Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the problem with this amendment is exactly what the sponsor said: It is exactly like Part B. Part B, as we know, is a premium that is paid with respect to doctors' examinations and Medicare reimbursement. Part D is the drug benefit. Part D premiums vary significantly nationwide according to geography and according to the plans offered. It is nothing like Part B. To say we should pattern this off Part B is a statement not fully appreciative of the sophistication of the changes in the Part D. That is one reason not to support this amendment. Second, any change in Part D is required to be in any Medicare bill if it comes up. We may want to make other Medicare changes. We don't want to be restricted to means testing. Third, this should be considered broad health care reform, at least Medicare reform, and not be isolated in this case. I strongly urge this amendment not be adopted.

Mr. BAUCUS. Mr. President, I ask for the yeas and nays.

Mr. BAUCUS. Mr. President, this amendment would maximize the budget's help for America's working families. It would use the surplus to provide tax cuts to every American taxpayer. Our amendment provides for permanent extensions of 2001 tax cuts that help working families, including the 10-percent bracket, marriage penalty relief, the refundable child credit, the adoption tax credit, and the child-care tax credit. Our amendment provides for a new property tax deduction available to any American homeowner, even those who don't itemize. Our amendment includes tax relief for America's military men and women, room to prevent the estate tax from rising above 2009 levels, and protection from unexpected taxes for gulf coast hurricane survivors. Turning surplus dollars into tax relief for American families is the right thing to do. I urge my colleagues to support the amendment.

Mr. BAUCUS. Mr. President, this amendment is privatization of Social Security. This body rejected an amendment of this nature in 2006. We also voted last year and rejected it. The country rejected the privatization in 2005. This will increase insolvency of the Social Security trust fund, not help it. Despite what the Senator said, let me quote what it says: Providing participants with the benefits of savings and investment while permitting the prefunding . . . Essentially, this, as stated in the language, sets up private accounts for the benefits of investments and savings. We all know that the volatility of the stock market is not the best thing for seniors. This is privatization of Social Security. We have voted on this many times in the past. I urge the same vote today.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, the effect of this amendment is not as described. It is similar to the amendment on privatizing Social Security. He said it was not; it was. He says this amendment gives people health insurance. It does not. What does it do? This is a death spiral for companies that provide health insurance for their employees because this amendment will have the effect of causing, for companies that have health insurance for their employees, those employees to leave the health insurance they have and get their own, particularly if they are young and healthy, which will mean the insurance plan the company provides will not work, and that is why it is a death spiral. This will have the effect of hurting small businesses that provide health insurance for their employees because younger, healthier people will leave to get their own, and that will cause the employer-provided coverage to disappear. This should not be done in middle of the night. We should have overall health reform, not this pernicious amendment.

Mr. BAUCUS. Mr. President, I missed the rollcall vote for amendment No. 4198, to increase the Indian Health Service by $1 billion in fiscal year 2009. Had I been present, I would have voted ``yea,'' in favor of the amendment. I have cosponsored the Medicare, Medicaid, and SCHIP Indian Health Care Improvement Act of 2007, S. 2532, and know the need to increase funding for the Indian Health Service. Mr. LEAHY. Mr. President, on rollcall vote No. 70, if present, I would have voted ``aye.'' amendment no. 4347

Mr. BAUCUS. Mr. President, I have been a strong proponent for repeal of the estate tax. Over the years, I have voted repeatedly to get rid of this tax. It harms American families, farms, and businesses. Once I realized that repeal would not be enacted immediately, however, I worked to get a compromise for the American people. I am continuing that fight. Last fall, during the farm tax markup, I announced my goal to develop a workable estate tax compromise that could be passed this year. I continue to be committed to that goal. As chairman of the Finance Committee, I have been using the Senate process to fully analyze what we need to do. I have been holding hearings on effective estate tax reform. The first estate tax hearing was held in November. The hearing focused on the scope of the problem. We had a second hearing yesterday to explore alternatives to our current estate tax system. And in April, the Finance Committee will hold a final hearing to discuss reforms to our current system that go beyond rates and exemptions. After those hearings, we plan to roll up our sleeves and begin working on an estate tax bill--a bill that will pass in the Senate. Once we develop that bill, we will have a markup in Committee. My goal is an estate tax bill that will get enough support to pass. That goal will take time and work on both sides. amendment no. 4170

Mr. BAUCUS

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

Mr. BAUCUS. Mr. President, I make that request.

Mr. BAUCUS. Mr. President, I send an amendment to the desk.

Mr. BAUCUS. Mr. President, there is one point in this amendment that needs explanation, and the Senator from North Dakota touched on it. It is basically this: Under our tax laws today, only those tax filers who itemize their deductions can take advantage of the property tax deduction. Only those Americans who itemize their deductions can take a property tax deduction which, therefore, lowers their income taxes. About two-thirds of Americans do not itemize. Two-thirds of Americans take the standard deduction. If they take the standard deduction, they cannot, therefore, deduct their property taxes from their income taxes. This amendment says all homeowners can take the standard deduction; that is, it makes no difference whether you itemize or whether you take the standard deduction. In either case, you are able to take full advantage of the property tax deduction to lower your property taxes. This will help in some small way to prevent the reduction of housing prices in some parts of the country where it is a real problem. It is clearly not the full answer, but it at least is a way to help and also gives tax relief to middle-income taxpayers because those taxpayers who do not take the standard deduction, those taxpayers who itemize are probably a little bit wealthier than are taxpayers who take the standard deduction. We are saying, if you take the standard deduction, you now can itemize this one item; that is, your property taxes. Technically, it is called above the line. Basically, it means if you take the standard deduction, you get full benefit of your property taxes; you can take the deduction against your income. And that is in this amendment.

Mr. BAUCUS. That is correct. Basically, it is in this amendment, honoring our men and women who are standing up for us in Afghanistan and Iraq.

Mr. BAUCUS. Mr. President, this is the amendment about which I spoke this morning. This amendment would take the surplus in the budget resolution and give it back to the hard-working American families who earned it. It would make permanent the 10-percent tax bracket. It would make permanent the child tax credit. It would make permanent the marriage penalty relief. And it would make permanent the changes to the dependent care credit. Further, it would make changes to the tax law to honor the sacrifices our men and women in uniform make for us every day. We lower the estate tax to 2009 levels. And it would allow middle- income taxpayers who do not itemize their deductions to nonetheless take a deduction for property taxes. I offer this amendment on behalf of myself, Senator Bayh, Senator Pryor, Senator Nelson of Florida, Senator Salazar, Senator Rockefeller, Senator Tester, Senator Brown, Senator Menendez, and Senator Bingaman. The amendment shows our commitment to American families. The amendment takes the surplus and returns it as tax relief to those hard- working families. I urge my colleagues to join me in supporting this amendment. I spoke at length about this amendment earlier today. This is a very brief summary, now that we are on the amendment.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H. Con. Res. 313, received from the House and at the desk.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the concurrent resolution be agreed to and the motion to reconsider be laid upon the table.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the following fellows and interns be allowed the privilege of the floor during consideration of the budget resolution: Arkaprava Deb, Ben Miller, Blake Thompson, Bridget Mallon, Bruce Ferguson, Cascade Tuholske, Claudia Garcia-Martinez, Connie Cookson, Damian Kudelka, Elise Anderson, Elise Stein, Emily Schwartz, Emma Redfoot, Ezana Teferra, Hy Hinojosa, Kayleigh Brown, Lily Alverson, Marissa Reeves, Mary Baker, Michael Bagel, Mike Yarnell, Mollie Lane, Ron Gebhausbauer, Stacy Celinsky, Susan Hinck, Suzanne Payne, Tamara Clay, Tom Louthan, and Tyler Gamble.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I wish to speak on the budget resolution and about an amendment I will offer when that amendment is in order. As I understand, that will be after the luncheon hour.

Mr. BAUCUS. Mr. President, the author and poet, Cervantes, had a character say: My wages . . . I have earned with the sweat of my brows. And so it is with America's hard-working families. They have earned their wages with the sweat of their brows. This afternoon, along with a number of other Senators, I intend to offer an amendment that would take the surplus in the budget resolution and give it back to hard- working American families who earned it. First, our amendment makes the 10-percent tax bracket permanent. That is a tax cut for all taxpayers. Second, we are making permanent changes to the child tax credit. That is a $1,000 tax credit per child. This tax credit recognizes that a family's ability to pay taxes decreases as their family size increases. Unless we act, the child tax credit will fall to $500 per child in 2010. We are making permanent the marriage penalty relief. Couples should not pay more taxes because they are married. This relief makes sure a married couple filing a joint return has the same deductions and tax brackets as they would if they filed as individuals. We are making permanent the changes to the dependent care credit. This credit is important to working families. It recognizes the increased cost of child care for thousands of Americans, especially child care for households where both parents work outside the home. We are making permanent the changes to the adoption credit. Most adoptions cost more than $20,000. This provision offers a credit of $10,000 for those willing to give a child a home. This amendment is also important because in it we believe it is important to pause and reflect on the sacrifices our men and women in uniform make for us every day. Nearly 1.5 million U.S. service men and women have served in Iraq, Afghanistan or both. Nearly 30,000 troops have been wounded in action. In September, I went to Iraq. I was impressed by what an amazing job our troops are doing. It is astounding. I met many Montanans from small towns such as Roundup and Townsend. I saw firsthand what a heavy burden our troops bear for all of us. They face hardships, they face danger, but they keep at it every day. Today, one small way to support them is to make the Tax Code a little more troop friendly. We can extend the special tax rules that make sense for our military that expire in 2007 and 2008. We can also eliminate roadblocks in the current tax laws that present difficulties to veterans and servicemembers. One problem this amendment would address is how the Tax Code treats survivors of our fallen heroes. The families of soldiers killed in the line of duty receive a death gratuity benefit of $100,000. But the Tax Code restricts survivors from putting this benefit in a Roth IRA. Today, we can make sure family members of fallen soldiers can take advantage of these tax-favored accounts. Another hazard in the tax laws impedes our disabled veterans. I am thinking of the time limit for filing for a tax refund. Most VA disability claims filed by veterans are quickly resolved, but many disability awards are delayed due to lost paperwork or the appeals of rejected claims. Once a disabled vet finally gets a favorable award, the good news is the disability award is tax free, but the bad news is many of these disabled veterans get ambushed by a statute that bars them from filing a tax refund claim. Today we can give disabled veterans an extra year to claim their tax refunds. Most troops doing the heavy lifting in combat situations are the lower ranking, lower income soldiers. Their income needs to count toward computing the earned-income tax credit, or EITC. Under current law, however, income earned by a soldier in a combat zone is exempt from income tax. This actually hurts low-income military personnel under the EITC. The EITC combat pay exception allows combat zone pay to count as earned income for purposes of determining the credit. That way, more soldiers qualify for EITC. But this EITC combat pay exception expired at the end of 2007. The EITC is a beneficial tax provision for working parents. It makes no sense to deny it to our troops. Today we can help to make combat duty income count for EITC purposes. In this amendment, we are making permanent provisions to allow combat pay as earned income for purposes of the EITC. This amendment allows hard-working, low-income military personnel to get the full benefit of the EITC. A soldier's rucksack is heavy enough as it is without loading it down with tax burdens. We owe the soldiers fighting in our Armed Forces an enormous debt of gratitude. This amendment is one small way we can salute our men and women in uniform for all they do. Also in this amendment, we are giving some certainty to American families on the estate tax. Lowering the estate tax to 2009 levels is the least we can do as we move toward estate tax reform. This is the minimum that we can and will achieve. And we are committed to exploring what more we can do. We are conducting thorough studies of the issue in hearings on that subject this week. I plan to offer a second amendment that would dedicate enough additional funds to estate tax reform that we can achieve a $5 million exemption and a 35-percent rate. Through these efforts, Congress will show that we support America's small businesses, ranchers, and farmers. Today's amendment also helps to address the housing crisis. Our amendment would allow middle-income taxpayers who do not itemize their deductions to nonetheless get a tax deduction for property taxes. That would give some relief to hard- strapped homeowners. Now, this amendment will not do everything. But we will do more. As chairman of the Finance Committee, I am fully committed to tax reform. Tax reform can mean giving tax relief to American families and businesses through simplification and sound tax policy. This year, the Finance Committee will do the spade work. We will hold hearings and prepare for the fundamental tax reform that we all want and expect next year, so when the next President takes office, he or she will make a major recommendation to the Congress on tax reform. We are holding hearings on that so we are ready. But today the amendment we will offer shows our commitment to American families. American families earned their wages with the sweat of their brows. This amendment takes the surplus and gives tax relief to those hard-working families. It is no less than what they have earned. Mr. President, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, Americans have important expectations for their public servants. They expect us to act for the common good. They expect us to advance our common values. But first and foremost, they expect us to have common sense. Last week's Department of Defense tanker procurement decision raises serious questions of common sense. As some of my colleagues have already discussed, the Defense Department last week awarded a $40 billion contract for a new generation of Air Force tanker aircraft to the European Aeronautic Defense and Space Company, or EADS, the parent company of Airbus. Receiving this major contract is an enormous victory for the European company. It is a victory for thousands of French, German, and Spanish Airbus workers this contract will employ. It is also a victory for U.S. contractors who will work on the project. Yet I have serious questions about whether this is a victory for good American policy or American common sense. My concern for this deal is not over the Defense Department's procurements. I leave that to my colleagues on the Appropriations Committee. I do not question the merits of one tanker plane over another. I leave that to my colleagues on the Armed Services Committee. But I certainly am concerned and have serious questions about this deal from the perspective of international trade. This responsibility falls to me as chairman of the Senate Finance Committee. The United States values competition and acknowledges the right of foreign companies, such as EADS's subsidiary Airbus, to pursue American markets and customers. American consumers, including the Federal Government, should have the right to buy the product that best suits their needs. That is only fair. But Airbus is not just another company competing in open markets on the merits of its products. It is not just a commercial venture. Rather, Airbus is the product of four decades of explicit government- industrial policies to create a European aircraft industry, an industry designed not just to compete with American companies but to defeat them with massive government funding. Don't take my word for it. Former French Prime Minister Lionel Jospin himself publicly pledged: We will give Airbus the means to win the battle against Boeing. True to Mr. Jospin's promise, decade after decade, project after project, European governments have injected massive amounts of subsidies into Airbus, including $15 billion in launch aid. These subsidies underwrote between 60 percent and 100 percent of Airbus's commercial aircraft development costs, including the A330 aircraft on which this tanker aircraft is based. These subsidies allowed Airbus to develop aircraft under terms unavailable to unsubsidized market participants or, as a former British Trade and Industry Secretary boasted: We are not standing to one side and leaving everything to the market. . . . In fact, European subsidization of Airbus was so extreme and so anticompetitive that 3 years ago, the U.S. Trade Representative initiated a dispute settlement case in the World Trade Organization. The USTR does not file these cases frivolously. They do so when the damage is real, the case solid, and all other means of resolution have failed. This case is still ongoing. A WTO panel is currently weighing the facts of the case, the effects of these subsidies on our aerospace industry, and the compatibility of these subsidies with international trade laws. What defies common sense to me is that one arm of the administration, the U.S. Trade Representative, argues subsidies to Airbus hurt our companies, skew global markets, and violate the rules of the game. Yet another arm of the administration, the Defense Department, rewards a subsidized company with a $40 billion contract to purchase illegally subsidized aircraft. That is the kind of Government decisionmaking that does not add up. It is not common sense, and it raises serious and fundamental questions about how this administration goes about its business. Does the right hand of the Government know what the left hand is doing? Does one agency respect international rules and their effect while the other one does not? What was USTR's role in this procurement decision? And why did the Defense Department appear to have disregarded it? These and other questions need answers, and I look forward to pursuing these answers with my colleagues. Until we hear a full accounting of this issue, I am left with an uneasy feeling that last week's decision by the Defense Department does little for the common good or common sense. Mr. President, I wish now to speak on an amendment I am going to offer when we get to the budget resolution. I will offer the amendment when we are on the resolution. I can either make my statement now or wait until we get to the resolution.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I now ask for a second reading, and I object to my own request.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that when the Senate completes its business today, it stand adjourned until 2 p.m. Monday, March 10, 2008; that following the prayer and the pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day; that the Senate proceed to a period of morning business until 3 p.m., with Senators permitted to speak therein for up to 10 minutes each, with the time equally divided and controlled between the two leaders or their designees.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it stand adjourned under the previous order.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, under the previous order, the Senate will begin consideration of the concurrent resolution on the budget at 3 p.m. on Monday. As announced earlier, there will be no rollcall votes on Monday. Senators should be prepared for a busy week as the Senate considers the fiscal year 2009 budget resolution.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I now ask unanimous consent that the Senate proceed to the immediate consideration of S. 2733, introduced earlier today by Senator Kennedy.