Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the answer to this is to deal with it in health care reform. Nobody knows the degree to which this is an issue. There is a lot of talk about this issue, especially from the other side. We don't know for sure what the dynamics are that cause or do not cause. We don't know what the consequences are. We don't know how much this really is a problem, frankly. That is why we should have health care reform legislation. This country does not have a health care system really, just a hodgepodge of different people doing different things. Clearly, we want a solution that is a combination of private insurance as well as public insurance, a uniquely American solution that is a combination of public insurance and private insurance. There is a very strong role for private health insurance in this country. In fact, the private health insurance industry wants health care reform. When they start to insure 46 million, 47 million Americans who do not have health insurance, it is an opportunity for them. They also want to engage us in insurance reform. They will have to change their business model, but they do agree the time has come to guarantee issue. That is a fancy word saying anybody who applies for health insurance is guaranteed to get it, and there is no discrimination on preexisting conditions, no discrimination based on medical history, no discrimination based on age. There is a lot we need to do in this country to get meaningful health care reform so everybody has health insurance, all Americans have health insurance, and also so costs are brought down. I remind my colleagues, we pay twice as much per capita on health care in this country than the next most expensive country. If we keep going down the road we have been going down--that is, not addressing comprehensively health care in this country--then that trend will continue to get worse and worse. That is a cost not just to families and individuals who pay so much more, but it is also a cost to our companies that have to pay so much more for health care than companies in other countries. Third, it is a big cost to our State and Federal budgets. Their budgets are so high because health care costs in this country are so high. Although this is more than an interesting question, we really do not know the answer to it. We are addressing it by this amendment in a piecemeal way. That is what is the whole problem with what we have been doing for the last 15, 23 years in this country. I do not mean to be critical of the Senator from Arizona and disparage what he is doing. If we come back with different Senators and different amendments to address another health care issue, it is like a big balloon: push it here and it pops up someplace else. We don't look at it comprehensively. I think the proper place to look, the place to draw the line between public coverage and private coverage is in the context of national health care reform.

Mr. BAUCUS. I am ready to vote. They want us to wait 2 minutes, Mr. President. I suggest the absence of a quorum to be equally divided.

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

Mr. BAUCUS. Mr. President, I move to reconsider the vote.

Mr. BAUCUS. Madam President, this is frankly a cleverly designed amendment which has dire consequences. Essentially it takes away Federal funding under the Children's Health Insurance Program where States cover children above 300 percent of poverty where the State cannot prove at least 80 percent of all the children in the State are below 200 percent of poverty, as covered either under the CHIP program or privately. The problem is this: States cannot control their economies. Let's say there is a recession. Let's say there is high unemployment. Let's say people lose their private health insurance coverage. States cannot control that. They cannot control what the total coverage in their State will be, public and private. If a State cannot guarantee that 80 percent, it cannot control it, then that State loses its Federal funds. So I think that even though it sounds pretty good on the surface, the trouble is States cannot control the dynamics that are going to determine whether the States get those Federal dollars. Therefore, I urge that the amendment not be adopted. I ask for the yeas and nays.

Mr. BAUCUS. Madam President, reserving the right to object, I would like to see the amendment. Madam President, might I ask if the Senator from Oklahoma could right now begin talking about his amendment while we have a chance to look at it, and then we could bring it up as soon as we have a chance to look at it. It saves some time.

Mr. BAUCUS. I am just saying speak on the amendment. Then we will make a decision to move it after we have had a chance to look at it.

Mr. BAUCUS. Madam President, I listened carefully to the Senator from Oklahoma, and I might say he has some interesting thoughts and interesting ideas. Let me think about them and maybe there is something we can do about them, and I thank the Senator.

Mr. BAUCUS. Madam Chairman, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, basically the amendment requires States to certify that 95 percent of their CHIP children, or Medicaid, are being paid first before the children of legal immigrants. No State meets that requirement. I might also say the nationwide average for covering children under 200 percent of poverty is 80 percent. No State reaches 95. It is too high a standard. More than that, we do include in this bill provisions for bonus payments to States to encourage them to cover low-income kids first. I think it would be inappropriate and unfair to make it an ironclad requirement that States must certify 95 percent. These are kids who are sick through no fault of their own. Their parents are paying taxes. They are full citizens--they are legal immigrants, but they are already incorporated into the system, being taxed, et cetera, and their kids should not be penalized. I strongly encourage us not to adopt this amendment because no State can certify to 95 percent.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following Finance Committee detailees, fellows, and interns be allowed floor privileges during the consideration of H.R. 2: Mary Baker, Lauren Bishop, Pete Harvey, Laura Hoffmeister, Matt Kazan, Bridget Mallon, Toni Miles, Kelcy Poulson, Aris Prasetiyo, Daniel Stein, and Kelley Whitener.

Mr. BAUCUS

Mr. BAUCUS. The author Lois McMaster Bujold wrote: Children might or might not be a blessing, but to create them and then fail them was surely damnation. Before 1997, we largely failed the children of the working poor. The Children's Health Insurance Program changed that. For millions of working families, the Children's Health Insurance Program has truly been a blessing. Before 1997, kids of the working poor had nowhere to go to get health insurance--nowhere. Their parents' employers did not offer health insurance benefits, and the individual market offered only low-quality insurance options at unaffordable prices. Without health insurance, kids could not see the doctor for a checkup, they could not get a prescription for an earache, and they could not get treatment for common chronic conditions such as asthma. Unhealthy kids cannot run and play, they cannot do well in school, and they cannot grow into healthy and productive adults. In 1997, Congress took action to address this problem. We established the Children's Health Insurance Program. Today, we finally move forward to keep the program going. The Children's Health Insurance Program has bipartisan roots, and it has achieved what we created it to do; namely, it covers low-income, uninsured kids. Congress enacted the Children's Health Insurance Program as a bipartisan compromise. Members of Congress wanted to address the rising number of children without health insurance, and Senator Rockefeller, Senator Hatch, Senator Kennedy, and the late Senator John Chafee led the way. I am proud to have helped write and pass the Children's Health Insurance Program 12 years ago. It has been a tremendous success. The Finance Committee reached a compromise that allowed States to set up children's health insurance programs that would meet their unique needs. States can choose whether they want to participate in the program. Within 2 years of CHIP's creation, every State decided to participate. It was a no-brainer. Every State wanted to address the health care needs of our most vulnerable children. In its first decade, CHIP cut the number of uninsured children by more than one-third. Today, because of CHIP, nearly 7 million children get the doctors visits and medicines they need. Those healthier childhoods will enable those 7 million kids to become healthy, productive adults. Health insurance is important. It is more than important; it is critical. Children with health coverage are more likely to get the health care they need, when they need it. Because of CHIP, 7 million kids have regular checkups, see doctors when they get sick, and get the prescription medications they need. The task before us is to reauthorize this important program. Many will recall that we started this process back in the year 2007. Congress worked hard, very hard to pass a bipartisan reauthorization package. I can tell my colleagues, Senators Hatch, Rockefeller and myself and Senator Grassley worked hours on end. I cannot tell you the number of hours we met and how hard it was, but we worked together and got that compromise. We got it passed on the floor, passed the House. But President Bush vetoed it twice. Times have changed. President Obama is looking forward to signing the Children's Health Insurance Program bill, and Congress is prepared to act. Americans overwhelmingly support covering kids. The bill before us today will keep coverage for all children currently in the program, and we will start to reach more than 4 million additional uninsured, low- income kids. In drafting this legislation, we relied heavily on the two vetoed bills. We keep CHIP focused on kids. That is the focus. Childless adults whom CHIP covers today will transition out of the program. This is focused on kids. This bill will not allow new waivers for CHIP coverage of childless adults. Low-income parents whom CHIP covers today will ultimately transition out of CHIP to Medicaid, with its lower match rate. This bill precludes new waivers for coverage of parents in CHIP. We cover low-income kids first. We agree that low-income kids are our first priority, but we do not limit State flexibility in designing CHIP programs. States choosing to cover kids above 300 percent of poverty will receive the lower Medicaid match for those kids. If they want to do so, they can, but they will get the lower match rate. We also included bonuses for States that meet enrollment targets for kids in Medicaid. Nearly three-quarters of uninsured kids are eligible for either Medicaid or CHIP but have not enrolled. We encourage States to improve their outreach practices to streamline enrollment procedures to keep them enrolled. We maintain State flexibility. We have given States the option to cover legal immigrant children and pregnant women during their first 5 years in the United States. States can decide whether they want to cover those children. Currently, Federal law prevents States from covering legal immigrants on Medicaid or CHIP until they have been in the country for 5 years. But some States have found this provision to be too restrictive. Those States have chosen to use their own money to meet the needs of their residents. In 2008, for example, 18 States chose to cover legal immigrant children, and 23 States chose to cover legal immigrant pregnant women, rather than deny them the health care they need for 5 years. The Federal Government should not penalize States for trying to help needy populations who are here legally. This bill would allow States the option to cover legal immigrant children and pregnant women in Medicaid or CHIP and receive the appropriate Federal match. More broadly, we have also created a State option that allows States to designate CHIP funds to offer premium assistance. Premium assistance can help families to afford private coverage offered by employers or other sources. We improve the quality of children's health insurance. Discussions about health insurance often get bogged down in talk about cost and coverage but we ignore quality. Discussions about quality often ignore the unique needs of children. Our CHIP bill launches a substantially new initiative to improve children's health quality. This initiative will invest $45 million a year for 5 years to develop national core measures for children's health quality, improve data collection in CHIP and Medicaid, and promote the use of electronic records. These efforts will help to improve the quality of care available in CHIP and Medicaid. We pay for what we do. Like the vetoed bills, this legislation will increase the Federal tax on a pack of cigarettes by 61 cents. We also make proportional increases for other tobacco products. Increasing the cigarette tax will discourage smoking, particularly among teens, and that will be good for kids as well. The bill we are considering today is a good bill. In putting together the Finance Committee's bill, we worked to cover as many low-income, uninsured kids as possible. We respected our budgetary limits, and we made compromises in good faith with our Republican colleagues. In committee, we made further compromises which I hope have strengthened this bill even more. I prefer to be standing here today with all my colleagues beside me, especially my good friends, Senators Grassley and Hatch. But we could not agree on everything. I hope the remaining disagreements do not prevent Senators from doing the right thing. Let us not fail the children of the working poor. Let us get these kids to doctors visits and medications they need, and let us continue the blessing that is the Children's Health Insurance Program. I yield the floor and suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Madam President, a Congressman from Pennsylvania said: I do believe we are now on the brink of a precipice, that will be dangerous for us to step too fast upon. The Pennsylvania Congressman spoke not today, but more than 200 years ago, in the early days of our Nation. We often forget that our young Nation was born not just in the glory of independence and democracy, but with the throes of a financial crisis. At its founding, America was so encumbered by debt that the annual interest on its debts alone was three times its foreseeable annual income. Finding a way out of that financial mess fell largely to one man, our Nation's first Treasury Secretary, Alexander Hamilton. Hamilton was not popular. His task was not easy. And he received little support. But ultimately he succeeded. Again today, our Nation finds itself on the brink of a precipice. Again today, the way out of our financial mess falls substantially on one man. Again, his task will not be easy. And again, he may not be popular with all of my colleagues. But again, he must succeed. Today, we are considering the nomination of Timothy Geithner to be America's Treasury Secretary, in a time of unprecedented crisis. Credit markets are broken. Nearly 3 million Americans have lost their jobs in the past year. Homeowners face foreclosure. And home values continue to fall. Financial alchemy, carelessness, excessive leverage, and greed have crippled Wall Street and America's financial institutions. Today, America does not face imminent bankruptcy, as it did in Alexander Hamilton's time. Our Nation's creditworthiness remains solid. And our currency and Treasury bonds anchor the world economy. Today's Treasury and Federal Reserve pack financial firepower and resources unmatched by any other economy. But in many ways, it will be far more daunting to solve today's challenges than it was in Hamilton's day. The exotic financial innovations that set off today's crisis are unprecedented. And their consequences are therefore not fully known. Today's unconventional crisis will not be solved with conventional solutions. We face this crisis integrated in a world economy through international trade, foreign direct investment, and global financial markets. We face this crisis relying on foreign nations to finance our current account deficit. And we face this crisis at a time when nearly every economy in the world appears headed for simultaneous--and in some cases rapid--recession. President Obama has asked the Senate to confirm Timothy Geithner without delay. Our economic crisis demands it. The Senate Finance Committee vetted Mr. Geithner thoroughly. We questioned him for 3 hours last week in a public hearing. And we examined him behind closed doors a week before. My colleagues and I strongly support his nomination. And I believe that Mr. Geithner is uniquely qualified for this job, at this time. Tim Geithner is a dedicated, lifelong public servant. He has not relied on money and political influence to rise to positions of responsibility. He did it the old fashioned way--with hard work, dedication, and competence. Mr. Geithner began his career at the U.S. Treasury Department. He rose to become Under Secretary of the Treasury for International Affairs. There, he dealt effectively with financial crises of the past decade. There, he earned the respect and trust of policymakers around the world. As president of the Federal Reserve Bank of New York, Mr. Geithner oversaw the execution of America's monetary policy, monitored financial institutions, and advised our economic partners around the world. More recently, Mr. Geithner worked with Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke on the series of initiatives aimed at thawing frozen credit markets and stabilizing our financial sector. History will judge the wisdom of how this past administration handled our crisis. But I take comfort in knowing that Mr. Geithner will enter his new job knowing the scope, motivation, and effect of what was done. He will enter his new job knowing what worked, what did not, and what more needs to be done. Mr. Geithner will surely make mistakes. We all do. But Mr. Geithner's experience will help him to avoid repeating the same mistakes that this past administration made. Mr. Geithner also knows what we expect of him. He knows that we expect him to be a good steward of taxpayers' money. He knows that we expect vigorous oversight of all financial recovery actions. He knows that we expect Congress to be consulted and informed on all initiatives. And he knows that the well-being of America's small businesses must be part of every decision he makes. When Alexander Hamilton became Treasury Secretary in the face of extraordinary crisis, he said: I conceived myself to be under an obligation to lend my aid towards putting the machine in some regular motion. With this vote, Mr. Geithner is under an obligation to lend his aid-- every last ounce of it--to putting our economic machine in regular motion. America is counting on it. Once again, we are on the brink of a precipice. Once again, our President calls upon one brilliant man to help to bring the Nation back. Let us give him the person whom he has requested. And let us confirm our new President's choice for Secretary of the Treasury. Madam President, I yield the floor, and I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, pursuant to rule XXVI, paragraph 2, of the Standing Rules of the Senate, I submit for publication in the Congressional Record the revised rules of the Committee on Finance for the 111th Congress, adopted by the committee on January 15, 2009. I ask unanimous consent that the rules be printed in the Record.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Madam President, the House bill before us contains a provision that causes me great concern. The provision would make the U.S. Government an active participant in an abusive tax shelter transaction. In the past, Congress has voted to shut that tax shelter down. And this week, I sought to offer an amendment to strike the provision from this bill. But I have been prevented from offering that amendment. That this provision will remain in the bill makes this bill a far less attractive measure. Section 18 of the bill requires the United States to serve as a guarantor of obligations incurred by domestic subway and other transportation systems. These obligations arise from the systems' participation in leasing arrangements called lease in/lease out, or LILOs, and sale in/lease out, or SILOs. LILOs and SILOs are sham transactions. The IRS has designated them as ``listed'' tax shelters. That means that these tax shelters are among the most egregious abuses of the tax law. LILOs and SILOs are very complicated deals, designed to look like legitimate leasing transactions. But in reality, they are shams. In a SILO, a tax-exempt entity nominally ``sells'' an asset, like a subway system. The other party to the deal is an investor who is subject to taxation and who needs a tax write-off. The investor nominally ``buys'' the asset. The investor then nominally ``leases'' the asset back to the tax-exempt entity. In truth, the benefits and burdens of ownership never shift. And the sale and the lease have no economic reality. These parties purport to make purchase payments and rent payments. But in reality, these payments are just paper entries, facilitated by a bank that is in on the deal. The investor pays the tax exempt entity an up-front fee in exchange for its willingness to participate in the deal. But other than that, no real money changes hands. There is little, if any, risk to any party to these transactions. That is because the deal is cooked from the beginning. It is planned so as to eliminate any risk. But there are significant tax benefits to the investor. The investor gets interest and depreciation deductions. And those deductions generate tax losses. Employing these tax losses, the investor pays less tax on income that the investor earns elsewhere. This chart illustrates how a SILO transaction works. You do not have to understand all the details to see how complicated the transaction is. As Chairman of the Finance Committee, I have had these deals on my radar screen for quite some time. In 2003, the Finance Committee held a hearing with a confidential informant. The witness risked his professional reputation to tell us how abusive LILO and SILO transactions are. I pushed for legislation to shut these deals down. The 2004 Jobs Act eliminated the tax benefits for most of the investors who had entered into these transactions. Since 2005, I have worked to shut down the remaining deals that the Jobs Act failed to address. Unfortunately, our efforts have met with resistance. Some argue that shutting down these transactions would be applying law retroactively. But I believe that these transactions always violated the law, as they lack any economic substance. In the Tax Increase Prevention and Reconciliation Act of 2005, Congress imposed excise taxes on tax-exempt entities and their managers who entered into tax shelter transactions. That law recognized the role that some tax exempt entities, including transit agencies, played as ``accommodating parties'' to tax shelter deals. Since 1999, the IRS has devoted considerable resources to shutting down these deals. The IRS has designated both LILOs and SILOs as ``listed'' tax shelter transactions. The IRS has audited every one of these transactions that it could find. The IRS has litigated four cases, and won every time. Recently, the IRS announced a settlement initiative to shut down the remaining cases and reports an 80-percent participation rate. We have been trying to stop these tax shelters for years. So how does the Government end up guaranteeing this kind of tax shelter? The complicated structure of LILOs and SILOs plays a part. Under the terms of the agreements, transit agencies are required to obtain a guarantee from an insurer. The insurer guarantees that the agencies will be able to buy back the subway at the end of the lease period. The agreements require that the insurer have a very high credit rating. The current economic crisis has caused downgrades of insurers' credit ratings. That has put the tax-exempt entities into technical default on their agreements. Under the agreements, when the tax-exempt entities default, the investors have a right to terminate the lease. The investors are taking advantage of this legal opportunity. They are trying to cash in. The investors are attempting not just to recoup the nominal purchase price of the assets. They are also demanding that the transit agencies pay over the value of the tax benefits that the investor will lose as a result of the premature unwinding of the deal. The value of the tax benefits can be many times the putative purchase price. This chart that I referred to earlier is an exhibit from a lawsuit, Hoosier Energy v. John Hancock Life Insurance. In that case, the Monroe County Circuit Court in Indiana issued a temporary injunction barring John Hancock from collecting on the technical default. Transit agencies do not have lots of excess money just sitting around. So they have come to the Congress asking for a guarantee from the U.S. Government. Now I do not want our Nation's subway systems to be at risk. I am open to considering ways to help keep them financially sound. But I am unwilling to do so at the expense of American taxpayers. The bill before us today asks taxpayers to put their tax dollars at risk. The bill asks taxpayers to guarantee transit agencies who knowingly and willfully entered into deals that had no economic substance and were designed for the sole purpose of avoiding taxes. The Government has come under much criticism for actions it has taken to jump-start our economy. But deliberately involving the U.S. Government in a tax shelter scam would add fuel to that fire. We must not add legitimacy to an abusive transaction that the Congress, the courts, the Treasury, and the IRS have spent years trying to shut down. We must not undermine the good efforts of the IRS to prosecute these cases. We need the IRS to accomplish as much work as it can to eliminate these and other scams. We must not ask American taxpayers who struggle to pay their taxes to underwrite deals set up to help wealthy investors attempting to shelter their income. The approach in the bill before us today is not a solution. Stepping in to guarantee these deals exposes American taxpayers to ongoing risk. Some event could trigger a requirement that the Government pay the investors. This bill puts taxpayers on the hook for a long time. In addition, I understand that this proposal applies to only 80 percent of the transit agencies that entered into these tax shelter deals. What about the other 20 percent of the systems who are not covered? What happens to them? We need a fair and balanced approach to resolve this issue. We would do better to figure out a way to discourage investors from acting on the technical default simply because the insurer's credit rating has been downgraded. A downgrade does not mean that the insurer is not good for the money. I intend to explore options with this goal in mind. We need a solution that protects both the transit agencies and the American taxpayer. Finally, this is an auto bill. We should not forfeit the opportunity to bolster our automotive industry by cluttering up the bill with unrelated and controversial proposals. There is a proper time and place for everything. This is neither the time nor the place to divert attention from our immediate task, helping our automakers. This provision has no business in the auto bill. The Senate should take the provision out. And if the Senate does not take the provision out, it will only add to the burdens that are weighing this bill down.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in a moment I will ask unanimous consent that the Senate proceed to passage of H.R. 7327, the pension bill. Before I do that, I wish to say this is very important relief for seniors and for the country. The bill includes a provision that would allow seniors who are 70\1/2\ years of age not to have to make withdrawals from their IRA accounts that the current law requires. Under current law, if you are 70\1/2\ or older, you must begin to withdraw significant amounts from your 401(k) accounts or IRA accounts and if you don't, you pay a big penalty. At these times it is not wise to require that, because the accounts are lower in value and they should not have to make those withdrawals if they don't want to. In addition, this legislation would allow companies to postpone making increased contributions to their pension plans also required by the recent pension law. When we revised pension law a short while ago, we were pretty strict to protect employees by requiring companies to make contributions to the pension plans at a much faster rate. That made sense then, but given the economic downturn, with the market values down so much lower than they were back then, it makes sense, I believe--and I think most Senators agree--that those contributions should be postponed or later modified in order to keep companies viable. A lot of companies need this to meet payrolls in these difficult times, and this will prevent them having to freeze their benefits. I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 7327, which was received from the House.

Mr. BAUCUS. Mr. President, we are living through an unprecedented economic downturn. Over the past 15 months, the Dow Jones Industrial companies have lost more than one-third of their value. An end does not appear in sight. This sharp market decline hurts more than just Wall Street. It hurts every American with a retirement plan. When the market drops, so do the assets in pension plans. Over the past 15 months, because of the current financial crisis, retirement accounts have lost as much as $2 trillion in assets due to the current financial crisis. That is $2 trillion that disappeared from the retirement accounts of American workers. And that is $2 trillion that disappeared from the accounts of pension plans. Congress must act now to protect individual retirement accounts and pension benefits and assets. This bill provides relief for seniors age 70\1/2\ and older whom current law requires to take distributions from their retirement plans. Individuals would have the option to keep their retirement savings where they are. We should not force them to take out huge portions of their savings when the market is down. This bill also contains a number of provisions to help ease the strain on pension plans. And this bill would help to prevent the need for some plans to reduce benefits or make extraordinary funding contributions due to the market downturn. If we fail to act and provide short-term funding relief, pension plans would be unable to afford their increased contributions. By one estimate, current law would require 350 of the Fortune 500 companies to contribute an extra $100 billion or more to their pension plans next year, even if the market rebounds. If these companies did this, they would reduce their investment spending by $60 to $70 billion next year. That is something that our economy cannot afford. This bill provides relief for single-employer plans that fall below the set funding target percentage set in the Pension Protection Act of 2006. And the bill provides analogous relief for multi-employer plans that are faced with significant underfunding due to market losses. This relief would allow them to temporarily freeze their current funding certification or extend the time period that they have to restore their funding levels. The bill also helps prevent benefit restrictions for those single- employer plans that may be significantly underfunded next year due to the market downturn. This bill also contains a number of critical technical amendments to the Pension Protection Act of 2006. The Pension Protection Act of 2006 arguably marks the most sweeping changes to the pension laws since the enactment of the Employee Retirement Income Security Act of 1974. Like many complicated pieces of legislation, technical corrections to the law must be made. Technical corrections to the law are often time sensitive. That is, many of them must be passed by both Houses of Congress before the effective date of the statute. Many of the rules under the Pension Act were effective January 1, 2008. This means that the time for passing technical corrections has come and gone. If we were not to act and pass these time-sensitive provisions now, the pension community and the Department of the Treasury--the agency tasked with interpreting the statute and providing the necessary details on how the new law works--would be placed in a very tough spot. That is, the Department of the Treasury would not have the necessary corrections and clarifications of the original intent of the act to sufficiently issue the details necessary to allow the pension community to achieve proper compliance. This would not be fair to the pension community or the Treasury Department. Failing to pass these technical corrections would therefore be irresponsible. Here in the Senate, we passed the technical corrections contained in this act back in December 2007. We already said that these corrections are good pension policy. Americans need real help from Congress to make sure that their retirement savings are safe and sound and available to them when they need it. This bill contains a number of provisions that would help to provide relief to individuals and pension plans and move the economy toward recovery. Individuals and the pension community warned that individual retirement account holders and pension plan participants could be adversely affected without the provisions contained in this bill. Passing this pension package sends the right message to individuals, plan sponsors, and pension plan participants. I thank my colleagues for helping to make passage of this bill possible today. Mr. President, I ask unanimous consent that the bill be read the third time and passed, the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements related to the bill be printed in the Record.

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, today I rise in tribute to the spirit of recovery for the Huntley Project High School which was destroyed in an early morning fire on Thursday, September 18. The bottomless community spirit and immediate outpouring of support from around Montana has enabled this school, its faculty and staff, 230 students, their parents and supporters to put their energies and efforts into opening its doors. Through the extraordinary leadership of school superintendent Dave Mahon and principal Tynie Mader, students gathered in the junior high auditorium at 8:15 a.m. on Monday, September 22, to receive school supplies and restart the school year in the wake of the fire. Classes are being held in trailers located on the practice field west of the burned high school. The weekend following the fire, families and members of the community came together to clean up temporary classrooms for use, donate funds to replenish music and sports equipment, books and computers lost in the fire. Donations have come in from communities across Montana the Malta School District sent $500 to help, having experienced a devastating fire in 1995. The school has received bandstands from Absarokee schools, cleats from a major sports corporation, backpacks from Billings elementary schools, donations from the local banks and area businesses and offers from as far away as North Carolina. The students have taken it upon themselves to shoulder part of the burden. They have applied to the television show ``Extreme Makeover'' to get their school rebuilt. They have been an integral part of sorting, carrying and cleaning school equipment. And their academic and extracurricular activities are getting an extra dose of school spirit these days. The school and community rallied around the athletic teams at Huntley Project following the devastating fire. This burst of school spirit helped propel the Huntley Project Red Devils to the Montana Class B State championship in football on November 22. Huntley Project defeated Fairfield High 41-28. The victory in the State title game on the Red Devils home field capped off a perfect season for coach Jay Santy and his players. A sign on the fence encircling the field said ``Devils risen up with the flames.'' Indeed this statement is true of all in the Huntley Project community. The Red Devils girls volleyball team also rose to the occasion to excel this season. After being displaced from their gym due to the fire, the team was forced to practice and play all their games away from home. Despite this added challenge the squad led by coach Iona Stookey placed third at the State class B volleyball tournament. I would like to congratulate these fine student athletes, their coaches and teachers, and all in the Huntley Project community not only for their achievements on the playing field but also for coming together to support each other and working to rebuild the school. Much has been done. More will need to be done. But we are Montanans, and we have that frontier spirit and grit that pulls a community together without question and without hesitation in times of need. In the meantime, we are all pulling for the Huntley Project Red Devils until their school is rebuilt. Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am pleased to have supported the nomination of Neil M. Barofsky to be the Special Inspector General for the Troubled Asset Relief Program, or TARP, at the Treasury Department. I have a great interest in the Special IG for the TARP. I raised the idea in the first place, the first weekend that we were examining the Treasury financial bailout proposal. As many will remember, the Treasury's original proposal for the TARP was three pages long. It gave the Secretary of the Treasury unlimited power over $700 billion. And it provided no oversight by anyone. The House and Senate spent 2 weeks hammering out a better bill. That better bill included strong oversight, and it included the office of a Special IG for the financial rescue program, as I proposed that first weekend. The size and complexity of this effort is unprecedented in recent memory. It is essential to have a team that focuses exclusively on the TARP program as managed by the Treasury Department, and it is essential for that team to report to Congress on the status of this new program. My proposal for a Special IG was based on the Iraqi Reconstruction Special Inspector General. That was another massive oversight challenge. As the Congress debated what to include in the rescue package, 33 Senators signed a letter to the congressional leadership endorsing the idea of a Special IG to oversee the troubled asset program. During the negotiations, the Treasury Department resisted. But then the administration and Congress agreed that the Special IG should be part of the final legislation. Congress passed it, and the President signed it into law. The law gives the Special IG a $50 million budget. He will have the duties and responsibilities of inspectors general under the Inspector General Act of 1978. He will have the power to supervise and coordinate audits and investigations of TARP activities. He will have the power to appoint staff to carry out the activities of the office. And he may enter into contracts for audits and studies. We expect a report to the Finance Committee every 120 days on the activities of the TARP, and the law also directs the Special IG to report to Congress if information he requests is refused. I support the nomination of Mr. Neil Barofsky. I congratulate him for his willingness to serve his country. It is going to be a demanding job. For some time, he is going to be playing catchup. I believe Mr. Barofsky's experience as a prosecutor with the U.S. Attorney's Office in the Southern District of New York will serve him well in his new role as the Special IG. The financial rescue program is huge--$700 billion. The number and variety of financial institutions receiving money from Treasury is extensive. Tracking the path of the bailout dollars through these institutions is going to be a difficult task. The harsh reality is that almost half the $700 billion is already out the door of the TARP. The new Special IG will be looking back at Treasury's use of about $290 billion dollars in 45 days. Anyone who has seen a number of the congressional hearings this week, including our Senate Finance Committee on November 17, knows there are a lot of questions about how the TARP is operating. We know that the Treasury Department has named Neel Kashkari, Assistant Secretary for International Economics, to head the financial rescue program. Treasury has decided to send $125 billion to nine major banks, including Citigroup and JPMorgan Chase. Another $125 billion will be allocated for thousands of small and midsized banks. The American International Group, or AIG, will receive around $40 billion of TARP funds in return for issuing preferred shares to the Treasury Department. Secretary Paulson has also announced a policy regarding preferred shares and warrants for common stock. Standards for restrictions on executive compensation are being developed. Those include a clawback provision and a ban on golden parachutes during the period that Treasury holds equity issued through this program. Several senior posts have been filled. And the law firm Simpson Thacher & Bartlett has been selected as a legal adviser. Treasury has announced that the Bank of New York Mellon will serve as its custodian for the implementation of the Troubled Asset Relief Program, and PricewaterhouseCoopers and Ernst & Young have been hired to help with accounting and internal controls services. These decisions made by the Treasury Department are critically important to the financial rescue program. Yet the Treasury has made them all without any oversight by a Special IG. As for the use of the funds, the bottom line, frankly, is that the Secretary of Treasury told Congress and the American people that the Bush administration needed $700 billion to purchase troubled assets. Yet last month, the Treasury Secretary announced that, in fact, there were no plans to purchase troubled assets. To say that this was a surprise is an understatement. Congress needs to find out why the first plan was rejected and a new plan was developed. What is the theory behind the new plan for providing equity to these financial establishments? What exactly are the agreements with the financial institutions who have received TARP funds? And what conflict of interest standards were followed? Once the Special IG is in place, we can start to answer some of these questions. Half the money is gone. And it is way past the time when we should have had a Special Inspector General on the job overseeing the program. I am pleased that the Senate has confirmed Mr. Barofsky, and I look forward to helping him conduct aggressive oversight of the TARP program.

Mr. BAUCUS

Mr. BAUCUS. I am happy to respond to the Senators from Arkansas, Oregon, and Washington, whom I have worked with for several years on this issue. They and others have persuaded me that the timber tax provisions are fair and are important. That is why I strongly supported including the provisions in the farm bill. That said, I believe that the timber tax provisions are in a different category than the extenders that are included in the current bill. The extenders in this bill are provisions that have been in the Tax Code for some time, and most already have expired. The timber tax provisions, in contrast, are new--enacted earlier this year--and, as the Senator said, they do not expire until May 2009. In light of that, although I strongly support the timber tax provisions, I believe that it is better to address them early next year rather than as part of this bill. I anticipate that we will be considering tax legislation early in the next Congress. I will work with Senator Lincoln, Senator Murray, and other interested Senators to see that the timber tax provisions are extended.

Mr. BAUCUS

Mr. BAUCUS. I want to thank my distinguished colleagues from Massachusetts and Nevada for raising this issue with us. I want to assure them that we are aware of this problem and we will work with our colleagues to consider legislation to eliminate the burden for employees and employers as early as possible.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, President John F. Kennedy said that ``if a free society cannot help the many who are poor, it cannot save the few who are rich.'' This week, Congress has worked hard on the American economy. No matter how grave our problems today, America remains the world's richest nation. Our domestic challenges are great. But ours remains a land of opportunity and prosperity. With our own economy in hard times, it is easy to forget the world's poorest. It is easy to forget that more than a billion people around the world live on a dollar a day or less. Concerned about maintaining our own standard of living, we can forget that the wealth of too many consists of little more than the clothes on their backs and the few coins in their pockets. The legislation that we consider today proves we are not an island-- economically or morally. Today's legislation accomplishes four key objectives. It extends the Generalized System of Preferences for 1 year, extends the Andean Trade Preferences Act for 6 months to 1 year, with safeguards to ensure that Bolivia and Ecuador comply with that program's rules, affords the Dominican Republic enhanced access to the U.S. market in a way that benefits U.S. producers, and allows our trade preference program with Africa--known as AGOA--to work better. I am proud that, by considering and passing this legislation, America again proves that we are still capable of thinking of others. By acting on this bill, Americans underscore that those who do not share our wealth must not be denied hope for a better life. By extending our trade preference programs, Americans reaffirm the fundamental belief that the world's poor are no less human than we are, and they deserve a fair shake for a hard day's work. America has crafted trade preference programs for those hundreds of millions of poor around the world, not with a handout, but with a leg up. These preference programs offer more than 130 countries a way out of extreme poverty--poverty that is not just morally repugnant, but politically destabilizing. Our GSP and ATPA programs give developing country workers a living, rewards productive investment, and grants better access to America's market. The benefits of these programs are mutual and create jobs that earn good wages in Montana and the rest of the country. Retail and transportation jobs in America depend on flower exports from Ecuador and Colombia. We sell American cotton to Andean and Dominican textile buyers who turn it into fabric and apparel. American manufacturers rely on imports from GSP beneficiaries to lower input costs on electrical parts and building materials. And American consumers benefit from lower priced products from diamond rings to tires. Our preference programs are not perfect. My colleagues and I are concerned that our preference programs may help those who do not need or deserve our help. We are concerned that certain beneficiary countries boast globally competitive industries and wealthy owners. We are concerned that certain beneficiary countries show disdain for America's foreign policies and do not provide adequate protections for the American companies operating in those countries. Yet I recognize that the good and prosperity of the many cannot be sacrificed to punish the few. The inappropriate actions of a few cannot lead us to inaction that hurts the many and throws entire economies into a spiral of insecurity and poverty. This legislation on our preference programs is no blank check. Our preference programs require beneficiary countries to protect U.S. investment and intellectual property and to provide workers with internationally recognized worker rights. Our programs provide the administration with the flexibility to work within the program in order to determine whether or not to designate a country a beneficiary country. And when beneficiary countries do not abide by these eligibility criteria, they must be held responsible. I commend the administration for launching an ATPA review of Bolivia to ensure that it continues to abide by the eligibility criteria. Our preference programs also contain measures to make sure that developing countries that become globally competitive graduate to operate under the same terms as the rest of America's trading partners. These policies are not perfect. No policy this body passes is static. Every policy requires review and reevaluation to make sure it works how it should, for whom it should. As chairman of the Finance Committee, I am committed with my colleagues to reviewing and reevaluating our trade preference programs to make them work better for Americans and our trading partners. Let us do things the right way, the American way, and extend our preference programs.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, reserving the right to object, I would like to be able to get in this line too, so I ask unanimous consent that I speak following the Senator from New Hampshire.