Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Tomorrow.

Mr. BAUCUS. Thank you.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, earlier today, Senator Harkin introduced legislation dealing with the recent agreement between States and the U.S. tobacco industry. Senator Harkin's provision says simply that the payments from tobacco companies to States should not be tax deductible. I applaud this effort, and I want to speak for a few moments on the subject and how we might proceed from here. Last week, a number of State attorneys general reached an agreement with several American tobacco companies. The agreement will compensate the States for their Medicaid spending on people who suffer from smoking-related illnesses, like lung cancer and emphysema, with $368 billion in payments over the next 30 years. It is also supposed to include measures to protect the public health and provide tobacco companies with protections against future losses. Congress must soon be asked to pass a law implementing this agreement. Because the agreement is very large and very ambitious, we will need a lot of time and study and consultation before we can reach a final judgment. But let me start with a basic principle. I think we all would agree that a fair negotiated agreement is much better than litigation. But the key word is ``fair.'' The agreement must be fair to States as they pay Medicaid expenses, fair to the Federal Government as it pays for Medicaid and Medicare, fair to kids, fair to the public, and fair to the taxpayers. Initially, my reaction to the first point is that we should give the attorneys general a lot of deference on fairness to States. After all, they negotiated the agreement. With respect to the Federal contributions to Medicare and Medicaid, though, I am concerned that the agreement may not be fair. On public health, it seems they have come to some very good provisions on advertising, but perhaps weaker provisions on regulation of nicotine. All this will take some more study. But I see one thing right away which seems to me grossly unfair to taxpayers. That is, under the terms of this agreement, tobacco companies will apparently be able to deduct their compensation payment from their tax bill as ordinary and necessary business expenses. Thus, the tobacco companies could deduct $368 billion from their taxable income and reduce their tax payments by about $123 billion, assuming we maintain a corporate tax rate of about 33 percent during the course of this agreement. In effect, this would reduce the tobacco companies' payment by $123 billion and force the taxpayers to pick it up instead. That is a full third of the compensation payment to States. I believe that is wrong. I believe it is unfair. The basis of this whole agreement is the idea that tobacco companies bear some responsibility for the illnesses caused by tobacco and nicotine and should help pick up the tab. I agree with that. I also feel strongly that ordinary taxpayers are not responsible for the illnesses caused by tobacco, and they should not have to put up $123 billion to pay for the treatment. Is there a solution to the problem? Yes, there probably is. We should look into the issue, and I believe that the Senate Finance Committee should hold hearings on the tax implications of this settlement. But already it seems clear that these payments are not necessary business expenses. They are, rather, belated compensation for the health effects of tobacco. I do not think they should be tax deductible. I will explore every means, including legislation if necessary, to make sure this agreement is fair to taxpayers.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I very much thank again publicly my chairman of the committee, Senator Roth, who has heard many, many compliments on his leadership of the committee. I have complimented him many times already. Other Senators have complimented him many, many times. But one cannot compliment him too often because he did a terrific job in coming up with a bipartisan bill, as we know, that passed the Senate not too long ago by a vote of 80 to 18--quite an accomplishment.

Mr. BAUCUS. Absolutely. Absolutely.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I want to take this opportunity to repeat my interest in including funding in the reconciliation bill which would facilitate our schools' efforts to acquire computers and become connected to the Internet. If our students are going to be fully prepared to face the next millennium with computer skills adequate to the task of competing in a global economy, I believe we in the Federal Government have a responsibility to ensure that our schools have every opportunity to acquire computer equipment. The House Ways and Means Committee reported a bill which includes funds for an enhanced charitable deduction for those who donate computer equipment to the schools. As you know, based on the experience I have had helping schools in Montana acquire computer equipment, I have been working on a somewhat different approach which provides a tax credit for companies that give a price discount to schools purchasing new equipment. I ask the chairman to work with me during conference to evaluate the House Ways and Means proposals and my proposals to increase schools' access to the Internet.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I opposed the Bumpers Amendment that would repeal percentage depletion for hardrock mining companies operating on public and formerly public lands. I believe this amendment is the wrong approach to bringing about mining law reform. Hardrock mining provides many high-paying jobs and is essential to the economy of Montana. This amendment would raise taxes on the hardrock mining industry which will negatively effect everyone that depends on mining for their economic livelihood. The intent of this amendment is not about percentage depletion. This amendment is an overt attempt to punish the hardrock mining industry for the lack of success in reforming the 1872 Mining Law. Percentage depletion is being used as a surrogate to bring about reform. If there are problems with the 1872 Mining Law, we should approach those problems directly--not in the form of repealing percentage depletion. Let's not wage economic warfare against an entire industry. The repeal of percentage depletion is the wrong tool for bringing about mining law reform. The Bumpers amendment could have potentially devastating effects on the hardrock mining industry. children's health care provision

Mr. BAUCUS

Mr. BAUCUS. If the Senator will yield for 30 seconds, the choice we had in the Finance Committee was to either work with the chairman for a better bill or not work with the chairman and make a statement and get a worse bill.

Mr. BAUCUS. Mr. President, in the last couple of hours, in my judgment, this debate has turned into a rather partisan matter, with Republicans lining up on one side and Democrats lining up on the other. That is fine. I mean, each Senator has his right to say what he or she thinks. That is why we all ran for office and why we are here doing our very best for our constituents. But I also think that our people at home want us to, as much as possible, work together. Sure, some of us have differences, but, as much as possible, they want us to work together for the best interests of the American people. That, I think, is why the President worked with the Congress to try to fashion, and did fashion, a budget agreement--an agreement which will reduce the budget deficit by the year 2002; an agreement which contains provisions that the President, the chief Democrat in our country, wanted; and provisions which the Republican leadership in the Congress wanted. It is not the best agreement in the world, but we are a democracy and democracies sometimes are messy and uneven. But it was a pretty good agreement, by most Americans' standards. The House then attempted to put together its portion of the agreement. I might say that the Ways and Means Committee got pretty partisan. Democrats on the Ways and Means Committee fought vociferously with Republicans on Ways and Means. But the Republicans have a majority of the votes, so they won. Democrats lost, and from the Democrats' point of view, the bill that came out of House Ways and Means Committee is a pretty bad bill. I take my hat off to the chairman of our Finance Committee and our ranking member. The chairman of our committee took a different tack. His view is to work together. The chairman of the Finance Committee, the Senator from Delaware, Senator Roth--I have never seen anyone as fair with both sides of the aisle, in trying to come together with a solid agreement that made sense, near unanimous sense, to the members of that committee. It is wonderful. I have served with other chairmen of the Finance Committee. I know Senator Moynihan knows of when I speak. Sometimes that did not happen in other Congresses. In other Congresses, sometimes it was all Republicans this and all Democrats that. When the other side has the votes, you can make a statement, but you lose. In this case, Chairman Roth worked with the Democratic side of the aisle, and, as a consequence, we came up with a lot better bill-- better, I say, than what is produced in the House pursuant to the budget agreement, agreed to by the President and congressional leadership. Why is it better? It is better because he worked with us. It is also better for these reasons: It has a cigarette tax, which I think most Americans want; it gave a big chunk of dollars to child care, to health insurance, which people want in this country; there is a big emphasis on education, which I think most people in this country want. There are many provisions which are very good. Now, in return for Chairman Roth working so hard with Senator Moynihan to put an agreement together, Chairman Roth asked a very reasonable question with respect to six key points, in the final hours of putting this bill together. The six key points, very simply, dealt with a ticket tax, cigarette tax, with unified credit, and there are a couple others. But there are six key points. He asked us, would all the members of the committee agree to support that agreement? He asked for a show of hands. Every hand went up. Every member of the committee raised his hand to support the agreement. Now, here we are on the floor today, Thursday afternoon, and my party leader has come up with a very good substitute. In many respects, I think it is better than the bill that came out of the committee. But I made an agreement. I pledged my honor to support the six terms that Senator Roth asked us to support, so that we would come up with a better bipartisan bill. That is not to say I support or am bound to support every provision of the bill. But with respect to those six key points, I feel duty-bound to honor that commitment, and I will do so here today. Now, if we could find a Democratic substitute which did not contravene any of those six points, I would probably support it. But the substitute before us does contravene those six points. I feel, as a matter of honor, that I cannot support the Democratic substitute. I must say that the bill before us--the Finance Committee bill--is not that bad. Remember, we are operating under the agreement that the President and congressional leadership agreed to. Given those parameters, this is not that bad a bill. It reduces the budget deficit, it does reduce taxes, it gives a child tax credit, it helps education, and it is good--not perfect, but it is good. Now, on down the road, we will have opportunities to still improve upon the bill. The President, after all, has the authority to sign or not sign the bill. I very much pledge to work with all Members of Congress, with my constituents at home, and with the President and the conferees, whoever they may be, to keep improving upon this bill. I must say, Mr. President, that this is a very difficult position to take because I do not like to be taking a position contrary to the leader of my party. But I do believe that it is the right position to take. After all, we are elected to do what's right. In my judgment, what is right is to support the agreement I reached with the chairman of the committee and also work to continue to improve upon this bill as it reaches different stages of this progress. I, therefore, will not vote for the substitute.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the chairman of the committee has adequately described the amendment. I very much appreciate that he will accept the amendment. THE PRESIDING OFFICER. If there be no further debate, the question is on agreeing to the amendment.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join with my colleague, Senator D'Amato, in introducing this legislation, which would permanently extend the 10-year grandfather for publicly traded partnerships [PTP's]. PTP's were first created in the early 1980's for the purpose of combining the traditional limited partnership form with the ability to have the partnership units freely traded on established securities or secondary markets. When Congress enacted the Omnibus Budget Reconciliation Act of 1987, it included a provision which reversed existing law at the time by requiring that PTP's would generally be treated as corporations for income tax purposes. The act completely exempted certain types of PTP's from the law, primarily those whose income is derived from resources such as timber, oil and gas, minerals, and real estate. PTP's which did not meet the criteria were given a 10-year transition period, after which they would no longer be exempted from the new requirements. This transition period, the grandfather, expires at the end of 1997. Our bill would extend it permanently. Mr. President, there is no public or tax policy reason for treating the grandfathered PTP's differently than those completely exempted from the law. All of the PTP's relied upon the law that was in effect when they were created. They are all similarly structured and deserve the same right to preserve their partnership status, regardless of the line of business in which they operate. There are only 27 of them remaining, and they are involved in a wide variety of industries, from motels and restaurants to chemicals, financial advising and macadamia nuts. They went through a costly and time-consuming process in order to convert from a corporation to a PTP in the first place, and will incur many of the same costs if they are now required to convert back to corporate form when the grandfather expires in January. More importantly, I am concerned about the effect that the loss of the grandfather will have on PTP investors. It is a virtual certainty that the value of PTP units will be adversely affected if the grandfather expires, reducing the value of the investor's holdings. Most of these investors are average, middle-class taxpayers, many of them elderly, who invested in PTP units because of their high yield. They are scattered throughout the country, and at last count numbered over 300,000. Many made this investment before the 1987 act was passed. There is no tax policy goal that will be achieved by allowing the grandfather to expire. That goal was fully achieved by making the law apply prospectively. All we accomplish is inflicting harm on these PTP's and their investors, without their having done anything illegal or improper when they were created. With this action, all remaining PTP's would be treated uniformly under the law. If the legislation is incorporated into this year's reconciliation bill, it will be as a revenue-neutral measure.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join with my colleague, Senator D'Amato, in introducing this legislation, which would permanently extend the 10-year grandfather for publicly traded partnerships [PTP's]. PTP's were first created in the early 1980's for the purpose of combining the traditional limited partnership form with the ability to have the partnership units freely traded on established securities or secondary markets. When Congress enacted the Omnibus Budget Reconciliation Act of 1987, it included a provision which reversed existing law at the time by requiring that PTP's would generally be treated as corporations for income tax purposes. The act completely exempted certain types of PTP's from the law, primarily those whose income is derived from resources such as timber, oil and gas, minerals, and real estate. PTP's which did not meet the criteria were given a 10-year transition period, after which they would no longer be exempted from the new requirements. This transition period, the grandfather, expires at the end of 1997. Our bill would extend it permanently. Mr. President, there is no public or tax policy reason for treating the grandfathered PTP's differently than those completely exempted from the law. All of the PTP's relied upon the law that was in effect when they were created. They are all similarly structured and deserve the same right to preserve their partnership status, regardless of the line of business in which they operate. There are only 27 of them remaining, and they are involved in a wide variety of industries, from motels and restaurants to chemicals, financial advising and macadamia nuts. They went through a costly and time-consuming process in order to convert from a corporation to a PTP in the first place, and will incur many of the same costs if they are now required to convert back to corporate form when the grandfather expires in January. More importantly, I am concerned about the effect that the loss of the grandfather will have on PTP investors. It is a virtual certainty that the value of PTP units will be adversely affected if the grandfather expires, reducing the value of the investor's holdings. Most of these investors are average, middle-class taxpayers, many of them elderly, who invested in PTP units because of their high yield. They are scattered throughout the country, and at last count numbered over 300,000. Many made this investment before the 1987 act was passed. There is no tax policy goal that will be achieved by allowing the grandfather to expire. That goal was fully achieved by making the law apply prospectively. All we accomplish is inflicting harm on these PTP's and their investors, without their having done anything illegal or improper when they were created. With this action, all remaining PTP's would be treated uniformly under the law. If the legislation is incorporated into this year's reconciliation bill, it will be as a revenue-neutral measure.

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, over the Memorial Day recess, I made a week-long trip to East Asia. This included stops in Seoul, South Korea; Pyongyang, North Korea; Beijing, China; Hong Kong, as well as Misawa Air Force Base in Japan. I spent most of my time on the three issues of most immediate concern to us in northeast Asia this year. First, food and security problems on the Korean Peninsula; second, the negotiations over China's entry into the World Trade Organization; and third, Hong Kong's transition to Chinese sovereignty, now less than 3 weeks away. I also discussed longer term issues, including environmental protection, human rights, and United States-China security relations. These are complex subjects, with great implications for our national interest in all sorts of areas. With respect to the three immediate issues, I think our basic strategies are well conceived, and we have good people in the military and the Foreign Service working on them. I am in the process of drafting a trip report that will address them in much more detail. But we in Congress must first take up a different issue; that is, whether to support the President's decision to renew China's MFN status. So I will return to the floor in coming days to discuss the basic security, trade, environmental, and humanitarian issues we face in China and in East Asia generally. But today I will concentrate on MFN status--why it is legally right; why it is morally right, and why, given our compelling interest in issues like security in Korea, more fair and reciprocal trade with China, and a smooth transition for Hong Kong, it is right for our national interest. Legally Right First, renewal of MFN status is right under our law. The Jackson- Vanik law, which has governed renewal of MFN status for nonmarket economies since 1974, is the main law in place. It conditions MFN on two things: the existence of a bilateral commercial agreement, and freedom of emigration. Under the law, the President's choice is clear. We have a bilateral trade agreement signed with China in 1980, and China allows free emigration. Therefore, as a legal matter, the President was right to renew MFN and we should back him up. Morally Right Second, renewing MFN status is morally right. At times, people in Washington are tempted to see a vote to revoke MFN as something which might promote human rights in China. This is a fine sentiment. People who advocate revoking MFN status to promote human rights are very well intentioned. But the effects of revoking MFN would be the opposite of what they intend. To revoke MFN status, very simply, is to raise tariffs from Uruguay round to Smoot-Hawley levels. To take one example, that means raising tariffs on toys and stuffed animals from zero to 70 percent overnight, again, automatically, from zero to 70 percent tariff overnight. That hits one of China's major exports to the United States, at about 6 billion dollars' worth last year. And who makes them? On the whole, it's young Chinese working people trying to improve their lives. What would happen if we revoke MFN status? The result should be obvious. Millions of innocent Chinese workers in toy factories and in other walks of life would lose their jobs. The Chinese Government would certainly be hurt, but it would still be there the next day. But the lives of these workers would be ruined. So, far from improving human rights, revoking China's MFN status would cause immense human suffering in China. Of course, that would discredit our human rights efforts with the Chinese public. No rational person can expect anyone in China to thank us for harming their economy and inflicting misery on them, their families, or their fellow citizens. By contrast, if human rights is our motivation, MFN is an irreplaceable part of an effective policy. As the Democracy Wall activist Wang Xizhe--until recently, a political prisoner--says: The goal of exerting effective, long-term influence over China can only be achieved by maintaining the broadest possible contacts with China, on the foundation of MFN, thus causing China to enter further into the global family and to accept globally practiced standards of behavior. A long-term policy may emotionally be hard to accept. There are real human rights problems in China: About 3,000 political prisoners remain in jail, strict limits on freedom of assembly exist, very severe policies in Tibet. We would like to solve them all in a day, but the fact is, that won't happen. Only by staying the course, staying involved through trade and human exchange, as well as diplomacy, can we hope to make a difference. Right for the National Interest Finally, we are Americans first, and we are responsible to the American public on our policy decisions. And renewing MFN status is right for our own national interest. Security issues are an example. I can say from firsthand experience that we have a very complex, very dangerous situation at hand in the Korean Peninsula. North Korea is a politically isolated government, with very severe food and economic problems, and a large and well-armed military machine. We have a commitment to joint defense of South Korea, we Americans and the South Koreans, and we have 37,000 men and women permanently on the line just a few miles south of the DMZ. We owe it to them to pursue a very serious, responsible policy that can keep the peace and ensure a swift victory if, God forbid, there is any conflict. And Chinese cooperation is absolutely essential to that. Deliberately antagonizing the Chinese Government and armed forces by revoking MFN will not help at all. We are also responsible to our own people to make trade with China more fair, more reciprocal, and more beneficial to our country. We have an opportunity to do that this year by bringing China into the World Trade Organization on a commercially acceptable basis. Cutting off MFN status would put us on the opposite track: it would balance trade at close to zero, cutting off jobs and prosperity here as well as in China. As we look into the next century, we must work to slow global warming, ocean pollution, and the loss of biodiversity. To take just one statistic, in the next 20 years, world greenhouse emissions will grow from 6 to 9 trillion tons a year. Fully 1 trillion of the additional 3 trillion tons will come from China. That is, one-third of all greenhouse gas emissions in the next 20 years, if nothing is done, will come from China. We have a chance now to moderate that trend. And a political crisis caused by revoking MFN would make that mutually beneficial effort very difficult. Views of Our Friends and Allies Our own common sense should tell us that China is a key player on all these issues. Wantonly picking a fight with the world's largest country by revoking MFN status, when only 6 countries in the world lack MFN status and 151 countries actually get tariff rates better than MFN, would be foolish. And our allies tell us the same thing. During my trip last month, I met top national security officials in the South Korean Government. I spoke with senior officers of the Japanese Self-Defense Forces. And I met with Chinese dissidents and democratic political leaders in Hong Kong. These are our friends, our strategic allies, people we work with every day, people who wish us well. Not a single one of them supported revoking MFN status. To the contrary, they all felt that a good relationship between the United States and China is crucial. The right course to take, therefore, is very clear. From Korea to human rights to global warming to Hong Kong and Taiwan and trade, we have very serious issues to discuss with the Chinese. And the annual MFN debate is an artificial, unnecessary crisis that makes results on all of them more difficult. So we should not debate this question into the misty and indefinite future. Instead, we should back up the President this year, renew China's MFN status, and when China faces up to its WTO responsibilities, then make MFN permanent. Mr. President, I ask unanimous consent that an acknowledgement on the East Asia trip be printed in the Record at this point.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, might I ask, are we in morning business?

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to join Senator Burns today in introducing legislation that authorizes the construction of a municipal, rural, and industrial water system for the Assiniboine and Sioux Tribes of the Fort Peck Reservation. The reservation has long been plagued by major drinking water problems including both inadequate supplies and unacceptable water quality. Ground water, the primary source of drinking water for many reservation residents, often exceeds the standards for total dissolved solids, iron, sulfates, nitrates, and in some cases for selenium, manganese and fluorine. Bacterial contamination of domestic water supplies has also been a recurring problem. On several occasions the Indian Health Service and Tribal Health Office have had to issue public health alerts regarding drinking water. In short, the very health of residents of the Fort Peck Reservation depends on construction of this pipeline. A safe and adequate supply of water is a necessity if the Fort Peck Nation is to realize its dream of economic development and full employment. The reservation economy is based on ranching and farming but expansion of agricultural operations is severely limited by the lack of adequate stockwater supplies. Additionally more effective distribution of water would result in more effective soil conservation and improvement of the native rangeland. The Bureau of Reclamation has determined that a regional MR&I water supply system using water from the Missouri River is a feasible alternative for addressing the serious water problems facing Fort Peck. This legislation will make that alternative a reality for the people of the Fort Peck Reservation. I urge my colleagues to join me in supporting authorization of this critical project.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am very pleased today to join my colleague, Senator Hatch, to introduce a bill to help American-owned companies compete in the world marketplace by simplifying our overly complicated international tax rules. America's economic success depends more than ever before on our ability to succeed in the international economy. When I came to the Senate, imports and exports together made up about 12 percent of our economy. Today it is 30 percent and growing every day. So more jobs than ever depend on exports and overseas operations. I have worked through the Trade Subcommittee to lower foreign trade barriers and encourage agreements to keep trade free and fair. I have sought to open foreign markets for Montana products like beef to wheat. And this work pays off. According to a report prepared by the accounting firm Price Waterhouse last month, exports of goods alone in the United States in 1996 supported almost 7 million direct and indirect jobs and account for over 11 percent of our Gross Domestic Product. In Montana, these exports totaled almost one-half billion dollars and supported 58,000 jobs in 1996. But while our trade policies have been successful in many areas, our Tax Code has failed to keep up. Its international provisions are outdated, unclear, complex, and duplicative. And the result is fewer jobs and less prosperity here at home. So Senator Hatch and I have joined in an effort to simplify our Code, remove duplicative or outmoded provisions, and provide incentives for trade whenever possible. This bill does not by any means cure all of the problems in the international tax arena. But it is a good starting point which simplifies existing law, reduces the cost of compliance, and begins to make rules more rational and more mindful of the competitiveness of U.S. businesses. The major provisions include: Putting U.S. companies entering into joint ventures in foreign markets on an equal footing with their foreign competitors by eliminating the so-called 10-50 foreign tax credit basket rules. Rationalizing the anti-deferral rules by eliminating provisions that duplicate other clauses of the Internal Revenue Code. This is essential if U.S. financial services companies are to keep their leading edge in foreign markets. Guaranteeing that the export tax incentive provided by the foreign sales corporation rules would apply to U.S. software sold overseas, and to approved sales of U.S.-made military goods overseas. Putting mutual funds on the same footing as individual companies in their ability to attract foreign investors, increasing their investment capital. And making it easier for utilities to bid for construction projects overseas. These things will make us more efficient and more competitive. It will allow companies to put less effort into accounting and filling out tax forms, and more into producing, competing, and creating jobs. And that is what we need, today, and even more so tomorrow. We live in a global economy, Mr. President, and we must help American companies compete in this economy if we hope to continue an expansion in which a quarter of our growth already comes from exports. The International Tax Simplification for American Competitiveness Act is a major step in that direction. I look forward to working with Senator Hatch and my other colleagues on the Finance Committee to have its provisions incorporated into the reconciliation bill we will soon be considering.

Mr. BAUCUS. Mr. President, I am pleased to join Senator Burns today in introducing legislation that authorizes the construction of a municipal, rural, and industrial water system for the Assiniboine and Sioux Tribes of the Fort Peck Reservation. The reservation has long been plagued by major drinking water problems including both inadequate supplies and unacceptable water quality. Ground water, the primary source of drinking water for many reservation residents, often exceeds the standards for total dissolved solids, iron, sulfates, nitrates, and in some cases for selenium, manganese and fluorine. Bacterial contamination of domestic water supplies has also been a recurring problem. On several occasions the Indian Health Service and Tribal Health Office have had to issue public health alerts regarding drinking water. In short, the very health of residents of the Fort Peck Reservation depends on construction of this pipeline. A safe and adequate supply of water is a necessity if the Fort Peck Nation is to realize its dream of economic development and full employment. The reservation economy is based on ranching and farming but expansion of agricultural operations is severely limited by the lack of adequate stockwater supplies. Additionally more effective distribution of water would result in more effective soil conservation and improvement of the native rangeland. The Bureau of Reclamation has determined that a regional MR&I water supply system using water from the Missouri River is a feasible alternative for addressing the serious water problems facing Fort Peck. This legislation will make that alternative a reality for the people of the Fort Peck Reservation. I urge my colleagues to join me in supporting authorization of this critical project.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today Senator Murkowski and I introduced a bill called the Rural Telemedicine Demonstration Act of 1997. As the Senate knows, Senator Murkowski and I represent States where a good number of our constituents live in rural areas. Individuals living in States like Montana often live in counties that are underserved by specialty health care providers. Due to new technology made possible by advances in fiber optics, it is now easier for rural citizens to be seen by specialty health care providers. Using this technology, a person living in Culbertson, MT, who would normally drive 300 miles for specialty medical care in Billings, can now be ``seen'' by a physician via telemedicine. But, in order for telemedicine systems to be a success in rural States like mine, Medicare must eventually reimburse telemedicine providers. This bill is the first step in that direction.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am very pleased today to join my colleague, Senator Hatch, to introduce a bill to help American-owned companies compete in the world marketplace by simplifying our overly complicated international tax rules. America's economic success depends more than ever before on our ability to succeed in the international economy. When I came to the Senate, imports and exports together made up about 12 percent of our economy. Today it is 30 percent and growing every day. So more jobs than ever depend on exports and overseas operations. I have worked through the Trade Subcommittee to lower foreign trade barriers and encourage agreements to keep trade free and fair. I have sought to open foreign markets for Montana products like beef to wheat. And this work pays off. According to a report prepared by the accounting firm Price Waterhouse last month, exports of goods alone in the United States in 1996 supported almost 7 million direct and indirect jobs and account for over 11 percent of our Gross Domestic Product. In Montana, these exports totaled almost one-half billion dollars and supported 58,000 jobs in 1996. But while our trade policies have been successful in many areas, our Tax Code has failed to keep up. Its international provisions are outdated, unclear, complex, and duplicative. And the result is fewer jobs and less prosperity here at home. So Senator Hatch and I have joined in an effort to simplify our Code, remove duplicative or outmoded provisions, and provide incentives for trade whenever possible. This bill does not by any means cure all of the problems in the international tax arena. But it is a good starting point which simplifies existing law, reduces the cost of compliance, and begins to make rules more rational and more mindful of the competitiveness of U.S. businesses. The major provisions include: Putting U.S. companies entering into joint ventures in foreign markets on an equal footing with their foreign competitors by eliminating the so-called 10-50 foreign tax credit basket rules. Rationalizing the anti-deferral rules by eliminating provisions that duplicate other clauses of the Internal Revenue Code. This is essential if U.S. financial services companies are to keep their leading edge in foreign markets. Guaranteeing that the export tax incentive provided by the foreign sales corporation rules would apply to U.S. software sold overseas, and to approved sales of U.S.-made military goods overseas. Putting mutual funds on the same footing as individual companies in their ability to attract foreign investors, increasing their investment capital. And making it easier for utilities to bid for construction projects overseas. These things will make us more efficient and more competitive. It will allow companies to put less effort into accounting and filling out tax forms, and more into producing, competing, and creating jobs. And that is what we need, today, and even more so tomorrow. We live in a global economy, Mr. President, and we must help American companies compete in this economy if we hope to continue an expansion in which a quarter of our growth already comes from exports. The International Tax Simplification for American Competitiveness Act is a major step in that direction. I look forward to working with Senator Hatch and my other colleagues on the Finance Committee to have its provisions incorporated into the reconciliation bill we will soon be considering.

Mr. BAUCUS

Mr. BAUCUS. Five?

Mr. BAUCUS. Thank you, Madam President. I also thank my good friend and colleague from Massachusetts. Madam President, I rise today in very firm opposition to the cloture motion on S. 4, the so-called Family Friendly Workplace Act, sponsored by my colleague from Missouri, Senator Ashcroft. Why do I do so? In speaking against cloture, I do not wish to convey that I oppose the idea of comptime. Quite the contrary, comptime is an idea whose time has come. Indeed, Federal workers get comptime. I think that other employees should also get comptime. We all hear from people in our home States--I know you do, Madam President--we all do--how pressed people are, particularly working moms, pressed for time, and do not have the time to keep their job as well as take their children to Babe Ruth ballgames or to parent-teacher conferences, and are very pressed for time. It only makes sense, Madam President, that employees, women and men on the job, get a little more flexibility so they can take time off to be with their family, with their children. It is not an easy task that parents have these days. Comptime would let working parents balance the needs of their families with the demands of their jobs. I believe it is only fair that we give America's families that tool. Unfortunately, the bill we are now debating, the so-called Family Friendly Workplace Act, fails to live up to its name. It is not family friendly at all. Why do I say that? First of all, the bill does not give workers the choice they need to make comptime effective. Under this bill, the employer can decide when a worker takes time off, not the employee. That means there is no guarantee that a parent would have time off when he or she needs it the most. That completely undermines the very concept of comptime. In addition, this bill dismantles two important safeguards that are fundamental to protecting the rights of workers. First, the bill eliminates the 40-hour workweek and replaces that time-honored tradition with an 80-hour, 2-week system, which means, under their bill, a worker who works 60 hours in 1 week may not be entitled to 1 minute of overtime. Second, this legislation would allow an employer to discriminate against a worker who chooses to take their overtime in the form of pay. Why? Because by assigning overtime only to workers who they know will take their accrued time in the form of vacation, the employer can save some money. But the worker gets pinched. Both of these changes will result in a pay cut for people who punch the clock. Lots of families depend on that extra money to make ends meet. We cannot risk taking it away from them. So that is why I rise in opposition to the cloture motion today, Madam President. But, as I said earlier, I am not speaking today against the idea of comptime. I like comptime. That is why I have offered a substitute amendment joined by Senators Kerrey and Landrieu. We will offer that substitute at the appropriate time. I think our bill gives workers the right kind of comptime. We offer employees comptime where they can choose when they take their own time off, comptime where they can take pay or time off without worrying about discrimination from their employers, and comptime that preserves the 40-hour workweek. Our amendment, I think, is clear. It is more reasonable and it is a better choice. I believe, Madam President, that when Senators look at both choices, the substitute that I plan to offer, as well as the current bill, they will realize that the better approach is the approach that we are suggesting. Madam President, the President has indicated that he would veto the current bill but he would sign the bill that we will be offering at the appropriate moment. I urge my colleagues again to vote against cloture. I yield back the balance of my time.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to speak on the Baucus- Kerrey-Landrieu substitute amendment to Senator Ashcroft's comptime bill. The Fair Labor Standards Act is a set of laws that Congress enacted some 60 years ago to protect the American worker from abuse in the workplace. These laws do a good job to make sure that our country's greatest asset, our work force, is protected. They put a halt to child labor. They established a 40-hour workweek. And they set up the concept of pay and a half for overtime. Under these laws, our country has grown and thrived, and, by and large, our workers are protected from extravagant abuses. However, our society has changed a great deal since Congress enacted that landmark legislation. We have more families where both parents hold down full-time jobs. We have more single-parent households. And for everyone it seems as if their dollar does not buy as much as it used to. All that means longer hours on the job, which, in turn, leads to less time spent with the family. Today's parents find themselves caught in a tightrope act as they try to balance the needs of their families with the demands of their jobs, and that just is not fair. I believe we are in a position to help them. That does not mean we should go about dismantling the protections on which our workers have come to rely. That is what some provisions of Senator Ashcroft's bill will do, and I think that is the wrong path. Instead, we must adapt our labor laws to maintain the protections that are so necessary while making it possible for our workers to have some flexibility. That is the right path. That is why my colleagues must support our substitute amendment. In Montana, I meet a lot of hard-working people. One thing they tell me time and time again is they need more flexibility in their work schedules. They need to be able to choose between earning time-and-a- half pay for their overtime or taking that time in the form of vacation. This choice would allow workers to either put aside a little extra money or take some time to be with their families. One area where the effects of this flexibility will be greatly felt is education. You see, in Montana, we pride ourselves on the quality education we provide our children. And we have done a pretty good job. One key to our success is parental involvement in their kids' education. That means taking time to meet with teachers, helping out on homework and participating in extracurricular activities. The Baucus-Kerrey-Landrieu amendment will allow parents to freely choose how and when they use their overtime so that parents can again be part of their children's lives. At the same time, I know every family is different and their needs vary greatly. Lots of folks depend on a little extra money to make ends meet. Others need time for their families. And that is why we need to make sure that every household can choose how to use their time and money. There are three clear reasons why my colleagues should vote for the substitute amendment offered by myself, Senator Kerrey from Nebraska, and Senator Landrieu. First, our amendment will allow employees the final choice on when and how they will use their overtime. Whether it is time or money, the worker gets the choice. That is very important. Senator Ashcroft's bill leaves the final decision on how you spend your time with the employer. Their bill has no protection for the worker. In fact, it would allow an employer to discriminate against a worker who chooses to take money for their overtime. That is just not fair. The second difference is that our amendment does not tamper with the 40-hour workweek. If you work more than 40 hours in a week, you are entitled to time-and-a-half pay. That is the way it has always been under the Fair Labor Standards Act. Americans overwhelmingly support the 40-hour workweek, and we ought to preserve it. Under Senator Ashcroft's bill, a worker could log 60 hours in 1 week and not qualify for 1 minute of overtime. For over 60 years, we have told our employees that if they worked hard and did a good job, they would be rewarded. Under this bill, we are reneging on that promise. The result is a pay cut for America's workers. And finally, the third reason my colleagues should support the substitute is that President Clinton has said he would sign our amendment, and he has said he would veto the other comptime bill. So if we are truly interested in giving workers flexibility in passing the comptime bill, we must support, I believe, our amendment. It is the only chance for a meaningful reform this year. Look, I think most Senators agree we need comptime. It is a good idea whose time has come. Yet, there are two ideas of how to get it done. One would take away workers' choice, end the 40-hour workweek, and is headed toward a certain Presidential veto. The other, our substitute, lets workers decide how to use their overtime, maintains the 40-hour workweek and will become law if we pass it. Our amendment I think is the more reasonable choice. So if you are really interested in passing a comptime bill, this is the time and our proposal is the bill. I urge my colleagues to vote in favor of the Baucus-Kerrey-Landrieu substitute amendment to the comptime bill. Mr. President, I yield my time, and I also thank the manager of the bill for his indulgence. Mr. D'AMATO addressed the Chair.