the BBA cuts went too far. In such cases, these cuts threatened to reduce Medicare and Medicaid beneficiaries' access to quality medical care and services. Congress responded by passing the Balanced Budget Refinement Act, BBRA, of 1999 and the Beneficiary Improvement and Protection Act, BIPA, of 2000. I was proud to play a role in both of these bills, including help for rural areas, which were disproportionately affected by the BBA. Despite the policies and payment changes enacted as part of BBRA and BIPA, we still find that in some cases more improvements and adjustments are needed. And that is why Senator Grassley and I are introducing this bill today. So what does this bill do? Most importantly, this bill would restore payments to physicians, which were cut in 2002 by about five percent. Under the Medicare fee schedule, payment for physician services depends on several factors, including the growth in medical inflation, performance of the American economy, and changes in law and regulation. Also central to the calculation of payments are estimates by the Centers for Medicare and Medicaid Services, or CMS, which was formerly known as the Health Care Financing Administration, of the numbers of Medicare beneficiaries in traditional fee-for-service Medicare. Largely because of significant estimation errors and a weakened economy, physicians under Medicare experienced an average payment reduction of five percent in 2002. If Congress does not act to fix the system, further large cuts are forecast for the coming years. And the potential consequences of inaction are serious. According to a 30-State survey by the Medicare Rights Center, Medicare beneficiaries in 15 states and the District of Columbia are already having trouble finding a physician who accepts new Medicare patients. And researchers from the Center for Studying Health System Change have found that the percentage of Medicare beneficiaries who reported delaying or not getting necessary physician care rose from 9.1 percent in 1997 to 11 percent in 2001. The study also showed that of the near-elderly, patients between 50 and 64, 18.4 percent experienced difficulty in seeing a physician in 2001, up from 15.2 percent in 1997. This bill would provide positive payment updates to the physician fee schedule over the next three years, representing a dramatic turnaround in Medicare physician payments. It would also modify the formula that is used to increase payments each year, the so-called SGR, which most physicians have learned to view with uncertainty and distrust. While this proposal on physician updates represents progress, I acknowledge that it is imperfect, producing large reductions in Medicare physician payments in 2006 and beyond. I am committed to working with my colleagues in the Congress and the Administration to find a more reasonable solution. Aside from physician payments, this legislation addresses a number of other important Medicare reimbursement issues, many of which are set to take effect today, October 1. The bill will completely eliminate the 15 percent cut in home health payments. It will forestall large cuts to indirect medical education, so critical to the well-being of our nation's teaching hospitals. And the bill will continue additional payments to nursing homes to help them hire more staff to care for patients. It should come as no surprise that another priority of mine, and Senator Grassley's, is ensuring that rural areas are treated on par with their urban counterparts. I represent a state with a population density of about six people per square mile where patients and providers are often separated by vast distances. The current Medicare payment structure does not adequately account for the unique circumstances and challenges of providing medical care in such areas, where economies of scale often make systems like prospective payment unworkable. That's why I was proud to help write the Sole Community Hospital law in the early 1980s and the Critical Access Hospital, CAH, program in 1997. Based on the Montana Medical Assistance Facility program, or MAF, the CAH concept has been a lifeline for over 600 rural communities nationwide, allowing hospitals that might have otherwise closed to stay open. This bill makes a number of important changes to the CAH program, including a provision allowing greater flexibility in the use of acute care and swing beds, as well as reauthorization of the Rural Hospital Flexibility Grant Program, which assists facilities in making the switch to CAH status. Aside from Critical Access Hospitals, this legislation makes a number of other important changes to bring Medicare equity to rural America. By making the Medicare Incentive Payment Program, MIPP, automatic, physicians can more easily receive their 10 percent bonus for practicing in health professional shortage areas. And by setting a floor for the physician work component of Medicare's geographic cost index, payments to rural physicians will be raised. This bill also puts rural and urban areas on a more level playing field with respect to non-CAH hospital payments. It equalizes the base payment rate for all PPS hospitals, eliminating the differential in the so-called ``standardized amount,'' which systematically pays rural areas less than large urban ones. And it makes Disproportionate Share Hospital, DSH, payments more equitable by allowing rural facilities to receive increased payments for treating indigent patients. Many of these provisions are based on the work and recommendations of the Medicare Payment Advisory Commission, MedPAC, in their report on rural Medicare policy. That report included telling statistics, and reinforced what I hear from my constituents on a regular basis: Medicare payment policy disadvantages rural areas and changes are needed. For example, in 1999, overall Medicare margins for rural hospitals with 50 beds or less were negative 5.4 percent, worse than any other category of hospital. And total margins for these hospitals are also the lowest, at 1.7 percent in 1999, compared to 3.6 percent for all hospitals. Clearly Congress has work to do to ensure greater geographic equity in Medicare payment, and this bill makes great strides to that end. In addition to many reimbursement changes, this legislation contains important relief for providers struggling with Medicare's regulatory framework. Many of these regulatory relief provisions were contained in legislation I wrote with Senators Kerry, Murkowski and Grassley last year. Among other things, these provisions will: ensure that CMS answers questions posed by health care providers in a timely manner; give additional appeals rights to providers, so that they receive fair treatment for honest billing mistakes; and ensure that CMS demands on providers to return overpayments are reasonable and do not force small providers to declare bankruptcy. In addition to Medicare provisions, this legislation addresses many critical issues related to Medicaid and the State Children's Health Insurance Program. The bill provides $5 billion in fiscal relief to states struggling with tight Medicaid budgets and nearly $3 billion to help safety net hospitals continue to provide critical health care services to low-income Americans. The bill also ensures the continued success of the S-CHIP program by giving States more time to spend their S-CHIP allotments and ensuring that as many children as possible are covered. The bill provides immediate, temporary fiscal relief to states in two ways: by giving states a temporary increase in their Medicaid match rate, or FMAP; and by increasing funding for the Social Services Block Grant. Taken together, these two approaches will help alleviate the pressure on states to cut programs that serve low income families, children, seniors and the disabled. The State fiscal relief provision recognizes that States are in the midst of their worst fiscal crisis since the early 1990s. States have cut their budgets across many programs, from education to health care to other social programs. And because Medicaid is one of the largest parts of state budgets, Medicaid continues to be a prime target for spending cuts. According to a recent report from the Kaiser Commission on Medicaid and the Uninsured, 45 states took action to reduce their Medicaid spending growth in fiscal year 2002, and 41 states are planning further reductions in fiscal year 2003. In my own State of Montana, Medicaid beneficiaries have been asked to pay a larger share of the costs of their coverage, and provider reimbursement rates have been cut. These program cuts have come about at the same time that Medicaid rolls are increasing due to the recession. As more people lose their jobs and health insurance--just yesterday, we learned that in 2001 another 1.4 million people joined the ranks of the uninsured, many become eligible for Medicaid. At the same time, States are forced to cut back on this vital safety net program when people need it most. This is a vicious cycle that we must help end. If we don't, the ultimate result of all this is an increase in the uninsured. Just as we saw in the early 1990s. The financial crisis facing State Medicaid programs is also felt by the facilities that provide care to Medicaid beneficiaries and low- income insured populations. To ensure that hospitals serving our most vulnerable populations can continue providing their vital services, this bill eliminates the scheduled reduction in federal Medicaid funding for hospitals that serve a disproportionate share of Medicaid beneficiaries and low-income, uninsured patients. Without the restoration of these DSH funds, safety net hospitals would lose nearly $3 billion in federal Medicaid funding over the next three years. States with smaller DSH programs will also benefit through this legislation, as it provides them with greater resources to serve their low-income patients. This bill also seeks to continue the unqualified success of the S- CHIP program by ensuring that S-CHIP funds are used to cover as many children as possible, as efficiently and effectively as possible. By giving states an additional year to spend funds that would otherwise be returned to the Federal Treasury and renewing the ongoing system to allocate unspent S-CHIP funds equitably among the States, the legislation will help sustain the significant progress S-CHIP has made in reducing the ranks of uninsured children. In addition, the new caseload stabilization pool will provide additional funds to states expected to have insufficient federal funds over the next few years, reducing the chance that children will be dropped from the rolls. This bill would also make important improvements to the Medicaid and S-CHIP waiver process. Medicaid and S-CHIP waivers have become an increasingly powerful way for the Secretary of Health and Human Services to make changes to crucial health programs without having to consult with, or seek legislative change from, the Congress. The General Accounting Office recently identified serious problems with the current waiver approval process, including a lack of accountability in several areas. I am pleased to have worked with Senator Grassley to develop legislation that would address the key GAO recommendations and begin to restore integrity to the waiver process. More specifically, this bill would require that the waiver process be more transparent and require public notification when major changes are in store. Our bill would also prohibit approval of future waivers that would take dollars set aside for children's health and use them instead on childless adults. Where Congress has set limits on the use of federal dollars, waivers should not be used as a back door way to get around those limits. Without question, the Medicaid and S-CHIP programs are vital components of America's health care safety net, and both programs are critical to the well-being of thousands in my State. The Billings Gazette reported yesterday that about 14,000 of the 18,000 newly- insured Montanans since 1999 were additions to Montana's Medicaid and S-CHIP programs. But despite the critical role these programs play, I am not convinced that we know enough about our nation's health care safety net. Based on legislation I introduced last congress with Senator Grassley, the bill we are introducing today would change that, by establishing the Safety Net Organizations and Patient Advisory Commission. SNOPAC would be an independent and nonpartisan commission charged with the authority to oversee all aspects of America's health care safety net, including Medicaid and S-CHIP. Based on an Institute of Medicine report, SNOPAC will include health care experts from the disparate parts of our safety net system, reporting to Congress on recommendations to maintain our intact, but endangered, health care safety net. Some will argue that Congress has more pressing Medicare priorities to address than restoring payments to health care providers. They argue will that before action on a bill concerning Medicare payment policy, Congress should debate and enact a solid prescription Medicare drug benefit. I agree wholeheartedly with the need for a good drug benefit. I have worked for years to enact one, and I think that the lack of a drug benefit is the greatest deficiency in the Medicare program today. Almost 40 percent of seniors currently lack drug coverage. And for those who have it, it is often unreliable and unaffordable. I did my utmost to pass a drug benefit this year, and I will continue my efforts until one is signed into law. But I will not support a benefit that is unworkable for Montana. And I will not support reviving a prescription drug debate that threatens passage of the important bill Senator Grassley and I are introducing today. The United States Senate debated Medicare prescription coverage in July. We had four votes on four different proposals to establish a drug benefit under Medicare. But all of those votes failed. None came close to getting the required 60 votes for passage in the Senate. Voting again on a prescription drug bill that has not changed materially from the proposals we voted on in July is not the way to pass a drug benefit. In fact, it's a prescription for legislative impasse--on prescription drugs and on provider reimbursement issues. For those reasons, I urge my colleagues to support this legislation, with the recognition that there are other pressing issues facing the Medicare program besides provider payments, but with the acknowledgment that maintaining access to health care services is also an important goal. As Calvin Coolidge once said, ``We cannot do everything at once . . . but we can do something at once.'' Today is October 1, and large Medicare, Medicaid and S-CHIP payment reductions and changes will go into effect. Congress should act as soon as possible to address these issues, to get something done, and to ensure access to care for our seniors, our children, and our disabled population. This bill is necessary, timely and should be considered with expedition. I urge Congress and the President to act swiftly on this comprehensive legislation and enact it into law.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today, along with Senator Grassley, to introduce the ``Beneficiary Access to Care and Medicare Equity Act.'' This legislation is critical to ensuring access to quality, affordable health care for the 40 million Medicare beneficiaries nationwide. Medicare is one of America's great success stories. Since its inception 36 years ago, Medicare has provided millions of elderly and disabled Americans with insurance coverage they would not have otherwise had. When Medicare was enacted, about half of America's elderly lacked health insurance. Now nearly all are covered by Medicare. Over the past three decades, Medicare has undergone significant changes, including changes in the way that health care providers are reimbursed. In response to rising Medicare expenditures, Congress has responded with complex cost-containment mechanisms: diagnosis related groups, or DRGs, for hospital inpatient services in the early 1980s, a fee schedule for physicians' services in 1989. And in 1997, Congress passed the Balanced Budget Act, which mandated prospective payment systems for hospital outpatient departments, home health agencies, and skilled nursing facilities. Gradually, Medicare has changed from a cost-based system to one of prospective, flat-rate payment. The significant changes in payment policy have resulted in a few bumps along the way, particularly those enacted as part of the Balanced Budget Act of 1997. The BBA was a well-intended attempt to get our Nation's fiscal house in order and extend the life of the Medicare trust fund. And in that regard, the goal of the legislation was achieved. Solvency of the Part A Trust Fund was extended by almost 30 years. But in some instances, the BBA cuts went too far. In such cases, these cuts threatened to reduce Medicare and Medicaid beneficiaries' access to quality medical care and services. Congress responded by passing the Balanced Budget Refinement Act, BBRA, of 1999 and the Beneficiary Improvement and Protection Act, BIPA, of 2000. I was proud to play a role in both of these bills, including help for rural areas, which were disproportionately affected by the BBA. Despite the policies and payment changes enacted as part of BBRA and BIPA, we still find that in some cases more improvements and adjustments are needed. And that is why Senator Grassley and I are introducing this bill today. So what does this bill do? Most importantly, this bill would restore payments to physicians, which were cut in 2002 by about five percent. Under the Medicare fee schedule, payment for physician services depends on several factors, including the growth in medical inflation, performance of the American economy, and changes in law and regulation. Also central to the calculation of payments are estimates by the Centers for Medicare and Medicaid Services, or CMS, which was formerly known as the Health Care Financing Administration, of the numbers of Medicare beneficiaries in traditional fee-for-service Medicare. Largely because of significant estimation errors and a weakened economy, physicians under Medicare experienced an average payment reduction of five percent in 2002. If Congress does not act to fix the system, further large cuts are forecast for the coming years. And the potential consequences of inaction are serious. According to a 30-State survey by the Medicare Rights Center, Medicare beneficiaries in 15 states and the District of Columbia are already having trouble finding a physician who accepts new Medicare patients. And researchers from the Center for Studying Health System Change have found that the percentage of Medicare beneficiaries who reported delaying or not getting necessary physician care rose from 9.1 percent in 1997 to 11 percent in 2001. The study also showed that of the near-elderly, patients between 50 and 64, 18.4 percent experienced difficulty in seeing a physician in 2001, up from 15.2 percent in 1997. This bill would provide positive payment updates to the physician fee schedule over the next three years, representing a dramatic turnaround in Medicare physician payments. It would also modify the formula that is used to increase payments each year, the so-called SGR, which most physicians have learned to view with uncertainty and distrust. While this proposal on physician updates represents progress, I acknowledge that it is imperfect, producing large reductions in Medicare physician payments in 2006 and beyond. I am committed to working with my colleagues in the Congress and the Administration to find a more reasonable solution. Aside from physician payments, this legislation addresses a number of other important Medicare reimbursement issues, many of which are set to take effect today, October 1. The bill will completely eliminate the 15 percent cut in home health payments. It will forestall large cuts to indirect medical education, so critical to the well-being of our nation's teaching hospitals. And the bill will continue additional payments to nursing homes to help them hire more staff to care for patients. It should come as no surprise that another priority of mine, and Senator Grassley's, is ensuring that rural areas are treated on par with their urban counterparts. I represent a state with a population density of about six people per square mile where patients and providers are often separated by vast distances. The current Medicare payment structure does not adequately account for the unique circumstances and challenges of providing medical care in such areas, where economies of scale often make systems like prospective payment unworkable. That's why I was proud to help write the Sole Community Hospital law in the early 1980s and the Critical Access Hospital, CAH, program in 1997. Based on the Montana Medical Assistance Facility program, or MAF, the CAH concept has been a lifeline for over 600 rural communities nationwide, allowing hospitals that might have otherwise closed to stay open. This bill makes a number of important changes to the CAH program, including a provision allowing greater flexibility in the use of acute care and swing beds, as well as reauthorization of the Rural Hospital Flexibility Grant Program, which assists facilities in making the switch to CAH status. Aside from Critical Access Hospitals, this legislation makes a number of other important changes to bring Medicare equity to rural America. By making the Medicare Incentive Payment Program, MIPP, automatic, physicians can more easily receive their 10 percent bonus for practicing in health professional shortage areas. And by setting a floor for the physician work component of Medicare's geographic cost index, payments to rural physicians will be raised. This bill also puts rural and urban areas on a more level playing field with respect to non-CAH hospital payments. It equalizes the base payment rate for all PPS hospitals, eliminating the differential in the so-called ``standardized amount,'' which systematically pays rural areas less than large urban ones. And it makes Disproportionate Share Hospital, DSH, payments more equitable by allowing rural facilities to receive increased payments for treating indigent patients. Many of these provisions are based on the work and recommendations of the Medicare Payment Advisory Commission, MedPAC, in their report on rural Medicare policy. That report included telling statistics, and reinforced what I hear from my constituents on a regular basis: Medicare payment policy disadvantages rural areas and changes are needed. For example, in 1999, overall Medicare margins for rural hospitals with 50 beds or less were negative 5.4 percent, worse than any other category of hospital. And total margins for these hospitals are also the lowest, at 1.7 percent in 1999, compared to 3.6 percent for all hospitals. Clearly Congress has work to do to ensure greater geographic equity in Medicare payment, and this bill makes great strides to that end. In addition to many reimbursement changes, this legislation contains important relief for providers struggling with Medicare's regulatory framework. Many of these regulatory relief provisions were contained in legislation I wrote with Senators Kerry, Murkowski and Grassley last year. Among other things, these provisions will: ensure that CMS answers questions posed by health care providers in a timely manner; give additional appeals rights to providers, so that they receive fair treatment for honest billing mistakes; and ensure that CMS demands on providers to return overpayments are reasonable and do not force small providers to declare bankruptcy. In addition to Medicare provisions, this legislation addresses many critical issues related to Medicaid and the State Children's Health Insurance Program. The bill provides $5 billion in fiscal relief to states struggling with tight Medicaid budgets and nearly $3 billion to help safety net hospitals continue to provide critical health care services to low-income Americans. The bill also ensures the continued success of the S-CHIP program by giving States more time to spend their S-CHIP allotments and ensuring that as many children as possible are covered. The bill provides immediate, temporary fiscal relief to states in two ways: by giving states a temporary increase in their Medicaid match rate, or FMAP; and by increasing funding for the Social Services Block Grant. Taken together, these two approaches will help alleviate the pressure on states to cut programs that serve low income families, children, seniors and the disabled. The State fiscal relief provision recognizes that States are in the midst of their worst fiscal crisis since the early 1990s. States have cut their budgets across many programs, from education to health care to other social programs. And because Medicaid is one of the largest parts of state budgets, Medicaid continues to be a prime target for spending cuts. According to a recent report from the Kaiser Commission on Medicaid and the Uninsured, 45 states took action to reduce their Medicaid spending growth in fiscal year 2002, and 41 states are planning further reductions in fiscal year 2003. In my own State of Montana, Medicaid beneficiaries have been asked to pay a larger share of the costs of their coverage, and provider reimbursement rates have been cut. These program cuts have come about at the same time that Medicaid rolls are increasing due to the recession. As more people lose their jobs and health insurance--just yesterday, we learned that in 2001 another 1.4 million people joined the ranks of the uninsured, many become eligible for Medicaid. At the same time, States are forced to cut back on this vital safety net program when people need it most. This is a vicious cycle that we must help end. If we don't, the ultimate result of all this is an increase in the uninsured. Just as we saw in the early 1990s. The financial crisis facing State Medicaid programs is also felt by the facilities that provide care to Medicaid beneficiaries and low- income insured populations. To ensure that hospitals serving our most vulnerable populations can continue providing their vital services, this bill eliminates the scheduled reduction in federal Medicaid funding for hospitals that serve a disproportionate share of Medicaid beneficiaries and low-income, uninsured patients. Without the restoration of these DSH funds, safety net hospitals would lose nearly $3 billion in federal Medicaid funding over the next three years. States with smaller DSH programs will also benefit through this legislation, as it provides them with greater resources to serve their low-income patients. This bill also seeks to continue the unqualified success of the S- CHIP program by ensuring that S-CHIP funds are used to cover as many children as possible, as efficiently and effectively as possible. By giving states an additional year to spend funds that would otherwise be returned to the Federal Treasury and renewing the ongoing system to allocate unspent S-CHIP funds equitably among the States, the legislation will help sustain the significant progress S-CHIP has made in reducing the ranks of uninsured children. In addition, the new caseload stabilization pool will provide additional funds to states expected to have insufficient federal funds over the next few years, reducing the chance that children will be dropped from the rolls. This bill would also make important improvements to the Medicaid and S-CHIP waiver process. Medicaid and S-CHIP waivers have become an increasingly powerful way for the Secretary of Health and Human Services to make changes to crucial health programs without having to consult with, or seek legislative change from, the Congress. The General Accounting Office recently identified serious problems with the current waiver approval process, including a lack of accountability in several areas. I am pleased to have worked with Senator Grassley to develop legislation that would address the key GAO recommendations and begin to restore integrity to the waiver process. More specifically, this bill would require that the waiver process be more transparent and require public notification when major changes are in store. Our bill would also prohibit approval of future waivers that would take dollars set aside for children's health and use them instead on childless adults. Where Congress has set limits on the use of federal dollars, waivers should not be used as a back door way to get around those limits. Without question, the Medicaid and S-CHIP programs are vital components of America's health care safety net, and both programs are critical to the well-being of thousands in my State. The Billings Gazette reported yesterday that about 14,000 of the 18,000 newly- insured Montanans since 1999 were additions to Montana's Medicaid and S-CHIP programs. But despite the critical role these programs play, I am not convinced that we know enough about our nation's health care safety net. Based on legislation I introduced last congress with Senator Grassley, the bill we are introducing today would change that, by establishing the Safety Net Organizations and Patient Advisory Commission. SNOPAC would be an independent and nonpartisan commission charged with the authority to oversee all aspects of America's health care safety net, including Medicaid and S-CHIP. Based on an Institute of Medicine report, SNOPAC will include health care experts from the disparate parts of our safety net system, reporting to Congress on recommendations to maintain our intact, but endangered, health care safety net. Some will argue that Congress has more pressing Medicare priorities to address than restoring payments to health care providers. They argue will that before action on a bill concerning Medicare payment policy, Congress should debate and enact a solid prescription Medicare drug benefit. I agree wholeheartedly with the need for a good drug benefit. I have worked for years to enact one, and I think that the lack of a drug benefit is the greatest deficiency in the Medicare program today. Almost 40 percent of seniors currently lack drug coverage. And for those who have it, it is often unreliable and unaffordable. I did my utmost to pass a drug benefit this year, and I will continue my efforts until one is signed into law. But I will not support a benefit that is unworkable for Montana. And I will not support reviving a prescription drug debate that threatens passage of the important bill Senator Grassley and I are introducing today. The United States Senate debated Medicare prescription coverage in July. We had four votes on four different proposals to establish a drug benefit under Medicare. But all of those votes failed. None came close to getting the required 60 votes for passage in the Senate. Voting again on a prescription drug bill that has not changed materially from the proposals we voted on in July is not the way to pass a drug benefit. In fact, it's a prescription for legislative impasse--on prescription drugs and on provider reimbursement issues. For those reasons, I urge my colleagues to support this legislation, with the recognition that there are other pressing issues facing the Medicare program besides provider payments, but with the acknowledgment that maintaining access to health care services is also an important goal. As Calvin Coolidge once said, ``We cannot do everything at once . . . but we can do something at once.'' Today is October 1, and large Medicare, Medicaid and S-CHIP payment reductions and changes will go into effect. Congress should act as soon as possible to address these issues, to get something done, and to ensure access to care for our seniors, our children, and our disabled population. This bill is necessary, timely and should be considered with expedition. I urge Congress and the President to act swiftly on this comprehensive legislation and enact it into law.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGA Safe Act. Maximum Economic Growth for America Through Safety Improvements. Safer roads save lives. Improving traffic and roadway safety is one of the biggest challenges facing the government today. Traffic deaths are consistently one of the top ten causes of deaths each year. Accidents involving motor vehicles affect all of us. This bill is only a beginning in our Nation's efforts to curb roadway accidents and deaths, in a way that best addresses the needs of our States. A large cause of accidents is the poor quality of signs in and around crosswalks, school and bicycle crossings. Highway signs marking pedestrian, bicycle, and school zone crossings help to alert motorists to the increased risks associated with these locations. This bill establishes a grant program to improve safety at pedestrian, school and bicycle crossings by marking them with fluorescent yellow-green, signs. FYG signs are currently the most reflective signs available. The Secretary of Transportation is directed to set aside $25 million each fiscal year from the Surface Transportation Program to finance these safety improvement grants. The funds may be obligated for eligible projects located on any public road. I've been hearing from County Commissioners from Montana as well as other States, about how much they need direct funding for local roads. These localities are hard pressed for funds and many of these roads are unsafe. This bill would establish a pilot program, at $200 million annually from fiscal year 2004-2009, to address safety on rural local roads. Funds could be used only on local roads and rural minor collectors, roads that are not Federal-aid highways. The program does not affect distribution of funds among States, as funds will be distributed to each of the 50 States in accord with their relative formula share under 23 U.S.C. 105. Funds could be used only for projects or activities that have a safety benefit. By January 1, 2009 the Secretary of Transportation is to report on progress under the provision and whether any modifications are recommended. This bill takes a different approach to the issue of aggressive driving. Rather than sanctioning drivers who display aggressive behavior, this section seeks to lessen that negative behavior by removing some of the frustration that causes that behavior. This section applies to all Federal interstates. It names the left lane as the ``National Passing Lane.'' It requires all vehicles to use the left lane for passing only. It further requires that all drivers allow other vehicles to pass them in the left lane. I believe that one of the big frustrations of drivers in this country is being held up by someone going slow in the left lane. It contributes to driver aggression and to congestion. The MEGA Safe Act seeks to alleviate that. An amount of no less than $1 million will be given to each State each year of the bill, 6 years, to educate the driving public about this new law and the proper behavior. Each State will decide how to best enforce this law, for example, enforcement of ticketable offenses such as if a driver does not allow another to pass or the driver is holding up the left lane with a line of cars behind him. Additionally, the bill funds a study to make recommendations on instituting measures that will help the federal government and states teach motorists and truck drivers how to effectively share the road with each other. Recently the American Automobile Association, AAA, unveiled a study that shows that the majority of highway crashes that involved trucks are caused by the car or cars involved. MEGA Safe would give $1 million to the American Trucking Associations, ATA, and AAA to issue a report making recommendations on how the Federal and State governments can better teach car drivers and more carriers how to share the road. It requires a preliminary report in a year and the final report a year later. Finally, the MEGA Safe Act would address Work Zone Safety by ensuring that, for each project that uses Federal funds, a trained and certified person would be given the responsibility for assuring that the traffic control plan is effectively administered. This would help reduce the number of deaths occurring in work zone safety areas. The MEGA Safe Act is by no means a comprehensive safety proposal, but I believe that these ideas are a good foundation for our safety policies as we embark on the Reauthorization of TEA 21.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGA Safe Act. Maximum Economic Growth for America Through Safety Improvements. Safer roads save lives. Improving traffic and roadway safety is one of the biggest challenges facing the government today. Traffic deaths are consistently one of the top ten causes of deaths each year. Accidents involving motor vehicles affect all of us. This bill is only a beginning in our Nation's efforts to curb roadway accidents and deaths, in a way that best addresses the needs of our States. A large cause of accidents is the poor quality of signs in and around crosswalks, school and bicycle crossings. Highway signs marking pedestrian, bicycle, and school zone crossings help to alert motorists to the increased risks associated with these locations. This bill establishes a grant program to improve safety at pedestrian, school and bicycle crossings by marking them with fluorescent yellow-green, signs. FYG signs are currently the most reflective signs available. The Secretary of Transportation is directed to set aside $25 million each fiscal year from the Surface Transportation Program to finance these safety improvement grants. The funds may be obligated for eligible projects located on any public road. I've been hearing from County Commissioners from Montana as well as other States, about how much they need direct funding for local roads. These localities are hard pressed for funds and many of these roads are unsafe. This bill would establish a pilot program, at $200 million annually from fiscal year 2004-2009, to address safety on rural local roads. Funds could be used only on local roads and rural minor collectors, roads that are not Federal-aid highways. The program does not affect distribution of funds among States, as funds will be distributed to each of the 50 States in accord with their relative formula share under 23 U.S.C. 105. Funds could be used only for projects or activities that have a safety benefit. By January 1, 2009 the Secretary of Transportation is to report on progress under the provision and whether any modifications are recommended. This bill takes a different approach to the issue of aggressive driving. Rather than sanctioning drivers who display aggressive behavior, this section seeks to lessen that negative behavior by removing some of the frustration that causes that behavior. This section applies to all Federal interstates. It names the left lane as the ``National Passing Lane.'' It requires all vehicles to use the left lane for passing only. It further requires that all drivers allow other vehicles to pass them in the left lane. I believe that one of the big frustrations of drivers in this country is being held up by someone going slow in the left lane. It contributes to driver aggression and to congestion. The MEGA Safe Act seeks to alleviate that. An amount of no less than $1 million will be given to each State each year of the bill, 6 years, to educate the driving public about this new law and the proper behavior. Each State will decide how to best enforce this law, for example, enforcement of ticketable offenses such as if a driver does not allow another to pass or the driver is holding up the left lane with a line of cars behind him. Additionally, the bill funds a study to make recommendations on instituting measures that will help the federal government and states teach motorists and truck drivers how to effectively share the road with each other. Recently the American Automobile Association, AAA, unveiled a study that shows that the majority of highway crashes that involved trucks are caused by the car or cars involved. MEGA Safe would give $1 million to the American Trucking Associations, ATA, and AAA to issue a report making recommendations on how the Federal and State governments can better teach car drivers and more carriers how to share the road. It requires a preliminary report in a year and the final report a year later. Finally, the MEGA Safe Act would address Work Zone Safety by ensuring that, for each project that uses Federal funds, a trained and certified person would be given the responsibility for assuring that the traffic control plan is effectively administered. This would help reduce the number of deaths occurring in work zone safety areas. The MEGA Safe Act is by no means a comprehensive safety proposal, but I believe that these ideas are a good foundation for our safety policies as we embark on the Reauthorization of TEA 21.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to discuss my intent on four rollcall votes where I was necessarily absent due to my required presence in my home State of Montana. These votes are directly important to Montana and the Nation. I would like the opportunity to further the debate on these timely issues. The cloture vote on Senator Byrd's amendment to the fiscal year 2003 Interior Appropriations legislation has a direct and fundamental impact on Montana for three reasons. First, the amendment reimburses the United States Forest Service for funding expended fighting fires this year. This funding is essential because of the high fire danger that still exists in the West due to the prolonged drought and funding already spent on fires cannot be used for existing USFS obligations and duties on our national forests. Second, my good friend from West Virginia's amendment has already been modified to include the most important funding that could be dispersed this year for Montana's economy. I'm speaking, of course, about natural disaster funding for our farmers and ranchers. Montana is suffering through its fourth year of drought and conditions could not be worse. If we do not move forward with a disaster package, there will simply be fewer family farms and ranches around next year. Period. This is a debate that has gone on far too long and the House and President Bush need to come to the table and accept the work of the Senate. A natural disaster proposal has now passed the Senate twice by a large bipartisan margin. Now is the time to get this funding out to the people who need it, who need certainty about their future. Finally, the reason that a cloture vote is required stems from the controversial nature of the pending amendment of Senator Craig regarding forest health. The issue of forest health is a huge problem in the West and has the most direct of conditions with not only the increased fire risk, but the drought that this legislation addresses. While the proposals vary, forest health is an issue that needs to be dealt with immediately. Further delay in the Senate does not serve Montanans or anyone in the West that is trying to make a living and a life under these conditions. Because we need to deal with all three of these issues as soon as possible, I fully support cloture on Senator Byrd's amendment. I am disappointed that it did not pass. With regards to the amendment proposed by my colleagues from Connecticut, Senators Dodd and Lieberman, I am forced to disagree with the basis of their amendment. My colleagues from Connecticut have represented their amendment as only codifying existing procedures. But, from what I understand based on the hearing held in the Indian Affairs Committee on September 18, this amendment in fact requires the implementation of new procedures, including adversarial hearings at the request of any interested party, raises the burden of proof that a petitioning group must satisfy in meeting the seven mandatory criteria, and requires the Department to provide notice to officials of every State and local government and municipality where a tribal group may have ever been historically located or any geographic area a tribal group may have ever occupied. In my home State of Montana, the Little Shell Band of the Chippewa Indians have been battling for over a decade for their Federal recognition. They have had to jump through many hoops as it is and they have yet to receive their official recognition. My Colleague's amendment would not only prolong the Little Shell's recognition, but would only add to the burden they have already carried for over a decade. Based on the outcome of the Indian Affairs hearing and the impact on my tribe at home, I respectfully disagree with my colleagues on this matter and believe it is in the best interest of the recognition process that their amendment was rejected. Moving on to the Homeland Security votes, I would like to address the amendment introduced by my esteemed colleague from West Virginia once again. Senator Byrd has urged that the Senate take its time to thoroughly debate and analyze the proposed legislation to create the Department of Homeland Security. He has introduced an amendment to ensure that the Congress continues to play a role in the creation of a new Federal Department of Homeland Security. I agree with the good Senator that Congress should debate and analyze this proposal, but I disagree with his proposal on how that debate should proceed. The Byrd amendment would require that the department be established in three phases. Each phase would be initiated by a proposal sent to the Congress by the President. Each proposal sent to Congress would be referred to the appropriate congressional committees. The appropriate Congressional Committees should be involved in this process. But there are no deadlines or fast track procedures for legislative consideration and no guarantee the proposals would ever emerge from Congress and be signed into law. This amendment would force Congress to reopen every battle over which agencies should be transferred into the new Department and on what terms they would be transferred. Moreover, by dividing the development into five separate legislative proposals, this amendment makes it impossible for legislators to consider the Department as a whole. I regret to say that I cannot support my colleague's amendment and believe it was in the Nation's best interest that the amendment was not agreed to. Finally, ever since the devastating attacks of September 11, Americans have been asking how the attacks happened, why they weren't prevented, and what corrective measures could be taken to prevent similar tragedies from ever occurring again. The American people deserve answers to these very legitimate questions. It's important that we find out just what happened through a non-partisan commission. The amendment introduced by Senator Lieberman represents a bipartisan initiative to help answer the many remaining questions in a constructive, methodical, and nonpartisan way. I support the amendment and am pleased that it passed.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am very pleased that the Senate agreed last night, by unanimous consent, to adopt an amendment that Senator Grassley and I offered to the homeland security bill. Our amendment will reinforce the commercial operations of the Customs Service within the new Department of Homeland Security. A key objective of the homeland security bill is to create coherence in law enforcement at our nation's borders. The Customs Service is vital to that endeavor. For the vast majority of people entering the United States, their first encounter with the U.S. Government is when they are cleared by a Customs officer. The Customs Service is the principal U.S. Government agency at most ports of entry. It enforces a multitude of commercial and other laws on behalf of itself and some 40 other Federal agencies. In addition to collecting duties, fees, and taxes on imports, Customs assists the Census Bureau in collecting trade data; enforces our environmental laws by ensuring that products of endangered species are not brought into this country; protects U.S. intellectual property owners and consumers by barring entry to counterfeit and ``gray market'' goods; prohibits illegal drugs and other contraband from coming into the United States; and enforces numerous other laws. It was a Customs inspector who apprehended the so-called millennium bomber in Port Angeles, WA in December 1999. Customs also has played a major role in putting an end to the scourge of child pornography on the Internet and to fighting the war on drugs. Unquestionably, Customs is an essential player in law enforcement at our borders and, for this reason, ought to be integrated into a new Department of Homeland Security. At the same time, we must not forget that the core mission of the Customs Service is a commercial mission. Customs is first and foremost responsible for the collection of duties, taxes and fees on imports. This is one of the oldest functions of the Federal Government. It was authorized by the second act of Congress, in July 1789. Today, duties collected by Customs constitute the second most important source of federal revenues, after the income tax. In fiscal year 2001, Customs processed over 25 million formal entries of cargo, worth over $1 trillion. Duties, fees, and taxes on that cargo amounted to about $20 billion. Thus, Customs' performance of its core commercial function is critical as a source of revenue to the U.S. Government. Customs' performance of its core commercial functions also is extremely important to the U.S. businesses that rely on imports and exports. The approximately 25 million formal entries that Customs processed in fiscal 2001 represented a 60 percent increase from only 5 years earlier. The volume of international trade is increasing significantly. To keep that trade flowing, Customs must perform its job with ever greater efficiency. For these reasons, we must ensure that in moving from the Department of Treasury to a new Department of Homeland Security, Customs is able to do its commercial job as capably as it does today. I commend Chairman Lieberman for recognizing this imperative and for working with the Finance Committee to secure the Commercial side of Customs within the new Department. I would like to point out that in mid-July, the Finance Committee held a very enlightening hearing on the issue of Customs' integration into a Department of Homeland Security. Following the hearing, Senator Grassley and I transmitted a set of recommendations to Chairman Lieberman and Ranking Member Thompson. I am very pleased that a number of the key recommendations are part of the pending bill. In particular: The bill preserves the Customs Service as a ``distinct entity'' in the new Department. The bill provides that appointments required to be made by the President, by and with the advice and consent of the Senate shall continue to be subject to that requirement. I understand that this will include the Commissioner of Customs. The bill preserves for the Secretary of the Treasury certain legal authorities regarding ``customs revenue functions.'' Thus, even though Customs will move to the Department of Homeland Security, the Secretary of the Treasury will remain the ultimate decision maker in issuing most commercial regulations administered by Customs. this is important, because it ensures that the national economic interest will guide the issuance of regulations affecting Customs' commercial operations. We must bear in mind that this bill will move a commercial agency-- Customs--from a Department whose primary focus is on the national economic interest, to a Department whose primary focus is on national security. The provisions I cited will help ensure that Customs' commercial mission does not get diluted in that process. The amendment accepted yesterday bolsters that objective. The amendment contains three provisions. First, it makes clear that certain user fees that Customs collects from passengers and conveyances entering the United States will be available for use by the Customs Service exclusively. Second, it sets up a special account at the Treasury to support development and implementation of Customs' Automated Commercial Environment, known as ``ACE.'' ACE is a modern computer system that will replace Customs' antiquated system for the processing of imports. Of the fees collected by Customs for processing merchandise, $350 million per year will be deposited into the ACE account. Third, the amendment makes clear that the Advisory Committee on Commercial Operations of the United States Customs Service--known as the ``COAC''--will remain in existence following Customs' move to the new Department. The COAC was created by statute in 1987. It is a bipartisan group of 20 representatives of individuals and firms affected by commercial operations of Customs. Over the years, it has provided valuable advice to the Secretary of the Treasury. Under this amendment, ti will continue to do so, and will advise the Secretary of Homeland Security as well. I firmly believe that these provisions, along with the customs- related provisions in the underlying bill will ensure that Customs remains a strong and effective trade agency, as well as a strong and effective law enforcement agency, in the new Department. Finally, I would like to say a word about another aspect of the Lieberman bill for which the Chairman should be commended. I am referring to the provisions protecting the rights of employees in the new Department. The most valuable resource of our government is the people who work for it. We must give every incentive for the best and the brightest to serve and to continue serving. I understand that the President has asked for enhancement ``flexibility'' in dealing with employees of the new Department. However, it is not at all clear to me that depriving federal workers of collective bargaining rights, merit systems protections, and whistle- blower protections, among other protections, is necessary to achieve improved homeland security. In fact, I believe that just the opposite is true. To improve homeland security, we need a top-notch workforce. Getting and keeping that top-notch workforce means assuring employees that they will be treated fairly and enjoy the same protections that other federal employees enjoy. I applaud Chairman Lieberman for recognizing this and embedding it in the bill. I thank the Chair.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the Committee on Finance filed a report on S. 1971 without the Congressional Budget Office cost estimate. I ask unanimous consent that the CBO cost estimate be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my friend and colleague from Montana, Senator Burns, for cosponsoring this amendment with me. I deeply appreciate his work. I point out this is truly a bipartisan effort to get agricultural and disaster assistance payments to farmers and ranchers across our country. This is not a partisan matter. This is a nonpartisan matter. Drought does not know whether a farmer is a Republican, a Democrat, an Independent, or whatever political affiliation he or she may have. Drought hits everybody relentlessly. It is clear that these last several years it has hurt a lot of farmers. This amendment we are attempting to pass will help farmers across our country. I also thank the numerous agricultural organizations that have demonstrated their support for the amendment by making an endless number of phone calls, writing letters, and tirelessly raising the need for agricultural assistance in the Halls of the Congress. Drought brings the producers to their knees, not only poor producers but the best producers. The crisis in our agricultural community has absolutely nothing to do with poor planning. I want to make that very clear. In fact, the farm bill has nothing to do with agricultural disaster assistance. The farm bill we passed has to do with farmers generally. If and when disaster hits, and if it is persistent over several years, then there is no choice but to fold up one's tent, leave, or cut back dramatically in a way that hurts not only the farmer but the rest of the community. According to the New York Times on May 3, 2002--not too many months ago--let me quote an article in that newspaper: In eastern Montana, more than a thousand wheat farmers have called it quits rather than try to coax another crop out of the ground that has received less rain over the last 12 months than many deserts get in a year. We today have the opportunity to help mitigate these drought conditions and keep our producers on the land. After consecutive years, drought harms not only producers but entire communities. I would like to share the words of Montana farmer Dan Debuff to illustrate the impacts of drought on his community of Shawmut: Our local John Deere dealer had sold seven combines last year at this time. This year he hasn't sold one. School enrollments are down 30 percent from 5 years ago and are still declining. Remember, this drought has been going on for 4 or 5 years. Gross revenues for the local grain elevator and fertilizer plant have declined 33 percent from 2 years ago and they have eliminated two full-time jobs. The large elevator and fertilizer plant have cut 9 full-time jobs out of a total of 25. The letter goes on to describe the adverse effects the drought has not only on farmers individually but also on communities. I have a chart which shows the effect of the drought now in America. It covers almost the entire West. If one draws a line a little bit west of the 100th meridian, almost all of America west of that line is in drought. The chart shows by color the worst conditions. The red and orange are the worst, and that is almost all of the western United States. In fact, it is almost half of the geographic United States of America. Without our help, without passing natural disaster assistance today, we will change the future of rural America forever. A large percentage of our hard-working producers will lose their land, lose their homes, their jobs, and their way of life. They will not be purchasing clothes, seed, fertilizer, or equipment in their local stores. They are going to have to move, take their kids out of school, go some place else, and try to make a go of it. We now have the opportunity to do something about that. A vote for this amendment is a vote for America's family farmers and ranchers to provide us with a safe domestic food supply. A vote for this amendment is a vote for the future of rural America. A vote for this amendment is a vote for fulfilling our responsibility as a country to protect our citizens from natural disaster. Rural America is resilient. Like them, I am not going to give up. We are going to keep trying until we get the disaster assistance we need. We give disaster assistance to people in the country for earthquakes, for floods, and for hurricanes. It only makes sense that we should give disaster assistance for our farmers. I voted for disaster assistance for Americans for flood insurance, for hurricanes, and for earthquake disasters. I voted for those because it was the right thing to do, the American thing to do. It is also the American thing to do to help our farmers and ranchers. I also ask the President to reconsider. I support the President many times and do not support him other times. This is one time I am asking the President to reconsider his opposition because our American farmers need all of America to help give them the assistance they need. I very much thank the Chair and thank my colleague from Montana and thank the Parliamentarian. I yield the floor.

Mr. BAUCUS. Mr. President, I ask my colleague if I may have 5 minutes.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to take the opportunity to congratulate Norma Eudora Cronk Dickson. On October 16th, 2002 she will celebrate her 100th birthday. Norma is a resident of Chinook, MT. Norma Dickson was born October 16, 1902. She was the eldest of four children born to John Colburn Cronk and Anna Rogers Cronk. John and Anna Cronk moved to Montana in 1898, and settled in the Milk River Valley in Coburg, MT. Her parents were ranchers and prominent members of the community. Her father John was elected state representative in Montana in 1923. Her parents raised cattle and prize winning Percheron horses. The livestock pavilion at the Blaine County Fairgrounds was dedicated to her father's memory. Norma attended college and taught for a few years prior to her marriage in 1928 to Dr. Joseph Robert Dickson, another Montana native who practiced dentistry in Chinook, Montana. Norma and Dr. Dickson had four children; Joseph Robert Dickson Jr., Marilyn Dickson Gregg, James Cronk Dickson, and George William Hunt Dickson. They also have thirteen grandchildren and ten great- grandchildren. In addition to Norma's dedication to her family, she has been very active in her community of Chinook, MT. Her involvements include the Eastern Star, Chinook Presbyterian Church, and High School Girl's State. She has also worked at the Chinook Senior Center as a volunteer from its inception until she was 97 years old. Finally, she was named Senior of the Year in Chinook. She is a treasure to her community, her State, and of course, to her family.

Mr. BAUCUS

Mr. BAUCUS. In response to my distinguished colleague, we have consulted with the Department of Agriculture and these crop losses would indeed qualify for assistance under this amendment. I know that the armyworm infestations have caused massive damage to crops throughout the Midwest and Northeast and I am pleased that this legislation will provide some assistance to these farmers.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I thank my good friend from North Dakota. We are all in this together. This is teamwork. By working together--both sides of the aisle--representatives and the people, we are going to get this passed because it is so necessary and so important. I thank my good friend, as part of the larger team.

Mr. BAUCUS. I will be glad to yield to my good friend from North Dakota.

Mr. BAUCUS. Madam President, first, I thank my colleague from North Dakota. He made a very good point that I don't think has been emphasized enough; namely, the farm bill that this body passed and enacted into law because of the recent disastrous conditions occurring in America will result in fewer Federal payments, fewer dollars paid out than was anticipated under that bill. As my friend from North Dakota pointed out, it is billions of dollars in savings which largely will offset the cost of this bill. My good friend further pointed out that farmers will receive payments under this legislation, disaster assistance, but will not receive it until this legislation is enacted into law. I thank my good friend from North Dakota for making that valid point. Some think that, gee, if we passed a farm bill, why do we have to pass agricultural disaster assistance which, for the 2 years--2001 and 2002--crop disaster program and the livestock assistance program scores at $5 billion. Crop Insurance is an important risk management tool but provides declining coverage in years of successive disasters. Emergency haying and grazing on CRP acreage is important. These are all pieces to the puzzle. The piece that is still missing--that producers are counting on the most-- is emergency natural disaster assistance. I thank my friend from North Dakota for pointing that out. Madam President, this is really pretty basic. Without our help, without passing agricultural disaster assistance for farmers and ranchers, this body will accomplish change in the future of rural America forever. We are at that point. After successive years of disaster, drought in Montana, we are at the breaking point. If agricultural assistance does not pass, I can tell you that my State of Montana, and probably other States in the Nation--particularly the high plains States, and perhaps even the State represented by the occupant of the Chair--the rural American landscape is going to change forever. Small towns are going to die. People are going to leave. There is not going to be much left. We are going to be destroying a way of life. It is that basic, that simple. It has been said this is a real emergency, a real disaster. That is an understatement. It will be changing the landscape of rural America if this legislation does not pass. I want to read from a letter from Wells Fargo Bank, a national lending institution which has banks in Montana. This is from Alan Pearson, district manager: Wells Fargo has always had a number of tools at its disposal, recognizing that farmers and ranchers have cyclical years. As lenders, we have made all efforts to ensure that credit needs are met by providing operating lines of credit and equipment and real estate financing. In addition, where applicable, Wells Fargo is the principal provider and underwriter of Federal Crop Insurance. However, it is our sense that, without significant Federal assistance for our region, many farmers and ranchers will not make it. Private insurance and easing of credit requirements only go so far. A principal reason why the situation warrants Federal assistance is that surface and groundwater resources have depleted to a level that requires successive above- average periods of precipitation to bring water reserves back to normal levels. I will repeat that. The situation has deteriorated so much that only with ``successive above-average periods of precipitation to bring water reserves back to normal levels'' will farmers begin to recover. Continuing: These conditions have worsened over the last 3 years, and our analysis shows that farm income will suffer unless Government assistance is available. As you are aware, without specific and timely Federal emergency disaster assistance, many producers will face daunting challenges in their operations. Unfortunately, a natural disaster is not only a condition in just a few States, as of July 22, 49 States are impacted by drought, and 36 percent of our country is currently classified at some level of drought. More than 40 percent of our Nation's rangeland is currently rated as poor or very poor. This is an issue that cannot be ignored. The Senator from North Dakota mentioned the problems in conference, trying to get the other body to agree, and the Speaker has basically said no. I hope very much the Speaker reconsiders, that the White House reconsiders and realizes that there is such an emergency that we must pass this legislation. I am pleased more than a fifth of the Senate has cosponsored this amendment. I will read some of the organizations that proposed this and endorse it: National Farmers Union, American Farm Bureau Federation, National Cattlemen's Beef Association, American Corn Growers, American Sheep Industry, American Soybean Association, National Association of Wheat Growers, National Barley Growers, and a number of others. I want to make another point that has not been made enough. There have been many references to the Dust Bowl years in the thirties. Some farmers tell me--very respected farmers whose operations have been in families for years--that this is even worse than the thirties for two reasons: Basically, in the thirties, there was 1 year with a little precipitation that broke the drought a little bit. But, more important, in the thirties, we did not have something called CRP. We did not have the Conservation Reserve Program. Many producers in my State have put their land in the CRP. What is CRP, for those who don't know? The CRP is the program the United States provides for farmers so they can take their land out of production and put it into grassland, in reserve. That is the Conservation Reserve Program. It helps the environment and helps game and birds and so forth. It is also a way for farmers to cash flow during years of drought. Because of better farming practices today, we do not have the Dust Bowl situation. If we continued to use the same farming practices today, we would be back to the situation of the thirties. You would see wind blowing dust across the Nation. It is because of our better farming practices that we don't have quite the Dust Bowl situation that all Americans at that time knew about. That leads me to another point. If a major U.S. company loses 20 percent of its income, which is in the quarterly reports, the stock goes down, it is in the newspapers, and everybody knows about it. Or if an industry loses a huge percentage of its income, or people go bankrupt, such as Enron and WorldCom and others, everybody knows about those bankruptcies because they are in the newspapers. People do not know about the individual farmers and ranchers who have to sell out because they, in effect, go bankrupt because of Dust Bowl situations, because of lack of income, and because of successive years of drought. Producers in my State have lost more than 20 per cent of their income for 4 consecutive years. There isn't another industry in America that could do that and still be standing. We should all be grateful that they are still in business because they are the ones who ensure that we have food on our plates. So it is our responsibility, as representatives of our States, to make this known to the world--particularly to the country and the Senate--so that our colleagues have an appreciation of what we are experiencing in Montana and in other Northwestern States. It is that serious. As has been pointed out, this body has responded to other emergencies--floods, tornadoes, earthquakes, the Trade Towers, and it was more than appropriate; everybody rushed to help. But we have the same emergency, the same disaster conditions today, but it is not as well known because it is a slow disaster. Mother Nature sometimes rains in parts of our State and not in others. Drought disaster is not as visible as, say, a WorldCom bankruptcy or an Enron bankruptcy; but it is just as important--in fact, even more important to those people who have to leave those communities and to those communities and towns. I plead that Members of this body vote overwhelmingly to help people who are facing disaster. I ask the body to also recognize the disaster we are facing. I ask the President of the United States to reconsider and agree and recognize that we have a disaster in the heartland of America, and we have a responsibility collectively, as the people's representatives, to help the people we represent and support disaster assistance. It is the only thing we can do. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Will the Senator yield for a unanimous consent request that I be added as a cosponsor of this amendment?