Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Again, I thank my colleague for bringing this matter to my attention. You raise a serious concern, and I can assure you my committee will take a look at the issues you raise.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I yield to the Senator from Illinois such time as he desires.

Mr. BAUCUS. Mr. President, we are now on the provision to extend unemployment insurance, as well as extend the home buyers tax credit, as well as expand the net operating loss provision. I wish to speak about that provision because I think it is so important that it pass. The British mathematical physicist Lord Kelvin once said: Until you can measure something and express it in numbers, you have only the beginning of understanding. The numbers now measure the beginning of a recovery, and we are beginning to understand the depth of the great recession of 2008 and 2009. It has been the longest recession since World War II. The numbers show that the American economy has been shrinking from the middle of last year to the middle of this year--shrinking. For January through March, it declined at a 6.4-percent annual rate. It has been the sharpest decline in 27 years. But last week, the Commerce Department reported that from July through September, the numbers show the economy grew at a 3.5-percent annual rate. When economists talk about the end of a recession, however, they mean the time when things stop getting worse, not necessarily getting better but stop getting worse. For most Americans, it will still be some time before things start getting better. Even though the economists can measure some improvement and express it in the numbers, we still have only the beginning of a recovery. Economists say that the stimulus package we passed last winter is part of the reason for the growth. On Friday, the Obama administration reported that the stimulus package has created or saved more than 640,000 jobs so far. Economists also credit consumer spending for the latest growth. In particular, economists credit automobile and housing sales. From July through September, housing sales rose at a 23.4- percent annual rate. The home buyer tax credit played a big part in that growth. That is one of the provisions we are considering in the amendment before us today. It will still take some time for the job picture to improve. Job growth turns around more slowly than the economy as a whole. Economists call this a lagging indicator. Last month, the jobless rate reached 9.8 percent. That is the highest rate in 26 years. Economists expect this week's report will show that unemployment rose again this month. Economists will say jobs will still be hard to find well into 2010. Last week, the Labor Department reported that 530,000 people filed their first jobless claims. That number has been heading down, but at more than half a million people, it is still far too high. We still need to do more to help the economy recover, and we still need to do more to help Americans get and keep good jobs. The extension of unemployment benefits and the tax relief in this legislation are part of the answer. I hope that today the Senate can act to bring relief to millions of Americans waiting for this important legislation. Unemployment insurance is a vital lifeline for millions of Americans. It is a lifeline many families and communities continue to need just to keep afloat. Along with the rest of the Nation, my State of Montana has felt the effects of this great recession. Our unemployment rate is up to 6.5 percent, and although it is not as high as the national average, many in my State are suffering. This is particularly true in the Montana mining, lumber, and construction industries. The national demand for lumber is expected to fall below 30 million board feet this year. The amount of lumber used to build new homes is expected to drop from 28 billion board feet to about 5 billion board feet, and that hits Montana very hard. When we help unemployed Americans, let's remember, we help their communities. When we help our unemployed neighbors, we also help keep open the neighborhood grocery store and the neighborhood gas station. When we help our unemployed neighbors, we also help our economy and ourselves. I am gratified that a majority of my colleagues appear to agree that it is important to extend unemployment benefits. I am also hopeful that we will deliver those benefits very soon. The amendment before us today also includes an extension of the Federal unemployment tax. This extension covers the cost of the extended unemployment benefits. The Federal unemployment tax has been extended every year since 1982. The amendment before us today would also provide tax relief to help our economy recover. The pending amendment would extend the home buyers tax credit and provide employers important tax relief. The home buyers tax credit has helped millions of Americans to buy their first homes. The tax credit has boosted demand and it has helped reduce the inventory of unsold homes. This, in turn, has helped to bring much needed stability to the housing market. But in the housing market, like the labor market, we are not yet in the clear. The housing market is still recovering from the implosion of the subprime mortgage market. In many parts of the country, housing prices remain at record lows and foreclosures continue as Americans continue to lose their jobs and the means to pay their mortgages. That is why it is important to extend the home buyers tax credit. In the amendment before us today, we have raised the income limitations to open the tax credit to millions more who are thinking about buying a home. Our amendment also extends the credit to include home buyers seeking to move up to a new home--not just for first-time home buyers but those who want to move up to a new home. For those who have lived in their current residence for 5 years or more, they would be eligible for a $6,500 tax credit if they want to buy a new home. It is $8,000 for first-time buyers and a $6,500 tax credit for those who want to move up--for those who have stayed in their current residence for 5 years. The home buyers tax credit would be extended to April 30 of next year. We also include new binding contract language. This language would effectively make the credit available until June 30 of next year, as long as the home buyer entered into a binding contract before May 1. I think this temporary extension of the home buyers tax credit is the right approach. It would provide a much needed stimulus of the housing market, and it would remain fiscally responsible. Our amendment also would add net operating loss relief for businesses. Under current law, small businesses are able to carry back their 2008 losses to profitable years for up to 5 years. Senator Snowe and I worked together on a bill that would expand this provision to all businesses. The amendment before us today includes that legislation. It would provide all businesses with the ability to carry back losses from 2008 and 2009 for 5 years--not just 2 years but 5 years. That is 3 years longer than under current law. This type of relief will help small and large businesses alike. This tax relief is paid for also in a fiscally responsible manner. Our amendment would delay a tax break for multinational corporations, many of which would benefit from the expanded NOL relief. We also included increases and penalties for taxpayers who fail to timely file partners and S corporation returns. We believe these provisions will increase compliance with the tax law and also help us close the tax gap. This package provides timely and essential relief to American families and businesses that have been affected by our economy. Our amendment would extend benefits to the unemployed Americans who are hurting the most and would help home buyers to buy homes. It would provide support for all businesses that are having trouble meeting their payroll in these tough economic times. This amendment would help to speed the recovery from the great recession. It would help to improve our economy, and it would help the American people. I urge my colleagues to support the legislation and vote for cloture on the amendment.

Mr. BAUCUS. Mr. President, I wish to make a couple of points, not get into a knockdown, drag-out argument with my good friend from South Dakota. First, he is saying the Democratic side is limiting his opportunity to offer amendments. I want to remind my friend that actually there has been a lot of to and fro here. The majority leader has offered many other opportunities for your side to offer amendments, back and forth, but it has gotten to the point where the leader had to draw the line and say we have to get moving here, we have to get moving on extending unemployment insurance. The point is, there were many opportunities to offer amendments, both ways. We have to get moving here and get unemployment insurance extended. The other main point I think is important, just to raise it, basically suggesting this bill is not paid for. The Congressional Budget Office is the gold standard here. The Congressional Budget Office says at least the Finance Committee bill--we don't have another bill before us yet in the Senate, but the Finance Committee bill, the committee I chair--the CBO said the Finance Committee bill was deficit neutral for 10 years. That is their assessment. The CBO is the gold standard. They make these determinations. That is what they said. They also concluded that the Finance Committee bill would reduce the deficit in future years--reduce the deficit in future years--and significantly reduce the deficit in subsequent 10- year intervals. I must say, they also made another very interesting conclusion that rebuts the charge that this health care legislation is more government. The fact is, the Congressional Budget Office concluded, in a letter to our committee, the bill would ``reduce the Government's overall commitment to health care.'' Reduce the Federal Government's overall commitment to health care-- not the same, not increase, but reduce. That is the Congressional Budget Office, in a letter: Reduce it. They gave a percentage. I think reduce it by a quarter or half percent GDP over time. We do not have legislation before us now because the leader is melding two bills together, the HELP Committee and Finance Committee bills. Then we have to go to conference and so on and so forth, but it would be my hope, be my expectation, be my interest, to see that continues, namely that the bill we pass out of this body is deficit neutral, when it comes back from conference it is deficit neutral over 10 years, actually does reduce the budget deficit over time, and actually reduces the Federal Government's commitment to health care. That is, the Federal Government would be paying less in health care over time. I hope that will be the case and that will be my expectation. That is something I will strive for. I want to make it clear: not more government, less government-- according to CBO anyway. Also the proposal out of the Finance Committee was deficit neutral. I reserve the remainder of my time.

Mr. BAUCUS. Mr. President, how much time is remaining on each side?

Mr. BAUCUS. Four seconds. That is interesting. I want to set the record straight for my good friend from Nebraska. I don't know how wise it would be to pay for this unemployment extension by stopping stimulus payments. Our economy is still coming out, still in recovery. We are by no means out of the woods yet. I think it would not make sense to pay for the extension of unemployment insurance benefits by going back to stimulus money and stopping the payment of stimulus dollars. I do not know exactly how many stimulus dollars are not yet spent, but I think it is significant and I think it would be unwise for us to stop them at this point. Beyond that, I think we should get on, vote, and pass this legislation. People are out of jobs. There is a record number of people seeking unemployment. There are, I think, about 15 million Americans chasing 3 million jobs. They can't find jobs, can't get them; they are unavailable. It seems to me it only makes sense for us to extend the underlying unemployment insurance for another 14 weeks for all States and 6 weeks for those high unemployment States. I mentioned earlier how important it is for us to keep spending stimulus dollars. I chuckled when I heard my good friend talk about filling the tree. Frankly, in my State we need not to fill up trees, we need to fell more trees so we can get more jobs in our State, and that is one reason for the extension of the home buyer's tax credit. The people in our home States, as we know, are more worried about jobs than anything else. That is what it comes down to is jobs, good- paying jobs. With this legislation, hopefully, if we get enough cloture votes so we can invoke cloture and get to the passage of the legislation, it is about jobs--extending the homeowners tax credit, it is expanding the net operating loss provision, which is so important to so many companies. Add to that, it is extending unemployment insurance to those people who need benefits because they are out of work, looking for jobs. Let me repeat two figures I mentioned earlier: There are about 15 million people in our country unemployed who are looking for about 3 million jobs. That is about one out of five. That is unconscionable in a country such as ours. Let's get on with this, let's pass this legislation so people can get some help. I yield the remainder of my time. I guess there is only 4 seconds left on this side. I suggest the absence of a quorum.

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

Mr. BAUCUS. Mr. President, I ask all remaining time be yielded back and I ask consent we proceed to the vote on the underlying measure.

Mr. BAUCUS. I thank the Chair.

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, I ask unanimous consent that I be allowed to speak for up to 20 minutes in morning business.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, these days, the economy is foremost on the minds of Americans, and well it should be. Two out of five Americans say the economy should be our top priority. That is more than twice as many as cite any other issue--two times that the economy is much more important. The unemployment insurance bill before us today helps to address the economy in several ways. In several ways, our legislation would help Americans to get and keep good jobs. First, our bill would extend much needed unemployment benefits. This unemployment insurance relief would get money into the hands of people who need it--need it desperately. I might say, there are about 15 million Americans out of work chasing about 3 million jobs. There are many more people unemployed looking for work. When we help unemployed Americans, let's also remember we help our communities, not just the individuals who receive unemployment benefits--and they have earned those benefits--but also the communities are helped by payment of those benefits. When we help our unemployed neighbors, we also help to keep open the neighborhood grocery store and the neighborhood gas station. When we help our unemployed neighbors, we also help to keep houses out of foreclosure. When we help our unemployed neighbors, we also help our economy; we help ourselves. According to officials in my home State of Montana, if we do not pass this 14-week extension, then at least 7,000 Montanans will lose their unemployment benefits. That is a significant number when we consider the population of my State, which is just a little bit over 900,000 total. A report prepared in June for the Montana Manufacturing Center showed that nationwide manufacturing employment fell from 13.8 million workers at the end of 2007 to 12.4 million workers at the beginning of 2009. That is a 10.5-percent drop in little more than a year--a 10.5-percent drop in workers in just more than a year. The decline nationwide was echoed in Montana, where manufacturing employment fell 8 percent. In south central Montana, logging and milling have slowed down in the Bozeman area, just as they have elsewhere in the State. That means workers in the logging and milling industries have been losing their jobs. It is absolutely essential we get this aid to those in need so they can continue to put food on the table while they continue to look for work. A second integral part of this legislative package is the extension of the home buyers tax credit. This tax credit has already helped nearly 1.5 million Americans to achieve the dream of owning a home. Without this tax credit, many of these first-time home buyers would have remained on the sidelines. They would have been unable to buy a home in these challenging economic times. The home buyers tax credit provides up to $8,000 for millions of Americans to purchase their first home. The credit has helped to reduce the excess supply of homes on the market and, in doing so, the credit has helped to stabilize the housing market. In many places throughout the country, homes are selling and inventories are dropping. The Pending Home Sales Index, a leading indicator of existing home sales, rose again in September for the eighth straight month. Total housing inventory fell 10.8 percent at the end of August. Home prices also appear to be slowly recovering. The Case-Shiller Home Price Index increased 1.4 percent in June after falling for 35 consecutive months. These encouraging numbers tell us that the home buyer tax credit is working. Yet the housing market remains fragile. High unemployment has increased foreclosure rates, inventories remain well above normal levels, and homes are worth substantially less than they were a year ago. In May, back home in Montana, I helped with a charity raffle of a new home in Billings. During the event, the homebuilders for this home told me how well the home buyer tax credit is working. They said it definitely helped to boost their sales. The builder made it very clear how much the tax credit has helped in Montana. Realtors and home builders across Montana have provided examples of the tax credit working to get buyers off the fence and into new homes. The Billings Gazette recently reported on one development where 30 homes were sold this year. Home buyers of 17 of those homes used the first-time home buyer tax credit when they bought their home. In Bozeman, MT, housing starts and home purchases have dropped off, but it is clear that the home buyer tax credit has helped to cushion that. The success of the American economy is closely tied to the success of the housing market. By helping to stabilize the housing market, the home buyer tax credit has helped to shore up the economy as it begins to recover. It is important that we temporarily extend the home buyer tax credit to further support our recovery. That is why we have proposed extending the tax credit to April 30 of next year. Because the housing market remains fragile, we propose expanding the credit to include a greater number of potential home buyers. As before, the $8,000 tax credit would be available to those buying a principal residence for the first time, but it will also be available to home buyers who have lived in their current residence for 5 years or more. These home buyers hoping to move up would be eligible for a $6,500 tax credit. This strikes a fair middle ground. We would help first-time home buyers and we would also help homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit. Our amendment would also increase income limits. This would enable an even greater number of potential home buyers to take the credit. Those earning less than $225,000 for joint filers and $125,000 for single filers would be eligible. Increasing this threshold would further stimulate the housing market by bringing a new group of buyers into the market. These days, millions of renters earn more than $75,000 a year. Our new home buyers tax credit would also include a ``binding contract'' provision that would allow anyone who has entered into a binding contract to be eligible for the credit, so long as they close on the home within 60 days. Also, the extended tax credit would continue to allow military personnel to claim their credit for an additional year. Many more Americans stand to gain from the extension of the home buyers tax credit, and with our amendment they would get help buying a new home during these tough economic times. Homes that are worth more than $800,000 would not be eligible for the home buyers tax credit. We need to target the credit toward those potential home buyers who need it most, not those buyers who would have bought a new home even without the new credit. To address concerns such as those raised by the Treasury Inspector General for Tax Administration, we have given the IRS additional tools to prevent erroneous credits from being paid. It is important that this tax credit does not become a permanent fixture in the Tax Code. That is very important. It certainly is to me. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter, traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months in 2010. With the new ``binding contract'' provision, we would effectively extend this tax credit for 7 months, long enough to encourage home buyers to buy homes but short enough to remain fiscally responsible. It is a fair approach and it would play an important role in getting the housing market back on its feet. In addition to unemployment insurance and the home buyer credit, our amendment would also add needed net operating loss relief for businesses. Under current law, corporations may carry back net operating losses 2 years. In the stimulus bill earlier this year, we were able to increase that carryback period to 5 years, but only for small businesses. The carryback provision for small businesses has been a great help to struggling small companies. They were able to carry back their losses to profitable years, and then they could file quick refund claims. This gave them much needed cash to meet payroll, invest in new equipment or inventory, or pay for other current expense obligations. But many businesses did not qualify for the carryback stimulus provision that helped small businesses. Many larger companies are also hurting during this economic downturn. Senator Snowe and I recognized this during our discussions on the stimulus bill. We introduced a bill to expand the needed relief to all businesses, and now we are including that relief here. The great recession, which I heard to date is officially over because now the GDP is growing for the first time in I don't know how many months--but the great recession has hurt Montana businesses from farming to retail to manufacturing. A recent series in the Billings Gazette highlights a number of historically profitable Montana industries that are facing serious losses as a result of hard economic times. The lumber industry provides an acute example. Pyramid Mountain Lumber is the oldest surviving family-owned and family-operated mill in Montana. Loren Rose, the controller of Pyramid Mountain, reports that their mill has faced increased costs on logs and fuel and orders have dropped because of the slowdown in home building. The owners have invested everything they have in the mill. They are terrific operators. I spent a good bit of time at that mill and I am very proud of it. They have done a super job. Loren said the lumber mills are ``all in'' as far as ownership investment. They have nothing left to invest. Other mill owners have had to shut down. Loren said that an NOL provision such as that in our bill would ``absolutely'' help in ``providing working capital to the small, independent mills.'' That is his quote. Our NOL provision would directly help this industry and others in Montana that are struggling to survive in these tough economic times. Let's expand the help we provided to small businesses to all businesses; that is, all businesses that need the cash infusion now. The questions always arise: How do we pay for these provisions? Our amendment pays for them responsibly. In 2004, Congress created a new way for American-based corporations to allocate interest for purposes of computing their taxes. The implementation of that allocation method was to be effective in tax years beginning after 2010. Our amendment delays the effective date of that provision until tax years beginning after 2017. Our amendment also increases penalties for taxpayers who fail to timely file partnership and S-corporation returns. These two provisions would allow Congress to provide additional incentives for home buyers and implement expanded NOL carryback relief for businesses. Both of these goals are big steps toward boosting our economy. Our amendment, I believe, is the right approach. I urge my colleagues to support it. Let us respond to the concern that is foremost on Americans' minds, and that is jobs, that is the economy. Let us pass this legislation to help unemployed Americans and provide tax relief, and let us pass this legislation that will help Americans to get and keep good jobs. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on October 29, 2009, at 10:30 a.m., to conduct a hearing entitled ``Modernizing Affordable Housing for Seniors and People with Disabilities.''

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on October 29, 2009, at 2:30 p.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on October 29, 2009, at 9:30 a.m. in room 406 of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet, during the session of the Senate, to conduct a hearing entitled ``Pensions in Peril: Helping Workers Preserve Retirement Security Through a Recession'' on October 29, 2009. The hearing will commence at 10 a.m. in room 430 of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate, on October 29, 2009, at 10 a.m., in SD-226 of the Dirksen Senate Office Building, to conduct an executive business meeting.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Aviation Operations, Safety, and Security Subcommittee on Commerce, Science, and Transportation be authorized to hold a meeting during the session of the Senate on October 29, 2009, at 10 a.m. in room 253 of the Russell Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on October 29, 2009, at 2:30 p.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security be authorized to meet during the session of the Senate on October 29, 2009, at 2:30 p.m. to conduct a hearing entitled, ``More Security, Less Waste: What Makes Sense for our Federal Cyber Defense.''

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Subcommittee on Public Lands and Forests be authorized to meet during the session of the Senate on October 29, at 2:30 p.m., in room SD-366 of the Dirksen Senate Office Building.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following staff of the Finance Committee and my personal office be allowed floor privileges during consideration of the unemployment insurance bill: Mary Baker, Blaise Cote, Margaret Franklin, Maryum Janjua, Bridget Mallon, and Audrey Schultz.

Mr. BAUCUS

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

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

Mr. BAUCUS. Mr. President, what is the pending business before the Senate?