Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I am glad to yield.

Mr. BAUCUS. Mr. President, it is with great reluctance that I feel constrained to say a few words, urging my colleagues, as meritorious as this is and as wonderful as the Senator from Maine is in representing her State, that this is just regrettably not good policy. I appreciate the remarks of my good friend from Virginia pointing out the sense-of-the-Senate resolution. I think Senators tend to vote for sense-of-the-Senate resolutions because that is our sense, that it would be a good idea. But when, as the Senator well knows, we have to decide what is within the parameters of how much we can spend and when it comes down to crafting something that is particular and specific, that is where the rubber meets the road and we have to decide whether the specific idea is really good tax policy or not. There is a lot of money here for education generally. It is about $35 billion, for higher ed and elementary and secondary ed. I am not going to list it all. I know that it doesn't directly help teachers. Teachers, I might say, in my State are probably some of the lowest paid teachers in the Nation. I might add to my good friend from Maine, I am afraid that some teachers are going to leave Montana to seek a better salary in other States. We are in a tough spot. If I didn't have the responsibility of managing this bill, I could very well support this. But I feel a responsibility to say a few words about it. First, it singles out for credit one group and one group only. If we start going down this road, then we are going to offer credits for expenses for every meritorious public service profession that exists. I know many teachers dig into their pockets to help their students. It is just awful, the things they have to go through to help their students. We don't begin to pay our teachers nearly enough, in my judgment. Given all that, I just don't know if it is wise to single out teachers as opposed to other professions. Second, the responsibility for teachers' salaries really is the school districts in the States. We are helping school districts tremendously in many ways by giving more IDEA money, more ESEA money, title I money, and all of these different categories that allow school districts to then spend more money in salaries for teachers. Districts will have a lot more money in total, so in addition to what they raise with property taxes, these programs will provide a lot of relief to the school districts. Third, this provision adds more complexity to the code. If there is anything we hear, it is that people want simplicity. They don't want more complexity. I know that doesn't sell very well when you are standing in front of schoolteachers or the NEA. We want to give a lot more to our teachers. Believe me, I am one of the strongest advocates in the State of Montana to give more money to our teachers. We should not be helping school districts in this way with responsibilities that are theirs when we have a better way, by giving more dollars to the other programs that I mentioned: IDEA, ESEA, and title I, et cetera. I wish we could support this, but as much as we would like to help, this is not a good policy to adopt.

Mr. BAUCUS. I yield the floor.

Mr. BAUCUS. I ask the Chair, under the consent agreement, is there any provision as to whether the Senator from New York or the Senator from Oklahoma go first?

Mr. BAUCUS. Mr. President, I will address another matter while we are waiting for Senator Schumer and Senator Nickles to speak with respect to the Schumer amendment. That will begin in about 8 minutes. I will make remarks about another part of this bill, the provisions of the bill comprising title XI, the pension provisions. First, some background. The American people, we all know, have many wonderful qualities but one of them, unfortunately, is not personal savings. People in other countries save more personally than do Americans. It is a concern many Members have. A lot of Members want to use the Code to encourage personal savings, and many provisions do so. During the last 20 years, personal savings rates in our country have consistently declined from a peak of under 11 percent of gross domestic product in the 1970s and the 1980s to zero or negative today. Why does this matter? A low savings rate means people are not putting their own money away for retirement. Social Security is helpful. We have other private savings provisions such as IRA accounts which are helpful, but the third leg of the retirement stool is pensions. The more people have in pensions that they can rely on for retirement, the more it will help. That means, importantly, less dependency on Social Security, which many Americans are too dependent upon. Sixteen percent of today's retirees rely exclusively on Social Security benefits for their retirement income. Two-thirds of all retirees today rely on Social Security for over one-half of their retirement income, yet Social Security only replaces an average of 40 percent of a worker's income because the program was never designed to be a retiree's sole source of support. Retirees continue to rely so heavily on Social Security there will still be far too many Americans spending their retirement years one step away from poverty. On top of that, a low savings rate means less capital is available for new investment. America will continue to grow more if we have capital available for investment. That is not only physical capital, it is human capital. Increased capital for investment is an essential element to our international competitiveness. Particularly now, at a critical time, where economic growth is slowing down a bit, something we want desperately to turn around, helping more Americans to save for their retirement would be a long-term economic stimulus for our country. Mr. President, I will have further remarks. I understand the minority leader is on the floor now and would like to speak on the amendment offered by the good Senator from Missouri. So I yield the floor.

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

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

Mr. BAUCUS. Yes.

Mr. BAUCUS. Mr. President, I don't see any Senators who want to speak. We have an order that there will be a vote at 7:45.

Mr. BAUCUS. Mr. President, I do not object, with the understanding that if the Senator wishes to bring up his amendment, it is in consultation with the Senator from Iowa as well as myself.

Mr. BAUCUS. At some point, yes. Mr. President, reserving the right to object again, the Senator well knows the clock is ticking. He may not have the time to debate his amendment if he is at the end when the clock has finally ticked down.

Mr. BAUCUS. Subject to the discretion of the two managers.

Mr. BAUCUS. Reserving the right to object.

Mr. BAUCUS. I don't know. Perhaps the Senator from Nevada and others know what the leadership's view is on the timing of the vote of the next amendment. Perhaps the Senator from Nevada can shed some light.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the clerks at the desk, with legislative counsel's assistance if needed, be authorized to correct the drafting of any Members' amendment that may be affected by changes in the committee amendment which the Senate just adopted.

Mr. BAUCUS. Mr. President, I rise to enthusiastically support the committee bill. This has not been an easy bill to write. These have been tough negotiations, a lot of give and take, as almost always is the case in any matter of significant consequence. The same is certainly true now. I might say the Senator from Iowa and I, along with other members of the committee, had many meetings. We took a lot of time to get comfortable with the various provisions of the bill, just to understand what they are. There was a lot of to and fro, but I might say it was all done in good faith. This is not easy. When there are so many moving parts and it is so complicated, by definition, people have to act professionally in order to get something accomplished and that is what happened. I have the highest respect for the chairman of the committee, who has done a yeoman's job, as well as the other members of the committee who worked hard to make this a workable bill. As we all know, when all is said and done, we must have a balanced compromise. We have to reach some agreement because we all cannot have our way in the constitutional way we as a country organize ourselves. We have to have some organization. That is basically majority rule. Let me explain why I think this is a good bill. In the first place, I believe this is a significant improvement, from my perspective, over the bills that were proposed by the President and passed by the Congress. Most significantly, the committee bill provides a much better distribution of tax cuts. That is a matter that I think is lost upon a lot of people. The committee mark has a better, more progressive distribution of the tax cut than either the bill suggested by the President or by the House. In fact, this might raise some eyebrows. According to the Joint Tax Committee analysis, the committee we all look to as the best independent analysis, the bill before us today will make the tax system more progressive than under current law--not only compared with the President's proposal, not only compared with the bill that passed the House, all the various bills that passed the House, but also compared to current law; that is, this bill is more fair in the distribution of tax cuts to payers of income taxes than current law. That is not to say this bill is better than the President's. I would not ask Senators to vote for a bill just because it is better than it could have been. Instead, I believe the standard we should apply on a tax bill is whether on its merits, taking everything into consideration, the bill makes positive changes that improve our tax system and are better for most Americans. By that standard, I suggest this bill passes with flying colors. Let me explain why. First, we create a new 10-percent bracket. This is the single biggest piece of the bill--$438 billion over 10 years, by far the single largest component. There is a new 10-percent tax bracket which has the effect of benefitting every single American who pays income taxes. Most of the benefit goes to low- and middle-income taxpayers. In fact, about 75 percent of the benefit goes to people who earn less than $75,000 a year. Let me repeat that statement. Seventy- five percent of the benefit under the 10-percent bracket, the new bracket, goes to people who earn less than $75,000 a year. One other thing. Unlike most of the other tax cuts in the bill, this one takes effect immediately--better yet, retroactively to the first of the year. This will not only help average taxpayers but it also provides an economic stimulus because it puts more money in the hands of consumers. We also expand the tax credit for families with children from $500 to $1,000 per child. And we do more. We increase the amount of the credit that is partly refundable so lower income families can benefit from the credit as well. We do this along the lines suggested by Senators Snowe, Lincoln, Kerry, Jeffords, and Breaux. It is a very important new contribution that they have authored. It is a good idea of theirs. I commend particularly Senator Snowe, who is the lead sponsor of the group to get more refundability under the child tax credit. This is a big improvement over the current law. Why? Because it means we will increase the tax credit for 16 million more children, I might say, compared with the President's bill; that is, this bill provides a benefit to 16 million more American children than the proposal of the President and the House. But that is not all we do for lower income working families. We make important reforms that expand and simplify the earned-income tax credit so it is available to many more low-income working families than it is today. In fact, the bill contains the most significant expansion of the EITC, earned-income tax credit, in many years. We also simplify the EITC--make it much easier for eligible families to qualify. These are huge simplification provisions. And there is more. We create new incentives for education. For example, we help parents set money aside for their children's future education. We encourage employers to help their employees attend classes and earn degrees, and we help college students pay off their student loans--a big improvement. Because of the leadership of Senator Torricelli and Senator Schumer, we create a new provision in the Tax Code that allows a deduction for college tuition payments. Many American families have a hard time meeting their children's higher education expenses. This provision is of significant help. It is not a total solution, but it goes a long way toward helping families provide for their children's higher education. All in all, I think it is an education tax incentive package of which we can all be proud. There is more. We include a pension tax incentive package that has strong bipartisan support in the Senate. We all know the problem. Our personal savings rate is at rock bottom, having gone from 11 percent of GDP 30 years ago to zero or even negative savings today, meaning, among other things, that people are not putting enough money away for their retirement, thereby increasing the potential burden on Social Security. The pension provisions of the bill will help address this problem, taking another step forward to addressing the baby boomer problem that we know is coming in about 10 years. We make it easier for workers to take their pension plans with them when they change jobs. We strengthen pension security and enforcement. We enhance pension fairness for women. We increase the contribution limits for IRAs and 401(k)s so people can put more money into them. On top of that, we create two new incentives that will dramatically expand pension coverage for lower income workers. One helps small businesses establish pensions for their employees. It is very hard today for small businesses to set up pension plans for their employees, much more difficult than it is for big business. In this bill, we help them do that. The other incentive is a new matching plan to help employees save their own money for retirement--again, an incentive to help employers match their contribution. We reduce the marriage penalty. We address the estate tax. These are not Republican priorities; they are not Democratic priorities. They are bipartisan priorities, important to virtually every single Member of the Senate. Those are the main provisions of the bill. Putting them all together, I believe the bill represents a very significant improvement over current law. That is the standard I think we should use. Is it perfect? No. Of course, it is not. Is it the bill that I would write, that any Senator would write? Of course not. That is not really the question. That is not the basic point. Rather, taken as a whole, does this bill represent a significant improvement over current law? I think it clearly does. At this point, I will address some of the key arguments that have been made against the bill. First, the process. Some will say that we should not be railroading this bill through the Senate on a reconciliation fast track which limits debate and amendment. I agree. To my mind, it is unnecessary, it is inappropriate, to use reconciliation instructions for a tax cut. I very much agree with the statements made earlier today by the senior Senator from West Virginia, Mr. Byrd. I believe he is right. He argued for a process that is much more open, that is more expansive, so that tax bills have a lot more time in this Chamber, and many more opportunities for amendment. I remind my colleagues, President Reagan's tax cut in 1981 was not under reconciliation, it was not under this constrained process; rather, it was outside reconciliation. The bill was considered here for 2 weeks. There were hundreds of amendments. That is democracy. I might say--it is a bit of a stretch here, but I think it is an important point--Thomas Jefferson once said: A country is only as strong as that bond and that nexus between the people and the people's representatives. Representatives cannot do it alone. People cannot do it alone. But it is that bond between the people and the people's representatives which, by and large, determines the strength of a country. If we rush a tax bill through too quickly--one of the most important bills that is going to be before this body perhaps in several years-- clearly, we need that process, that bond to work. And for it to work, we have to have the opportunity to offer many amendments, to debate them very thoroughly, to get the people engaged in what we are doing. By rushing this through, people do not know what is in this bill. There are problems as a consequence of that, but the deeper problem is people become disconnected from the process, and they care less about what we are doing because they do not know what we are doing, and they do not know how we got to where we are. They are going to start to become more cynical, less engaged. That is not good. And just as we all know in running for office, you cannot satisfy--I think as President Lincoln said--all the people all the time, but we do the very best we can. We want to fully engage people so they are more involved in getting a better product, but also because in engaging people, they understand the reasons for what we are doing much more clearly. That is fundamentally why I think this tax bill should not be in reconciliation but, rather, should be in an expanded process. That is why I voted and spoke against, I might add, the amendment of the good Senator from New Mexico some while ago to add reconciliation instructions to the budget resolution. It is really not good Government. Despite our best efforts, I must say, though, that dye has been cast. That decision has been made. So we have to work within the process that the Senate has chosen to employ. We have to work with what is given to us. We have to play the hand that is dealt. And that hand, unfortunately, means reconciliation for the tax bill. In any event, I might say, the chairman of the Finance Committee, Senator Grassley, has provided, I think, the best process possible under these circumstances. He has been totally open. He has been totally bipartisan. He has been equally fair. In light of the fact that I oppose the process, it should not compel us to oppose the bill. Let me turn to the substantive criticism of the bill. One criticism is the tax cuts are back-loaded. The bill does, in fact, cut taxes more in later years than in earlier years. That is true. In large part, this is because of the constraints of the budget resolution. But there are several points to keep in mind. First, the bill is significantly less back-loaded than the President's plan. I do not have the chart here. I think I will ask to have that chart put up. But the point is, the bill is significantly less back-loaded than the President's plan. That means these tax cuts come earlier, and the bill costs 36 percent less in the last year, in 2011, than in the President's plan. That is significant. Yes, there is still some back-loading. Yes, back-loading is a problem we should address. But the point is, we cannot let perfection be the enemy of the good. This is better than the President's proposal. As the chart shows--this is in the last year of the bill we are now considering, the last year being 2011--the administration's bill, which is similar to the House-passed bills, would cut taxes close to $300 billion in that last year. The bill before the Senate, which is shown in the blue on the right, indicates it is about half, a little more than half, about $186 billion, cut in the last year. So it is an example of less back-loading than the President's. I will show you another chart as well. This chart shows over the 10- year period of the bill--it is hard to see; I apologize; I am not the best color-contrast guy in the world in putting this chart together-- the red line going up is the administration's proposal, which shows that each year the tax cuts in the President's bill are greater. That is the red line that slopes upwards. It is hard to see, but the blue line that is underneath it shows, particularly beginning in the year 2004, the cuts in later years are much less. You will also notice that the blue line, though it is not really horizontal, is much more horizontal than the red line, again, showing that although there is some back-loading, there is much less back- loading in this bill. In addition, the most significant back-loading problem comes from repealing the estate tax in the year 2011. For that, and other reasons, I hope we can replace repeal of the estate tax with reform of estate tax. Third--and this is in explaining why there is this back-loading problem--under the Byrd rule, provisions that lose revenue during the second 10 years must be sunset; that is, they must be terminated. So if we do that--and this bill does do that--we can assure that the changes that are scheduled to be made in later years can be reexamined--and must be reexamined--down the road, in light of future budgets and future priorities. Another argument that has been made against the bill is that it is unfair. Critics say that too much of the tax cut goes to people at the upper end of the income scale. I might say, both sides bring passion to this argument. Critics of the bill rail against cutting taxes for millionaires. On the other hand, there are those for whom the top rate of 33 percent, down from 39.6, is a holy grail. Let's step back for a minute and just look at the facts. First, our Nation does have a progressive Federal income tax system. According to the Joint Committee on Taxation, the top 10 percent of taxpayers today pay about 70 percent of all Federal income taxes. The top 1 percent pay about 36 percent of all Federal income taxes. Our tax system is, therefore, very progressive today. In fact, essentially in each of the years since 1993 up through today it has consistently been more and more progressive. Given this progressive system, a tax cut that applies across all income classes is, by definition, going to result in a larger tax cut for upper income Americans because they pay more taxes. That is just simple mathematics. That, in part, is what happens under this bill. We cut taxes across all income groups, so everyone who pays income tax today benefits, and those who pay a large amount of income taxes do, in fact, receive a larger benefit--larger, I might add, than I would prefer. But remember, the bill does more than just cut income taxes. On that distribution point, let's take taxpayers with incomes of $25,000 or less, taxpayers with incomes of $50,000 or less, taxpayers with incomes of $75,000 or less, and taxpayers with incomes of $100,000 or less. In each of those categories, the percentage of tax reductions under the committee bill is much greater than under the administration's bill. And they vary; on average it is about 12 to 10 percent greater. Contrast that with taxpayers with incomes of $100,000 to $200,000, and taxpayers over $200,000. In both of those categories, the proportion of benefits under the committee bill is less for those taxpayers than under the President's plan. Again, to make the basic point: This bill is more progressive because it shifts tax cuts in a greater proportion to those Americans with incomes under $100,000. What it does is slightly decrease the proportion of tax cuts for higher income Americans compared with the President's and/or the House bill. This bill makes the tax system more progressive. We have also tried to cut taxes for people whose primary tax burden is not income taxes but payroll taxes. After all, about 80 percent of Americans pay more in payroll taxes than income taxes. Our bill doesn't leave these people out; it brings them in. These are the provisions that accomplish this: We expand and simplify the earned-income credit which may be the best program ever created to help low-income working families. We double the child credit and make it partly refundable, covering 16 million more children. We create new incentives to help low-income savers save for retirement. I have mentioned a lot of the provisions. So what is the practical effect? Take a married couple with two children earning $15,000. Under the President's proposal, they wouldn't get any tax cut at all. Once our bill is fully in effect, they will get a tax cut of $1,152, very significant for lower income Americans with kids. Putting it all together, I believe the bill we are considering today is one of the best bills ever written for lower and middle income families. I will say it again: This bill is one of the best ever written for lower and middle income families. So when we talk about fairness, let's keep our eye on the ball. Does this bill give wealthy people a tax cut? Yes, it does. But that is not the only question we should ask. There are other questions that might be more important. For example, does the bill help those who are struggling to feed their families and to pay their bills? Yes, it does. Does it help the single mom, the construction worker, the two-earner couple trying to put money away for their children's education? Yes, it does, and it helps them a lot. So with respect, I suggest to those who say the bill is unfair, just step back a bit, take a look at the whole picture. If they do, I am confident that many, not all, will conclude that the bill deserves their strong support. As I said at the beginning, this is not a perfect bill, but it is balanced. It is bipartisan. It is good for taxpayers. It is good for working families. It is good for the economy, and it is good for the country. I urge Senators to support the bill.

Mr. BAUCUS. Mr. President, I yield to the Senator from North Dakota.

Mr. BAUCUS. Reserving the right to object, Mr. President, if the Senator wants his amendment to be the next amendment under consent, that would be fine but not to be laid aside, which puts the Senator in the position to be able to object any time another amendment might arise.

Mr. BAUCUS. Reserving the right to object, I don't think that is a tenable position for the committee to be in because any time we want to go to another amendment, the Senator from New Hampshire would have the right to object. I think it is all right, if we can agree to an agreement that the amendment of the Senator from New Hampshire could be next but not that it be laid aside in a manner where he could object to any subsequent amendment that might be offered.

Mr. BAUCUS. The Senator can offer an amendment in his own right.

Mr. BAUCUS. Mr. President, as the Senator from North Dakota knows, we are trying to negotiate out a sequence and order of amendments. I very much appreciate the graciousness of the Senator from North Dakota. At this point, since I do not know what the Senator from Texas, who has an amendment on the subject, desires, I suggest that the Senator proceed with his amendment, and that after a reasonable period of time we will be in a much better position to know about how to sequence this. I urge the Senator to proceed.

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

Mr. BAUCUS. Mr. President, this is clearly a very important debate, and we very much want to reduce taxes for the American people. We want to do it fairly. Different Senators have a different perception of what fair is. It generally reflects their States. States are different. For some, it reflects different ideological points of view. It is America. We all have different points of view, and we are all trying to do the best we can. There is an old saying about statistics: Anybody can do what they want with statistics. When Senators are arguing their points, they are going to find facts and figures and use statistics that make their case better, the basic problem being in most cases Senators do not give the full picture because, correctly, they are advocating their point of view. That must be very frustrating to the American public. Who is right? Somebody makes one set of claims; somebody else makes another set of claims. The tax legislation is confusing enough as it is, but when people hear different sets of numbers, they seem to be juxtaposed to one another. Who is right? It is basically, for the reasons I indicated, because Senators tend to choose statistics that make their case, but are not broad brush and do not give a fair picture. I begin with complimenting the Senator from North Dakota. I do not know anybody in this body who has a greater command of the budget, the effects the different proposals in the budget have on the American economy, tax distribution, and all the components that go into a budget. He has charted us out in many respects, particularly in our conference luncheons on Tuesdays. We saw a lot of good charts. They are very informative. It pretty much helps the debate. It is very hard for people to hear statistics, and it is a little easier if they see charts, particularly if they can see not just a bunch of numbers but a graph which shows trends. The Senator from North Dakota has done a super job in helping to educate this body, and particularly the American public. I want to point out a little broader picture of the lay of the land. Basically, the statistics presented by the Senator from North Dakota about the distributional effect of the bill before us, particularly the top 1 percent--and his argument that the bill gives a greater proportion of benefits to the most wealthy compared with current law-- is accurate if you include estate tax provisions. But there are lots of analyses that show it is not accurate if you do not those provisions. Most Senators do want to include Federal estate tax reform and/or repeal. That is a fact. I know the Senator from North Dakota does. Let me talk about the Joint Tax Committee analysis. They are the group we look to for honesty and integrity in this process. Unfortunately, they only do analyses for 5 years. They rank income categories according to groups. Their analysis is a little different than the so-called Citizens for Tax Justice, a privately funded organization, which tends to do analyses in quintiles, rather than income brackets, like the Joint Tax Committee. According to the Joint Tax Committee, taxpayers with incomes of $200,000 or more--that is the top 4 or 5 percent of taxpayers--do not receive 33.5 percent of the benefits of this bill, as my good friend from North Dakota says. Instead, they will receive 22.5 percent of the benefits of the bill. Those are taxpayers who pay about 32 percent of all Federal taxes, not just income taxes. In fact, if you use the same analysis used by my good friend from North Dakota, the top 1 percent of taxpayers pay 26 percent of all Federal taxes and would receive 19 percent of the tax cuts in the bill if you take out the estate tax provisions. We have to be honest with ourselves: Are we or are we not going to include estate tax provisions? Those making the case that the distributional effect helps upper income Americans more, are not saying they prefer that because they favor Federal estate tax reform and/or repeal. I am pointing out that when you include Federal estate tax, the analysis is more accurate, but almost every Senator wants to include estate tax reform and/or repeal. The results work out that way because clearly the most wealthy Americans get the benefit of estate tax reform and/or repeal. In summation, the top 1 percent of taxpayers, according to the analysis by the Citizens for Tax Justice, are those with incomes of $373,000 or greater, and the argument is these taxpayers receive 33 percent of the benefits of the bill. If you look again, more deeply at the argument, the analysis presented includes estimates of the distribution of the estate tax provisions of the bill. Again, both parties, and nearly every Member of this body, support estate tax reform and/or repeal, and no matter how you do estate tax reform, nearly all the benefits go to the wealthiest Americans, and that is why there is that result. If I were writing this bill, it would be different. But I wanted to make it clear that the statistics--if we are honest with ourselves, we have to indicate whether or not we are for estate tax reform and/or repeal, and if we are--and most Senators are--then the statistics tend to have the result that people who also want estate tax reform complain about. I hope that clarifies things a bit, so we at least know what we are doing. I yield the floor.

Mr. BAUCUS. Mr. President, I will make some general comments to help put this debate in context. First of all, under this bill, who are the winners and who don't win quite so much? Under this bill, the big winners are married couples with kids. By far, they receive a greater share of the benefits of this bill, not only absolutely but proportionately. Who does not do quite so well? Singles. Single taxpayers do not do nearly as well in receiving benefits under this bill. Who else does not do quite so well under this bill? The elderly. The elderly do not do quite as well compared with married couples under this bill. Who else? Students. Students do not do quite so well compared with married couples under this bill. In the broad brush of things, the bill already gives very significant tax relief, in fact, disproportionate tax relief, to married couples already. We on the floor can decide to do still more. But if we do, it is at the expense of others. The others will necessarily be those nonmarried. Who are the nonmarrieds by definition? They are singles. And some of them are elderly and some are students. So it will be a shift away from people already not receiving nearly as many benefits absolutely and proportionately as married couples. That is a decision we can make here. Life is full of decisions. But that is the effect of what these amendments do. I mention one group: students. The amendment offered by the Senator from Texas will cut education to help married couples even more. These are important provisions. Let me mention what they are: expansion of education savings accounts, increasing contributions from $500 to $2,000 and also permitting withdrawal of funds for K-12 expenses; that is, kindergarten through high school, elementary and secondary expenses. That would be delayed under the amendment offered by the Senator from Texas. What else? The bill already eliminates the 60-month limit on deductibility of student loan interest. That is a big benefit for students. Students graduate from college, most have student loans. I have forgotten the figure. The average student loan is in the neighborhood of $15,000. It is not right that we cut off interest deductibility on those loans after 60 months. This bill says, OK, we are going to eliminate that 60 months. You can deduct the interest on student loans after 60 months. That is in the bill. The Senator from Texas, in order to pay for more relief to married couples, eliminates that 60-month deletion. It is still current law, up to 60 months. In addition, the amendment offered by the Senator from Texas would reduce significantly the above-the-line deduction for college tuition expenses of up to $3,000 in 2002 and 2003, and under the bill, above the line. She would limit it also for 2004 and 2005. I think for the purposes of the Senate, it is important to know that the bill, as I said, doesn't give a lot of help to students. It is fair to married couples already. I don't think it is a good idea to take even more away from students in education expenses generally and shift it over to married couples. I might also add, generally, there have been comments about this bill. People take potshots at the provisions of the bill dealing with solving the marriage penalty. Let me remind all of us again that this is the context of what is going on here, so we don't get wrapped around the axle and forget the bigger picture. Currently, more taxpayers today receive a marriage bonus than are inflicted a marriage penalty. Many more American taxpayers get a benefit under the tax law on account of being married than they receive a penalty on account of being married. What am I saying? American taxpayers, as couples, where the income of one spouse is, say, at least 60 percent of the income of the other spouse, receive a bonus because their incomes are combined. That automatically gives them a bonus compared to filing separately. The couples who receive a penalty today--not always--tend to be couples where one spouse earns approximately the same income, within about 20 or 30 percent. There is a marriage penalty, no doubt about it. We should do all we can to fix it, and we will. We are moving in that direction. But as we move in that direction, I remind my colleagues that we can't do everything at the same time. We know that is an impossibility. We have a limit here of about $1.35 trillion over 11 years. That is a limit. We would like to repeal the marriage penalty. We would like to give all the money back to the taxpayers so taxpayers don't have to pay income taxes. We want to have everything. But life is choices. We in the committee, working together, have made choices that are a tradeoff of different requests by Senators telling us what they want in this bill. If you put that together, we have tried to fashion a marriage penalty provision that is geared toward middle- income taxpayers. That is why the provision is doubling the standard deduction for married couples and also doubling the 15-percent bracket amount for married couples. We could have done more. We could have gone to upper brackets, more wealthy Americans. We wanted the distribution to be fairer to low- and middle-income Americans. That is why this is in the bill. I urge Senators to remember we can't just take these amendments in isolation. They are in context. They are in the context of the bill, of larger issues and of choices we have to make today, knowing that tomorrow, next month, in future years, we will make other choices and we will be able to make up for what we may not have done today. We will do what the American people want on the basis of trying to put these pieces together in a reasonable manner. This provision also has been sharply criticized by Senators who say it takes effect later, not right away. It has been ridiculed by those saying: ``Now you have it, now you don't have it''; it's a shell game. Those Senators conveniently don't point out other provisions in the bill that do take effect right away, which they support and which are expensive. They make it more difficult for everything in this bill. One is the creation of a 10-percent bracket, which is effective retroactively, I might add, to January 1 of this year. That in and of itself costs about $425 billion. That is not small change. That is immediate tax relief. A large percentage of the taxpayers who are in the 15-percent bracket will get that benefit. It is effective now and it helps the distribution for middle and lower income Americans. It is a very positive provision, which I know the Senators who complained about the delay of the marriage penalty really like--this 10 percent. They don't talk about it. You have to look at the whole bill and, I might add, too, the distributional effect of this bill is better significantly than the House-passed bill. It is better significantly than the proposals offered by the President. I believe when you add it all together, it is a bill that we can--a lot of us but not all--support. The marriage penalty provision is not perfect. I wish it were made effective earlier. I wish it could apply to all the marriage penalty provisions that are currently in the code, and they number about 65. This only deals with about 3 or 4 of them. The EITC provision I know the Senator from North Dakota likes. That is really good. But we don't deal with the other roughly 58 marriage penalties in the code, which have a little less effect because we don't have the money to eliminate them. They are a little less politically demanding than the ones with which we dealt with in this bill. I respect my colleagues for their amendments. I remind them there is already a disproportionate relief for married couples in this bill, compared with singles, elderly, and students. I don't know if we want to make that worse.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to recognize a young man who represents the best of Montana, Curtis Gibson. Curtis has distinguished himself as an intelligent, self-motivated Eagle Scout from troop nine in Billings and I am proud to speak about his accomplishment today. I would like to begin by stating that Curtis is the son of Robert and Linda Gibson and the brother of Kelly Gibson, who is also an Eagle Scout. As you may know, a Boy Scout is called to follow a strict code of conduct. He must be trustworthy, loyal, helpful, friendly, courteous, kind and brave. I am proud to say that Curtis Gibson embodies all of these attributes. While upholding the principles of the Scout oath and law, a potential Eagle Scout must earn 21 merit badges and prove to be a capable and effective leader. Moreover, he must also show that he has planned, developed, and led others in various service projects. I am here to affirm that Curtis has met these criteria and has recently been awarded the rank of Eagle Scout. Along the way to becoming an Eagle Scout, Curtis organized 20 scouts from Troop Nine to improve Montana's park system. They designed and constructed covered information kiosks at the entrances to Two Moon Park and Norm Schoenthal Island to benefit the Yellowstone River Parks Association and the Yellowstone County Parks Department. These scouts volunteered more than 100 hours during the school year to complete the project and I am grateful for his dedication to the greater Billings community. Curtis's project certainly benefits our park systems, but it also serves Troop Nine and those who gave their time for service and leadership. I am proud to say that Curtis has been involved in scouting for more than ten years and that he has spent six of those years with Troop Nine. Even though Saint Bernard's Parish in the Billings Heights is their home, Curtis has allowed his scouting activities to take him to Minnesota, Wyoming, South Dakota, the Florida Keys and Canada. In addition, Curtis recently joined Venture Crew Seven. This group joins together experienced Boy Scouts in the Billings area for extensive outdoor activities and service projects. However, Curtis has not limited himself solely to scouting. He is an active member of the student body at Skyview High School where he competes on the varsity swim team. Last year Curtis was named to the Montana all-state swim team. Once again, I would like to express my appreciation to Curtis for his dedication to the state of Montana and his service to the city of Billings. Curtis has prepared himself well for a lifetime of leadership. The youth of our communities will certainly one day, direct the future greatness of our Nation. It gives me great joy to see that Curtis has taken an active role to ensure the continued success and triumph of Montana and the United States.