Max Baucus

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, I move to waive the Budget Act. I ask for the yeas and nays.

Mr. BAUCUS. Mr. President, this is a good amendment which includes the best two-thirds of the estate tax relief in the House bill, which is the bill promoted by the majority side. It combines this estate tax relief with important incentives for middle-income persons to save for their retirement. Retirement security is known as a stool with three legs--Social Security, employer-sponsored pension plans and personal savings. This amendment goes a long way toward strengthening those last two legs for middle and lower-income America. By giving a tax credit to those under $75,000 in income to encourage them to save for retirement, and tax credits to small businesspeople who set up new plans for their workers, we can truly help average Americans save for the future.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I understood that Senator Schumer was going to speak, according to the list that I have.

Mr. BAUCUS. That put us behind.

Mr. BAUCUS. I thank the Senator.

Mr. BAUCUS. Mr. President, I heard the speech of my good friend from Georgia on the House bill. After very thorough consideration of this matter, I reach a different conclusion, I must say to my good friend from Georgia. Frankly, I urge my colleagues to oppose the House bill to repeal the estate tax. I do this for three reasons. First, there is a significant chance that the debate will be conducted under the restrictions of cloture, which denies Senators a fair opportunity to propose amendments. Second, the House bill reforms the estate tax the wrong way. There are all kinds of ways to reform the estate tax. The House bill is the wrong way. Third, the House bill crowds out and pushes aside other more important priorities in which the vast majority of the American people are far more interested. Before getting into those arguments in detail, I will provide some background about the estate tax. Nobody likes paying taxes, whether it is income taxes, sales taxes, payroll taxes, corporate taxes, or estate taxes. Of course, if one asks in a poll, would you like to have a certain tax repealed, the vast majority of Americans would say, yes, I don't like paying that tax, repeal it. Unfortunately, we all know we do have to pay some tax. After all, in a civilized society, there is some revenue that has to be raised to support society's governmental, organizational purpose and structure. The only question is, obviously, how much and what is the balance. We should aim to have a tax system that raises the minimum amount of revenue that is necessary and does it in a fair and balanced way. For more than 80 years, there has been a consensus that the estate tax is a small but important part of a fair and balanced tax system. It has been a bipartisan consensus. The Federal estate tax was first proposed by President Theodore Roosevelt. It was repeated by his successor, William Howard Taft. In fact, in his inaugural address in 1909, President Taft said that it may be necessary to raise additional revenue and that if so ``new kinds of taxation must be adopted, and among these I recommend a graduated inheritance tax as correct in principle and as certain and easy of collection.'' That was President William Howard Taft. A few years later, in 1916, Congress needed to raise additional revenue primarily to prepare for possible involvement in World War I. Congress had to make hard choices. Congress could either raise tariff rates or it could come up with an alternative. This is what the House Committee on Ways and Means said: It is probable that no country in the world derives as much revenue per capita from its people through the consumption tax as does the United States. It is therefore deemed proper that, in meeting the extraordinary expenditures for the Army and the Navy our revenue system should be more evenly and equitably balanced and a larger portion of our necessary revenues collected from the incomes and inheritances of those deriving the most benefit and protection from the government. Congress enacted the estate tax in 1916. It has been amended several times. For example, in 1932, in response to revenue needs generated by the Great Depression, the rates were increased significantly. In 1981, under President Reagan, the rates were cut significantly, with the top rate falling from 70 percent to 55 percent. Today the Federal estate tax applies to estates with a value of more than $675,000. That threshold amount is scheduled to rise to $1 million by the year 2006. There are special rules for farms and for family businesses. All told, the tax applies to the estates of about 2 out of every 100 people who die each year. That is about 2 percent. It raises $28 billion a year. To put that in perspective, it is 3 percent of the amount that is raised by the Federal income tax. under the estate tax. That brings me to the House bill we have before us today. The House bill works in two steps. First, over the first 9 years, the House bill gradually reduces estate taxes down to a top rate of about 40 percent. Then in the year 2010, a full 10 years after enactment, it completely repeals the estate tax. At the same time the House bill imposes a new requirement, something of which not many Senators are aware. People who inherit estates worth more than certain amounts must maintain what tax lawyers call the ``carryover basis'' of inherited assets. That is in the House bill. All told, the 10-year cost of the House bill is $105 billion. But it is important to note that the House bill is constructed to disguise the real long-term costs. In the 10th year, when the estate tax is completely repealed, the cost is almost $50 billion a year, and the cost will rise each year after that. I have seen estimates up to $750 billion over the second 10 years. That, in a nutshell, is the House bill. As I said at the outset, I oppose the bill. I do so for several reasons. My first concern is with the process. Once again, the majority may invoke cloture as a first resort. This limits debate. It limits the ability for Senators to offer amendments. Most important of all, it denies the American people an opportunity to have their elected representatives conduct a full, unfettered public debate about a very important issue. I hope that we can avoid cloture and have an open debate. I have another concern about the process. This is a serious issue, whether we repeal a Federal estate tax. We are considering a proposal that can be fairly described as radical--total repeal. That is pretty radical. The House bill would completely repeal a tax that has been an integral part of the Federal tax system since 1916; repeal it, lock, stock, and barrel, get rid of it totally, with no amendments and no hearing. That raises many serious questions. One is the impact across income levels. I am not talking about class warfare. Believe me, that is one thing I don't like to get into; I don't believe in it. That is bashing the rich. Rather, I am talking about fully understanding the impact of this proposal on the overall fairness and balance of our tax system, a subject we have not addressed. It hasn't even been raised; we haven't had the opportunity. Another question is about the new rules to maintain the carryover basis of certain inherited assets--very complicated, totally new, not debated, not even known by a majority of Senators. In some cases, this would require recordkeeping across several generations. Just think of that, requiring new recordkeeping across several generations. I remember back when Congress tried to do something similar in 1978. The new law was extraordinarily complex. It created a fierce public backlash, and we quickly repealed it. We would do the same if this were ever enacted into law; I guarantee it. Do we want people to have to keep track of the price that their great-great-grandparents paid for property and investments? Under the House bill they will have to. Another question is the impact on charitable giving. A great deal of charitable giving comes from bequests. People make these bequests primarily because they want to help communities. That is a good cause. But we all know in some cases there is a tax planning element because charitable contributions are deducted from the value of an estate. Do we know how repeal of the estate tax will affect charitable giving? Has that been discussed, debated? Many estate tax lawyers I talk to tell me: Max, if you repeal the Federal estate tax, it is going to have a substantial effect on charitable giving. There will be a substantial reduction in charitable giving, major, big time, if you repeal the Federal estate tax. Another question is the impact on States. Currently--this is not well known; how could it be, there hasn't been a hearing; we had no opportunity for amendments--currently an estate receives a credit for inheritance and estate taxes that the estate pays to a State government. As a result, these State taxes generally don't increase the overall burden on an estate. Instead, they shift revenues from the Federal Government to the States. It is about a third. The long and short of it is, about a third of all the Federal estate taxes that are collected go to States. We, therefore, collect the revenue that goes to the States. Under a total repeal, that is the end of that. Does anybody know that? Do the States know that? Do the Governors know that? I don't think they have focused on this because they don't know about it. How could they? There have been no hearings. If the Federal estate tax umbrella is repealed, many States may face strong pressure to reduce or eliminate their own inheritance taxes and estate taxes--resulting in unintended consequences, unthought-out consequences, unknown consequences. Still another question is how repeal of the estate tax will affect the concentration of wealth. As we all know, one reason the estate tax was enacted and later strengthened was to limit the accumulation of huge fortunes that can be passed on to create economic dynasties. Are we prepared to say that today this is no longer an issue? Now I am not trying to be judgmental, Mr. President, believe me. I am just raising very important questions that have to be discussed, debated, and thought out. I am not suggesting I have all the answers. I am simply saying these are very serious questions that deserve more time and attention than we are giving them. After all, we are not referring the House bill to the Finance Committee for a hearing where the questions can be addressed. In fact, the Finance Committee hasn't held a hearing on estate taxes in this Congress. I will repeat that. The Finance Committee has not held a hearing on estate taxes in this Congress. Instead, we are rushing the House bill to the floor under cloture. Why are we doing this? Why not hold hearings so that we can more fully understand the implications of the House bill? That is just my first concern in the process. Now my second concern. While the House bill reforms the estate tax, it reforms it in the wrong way. There is a right way and a wrong way to do things. The House bill reforms the wrong way. For a long time, I have supported reform of the estate tax. Most of us here do. I have worked on special rules for farms and ranches. A few years ago, I worked closely with Senator Dole on reforms for family- owned small businesses. Despite these and some other improvements, the estate tax still hits some people too hard, especially those who own farms, ranches, and small businesses. We should fix that. We should fix it now. We need to help our farmers and our small businesses. The amendment that I and the majority of my side support will do that. The House bill that we may adopt, would do very little for those estates, very little for those farmers, ranchers, and small business people--until 10 years later when, under their bill, it is fully repealed. On the other hand, the alternative that Senators Moynihan, Conrad, and I propose would reform the estate tax in the right way. It would do two things that are simple but effective. First, we dramatically increase the amount that is exempt from the estate tax. Currently, it is $675,000. We increase it to $1 million per spouse right away. And a few years later, we begin to increase it again until it reaches $2 million. For a couple, that would be $4 million. Second, we increase the family-owned business exclusion to $4 million per spouse. For a couple, that is $8 million. These simple changes have a huge effect. The first year, we would exempt over 40 percent of the estates that currently are subject to an estate tax. The fact is, it is much more relief for estates in this range than the House bill would provide. As this chart shows, the Democratic alternative is on the left. This chart shows who is left paying taxes after the first year. On the left side, you can see the bar there, which represents the Republican bill, 50,000 Americans would continue to pay estate taxes in the first year, just like they would under current law. In the first year, as it shows on the right side, under the Democratic alternative, only 30,000 Americans would pay estate taxes. Guess what. That basically continues for 9 years--not totally, but basically. So the Democratic alternative provides relief--significant relief--in the first 10 years. The Republicans' doesn't. There is some near the end. But there is a cliff effect after 10 years, with all of the consequences we have not even talked about. These simple changes have a huge effect. The first year, we would exempt over 40 percent of the estates that are currently subject to an estate tax. Under the Republican alternative, none would be exempt over the first 10 years. Over the longer term, when the provisions take full effect, the Democratic proposal would exempt two-thirds of all estates, three-quarters of all small businesses, and 90 percent of all farms and ranches that would otherwise have to pay estate tax. Remember, only 2 percent of the estates pay an estate tax. But we are saying in the Democratic alternative that three-quarters of those who currently pay--three-quarters of the small businesses, two-thirds of all estates, and 90 percent of all farmers and ranchers would be exempt. This chart shows that, under current law, the Democratic alternative exempts three-quarters of all family-owned businesses. The Democratic alternative exempts 95 percent of farms. On the left, under current law--this is a huge bar. That means those folks are still paying. Under the Democratic alternative, very few pay. You can see that. This other chart is showing the same thing with respect to all estate taxes. That is, over the first 10 years, fewer Americans will be paying estate taxes than under the House bill. Next year, it is expected that about 2.5 million Americans will die. Roughly 50,000 will have estates that would pay an estate tax under current law. Under the House bill, every one of these estates will still pay an estate tax, but at slightly lower rates, with the greatest rate reductions going to the larger estates. Again, the greatest rate reductions will go to the larger estates; whereas, under the Democratic alternative, the bulk--almost all of the relief--is immediate, and it goes to farms, ranches, and small businesses. The small business exclusion is raised to $8 million per couple eventually, and the unified credit is raised to $4 million eventually. So under our substitute, fully 20,000 of those 50,000 estates won't pay an estate tax at all in the very first year. They will be exempt, period. The exemptions will be concentrated on the farms, ranches, and the small businesses that need relief. That is the right kind of reform, not the wrong kind, which I mentioned earlier. My third concern is about priorities. At the end of the day, that is what this debate is really about. We provide complete relief to estates worth up to $4 million, and farms, ranches, and small businesses worth up to $8 million--complete relief. The proponents of the House bill insist that we go much further, at an additional cost of about $40 billion over 10 years. In later years, the cost will be much higher, about $50 billion a year. They argue, in support of the House bill, that whatever the size of an estate, we should not impose a tax at the event of death rather than when an asset is sold, and we should not impose rates as high as 55 percent. These are serious arguments. I don't dismiss them out of hand. Senator Kyl, in particular, has presented an articulate case. But reasonable people can differ. When we get the facts out and determine what is really going out, different people can reach different conclusions. I think it comes down to priorities. It seems to me that we in this Chamber could agree in an instant to provide relief to the vast majority of farms, ranches, and small businesses and, indeed, for the vast majority of estates that are now subject to the tax. We can do it for a cost of $60 billion over 10 years--less than in the House bill. So the real question, then, is whether it makes sense for us to spend another $40 billion to provide relief for people who are, by any measure, very well off and can take care of themselves. Again, it is a question of priorities. Despite the euphoria the new estimated budget surpluses seem to induce, we all know that, in truth, there is no free lunch. If we reduce tax revenue by another $40 million, we will have much less for other priorities, such as health care and prescription drugs, which are much more important to most Americans. Providing middle-class working families relief from payroll taxes is one example; providing incentives for education and savings, and providing incentives for research and development, which will keep our economy on the cutting technological edge, those are other alternatives and higher priorities of the American people which will help make our economy stronger, and providing prescription drug coverage so that seniors don't have to choose between food and medicine. Many, as we well know, have to make that choice. Oh, yes. Let's not forget that we are paying down the national debt. That is pretty important. I hope cloture is not sought. I hope that at some point soon we have a real opportunity to discuss and resolve our differences. After all, there are some positive signs. The President has signaled that he has an interest in compromise. Enlightened business leaders are now suggesting there can be a compromise. In other words, if we want to write a law rather than create a political issue, we can achieve a compromise that makes meaningful reforms in estate tax and also address other pressing national needs. That would be good news. I hope it happens. I reserve the remainder of my time.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that upon disposition of the Interior appropriations bill, the Senate proceed to the consideration of the China PNTR legislation and that the first amendment in order to the bill be Senator Thompson's China sanctions amendment.

Mr. BAUCUS. Mr. President, I hope the majority side will not object. PNTR transcends all other issues that are before the Senate. It is an international issue. It is a public policy, a foreign policy issue, one which clearly falls in the category of politics stopping at the water's edge. This measure is monumental in its implications. It must pass. The sooner it passes, the better. Delay is danger. We all know that our relations with China are extremely important but also tenuous. The more this issue is delayed, the more likely it is that some untoward, unanticipated, unexpected event might occur which would deteriorate relations between our two countries and make it more difficult to pass a very needed piece of legislation. I understand the majority's concern about scheduling, about appropriations bills, about other matters. But I strongly urge the majority party and the leader of the majority party, who correctly sets the schedule, to put politics beyond this, to put policy, public interest, and national security above all the other concerns that are legitimate here in the Senate because once PNTR is set for a vote this month, I predict that the logjam will break. It will be easier then to take up other measures. I very strongly urge the Senator from New Hampshire to pass the word on to the majority leader, and others, of the importance of bringing this bill up in July--this month, a date certain--so we can begin to establish a relatively comprehensive and solid relationship with the country that is going to be probably one of the most important countries that this country is going to be dealing with in this next century. It is absolutely critical. Several Senators addressed the Chair.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, last week, I was successful in achieving the inclusion of a bipartisan amendment in the Manager's Amendment on Labor, Health and Human Services, and Education Appropriation bill, on one of the most important issues we will deal with in this Congress-- the poor condition of our Nation's school buildings. Let me briefly describe this amendment before I talk about the larger problem this amendment is seeking to address. This amendment is co-sponsored by Senator Bingaman, Senator Domenici, and Senator Hutchison from Texas--this bipartisan group should send a very strong signal that this amendment is worthy of support. This is a very simple amendment. Both the House and Senate versions of the Labor-HHS Appropriations bill set aside $25 million for Impact Aid school construction. This amendment increases that amount to $10 million. It offsets the increase by reducing the administrative and related expenses of the Departments of Health and Human Services, Labor, and Education on a pro rata basis by $10 million. Allow me to explain why this amendment is so important to me and to the bi-partisan group of Senators that support this amendment. As you know, there are a number of pending bills that address our nation's school construction needs. And in the past days, we have voted on a number of amendments addressing school construction issues generally. These funds assist local school districts who are then able to raise the remainder of their construction funds through bond issues. Like other school costs, the bonds are paid for by taxes on local property. Issuing bonds is a time-honored approach to school construction. But in the heated national debate, one group of children is continually left out in the cold--students who live on federally owned land, usually an Indian reservation or a military installation. In Montana, some 12,000 children fall into this category. These schools are located in areas where much of the local property can't be taxed because of Federal activities. This tax-exempt property may be a military base or an Indian reservation. In many cases, the local public schools have to educate the children of families that live on the property. These so-called ``Federal Students'' could come from military families. They could come from civilian families. They could come from Native American families. The Congress has recognized its responsibility for these schools through payments authorized by Title VIII of the Elementary and Secondary Education Act. The House and Senate bills allocate $25 million for school construction to be distributed under Section 8007 of the Elementary and Secondary Education Act. This is simply insufficient to meet the needs of these federally impacted schools. In fiscal year 2000, Montana had 28 school districts that were 50 percent or more impacted with either Indian land children or military students. Nationwide, there were 249 such districts. In FY2000, the average allocation per school district in Montana of Impact Aid funds is just below $18,000. The average dollar received per student is $57. Think about that for a moment. $57 for construction is not going to do a heck of a lot of good for schools that are literally falling down. Now, under the FY2001 appropriations bill, funding would increase to approximately $90 per student. And while that's better than $57, it still falls way short of meeting the needs of our students. Let me tell you a couple of stories to illustrate this point. I remember talking last year with the Superintendent for the Harlem School District Don Bidwell. His district is so crowded, he has students using a closet, where they used to keep the snow blower, for a classroom. Now the snow blower is in the hall and the students are in the closet. And let me tell you about a recent visit with Steve Smyth, the Superintendent of the Browning school district in Montana. Browning is situated in one of the windiest areas of Montana. Mr. Smyth informed me that a year ago, the students, teachers, administrators and community watched the roof on the high school building literally curl up like the lid on a sardine can because of the harsh winds. Just to replace that roof, the district spent $115,881. And yet, they only received $27,000 for school construction and repairs in FY 2000. How can we justify giving them only enough money to pay for one-fourth of their roof? That is a disgrace. Let me give you another example. In 1998, the Box Elder school received $13,000 in Impact Aid construction funding. In FY 2000, they received $19,500. That might be enough to give half the building a paint job, but not for much more. It's like trying to put out a fire with squirt gun. What this school really needs is a new building or a major renovation. The condition of these schools is not a Montana problem. Nor a Nebraska problem. Nor a partisan problem. Instead, it's a national problem. As a nation, we can no longer pretend that this is a problem in a few schools in a few states that can be solved with a few scraps from our federal education appropriation. Every child in the United States deserves a healthy learning environment. An important and vital part of that environment is the physical structure the learning takes place in. Our children should be confident their school will still be standing by the end of the day. Our children shouldn't fear that their school is going to burn down because of faulty wiring. Mothers and fathers should know that when they drop their children off at school or send them off to the school bus, that they are sending them to a safe place. I am pleased the managers of this bill saw this amendment fit to be included in their amendment. I thank Senators Bingaman, Domenici, and Hutchison from Texas for their support. I hope that the conferees will maintain this increased level of funding.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to address recent developments in the effort to reform our sanctions policy towards food and medicine. Let me recall a bit of recent history. Late last year, the Senate passed legislation to end the use of food and medicine as a weapon of foreign policy. We passed it by a substantial margin--70 to 28--as an amendment to the FY 2000 Agriculture Appropriations bill. We have both moral and commercial concerns. It is just wrong to inflict suffering on innocent people by withholding food and medicine because we oppose the policies of their government. This goes against the core values of our nation. Commercially, the reform legislation would open markets to American producers, especially American farmers. They have been struggling through a long and terrible crisis brought on by low prices and bad weather. Opening new foreign markets would especially help our family farms. The sanctions reform amendment ran into stiff opposition from House members in conference. Their main objection was that the bill would allow food and medicine sales to Cuba. Unfortunately, they prevailed, and the amendment was struck from the conference report. That was last year. What about this year? We've had two important developments. On the Senate side, the Agriculture Committee included sanctions reform in the FY 2001 Agriculture Appropriations bill, which was reported out in May. It is the section of the bill entitled the ``Food and Medicine for the World Act.'' I would like to acknowledge the work of my colleagues on this important legislation, especially Senators Dodd, Dorgan, Roberts, Ashcroft and Hagel. It is very similar to the amendment the Senate passed last year. I would note that it contains a new provision which weakens the sanctions reform effort. This provision requires one-year licenses for sales of food or medicine to governments on the State Department's terrorism list. Currently this list covers seven countries, Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba. I believe that this provision is an unnecessary restriction on our agricultural exporters. But I am much more concerned about recent developments on the House side. In late June, House members struck a deal to accommodate the same small group which fights against sanctions reform every year. Those members now have one main target: Cuba. This recent House deal is billed as a move to lift unilateral sanctions on food and medicine. In fact, it does just the opposite. Let me explain. First, it would outlaw all finance and insurance of food sales to Cuba, even sales to private groups. This would essentially prohibit all U.S. exports. In today's world, nobody trades without some sort of finance. It takes at least a letter of credit. What is the alternative? Only to ride along on the cargo ship to exchange your wheat for cash in Havana harbor. Everybody requires some sort of commercial insurance. In fact, the House agreement is so broadly written that it might even make third-country finance illegal. This is very bad legislation. Second, the House agreement would impose even stricter licensing requirements than are in effect today on sales of food and medicine. These new restrictions would apply not just to Cuba, but also to Iran, Iraq, Libya, Sudan, Syria and North Korea. Third, it would make it harder for U.S. exporters to travel to Cuba to explore the market. Fourth, it would prohibit any food assistance, such as Food for Peace, to Cuba, as well as to Iran. Accepting these provisions would be a major setback for the Senate. The House agreement goes beyond sanctions for food and medicine. It includes provisions on travel to Cuba, an entirely unrelated issue. It would remove all flexibility from the current travel regulations in two ways. First, it would make them statutory. They could only be changed in the future by new legislation. Second, it would deny the Treasury Department any discretion in issuing travel licenses. I understand that the current House plan is to strip this bad legislation from their version of the FY 2001 Agriculture Appropriations bill, and then bring it up in conference. We must not let a small group of House members prevail again this year. I firmly oppose the House agreement, and I urge my colleagues to do likewise. We should work to ensure passage of the Food and Medicine for the World Act. Last year, the Senate took action that was correct and sound. We should continue to press forward.

Mr. BAUCUS

Mr. BAUCUS. I arrived on the floor a little late. What is the pending business?

Mr. BAUCUS. Mr. President, reserving the right to object, my concern is that we are setting the July schedule, albeit part of the July schedule, but without inclusion of a date or time for PNTR. I am very concerned that as we start taking up matters in July--even though it is the Thompson amendment--who knows what might intervene. You have reconciliation; you have appropriations bills, and whatnot. Because we do not have a date certain on the request for PNTR, it could very easily slip into September or even a later date. I know it is very much the intention of the majority leader to bring up the PNTR in July. He has said that many times. And I very much appreciate that. But as I have said personally to the majority leader, I am not so certain that, despite his best intentions, he can totally control whether or not PNTR actually does come up in July. In addition, the merits of the bill that would otherwise be scheduled to come up after the July recess is very dangerous. I do not think Senators have really had the time to look at the provisions of that bill, to think through the implications of that bill. It has unilateral sanctions, mandatory--not discretionary-- sanctions against China. It is very overdrawn. American companies doing business in China could be sanctioned. It has extraterritorial provisions which are way beyond the ordinary rules of international law. I think it would cause a tremendous strain in the context of PNTR. My concern is that we are setting the schedule for July, albeit just a part of July, that does not include probably the most important vote that this Senate is going to take up this Congress; that is, passage of PNTR. And until there is a date set for PNTR, I must respectfully object.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to express my strong opposition to a provision, which has been included in the military construction conference report, that prevents EPA from using any funds to implement a new rule to clean up our nation's streams, rivers, and lakes. Let me explain why this rule is important. Since 1972, when the Clean Water Act became law, we've made a lot of progress in cleaning up our water, especially with respect to so-called ``point sources'' like sewage treatment plants and industrial plants; the pipe that come out of plants and go into lakes and streams. But we still are far from reaching our goal of fishable, swimmable waters. That is the standard in the act. That's where the new rule comes in. It relates to something called ``total maximum daily loads,'' or TMDLS. It is a long, technical- sounding label. But it's a pretty simple concept. A TMDL is really a pollution budget for a watershed. It's like the Clean Water Act version of a State implementation plan under the Clean Air Act. The TMDL program was actually enacted as part of the original Clean Water Act, way back in 1972. For a long time, it was dormant. But, in recent years, environmental groups have lawsuits requiring EPA and states to implement the program. In virtually every single case, they have won. In light of this, EPA decided to revise its rules for the TMDL program, to bring them up to date. To begin with, it convened a group of stakeholders, who worked for two years to make recommendations. Then, last August, EPA proposed new rules. Make no mistake about it. These rules have been controversial. Like many others, I have been particularly concerned about the proposal to require many forestry operations to get Clean Water Act permits. I thought EPA was taking a long, winding road that didn't end up in the right place. But EPA has been listening. In response to Congressional hearings and public comments, it has made changes. For example, it dropped the forestry proposal and made other parts of the rule more workable. As I understand it, the rule has gone to OMB for review, and should be published, in final form, soon. But then we get this conference report. Out of the blue, it provides that none of the funds appropriated to EPA for 2000 and 2001 can be used to implement the new rule. I have two major problems with this provision. The first problem is the process by which the provision has been included in the conference report. The process is, in a word, outrageous. Clearly, there are differences of opinion about the TMDL rule. But there are several opportunities for those differences to be debated. The Environment and Public Works Committee is considering a bill, introduced by Subcommittee Chairman Crapo and Committee Chairman Smith, that would, among other things, delay the final rule. The House HUD/VA/ Independent Agencies Appropriations bill contains a provision that also would delay the rule. Of course, there is the regulatory review process we enacted in 1996, that allows Congress to disapprove a final rule. In each case, we would have a debate. The merits would be discussed. Senators could explain why they believe that the rule should be delayed; others could respond. Then we would have a vote, and the public could judge our actions. That's not what's going on here. Instead, opponents of the rule have slipped the provision into an unrelated conference report that cannot be amended--no debate, no sunshine, no public knowledge of what is going on. And they have done it on a bill that provides emergency funding for many urgent national needs, so that the President is under strong pressure to sign the bill. Frankly, I wonder why they have taken this approach. Why not debate, in clear public view? What are they afraid of? Another thing, by using conference reports this way, we further weaken the bonds that bind this institution together, and reduce public confidence in our deliberative process. This is no way to run a railroad. The second problem with the provision is substantive. Despite significant progress since 1972, too many of our rivers, streams, and lakes do not meet water quality standards. EPA's proposed rule makes some important improvements. At the heart of it, the rule clarifies the operation of the TMDL program and requires implementation plans, so that the program becomes more than a paperwork exercise. At the same time, the rule gives States more time to complete their lists, allocations, and plans--a lot more time. That is a pretty good tradeoff. By blocking the rule, we will simply delay the tough decisions about how to make the program work. We will perpetuate the current outdated, fragmented, litigious system. Most important of all, we will delay, once again, the day when our nation finally has clean streams, rivers, and lakes, from sea to shining sea. I regret that this provision has been included in the conference report and I will work to reverse the decision at the earliest opportunity. I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I share the concerns that have been raised about the potential scope of authority of the electric reliability organizations and would also seek clarification on this point. It is my understanding that in addition to not diminishing or affecting any environmental obligations, this legislation does not authorize the electric reliability organizations to direct or authorize any covered facility to violate or disregard the requirements of any Federal or State environmental law or regulation.

Mr. BAUCUS. I also thank the chairman for his clarification.

Mr. BAUCUS

Mr. BAUCUS. I thank the majority leader very much. I assure him, as a member of the Finance Committee, we definitely plan to take up some form of estate tax reform. I don't know what version it would be, but clearly that has to pass this year. In addition, however, I do believe there is one other matter that is even more important than estate tax reform, and that is PNTR for China. It far transcends appropriations bills, marriage penalty relief, bankruptcy reform. Getting PNTR passed in July, I think, is of such urgency and is so important that I am constrained to object to any unanimous consent request that sets the schedule for July unless it also includes a time when we are going to take up PNTR. I know the leader knows that is my view. I just hope that in working with the leader, we can work out some accommodation to reach that objective.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to spend a few moments talking about the issue of PNTR, Permanent Normal Trade Relations, with China. Last month, the House passed H.R. 4444. That bill authorizes PNTR for China once the multilateral protocol negotiations are completed and the WTO General Council approves China's accession. The bill includes a solid package of provisions that establishes a framework for monitoring progress and developments in China in the human rights area. It also provides for enhanced monitoring of China's compliance with its trade commitments. Now, it is our turn in the Senate to act. We have two challenges. First, we need to debate the bill now, not later. And, second, we need to pass the bill without amendment. I call on the Majority Leader to set a date certain in July to start this process. Extending permanent normal trade relations status to China. Regularizing our economic and trade relationship with China. Bringing China into the global trade community. Helping the development of a middle class in China. Developing an environment between our two countries where we can productively engage China in significant security, regional, and global discussions. These are not Democratic issues. These are not Republican issues. These are national issues. Passage of PNTR is a first step, and it is critical to America's national economic and security interests. Support in the Senate is strong. I believe there will be an overwhelming vote in favor of final passage. Republicans and Democrats. Small states and large. East and West. North and South. Conservative and liberal. Most of us recognize how important this is to our country, to the region, and to the world. That is why I will continue to urge the Majority Leader to set a firm date to bring the PNTR bill to the floor so we can move this legislation. I ask my colleagues, Republican, as well as Democrat, to join me in delivering that message to the Majority Leader. Once it comes to the floor, there will likely be a plethora of amendments, some germane and others non-germane. The Senate has its own rights and prerogatives. I will always defend the right of Senators to offer amendments to a bill. But, I am concerned that amendments in the Senate, which would force the bill into a conference with the House, would lead to delaying, and perhaps jeopardizing, final passage of this landmark legislation. We cannot afford such a development. H.R. 4444 is a very balanced bill. It deals with the major concerns relative to China's entry into the global trading system. Therefore, along with many of my colleagues, I have made a commitment to oppose any amendment to H.R. 4444, no matter how meritorious the amendment might be on its own terms. Prompt passage and enactment of this bill should be a top bipartisan priority. I urge all my colleagues to join me in making the commitment to oppose any attempt to amend this legislation. H.R. 4444 ensures that future U.S. administrations will closely monitor China's compliance with its WTO obligations and with other trade agreements made with the United States. It will make the administration in the future act promptly in the case of damaging import surges. It provides for a vigorous monitoring of human rights, worker rights, and the import of goods produced by forced or prison labor. H.R. 4444 also provides for technical assistance to help develop the rule of law in China. It enhances the ability of U.S. government radios to broadcast into China. And it states the sense of Congress regarding Taiwan's prompt admission to the WTO. To repeat, extending PNTR to China is vitally important to America's economic and strategic interests. Our top priority should be a bill approved by the Senate identical to H.R. 4444 so that it can immediately be sent to the President for signature. I hope we complete action rapidly in July.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to be able to speak about 5 minutes, if possible.

Mr. BAUCUS

Mr. BAUCUS. I thank the Senator. I will not object to a unanimous consent request on this bill today, but I do hope prior to recessing for the July recess we can work out an agreement, that the majority leader will be able to make a statement, the result of which is to make it clear that the vote will come up in July. I reserve my right as to what action I will take tomorrow. I thank the Senator.

Mr. BAUCUS. On another matter, Mr. President, I ask the Senator from Iowa to yield for a question.

Mr. BAUCUS. Mr. President, I object.

Mr. BAUCUS. Mr. President, I ask unanimous consent to proceed for 2 minutes.

Mr. BAUCUS. Reserving the right to object, I will object until I can get some understanding or we can get some understanding from the majority leader as to when we are going to have a date set for a vote on PNTR. This is an issue which transcends politics, if I might have the attention of the majority leader.

Mr. BAUCUS. Mr. President, if I could consult with the good Senator from Iowa on a matter which I raised earlier, that is, the Senator from Mississippi, the majority leader, asked unanimous consent for the Senate to take up a list of amendments on both sides and to have printed that list of amendments with respect to the pending bill. I asked the majority leader if it might not be a good idea for the leader to set a date certain in July to bring up PNTR. I am not asking the Senator for his view on the bill, but I ask the Senator if he thinks it is a good idea to bring the bill up and at least have a vote on it, particularly in July. Wouldn't it be better to have a bill brought up in July than, say, in September, given the fact that it has passed the House, given the fact that we will bring it up sometime this session of Congress, and given the fact that delay is dangerous? Does the Senator agree it would be a good idea to bring it up and have a date certain, at least for insurance that we are going to vote on it this year? The month of July would be the preferable month to vote on it rather than a subsequent month; does the Senator agree?