Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to comment on some important events that took place here in Washington last week while many of us were back home meeting with our constituents. For the past 25 years, we've had an annual Spring ritual in Washington. I'm not referring to the cherry blossoms. Every April, the International Monetary Fund (IMF) and the World Bank hold their joint meeting. Bankers and finance ministers from around the world travel to Washington to talk about the global economy, exchange rates, poverty reduction, and the so-called ``international financial architecture.'' These are tremendously important subjects. But the talks are highly technical, and the results are shrouded in the vague language of diplomatic communiques. The meetings don't produce startling breakthroughs. For most people they are hard to understand. So the annual IMF-World Bank meetings in Washington have rarely generated much news, and the participants liked it that way. This year was different. A coalition of activists vowed to descend on Washington to disrupt the meetings. More than 1,700 journalists registered to cover the event. Few of those journalists came to report on IMF discussions of extended funds facilities or economic stabilization criteria. They were hoping for the kind of news that protesters made at last year's WTO meetings in Seattle when they closed the city down. But those who came to Washington hoping for Seattle-style violence were disappointed. Both the police and the demonstrators are to be commended for that. Those who came here hoping to throw the meetings off track were also disappointed. Unlike the WTO ministerial in Seattle, the IMF meetings did not attract a big crowd of protestors. The labor unions stayed home. The big environmental groups were absent. So the meeting took place pretty much as scheduled, albeit with some inconvenience and no dramatic events. Business as usual. There was one underlying theme among those who did come: a feeling that international economic institutions undermine the interests of ordinary citizens. I heard that on the streets of Seattle last December, when protestors took aim at the world's main trade body. And I heard it again last week when they focused on the IMF and the World Bank. The demonstrators had no confidence that those institutions are moving in the right direction. This lack of confidence concerns me greatly. It exists not only here at home, but also in many other countries. I believe that America must lead an effort to restore faith in the economic institutions we have worked so hard to build over the past fifty years, economic institutions that have served our country and our people. The World Trade Organization. The IMF. The World Bank. And we in the Congress should lead that effort. Look at the evidence here at home. In the trade arena, I've seen a rapid decline in the domestic consensus in favor of open markets. One result is that we've been unable to renew the President's fast track trade negotiating authority. Morever, the lack of a domestic consensus has undermined our ability to lead in the WTO. It has weakened our bargaining power. Other members, especially the EU and Japan, take advantage of our weakened position and resist opening up their markets to the production of American workers and farmers. In the financial arena, last week's demonstrations showed that Americans are losing faith. They don't think that the IMF and the World Bank serve the needs of the people, especially the most vulnerable here and in other countries. Instead, they believe that the institutions serve the needs of the big and the rich. The IMF and the World Bank stand accused of mismanaging the Asian financial crisis through misguided policies which needlessly lowered the living standards of millions of people, throwing many of them back into poverty. They stand accused of mismanaging the Russian economy. Are these criticisms justified? It's difficult for Americans to judge. These institutions do not operate in the daylight of public scrutiny. Although they exist on taxpayer funds, they do not hold themselves accountable to taxpayer concerns. America is the biggest shareholder in both the IMF and the World Bank. And the lack of transparency has seriously undermined American public confidence in both the IMF and the World Bank. Over the past week I've read and heard a number of condescending remarks about the protestors. They've been called naive, poorly informed, misguided. But the concerns they express are real and are shared by many Americans who did not march down Pennsylvania Avenue. We need to take these concerns seriously, because they express a strong undercurrent in American thinking. In my talks with representatives from the business, environmental and labor communities, I find that strong centrist elements seek practical solutions. We in the Congress can supply the political leadership to firm up this middle ground on the issues of trade and finance, trade and labor, trade and the environment, and restore confidence in the international trade and financial system. It is an important undertaking. America's ability to lead the world into an era of global prosperity benefitting rich and poor alike requires us to firm up and expand the middle ground to reforge our domestic consensus.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I yield 10 minutes to the Senator from California.

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

Mr. BAUCUS. Mr. President, we are now on the marriage penalty bill. I suggest to the Senator, since there are no other Members on the floor, he can take time off the majority side on the pending measure.

Mr. BAUCUS

Mr. BAUCUS. It is so.

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

Mr. BAUCUS. Mr. President, I think it is important to lay things out as to what this issue is and what it is not. There is a lot of talk that this is a marriage tax penalty. There is even an implication by some that there is something put in the Tax Code to penalize couples because they are married; that is, they have to pay more taxes. Of course that is not true. A little history, I think, is instructive as to why we are here and what perhaps some solutions might be. When the income tax was enacted, the Congress treated individuals as the unit of taxation, whether or not one was married. If somebody made a certain amount of money, he or she paid income taxes. If he or she got married, he or she was subject to the same rates, the same schedule. The individual was treated as the unit. That was the case for a while. But many States in our Nation are community property States. They have different laws which determine to what income a man or woman in married status is entitled. In community property States, the rule is any income earned by a spouse is automatically community property and therefore is equally divisible. As a consequence, in community property States, each, the man and wife, would combine their incomes and file separately. That was upheld by the courts. That created a big discrepancy between community property States and common law States. In common law States, an individual still had to pay the individual rates, whether or not he or she got married, which was just not fair. So Congress in 1948 changed the law to make it fair. What did Congress do? Congress in 1948 said: OK, we are going to double the deductions for married couples as opposed to singles, so when you get married, you do not pay any more taxes than you would pay if you were single. That was the rule of thumb. The brackets for the married were doubled, and the deductions were doubled. That created another inequity. In this area of tax law, when you push down the balloon someplace, it pops up someplace else. The inequity created was the inequity for individual taxpayers because individual taxpayers say: Wait a minute, here I am as an individual taxpayer. I am paying up to 42 percent more in income taxes on the same income that a married couple earns. If the married couple earns $100,000, hypothetically, my taxes as a single individual earning $100,000 are up to 42 percent more than the couple's. That is not right. Congress in 1969 agreed that was not right, so Congress went in the other direction. In 1969, Congress said: We are going to raise it, widen the brackets, adjust the brackets for individuals so they are a little more in line with those for people who are married. The rule of thumb was a tax paid by an individual could not be more than 60 percent more than the taxes paid by a married couple. That was fine for a while. Then over the years we have a lot more couples where both members of the family are earning more income. This is a long way of saying when we make some change in the law here, it is going to cause some inequity someplace else. It is a mathematical truth that we cannot have marriage neutrality and progressive rates and have all married couples with the same total income pay the same taxes. It is a mathematical impossibility to accomplish all three objectives. It cannot be done. So we have to make choices. The choices are whether to tilt a little more in one direction or the other. The bill before the Congress now is a good-faith, honest effort to try to solve that problem. There are different points of view. The bill passed out by the Finance Committee attempts to solve that problem one way. The provision offered by Senator Moynihan, the ranking member of the Finance Committee, had a different approach to solve that problem. Let me very briefly lay it out so people have a sense of what the two different approaches are to solve the marriage tax penalty problem. Recognizing that today, to be honest about it, more married couples receive a bonus when they get married, not a penalty--or, to state it differently: More people, men and women, when they get married today, will receive a bonus; that is, they will pay less taxes as a consequence of getting married than they would individually. It is true that about half of the people who get married end up paying more taxes, and that is called the marriage tax penalty. It is a consequence of the progressive nature of our Tax Code, along with a desire to be fair to widows and widowers and other single taxpayers, and to be fair to married taxpayers, making sure that some married taxpayers, who have the same income as other married taxpayers, do not pay more. It is a very hard thing to do. The majority bill tries to solve it this way: It raises the standard deduction. It raises the 15-percent and 28-percent brackets. It changes the earned-income tax credit for lower income people. It makes no other change. It is pretty complicated. As a consequence, some people who are married and pay a marriage tax penalty will receive relief but not all will. This is a very important point. The majority committee bill addresses only 3 of the 65 provisions in the code which cause the marriage tax penalty. That is standard deduction and the two brackets. That is all. The chart behind me shows the situation. On the left is current law. There are 65 provisions in the Tax Code today which cause a marriage tax penalty. The GOP proposal, which is the column in the middle of the chart, addresses only 3, leaving 62 provisions in the code which cause a marriage tax penalty. What is one of the biggest? Social Security, and it is a big one, too. It costs about $60 billion to fix. The majority committee bill says: No, we are not going to help you seniors. If two of you get married, you have to pay more taxes. You have a marriage tax penalty; we are not going to help you. The majority committee bill does not deal with seniors at all. There are a lot of senior citizens in our country who are not going to find any relief as a consequence of the majority bill. There are 61 other provisions in the code on which the majority committee bill will not give people relief. The bill offered by Senator Moynihan, the ranking member of the Finance Committee, is very simple. It says to taxpayers: OK, you have a choice. You, as a married couple, can file jointly or you can file separately. That is your choice. You run the calculation, and whatever comes out lower is presumably the one you are going to make. What is the beauty about that? Why is that better? It is better because it is simple. The majority bill further complicates the code, and the code is complicated enough. The majority bill adds more complications by trying to deal with changing the deductions, phase- ins, and so forth. There are a lot more complications. The minority provision is very simple. It says: You choose. It does not add more complications. In addition, it addresses all 65 of the marriage tax penalty provisions in the code today. There are many of them. I mentioned one such as Social Security. That is one the majority bill does not address. Other are like interest deduction of student loans. Many students have loans, and as a consequence of current law, when you get married, sometimes you pay more taxes. The majority committee bill does not do anything about that. The majority committee bill does not address that. It only deals with 3 provisions--the standard deduction and two brackets, 15- and 28-percent brackets. Those three provisions sometimes cause a marriage tax penalty. The minority bill takes care of all the penalty provisions in the code. Look at the chart again. The zero under the Democratic proposal means there are zero marriage tax penalties as a result of the Democratic proposal. The GOP proposal has 62 remaining marriage tax penalties. I am curious as to why they did not address those. I may ask some Members on that side as to why they did not address some of them. A lot of folks are going to wonder, senior citizens are going to wonder, somebody who takes an IRA deduction is going to wonder, someone who takes a Roth IRA deduction is going to wonder: Gee, why don't they take care of marriage tax penalties that affect me? I do not know. Maybe sometime the majority can answer why they do not address those other marriage tax penalties. There are other inequities, but I am not going to get into all of them right now. We will get into them at a later date. It is important to point out that there are two attempts to solve the marriage tax penalty problem: The majority committee bill only deals with three of the provisions in the Tax Code which cause a marriage tax penalty. The minority bill deals with all of them. There is no provision left as a consequence of the minority bill. In addition, the minority bill is much simpler; one only has to choose, whereas in the majority committee bill, my gosh, one cannot choose; they are forced into a situation, and they are not part of the solution. They have to deal with extra complexities. It does not solve the problem. I yield the floor and reserve the remainder of the time.

Mr. BAUCUS. I appreciate the Senator's remarks. We are on my time, so I will finish up. Briefly, I think it is important to point this out. One of the provisions not dealt with in the majority bill is taxation of Social Security benefits. That is no small item. It would cost about $60 billion over 10 years if it were to be addressed. I remind people that today the majority bill before us is about $248 billion over 10 years. So, in addition, $60 billion is the amount that senior citizens would have to pay as a consequence of the marriage tax penalty, which is not covered by the Finance Committee bill. I might add that, again, the minority bill does solve the Social Security benefits problem, as it does each of the other 62 remaining provisions in the Tax Code which may result in a marriage tax penalty. I hear people say, well, theirs is a better bill. But that doesn't get down to the specifics of what it actually does. I remind Senators that over half of the tax reduction in the bill offered by the Finance Committee goes to people who are already in a bonus situation. It has nothing to do with the marriage tax penalty. I am suggesting that those are dollars that could be perhaps better spent for debt reduction. I think most Americans would like to see the national debt paid off. That makes a lot more sense to me. Or perhaps they would prefer that it go to education, health care, or whatnot. We are here to address the marriage tax penalty. I think we should focus on the marriage tax penalty and, by doing that, I submit that the proposal offered by Senator Moynihan, the minority alternative, focuses only on the marriage tax penalty. It is very simple to understand. Essentially, the taxpayers choose whether to file jointly or separately. I think that sort of empowers the taxpayers to decide for themselves what they want to do. They can be part of the solution where they pay lower taxes and not have to pay any marriage tax penalty at all. Again, $60 billion of Social Security benefits is not fixed by this bill. I want to add this, and I know my time is about to expire, the AMT. One consequence of the committee bill is that there are 5.6 million more taxpayers who are going to have to file under the alternative minimum tax than today--5.6 million new taxpayers, new people who are not filing under the alternative minimum tax, separate and filing today, will not have to under the Finance Committee bill. That is not the case in the minority committee bill. I think we should give relief to those folks so they don't have to go to the AMT situation; or, to say it differently, the Finance Committee bill gives some relief to AMT taxpayers and then takes it back by saying now you new taxpayers have to file the AMT. Why is that result? Why does that happen? It happens because of what I have said for a good part of this day; namely, the Finance Committee bill only deals with 3 of the 65 provisions. Those three are: the standard deduction, the 15-percent and 20-percent brackets. As a consequence, there is this AMT shift. I don't think we want to say to 5.6 million Americans that you do not have to file the AMT today, the alternative minimum tax, and go through all of that and pay that tax, but now you will, as a consequence of the Finance Committee bill. I don't think we want to do that.

Mr. BAUCUS. Mr. President, I see my good friend, the Senator from Texas, still on the floor. I will ask her a couple of questions. Clearly, we both want to solve the marriage tax penalty. It is my judgment that we are going to pass legislation this week--I hope so. There will be a couple of amendments. It is normal and proper in the Senate for Senators who think they can improve upon a bill to offer amendments. I certainly hope we can dispose of the issue this week. I expect that to happen. I hope so. In doing so, obviously, we want to do what is right. When you do something, you should do your darndest to make sure you do it right the first time so you don't have to correct mistakes later on. I am wondering why it would not make more sense to address all of the marriage tax penalty problems in the code in this bill rather than only a few. As the Senator knows, there are about 65 provisions in the Tax Code, the consequence of which sometimes results in a marriage tax penalty for some married couples--not all but for some. I am not being critical of the provision offered by the majority. But as the Senator knows, in the proposal offered by the majority, they deal with only 3 of those 65 provisions; whereas, the way the minority attempts to solve this, or proposes to solve the marriage tax penalty problem is to allow optional filing; as a consequence, all 65 provisions in the code are dealt with, so that in the minority position all of the marriage inequities are solved--all 65 provisions. I am wondering why--without being critical--it doesn't make more sense for us while we are here, while we are going to pass a bill relieving couples of the marriage tax penalty, to entirely solve the problem, as is the case in the minority bill, rather than only for a few, as is the case in the majority bill.

Mr. BAUCUS. Maybe the Senator is not addressing the question, for many good reasons. The question is, why not deal with all 65 of the inequities rather than only 3?

Mr. BAUCUS. Will the Senator yield for a question?

Mr. BAUCUS. I ask the Senator, is the so-called marriage tax penalty a consequence of getting married or is it a consequence of getting married and the proportion of incomes each spouse earns? I might ask the question differently. How many people in America--if the Senator knows, and he may--get a bonus under our tax laws, not a penalty? What percentage of American taxpayers today receive a bonus as opposed to a penalty?

Mr. BAUCUS. That is because when they get married, they pay less taxes.

Mr. BAUCUS. I ask the Senator, are there some people getting married and, as a consequence, pay less taxes?

Mr. BAUCUS. If we are trying to solve the so-called marriage penalty problem, then we should try to solve the so-called marriage tax penalty problem.

Mr. BAUCUS. If I could answer the question, on the other hand, if we want to do something else in addition to solving the marriage tax penalty problem, that is a different debate, and we should try to figure out how best to do that. As it is today, there are 25 million Americans who find themselves in the penalty position when they get married. But there are 21 million Americans who find themselves in a bonus situation when they get married. It is about 50-50. It makes sense, I think, to try to give relief to those in the penalty situation. I am not sure if those who are already in the bonus situation need more relief, as contained in the Finance Committee bill, the majority bill. I was asking the Senator why we are doing that. Why are we doing more than fixing the penalty?

Mr. BAUCUS. This Senator is not advocating any increase in taxes; no way at all. I want to make that clear. I know the Senator didn't mean to imply that I was thinking of raising taxes because I am not.

Mr. BAUCUS. If I might ask the Senator one more question, is it better to try to find some way to pay down the national debt at the same time we are fixing the marriage tax penalty problem? The Senator gave a hypothetical of a man and woman each earning $30,000. They get married and have to pay more taxes. That is not right. I totally agree that is not right. That ought to be fixed. Somebody who pays more income taxes as a consequence of getting married should not be facing that situation, and we should, in the Congress, figure out a way--as various proposals do--so a couple does not have to pay any more income taxes as a consequence of getting married. I agree with the Senator. That is not right.

Mr. BAUCUS. Mr. President, I yield the Senator 5 minutes so we can continue this discussion.

Mr. BAUCUS. The question I am asking is this: More than half of the Finance Committee bill does not address the marriage tax penalty problem. More than half goes to married couples who have no marriage penalty problem but who are already in a bonus situation. I am asking the Senator: Most Americans would rather have the national debt paid down. Doesn't it make more sense for us to address the marriage tax penalty problem directly and to take the rest and help pay down the national debt?

Mr. BAUCUS. What we are trying to do is find a solution that solves the problem of the disparity in what each spouse makes, which might then cause the penalty. For example, we all know when you have a married couple and one spouse receives more income than the other-- considerably more--the joint tax is going to be less than if they are filing separately. We all know that. That is mathematically a given. The consequence, though, of a married man and woman who earn roughly the same amount is that couple pays more in taxes than they would pay if they were separate. So what we are trying to do is solve the problem--if the Senator would agree with me--and to make sure that when a man and woman get married, we address the problem created when the two people have somewhat similar incomes, which then creates the penalty. So some who are married pay a penalty and some get a bonus. Aren't we only trying to solve the penalty problem for those couples who find themselves in a penalty position?

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I suggest the absence of a quorum, and I ask unanimous consent that the quorum call not be charged against either side.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I know there will be a lot of time for debate later today and tomorrow, and perhaps in the future, on the so-called marriage penalty. I want to respond to two points that several of our Republican colleagues have made with respect to the Finance Committee bill, the majority bill. The first claim is that the Finance Committee bill, the majority bill, eliminates the marriage penalty. Not true. It does reduce the marriage penalty for some people, to some extent, but it does not eliminate the marriage penalty. Why do I say that? Well, first, let me show you this chart. This chart basically shows, in the main, that there are 65 provisions in the Tax Code that create a marriage tax penalty; 65 different provisions in the code create the so-called marriage tax penalty, the inequity that married people pay. The Republican bill, the Finance Committee bill, addresses some of them. How many? Out of the total of 65, how many do you suppose the Finance Committee addresses? A grand total of three. So 62 of the provisions in the Internal Revenue Code that cause a marriage tax penalty are not addressed by the Finance Committee bill. Let me give you an example. One is the deduction for interest on student loans. The phaseout for this begins at $40,000 for unmarried individuals and about $60,000 for joint return filers. So if two young people each earn $35,000 and they marry, they get hit harder by the phaseout. In other words, they pay a marriage tax penalty. It is not covered by the Finance Committee bill. It is covered by the alternative to be offered by Senator Moynihan. Another example in the Finance Committee bill is not covered. A marriage tax penalty that is not taken care of is Social Security for seniors. The tax threshold for Social Security for seniors is $25,000 for individuals and $32,000 for couples. Again, a marriage tax penalty. What does the Republican bill, the Finance Committee bill, do about these provisions? Nothing. They are not among the three penalties the Republican bill addresses. The Democratic proposal, in contrast, addresses all 65 marriage tax penalty provisions--all of them. Not 3, not 4, not 5, but all of them, all 65. So, again, the Finance Committee bill does not eliminate the marriage tax penalty. The Democratic alternative does. There is a second point made on the floor today that I would like to address. About half of the relief in the Finance Committee bill goes to people who don't pay a marriage tax penalty today. They get a so-called bonus, or they get neither a penalty nor a bonus. That is this chart. This chart shows that less than half of the relief in the majority bill goes to the marriage tax penalty; that is, more than half goes to people who don't have a marriage tax penalty, who are already in a bonus situation. Some argue, well, gee, we should not penalize couples, such as those with a stay-at-home spouse, by denying them the same tax cut we provide to couples who face a marriage tax penalty. Frankly, that is a red herring, as lawyers say. That is totally beside the point. Obviously, we have nothing against people who receive a tax bonus. Nobody wants to penalize them. But let's be honest. If we are providing half the relief to people who don't pay a marriage tax penalty, it is simply not a marriage tax penalty bill anymore; it is a tax cut bill, and we should evaluate the bill on that basis. Let's talk about singles, for example. The marriage tax penalty relief bill that we are talking about is going to proportionally put more burden on individuals, single taxpayers, on widows who are not heads of households, widowers. They are going to be hit indirectly because of the action that will probably be taken at a later date on this floor. In the main, this is not a marriage tax penalty bill out of the Finance Committee; it is primarily a tax cut bill. That kind of tax cut compared with other priorities may or may not make sense. What about prescription drugs, long-term care, retirement security? I don't think we have addressed those issues enough on this floor; that is, trying to determine what our priorities should be, given the limited number of dollars we have in the budget surplus. Another thing. Viewed as a tax cut, the majority bill is completely arbitrary. There is no particular rhyme or reason to it. If you are married and pay a marriage tax penalty, you get a tax cut. If you are married and pay no marriage tax penalty, you get a tax cut. That is what the Finance Committee bill does, in the main. If you are married and get a tax bonus, you still get a tax cut. That is what the committee bill does. If you are single, you get no tax cut. In fact, the disparity between married and single taxpayers widens to where it was before 1969. Think about this for a moment. If you are married, have no children, you are receiving the so-called marriage bonus, you get a tax cut. If, on the other hand, you are a single mom and you have three kids, you get zero tax cut. Is that what we want to do? So the Finance Committee bill doesn't eliminate the marriage penalty. It simply does not. Sixty-two of the marriage penalties in the code are not addressed by the Finance Committee bill. Only three are. There are many others I have not mentioned which are very big and have a very big effect. In addition, the majority committee bill provides a large tax cut unrelated to the marriage tax penalty. It is a large tax cut which has nothing to do with the marriage tax penalty. I am saying briefly, because my time is about to expire, that there are some major flaws in the majority bill. I have only touched on a couple of them. There are many more which will be brought out later in the debate. I urge my colleagues, people around the country watching this on C- SPAN, other offices, and the press to take a good look at the majority bill because there are some real problems with it. I hope we can straighten them out and fix them very soon. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I thank my good friend from California for her statement. This will come out later when we debate this more. I think it is important to note that the proposal advocated by my good friend from California has a certain deficiency, which is that it does not at all address the marriage tax penalty caused by unearned income. The proposal advocated by my friend from California deals only with the marriage tax penalty caused by earned income; that is, by wages and salaries. There are a lot of senior citizens in our country, as we know. Most of their income is unearned income. It is pension benefits, Social Security income. It is not wages or salary. As a consequence, there is about a $60 billion tax penalty over 10 years for senior citizens that is not addressed in the proposal offered by or mentioned by and advocated by the Senator from California but which is covered by the proposal offered by the Senator from New York, the Democratic proposal. I will address another situation. There are lots of aspects of the marriage tax penalty provision. Again, there is nothing in the code that imposes a penalty on marriage. It is just that because of our combination of progressive rates, a desire to achieve neutrality between married taxpayers and individual taxpayers with the same income, a desire to achieve equality between married couples with the same income but with different distribution in earnings, we end up with this problem. There is no total fix. It is just a matter of trying to figure out what makes the most sense. This chart deals with only one aspect of the so-called marriage tax penalty. That is the example of the marriage tax penalty in the earned- income tax credit, the EITC, a provision in the law which is to help low-income people who otherwise face a significant tax burden, let alone all the other difficulties they are facing in life with low income. This chart shows first a single mother with two children. Let's say her income is $12,000 a year, which is very common. She, today, would receive an earned-income tax credit benefit of $3,888. Let's take a single father with no children. Let's say his income is the same; it is $12,000. Obviously, he receives a zero earned-income tax credit. Let's say the single mom with two children marries the individual with no children. Now they are married with two children. Their total income will be $24,000, hers $12,000 and his $12,000. But because of the marriage tax penalty, because of the way the Tax Code works, and in particular the EITC provisions which are very complex, as a consequence of the man and the woman getting married, their now joint earned-income tax credit will no longer be the $3,888, which the woman alone with her two children would receive. Rather, now that they are married, the combined EITC benefit would be lower, in the neighborhood of $1,506, a clear penalty for getting married. It is something we want to fix. It has been stated several times that the proposal, the Finance Committee proposal helps low-income people by addressing the marriage tax penalty under the EITC. It does, but not very much. The maximum amount of relief that can be received under the Finance Committee bill in addressing a potential $2,382 penalty is $500. That is the maximum amount of benefit under the marriage tax penalty that is addressed in the Finance Committee bill. Contrast that with the Democratic alternative. Under the Democratic alternative, there would be total relief; that is, a single mom with two children and a single father with no children, when they get married, would receive no penalty. Why is that? Because of the simplicity of the Democratic alternative. The simplicity is, if you are married, you just choose. You file jointly or you file separately. You choose the one which results in lower tax. As a consequence, all of the 65 provisions in the Tax Code which sometimes cause a marriage penalty are addressed. They are all solved. The minority bill solves completely the marriage tax penalty problems facing some Americans. Contrast that with the Finance Committee bill, which does not solve completely the marriage tax penalty problems facing some married taxpayers because the Finance Committee bill deals with only three of the inequities, not all 65. This is just one of the inequities the Finance Committee bill does not address very much. There is kind of a little tack-on provision which addresses it. But as a consequence, the Democratic alternative completely solves the EITC problem. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to oppose the Lott bill to repeal the gasoline tax that funds our nation's highway program. I do so for two reasons. First, the bill would undermine the landmark 1998 highway bill, which is so important to economic development in Montana and throughout the country. Second, the bill will not reduce the price of gas at the pump. It is, in short, a bad idea. I urge that it be rejected by a strong, bipartisan, vote. By way of background, the gas tax was established for one simple reason: to finance the construction of the national highway system. In 1993, there was a departure. The tax was increased, by 4.3 cents a gallon. And, for the first time, the tax was used not for the highway program, but instead for deficit reduction. I supported the increase, reluctantly, as part of an overall compromise that was a key step toward balancing the budget. Even so, many of us were determined to restore the principle that the gas tax should only be used to fund our highway and related transportation programs. We worked, as we said, to ``put the trust back in the trust fund.'' It was a long, difficult fight. We faced tough opposition, from the administration, the budget committees, and elsewhere. But, in the end, we prevailed. During the Senate's consideration of the 1998 highway bill, we provided that the entire gas tax, including the 4.3 cents, would go into the trust fund and be used exclusively for highway construction and other transportation needs. When an amendment was offered to repeal the 4.3 cent tax, it was defeated. Don't get me wrong. Nobody likes taxes. But the tax goes directly to improve the roads. As these things go, the gas tax has worked well. The Lott amendment would turn back the clock. It would repeal the 4.3 cent tax. Let me explain what this would mean for our nation's highway program. It puts $20 billion worth of the highway trust fund in jeopardy. I'll get right to the point. Most of my colleagues were here for the highway bill debate. You know how difficult it was. You know how hard we fought to make sure that each of our states would get enough funding to support our transportation needs. For my state of Montana, it would mean losing $184 million. That, in turn, will mean delays and cancellations. Roads won't be repaired. Interchanges won't be built. Safety improvements will be left on the drawing board. In Montana, The DOT estimates that upwards of 60 projects would be delayed or canceled. Projects that would increase mobility and save lives. That's not all. If this bill passes, Mr. President, we will be breaking faith. We will be breaking faith with governors. With state transportation agencies. With contractors. And with thousands of hard- working folks who show up every day, in good weather and bad, to build our roads and improve our communities. Who depend on their jobs to support themselves and their families. Senator Lott and others argue that the bill won't affect the highway program, because any reductions in highway funding would, in effect, be covered by transfers from other programs. In other words, the bill would shift the burden somewhere else. But we all know that there aren't any easy alternatives. There are no easy cuts. So we should not assume that these ``alternative'' cuts will occur. We have to assume that the cuts will come right out of the highway program. And that, again, would be devastating. To what end? the proponents of the Lott bill say that, if we cut the tax, it will reduce the price of gas at the pump. Certainly, there is reason to be concerned about the price of gas at the pump. I represent Montana. The Big Sky State. We drive long distances. We're sensitive to the price of gas at the pump, which has risen from $1.18 gallon a year ago to $1.59 a gallon now. We need to get the price down, as soon as we can. But there is no reason to believe that a reduction in the federal gas tax will result in lower prices at the pump. After all, this is a market ruled by a cartel. Until we break the stranglehold of that cartel, we'll be limited. We can cut the gas tax. But we can't guarantee that the price at the pump will be reduced by the same amount. Instead, the difference may well offset by price increases, by either the OPEC producers or by the refiners, marketers, and other middlemen. Pulling this all together, the Lott amendment will undermine our highway programs without enhancing our energy independence. There's one final point. For the past few years, Congress has been criticized for putting partisan politics ahead of the public interest. In short, of not getting much done. There have been some notable exceptions. Balancing the budget. Reforming the welfare system. And, yes, reaching a bipartisan compromise on the 1998 highway bill, TEA-21. The bill did not just reauthorize the highway program. It renewed and revitalized the highway program. We passed it overwhelmingly, by a vote of 88-5. It was a great accomplishment. We can confirm that accomplishment today, by rejecting the Lott bill.