Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I thank the Chair.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, perhaps I can help matters out. I see three speakers who wish to speak.

Mr. BAUCUS. I object.

Mr. BAUCUS. Mr. President, I see that the Senator from Texas wishes to speak.

Mr. BAUCUS. Mr. President, what is the parliamentary position?

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. BAUCUS. Mr. President, very briefly, for the information of my colleagues, this second point of order challenges the amendment for going below the revenue floor and for going above the spending ceilings of the budget resolution. The amendment does, in fact, violate the revenue floor and spending ceiling. That is true. It is also true that the House bill, which will then come up, also violates the Budget Act for the same reasons, as does the bill offered by my good friend from Iowa, as does the White House proposal. They all do. The reason is because we have an emergency here. There are problems with which we have to deal. That is why. I wish this waiver would pass, but I know it won't. I yield the floor.

Mr. BAUCUS. Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974, I move to waive the applicable sections of that act for the purposes of the pending amendment and ask for the yeas and nays.

Mr. BAUCUS. Madam President, I thank my good friend from Iowa, Senator Grassley, for his help on this bill. The choice in the vote before us, about to occur in 15 minutes, is very simple. Do we want to proceed to help provide the stimulus to the American economy? Do we want to help provide health insurance benefits to people who have lost their health insurance because of their lost jobs? Do we want to provide an extension of unemployment benefits? Do we want to help New York City, which has been wrecked and devastated by the tragedy of September 11? Do we want to give disaster assistance to farmers and ranchers whose incomes are lower year by year. Do we want to do these things or not? That is the sole question before us. That is all it comes down to. I am astounded that we hear these arguments that this is not an emergency. I have been in this body for 20-some years, and we have voted for many items designated as emergencies that were far less of an emergency than what has happened to our country since September 11. What were they? Let me tell you. First of all, the stand-alone bills we have passed in this body: Unemployment insurance, in 1993, $5.7 billion. That was designated an emergency, so we passed it. IRS reform, if you can believe, $130 million--emergency. I don't know what the emergency was, but that is what Congress decided. The airline bill this year, $17 billion over 10 years. What were some other emergencies? We have had Hurricane Andrew. We had floods in various States, and we have designated those all as emergencies, this Senate did, and they were emergencies. And there have been more emergency designations. The Los Angeles riots in 1992 was designated an emergency. We provided additional dollars to help Los Angeles recover from the riots in 1992. The terrorist bombing in Oklahoma City--we designated that as an emergency to help Oklahoma City, as we should have. Peacekeeping in Bosnia--we designated additional dollars for our military, our Defense Department, because that was an emergency, fighting in Bosnia. That was designated an emergency, as well it should have been. Other natural disasters, hurricanes and floods. I, for the life of me, cannot understand this argument that we hear from the other side that what has happened to this country since September 11 is not an emergency, particularly in comparison to past events that were designated emergencies. There is a provision in the Budget Act which says if we go over the technical spending limits, it has to be an emergency to avoid a budget point of order. That is entirely up to the discretion of the Senate. In fact, the Congressional Budget Office, in this document, says: Emergency spending is generally whatever the Congress and the President deem it to be. It is up to us to decide whether this is an emergency or not. We all know what has happened to New York City, what has happened to our economy--900,000 people out of work since this spring. That is the entire population of my State of Montana--900,000 people out of work. Most people who lose their health insurance do so because they have lost their jobs. This is a super-emergency compared with the other events that this body has designated emergencies. Why is this not an emergency, too? Where are we? What are we thinking of? Hello? Wake up, Senate. Wake up and see what is happening to the country. Wake up and see what is happening in New York City. If all of us in the Senate were to go to Ground Zero, we would know that is an emergency. Some have and some have not. All should. The same occurs all across the country. Homes lost, people tossed out of work, farms and ranches going down the tubes because either they don't have crops, it is a disaster, a drought or a flood, or they are not getting their income. What is going on here? Of course it is an emergency. Meanwhile, we have heard, and I am disappointed to have to say this, characterizations and mischaracterizations, representations and misrepresentations, of what is in the Senate bill. Senators, some of them, have taken easy shots, not getting to the heart of the matter. That is regrettable. I will sum up in 10 seconds. This is clearly an emergency, and I urge Senators to vote to waive the point of order, stop the roadblock. Let's roll. Let's help America.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I suggest the absence of a quorum, and I ask unanimous consent the time be equally charged against both sides.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. I thank the Senator. Mr. President, I ask unanimous consent that the Senator from California be allowed to speak for 5 minutes at the conclusion of the remarks of the Senator from New Jersey.

Mr. BAUCUS. Mr. President, I yield 15 minutes to the Senator from New Jersey.

Mr. BAUCUS. Mr. President, we are now on the Economic Recovery Act. I would like to make a few comments on it, if I might. I know I will be followed by my very good friend, a terrific Senator, Mr. Grassley from Iowa. This is a sober time. Our Nation is at war overseas and at home. Like all Americans, we are struggling to respond, to hold together, to assume our responsibilities. Among other things, we in this Chamber have the responsibility to help get the economy back on track. The September 11 attacks took a bad economic situation--our economy was deteriorating--and made it significantly worse. I very sadly add, the tragic crash of an American Airlines plane yesterday in New York, I am sure, adds more angst and concern across our country, which has a very direct effect on people's emotions and psychology, but also, to some degree, on the economy, people's willingness to believe in the future. We had virtually no economic growth in the second quarter of this year, and we have had negative growth in the third quarter of this year, 2001. In addition, in October unemployment jumped from 4.9 percent to 5.4 percent. That is the largest jump since May of 1980. We also have reports of 638,000 layoffs of American workers announced since September 11. Manufacturing has been particularly hard hit. Last month, manufacturing lost 142,000 jobs. That was just in the one month of October. That was the 15th consecutive month that manufacturing jobs dropped. Since July of last year--a little over a year ago--manufacturing has lost an incredible 1.3 million jobs. That is over about 15, 16 months. Manufacturing employment has now fallen to its lowest levels since November 1965. The problems are not limited to the manufacturing sector. In October, non-manufacturing industries experienced the most dramatic slowdown in business activity since a report by the National Association of Purchasing Managers began in 1997. Agricultural producers are hurting, too. Net farm business income was at a 10-year low in 1999 and 2000. Still, unless Government assistance is continued, net farm income in 2001 is actually projected to be lower than farm income in 1999 and 2000. The most acute problems are faced by farmers whose farms have been hit by floods, drought, tornadoes, and other national disasters. Finally, the economies of New York and the surrounding regions have taken an unimaginably severe blow from the events of September 11. It is not just the economy of the New York region that has taken a hit. It is our highly interdependent economy all across our entire country that has suffered as a consequence of the Twin Towers and the Pentagon tragedies as well as the other events that have occurred. So what can we do? How do we help Americans regain confidence in the future so people want to, for example, buy refrigerators and cars, take family vacations, and have a really good, confident feeling about the future? How do we help businesses believe in the future, invest in new products, design new products and ways of doing things? It is a psychology that really comes down to confidence. How do we help engender the confidence we all desire? First, there is something--the fancy term is ``monetary policy.'' That is essentially the Federal Reserve System essentially raising or lowering interest rates to help make borrowing more expensive or less expensive. Basically, I think the Federal Reserve has done a pretty good job. Last week, the Federal Reserve Board cut short-term interest rates for the 10th time this year--that is a lot of cuts over 1 year-- clearly, trying to help make borrowing less expensive, people more inclined to borrow and to spend more, putting more money into the economy. My guess is, more rate cuts will follow. But monetary policy alone does not appear to be enough. We also have to pass legislation to stimulate the economy through what is called fiscal policy. Just as a reminder, fiscal policy is when Congress basically either raises taxes or lowers taxes--spends money or does not spend as much--with an economic effect on the economy. To stimulate the economy through traditional garden variety fiscal policy, Congress spends money. Now, there are a couple of ways to spend money. One is through cutting taxes; that is, in effect, spending money. The other is direct expenditures by the Congress. We are trying to figure out how to stimulate the economy by spending money. Now, there is no magic, clearly--no magic, no recipe that will send us going back to double-digit growth. Nevertheless, I think there are some simple guidelines that we in Congress can follow to help regain that confidence. Most significantly, the bipartisan leaders of the House and Senate Budget Committees provided us about a month ago with some very important guidelines. This is very important. The leadership of the Budget Committee--Republicans and Democrats, both House and Senate--all got together. That is remarkable. A lot of times around here we are not always on the same page. But all four of them got together because they were thinking of the longer term, about our national budget. They agreed upon a certain set of guidelines they thought were appropriate in an economic stimulus, economic recovery, a package that we might pass. Let me try to put in my own words what they said. They first said the economic recovery stimulus bill should be temporary--that is, something that is a direct, essentially a 1-year stimulus, upfront now, to help get the economy going. In one respect, I think it is because we have some sense of what the economy is going to be like next year. We don't have much of a sense of 2, 3, 4, 5 years down the road. We need to do what we can to stimulate the economy now and take stock a year from now to see where we are. They also said they should not spend too much over the long run. That is part and parcel with the upfront. We are very nervous in Congress about longer run, about runups in the Federal budget which tend to cause moderate and long-term interest rates to rise. Why? Because bond traders are thinking, gee, if Congress is spending all this money in the longer term, probably there will be competition for capital, and inflation is going to go up a bit, probably, with all that spending, and the price of bonds goes down as long-term rates stay up. They don't come down like we want them to. They will come down if we say we are going to be responsible and we are not going to spend a lot of money in the out-years. That is very important. The Budget Committee chairmen--all 4--also said we should get the money into the hands of those who will spend it quickly; that is, they are talking more about a consumer-led stimulus. Get people spending money. Then businesses are going to want to invest, start manufacturing products and selling products to the people who are buying. They said-- the budgeteers--consumers who will spend money then help stimulate business. They also said we should spend money on businesses who will spend it on capital equipment. That should be stimulative as well. One more point: In addition to providing an economic stimulus in this legislation, we also have to lend a hand to the Americans who are really suffering. It is one thing to help put money in the economy; it is also as important--if not more important--to help the Americans who are really suffering and living paycheck to paycheck and trying to make ends meet as a consequence of the terrorist attacks, or because of the recession in which the economy is now. At a time like this, I think it is critical that they are all a part of this, and that we Americans work together to find a good solution. That is what we tried to do in this bill. That is what is contained in the bill the Finance Committee is now presenting to the Senate. I think we have done a pretty good job. The bill has six main elements, every one of which is important. First, we provide a further tax rebate. You will recall that there are about 130 million taxpayers in our country. When the checks went out in the past summer on the tax bill this Senate passed, 79 million Americans got a full rebate. Individuals got either $300, or families got $600, and another 14 million taxpayers got a partial rebate--less than the full $300 or $600. Another 34 million American taxpayers got no rebate whatsoever; 34 million got no rebate in the last go-around, last summer. Why? The rebate then was limited to the amount that people paid in income taxes. You have to remember that a family who paid income taxes of less than $600 did not get a full rebate. For a family of four, that would be a gross income of about $30,000. If they made less than that, they didn't get a full rebate. In many cases, they didn't get any rebate. So here is what we do in this bill. This bill provides a second round of tax rebates for people who paid payroll taxes but got only a partial rebate, or no rebate, the last time around. As a result, by the time the second round of checks go out, every one of the 130 million people who paid Federal taxes also will receive a full rebate. To some extent, this is a matter of simple fairness. After all, some got it last time and the rest of the Americans should get it this time. It is also more than that. The people who didn't get full rebates earlier tend to have relatively low incomes. Those who got it last time have higher incomes. The people who get it now are likely to spend a higher proportion of the new income they get because they are lower income Americans. They have to spend it, frankly, to make ends meet. That would be a direct stimulus to the economy. Second, we establish a series of temporary tax incentives. Most significantly, we provide special tax depreciation deductions for a limited time to encourage businesses to invest in new plants and equipment. As it now stands, businesses deduct the cost of new plants and equipment over a period of years. There are various rules that apply. We add a temporary depreciation ``bonus'' of 10 percent for investments made before the end of next year. What does that mean? That basically means, whatever your depreciation schedule is, take 10 percent and do it all the first year, expense it more quickly, move it up, which helps your bottom line. It encourages you to invest. Senator Hatch and others have suggested that we make the percentage higher than 10 percent. I am open to that. I am open to a higher percentage if it fits into the framework of our overall bill. The accelerated depreciation deduction will have a couple effects. First, it will encourage businesses to invest sooner rather than later. That, in turn, will directly stimulate the economy. Further, to the extent some of the additional investments could be put to use right away, it will increase productivity. That is no small matter. We also provide an even larger depreciation deduction for small businesses by increasing what is called the ``expensing'' deduction under section 179. This deduction is available only for new investments made in the next 12 months. Finally, we allow companies a longer period to carry back net operating losses. This change is needed to make the first two investment incentives work efficiently. It also provides a modest break for companies struggling to stay on their feet. Those are the nationwide investment incentives through tax cuts. It is one way to stimulate the economy through fiscal policy; it is tax cuts. There are lots of ways to do it and that is one way in this bill. That is very important. The third section of the bill provides tax relief to the area in Lower Manhattan that was devastated by the terrorist attacks of September 11. Yesterday's crash has rekindled our memory of what happened on September 11--the death, the destruction, the horror, and the angst in our national psyche. The September attacks also had a huge economic effect on New York City. It was amazing to all of us who have been to Ground Zero and have seen it. Fifteen thousand businesses were destroyed or disrupted and 125,000 workers were displaced. That is just the beginning of it. The Senators from New York and New Jersey can go on and on in much greater detail and describe the magnitude and degree of devastation that New York has suffered. Every American wants to help, from those who live across the river in New Jersey, to those who live across the country in my State of Montana. All Americans want to help. We are all together in this. Let me explain how we came up with the New York package. After the attacks, Senators Schumer and Clinton and Torricelli and Corzine, along with Governor Pataki, approached me with a series of tax proposals for New York City. We had lots of discussions. They have been wonderful in representing their people and, second, working to do what is right. We rejected several ideas, but we revised others. After a lot of give and take, we were able to agree on a package that is fair, targeted and, I think, practical. The basic idea is pretty simple. We provide temporary tax incentives to encourage business to either stay in lower Manhattan or to relocate in New York City. There are three main provisions. First, we expand the work opportunity tax credit which exists under current law to encourage employers to hire certain categories of individuals. We create a new category for people who find jobs in lower Manhattan or who used to work there and relocate to another part of New York City. Second, we allow enhanced cost recovery to encourage businesses that lost property in the attacks to relocate to New York City. Third, we authorize the issuance of $10 billion in tax-exempt private activity bonds to rebuild the area damaged by the attacks. As a related matter, we include an amendment offered by Senator Torricelli based on a bill I wrote with Senator Grassley. It provides tax relief to victims of the terrorist attacks, including both attacks of September 11 and the Oklahoma City bombing a couple of years ago. Clearly, we will be taking stock at the end of this year as to what more is needed for our country, including New York City. This is basically to stem the hemorrhage, to help people at least tread water and not sink. But we are going to be taking a look at this again, and I welcome working with all the people from New York and other parts of the country as we try to find a national economic plan for next year. The final provision in this part of the bill allows Indian tribes to issue additional types of tax-exempt bonds to promote economic development. This provision obviously is not related to the September 11 attacks or the recession, but it will help promote economic development in a part of America--Indian country--that has been left behind for far too long. I will now move on to the fourth section of the bill, unemployment benefits. We all understand the problem. In October, we had the biggest jump in the unemployment rate in 20 years. Work is harder to keep and even harder to find. In response, we have taken an approach that Congress has adopted many times in the past; that is, we extend unemployment benefits by 13 weeks. We also take a few additional steps. We temporarily increase unemployment benefits by the greater of 15 percent or $25 a week. These people, because of inflation and the difficulty with making ends meet, deserve that. We make modest and temporary improvements in the operation of the unemployment insurance program. Specifically, we update the reporting period and provide better coverage for people seeking part-time work. One does not have to be a full-time worker to qualify. If you are a part-time worker, you should and do qualify. Others argue that unemployment insurance is a poor economic stimulus. This surprising argument is contrary to the history of the program and to the overwhelming economic evidence. Alan Krueger of Princeton University put it this way: Unemployment insurance is the quintessential economic stimulus: benefits ramp up temporarily in a downturn and reach those most in need. A similar point was recently made by Joseph Stiglitz, co-winner of the 2001 Nobel Prize for Economics. He said: First, we should extend the duration and magnitude of the benefits we provide to our unemployed. . . . This is not only the fairest proposal, but also the most effective. Senior economist Jane Gravelle of the nonpartisan Congressional Research Service recently said this: Extending unemployment compensation is, in fact, likely to be a more successful policy for stimulating aggregate demand than many other tax/transfer changes. Remember, one of the main reasons we have an unemployment insurance program is to provide economic stimulus during times of economic downturn. That is the whole point of it. Explaining the program in 1934, President Roosevelt said that it will ``act as a stabilizing device in our economic structure and as a method of retarding the rapid downward spiral curve and the onset of severe economic crisis.'' To put it bluntly, people who have lost their jobs and are struggling to get by are likely to spend any additional money they get, providing a direct stimulus to the economy. The next section of the bill helps people maintain health insurance coverage for themselves and their families. As unemployment rises, the number of uninsured Americans also rise. People are laid off, and they do not have health insurance. In the recession of the early 1990s, more than half the workers who became unemployed also became uninsured. That is an important point. More than half the workers who lost their jobs in the early 1990s also lost their health insurance. My proposal responds to this in a couple of ways. The first way is through the so-called COBRA program. That program was enacted in 1987. It allows people to maintain their employer-provided health insurance coverage for 18 months after they leave a job as long as they pay the full premiums themselves. That is current law. That is also the problem. Simply put, COBRA premiums--that is, paying full freight for health insurance--is very expensive. On average, the cost for individual coverage is $2,700 a year. As one is layed off, to maintain COBRA health insurance, one has to pay $2,700 for coverage, and for family coverage, turn that 2 and 7 around and it comes out to $7,200 or almost $600 a month. Not many families on unemployment benefits can afford that. The average unemployment benefit is $231 a week. As a result, only about 18 percent of the workers who qualify to maintain their health insurance coverage under COBRA actually do so. It stands to reason. It is too expensive, so it is only 18 percent. Here is what we do. First, we provide a 75 percent subsidy for COBRA coverage. In essence, the Federal Government would pay the portion of the premium that previously had been paid by the employer. This is for only 18 months. It is temporary. Second, we give States funds and flexibility to pay the remaining 25 percent for people with very low incomes. Third, we give States funds and flexibility to provide Medicaid coverage for workers who are not eligible for the COBRA program. Fourth, we increase the matching rate for State Medicaid coverage to make it easier for States to maintain coverage at a time when State budgets are being squeezed. We have heard a lot about this. A lot of State budgets are in tough shape. Most have a constitutional requirement to balance the budget, and they are strapped. It is very difficult. I am not going to get into whether they properly cut taxes in the last 2 years when times were good, but nevertheless, we have to take things as they are, and I think the States do need some help. Forty-nine States face balanced budget requirements and are likely to cause them to increase taxes and cut spending, even though such steps could deepen the recession. The increase in the matching rate provides fiscal relief for States at a time when it is badly needed. All told, these provisions will maintain health insurance for millions of workers who have lost their jobs or stand to lose them in the difficult months ahead. Like unemployment insurance, this proposal has been criticized pretty sharply. Some argue that covering health insurance costs will not provide an economic stimulus, apart from these people who are out of work and need a little help. I grant the case is not as straightforward--strictly on the stimulus point--as it is for unemployment insurance, but still the argument for stimulus is very strong. In any event, this part of the proposal is not just designed to provide economic stimulus, it is designed to help people who have lost their jobs to the recession. Critics also argue the proposal is an indirect way to establish a new entitlement program. We have heard that, too. Some people do not like new entitlement programs, as a matter of philosophy and ideology, never mind what the practical consequences may or may not be. This is not a new entitlement program. We are responding to a temporary crisis with a temporary solution. The program ends after 1 year on December 31, 2002: It is over; it is the end of the line; it is done. Finally, critics argue the program will be slow and cumbersome. Let's be candid. There are several competing proposals to provide temporary health insurance coverage. Each raises the same issues: How efficient and how quickly will the dollars be in the hands of people who need it? Whether we are talking about direct payments, COBRA tax credits--that is another idea--block grants to the States--that is the President's idea--we still have to come up with a system that works quickly and effectively. I am less hung up as to which it is. I want people who need health insurance to get health insurance benefits quickly and efficiently. If someone can come up with a better approach that accomplishes our goal, I am more than willing to listen. Let me now turn to a section of the bill that is extremely important: The provisions for agriculture and rural economic development. To set the stage, let me remind colleagues once again about the state of the agricultural economy. We have had an unprecedented streak of bad weather and bad economic conditions. Farmers in parts of the South and northern-tier States have been particularly hard hit. Although some sectors and some regions have begun to recover, farmers' overall earnings from their farming operations--that is, absent Government payments--are down sharply. The current difficulties could not come at a worse time. A downturn in farm income does not just impact farmers. It wreaks havoc in the rural communities that depend on them. Farmers in economic distress are not able to make their usual purchases of seed, fertilizer, not to mention food and clothing. This puts the agricultural sector at considerable risk. To ensure the stimulus plan also provides benefits to agriculture- dependent economies in the South, the Midwest, the northern-tier, the bill extends three programs that have been critical to shoring up farm income in the last 3 years. Not a new program, it just extends the current program. Some of my colleagues have attacked the agriculture section of the bill. They have poked fun at it, circulating pictures of various fruits and vegetables. The farmers and ranchers across this country may not find this all so amusing. They may wonder why the economic problems of ailing corporations demand immediate action but the economic problems of farmers and ranchers deserve only derision. They are asking that question, and rightfully so: Why do big corporations get assistance in an economic downturn but not farmers and ranchers? Good question. We know the answer. Farmers and ranchers are part of America, too. Let me be blunt. My constituents, including farmers and ranchers suffering through another disaster, deserve economic relief every bit as much as Americans from urban areas. Finally, to complete my summary of the bill, we also extend various tax and trade provisions that are scheduled to expire under current law and make a handful of additional changes to the Tax Code. I believe this bill will help us achieve our objective of providing a fiscal stimulus for the economic recovery of our Nation. It is temporary. It is carefully targeted. It will increase both business investment and consumer demand, heavier on consumer demand which is needed more in this country. Perhaps more importantly, it will extend a helping hand to the people who have lost their jobs and risk losing their health insurance. On balance, it is a very solid bill that deserves support in this Chamber. Time is critical. I hope we can complete debate quickly. Every day counts for Americans who need assistance and are looking at us. Is the Congress going to stand up and do what it should do, so we have a chance to wrap up our differences with the House before Thanksgiving? It is important we pass this quickly. I understand others will disagree with my description of the bill. They will say it falls short. They will argue we need more tax cuts, that we do not need to do so much for the unemployed, that there are better ways to cover health insurance. They will question whether we should have any agriculture provisions in this bill at all. I say let us have that debate, and let us try to resolve our differences with due respect to each Senator's point of view. Let us get to the bottom, get the facts out, learn the truth, what works, what does not work, so we can get the job done. After all, the American people are suffering. They have been hit with shock after shock after shock. They look to us for leadership. It is time to provide it. As the President said, quoting the heroes who jumped the hijackers over Pennsylvania, let's roll.

Mr. BAUCUS. Therefore, the order with respect to H.R. 3090 should now reflect that the debate-only limitation will extend until 4:45 today.

Mr. BAUCUS. Mr. President, I would like to clarify for the record and I ask unanimous consent that the previous order with respect to Executive Calendar No. 511 remain in effect.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I want to speak a little bit about health insurance. As I mentioned before, our country's economic downturn has put millions of American workers and their families at risk. The unemployment rate has increased by 25 percent over the same time last year. In October alone, we lost 415,000 jobs. That is 1 month alone. That is the highest single jump since 1980. In addition to losing jobs and income, many Americans have lost their health insurance. Clearly, this is something we need to address. Health insurance is necessary because it gives us access to needed health care services and it gives families financial security from medical bills. Uninsured workers and their families often delay or skip needed treatment. When they do seek care, they often end up heavily in debt. Many of us serving in this body have encountered many people deeply in debt because of needed health care. Many families even go bankrupt as a result. In fact, half of all bankruptcies are a direct result of health or medical bills, not out-of-control spending by families. I believe very strongly that giving laid-off workers assistance so they might keep their health insurance is of utmost importance. In my view, helping Americans who lose their jobs hold on to their health insurance is the right thing to do, not just for the families put at risk but for the economy as well. Some critics have said we should include health insurance coverage in the economic stimulus package. Some say we should not. Some have gone so far as suggesting the President should veto a bill that includes these provisions. It is not stimulus, they say; therefore, the President should veto the bill. I have heard that many times from representatives of the President. I am the first to admit the arguments that health care coverage is stimulative are not as strong as the arguments for some of the other provisions of the bill. For example, virtually everyone agrees unemployment insurance, while helping people supplement lost income, is also stimulative. In fact, the multiplier effect is $2.50 for every $1 spent on unemployment insurance. Nevertheless, there are several reasons I believe health care does represent stimulus, and I would like to review them for my colleagues and for the benefit of the critics. First, the rate of health insurance coverage is sensitive to economic conditions. Over the past several years, a strong economy has helped to moderate the growth of the uninsured population. The number of uninsured Americans has been growing. In the past several years, the strong economy has helped moderate that growth of uninsured population. Many employers use health care benefits as a way to attract and keep workers in a competitive market. During the same period, we created CHIP, the Children's Health Insurance Program, to make health insurance coverage available to more children. In times of recession, though, things are much different. Simply put, a downturn in the economy means many more people go uninsured. Employer-sponsored insurance declines, and States struggle to pay their share of the cost of public programs, such as Medicaid and CHIP. I know that is true in my State. According to a recent study, a 2-percent increase in unemployment will lead to an additional 3.2 million people eligible for Medicaid. That means the October jump in the unemployment rate alone will lead to an additional 800,000 people on Medicaid. We do not need a report to tell us this. We know this from past experience. In the recession of the early 1990s, more than half of the workers who lost their jobs became uninsured. Let me repeat that. In the recession of the nineties, more than half of the workers who lost their jobs also as a consequence became uninsured. We cannot let that happen again. Second, personal spending on health care means less consumer spending. Families with health insurance are able to spend more on other priorities. Families without health insurance spend more out of pocket on health care, making it harder for them to spend on other things. A study by the Kaiser Family Foundation tells us that nearly one in five uninsured cannot meet their essential expenses. Nearly one in four uninsured cannot pay their full gas, electric, or oil bills; one in seven persons who do not have health insurance cannot pay their full rent or mortgage. Third, States are facing serious fiscal problems. State budgets are more unstable in the wake of the September 11 attacks. Revenues are declining while the need for spending on important programs is increasing. Sales tax revenues have dropped in States that rely on tourism at the same time disaster relief efforts and unemployment are increasing. Last month, the Washington Post reported a number of States particularly hard hit by the recession are already calling special legislative sessions and taking dramatic action to reduce spending. Many of these States are thinking about making reductions in Medicaid benefits or cutting eligibility to alleviate budget pressures, despite the fact that more people will likely be turning to States for help with health insurance. Putting money into the health care system, which represents 13 percent of the national economy and employs millions of people, will itself stimulate the economy. This is particularly true in rural areas where the local hospitals are often the biggest employer. Including health insurance in an economic stimulus package is of critical importance both to the economy and to the American people. What about the specifics of my proposal? The health provisions in my package are short term; they are temporary. My bill provides direct subsidies to the purchase of private COBRA coverage. It would give a 75-percent Federal premium subsidy for those eligible for COBRA coverage. Anyone who lost their job after September 11 would be eligible to receive this assistance for up to 12 months. The program would be strictly short term and would end December 31, 2002. Why focus on COBRA? Because COBRA coverage was specifically designed to help workers maintain their health coverage when they change or lose their jobs. Unfortunately, though, this coverage is very expensive: $2,600 a year for individuals and a full $7,000 for families. That is almost $600 a month for family coverage. Consider the average unemployment check is just over $800 a month, and one realizes why fewer than 20 percent of displaced workers actually sign up for COBRA. It is just too expensive. They cannot afford it. According to the Congressional Budget Office, the COBRA subsidy will help up to 7 million Americans hold on to their health insurance even after they lose their jobs. But COBRA subsidies will not help everyone who loses their job. It will not help those who are not eligible for COBRA either because they worked for a small employer who is exempt from COBRA or that firm went bankrupt. To help those workers, my bill also includes a short-term, temporary Medicaid option for individuals and families who are not eligible for COBRA. This is a State option. It is up to the States. They can decide. I propose to give States an enhanced matching rate to encourage States to adopt this new coverage option. Like the COBRA subsidies, this coverage is available to people who become unemployed after September 11 this year, and like the subsidies, Medicaid coverage will be available for 12 months. Some say that States cannot afford to take up this option, even with an increased Federal match. I understand that. That point is well taken, and it is one of the reasons I am also proposing to increase the matching rate for Medicaid. By giving States a higher Medicaid match, an F-match, as it is called, States will have an easier time maintaining coverage. The additional funding may give the States what they need to take up the new coverage option for displaced workers. All told, this may maintain health coverage for millions of people who have lost their jobs or stand to lose them in the difficult months ahead. I have also heard critics argue my proposal is an indirect way to establish a new entitlement program. It is not. That is not the intention. We are responding to a temporary crisis with a temporary solution. All coverage, whether received through corporate or Medicaid, will be provided on a temporary basis. The program ends after 1 year. It is in the law, black and white, underlined. It is there. It ends in 1 year. Critics argue the COBRA Program and Medicaid coverage will be slow and cumbersome to implement. First, I disagree. I think we can get the program up and running in short order but not if we wait 6 months for new regulations to be published. My proposal specifically states the program should be implemented regardless of whether a final rule has been published. That is not new. It is not unusual. It is a step that is taken in times of emergency, and I argue the current economic situation dictates we are in such an emergency. Let us also be candid. There are several competing proposals to provide temporary health care coverage, and they all raise the same issues. Whether we are talking about direct payments, COBRA, tax credits, as some propose, or block grants to States, as the President has suggested, we have to come up with a system that works quickly and works efficiently. I say let us work on solving these implementation issues together rather than trying to undermine each other or pointing fingers and saying it cannot be done. Let me conclude by reiterating how important health care coverage is to Americans and how devastating it can be for a family to lose its coverage. I believe the package of health proposals I have put together will go a long way toward helping those who are truly in need. It will also provide a quick, temporary boost to the economy. I realize not everyone agrees with our approach, but I do hope we all can agree health insurance coverage is a crucial element of any economic stimulus package. It is the right thing to do, and it is good policy. I look forward to working with all my colleagues to reach an agreement that keeps our primary goals in mind; that is, stimulating the economy and helping American families. I suggest the absence of a quorum.

Mr. BAUCUS

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

Mr. BAUCUS. Madam President, I would like to speak a little about the stimulus economic recovery bill that is now pending, particularly from the point of view of what the provisions are that affect small business. In the aftermath of September 11, it became clear that our economy generally was going to suffer. I remember reading an article. It was kind of stunning in a certain aspect; that is, if the terrorists were aiming the planes at the ``masters of the universe''--New York bond traders, and so forth--it did wreak tremendous devastation and tragedy for so many people who do trade in securities, but to an even greater degree it has affected the economic livelihood of small businesses, shop owners, different communities in the city of New York. It is middle-income and lower-income people, who live in New York and across the country, who are hurt the most, who are hurt more than higher income people. The loss of life is beyond description. But, in addition, the economic devastation has hit small business more than it has hit big business. And small businesspeople have a much harder time adjusting than do big businesses. So for that reason, because we have limited resources, we want to make sure we have a balanced solution that very much helps small business. When the President spoke about an economic stimulus, he made three basic points. One, he wanted us to stimulate the economy. He suggested that it be short-term. He also suggested that any stimulus not have adverse long-term consequences on future budgets. These are principles with which we all agree. Let me speak now about small business. We say this many times, and I think it is very important to say it again. Small business really is the backbone of America. More new jobs are created by small business than by big business. That is a fact. We tend to forget that. We read reports that such-and-such company is laying off so many people and another company is laying off another thousand people, or several thousand people. We hear that, and those are big companies that have lots of employees, and unfortunately they are laying off relatively large numbers. We don't hear a word about the mom-and-pop businesses in our communities that had to lay off a few people. It is happening all over the country. The numbers are so great. They are also the same businesses that create more jobs. They create more jobs than does big business. Small business is also the genesis and the fountain of more business ideas. More business ideas are developed by small business than by big business. There is probably a reason for that. A small business has to fight to survive; the margins are so low. If you are opening up a small business, you have to pay that payroll tax the first day, even though you don't have any income. It is very tough. Lots of people have new ideas and they want to start a business. That is the American way. It is critically important that we not lose sight of small business. In fact, I think we should help small business because in many ways it is the bedrock of our country. Here is what we have done. Let's look at some of the provisions of the bill. One is to increase the amount a business can expense. It is called section 179 of the Tax Code. That section allows businesses to expense rather than depreciate assets, right now, this year, instead of writing it off over a period of time. We increase the limit. By increasing that limit, small business can write off more and invest more than they otherwise could. Section 179 of the code provides an exception to the normal depreciation rule. That is the limit that a small business can expense. It allows up to $24,000 in business purchases to be deducted in the year of purchase. The amount is reduced once a business makes $200,000 worth of purchases in a given year. That is not a lot of money, but that is the limit. We want to allow businesses to deduct more so they purchase more products upfront. Increasing the amount that can be expensed is the simplest way to stimulate small business to try to expansion. It helps small business keep up with rapid growth and change in the technology sector by reducing the capital costs of the company. The bill reported by the Finance Committee includes a provision that increases the amount a business can expense from $24,000 to $35,000 over a 12-month period. This also raises the maximum amount of qualified purchases from $200,000 to $325,000. This provision provides an immediate and focused stimulus. It is only available to companies purchasing equipment, and only if they make the purchases within a 12- month period. I might say that this is a bipartisan provision. There are a lot of bipartisan provisions in this bill. We hear sometimes about the partisan provisions, but much more in this bill is more bipartisan than not. One is the rebate checks. Both sides agree to that. Both sides agree to the small business 179 expensing limit being raised. Both sides agree to bonus depreciation; it is just a question of how much. Both sides agree to extending unemployment compensation benefits; it is just a question of how much. Both sides agree that we should probably help the people who have lost their health insurance because they have lost their jobs. Over the last year, more than half of the people who have lost their jobs as a consequence have also lost their health insurance. That is because most people who are laid off had health benefits as part of the job, but they don't anymore. So this expensing is one of the other bipartisan provisions. A couple of statistics about small business. In 1996, there were about 5 million corporations, partnerships, and sole proprietorships that had potential 179 investments. Of those 5 million, about 96 percent had gross receipts of $5 million or below. We are talking small business, not big business. Expanding the amount of investments these companies can make and expense immediately would give these small businesses real incentive to invest and give the economy a needed lift. In Lower Manhattan alone, there are between 14,000 and 16,000 businesses directly affected by the collapse of the Trade Towers. That is according to the Empire State Development Corporation. I daresay there are many more indirectly affected. It is estimated that as many as 105,000 businesses may ultimately be impacted directly or indirectly in New York as a consequence of the disaster of September 11. Those businesses need to bounce back, and this provision, along with other specific provisions in the bill, will go a long way to provide that assistance. I might say that the 179 provision, where businesses can expense more, is not only targeted to New York, but to the whole country, because this economic downturn we are experiencing really began about a year or so ago, and it was accelerated by September 11; but the whole country has experienced an economic downturn. That is why this provision will help New York and also the rest of the country. Madam President, I also believe that tomorrow morning, in the spirit of bipartisanship, we are finally going to sit down and work out an agreement on the stimulus/economic recovery bill. I think the leadership on both sides of the aisle is going to meet with senior tax-writing Senators and House Members and we are going to say: We have had our say, and each party scored its points. Now let's get on to business and do what the American people want--that is, write an economic recovery bill on a bipartisan basis as quickly as possible and help get this country moving. As the President said recently, in reference to a fellow who helped prevent an airplane disaster in Pennsylvania when he said, ``Let's roll,'' I say to all my friends and colleagues that I very much hope tomorrow, when we have this meeting, we start to roll and put together a bipartisan bill. This section 179 small business expensing provision is one of many which I know we are going to agree to in helping our economy. Madam President, I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President. I rise today to introduce the United States--Taiwan Free Trade Agreement Act of 2001. This bill authorizes the President to begin negotiations with Taiwan on a Free Trade Agreement, FTA, and provides for fast track consideration of a completed agreement by the Congress. Like the U.S.-Jordan Free Trade Agreement that was passed earlier in the session, this bill emphasizes the importance of promoting sustainable development and maintaining strong labor laws. Over the past two decades, Taiwan has emerged as an important U.S. ally in the Asia-Pacific region. Together, we have worked to maintain peace and promote development throughout the region. As part of this process, the United States has committed itself to defending Taiwan from aggressive attacks, and provides millions of dollars annually in military aid to the island. Taiwan has emerged as a vocal supporter of U.S. policy throughout Asia and the world. After the September 11 terrorist attacks, Taiwan was one of the first nations to express condolences and offer whatever aid we might need. The ties between the United States and Taiwan extend beyond political ones, however. Taiwan is the United States' eighth largest trading partner, despite not yet being a member of the World Trade Organization. In 2000, the U.S. exported more than $22 billion worth of goods and services to Taiwan, more than we exported to either China or Hong Kong. The trade relationship between the United States and Taiwan has blossomed despite the fact that Taiwan is largely excluded from the international forums that help promote economic and political liberalization. For example, Taiwan is not a member of the United Nations. This international isolation will start to end in 2002, when Taiwan is scheduled to become a member of the World Trade Organization, WTO. As part of the membership process, Taiwan made a number of trade concessions to further liberalize its trade regime; the U.S. will benefit from the lowered tariffs and declining market barriers that were part of these concessions. There are opportunities in the Taiwanese market that we must look to seize. For example, U.S. agricultural producers have been particularly under-represented in the list of exports to the region. A U.S.-Taiwan FTA could eliminate the last barriers to U.S. exports to Taiwan. Exporters, particularly agricultural exporters, would finally have unfettered access to a market of more than 22 million people. Moreover, importers would benefit from reduced tariffs and easier customs regulations. The economic rationale for a U.S.-Taiwan FTA is indisputable. But the United States has always exported more than just its goods and services. This Nation's support of freedom and democracy throughout the world has been its most important trade policy for more than two hundred years. Taiwan shares these values and deserves the continued support, both political and economic, of the United States. Over the past fifty years, Taiwan has evolved from single-party rule to a nation of free and open elections, where the transfer of power takes place smoothly and peacefully. Today, it is a vibrant democracy that is continuing to progress towards open markets and liberalized trade. Supporting this process with an FTA not only encourages Taiwan to continue its economic reforms, it also serves as an explicit example of the very real benefits of opening markets for those countries that are just beginning to participate in the global trading system. A free trade agreement with Taiwan is a concrete step that the United States can take towards supporting an ally that shares our values. The fact that such an agreement also promises concrete economic benefits to American farmers and manufacturers makes this process even more essential. I urge my colleagues to join me in supporting the United States- Taiwan Free Trade Agreement Act of 2001.

Mr. BAUCUS

Mr. BAUCUS. Mr. President. I rise today to introduce the United States--Taiwan Free Trade Agreement Act of 2001. This bill authorizes the President to begin negotiations with Taiwan on a Free Trade Agreement, FTA, and provides for fast track consideration of a completed agreement by the Congress. Like the U.S.-Jordan Free Trade Agreement that was passed earlier in the session, this bill emphasizes the importance of promoting sustainable development and maintaining strong labor laws. Over the past two decades, Taiwan has emerged as an important U.S. ally in the Asia-Pacific region. Together, we have worked to maintain peace and promote development throughout the region. As part of this process, the United States has committed itself to defending Taiwan from aggressive attacks, and provides millions of dollars annually in military aid to the island. Taiwan has emerged as a vocal supporter of U.S. policy throughout Asia and the world. After the September 11 terrorist attacks, Taiwan was one of the first nations to express condolences and offer whatever aid we might need. The ties between the United States and Taiwan extend beyond political ones, however. Taiwan is the United States' eighth largest trading partner, despite not yet being a member of the World Trade Organization. In 2000, the U.S. exported more than $22 billion worth of goods and services to Taiwan, more than we exported to either China or Hong Kong. The trade relationship between the United States and Taiwan has blossomed despite the fact that Taiwan is largely excluded from the international forums that help promote economic and political liberalization. For example, Taiwan is not a member of the United Nations. This international isolation will start to end in 2002, when Taiwan is scheduled to become a member of the World Trade Organization, WTO. As part of the membership process, Taiwan made a number of trade concessions to further liberalize its trade regime; the U.S. will benefit from the lowered tariffs and declining market barriers that were part of these concessions. There are opportunities in the Taiwanese market that we must look to seize. For example, U.S. agricultural producers have been particularly under-represented in the list of exports to the region. A U.S.-Taiwan FTA could eliminate the last barriers to U.S. exports to Taiwan. Exporters, particularly agricultural exporters, would finally have unfettered access to a market of more than 22 million people. Moreover, importers would benefit from reduced tariffs and easier customs regulations. The economic rationale for a U.S.-Taiwan FTA is indisputable. But the United States has always exported more than just its goods and services. This Nation's support of freedom and democracy throughout the world has been its most important trade policy for more than two hundred years. Taiwan shares these values and deserves the continued support, both political and economic, of the United States. Over the past fifty years, Taiwan has evolved from single-party rule to a nation of free and open elections, where the transfer of power takes place smoothly and peacefully. Today, it is a vibrant democracy that is continuing to progress towards open markets and liberalized trade. Supporting this process with an FTA not only encourages Taiwan to continue its economic reforms, it also serves as an explicit example of the very real benefits of opening markets for those countries that are just beginning to participate in the global trading system. A free trade agreement with Taiwan is a concrete step that the United States can take towards supporting an ally that shares our values. The fact that such an agreement also promises concrete economic benefits to American farmers and manufacturers makes this process even more essential. I urge my colleagues to join me in supporting the United States- Taiwan Free Trade Agreement Act of 2001.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to take this opportunity to explain my absence during yesterday's roll call vote on the nomination of Larry Hicks to be U.S. District Judge of the Nevada District. I do not dissent on Mr. Hick's nomination and if I had been present, I would have voted aye. Unfortunately I was absent during yesterday's rollcall vote because my attendance was necessary at a meeting to discuss the economic future of my home State of Montana. I discussed the State of Montana's timber industry with Plum Creek Timber Co., the largest wood products business in Montana. To be specific, we discussed what tools are necessary to ensure that business in Montana survives our Nation's current economic downturn. The future of a specific industry in my State brings me to a larger point, the economic state of rural America after September 11, 2001. Much attention has been paid, as it should, to the economic effect of the terrorist attacks on our major centers of commerce. Primarily America's largest cities and the coasts. However, the impact has been felt equally as hard in rural America where the economy was already slowing. In addition to the wood products industry, agricultural commodities which are the lifeblood of Montana and rural America are hurting worse then ever before. The past 3 years have been disastrous due to drought. Now Montana's farmers are faced with sharply escalating operating costs due to higher energy and fertilizer prices. According to the most recent projections provided by the U.S. Department of Agriculture, total farm expenses are expected to rise again this year, right on the heels of a $10 billion increase last year. As costs spiral out of control, farm income has not kept pace. Last year net farm business income was at a decade low according to USDA. Unless Government assistance is continued, net farm income in 2001 is projected to be even lower. The downturn in rural America is especially calamitous because prolonged economic depression often means extinction for these rural communities. A few bad years forces everyone out of business, not just those that sell commodities for a living. The very people and places that make up the fabric of the American economy are forced to seek opportunity elsewhere. This is a price that I am not willing to pay. As we consider economic recovery measures we cannot forget rural America. We must not let the immediate damage that we see every night on the evening news blind us to the crisis that is happening in rural communities across America. We simply do not have a choice. The cost is simply too high.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Madam President, I rise today to discuss the upcoming WTO meeting in Doha. I want to express my very serious concerns about the direction I believe these negotiations are heading. Let me start with the area with which I have the most serious concern; that is, protecting U.S. trade laws. Enforcement of our trade laws is one area where the administration and the Congress have recently worked very closely together. On issues such as softwood lumber and steel, Congress and the administration have worked together to ensure that our companies and workers are protected from unfair trade practices. It has been working well. Recent lumber decisions by the National Trade Commission and by the Department of Commerce, as well as the free trade decision on steel dumping onto U.S. markets, are areas where the administration and the Congress worked together on enforcing our trade laws against unfair foreign trade practices. These cases demonstrate why our trade laws are critical, and also why the case for defending trade laws is one that has always been bipartisan. Indeed, earlier this year I was joined by 62 of my colleagues in a letter urging this administration not to weaken our trade laws. I again urge the administration to accept the inescapable fact that our trade laws are part of the political bargain on trade. Without assurances that America has the laws to protect itself against unfair foreign trade practices, future trade agreements will be very tough to sell. Americans are not wanting to buy into a trade agreement if they are not assured the trade laws are protected and upheld so we can protect ourselves against other countries' foreign trade practices. Recent history demonstrates why we should be concerned. Both NAFTA and the recent GATT and WTO negotiations have significantly undermined enforcement of America's trade laws. There have been suggestions that we use WTO negotiations as an opportunity to address due process and transparency concerns in the application of other countries' trade laws. These are problems of compliance with existing WTO rules and not problems requiring us to revisit the rules themselves. Indeed, our existing international rules are constantly under attack. Countries are now trying to achieve through litigation what they failed to achieve in previous negotiations. Remember that our trade laws are WTO legal. They conform with and are consistent with the principles and the rulings of WTO. We are not trying to do anything unfair. We are just trying to be fair and make sure we are protected. Realizing that many of our trading partners want to weaken our trade laws, I was quite surprised to read that the draft declaration indicated a willingness to renegotiate these rules. This is the draft declaration looking toward Doha. Why should we do this? What do we gain? Where is the affirmative agenda? At a minimum, the United States should be seeking to address the underlying market distortions that cause dumping and that cause other countries to subsidize. We should be trying to correct the erroneous WTO decisions that have been handed down for the last several years. Yet all the draft declaration indicates is that we will engage in a wholesale renegotiation of these rules. I find that very disturbing. I hope our trading partners realize that when it comes to weakening our trade laws through further negotiation they will face stiff, unyielding, and bipartisan opposition in the Congress. I am also concerned about the declaration's environment and labor provisions. I was happy to see the reaffirmation of our commitment to the sustainable development, and that the WTO will increase its focus on the relationship between multilateral environmental agreements and trade rules. Both these issues deserve even more attention. I am concerned, however, about the comments from our negotiators that these are ``Europe's issues.'' Sustainable development is not a concern of Europe alone. I hope the lessons of Seattle have not somehow been lost on us. These are American concerns--more so now than ever. So too is the issue of labor and trade. The declaration makes the mistake of suggesting that labor standards are--and I quote--``social issues,'' appropriately handled by the ILO. I want to be clear on this point. We have now turned the corner on these issues. As the overwhelming support for the recent United States- Jordan Free Trade Agreement makes clear, environment and labor standards are now a part of the trade dialog. They are here. We passed it; that is, we passed legislation which affirms it. Finally, I want to express my strong support for Taiwan's accession into the WTO--as a full member of the WTO. This includes the right to challenge the trade practices of China--or any other country--just as other members have the right to challenge Taiwan. I am concerned about some of the recent reports that China is advocating some kind of lesser status for Taiwan. As an independent member of the WTO, Taiwan should have, and will have, the same rights as every other member. I hope the administration will take a strong stand in this regard. As we look toward and beyond Doha, I look forward to working with the administration. But I also urge our negotiators not to give up the store. The goal of launching a new round of negotiations is not an end in itself. We must be vigilant in ensuring that we get the best deal for our farmers, our workers, and our companies.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the horrific terrorist attacks of September 11, and America's response to those attacks have shifted our sense of priorities about what's important for our Nation. But, as we move forward with the challenging task of eliminating terrorism and securing the safety of our citizens, we must not lose sight of other values that make our Nation great. Some are using the shock and fear caused by the September 11 attacks to call for renewed focus on our energy security, and more particularly to renew their calls to open the Arctic National Wildlife Refuge to exploration and drilling. While I agree that it is high time we developed a strategy to reduce our dependence on imported oil and secure the Nation's energy resources and infrastructure, we should all know by now that developing ANWR will not achieve this goal. I have followed the Arctic debate closely for many, many years. I've spoken to this body on a number of occasions about this subject. The facts and best evidence on the main points at issue persuade me, as they have in the past, that drilling in the Arctic is both unnecessary and unwise. First, there is no oil bonanza in the Arctic that will impact or enhance the Nation's energy security, and neither the Senate nor the Nation should be rushed to an ill-fated judgement based on wildly inflated claims to the contrary. At peak production, many years down the road, the arctic coastal plain might at best replace about 5-9 percent of the foreign oil imported by the U.S. Oil from the arctic refuge will not have any meaningful impact on either the price of gasoline or on our demand for imported oil. It would do nothing to secure energy independence for our Nation. Arctic oil is also expensive to produce and transport to the lower 48. Which is why, until Congress banned oil exports, the oil companies shipped a lot of that oil to foreign markets. If those exports bans are ever lifted, we'll likely see any oil from the refuge shipped overseas. There's a reason America imports so much OPEC oil, it's cheap. In short, our energy security lies in reducing our dependence on oil, period. The more efficiently our Nation uses oil, gas and other energy resources, the more we depend upon alternative energy resources and renewable resources, the less vulnerable our country will be to oil supply disruptions and price spikes. Moreover, the arctic refuge's coastal plain is the last 5 percent of the entire Alaskan coastal plain that is not already open to oil drilling. The remaining 95 percent of the Alaskan coastal plain is not only open to drilling, but vast tracts of it have yet to be explored for their potential oil reserves. What's so special about this last 5 percent, preserved since the Eisenhower Administration? It's the heart of all the wildlife diversity in the entire Arctic National Wildlife Refuge. That 5 percent is the central calving ground for the porcupine caribou herd, the exact same landscape that would be scarred with oil wells, drill pads, roads and pipelines if drilling is allowed. That 5 percent is essential migratory habitat for 135 species of birds and waterfowl. That 5 percent is home to polar bears, musk oxen, grizzly bears, wolves, 36 species of fish, and more than 100 other species of wildlife. In fact, ANWR is the most important polar bear denning area in Alaska. That 5 percent is also a desert compared to the rest of the arctic coastal plain. I have yet to hear a satisfactory explanation from the oil companies about how they will deal with the fact that there is not enough water to build ice roads in ANWR. If you can't build ice roads that ``disappear'' in the spring, you have to build gravel roads. Given what we have been told about the dispersed nature of recoverable oil in the refuge, the oil companies will need to build a lot of roads, roads that will crisscross the refuge, disrupting the natural flow of water during the spring, marring the wild character of the refuge and interfering with wildlife migration patterns. In Montana, we know we must have working landscapes where we encourage oil and gas development, promote timber harvest and grow our Nation's food and fiber. We know such landscapes, if carefully managed, can also produce abundant wildlife populations and much recreational opportunity. Balancing appropriate development with the need to protect special places, for ourselves and for our children, is a dance Montanans know well. So too the Arctic National Wildlife Refuge. We have far too many other options open to us right now to secure our energy future than any that may or may not materialize from drilling in ANWR. Americans aren't ready to drill, and America doesn't need to. I hold that the Arctic refuge is too wild to waste. I would also like to address briefly some concerns I have with some of the energy proposals made by our colleagues in the House. I am particularly concerned with provisions that affect oil and gas leasing procedures on public lands. The House suggests that we replace the current public process surrounding oil and gas leasing on public lands with a centralized federal mandate that would remove any meaningful public involvement from oil and gas leasing decisions on national forest lands. In the 1980's, many Montanans traveled to Washington, DC to urge passage of legislation to bring the public into oil and gas leasing decisions on national forest and public lands. Their efforts and those of many others resulted in the passage of the 1987 Federal Onshore Oil and Gas Leasing Reform Act. Under current law, the forest supervisor analyzes likely impacts, considers surface resources and consults with the public before determining (1) where Federal oil and gas leasing is authorized and, (2) under what circumstances it should occur. Even if a lease is offered, it often contains provisions to protect wildlife and the environment through stipulations that limit roads and other industrial developments. Legislation endorsed by our colleagues in the House would eliminate the existing public involvement process. That legislation would strip national forest supervisors of existing authority to make decisions regarding oil and gas leasing. The local supervisor's authority would be transferred and centralized under the Secretary of Agriculture who is directed to ``ensure that unwarranted denials and stays of lease issuance and unwarranted restrictions'' on all oil and gas exploration or development operations ``are eliminated'' from oil and gas operations ``on Federal land.'' This seems out of character with the often repeated pledge from the Administration and others, that local communities should have a greater voice in the public lands decisions that directly affect them. Other language would direct the Secretaries of Agriculture and Interior to order a rewrite of oil and gas leasing plans to remove limits or restraints on oil and gas exploration and development. This would include local Montana decisions that limit oil and gas development designed to protect native trout streams. Still more language would give the oil and gas industry the power to force a review of previous decisions to limit oil and gas development on national forest and BLM lands, including written explanations showing ``whether the reasons underlying the previous decision are still persuasive.'' In Montana, such decisions authorized millions of acres for leasing while protecting municipal drinking water sources for Helena, Red Lodge, and East Helena, popular hunting areas, key habitat and wild lands in the Elkhorns Wildlife Management Area, Line Creek Plateau and along Montana's Rocky Mountain Front. Montanans invested years in each of these decisions. They have been well debated, they have withstood legal challenge. They do not need to be reopened by Congress. In short, I want to express my opposition to any similar provisions that may arise in the Senate. As I have outlined above, what may seem like obscure language to other members of this body is vitally important to Montanans, and could have an enormous impact on my state, and the landscapes Montanans have declared too precious to develop.