Max Baucus

Mr. BAUCUS

Mr. BAUCUS. I ask for the yeas and nays on the amendment.

Mr. BAUCUS. Mr. President, a very quick point. This section in the bill does provide a $15 million writeoff, but that is for small films. Under the provisions of the bill, the bonus depreciation cannot be taken up at the same time as the expensing provision. You get one or the other. I yield back the remainder of my time.

Mr. BAUCUS. Mr. President, this may sound like a good idea, but it isn't. There are a lot of reasons. First, it is a question of fairness, fairness to American companies that do their business in America compared with American companies that do their business in America and maybe significantly overseas. If you are an American company and you are doing business in America, let's say you are doing pretty well. You pay the standard 35-percent corporate rate; that is, if you are an American company. If you are an American company but you have significant overseas operations, subsidiaries and businesses in the Cayman Islands and other offshore entities, under this bill you don't pay that 35-percent rate that the American company pays that is doing business. You pay a much lower rate under this bill and basically pay 5 percent. I think that is about it. So on the first level, this is totally unfair. Here we are, an American company doing business in America. We have to pay the full 35- percent corporate tax rate compared with companies that have significant revenues overseas. They bring it back to the United States, and they only pay 5 percent. These are companies that are taking advantage of the current tax laws by bringing it home, especially bringing back home repatriated income. Under our tax laws, income by an American company earned overseas, active income, is not taxed unless it is brought home to the United States. But when it is brought home, then it is taxed at the basic 35- percent rate. There are some who claim that that revenue overseas is trapped. It is trapped overseas. Because they are bringing it back home, where they have to pay our rate. That is a totally unfair mischaracterization. It is not trapped. It would be trapped if they had to pay a penalty to bring it back, say a 70-percent rate. They bring it back at the ordinary rate, the rate the other companies have to pay. So it is not trapped. It is just that companies want to take advantage of this argument that they have to do it to create jobs. Data shows that the last time we enacted something such as this, there were virtually no new jobs created in the United States. Why is that? Because companies use this money for other purposes. If there were provisions in the law that they had to use to it create jobs-- money is fungible. So they say: OK, we will use some of this to make our payroll. Then we will use the money to pay dividends, go pay stockholders, go do something else. It is so easy to get around the nominal putative provisions in this amendment. I must say also this is expensive. This costs $30 billion over 10 years for no good reason. Sure, if I am an American company with significant overseas operations and I parked a lot of my, say, patent development over in the Cayman Islands--and that is what they do, many of them, they develop a patent in the United States and park it over in the Cayman Islands, enjoy a very low tax rate, and then send the revenue generated by that patent back to the United States, that is what they want to do under this amendment--sure, I would like to do that, if I were an American company. I don't want to pay taxes, compared with the garden variety American company that does have to pay taxes. There are a lot of reasons why this is a bad idea. It will not create new jobs. In fact, there is no job creation according to a study, which I can put in the Record, done on the last repatriation provision. We also know from the IRS that most of the dividends in 2004 came from tax havens such as Bermuda and the Cayman Islands and other low tax jurisdictions such as Ireland and Switzerland. These companies took advantage. It is not illegal, but they took advantage of the law by parking their operations over in those countries. I do not think we should be rewarding bad conduct by enacting this amendment. This is an enabling kind of amendment. It encourages and enables future conduct. Where companies would say they developed a U.S. patent, they would sell the patent, put the cash in an overseas subsidiary in the Cayman Islands, and that sub then buys the patent and the money is then repatriated back. It is very much at the expense of good, solid American companies doing business in America. This amendment will not encourage business to reinvest in America. The last evidence shows it did not happen. Money is fungible. A lot of it went to stocks and dividend payments. I yield the floor.

Mr. BAUCUS. Mr. President, I will speak briefly. I know others want to speak. I asked the Congressional Research Service to investigate this question, and I have a memorandum from them dated January of this year. It is from Jane Gravelle, senior specialist in economic policy. Jane Gravelle is a very respected analyst at the Congressional Research Service. This is an independent study. She has no ax to grind except to just get the facts. Let me briefly indicate some of the findings they have. I will read here: The following is a list of firms with repatriations and job reductions-- Not job additions, ``job reductions''-- along with the news source, in order of the size of the repatriations. The total in repatriations for these twelve firms is $140 billion, or one third of the total repatriations of $312 billion reported by the Internal Revenue Service. First: Pfizer repatriated [in that period] $37 billion. According to a New York Times Editorial . . . [and lots of other sources] Pfizer planned to lay off-- ``Lay off,'' not add, ``lay off''-- 10,000 employees. I might say, according to Michelle Lederer, of Slate Magazine, in an article entitled ``The $104 Billion Refund,'' dated April 13, 2008, Pfizer had a 106,000 job loss in 2005. Merck repatriated $15.9 billion and announced layoffs of 7,000 workers. . . . Not additions--layoffs. Hewlett-Packard repatriated $14.5 billion with a layoff of 14,500 jobs. Procter and Gamble repatriated $10.7 billion . . . and cut jobs by an unspecified amount. . . . We do not know what that number is. IBM repatriated $9.5 billion; it added only 400 jobs worldwide out of 345,000 [jobs] but eliminated 5 million square feet located in the United States. . . . Pepsi Co. repatriated $7.5 billion and laid off 200 to 250 Frito Lay workers. . . . The list goes on in descending order. The other amounts are not as great. So there is ample documentation that companies that have repatriated did not add; they laid off. Why? It makes sense because the money that comes back is fungible. They can use it for any purpose--any purpose-- they want. It is not going to create jobs. They would like to have it come back and say it creates jobs, but it does not. Now, my good friend from California said: Well, Joint Tax scores this positively in the first 2 years. That is right. But over 10 years, it is negative $30 billion, and a positive score does not mean jobs. A positive score just means there is more money for Uncle Sam because they are paying a lower tax rate. But that begs the question: What are they going to do with those dollars? I submit, based upon the evidence we have from the Congressional Research Service, they do not use it for new jobs. Past experience indicates, if anything, it is that these companies, in fact, took this money and cut jobs.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the time until 8:15 p.m. be for debate with respect to the Boxer-Ensign amendment No. 112, with the time equally divided and controlled by Senators Boxer and Baucus or their designees, and that no amendment be in order to the amendment prior to a vote in relation to the amendment; further, that the Vitter amendment No. 179 not be divisible.

Mr. BAUCUS. No.

Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from North Dakota.

Mr. BAUCUS. Mr. President, there is a parade of repentant sinners here. The Senator from New Mexico said he voted for it last time; it is a bad idea, and he is going to vote against it this time. I think the Senator from Massachusetts said the same thing: He voted for it last time, he learned it is a bad idea, it didn't work, and he is voting against it this time. I confess, Mr. President, I am in that same situation. I voted for this last time, it is a bad idea, it didn't work, and I am very much opposed to it this time. Both the Senators from North Dakota and New Mexico have stated the fact that this amendment is going to encourage companies to go overseas. That is true. But the effect is even more pernicious than that. This amendment encourages companies to go to low-tax jurisdiction countries, such as the Cayman Islands and the Bahamas. Why? Because, currently, an American company that has operations overseas, say the U.K., it pays the U.K. tax. It does not pay the American tax until it is brought back, with the U.K. tax offsetting the American tax. That is standard law. Under this amendment, because the income coming back will be at a very low rate--5 percent--there is no incentive for these companies to go to a higher jurisdiction country because there is no need to offset. Rather, there is an incentive to go to the lower jurisdiction country--a low- tax jurisdiction country--because the tax rate is so low, such as the Cayman Islands or the Bahamas, and all that. So not only does it encourage companies to go overseas, it encourages them to go to low income tax countries such as the Cayman Islands and the Bahamas. This is a bad amendment, and I urge its defeat.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I first want to commend my colleagues, Senator Inouye from Hawaii, the chairman of the Appropriations Committee, who I think has undertaken a masterful job in helping to craft, along with his counterpart, Senator Cochran from Mississippi, an economic recovery package that will go a long way toward getting people back to work. They have done half of the job; the other half was left to the Finance Committee. I think together we have come up with a very good beginning to get Americans back to work and to invest in many of the projects this country needs so desperately. In 1932, President Franklin Roosevelt said: The country needs and . . . the country demands bold, persistent experimentation. . . . [A]bove all, try something. The millions who are in want will not stand idly by silently forever . . . . Today, the country once again demands bold action. Our country demands bold action to help rebuild a very badly damaged American economy. Consider the terrible blows to our economy and the problems that we face if we do not act. Last Friday the Commerce Department reported that from October through December of last year the economy shrank at its fastest pace in a quarter century. Last year 2.6 million people lost their jobs. If we do not act, 3 to 4 million more people will lose their jobs. The decline in home prices and the stock market collapse have sharply reduced the net worth of American families. Net worth declined by roughly one-fifth between the middle of 2007 and the fourth quarter of 2008. CBO projects that the national average home price will fall by another 14 percent between the third quarter of 2008 and the middle of 2010. Equity wealth has declined by $6 trillion between the end of 2007 and the end of 2008. The Standard and Poor's 500 stock index fell by almost 45 percent from October 2007 to December 2008. And the financial crisis has spread around the world. These are not just numbers. These are families who are hurting. These are mothers and fathers who have lost jobs. These are parents who have seen college savings decimated. These are couples who are struggling to keep their homes. We need to act. This economic recovery bill will save or create 3 to 4 million jobs. It will position our economy to be more competitive. The measure before us today provides an appropriate response to the conditions that we face. The Senate Finance Committee worked with the President and Members of the Senate and the House to put together its part of the economic recovery substitute that we are considering this week. The Senate Appropriations Committee took the lead on its part, as well. We think that the provisions in this substitute represent the best ways to address spending slowdowns and rising unemployment. And it will be effective. More than 99 percent of the Finance Committee's provisions effects will come in the first 2 years of the bill. To counteract weak consumer demand and spending slowdowns, we have included several proposals that will put more cash in the pockets of America's taxpayers, seniors, and disabled veterans. The making work pay tax credit cuts taxes for more than 95 percent of American working families. It gives single taxpayers up to $500 and married taxpayers up to $1,000 this year and next in additional cash that they can use just now. People will be able to receive the benefit throughout the year through a reduction in the amount of income tax withheld from their paychecks. Seniors, disabled veterans, other disabled workers, and SSI recipients would receive a one-time payment of $300. Families with children would also benefit from these proposals. The income threshold to receive the refundable child tax credit would be reduced so that more people would be eligible. The earned income tax credit would be increased for families with three or more children. An amendment added in the Finance Committee will ensure that the alternative minimum tax will not hit any new taxpayers for 1 more year. Folks struggling to pay for higher education would get relief. The proposal includes a partially-refundable new tax credit up to $2,500 for the cost of tuition and fees, including books. Section 529 plans would be enhanced by including the cost of computers as a qualifying expense. This measure would help homeowners who are taking advantage of the first-time homebuyer's credit enacted last year. Under current law, homebuyers have to pay this credit back over 10 years. The substitute before us today would eliminate the repayment obligation, unless the homebuyer sells the home within 36 months of the purchase. For small businesses, we have included expanded expensing through section 179. This provision helps small businesses quickly recover the cost of certain capital expenses. For businesses in general, we would increase the years that they can carry back losses and general business credits. This would put cash in the hands of businesses right now. Businesses would also get a tax incentive through the work opportunity tax credit for hiring unemployed veterans and disadvantaged youth. The economic downturn has frozen the municipal bond market. This recovery bill includes changes that would help to free up this market, unlocking cash for infrastructure investment. Banks would be able to inject more capital into projects creating demand for municipal bonds, driving down interest rates. And increasing the small issuer exception would increase the range of municipalities from which banks can buy. This substitute would also eliminate tax-exempt interest on private activity bonds as a preference item under the alternative minimum tax. This would draw new investors and help stabilize the market. The legislation would also establish parity for tribal governments on $2 billion of tax-exempt bonds. This important change would allow tribal governments to issue debt for projects on equal footing with other government issuers. And this substitute would create a new tax-credit bond option. This new bond would give State and local governments a new tool to finance infrastructure projects. We have also included incentives for energy in this recovery package. These incentives would create green jobs producing the next generation of renewable energy sources, wind, solar, geothermal. The substitute would extend and modify the renewable energy production tax credit for qualifying facilities. The substitute includes additional funding for clean renewable energy bonds to finance facilities that generate electricity from renewable resources. And the substitute includes conservation bonds for States to use to reduce greenhouse gas emissions. Energy experts often cite efficiency as the low-hanging fruit. Efficiency is the easiest way for us to reduce our energy consumption and greenhouse gas emissions. So we have included incentives for energy efficiency. The substitute would increase the value of the existing credit for energy efficient homes. The substitute would eliminate the limitations on specific energy-efficient property. And the substitute would extend the credits for various types of energy efficient property, for both residential and business. Two new tax credits would spur our alternative energy and production. The advanced energy research and development credit would provide an enhanced 20 percent R&D credit for research expenditures incurred in the fields of fuel cells, energy storage, renewable energy, energy conservation technology, efficient transmission and distribution of electricity, and carbon capture and sequestration. The second energy tax credit is an advanced energy investment credit for facilities engaged in the manufacture of advanced energy property. This substitute would make sound investments in health information technology, or health I.T. These investments should reduce costs, improve quality, and help patients make better decisions about their health care. Expanding use of health I.T. should make our health care system more efficient, reduce errors, and help bring down costs. Health I.T. would also provide a platform for standardizing and collecting data to move toward paying for performance, another way to improve efficiency and decrease costs. Investing in health I.T. will help to put that infrastructure in place, while creating thousands of high-tech jobs. And reforming health care is the right way to get a handle on entitlement spending. The economic crisis has also created significant fiscal difficulties for States. At least 45 States will face budget shortfalls. Economists expect those shortfalls to total more than $350 billion over the next 2 years. These dire circumstances have forced painful choices. Almost half the States have already made or proposed cuts to their Medicaid Programs. The continued rise in unemployment places a further strain on Medicaid. Decreased revenue coming in means less money to fund Medicaid. And experts warn that every percentage point increase in unemployment adds 1 million people to the Medicaid and CHIP rolls. Economists tell us that State fiscal relief is an effective means to stimulate the economy. And they also advise that targeted relief to those most in need, not based on circumstances of States' own making but based on true measures of distress, is the best means of distribution. The substitute before us today would provide much-needed relief to every State through a temporary increase in the Federal share of Medicaid funding. The substitute would also provide additional aid targeted to States facing the most precarious fiscal situations, measured by an increase in unemployment. These measures will keep States from having to lay off cops or teachers. And keeping those workers on the job will help the economy. The economic recovery package also supports those who have lost employment and helps them to find new jobs. While almost all workers pay into the unemployment insurance program, only about half of them qualify for benefits. American workers deserve better. The substitute before us would increase and extend benefits to those currently looking for work. The substitute before us would help States to cope with the increasing number of families needing temporary assistance. And it would remove the incentive for States to artificially keep their TANF caseloads low. In addition, the substitute would ensure that families that qualify could continue to receive child support payments that are intended to be spent on children. For those who receive it, child support constitutes about 30 percent of poor families' income. The substitute before us would also increase the incentive to become employed by extending the transitional medical assistance program under Medicaid for 18 months. TMA allows former TANF recipients to retain Medicaid coverage for one year after they become employed. These workers usually earn too little to afford private coverage. The substitute before us would also remove barriers to getting Medicaid and CHIP for low-income American Indians and Alaska Natives. The funds directed toward these programs for vulnerable populations would go into the hands of folks who need it and who will spend it right away. These proposals will increase economic activity, create jobs, and shorten the amount of time that we all spend in this economic crisis. Another key component of our economic recovery package would help unemployed workers maintain their health coverage. When workers lose their jobs, they lose more than their paychecks. They often lose their health insurance coverage, as well. To address this problem, our proposal includes help for unemployed workers to pay for their health care premiums. Today, most workers who lose their jobs have the right to keep their health insurance for up to 18 months under the COBRA program. But to be eligible for COBRA health benefits, workers must pay all of the premium costs, plus an additional 2 percent for administrative costs. For most folks who have just lost their job, this is simply unaffordable. Our plan would provide a subsidy to cover up to 65 percent of health premium costs, for up to 9 months. This premium subsidy is shortterm. It would be available only to unemployed workers while they look for a new job. For those workers who lose their jobs to international trade, President Kennedy established trade adjustment assistance, or TAA. I have long championed TAA and worked to expand its reach and improve its effectiveness. Today, TAA gives workers the chance to retrain for new jobs, get access to health care, and ultimately get back to work. And that is why the substitute before us today includes a 2-year extension of TAA. Yet in a time when Americans are doing everything they can to change, adapt, and be flexible in a global economy, TAA should do the same. We can do more to expand who can benefit from TAA, and we can improve how we get them those benefits. That is why I am working with Senator Grassley, Chairman Rangel, and Congressman Camp on a robust expansion of TAA. We hope to include this improved TAA in the economic recovery package before it is enacted. The package that we are considering this week is our best effort to reach a consensus on an economic recovery bill that can pass the Senate and the House quickly. The Nation demands action and action now. Let us act quickly to put our economy back on track. Let us act to restore the Nation's financial health. And let us act pass this important legislation this week.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following fellows, detailees, and interns of the Finance Committee be allowed floor privileges during the consideration of the America Recovery and Reinvestment Act: Mary Baker, Randy Debastiani, Pete Harvey, Laura Hoffmeister, Matt Kazan, Michael London, Bridget Mallon, Vincent Mascia, Toni Miles, Aris Prosetiyo, Leslee Soudrette, Dan Stein, and Kelly Whitener.

Mr. BAUCUS

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

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

Mr. BAUCUS. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 80

Mr. BAUCUS. Mr. President, very simply, I do not agree with this amendment. Why? Because here we are. It is about 5 o'clock. We are on the verge of passing a 4\1/2\ year reauthorization of the Children's Health Insurance Program. We are on the 2-yard line. We are about ready to put this ball across the goal to score a touchdown, to get this passed. This amendment sets us back several yards, quite a few yards. We are on the 2-yard line for a 4\1/2\ year reauthorization. If this is agreed to, we are back to the 50-yard line. I think it is better to get this bill past the goal line and pass this 4\1/2\ year legislation. I urge we do not adopt this amendment that sets us back.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the pending amendments be temporarily laid aside so that the Senator from New Mexico, Mr. Bingaman, can call up an amendment.

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

Mr. BAUCUS. Mr. President, I wish to address two pending amendments. The first one I will address is the DeMint amendment which provides for a deduction for health care costs for certain children. Essentially, the DeMint amendment allows for a deduction for health care costs of children who are not in a Federal program, either Medicaid or the Children's Health Insurance Program, up to $1,500. That is up to the average federally funded program, which I understand is up to $1,500. On the face of it, that might sound like something people might want to do, to give an extra tax deduction for children's health care expenses. The trouble is, we are here today trying to make sure that the Children's Health Insurance Program works and works better. A lot of effort has gone into this legislation, and there have been a lot of amendments from various Senators trying to improve on the bill. First, this is not a tax bill. The Tax Code does allow employees who receive health care benefits from their employer to not count that as taxable income. That is true. It is a big provision in the Tax Code today. I think it amounts to roughly $250 billion, $260 billion a year. The employer is able to take the deduction of employer health care expenses, whatever the expenses might be, and there is no limit today in current law. All health care that is provided by the employer is not taxable income to the employee. In fact, when we deal with health care reform, we will have to look at that. We do not want to move away from employer-provided coverage. That is something the American public is used to. They understand it. Companies are used to it. They understand it. Some have suggested abolishing that tax and basically saying individuals have to find their own insurance, irrespective of employment. I do not think that is a good idea, and I think that is the judgment of the Congress. Senator DeMint wishes to add a tax provision basically providing the children who are not covered by either the Children's Health Insurance Program or Medicaid, as I understand the amendment, with a deduction for health care expenses up to $1,500 every year. I do not think this is the time and place to be coming up with single rifleshot, arbitrary tax amendments on a nontax bill. These provisions have to be considered together. These tax provisions have to be considered together, certainly in the context of health care reform. We take up various ways to give incentives to people to get health insurance, especially in the private market, in the individual market right now because right now it is very difficult for some people in the individual market to get health insurance. We will probably provide health credits to assist people in the private market. We also could look to the employer exclusion and see if that can be modified. All this should be addressed in the context of comprehensive health care reform. We need comprehensive health care reform in this country. We already know how much we pay for health care in this country. We pay twice as much per capita than the next expensive country. We have 46 million Americans not covered by health insurance. It is an abomination. We are the only industrialized country in the world that does not provide a mechanism to provide health insurance for its people. That makes no sense. The United States is slipping, frankly, in a lot of areas. Look at our financial banking system. It is crumbling. In Davos, Switzerland, we have been roundly criticized as a country for letting this happen to us. Of course, the credit markets seized up. It is very complex. The fact is, it has happened and we Americans have let it happen. We also have to reform our health care system and reform it in a way so Americans can get health care more easily than they can now, make sure they are all covered, improve the costs, and improve our delivery system. Our delivery system is in the dark ages. We in America compensate doctors and hospitals on the basis of volume, not on the basis of quality. Many of us have ideas. We have to put all this together into comprehensive health reform. I wrote a white paper months ago. I don't mean to pat myself on the back, but most people feel that is the best beginning to get comprehensive health care reform. Others have a lot of ideas to add to it, subtract from it. But it is probably a pretty good foundation of where we have to reform our health care system. That is where we should take up provisions such as the DeMint amendment. That is where we should decide whether it makes sense to change the Tax Code to get better health care, outside of the children's health care program. This is not an amendment addressed to the Children's Health Insurance Program. This is an amendment that has to do generally with children, irrespective of income of families. This amendment has nothing to do with income of families. It says basically if you are not covered, you get a $1,500 contribution. I guess in some sense the proponents of the amendment could argue this is for upper income people, for moderate income people, for families whose children are not enrolled in the Children's Health Insurance Program. That may be. But that issue must be addressed in the context of comprehensive health care reform. That is the best place. I do not think it makes sense to adopt this kind of amendment. Then somebody else will have an amendment for a tax break here, a tax break there, and who knows what. This should be taken up in comprehensive health care reform or a comprehensive tax bill. We are going to take up tax legislation later this year. There will be lots of opportunities to address health care in our Tax Code. But this is not the time and place. I urge Senators to resist the siren's song, resist temptation because this is not the road we should go down, not at this time. There is a time and place for everything. There is a time and place for health care tax amendments. This is not the time and place. Frankly, I think the more we as a Congress are strategic, we plan a little more, we don't just react to the idea of the instant but think things through a little bit more, we will be a lot better off and we will be serving our people better than we are at this moment. I strongly urge Members to resist this amendment so we can get on to health care reform and tax reform at a later date. I urge Senators not to vote for the DeMint amendment because it, frankly, does not belong on this bill. Amendment No. 86 On another matter, I wish to speak to the Coburn amendment No. 86. Essentially, this amendment would get rid of the Children's Health Insurance Program, abolish it. That is right, abolish it. This is the same program that had such strong support in America. Republicans have supported it and Democrats have supported it over the decade. It currently serves almost 7 million people, and with the legislation before us, we will boost that to 10 million people. The same CHIP program, the underlying bill, as I said, 10 million people, it works. It worked for 12 years. It is effective. People like it. Why? Because it works. It is a shared partnership between Uncle Sam and the States. It makes no sense to throw this away because it has worked so well. To be fair, the Senator from Oklahoma wants to not only abolish the program but replace it with a private system. As I understand it--I don't want to put words in his mouth--a private account system. It sounds a lot like Social Security privatization, which is roundly criticized. It is a good thing we didn't adopt that with the shape the stock market is in. People putting savings in a private Social Security account would find they would have lost a lot. In the meantime, Social Security is strong, it is there, the benefits are there. It is kind of like a defined benefit plan, a defined contribution plan. Seniors can count on it. Social Security is there. It is financed by the payroll tax. The trust fund is in very good shape. The Social Security trust fund is not in jeopardy for, gosh, 30 years from now essentially. Seniors know that Social Security is there. In the same vein, families, working poor families, families who do not have the same income as others, should rest assure the Children's Health Insurance Program is there. They need that constancy, that predictability. Therefore, I urge Senators not to support the Coburn amendment which essentially abolishes the CHIP program and replaces it with a private system which is precarious at best, certainly given these times.

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

Mr. BAUCUS. Mr. President, a few moments ago the Senator from Mississippi, Senator Wicker, offered an amendment. Basically, it is directed at the so-called August 17, 2007, directive that President Bush promulgated. That directive issued strict guidelines to States regarding Children's Health Insurance Program enrollment, focusing on potential crowdout, and mandated that States adopt more restrictive so- called crowdout policies. Among the policies in that August 17 directive was a requirement that the States prove that at least 95 percent of the children below 200 percent of the poverty level have some coverage before they can enroll higher income children. The amendment offered by the Senator from Mississippi would, in the same vein, prohibit States from receiving the Federal match for individuals under the program above 200 percent of the Federal level unless they enrolled 90 percent of all children under 200 percent. That is an impossibly high standard, one that cannot be met. Certainly, the 95 percent in the August 17 directive could not be met. That is why that directive was never put into effect. It is too tight. It would not work. Yesterday, this body voted against an amendment which would set the requirement at 80 percent, and the amendment before us sets the requirement not at 80 percent but a much higher rate; that is, 90 percent. These are impossible standards for States to meet. It is virtually impossible for a State to meet 90 percent. Even mandatory provisions--let's take auto insurance. The takeup rate in States is not 90 percent. Even where it is 90 percent, I think the average is like in the eighties somewhere. This is not mandatory. The CHIP program is not mandatory. It is an optional program for States. It is optional whether a person wants to participate in CHIP or participate in the private market. It is totally optional. So it is impossible for a State to achieve a 90-percent rate. That is a standard which is much too high. Also, another reason it is so difficult for States to reach a 90- percent rate is because of the economic downturn we are facing. With the downturn we are facing, people are leaving employment, regrettably, they are being laid off, which means they are losing health insurance. The more people who are laid off, the more people lose health insurance, the more difficult it is for a State to show that it is meeting a 90-percent requirement. That is just a mechanical effect of this amendment. The practical and personal effect is that this is going to hurt kids because the amendment has the effect of denying Federal dollars to States when they cannot meet an impossibly high so-called takeup rate. Therefore, I urge my colleagues to not vote for this amendment. It is not a good idea. It does try to attempt to address something called crowdout, which has been debated here on the floor for a long time. Frankly, this crowdout debate is missing the mark here. We are not keeping our eye on the ball. The ball really is, how do we get more kids covered under the Children's Health Insurance Program? For all of the reasons Senators have indicated, my gosh, we want our kids to be healthy. Healthy kids go to school. Healthy kids in school perform better in school. If they perform better in school, they are going to do better when they graduate. We want healthy kids. The more we have healthy kids, the more likely it is we are going to have healthy families and more productive families and be able to address some of the adverse consequences the recession now presents to us. I yield the floor. The PRESIDING OFFICER (Mrs. Hagan.) The Senator from Wyoming is recognized.

Mr. BAUCUS. Mr. President, basically the Bunning amendment is the fourth amendment that would put a cap on eligibility. Yesterday the Senate rejected the Cornyn amendment that would cap it at 200 percent of poverty, a Roberts amendment with a cap of $65,000, and a Murkowski amendment with a cap of 300 percent of poverty. All these amendments, including the Bunning amendment, have the same flaw; that is, they would raise the possibility of kicking kids off the Children's Health Insurance Plan; that is, they are diminishing amendments. They do not add, they subtract. The kids currently on the Children's Health Insurance Plan are taken off. That is not something I think we want to do. The specific amendment in question here will have that effect. It will basically say that because the States that have been mentioned here essentially get a match rate according to the Children's Health Insurance Plan, that because of the amendment--the amendment says they will get less, they will get the Medicaid match rate, which is less than the Children's Health Insurance Plan; therefore, those kids cannot participate. Theoretically there could be some participation because the match rate in Medicaid, which I think is around 15 percent lower--in the case of let's say New York or New Jersey--than the Children's Health Insurance Plan match. But still the effect is the same. If this amendment were to go into effect, children currently in, say, New Jersey who receive the Children's Health Insurance Plan match rate will probably get kicked off. A lot will be kicked off the Children's Health Insurance Plan because the match rate is lower, down to the Medicaid rate. That is not right. The fact is all of these amendments, including the Bunning amendment, are restrictive. It is constrictive. It is a reducing amendment. It pressures to take children off the Children's Health Insurance Plan rather than add children. People talk about 200 percent of poverty, 300 percent of poverty, et cetera. I think New Jersey is at 350 percent of poverty. One interesting point there is they are at that rate, A, because they asked for it and, B, because President Bush's administration gave a waiver and said, yes, go ahead and do it. President Bush, his administration, and the Republican Secretary of HHS, said, yes, New York, go ahead and do that. That is fine. You should do that. One can guess why they may have granted that waiver. The reason is because when you talk poverty levels, such as 200 percent of poverty, that is a national figure. It is not a different number for each State, it is what is the national number. New Jersey, I think, has the highest per capita income of any State in the Nation. Clearly, the Federal poverty level which applies to New Jersey probably does not match what the realities are in that State. The realities are if you take a family a little bit above the national median income, a family in that State, in New Jersey, is probably facing the same economic pressures and difficulties--paying for health insurance, providing for the kids and the kids' medical bills--as would the average family in a State where the median income is the same as the national median income. That is probably why New Jersey asked for that waiver and probably why the Republican Secretary of Health and Human Services granted that waiver. But that is where we are. That is history. It makes sense. The fact is, this amendment says, no, we are going to undo that, even though New Jersey is used to it, even though New Jersey applied for the waiver and lawfully was granted the waiver, we say: No, no, not that anymore. We are going to reduce the match rate you and New Jersey get and it is again going to have the pressure of hurting kids in that State and taking kids off the Children's Health Insurance Plan. That is not the right thing to do. I therefore respectfully urge Senators to not support this restrictive amendment which does not add kids to the Children's Health Insurance Plan. Rather, it takes kids off the Children's Health Insurance Plan.

Mr. BAUCUS. Mr. President, I say to my good friend from Oklahoma, we are prepared to accept the next Coburn amendment. I wonder if the Senator is prepared to yield back the balance of his time so we can accept it. He does. That is great.

Mr. BAUCUS. We are on the next amendment.

Mr. BAUCUS. Mr. President, I agree with the interpretations of the Senators from Hawaii regarding section 214.

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

Mr. BAUCUS. Mr. President, we had a good day on the Children's Health Insurance Program bill yesterday. We considered 10 amendments; we conducted 6 rollcall votes. All in all, I think it was a very productive day because we are very close to finishing and passing the Children's Health Insurance Program--reauthorizing it--so it can be sent to the House. My expectation is the House will then take the Senate bill and send it to the President so we can get it signed very quickly. This morning, at about 10 a.m., we expect Senator Hatch to come to the floor to offer his amendment regarding the definition of an unborn child. I know Senator Boxer, and perhaps some other Senators, wish to be here to address that issue and speak on that as well. Last night, Senator Coburn offered two amendments and spoke about another, and we hope to work with him to process those amendments. For the information of Senators, we are working to set up a series of votes on amendments, perhaps later this morning. A specific time has not been set. My guess is it will be quite late this morning. Frankly, we are working to finish this bill this afternoon. This bill is moving along very quickly, and I urge Senators to bring any remaining amendments they may have to the floor so we can wrap it up. This is a wonderful program. There aren't very many people who disagree with the Children's Health Insurance Program as enacted by Congress back in 1997. It was wonderful work on the part of Senator Rockefeller, Senator Hatch, Senator Kennedy, and the late Senator John Chafee. They worked very hard. It is very interesting, there were very serious discussions on the one hand, with many Senators who thought this should be another entitlement program for children; on the other hand, some Senators thought, no, this should not be an entitlement program, it should be a block grant program. That was the compromise; that States get a big chunk of money, to be matched by State payments to provide health insurance for the working poor--for kids of families who are just above the income levels set for Medicaid. It has worked very well. It is very important, and I am very happy, frankly, and proud of the attempt that was begun back in 1997 by the Senators I mentioned. We had hoped to get this approved a couple years ago, late in 2007, but unfortunately those two efforts were vetoed by President Bush. But here we are today. This is 2009--a new era, a new opportunity--and I think most Senators are quite proud of the efforts we are making to help more kids get better health insurance. I hope Senator Hatch gets to the floor soon so he can offer his amendment and then we can proceed. I yield the floor, and I suggest the absence of a quorum.