Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Madam President, we have had 3 good weeks of debate on this bill. I urge my colleagues now to think about voting to invoke cloture so we can get past this bill and get on to other business. We have already disposed of 19 amendments. A number of other proposed amendments have been addressed through colloquies and will also be included in the managers' amendment at the end of this legislation. I might say, early in the debate we were able to forge a historic compromise on trade adjustment assistance which expanded the program to deserving groups of workers and, for the first time, provided health care adjustment to TAA recipients. That is an extremely important development. Currently, trade adjustment assistance--that is, assistance to workers displaced because of trade--is paltry. It doesn't help workers very much. It only applies to primary workers anyway. We made huge, significant improvements to help develop a consensus on trade; that is, so more people get in on the benefits of trade or at least are not harmed when there is natural change in our economy because of globalism and economic readjustment. This trade adjustment assistance part of it, it should be understood, I might say unpretentiously, is an extremely important part of this bill. As it stands now, I believe this bill is the most forward-looking and significant trade legislation to be considered by this body in over 15 years. The fast-track extension included in this bill provides authority for the President to negotiate trade agreements, both multilaterally and unilaterally. Using fast track, the President will be able to open new markets for U.S. exporters and for the benefit of U.S. consumers. As I have noted before, this section of the bill is also the most progressive ever to gain serious consideration by the Congress. Not only is the trade adjustment assistance provision most progressive, but also the fast-track TPA portions of the bill are most progressive. For the first time, labor and environmental issues are part of the core of any future trade agreements. That is monumental. I cannot tell you, Madam President, the number of years that issue has been debated. Those who did not want labor to be included at all in the negotiating objectives of trade agreements, who did not want environmental issues at all considered, won the day. But, frankly, I think it was the breakdown of the ministerial in Seattle; that is, the trade ministers' meeting in Seattle, which could not cope with all the changes in the world, including the necessary inclusion of labor and environmental provisions, that has now brought this to where, in this legislation, we are doing so. This bill for the first time includes labor and environmental issues. It also continues U.S. priorities such as opening agricultural markets. We all know one of the biggest challenges we face as Americans is knocking down agricultural trade barriers worldwide. The European Union is one of the greatest offenders. We also know we want to preserve our U.S. trade laws, such as section 201 of our countervailing duty laws or antidumping, which are there to help keep other countries honest; that is, to help prevent other countries from dumping in America, from subsidizing their production and sending it over to America. We need those laws to help keep those other countries honest because our borders are significantly more open than are the borders of other countries. So we need our trade laws to help them do what they know is the right thing to do. If we do not have our trade laws, they are unlikely to do it. The legislation before us, as I mentioned, extends and expands trade adjustment assistance. It is critically important. This is long overdue. Let me just explain in some detail, although not much detail, what that provides. We extend coverage to ensure workers can complete job retraining. That is an extension. We have a whole new pilot program on wage insurance, so a lot of people who are dislocated on account of trade have the option not to take the trade adjustment benefits but, instead, can take wage insurance, which essentially compensates the employee for half of the difference between his old job and his new job, the beauty of this being it helps people work again; they are back at a job working, as opposed to just receiving benefits. We also expand coverage to secondary workers--not just primary workers. For example, if an auto plant lays off employees, what about the supplier of windshields or the supplier of engine parts? They get laid off, too. Those are the secondary workers who are now covered under this bill. It is a huge benefit. We expand it to farmers and to fishermen. They get displaced because of trade many times. As I mentioned, it is extremely important. For the first time, we provide health insurance for displaced workers. It is critically important in these days where, unfortunately for many people, it is hard to get health insurance anyway. When you are displaced and lose your job, what are you going to do about your health insurance? You are going to need health insurance. We provide health insurance under trade adjustment assistance. These matters should not be taken lightly. They are extraordinarily important. Those trade adjustment assistance provisions will be available to people who are displaced because of trade irrespective of whether it was a consequence of a fast-track bill, irrespective of whether that dislocation was a consequence of some trade agreement not subject to fast track--most trade agreements are not subject to fast track--irrespective of whether there is any agreement of any kind because the world economy is so fluid and some changes are almost chaotic. Those benefits in the legislation will be available to anybody who qualifies and loses a job on account of trade, irrespective of any fast track or any trade bill. It is vitally important. The bill also extends and expands two very vital preference programs. One is the Generalized System of Preferences, GSP, and the other is the Andean Trade Preference Act, which is very important, particularly if we want to increase trade in South America. European countries and others have trade with South America. We need to get moving and have a better trading relationship with at least the Andean countries in South America. This bill extends those preference programs for 5 years, and also rebates tariffs paid since expiration which was the end of last year. The two I mentioned are also improved. The Andean Trade Preference Act now includes a petition process for reviewing the progress of Andean countries in meeting the objectives set out in the bill. And the GSP Program has been updated to take into account the definition of core worker rights promulgated by the ILO's 1998 declaration. That is an update. It helps to bring ILO standards up to date. Further, in this debate on this bill, Senators have improved the legislation through their amendments. Senator Kennedy, for example, won an amendment to ensure that the global AIDS crisis is properly recognized in trade legislation. Senators Dayton and Craig contributed an important amendment to ensure U.S. trade laws are not needlessly treated as bargaining chips in trade negotiations. I intend to see to it that this issue is properly addressed as this legislation moves forward. Senator Edwards added an amendment to ensure that the interests of textile companies and their workers are treated fairly in trade negotiations, and under trade adjustment assistance. I congratulate each of these Senators for their contributions and hope they will help us in moving their amendments and the entire legislative package forward. We have had a good and full debate on this trade bill. I plan to continue to work with Senators to see to it that their concerns are addressed. But it is time to begin to think about passing this bill. It is time to wind down the debate. It is time to invoke cloture. There are always going to be further amendments that some Senators wish to offer. But at some point we need to declare that enough is enough and move this process forward. I believe we are at that time. For the sake of American workers, for the sake of American business, for the sake of every American farmer and rancher, particularly American workers and employees, and because a very important part of this bill is to help those who are dislocated on account of trade, I urge my colleagues to vote for cloture. I suggest the absence of a quorum.

Mr. BAUCUS. To answer my good friend from Florida, it is my understanding that either of the two could properly be called up at this time.

Mr. BAUCUS. Madam President, further answering the basic question of the Senator from Florida, the amendment we have on the list that is ready to be brought up is No. 3440. That was my understanding; that is the amendment to be brought up.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I move to reconsider the vote.

Mr. BAUCUS. I ask unanimous consent that the underlying time agreement be extended an additional 30 minutes equally divided.

Mr. BAUCUS. I yield 10 minutes to the Senator from Texas.

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

Mr. BAUCUS. Mr. President, there are many statements the Senator made with which I take issue because they are inaccurate. One of the most inaccurate is the last statement the Senator made, that there is nothing in the bill to make sure foreign investors are not accorded greater rights than domestic investors. This is the Kerry language which we provided for in the underlying bill--not the Kerry amendment now being offered, but Kerry language he suggested earlier. Let me read it: Insert the following: foreign investors in the United States are not accorded greater rights than United States investors in the United States. That is what is in the bill. So his statement to the contrary, that there is nothing in the bill that assures foreign investors do not have greater rights than domestic investors, is inaccurate. We already include it in the underlying bill.

Mr. BAUCUS. Mr. President, I appreciate the remarks of my friend from Nebraska. I might go further and say, not only is there no need for the Kerry amendment but it would create huge problems for Americans in America and problems for Americans overseas. Whether they are intended or unintended consequences, I am not sure, but those consequences are real. I must repeat, the underlying bill was changed in the Chamber to include language suggested by the Senator from Massachusetts, Mr. Kerry, that solves all the problems he has now been talking about. What are they? Essentially if you listened closely to the cases he has been talking about, the concern is that a foreign investor might have superior rights compared to a domestic investor. The language we adopted says clearly that foreign investors have no greater rights than a domestic investor. That is the language in the underlying bill. We are talking about trade promotion authority. We are talking about fast track. We are talking about negotiating objectives. We are talking about what we would like our executive branch trade negotiators to work toward, the guidelines under which we are giving them to work. One of the guidelines in the current bill is that foreign investors would have no greater rights than domestic investors in investor-state dispute settlements. That is clear. All the problems the Senator from Massachusetts talked about are already taken care of. That is why in many respects the statement by the Senator from Nebraska is true. It is unneeded. The problem is already cured in the bill with the inclusion of the language that foreign investors enjoy no greater rights than domestic investors. If you look at the actual language of the amendment, not only is it not needed, it creates a whole host of additional problems we just don't need to have. One is when we try to define what expropriation is. We can't redefine the Supreme Court's definition of what expropriation is. That is up to the Supreme Court to define so long as it applies equally to domestic and foreign as the underlying language provides. Second, he creates an initial hurdle that a domestic investor has to get approval from his host government before he or she could seek redress of rights in the foreign country. For an American investor that means the United States Government and the State Department and, who knows, the Treasury Department can get involved and say, we have problems with the other country. We don't know if we want you to proceed with your case in the other country; we don't want you to do that. That is what is called for by the Senator's language. In addition, he suggests that a foreign investor cannot bring a claim presumably in the United States unless that foreign investor can prove that the underlying action by the municipality or the State was primarily to discriminate against the foreign investor, an almost impossible burden to meet. Clearly, if we create that almost impossible burden for foreign investors in the United States, other countries can do the same. This means that other countries, under the guise of public health and safety and environmental protection, could discriminate against the United States in a very subtle way and discriminate against U.S. investors as opposed to their own investors, but make it very difficult, if not impossible, for the U.S. investor to prove that the primary purpose of that other country was to discriminate against the United States. That is what this language says. I am not talking about potential problems. I am talking about the exact language of the bill. I will run through them again. It tries to define--incorrectly--what constitutes a taking under the fifth amendment of the Constitution and, B, it requires that a host investor get permission of the host government and, C, sets the impossible standard that a foreign investor must show that the primary purpose was to discriminate against him in seeking redress in a foreign country. That is going to boomerang against the United States. The main point, taking care of all the problems suggested by the Senator from Massachusetts, there are no problems left. We handled it. It is in the bill. Second, the additional language that he suggests is just going to cause a whole host of problems that we don't need, to put it mildly. I reserve the remainder of my time.

Mr. BAUCUS. Mr. President, we are waiting for Senators Grassley and Brownback with respect to a sense of the Senate regarding granting Russia PNTR benefits. I hope those Senators can come fairly quickly because as soon as they do we can take up that resolution. In the meantime, I will say a few words about the health provisions included in the pending legislation. I say from the outset that I am extremely pleased about these provisions. They represent, first, a true bipartisan compromise, the result of months of negotiations, and, I might add, lots of concessions on both sides. After all that effort, I believe we have reached an agreement that will provide real, genuine help to families affected by new trade policies. Before describing the proposals, I commend Senator Grassley from Iowa. Many people spend a lot of time talking about bipartisanship in this town, but Senator Grassley does more than just talk. He is bipartisan. His efforts on this issue and others were crucial to getting a workable bipartisan compromise. I am happy to have him as my partner on the Finance Committee. What is the proposal? The proposal provides a 70 percent tax credit for health insurance premiums to workers who participate in trade adjustment assistance, known as the TAA program. This tax credit is advanceable and it is refundable. That means workers displaced by trade will not have to pay the full cost of their health insurance and then wait to be reimbursed when they file their tax returns the next year. They get the help up front, when they need it. Employees can also use this credit for a number of health insurance options. Those include maintaining their existing health insurance under what is known as COBRA coverage; purchasing insurance through a State high-risk pool or comparable coverage that the State has established; a State employee benefit plan or comparable coverage; they can purchase through a State-operated health plan; or coverage purchased through a private pool. Some Senators expressed concern about the impact on workers with individual market policies. And they argue it will take a long time to establish a State group coverage option. These are good points. They are valid. We attempted to address them. Workers covered by individual market policies before losing their jobs will be able to keep those policies and take full advantage of the 70 percent tax credit. In addition, because we believe it will take some time for the Treasury Department to set up the tax credit mechanism and because it will take States some time to establish group purchasing agreements, we have included interim coverage under the National Emergency Grant Program. In short, it is not everything that Senators on either side of the aisle wanted. There are some provisions and concessions made on both sides of the aisle. We dropped on our side the Medicaid provisions. We yielded on the issue of requiring those eligible for COBRA to purchase only COBRA coverage. Most importantly, we moved from a premium subsidy to a tax credit, something that Republicans and centrists support. Similarly, the compromise is not everything the other side wanted. There is a tax credit, but not for the purchase of individual coverage. Indeed, the size of the tax credit, 70 percent, represents a sacrifice on both sides. Those on our side started at 75 percent; the other side wanted 60 percent. In the end, we split the difference at 70 percent-- not exactly an even split, but a good split. None of the sacrifices were easy. Each side had to swallow a bit of their pride. While we may have given up a little, displaced workers and their families gained a lot. I am proud we proved our ability to work together and compromise to help Americans in need. The trade adjustment assistance provisions are very significant. They are a huge improvement over current law. These provisions give health insurance benefits to displaced employees. They give substantial benefits for a couple of years to employees displaced because of trade. They are a main driver of this bill. In addition, we are giving fast track negotiating authority to the President under certain negotiating objectives. But the real substance of the legislation that is about to be passed here that has immediate legislative effect is the trade adjustment assistance provisions. They are significant. That is the legislation that will be enacted as a consequence of the trade bill we are now negotiating. I urge all colleagues to remember that. When we hear complaints of displaced employees, rest assured there are significant provisions that help those employees that will be displaced because of trade. The underlying bill develops a greater consensus on trade so more and more Americans are able to gain the benefits of trade--not just the multinational companies, but small business, so all the people that work in America so diligently to try to improve their income and have health insurance for their family and children can live a good life, take vacations and so forth. In the past, there has not been sufficient consensus on trade, and there still is not sufficient consensus, but the provisions help move us in that direction. I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from Iowa.

Mr. BAUCUS. Mr. President, how much time remains on both sides?

Mr. BAUCUS. Mr. President, I yield myself such time as I may consume.

Mr. BAUCUS. Madam President, is all time yielded back?

Mr. BAUCUS. Mr. President, we sympathize with the general concern of the Senator from Massachusetts; namely, making sure that foreign investors do not have greater rights in the United States compared to domestic investors in challenging whether an action by a government body, say a State, city or county, is a takings under the Constitution of the United States. We all recognize that. This is an area that is complex. It requires us to step back a little bit and find a ``level playing field'' between foreign investors and U.S. investors. The Senator from Texas is absolutely correct. The main reason we are addressing this situation really began years ago when U.S. investors were being discriminated against overseas. It caused quite a few problems in many countries. So over the years, various treaties have been written between the United States and other countries trying to create a balance between foreign and domestic investors in the United States and in other countries. That is the whole goal here. When NAFTA was written, including chapter 11, there probably was too much emphasis given to protecting U.S. investors' rights overseas rather than the interests of government here at home because that was the biggest concern at that time. Since then, there has been a rising concern that perhaps NAFTA went too far and gave too great a protection to foreign investors versus domestic investors in the United States, which led to concerns raised by the Senator from Massachusetts. In this bill, we attempted to correct that problem with various provisions. We have lots of provisions in the bill to even the playing field. We also took a provision suggested by the Senator to make it crystal clear that there is absolutely no favoritism given to domestic versus foreign investors who sued the United States challenging whether certain regulations were takings under the fifth amendment. It makes no difference whether it is foreign or domestic investors; an investor will be treated exactly the same whether he or she were in the other category. We took that language and added to that the amendment in the underlying bill to make that very clear. But we have to make sure that American investors--while we are protecting ourselves by making sure foreign investors don't have an advantage over U.S. domestic investors in the United States--overseas are treated fairly and are not discriminated against. There are some very glaring problems with the amendment offered by the Senator from Massachusetts. First, he tries to define what constitutes a taking under the fifth amendment. His definition, first, is simplistic and, second, it is wrong. First, it is simplistic, because all of us who have studied these issues know--believe me; I spent quite a bit of time a few years ago on the Environment and Public Works Committee--that the Supreme Court's definition of what constitutes a taking, and, therefore, requires compensation is extremely complicated. It is extremely complex. It depends totally upon the facts and circumstances of the case. I will not take the Senate's time to quote all of the language of the Supreme Court opinions on takings which makes this point very clear. But that is the case. The Senator from Massachusetts, however, wants to define in a sentence what ``takings'' is. His definition is wrong. With all due respect to my good friend from Massachusetts, it is also irrelevant because we can't define takings. The Supreme Court says what takings is. The Supreme Court under Marbury v. Madison interprets the Constitution. The Congress doesn't say what the Constitution says. We could say a lot. When it comes to what constitutes a fifth amendment taking, the Supreme Court decides that; we can't make that decision. Here is how the Senator from Massachusetts defines takings. It is wrong. He says a measure is not a taking if it causes a mere diminution in the value of property. You can't define takings like that. It is wrong. You can't define it here in the statute. The Supreme Court is going to define what a taking is. With the Senator's language, we are adding a huge incorrect and irrelevant complexity. It just shouldn't happen. It just fouls things up. It is not the right thing to do. He has in his amendment another provision which is a real problem; namely, that investors--in the United States or any country--who want to bring an action in the other country--say a Canadian investor in the United States is claiming that actions are takings. That Canadian investor has to get permission from his country. Turn that around. Obviously, other countries are going to do the same thing, or turn that around in our case. We Americans would have to get permission from the U.S. Government to bring an action against another country claiming expropriation, an additional hurdle which the Senator from Massachusetts places in the way of a U.S. investor seeking redress overseas. Now, I ask you. The Senator from Texas made the point: What if the U.S. State Department is in negotiations with, let us say, France over some matter, no matter what it is. Maybe it has to do with the Middle East; who knows what it is. Let us say a major American investor wants redress because he believes the French Government took action which was an expropriation of his property. He would have to get the approval of the U.S. Government. Knowing the State Department as we do, they are going to get very involved, or could get very involved, and impede or prevent that American from exercising his rights. The Kerry amendment requires the investor to get permission from his host country before he can bring an action before the dispute panel where the investor thinks the action of the other country amounts to expropriation. There is another problem. It is a huge loophole. Essentially, this loophole says a foreign investor in the United States has to first prove that the primary purpose of the regulation was not discriminatory. No U.S. investor is going to be able to prove that the primary purpose of a foreign regulation was not discriminatory. That creates a huge additional burden for the U.S. investor that a foreign investor in the United States does not have. Most Americans say: Gee, what is wrong with that? Let us make those foreigners have to prove a much higher and an almost impossible standard compared with the domestic investors. It is going to happen. Do you think other countries are going to just sit back and take that? They are going to do the same thing. They are going to say: Wait a minute. In France, in Canada, or in whatever country, an American investor who wants to come to that country, assuming he can first get permission from his own United States State Department has to show that the primary purpose in France, or in Canada, or in whatever country is to discriminate against Americans. The American investor cannot prove that. It is almost impossible to prove that the primary purpose in that country was to discriminate against Americans. It is almost impossible. That is why this amendment, while on the surface it talks about all these cases--and there are going to be cases. There are always going to be cases pending for a dispute settlement action. There will always be. But the mechanism which the Senator from Massachusetts prescribes here, when one reads the exact language of his amendment, has all these very deep flaws. To say there are unintended consequences is to say blithely that there will be dramatic consequences as a result in the consequence of this action, if we are so foolish enough to pass this amendment. I know that is strong language. I have the utmost respect for my good friend from Massachusetts. But that is what this language does. One has to read the language. As I said from the outset, we have gone overboard to take the earlier language suggested by the good Senator to make sure that the playing field is in fact level. We have done that. That is in the bill. That is in the bill. But to go further and adopt the provisions now offered by the Senator will have very dire consequences for American investors overseas, and also boomerang against the various municipalities and States. I hear about a letter stating that the States basically are a little fearful Uncle Sam might do some things that will override their prerogatives. But I don't think the persons who wrote that letter really thought through the full implications of this amendment offered by the Senator from Massachusetts because, if they had, I doubt very seriously many of them would have signed the letter. I reserve the remainder of my time.

Mr. BAUCUS. How much time is remaining on each side?

Mr. BAUCUS. Mr. President, I yield to my good friend from Nebraska-- how many minutes?

Mr. BAUCUS. Mr. President, I will take 1 minute. This debate is devolving into little details. In my 1 minute, let me say, again, the Senator is inaccurate because we are talking about negotiated objectives in the bill. They all have the same force and effect. That is, the language referred to has the same effect as it would for another part of the bill. We are talking about negotiated objectives given to our negotiators as they try to negotiate other agreements.

Mr. BAUCUS. Mr. President, how much time remains?

Mr. BAUCUS. Mr. President, the next amendment is the Kerry amendment, as the Chair announced, with 60 minutes evenly divided. I am just going to take a few minutes until the Senator from Massachusetts is back, so he can speak on his amendment. Very briefly, this amendment may sound good on the surface, but for very compelling reasons it is not a good idea. It is a very bad idea. I will tell you why. It is true that under current law, one has the argument that foreign investors are at an advantage compared to domestic investors in seeking to protect their rights, say, in a fifth amendment takings question regarding, say, an environmental statute. The Methanex case dealing with MTBEs in California has not yet been resolved, but there is an argument that foreign investors in this case are in a more advantageous position than a U.S. investor with respect to the same kind of proceeding, and that is because of the way investor-state relationship rights are written under chapter 11 of NAFTA. There are many treaties which govern investor-state relations that are causing some question. One is the one I mentioned. I will not get into great detail as to why the amendment offered by the good Senator from Massachusetts should not be adopted. Suffice it to say that in this underlying bill we have made major changes to ``level the playing field'' between foreign and domestic investors, as well as the rights of those seeking to uphold municipal and State regulations with respect to public health, safety, and the environment. It is totally a level playing field. To make that point even further, we adopted in the underlying bill a provision suggested by the Senator from Massachusetts, Mr. Kerry, which made it crystal clear the rights of foreign investors in America do not enjoy an advantageous position over the rights of American investors to make sure the playing field is exactly level. As a matter of comity, I can now let the Senator from Massachusetts go ahead and explain his amendment. I thought I would get started while we were waiting for the Senator to come to the Chamber. He has had some other matters to attend. He is here immediately, and we are glad to have him here to speak to the amendment. I reserve the remainder of my time.

Mr. BAUCUS

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

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

Mr. BAUCUS. Mr. President, I call for the regular order. Amendment No. 3406

Mr. BAUCUS. Mr. President, I inquire of my good friend from Virginia if he is willing to enter into a time agreement on this amendment of, say, 10 minutes.

Mr. BAUCUS. Mr. President, I move to table the Allen amendment.