Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I want to take this time to talk in some detail about the Trade Adjustment Assistance provisions in the conference report. I am proud of the entire conference agreement--but I am particularly proud of the TAA provisions. For the first time since 1974, we are partnering a grant of Presidential authority to negotiate agreements that expand trade with a serious commitment to deal with the downside of trade expansion. We all know that trade greatly benefits our economy as a whole. But we also know that a Government decision to pursue trade liberalization can have adverse consequences for some. As President Kennedy recognized in 1962, we, as a government, have an obligation ``to render assistance to those who suffer as a result of national trade policy.'' The trade adjustment assistance program has been around for 40 years. During that time, it has quietly helped thousands of trade-impacted workers to retrain and make a new start. But the program has also been criticized for being too complicated, underfunded, and available to too few workers. This conference report will go a long way toward solving these problems and making TAA work better for working Americans. Does it have everything in it that I could have wished? To be honest, no. That is the nature of compromise. But overall, I think we have done very well indeed. So let me know run through some of the most important provisions in the conference report. First, the conference report expands the number of workers eligible for TAA benefits in several ways. Like the Senate bill, the conference report covers secondary workers where the loss of business with the primary firm ``contributed importantly'' to job losses at the secondary plant. In addition, where a secondary plant supplies 20 percent of more of its sales or production to the primary plant, coverage is presumed. The conference report also provides TAA coverage to downstream workers who are impacted by trade with Mexico or Canada. The conference report also expands coverage to workers affected by shifts in production. Workers are automatically covered if their plant moves to a country with which the United States has a free trade agreement, or to a country that is part of a preferential trade arrangement such as ATPA, CBI, or AGOA. For workers whose plant moves to any other country, TAA benefits are available if the Secretary of Labor determines that imports have increased or are likely to increase. While the Senate bill did not require a showing of increased imports, there are virtually no instances in which relocating production abroad would not be accompanies by, or lead to, an increase in imports of the product. Only workers at a company that produced 100 percent for export, with no domestic sales, would be excluded. And it is particularly important to note that the workers do not have to prove that the increase in imports will come from the country to which production relocated. In addition, the conference report includes a new TAA program for farmers, ranchers, fishermen, and other agricultural producers. Past attempts to shoehorn farmers into eligibility requirements intended for manufacturing workers have left most with no access to TAA. By focusing eligibility requirements on the relationship between imports and commodity prices, the conferences bill creates a program better suited to the unique situation of trade-impacted agricultural producers. The Senate bill actually included two separate programs--one specifically for independent fishermen and one for farmers, ranchers, and other agricultural producers. The conference report eliminates the separate program with dedicated funds for fishermen. But that does not mean fishermen are excluded from TAA. As agricultural producers, they are still able to participate in the general TAA for farmers program. Taken together, these expansions in eligibility are likely to result in tens of thousands of additional workers receiving TAA benefits every year. Moreover, the benefits that they receive will be better than ever before in several ways. Most importantly, the TAA provisions include health care coverage for displaced workers for the first time in the program's history. Workers eligible for TAA will receive a 65 percent advanceable, refundable tax credit that can be used to pay for COBRA coverage, or a variety of state-based group coverage options. The credit could not be used for the purchase of individual health insurance unless the worker had a private, non-group policy prior to becoming eligible for TAA. The health care credit is available to workers for as long as they are participating in the TAA program. The conference report also improves coverage by extending income support from 52 to 78 weeks for workers completing training. It adds a further 26 weeks of training and income supports for workers who must begin with remedial education such as English as a second language. To pay for this additional training, the annual training budget is doubled from $110 million to $220 million. For older workers, the conference report offers wage insurance as an alternative to traditional TAA. Workers who qualify and who take lower- paying jobs can receive a wage subsidy of up to 50 percent of the difference between the old and new salary--up to $10,000 over two years. The goal is to encourage on-the-job training and faster re- employment of older workers who generally find it difficult to change careers. The Senate bill included a two-year wage insurance pilot program. The conference report improves on the Senate bill in two ways--by making the program permanent, and by providing TAA health benefits to workers under the program if the new employer does not provide health insurance. There are other enhancements to benefits as well. Job search and relocation allowances are increased. The authorization level for the TAA for firms program is increased from $10 million to $16 million annually. And the Conference Report improves on the Senate bill by providing TAA health care benefits for up to 2 years to workers receiving pension benefits from the Pension Benefit Guarantee Corporation. Finally, in addition to expanding benefits and eligibility, the conference report makes a number of improvements that streamline the program. Like the Senate bill, the conference report consolidates the existing TAA and NAFTA-TAA programs. This eliminates bureaucracy and confusion and saves workers the trouble of applying to two separate programs. The conference report also shortens the time in which the Secretary of Labor must consider petitions, extends permissible breaks in training so workers don't lose income assistance during semester breaks, and provides common-sense training waivers for all workers. Taken together, these are extraordinary improvements in the Trade Adjustment Assistance program. They will make the program fairer, more efficient, and more user friendly. Over the past year and longer, I have worked hard--with the help of many colleagues on both sides of the aisle--to raise the profile of TAA. All along, my message has been that if we want to rebuild the center on trade, improving Trade Adjustment Assistance is the right thing to do. I am proud of how far we have come toward that goal. I am proud of this conference report. I urge my colleagues to support the conference report and send this historic legislation to the President this week.

Mr. BAUCUS. Mr. President, before we conclude today, I would be remiss if I did not thank a number of people. First, in the House, I want to thank Chairman Bill Thomas. He and I disagree on some things--that's for sure. But we share a common goal of both expanding trade and helping workers left behind by trade. And we share the goal of getting this to the President's desk as soon as possible so that we can help jump-start this economy. We worked together to craft a strong trade bill--and I thank him for his efforts. Second--I want to thank Congressmen Cal Dooley, John Tanner, and Bill Jefferson, who helped craft the House fast track legislation, and also Anna Eshoo and Ken Bentsen, who provided so much help on TAA. In the Senate, I first want to thank Senator Daschle, who has helped this trade bill move through every step of the process. I also want to thank two Senators who played a key role during the committee process-- Senator Bingaman for his efforts on TAA and Senator Bob Graham on ATPA. And I appreciate Senator Breaux's work both during the Senate negotiations and during the conference. I also want to give credit to a number of Senators whose efforts made this legislation much better. Senators Dayton and Craig on trade laws; Senator Edwards on the textile negotiating objectives and also on TAA; Senator Kennedy on access to medicines; Senator Harkin on child labor; Senator Inouye on some of the tuna provisions in ATPA, and Senators Rockefeller, Murkowski, and Wellstone on benefits for steel retirees. Finally, I, of course want to thank my partner on the Finance Committee, Senator Chuck Grassley for being helpful throughout this process. Of course, to actually complete work on a major bill like this requires the efforts of many others. For more than 18 months, many staff members have made incalculable efforts to prepare this legislation and move it to passage. John Angell and Mike Evans oversaw the efforts of the Finance Committee staff on this legislation and all other activities of the Committee. Greg Mastel led the effort on the Democratic staff to prepare this legislation from the first round of hearings to the final Senate vote. He was ably assisted by a tremendously skilled and energetic staff, including Tim Punke, Ted Posner, Angela Marshall, Shara Aranoff, and Andy Harig. The Finance Committee health and tax staffs also played an important role, especially Liz Fowler, Kate Kirchgraber, Liz Liebschutz, Mitchell Kent, and Mike Mongan. The Finance Committee also benefited from the able efforts of the leading Republican staff members, Everett Eissenstat and Richard Chriss. In the House, the staff of the Ways and Means Committee and the New Democrats who supported this bill deserve similar credit. This legislation also literally would not have been possible without the help of our skilled legislative counsel, Polly Craighill, Stephanie Easley, and Ruth Ernst, and Mark Mathiesen. Finally, I would say a word of thanks to the many members of the Administration who staffed and supported this legislative effort, including Grant Aldonas, Faryar Shirzad, Peter Davidson, John Veroneau, Heather Wingate, Brenda Becker, Penny Naas, and many others. I--as well as the Senate and the country--owe you all a debt of gratitude. I also rise today to thank one additional person who played an enormous role in the passing of this trade bill--Howard Rosen. I do not believe there is a person in this country who feels more passionately about the TAA legislation than Howard Rosen. He helped write this bill, he worked hard to encourage Members of the Senate and Members of the House to support this bill, and he is a big reason that we now have such a good TAA program. And I know Howard's efforts will not end here. I know he will keep working to make TAA an even better program. We all owe him a great deal of thanks. anticircumvention

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to urge my colleagues to vote yes on the motion to invoke cloture on the trade bill. Three months ago, the Senate passed its version of the Trade Act of 2002. It was a strong bill, it was a progressive bill, and it passed overwhelmingly with strong bipartisan support. We now have completed our conference with Representatives of the House. I am pleased to present the Senate with a conference report that retains and builds upon key elements of the Senate bill. Let me begin by discussing the reestablishment of the President's fast-track trade negotiating authority. This authority will make it easier for the President to negotiate strong trade agreements, but we do not give the President a blank check. Far from it. The bill makes Congress a full partner in trade by laying out negotiating objectives on a number of topics and creating a structure for consultations--I might add, much stronger than previous fast-track bills. Most of the debate on fast track has focused on three trouble spots in trade negotiations: Labor rights and environmental standards; so- called chapter 11 provisions; and U.S. trade laws. Let me turn to them. First, labor and environmental standards. Most importantly, this bill adopts the standards set forth in the United States-Jordan Free Trade Agreement; that is, as a floor. No standards in future trade agreements can go below the floor set in the United States-Jordan Free Trade Agreement, which is a pretty high floor, but certainly agreements can be higher. In that agreement, in the United States-Jordan Free Trade Agreement, both parties agreed to strive for labor standards articulated by the ILO and for similar improvement in environmental protection. Both countries also agreed to faithfully enforce their environmental and labor laws and not to waive them to gain a trade advantage. The conference bill's fast-track provisions fully adopt the Jordan provisions, and the bill makes it clear that Jordan is the model for every free-trade agreement we negotiate; that is, the bottom floor is Jordan. Again, agreements can go higher. That is a big step forward. In addition, the conference report obtains negotiating objectives seeking to eliminate the worst forms of child labor. Senator Harkin has been a tireless advocate on this issue, and I am proud the conference report includes this important objective. Another contentious issue pertains to investor-state dispute settlement, also known as chapter 11, in reference to provisions on this topic in NAFTA, the North American Free Trade Agreement. The conference report attempts to balance the legitimate needs of U.S. investors with the legitimate needs of Federal, State, and local regulators, and the concerns of environmental and public interest groups. The bill directs trade negotiators to seek provisions that keep Chapter XI-type standards in line with the standards articulated by U.S. courts on similar matters. It urges the creation of a mechanism to rapidly dispose of frivolous complaints and to deter their filing in the first place. And it urges the creation of an appellate body to correct legal errors and ensure consistent interpretation of key provisions by Chapter XI arbitration panels. That is a level playing field. So neither country has an advantage, and neither investors on the one hand, nor municipalities nor environmental groups on the other hand, have an advantage. It is a totally level playing field. I am pleased that, on the whole, we were able to retain the Senate objectives on investment. The second difficult issue within fast track is how we ensure fair trade. To battle unfair trade practices, the United States and most other developed countries maintain antidumping and countervailing duty laws. Another critical U.S. trade law--Section 201--aims to give industries that are seriously injured by import surges some time to adapt. Rather than being protectionist these laws are the remedy to protectionism. And importantly, these laws are completely consistent with U.S. obligations under the WTO. On a political level, these laws also serve as a guarantee to U.S. industries and U.S. workers. Without those critical reassurances, I suspect that the already sagging public support for free trade would evaporate, and new trade agreements would simply become impossible. Now, the Senate overwhelmingly supported an amendment by Senators Dayton and Craig. That amendment provided a process for raising a point of order against a bill that changes trade remedy laws. The House bill did not include this provision--although I expect the House might support such a provision if put to a vote. That said, in the conference process we needed to come up with an alternative if we were going to move forward. I believe the provisions that have come out of that process are very strong--and give Congress an important role before an agreement is finalized. Let me explain. First, this legislation raises concerns regarding recent dispute settlement panels under the WTO that have ruled against U.S. trade laws and limited their operation in unreasonable ways. These decisions clearly go beyond the obligations agreed to in the WTO and undermine the credibility of the world trading system. We must correct these erroneous decisions. That is why our concern regarding WTO dispute settlement is identified at the very outset of the bill--as findings--and why the Administration is directed to develop a strategy to counter or reverse this problem, or lose fast track. This bill also contains a principal negotiating objective directing negotiators not to undermine U.S. trade laws. This fully expresses Congress's view that maintaining trade laws is among the highest priorities in our trade negotiations. Finally--and most importantly, I believe--this bill directs the President to send a report to Congress, 6 months before he signs an agreement, that lays out what he plans to do with respect to our trade laws. This is important. This provision provides that the President--before he reports on any other issue--must lay out any changes that would have to be made to U.S. trade laws. This will give Congress a chance to affect the outcome of the negotiations well before they occur. In fact, to buttress that point, the bill provides for a resolution process where Congress can specifically find that the proposed changes are ``inconsistent'' with the negotiating objectives. I suspect that if either House of Congress were to pass such a resolution--by the way, it is privileged. I mean it is nondebatable. It cannot be filibustered. So the relevant committees--House Ways and Means and Senate Finance-- report this out, and it starts with a resolution offered by any Member of Congress in the respective bodies. I suspect that resolution--again, privileged, not filibustered, not amendable--would be very much listened to by the President. If they don't get that message, there are ways that either House of Congress can derail a trade agreement. But I don't think it would come to that. I think the agreement would be renegotiated in that circumstance--and that is the point. This is a solid fast track bill. If passed, this will be the most progressive fast track bill we have ever had. Let me turn to the portion of the bill that I believe is the most historic. We now have a unique opportunity to expand and improve a program that is a critical part of moving toward a consensus on trade-- that program is Trade Adjustment Assistance. TAA is a program with a simple, but critical, objective: To assist workers injured by imports to adjust and find new jobs. TAA was created back in 1962 as part of an effort to implement the results of the so-called Kennedy Round agreement to expand world trade. President Kennedy and the Congress agreed that there were significant benefits to the country as a whole from expanded trade. They also recognized, however, that some workers and firms would inevitably lose out to increased import competition. TAA was created as part of a new social compact that obliged the Nation to attend to the legitimate needs of those that lose from trade as part of the price for enjoying the benefits of increased trade. Unfortunately, we have not always upheld that bargain in pursuing new trade agreements. This legislation aims to fulfill the bargain struck in 1962. It makes several important changes in the TAA program to make it more effective: First, the conference bill expands the number of workers eligible for benefits. Like the Senate bill, the conference bill covers secondary workers. The conference bill also expands coverage to workers affected by shifts in production. Workers are automatically covered if their plant moves to a country with which the United States has a free trade agreement, or to a country that is part of a preferential trade arrangement. For workers whose plant moves to any other country, benefits are available if the Secretary of Labor determines that imports have increased or are likely to increase. ``Or are likely to increase'' is very important because obviously if a plant moves to another country, imports are likely to increase. Since companies that move offshore typically ship back to the United States, I can think of no circumstances in which relocating production abroad would not be accompanied by or lead to an increase in imports of the product. Moreover, I would note here that the workers do not have to prove that the increase in imports will come from the country to which production relocated. This is a standard that is easily satisfied. In addition, the conference agreement also includes a new program for farmers, ranchers, fishermen, and other agricultural producers. Taken together, these expansions in eligibility are likely to result in a program that would cover under 200,000 workers per year. Moreover, TAA benefits are substantially improved. For the first time in the history, we provide health care coverage for displaced TAA workers. Who would have thought--when we started this process 2 years ago-- that we would be able to achieve such an important and laudable goal? But that is exactly what we accomplished. Workers eligible for TAA will now receive a 65 percent advanceable, refundable tax credit that can be used to pay for COBRA coverage, that is, coverage related to lost health insurance on account of lost jobs or a number of other group coverage options through the States. This assistance is available to workers for as long as they are participating in the TAA program. I am pleased with the health care provisions in the conference report, and I hope that we can bring the same willingness to work together and compromise to other important health care issues before us. The conference report also extends income support from 52 to 78 weeks to allow workers to complete training. And thanks to the efforts of Senator Edwards, it adds a further 26 weeks of training and income support for workers who must begin with remedial education such as English as a second language. To pay for this additional training, the annual training budget is doubled from $110 million to $220 million. For older workers, the conference report offers wage insurance as an alternative to traditional TAA. Workers who qualify and who take lower- paying jobs can receive a wage subsidy of up to 50 percent of the difference between the old and new salary--up to $10,000 over 2 years. The goal is to encourage on-the-job raining and faster re-employment of older workers who generally find it difficult to change careers. The bill included a 2-year wage insurance pilot program. The conference report improves on the Senate bill in two ways--by making the program permanent, and by providing TAA health benefits to workers under the program if the new employer does not provide health insurance. Finally, in addition to expanding benefits and eligibility, the conference agreement makes a number of improvements that streamline the program. It eliminates bureaucracy. It makes the program fairer, more efficient, and more user friendly. And I believe it will meet the ultimate goal of TAA--getting workers back to work more quickly. All told, this bill amounts to a major expansion and a historic re- tooling of TAA--a step that is long overdue. Forty years ago, President Kennedy asked Congress for trade liberalizing legislation. It was a much simpler bill at that time, when trade issues were more narrowly defined, but it was still controversial. For many of the same reasons, that remains controversial today. President Kennedy emphasized the importance of trade for our economy, for our workers, for American leadership, and the world. He also recognized, even then, that trade also creates dislocation and that a new program, trade adjust assistance, was needed to help workers left behind by trade. Congress seized that opportunity and passed the Trade Expansion Act of 1962. Today, we, too, can show the world and America what we stand for. Building not only on the vision of President Kennedy but also on the efforts of the Presidents who followed him, we can show the world that America will lead the way in building a new consensus on international trade. We, too, must seize that opportunity. I urge my colleagues to vote to invoke cloture and to pass the conference report.

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the Foreign and Armed Services Tax Fairness Act of 2002, FAST Fairness, that will not only correct inequities in the current tax code 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 unanimously a bill, H.R. 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 believe we can 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 move forward with this military tax package and incorporate additional provisions already introduced by my colleagues. I would now like to describe the provisions that I have chosen to include in this critical piece of legislation: 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 H.R. 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. I support the provisions of H.R. 5063 and S. 2783, therefore I have included them in this piece of legislation. In 1997, Congress passed legislation revising the taxation of capital gains on the sale of a person's principal residence. The new rule is that up to $250,000, $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 five 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. My proposal would permit service personnel and members of the Foreign Service to suspend the five-year period while away on assignment, meaning those years would count toward neither the two years nor the five year periods. This is a also similar to provisions on H.R. 5063. 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 $180,000 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 $80,000 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 FY2002 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'm happy to include this provision in my legislation. 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. I would like to thank Senator Johnson for introducing S. 2785. It is important that we support all our troops when they are overseas. Some reservists who travel one weekend per month and two weeks in the summer for reserve duty incur significant travel and lodging expenses. 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 some of its provisions in my military tax package. 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 active military, and substantially all of the members must be either current or former active military or widows of former active 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. I have included it in my tax package. Finally, I want to ensure that women in the military can continue their dedicated service even once they have entered motherhood 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 excludable from income. Senator Landrieu has introduced S. 2807, a similar measure. I support this measure and am proud to include it in this piece of legislation. It is my intention to mark-up this legislation soon in hopes that we can move it through the Senate quickly. 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 would like to see a military tax equity bill signed into law by the President before the end of the year. Mr. President, I ask consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the Foreign and Armed Services Tax Fairness Act of 2002, FAST Fairness, that will not only correct inequities in the current tax code 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 unanimously a bill, H.R. 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 believe we can 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 move forward with this military tax package and incorporate additional provisions already introduced by my colleagues. I would now like to describe the provisions that I have chosen to include in this critical piece of legislation: 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 H.R. 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. I support the provisions of H.R. 5063 and S. 2783, therefore I have included them in this piece of legislation. In 1997, Congress passed legislation revising the taxation of capital gains on the sale of a person's principal residence. The new rule is that up to $250,000, $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 five 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. My proposal would permit service personnel and members of the Foreign Service to suspend the five-year period while away on assignment, meaning those years would count toward neither the two years nor the five year periods. This is a also similar to provisions on H.R. 5063. 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 $180,000 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 $80,000 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 FY2002 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'm happy to include this provision in my legislation. 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. I would like to thank Senator Johnson for introducing S. 2785. It is important that we support all our troops when they are overseas. Some reservists who travel one weekend per month and two weeks in the summer for reserve duty incur significant travel and lodging expenses. 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 some of its provisions in my military tax package. 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 active military, and substantially all of the members must be either current or former active military or widows of former active 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. I have included it in my tax package. Finally, I want to ensure that women in the military can continue their dedicated service even once they have entered motherhood 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 excludable from income. Senator Landrieu has introduced S. 2807, a similar measure. I support this measure and am proud to include it in this piece of legislation. It is my intention to mark-up this legislation soon in hopes that we can move it through the Senate quickly. 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 would like to see a military tax equity bill signed into law by the President before the end of the year. Mr. President, I ask consent that the text of the bill be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the Committee on Finance filed a legislative report on S. 2498, the Tax Shelter Transparency Act of June 28, 2002. At the time the report was filed, the Congressional Budget Office cost estimate was not available. The cost estimate has been finalized by the CBO and is attached for public review. I ask unanimous consent that the enclosed cost estimate for S. 2498 be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Madam President, on March 28, 2002, Secretary Veneman declared Montana a drought disaster. This drought designation came two months earlier than in 2001, and eight months earlier than in 2000. The unrelenting drought Montana is suffering has brought economic hardship to our agriculture producers and rural communities. In 1996, the year before the drought, Montana received $847 million in cash receipts from wheat sales. In 2001, four years into the drought, Montana received $317 million in cash receipts, a 62 percent decline. Agriculture is more than 50 percent of my State's economy, and is truly the backbone of my State. The drought not only affects our farmers and ranchers. It is felt throughout our rural communities. Small businesses are being forced to close their doors. Families are moving away to find work. It would be virtually impossible to find a single person who has not been either directly or indirectly affected by the dry conditions that we have. Without our help, without passing natural disaster assistance, it is estimated that 40 percent of Montana's farmers and ranchers will not qualify for operating loans for the 2002 crop year. A large percentage of these hardworking people will lose their land, their homes, their jobs, and their way of life. They will not be purchasing clothes, seed, feed, fertilizer, or equipment in their local stores. They will have to move, take their kids out of school. Small towns will die. It is unfortunate that farmers and ranchers from Montana have to suffer the effects of prolonged drought without Federal assistance because disaster was not as wide spread in 2001 as it has been in 2002. The farmers and ranchers who suffered from severe drought in 2001 should not be penalized, rather rewarded for their persistence and dedication to Montana's vital industry. We desperately need cooperation and support from all sides to prove relief to our producers that have struggled through dry conditions for so long. We need disaster assistance immediately and we need to provide extra assistance for those who have endured drought in 2001 and 2002. It is time to take action and to provide for those who have produced so many vital resources for the people of the United States. I am disappointed that we have not been able to produce legislation that is much needed and long overdue to benefit the hard working farmers and ranchers of the state of Montana and across the country. Many of the agricultural producers in Montana who have worked the same land for generations will no longer be able to survive as farmers or ranchers without disaster relief. Consecutive years of drought have caused economic devastation that soon prevent these agricultural producers from doing their jobs. The effects of this cycle will be devastating to the economy and the people of my state. Unfortunately natural disaster is no longer an issue for just a few States. As of July 22, forty-nine of 50 States are impacted by drought and 36 percent of our country is currently classified as some level of drought. This is an issue that can no longer be ignored. I am pleased today to introduce with Senator Burns a natural disaster package that will provide assistance to producers who have had losses due to natural disasters in 2001 and 2002. It also includes funding for 2001 and 2001 for the Livestock Assistance Program and the American Indian Livestock Feed Program. The package that we introduce today is the same policy that 69 of my Senate Colleagues supported when Senator Enzi and I offered the amendment to the Farm Bill but extended to cover the 2002 crop year as well. It is true that the U.S. Department of Agriculture has utilized the tools that they have available to them. Access to low interest loans, grazing and haying on CRP acreage are important pieces to ensuring that our producers stay in business. However, there is still one major piece of the puzzle missing and that is natural disaster assistance. It is also true that crop insurance is a very important risk management tool. I supported the crop insurance reform bill and I support and understand the importance of crop insurance. More than 90 percent of insurable acres in Montana are insured. Unfortunately for the program to be run in an actuarially sound fashion, producers are helped the least when they hurt the most. When a producer is suffering from consecutive years of drought, their premium increases and their coverage decreases. We have the opportunity to stop that process. To keep our rural communities and economies alive. Rural America is resilient. And like them, I will not give up. Thousands of people are suffering from a relentless drought. They deserve natural disaster assistance and I will continue to fight to ensure they get it. I am pleased to be working with my fellow Senator from Montana, and I ask each of my Senate colleagues to join us in this effort.

Mr. BAUCUS

Mr. BAUCUS. Madam President, on March 28, 2002, Secretary Veneman declared Montana a drought disaster. This drought designation came two months earlier than in 2001, and eight months earlier than in 2000. The unrelenting drought Montana is suffering has brought economic hardship to our agriculture producers and rural communities. In 1996, the year before the drought, Montana received $847 million in cash receipts from wheat sales. In 2001, four years into the drought, Montana received $317 million in cash receipts, a 62 percent decline. Agriculture is more than 50 percent of my State's economy, and is truly the backbone of my State. The drought not only affects our farmers and ranchers. It is felt throughout our rural communities. Small businesses are being forced to close their doors. Families are moving away to find work. It would be virtually impossible to find a single person who has not been either directly or indirectly affected by the dry conditions that we have. Without our help, without passing natural disaster assistance, it is estimated that 40 percent of Montana's farmers and ranchers will not qualify for operating loans for the 2002 crop year. A large percentage of these hardworking people will lose their land, their homes, their jobs, and their way of life. They will not be purchasing clothes, seed, feed, fertilizer, or equipment in their local stores. They will have to move, take their kids out of school. Small towns will die. It is unfortunate that farmers and ranchers from Montana have to suffer the effects of prolonged drought without Federal assistance because disaster was not as wide spread in 2001 as it has been in 2002. The farmers and ranchers who suffered from severe drought in 2001 should not be penalized, rather rewarded for their persistence and dedication to Montana's vital industry. We desperately need cooperation and support from all sides to prove relief to our producers that have struggled through dry conditions for so long. We need disaster assistance immediately and we need to provide extra assistance for those who have endured drought in 2001 and 2002. It is time to take action and to provide for those who have produced so many vital resources for the people of the United States. I am disappointed that we have not been able to produce legislation that is much needed and long overdue to benefit the hard working farmers and ranchers of the state of Montana and across the country. Many of the agricultural producers in Montana who have worked the same land for generations will no longer be able to survive as farmers or ranchers without disaster relief. Consecutive years of drought have caused economic devastation that soon prevent these agricultural producers from doing their jobs. The effects of this cycle will be devastating to the economy and the people of my state. Unfortunately natural disaster is no longer an issue for just a few States. As of July 22, forty-nine of 50 States are impacted by drought and 36 percent of our country is currently classified as some level of drought. This is an issue that can no longer be ignored. I am pleased today to introduce with Senator Burns a natural disaster package that will provide assistance to producers who have had losses due to natural disasters in 2001 and 2002. It also includes funding for 2001 and 2001 for the Livestock Assistance Program and the American Indian Livestock Feed Program. The package that we introduce today is the same policy that 69 of my Senate Colleagues supported when Senator Enzi and I offered the amendment to the Farm Bill but extended to cover the 2002 crop year as well. It is true that the U.S. Department of Agriculture has utilized the tools that they have available to them. Access to low interest loans, grazing and haying on CRP acreage are important pieces to ensuring that our producers stay in business. However, there is still one major piece of the puzzle missing and that is natural disaster assistance. It is also true that crop insurance is a very important risk management tool. I supported the crop insurance reform bill and I support and understand the importance of crop insurance. More than 90 percent of insurable acres in Montana are insured. Unfortunately for the program to be run in an actuarially sound fashion, producers are helped the least when they hurt the most. When a producer is suffering from consecutive years of drought, their premium increases and their coverage decreases. We have the opportunity to stop that process. To keep our rural communities and economies alive. Rural America is resilient. And like them, I will not give up. Thousands of people are suffering from a relentless drought. They deserve natural disaster assistance and I will continue to fight to ensure they get it. I am pleased to be working with my fellow Senator from Montana, and I ask each of my Senate colleagues to join us in this effort.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, what is the parliamentary situation? What is pending? Amendments Nos. 4309 and 4310

Mr. BAUCUS. Mr. President, on behalf of Senator Kennedy, whom I do not see in the Chamber yet, I yield myself 4 minutes.

Mr. BAUCUS. Mr. President, I am going to vote for the Graham-Miller amendment because it is, to my mind, the best proposal before us. It will provide affordable prescription drug coverage throughout the country. I think that is the best policy. But it now appears there may not be enough votes for that amendment. The same, I might add, is also true of the Grassley amendment, which embodies the so-called tripartisan approach. If that turns out to be the case, we will be at a stalemate. At that point, we will have to decide whether there is some way to resolve our remaining differences so we can write a prescription drug bill that can pass. With that in mind, I would like to briefly discuss the three key remaining differences. The first, and probably most significant, is referred to as the delivery model. That may sound like some kind of technical jargon, but it is actually a very important matter and will determine whether we are passing some theoretical, pie-in-the-sky prescription drug benefit that works on paper but fails out in the real world or whether we are passing one that will really get prescription drugs to seniors at affordable prices. There are two approaches. Under the Graham-Miller approach, prescription drugs will simply be added to the existing Medicare Program, with some new incentives for efficient administration. Under the Grassley approach, in contrast, prescription drugs will be provided through a new, market-based system that relies on private insurance companies. People may ask: Why not try something new? What is wrong with a new market-based system? Simply this: The new system is untested and may leave seniors without adequate coverage, especially in rural States such as my State of Montana. Let me explain. Montana seniors, like those living in other rural areas, lack the rich retiree coverage options their urban counterparts enjoy. There just are not as many large companies offering benefits to retired workers in my State of Montana as there are in other parts of the country. We also do not have any Medicare+Choice plans offering free or low- cost drugs to beneficiaries as in places such as Florida or some other parts of the country. In addition, our Medigap rates are higher than the national average and Medicaid coverage is lower. On top of all that, we have been burned in the past by the promises of competition and efficiency. Rural areas often get the short end of the stick when we deregulate and leave people at the complete mercy of market forces that favor highly-populated areas. Consider airline deregulation, managed care, and energy deregulation, to name a few. I don't want to overstate the case. I'm not saying that a new approach is absolutely unworkable. But I am not willing to buy a pig in a poke. I want a reasonable assurance that a private insurance model will work. I know that many other Senators share my concern. How can we address this concern? Is there another way, another idea? There may be. In essence, we would shift to a new, market-oriented system but do it gradually, with plenty of safeguards to make sure that it really works, especially in rural areas and other underserved areas. The resulting system might not be quite as efficient as some would like but in exchange, it is more stable than it otherwise would be under the private model. The second key difference, between the two main proposals, is how much to spend on a prescription drug benefit. Clearly, we are talking about a big investment of government dollars, and even at the amounts we are considering here, we won't buy a benefit that will meet seniors' expectations. The proposals that include a so-called doughnut, or coverage gap, give pause for concern, simply because during some parts of the year, seniors would not receive any assistance. I don't want to belabor the point, as I know many others have talked about this problem over the past few days. To my mind, the Graham-Miller bill is right about on target, and I hope that those who support the Grassley approach can, in the spirit of compromise, agree to devote some further resources to helping our seniors. The final key difference involves what is referred to as ``Medicare reform.'' That means making additional changes to the Medicare system, beyond those necessary to provide a prescription drug benefit. With due respect to the proponents of reform, I believe that we should keep our eye on the ball. We have limited resources. Many of the reforms are untested and, in some cases, risky. We will have other opportunities to consider broader changes to the Medicare program. In light of this, I suggest that we defer the debate about additional reforms until a later date, and concentrate on prescription drug coverage. Those are the key differences. Delivery model, spending, and other reforms. Are they significant? They certainly are. Can they be resolved? If we roll up our sleeves and put the interests of seniors ahead of politics or theory, we will get it done. I yield the floor and encourage my colleagues in the next several days to work to find a compromise that gets the large vote and protects our seniors.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I rise to congratulate the outstanding wrestlers from my home State of Montana who won the Amateur Athletic Union Grand Nationals Wrestling Championships in Shreveport, LA, this past June. This was the first year in which Montana has sent an organized team to the competition, and on behalf of all Montanans, I want to say how proud we are of these athletes and their historic success. In order to win the title, Team Montana, competed in Greco-Roman, Freestyle and Sombo disciplines, which are the three international disciplines of wrestling. Led by Stan Moran of Wolf Point, MT, the team was composed of athletes 5-35 years old, including World Champion Josh Charette; World Silver medalist Rob Charette; and World Bronze medalist Stan Moran, Jr. This is Josh Charette's third consecutive World Open Championship. Josh is currently representing Montana at the Olympic Training Center in the Judo discipline, where he is preparing for the 2004 Olympic Games in Athens. Athough these outstanding athletes are in the spotlight, I also want to take a moment to comment on the strength of the wrestling community in Montana. Whether it is this recent success at the AUU Grand Nationals Wrestling Championships or the success of Montana State University--Northern's wrestling program, Montana's entire wrestling community has a record that it can be very proud of. I know that such success comes only with focus and determination, and I want to commend the families, coaches, and wrestlers who have fostered an environment of excellence. Again, I applaud these Montana wrestlers for their hard work and dedication to their respective disciplines. I wish them continued success in all their endeavors.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the Trade Adjustment Assistance Improvement Act of 2002. You may ask why I am introducing this new bill now. After all, only about a month ago the Senate passed the Trade Act of 2002, a bill which prominently features a landmark expansion and improvement of the current Trade Adjustment Assistance program. We all know that work on that trade bill is not yet complete. And I continue working diligently to get that bill through the conference process and on to the President's desk just as soon as possible. Indeed, I am frustrated that so much time has been lost on this bill. Five weeks in the House as they worked through a very unusual process of appointing conferees. More time in the Senate while Republicans blocked efforts to get the bill to conference. The TAA provisions in the trade bill that passed the Senate back in May are solid and important. They represent a huge improvement over current law. It is critical to remember, however, that they are the product of compromise, a compromise that was reached between Democrats and Republicans in the Senate and with the Administration. In my view, the Senate-passed TAA reforms represent a good first step toward making TAA work for American workers. But we could do better. And we should do better. That is why I am here introducing new TAA legislation today. I think American workers should know that my commitment to improve TAA will not end after we pass the current trade bill. This new bill includes a number of provisions not included in H.R. 3009, the bill that passed the Senate. I would like to summarize a few of the most important new provisions now. First, this bill makes training a full entitlement under TAA. Under current law, TAA income support is an individual entitlement, but the training entitlement is subject to a funding cap. When funds run out, as they frequently do, workers cannot get the training to which they are entitled. In some cases, this results in denial of income support as well. While H.R. 3009 raises the funding cap in an attempt to eliminate funding shortfalls for TAA training, I think this bill takes an even better approach. After all, TAA is fundamentally a retraining program. It just makes sense to make the same commitment to fully fund training that we already do to income support. Second , this bill broadens the scope of eligibility to additional groups of trade-impacted workers who were dropped from TAA in the compromise language passed by the Senate. This includes, most importantly, a much broader definition of secondary workers. In particular, this bill includes full TAA eligibility for downstream secondary workers, rather than limiting that eligibility to workers impacted by NAFTA. It also includes coverage for workers who provide services under contract to trade-impacted firms and to truckers who may be adversely affected by the opening of the border to Mexican trucking services. In sum, this bill aims to make sure that every worker who loses his job as a result of trade gets fair and equitable access to services under TAA. Third, this bill creates an easy and efficient process for providing TAA benefits on an industry-wide rather than firm-by-firm basis. We all know that there are industries in this country, like softwood lumber, steel, and textiles, just to name a few, that are experiencing declining employment on a national basis as a direct consequence of trade. The bill addresses the problem two ways. In cases where an industry has already demonstrated adverse trade effects in a section 201 or ``safeguard'' investigation, the President must provide industry-wide TAA certification as part of the remedy. It also requires the Secretary of Labor to use an industry-wide approach to certification in other industries when there is evidence that trade-related worker displacements are national in scope. Finally, we restore the 75 percent health care tax credit for TAA participants that was reduced to 70 percent in the compromise trade bill. We also give workers additional choices for obtaining health care coverage. Without strong and meaningful improvements in the TAA program, I think we would not have seen the wide, bipartisan support for the overall trade bill that allowed it to pass the Senate by a vote of 66- 30. For that reason, I view the Senate-passed TAA bill as a floor for what can reasonably be agreed to in conference. I don't think that something weaker is going to get us to a majority when the Senate considers the conference report. As I mentioned before, many of the provisions included in this new bill were dropped from the trade bill that recently passed the Senate as part of a bipartisan compromise. Many, if not all, of them fall easily within the scope of the upcoming conference. While I plan to vigorously defend the Senate bill in conference, I want to remind my colleagues in the House that the Senate bill already represents a bipartisan compromise, one worked out with the Administration. In passing the rule to go to conference, my colleagues in the House have passed a bill that would completely gut the Senate-passed provisions. For example: the restrictions on coverage for secondary workers are so strict as to effectively eliminate coverage; the bill would not cover shifts in production to non-NAFTA countries; and the health care benefits have been significantly weakened. They would cover many fewer workers, for a shorter period of time, with reduced benefits that may be of little use. I would suggest to my colleagues in the House that efforts to weaken the Senate bill will be met with equally strong efforts to strengthen it. It should come as no surprise that, if my House colleagues persist in trying to weaken TAA, I will feel obligated to raise some of the provisions that were dropped in the Senate negotiations. As I have said many times, I believe an improved TAA program is critical to regaining public confidence in a liberal trade policy for our country. In future, I intend to keep working toward the goal of improving TAA in every way available. I think this new bill points us in the right direction and I am pleased to be introducing it today.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the Trade Adjustment Assistance Improvement Act of 2002. You may ask why I am introducing this new bill now. After all, only about a month ago the Senate passed the Trade Act of 2002, a bill which prominently features a landmark expansion and improvement of the current Trade Adjustment Assistance program. We all know that work on that trade bill is not yet complete. And I continue working diligently to get that bill through the conference process and on to the President's desk just as soon as possible. Indeed, I am frustrated that so much time has been lost on this bill. Five weeks in the House as they worked through a very unusual process of appointing conferees. More time in the Senate while Republicans blocked efforts to get the bill to conference. The TAA provisions in the trade bill that passed the Senate back in May are solid and important. They represent a huge improvement over current law. It is critical to remember, however, that they are the product of compromise, a compromise that was reached between Democrats and Republicans in the Senate and with the Administration. In my view, the Senate-passed TAA reforms represent a good first step toward making TAA work for American workers. But we could do better. And we should do better. That is why I am here introducing new TAA legislation today. I think American workers should know that my commitment to improve TAA will not end after we pass the current trade bill. This new bill includes a number of provisions not included in H.R. 3009, the bill that passed the Senate. I would like to summarize a few of the most important new provisions now. First, this bill makes training a full entitlement under TAA. Under current law, TAA income support is an individual entitlement, but the training entitlement is subject to a funding cap. When funds run out, as they frequently do, workers cannot get the training to which they are entitled. In some cases, this results in denial of income support as well. While H.R. 3009 raises the funding cap in an attempt to eliminate funding shortfalls for TAA training, I think this bill takes an even better approach. After all, TAA is fundamentally a retraining program. It just makes sense to make the same commitment to fully fund training that we already do to income support. Second , this bill broadens the scope of eligibility to additional groups of trade-impacted workers who were dropped from TAA in the compromise language passed by the Senate. This includes, most importantly, a much broader definition of secondary workers. In particular, this bill includes full TAA eligibility for downstream secondary workers, rather than limiting that eligibility to workers impacted by NAFTA. It also includes coverage for workers who provide services under contract to trade-impacted firms and to truckers who may be adversely affected by the opening of the border to Mexican trucking services. In sum, this bill aims to make sure that every worker who loses his job as a result of trade gets fair and equitable access to services under TAA. Third, this bill creates an easy and efficient process for providing TAA benefits on an industry-wide rather than firm-by-firm basis. We all know that there are industries in this country, like softwood lumber, steel, and textiles, just to name a few, that are experiencing declining employment on a national basis as a direct consequence of trade. The bill addresses the problem two ways. In cases where an industry has already demonstrated adverse trade effects in a section 201 or ``safeguard'' investigation, the President must provide industry-wide TAA certification as part of the remedy. It also requires the Secretary of Labor to use an industry-wide approach to certification in other industries when there is evidence that trade-related worker displacements are national in scope. Finally, we restore the 75 percent health care tax credit for TAA participants that was reduced to 70 percent in the compromise trade bill. We also give workers additional choices for obtaining health care coverage. Without strong and meaningful improvements in the TAA program, I think we would not have seen the wide, bipartisan support for the overall trade bill that allowed it to pass the Senate by a vote of 66- 30. For that reason, I view the Senate-passed TAA bill as a floor for what can reasonably be agreed to in conference. I don't think that something weaker is going to get us to a majority when the Senate considers the conference report. As I mentioned before, many of the provisions included in this new bill were dropped from the trade bill that recently passed the Senate as part of a bipartisan compromise. Many, if not all, of them fall easily within the scope of the upcoming conference. While I plan to vigorously defend the Senate bill in conference, I want to remind my colleagues in the House that the Senate bill already represents a bipartisan compromise, one worked out with the Administration. In passing the rule to go to conference, my colleagues in the House have passed a bill that would completely gut the Senate-passed provisions. For example: the restrictions on coverage for secondary workers are so strict as to effectively eliminate coverage; the bill would not cover shifts in production to non-NAFTA countries; and the health care benefits have been significantly weakened. They would cover many fewer workers, for a shorter period of time, with reduced benefits that may be of little use. I would suggest to my colleagues in the House that efforts to weaken the Senate bill will be met with equally strong efforts to strengthen it. It should come as no surprise that, if my House colleagues persist in trying to weaken TAA, I will feel obligated to raise some of the provisions that were dropped in the Senate negotiations. As I have said many times, I believe an improved TAA program is critical to regaining public confidence in a liberal trade policy for our country. In future, I intend to keep working toward the goal of improving TAA in every way available. I think this new bill points us in the right direction and I am pleased to be introducing it today.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to recognize an outstanding Montanan whose distinguished career has literally changed the course of two generations of families in the Flathead Valley. In the 1950's a college student from Southern California came to Montana to be a camp counselor on Flathead Lake. As many do, he fell in love with the area and pledged to return after completing medical school to begin his practice in Kalispell, MT. True to his word, Dr. Van Kirke Nelson, his wife Helen and their children Greg, Julie and Kathy packed all their belongings in a beer truck and moved to Kalispell where Kirke became the town's first medical specialist, opening his practice as an OB-GYN in 1962. Forty years, two children, Nancy and Doug, and ten grandchildren later, my dear friend Kirke Nelson retired from active medical practice on July 1, 2002, leaving behind a legacy that has enriched the very fabric of the community to which he and his family mean so much. For 40 years, Dr. Van Kirke Nelson delivered the town's babies. Lots of babies. So many, in fact, that it is not unusual for him to look at a list of Flathead High graduates and determine that he has delivered a majority of them. Think of it this way. At 10 babies a month, 12 months a year, for 41 years, Kirke delivered roughly 4,920 babies in his career. To put that in perspective, those 4,920 new Montanans are a larger group than the entire population of 22 of Montana's 56 counties. But the quality of Kirke's career cannot be measured in numbers. Every day he changed lives and made the Flathead Valley and Montana a better place to live. Partners, co-workers, patients and their families all know what I mean. There are more stories than one can possibly tell, and you can be assured that although he is retired, there will be many, many more stories yet to come. Because you see, Kirke Nelson will never retire from making a difference in the world around him. The phone may not ring in the middle of the night anymore, but knowing Kirke as I do, that just means he'll just be better rested for the challenges that lay ahead. I know no better Montanans than Kirke and Helen Nelson. I wish for them in this retirement an enriched life with each other and their wonderful family. There are not thanks enough for this kind of career that Kirke has shared with us, but that's what makes America so great. Ours is a country where dreams come true. Where promises are our bond. And where ordinary careers become extraordinary because of the people who live them. Kirke Nelson's career has been truly extraordinary. And on behalf of a grateful community, State and nation, it is my honor to rise today to say thank you.

Mr. BAUCUS

Mr. BAUCUS. I also agree with the remarks of my colleagues. As chairman of the Finance Committee, which also has jurisdiction over pension plans, I join the chairman of the HELP Committee and the ranking members of both the Finance and HELP Committees in urging the chairman and ranking member of the Banking Committee to work with us as you go to conference on S. 2673, to ensure that the blackout provisions are drafted in such a way as to ensure the proper operation of the pension system.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I rise today to briefly comment on my vote against Senator Kennedy's amendment to the Defense authorization bill. This amendment would have resulted in a fundamental change in the way the Department of Defense is structured. It mandated a new policy for every new, modified, or renewed contract for all noninherently governmental services within the Department of Defense. The consequences of such a change at this point in time would not, in my estimation, serve the best interests of my State or of this Nation. Small businesses are an integral part of Montana's economy. Small businesses meet the diverse, everyday needs of Montana's citizens; many Montana small businesses also successfully compete for federal contracts. The provisions of this amendment would have priced many small businesses out of Federal contract competitions. In light of Montana's struggling economy, I could not vote for an amendment that would have increased small business costs while creating an insurmountable hurdle that need not exist. I am also keenly aware of the human capital crunch that the Federal Government currently faces. The Department of Defense faces particular challenges as they seek to maintain readiness while adjusting to post- cold war and post-September 11 realities. This amendment would have resulted in increased personnel costs for the Department of Defense, but, more importantly, it would have delayed contract awards and adversely affected mission effectiveness. This is not in the best interest of our nation's security or economic needs. I am a strong supporter of labor standards in both the private and public sectors. Upholding labor standards for all Montanans is a top priority for me. I also firmly believe that the Federal Government needs to secure the best services, whether public or private, for the taxpayer dollars it expends. In examining this amendment, I felt that it did not uphold these standards. Instead, the amendment held the potential to harm Montana's small business viability and exacerbate the public-sector federal human capital shortage.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the ``Health Insurance Access Act'' of 2002. This bill addresses one of the most serious problems facing the United States. The problem of the uninsured. According to recent census data, 38 million Americans lack health insurance coverage. More than the population of twenty-three States. Plus the District of Columbia. And lack of coverage is an even greater problem in rural areas. In Montana, one in five citizens goes without health insurance. As premiums sky-rocket, I'm worried that this number may grow even higher. For America's uninsured, the consequences of going without health coverage can be devastating. Put plainly, uninsured Americans are less healthy than those with health insurance. They delay seeking medical care or go without treatment altogether that could prevent and detect crippling illnesses. Illnesses like diabetes, heart disease, and cancer. The uninsured are far less likely to receive health services if they are injured or become ill. These factors take an enormous personal toll on the lives of the uninsured. They are sicker and less productive in the workplace. Their children are less likely to survive past infancy. And they must struggle with the knowledge that a serious injury or illness in their family might push them to the brink of financial ruin. I just recently saw a statistic that women with breast cancer who lack health insurance are 49 percent more likely to die than women who have insurance. Unfortunately, this statistic is just one of countless other statistics about the effects that lack of health insurance has on peoples' health and their lives. But these personal struggles are not the only affect of America's uninsured problem. Because when the uninsured become so sick that they must finally seek emergency treatment, there is no one to pay for it. No insurance company. No government program. So who absorbs the cost of this uncompensated medical care? We all do. In the form of higher health care costs. Higher and higher premiums at a time when the cost of health care is already rising out of control. The situation is becoming critical. And I believe the time for talking has ended. It is time for us to examine solutions instead of talking about the problem. That is why I have joined with Senator Gordon Smith to introduce this important piece of legislation. Our bill would lift millions of Americans out of the ranks of the uninsured. It would give millions of families the peace of mind that comes from knowing they will receive the care they need, when they need it. And it would lighten the load of uncompensated care on our over-burdened health care system. Our bill attacks the problem of the uninsured on several fronts. As you know, the 38 million uninsured Americans are a diverse mix of people. Some work for small employers, who simply can't afford the high cost of health insurance. Others have pre-existing health conditions. These conditions translate into unaffordable, even astronomical, health care insurance premiums. Some uninsured Americans fall just beyond the eligibility levels for public programs like Medicaid. And many are near-elderly individuals, too young to qualify for Medicare, yet old enough that any health condition at all means expensive premiums or high deductibles. In fact, the fastest growing segment of the uninsured today is the near-elderly population. Our bill addresses each of these populations. The first part of our bill would target uninsured Americans who work for small businesses. It would give a tax credit of up to 50 percent to small firms, those with 50 or fewer employees, for the cost of health insurance premiums for their employees. The credit is not limited only to employers who do not currently provide health benefits. It is available to all qualified small employers. The credit will give small employers the extra resources they need to extend, or continue to offer, health benefits to millions of hard-working Americans and their families. One thing I heard from my constituents traveling around the State, in addition to grief over increasing premiums, is that the health insurance options available to individuals and small employers are limited. If they could pool their resources together, even across State lines, they might be able to reduce their costs as a group. In response to these concerns, the second part of our bill would provide funding to states, private employer groups, and associations to create purchasing pools. These purchasing pools, or alliances, as we call them in this bill, would provide small employers with affordable health coverage options, which would, accordingly, allow them to take maximum advantage of their tax credits. For individuals with high cost health conditions, our bill would spend $50 million annually to support state high risk pools. These pools serve a dual purpose. They offer high-risk individuals a place to purchase affordable health coverage. And, by isolating the costs of high-risk individuals, they help lower premiums for those who are not considered high risk or high cost. Fourth, our bill would also allow states to expand health insurance coverage to the parents of children who are eligible for Medicaid and the Children's Health Insurance Program, or CHIP. This will reach an estimated four million low-income parents who do not currently meet eligibility levels for health insurance coverage under public programs. It will also help us cover even more kids under CHIP, kids who are eligible for coverage but not currently enrolled. Finally, our bill would allow uninsured Americans between the ages of 62 and 65 to buy into Medicare. Under current law, Americans in this age group are stuck in a bind: not old enough to qualify for Medicare, but unable to afford the high cost of private health insurance options because of their age or health condition. This predicament explains why they represent the fastest-growing group of uninsured. Our bill would offer the near-elderly a more affordable, quality health care package to tide them over until they reach 65. All told, these efforts would expand access to health insurance coverage to 10 million Americans who are currently uninsured. It's not a panacea. But it's a start. I commend Senator Smith for his hard work on this issue. I believe our bipartisan efforts prove that covering the uninsured is not a Democratic issue. It's not a Republican issue. And it's not a Montana or an Oregon issue. It's an American issue. I hope my colleagues will join this fight by helping us pass this legislation, and taking a solid step towards providing quality, affordable health insurance to all Americans.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGATRUST Act, the Maximum Growth for America Through the Highway Trust Fund. Next year, the Congress must reauthorize highway and transit programs and the system of Federal financing for them. This is a very important issue for our Nation. The highway and transit programs are very important in every State. Very few other pieces of legislation effect our country's citizens and businesses more directly than the highway bill. These are our ways for moving goods and people. They are key to our economy and our ability to connect to one another. This country needs good, safe highways in order to cross great distances, and highway and transit construction and maintenance is an important part of every State's economy. In order to facilitate our work in reauthorizing these programs, I plan to introduce a series of bills concerning important issues that Congress must address in that legislation. This will be the first of those bills, a proposal concerning revenues for the highway trust fund. But unlike other bills I will introduce, this one must pass more quickly because it sets the foundation for the other bills I will be introducing later. This bill will represent how this country will help pay for our highway and transit needs over the next several years. The MEGATRUST Act represents an important step in the effort to strengthen our Nation's economy, and improve its quality of life, by investing in transportation. It would increase revenues into the highway trust fund by several billion dollars annually by making some needed corrections in the way Federal revenues are credited to the highway trust fund. Nothing in this bill increases any tax. I repeat that. Nothing in this bill increases any tax. Federal dollars to help States and localities improve their highways and transit systems are derived largely from the Federal highway trust fund. Under the system today, revenues from highway user taxes are deposited into the highway trust fund, and, more specifically, into separate accounts within the fund for highways and for transit. Those are two separate accounts. These revenues are, in turn, distributed to States and localities for transportation investments that truly to improve our lives, create jobs, and make our economy better. This trust fund mechanism has been widely regarded as successful. But, as always, we must make adjustments to meet new challenges. This bill would improve and extend this important financing mechanism, principally by making sure that certain revenues not currently credited to the highway trust fund are, in fact, placed in that fund. The MEGATRUST Act does several things. First, it will ensure that taxes paid on gasohol are fully credited to the highway account of the highway trust fund. Today, when gasohol is taxed, the mass transit account of the highway trust fund receives its full share of revenues, as if the fuel were gasoline. But 2.5 cents of the gas tax per gallon that is imposed on gasohol is credited to the general fund of the Treasury, not to the highway account. So the MEGATRUST Act ensures that those 2.5 cents per gallon go to the highway account. Second, the MEGATRUST Act will ensure that the highway system does not bear the cost of our national policy to develop and promote the use of gasohol. This tax rate preference is part of our national policy to advance the use of gasohol. I believe the ethanol subsidy is good energy policy, good agriculture policy, and good tax policy. Yet ironically, it is the highway trust fund that bears the burden of the subsidy. Since it is good general policy--that is, gasohol--I believe the general fund should bear the burden of the subsidy, not the highway trust fund. Gasohol, as a fuel, is taxed 5.3 cents per gallon less than gasoline. But gasohol-fueled vehicles cause the same wear and tear on roads as gasoline-fueled vehicles. That is obvious. They use the same roads, travel the same distances, et cetera. Ensuring necessary and affordable energy supplies is important to the quality of life and economic prosperity of all Americans. Policies to achieve these objectives, however, should not come at the expense of transportation infrastructure improvements. Accordingly, the MEGATRUST Act would leave the gasohol tax rate preference in place but credit the highway account of the highway trust fund with revenue equal to that forgone to the Treasury by the gasohol tax preference. Third, the MEGATRUST Act credits both the highway and mass transit accounts of the highway trust fund with interest starting in fiscal year 2004. Today, the highway trust fund is one of the few trust funds in the Federal budget that is not credited with interest on its unspent balance, which is highly inappropriate. The MEGATRUST Act would change this in order to make sure that collected highway user taxes are to be put to work for better transportation for our citizens. Fourth, the MEGATRUST Act would extend the basic highway user taxes and the highway trust fund so they do not expire. And last, the MEGATRUST Act would require the creation of an important commission concerning the future financing of the Federal highway and transit programs. Why is that important? While the current mechanism has worked well, we know that cars will become more fuel efficient and advancing technology will only bring us closer to increased fuel efficiency. Other changes are possible as well in our dynamic economy. While major changes will not occur overnight, we have to be ready for them. We have to understand what is likely to happen so we can consider making adjustments in the highway trust fund and its revenue streams, so we are not caught off guard and unable to adequately fund our transportation system. What am I saying? I am basically saying that the hybrid fuel vehicles--it could be fuels cells, other technologies for our automobiles of the future--they do not use gasoline, they do not use gasohol, therefore, revenue would not be placed in the highway trust fund. We have to anticipate all of those changes so our highways are adequately funded regardless of the types of cars and regardless of the type of energy that is used to propel those cars. I especially thank Senators Harkin, Warner, Crapo, Graham of Florida, Reid, Daschle, Carnahan, Bond, and Craig for working so closely with me on this legislation. In sum, through this highway trust fund proposal, I want to make clear to my colleagues that there are ways to increase revenue into the highway trust fund without raising taxes. We will need to increase highway trust fund resources to help us all structure a successful reauthorization bill next year, and I look forward to working closely with my colleagues to that end.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am introducing a bill today that is extremely important to the people of my State of Montana. Why is it so important? Because I hope it will take us one step closer to achieving permanent protections for Montana's magnificent Rocky Mountain Front. The Front, as we call it back home, is part of one of the largest and most intact wild places left in the lower 48. To the North, the Front includes a 200 square mile area known as the Badger-Two Medicine in the Lewis and Clark National Forest. This area sits just south-east of Glacier National Park, one of our greatest national treasures. The Badger-Two Medicine area is sacred ground to the Blackfeet Tribe. In January of 2002, portions of the Badger-Two, known as the Badger-Two Medicine Blackfoot Traditional Cultural District, were declared eligible for listing in the National Register of Historic Places. South of the Badger-Two, the Front includes a 400 square mile strip of national forest land and about 20 square miles of BLM lands, including three BLM Outstanding Natural Areas. Not only the Front still retain almost all its native species, only bison are missing, but it also harbors the country's largest bighorn sheep herd and second largest elk herd. The Rocky Mountain Front supports one of the largest populations of grizzly bears south of Canada and is the only place in the lower 48 States where grizzly bears still roam from the mountains to their historic range on the plains. Because of this exceptional habitat, the Front offers world renowned hunting, fishing and recreational opportunities. Sportsmen, local land owners, hikers, local communities and many other Montanans have worked for decades to protect and preserve the Front for future generations. In short, a majority of Montanans feel very strongly that oil and gas development, and Montana's Rocky Mountain Front, just don't mix. The habitat is too rich, the landscape too important, to subject it to the roads, drills, pipelines, industrial equipment, chemicals, noise, and human activity that come with oil and gas development. Building upon a significant public and private conservation investment and following an extensive public comment process, the Lewis and Clark National Forest decided in 1997 to withdraw for 15 years 356,000 acres in the Front from any new oil and gas leasing. This was a significant first step in protecting the Front from developing that I wholeheartedly supported. However, in many parts of the Rocky Mountain Front, oil and gas leases exist that pre-date the 1997 decision. These leaseholders have invested time and resources in acquiring their leases. Several leaseholders have applied to the federal government for permits to drill. These leases are the subject of my proposed bill. History has shown that energy exploration and development in the Front is likely to result in expensive and time consuming environmental studies and litigation. This process rarely ends with a solution that is satisfactory to the oil and gas lessee. For example, in the late 1980's both Chevron and Fina applied for permits to drill in the Badger Two Medicine portion of the Front. After millions of dollars spent on studies and years of public debate, Chevron abandoned or assigned all of its lease rights, and Fina sold its lease rights back to the original owner. Therefore, I think we should be fair to those leaseholders. We want them to continue to provide for our domestic oil and gas needs, but they are going to have a long, difficult and expensive road if they wish to develop oil and gas in the Rocky Mountain Front. My legislation would direct the Interior Department to evaluate non- producing leases in the Rocky Mountain Front and look at opportunities to cancel these leases, in exchange for allowing leaseholders to explore for oil and gas somewhere else, namely in the Gulf of Mexico or in the State of Montana. In conducting this evaluation, the Secretary would have to consult with leaseholders, with the State of Montana and the public and other interested parties. When Interior concludes this study in two years, the bill calls for the agency to make recommendations to Congress and the Energy and Natural Resources Committee on the advisability of pursuing lease exchanges in the Front and any changes in law and regulation needed to enable the Secretary to undertake such an exchange. Finally, in order to allow the Secretary to conduct this study, my bill would continue the current lease suspension in the Badger-Two Medicine Area for three more years. This lease suspension would only apply to the Badger-Two Medicine Area, not the entire Front. That's it, that's all my bill does. It doesn't predetermine any outcome, it doesn't impact any existing exploration activities or environmental review processes. It just creates a process through which the federal government, the people of Montana and leaseholders can finally have a real, open and honest discussion about the fate of the Rocky Mountain Front. We should look for ways to fairly compensate leaseholders for investments they've made in their leases if they decide to leave the Front rather than waste years and millions fighting to explore for uncertain oil and gas reserves. Because, a lot of Montanans don't want to see the Front developed, and they will fight to protect it. Including me. So, developers can wait years, or decades, or most likely never, for oil and gas to flow from the Front. Or we can look at ways to encourage domestic production much sooner, in much more cost effective, appropriate and efficient ways somewhere else. That is what I hope this legislation will accomplish, and I hope my colleagues in the Senate will support it.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to introduce the ``Health Insurance Access Act'' of 2002. This bill addresses one of the most serious problems facing the United States. The problem of the uninsured. According to recent census data, 38 million Americans lack health insurance coverage. More than the population of twenty-three States. Plus the District of Columbia. And lack of coverage is an even greater problem in rural areas. In Montana, one in five citizens goes without health insurance. As premiums sky-rocket, I'm worried that this number may grow even higher. For America's uninsured, the consequences of going without health coverage can be devastating. Put plainly, uninsured Americans are less healthy than those with health insurance. They delay seeking medical care or go without treatment altogether that could prevent and detect crippling illnesses. Illnesses like diabetes, heart disease, and cancer. The uninsured are far less likely to receive health services if they are injured or become ill. These factors take an enormous personal toll on the lives of the uninsured. They are sicker and less productive in the workplace. Their children are less likely to survive past infancy. And they must struggle with the knowledge that a serious injury or illness in their family might push them to the brink of financial ruin. I just recently saw a statistic that women with breast cancer who lack health insurance are 49 percent more likely to die than women who have insurance. Unfortunately, this statistic is just one of countless other statistics about the effects that lack of health insurance has on peoples' health and their lives. But these personal struggles are not the only affect of America's uninsured problem. Because when the uninsured become so sick that they must finally seek emergency treatment, there is no one to pay for it. No insurance company. No government program. So who absorbs the cost of this uncompensated medical care? We all do. In the form of higher health care costs. Higher and higher premiums at a time when the cost of health care is already rising out of control. The situation is becoming critical. And I believe the time for talking has ended. It is time for us to examine solutions instead of talking about the problem. That is why I have joined with Senator Gordon Smith to introduce this important piece of legislation. Our bill would lift millions of Americans out of the ranks of the uninsured. It would give millions of families the peace of mind that comes from knowing they will receive the care they need, when they need it. And it would lighten the load of uncompensated care on our over-burdened health care system. Our bill attacks the problem of the uninsured on several fronts. As you know, the 38 million uninsured Americans are a diverse mix of people. Some work for small employers, who simply can't afford the high cost of health insurance. Others have pre-existing health conditions. These conditions translate into unaffordable, even astronomical, health care insurance premiums. Some uninsured Americans fall just beyond the eligibility levels for public programs like Medicaid. And many are near-elderly individuals, too young to qualify for Medicare, yet old enough that any health condition at all means expensive premiums or high deductibles. In fact, the fastest growing segment of the uninsured today is the near-elderly population. Our bill addresses each of these populations. The first part of our bill would target uninsured Americans who work for small businesses. It would give a tax credit of up to 50 percent to small firms, those with 50 or fewer employees, for the cost of health insurance premiums for their employees. The credit is not limited only to employers who do not currently provide health benefits. It is available to all qualified small employers. The credit will give small employers the extra resources they need to extend, or continue to offer, health benefits to millions of hard-working Americans and their families. One thing I heard from my constituents traveling around the State, in addition to grief over increasing premiums, is that the health insurance options available to individuals and small employers are limited. If they could pool their resources together, even across State lines, they might be able to reduce their costs as a group. In response to these concerns, the second part of our bill would provide funding to states, private employer groups, and associations to create purchasing pools. These purchasing pools, or alliances, as we call them in this bill, would provide small employers with affordable health coverage options, which would, accordingly, allow them to take maximum advantage of their tax credits. For individuals with high cost health conditions, our bill would spend $50 million annually to support state high risk pools. These pools serve a dual purpose. They offer high-risk individuals a place to purchase affordable health coverage. And, by isolating the costs of high-risk individuals, they help lower premiums for those who are not considered high risk or high cost. Fourth, our bill would also allow states to expand health insurance coverage to the parents of children who are eligible for Medicaid and the Children's Health Insurance Program, or CHIP. This will reach an estimated four million low-income parents who do not currently meet eligibility levels for health insurance coverage under public programs. It will also help us cover even more kids under CHIP, kids who are eligible for coverage but not currently enrolled. Finally, our bill would allow uninsured Americans between the ages of 62 and 65 to buy into Medicare. Under current law, Americans in this age group are stuck in a bind: not old enough to qualify for Medicare, but unable to afford the high cost of private health insurance options because of their age or health condition. This predicament explains why they represent the fastest-growing group of uninsured. Our bill would offer the near-elderly a more affordable, quality health care package to tide them over until they reach 65. All told, these efforts would expand access to health insurance coverage to 10 million Americans who are currently uninsured. It's not a panacea. But it's a start. I commend Senator Smith for his hard work on this issue. I believe our bipartisan efforts prove that covering the uninsured is not a Democratic issue. It's not a Republican issue. And it's not a Montana or an Oregon issue. It's an American issue. I hope my colleagues will join this fight by helping us pass this legislation, and taking a solid step towards providing quality, affordable health insurance to all Americans.

Mr. BAUCUS. Mr. President, I rise today to introduce the MEGATRUST Act, the Maximum Growth for America Through the Highway Trust Fund. Next year, the Congress must reauthorize highway and transit programs and the system of Federal financing for them. This is a very important issue for our Nation. The highway and transit programs are very important in every State. Very few other pieces of legislation effect our country's citizens and businesses more directly than the highway bill. These are our ways for moving goods and people. They are key to our economy and our ability to connect to one another. This country needs good, safe highways in order to cross great distances, and highway and transit construction and maintenance is an important part of every State's economy. In order to facilitate our work in reauthorizing these programs, I plan to introduce a series of bills concerning important issues that Congress must address in that legislation. This will be the first of those bills, a proposal concerning revenues for the highway trust fund. But unlike other bills I will introduce, this one must pass more quickly because it sets the foundation for the other bills I will be introducing later. This bill will represent how this country will help pay for our highway and transit needs over the next several years. The MEGATRUST Act represents an important step in the effort to strengthen our Nation's economy, and improve its quality of life, by investing in transportation. It would increase revenues into the highway trust fund by several billion dollars annually by making some needed corrections in the way Federal revenues are credited to the highway trust fund. Nothing in this bill increases any tax. I repeat that. Nothing in this bill increases any tax. Federal dollars to help States and localities improve their highways and transit systems are derived largely from the Federal highway trust fund. Under the system today, revenues from highway user taxes are deposited into the highway trust fund, and, more specifically, into separate accounts within the fund for highways and for transit. Those are two separate accounts. These revenues are, in turn, distributed to States and localities for transportation investments that truly to improve our lives, create jobs, and make our economy better. This trust fund mechanism has been widely regarded as successful. But, as always, we must make adjustments to meet new challenges. This bill would improve and extend this important financing mechanism, principally by making sure that certain revenues not currently credited to the highway trust fund are, in fact, placed in that fund. The MEGATRUST Act does several things. First, it will ensure that taxes paid on gasohol are fully credited to the highway account of the highway trust fund. Today, when gasohol is taxed, the mass transit account of the highway trust fund receives its full share of revenues, as if the fuel were gasoline. But 2.5 cents of the gas tax per gallon that is imposed on gasohol is credited to the general fund of the Treasury, not to the highway account. So the MEGATRUST Act ensures that those 2.5 cents per gallon go to the highway account. Second, the MEGATRUST Act will ensure that the highway system does not bear the cost of our national policy to develop and promote the use of gasohol. This tax rate preference is part of our national policy to advance the use of gasohol. I believe the ethanol subsidy is good energy policy, good agriculture policy, and good tax policy. Yet ironically, it is the highway trust fund that bears the burden of the subsidy. Since it is good general policy--that is, gasohol--I believe the general fund should bear the burden of the subsidy, not the highway trust fund. Gasohol, as a fuel, is taxed 5.3 cents per gallon less than gasoline. But gasohol-fueled vehicles cause the same wear and tear on roads as gasoline-fueled vehicles. That is obvious. They use the same roads, travel the same distances, et cetera. Ensuring necessary and affordable energy supplies is important to the quality of life and economic prosperity of all Americans. Policies to achieve these objectives, however, should not come at the expense of transportation infrastructure improvements. Accordingly, the MEGATRUST Act would leave the gasohol tax rate preference in place but credit the highway account of the highway trust fund with revenue equal to that forgone to the Treasury by the gasohol tax preference. Third, the MEGATRUST Act credits both the highway and mass transit accounts of the highway trust fund with interest starting in fiscal year 2004. Today, the highway trust fund is one of the few trust funds in the Federal budget that is not credited with interest on its unspent balance, which is highly inappropriate. The MEGATRUST Act would change this in order to make sure that collected highway user taxes are to be put to work for better transportation for our citizens. Fourth, the MEGATRUST Act would extend the basic highway user taxes and the highway trust fund so they do not expire. And last, the MEGATRUST Act would require the creation of an important commission concerning the future financing of the Federal highway and transit programs. Why is that important? While the current mechanism has worked well, we know that cars will become more fuel efficient and advancing technology will only bring us closer to increased fuel efficiency. Other changes are possible as well in our dynamic economy. While major changes will not occur overnight, we have to be ready for them. We have to understand what is likely to happen so we can consider making adjustments in the highway trust fund and its revenue streams, so we are not caught off guard and unable to adequately fund our transportation system. What am I saying? I am basically saying that the hybrid fuel vehicles--it could be fuels cells, other technologies for our automobiles of the future--they do not use gasoline, they do not use gasohol, therefore, revenue would not be placed in the highway trust fund. We have to anticipate all of those changes so our highways are adequately funded regardless of the types of cars and regardless of the type of energy that is used to propel those cars. I especially thank Senators Harkin, Warner, Crapo, Graham of Florida, Reid, Daschle, Carnahan, Bond, and Craig for working so closely with me on this legislation. In sum, through this highway trust fund proposal, I want to make clear to my colleagues that there are ways to increase revenue into the highway trust fund without raising taxes. We will need to increase highway trust fund resources to help us all structure a successful reauthorization bill next year, and I look forward to working closely with my colleagues to that end.

Mr. BAUCUS. Mr. President, I am introducing a bill today that is extremely important to the people of my State of Montana. Why is it so important? Because I hope it will take us one step closer to achieving permanent protections for Montana's magnificent Rocky Mountain Front. The Front, as we call it back home, is part of one of the largest and most intact wild places left in the lower 48. To the North, the Front includes a 200 square mile area known as the Badger-Two Medicine in the Lewis and Clark National Forest. This area sits just south-east of Glacier National Park, one of our greatest national treasures. The Badger-Two Medicine area is sacred ground to the Blackfeet Tribe. In January of 2002, portions of the Badger-Two, known as the Badger-Two Medicine Blackfoot Traditional Cultural District, were declared eligible for listing in the National Register of Historic Places. South of the Badger-Two, the Front includes a 400 square mile strip of national forest land and about 20 square miles of BLM lands, including three BLM Outstanding Natural Areas. Not only the Front still retain almost all its native species, only bison are missing, but it also harbors the country's largest bighorn sheep herd and second largest elk herd. The Rocky Mountain Front supports one of the largest populations of grizzly bears south of Canada and is the only place in the lower 48 States where grizzly bears still roam from the mountains to their historic range on the plains. Because of this exceptional habitat, the Front offers world renowned hunting, fishing and recreational opportunities. Sportsmen, local land owners, hikers, local communities and many other Montanans have worked for decades to protect and preserve the Front for future generations. In short, a majority of Montanans feel very strongly that oil and gas development, and Montana's Rocky Mountain Front, just don't mix. The habitat is too rich, the landscape too important, to subject it to the roads, drills, pipelines, industrial equipment, chemicals, noise, and human activity that come with oil and gas development. Building upon a significant public and private conservation investment and following an extensive public comment process, the Lewis and Clark National Forest decided in 1997 to withdraw for 15 years 356,000 acres in the Front from any new oil and gas leasing. This was a significant first step in protecting the Front from developing that I wholeheartedly supported. However, in many parts of the Rocky Mountain Front, oil and gas leases exist that pre-date the 1997 decision. These leaseholders have invested time and resources in acquiring their leases. Several leaseholders have applied to the federal government for permits to drill. These leases are the subject of my proposed bill. History has shown that energy exploration and development in the Front is likely to result in expensive and time consuming environmental studies and litigation. This process rarely ends with a solution that is satisfactory to the oil and gas lessee. For example, in the late 1980's both Chevron and Fina applied for permits to drill in the Badger Two Medicine portion of the Front. After millions of dollars spent on studies and years of public debate, Chevron abandoned or assigned all of its lease rights, and Fina sold its lease rights back to the original owner. Therefore, I think we should be fair to those leaseholders. We want them to continue to provide for our domestic oil and gas needs, but they are going to have a long, difficult and expensive road if they wish to develop oil and gas in the Rocky Mountain Front. My legislation would direct the Interior Department to evaluate non- producing leases in the Rocky Mountain Front and look at opportunities to cancel these leases, in exchange for allowing leaseholders to explore for oil and gas somewhere else, namely in the Gulf of Mexico or in the State of Montana. In conducting this evaluation, the Secretary would have to consult with leaseholders, with the State of Montana and the public and other interested parties. When Interior concludes this study in two years, the bill calls for the agency to make recommendations to Congress and the Energy and Natural Resources Committee on the advisability of pursuing lease exchanges in the Front and any changes in law and regulation needed to enable the Secretary to undertake such an exchange. Finally, in order to allow the Secretary to conduct this study, my bill would continue the current lease suspension in the Badger-Two Medicine Area for three more years. This lease suspension would only apply to the Badger-Two Medicine Area, not the entire Front. That's it, that's all my bill does. It doesn't predetermine any outcome, it doesn't impact any existing exploration activities or environmental review processes. It just creates a process through which the federal government, the people of Montana and leaseholders can finally have a real, open and honest discussion about the fate of the Rocky Mountain Front. We should look for ways to fairly compensate leaseholders for investments they've made in their leases if they decide to leave the Front rather than waste years and millions fighting to explore for uncertain oil and gas reserves. Because, a lot of Montanans don't want to see the Front developed, and they will fight to protect it. Including me. So, developers can wait years, or decades, or most likely never, for oil and gas to flow from the Front. Or we can look at ways to encourage domestic production much sooner, in much more cost effective, appropriate and efficient ways somewhere else. That is what I hope this legislation will accomplish, and I hope my colleagues in the Senate will support it.

Mr. BAUCUS

Mr. BAUCUS. Madam President, reserving the right to object--I ask the indulgence of my friend--if I could have about 7\1/2\ minutes.