[Congressional Record Volume 153, Number 19 (Wednesday, January 31, 2007)]
[Senate]
[Pages S1364-S1380]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     FAIR MINIMUM WAGE ACT OF 2007

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of H.R. 2, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 2) to amend the Fair Labor Standards Act of 
     1938 to provide for an increase in the Federal Minimum Wage.

  Pending:

       Reid (for Baucus) amendment No. 100, in the nature of a 
     substitute.
       McConnell (for Gregg) amendment No. 101 (to amendment No. 
     100), to provide Congress a second look at wasteful spending 
     by establishing enhanced rescission authority under fast-
     track procedures.
       Kyl amendment No. 115 (to amendment No. 100), to extend 
     through December 31, 2008, the depreciation treatment of 
     leasehold, restaurant, and retail space improvements.
       Enzi (for Ensign/Inhofe) amendment No. 152 (to amendment 
     No. 100), to reduce document fraud, prevent identity theft, 
     and preserve the integrity of the Social Security system.
       Enzi (for Ensign) amendment No. 153 (to amendment No. 100), 
     to preserve and protect Social Security benefits of American 
     workers, including those making minimum wage, and to help 
     ensure greater Congressional oversight of the Social Security 
     system by requiring that both Houses of Congress approve a 
     totalization agreement before the agreement, giving foreign 
     workers Social Security benefits, can go into effect.
       Vitter/Voinovich amendment No. 110 (to amendment No. 100), 
     to amend title 44 of the United States Code, to provide for 
     the suspension of fines under certain circumstances for 
     first-time paperwork violations by small business concerns.
       DeMint amendment No. 155 (to amendment No. 100), to amend 
     the Public Health Service Act to provide for cooperative 
     governing of individual health insurance coverage offered in 
     interstate commerce, and to amend the Internal Revenue Code 
     of 1986 regarding the disposition of unused health benefits 
     in cafeteria plans and flexible spending arrangements and the 
     use of health savings accounts for the payment of health 
     insurance premiums for high deductible health plans purchased 
     in the individual market.
       DeMint amendment No. 156 (to amendment No. 100), to amend 
     the Internal Revenue Code of 1986 regarding the disposition 
     of unused health benefits in cafeteria plans and flexible 
     spending arrangements.
       DeMint amendment No. 157 (to the language proposed to be 
     stricken by amendment No. 100), to increase the Federal 
     minimum wage by an amount that is based on applicable State 
     minimum wages.
       DeMint amendment No. 159 (to amendment No. 100), to protect 
     individuals from having their money involuntarily collected 
     and used for lobbying by a labor organization.
       DeMint amendment No. 160 (to amendment No. 100), to amend 
     the Internal Revenue Code of 1986 to allow certain small 
     businesses to defer payment of tax.
       DeMint amendment No. 161 (to amendment No. 100), to 
     prohibit the use of flexible schedules by Federal employees 
     unless such flexible schedule benefits are made available to 
     private sector employees not later than 1 year after the date 
     of enactment of the Fair Minimum Wage Act of 2007.
       DeMint amendment No. 162 (to amendment No. 100), to amend 
     the Fair Labor Standards Act of 1938 regarding the minimum 
     wage.
       Kennedy (for Kerry) amendment No. 128 (to amendment No. 
     100), to direct the Administrator of the Small Business 
     Administration to establish a pilot program to provide 
     regulatory compliance assistance to small business concerns.
       Martinez amendment No. 105 (to amendment No. 100), to 
     clarify the house parent exemption to certain wage and hour 
     requirements.
       Sanders amendment No. 201 (to amendment No. 100), to 
     express the sense of the Senate concerning poverty.
       Gregg amendment No. 203 (to amendment No. 100), to enable 
     employees to use employee option time.
       Burr amendment No. 195 (to amendment No. 100), to provide 
     for an exemption to a minimum wage increase for certain 
     employers who contribute to their employees health benefit 
     expenses.
       Kennedy (for Feinstein) amendment No. 167 (to amendment No. 
     118), to improve agricultural job opportunities, benefits, 
     and security for aliens in the United States.
       Enzi (for Allard) amendment No. 169 (to amendment No. 100), 
     to prevent identity

[[Page S1365]]

     theft by allowing the sharing of social security data among 
     government agencies for immigration enforcement purposes.
       Enzi (for Cornyn) amendment No. 135 (to amendment No. 100), 
     to amend the Internal Revenue Code of 1986 to repeal the 
     Federal unemployment surtax.
       Enzi (for Cornyn) amendment No. 138 (to amendment No. 100), 
     to amend the Internal Revenue Code of 1986 to expand 
     workplace health incentives by equalizing the tax 
     consequences of employee athletic facility use.
       Sessions (for Kyl) amendment No. 209 (to amendment No. 
     100), to extend through December 31, 2012, the increased 
     expensing for small businesses.
       Division I of Sessions (for Kyl) amendment No. 210 (to 
     amendment No. 100), to provide for the permanent extension of 
     increasing expensing for small businesses, the depreciation 
     treatment of leasehold, restaurant, and retail space 
     improvements, and the work opportunity tax credit.
       Division II of Sessions (for Kyl) amendment No. 210 (to 
     amendment No. 100), to provide for the permanent extension of 
     increasing expensing for small businesses, the depreciation 
     treatment of leasehold, restaurant, and retail space 
     improvements, and the work opportunity tax credit.
       Division III of Sessions (for Kyl) amendment No. 210 (to 
     amendment No. 100), to provide for the permanent extension of 
     increasing expensing for small businesses, the depreciation 
     treatment of leasehold, restaurant, and retail space 
     improvements, and the work opportunity tax credit.
       Division IV of Sessions (for Kyl) amendment No. 210 (to 
     amendment No. 100), to provide for the permanent extension of 
     increasing expensing for small businesses, the depreciation 
     treatment of leasehold, restaurant, and retail space 
     improvements, and the work opportunity tax credit.
       Division V of Sessions (for Kyl) amendment No. 210 (to 
     amendment No. 100), to provide for the permanent extension of 
     increasing expensing for small businesses, the depreciation 
     treatment of leasehold, restaurant, and retail space 
     improvements, and the work opportunity tax credit.
       Durbin amendment No. 221 (to amendment No. 157), to change 
     the enactment date.

  The PRESIDING OFFICER. The Senator from Arizona.


                           Amendment No. 209

  Mr. KYL. Mr. President, there are at least two--and I believe only 
two--amendments that will be pending that are germane postcloture to be 
considered. The first of those is my amendment No. 209. I will speak to 
that at this point and then will continue the debate after some other 
business has been conducted.
  Amendment No. 209 to the substitute is an amendment to the Baucus 
Finance Committee amendment which has been agreed to by the Senate. I 
will describe the background of that amendment and then the 
justification for it.
  Under current law, small businesses can expense $100,000 of qualified 
business investments in the first year that the property is placed into 
service. Because the level is indexed for inflation, the 2007 expensing 
limit is $112,000. But after 2009, the expensing limit drops back down 
to $25,000 a year, clearly an insufficient amount. Recognizing this, 
the Baucus Finance Committee amendment would extend the increased 
expensing levels through 2010. That is only a 1-year extension. 
Amendment No. 209 extends it through 2012, which is the same period of 
time that the work opportunity tax credit has been extended under the 
Finance Committee amendment. Section 179 of the Tax Code, which allows 
small businesses to elect to deduct all or part of the cost of certain 
qualifying property the year that it is placed into service, would work 
through the year 2012 rather than 2010, as under the Finance bill.
  We know that this immediate expensing has been critical to supporting 
economic growth. We, also, know that small businesses account for about 
60 percent of the cost that is imposed as a result of the increase in 
the minimum wage that is in the underlying bill. As a way to try to 
help small businesses overcome the costs we are imposing on them, we 
have talked to them. They are pretty unanimous in the view that the one 
thing we could do that best helps them be able to afford this is to 
extend the small business expensing under section 179.
  The reason we need to extend it a longer period of time is because of 
the certainty they need. When they are planning on making improvements 
to their business and they know they can expense that when they put 
that improvement in place, in force, then they will proceed to do what 
is in the economic best interest of their business. But if their plans 
are restrained by the Tax Code, then we are not enabling them to 
fulfill their fullest potential in making the business decisions that 
create jobs. The key of this particular program is that it is a job 
creator. That is why almost all of us would like to see this extended 
as far as we can. I don't think there is any real dispute about that. 
As I said, the Kyl amendment to the Baucus substitute would simply 
extend this increased small business expensing through the year 2012, 
the same extension as is given the work opportunity tax credit.
  For the sake of illustration, you can see that on this chart, the 
work opportunity tax credit is extended through the year 2012, and as a 
result of the Finance Committee bill into 2013. The other expensing 
provisions or depreciation provisions that were in the Finance 
Committee bill are only extended through the end of the first quarter 
of next year, except for section 179, which currently goes through the 
end of 2009, and the Finance Committee bill takes it through 2010.
  What this amendment would do is take it through 2012, the same period 
as the work opportunity tax credit under the Finance Committee bill.

  The chairman of the committee argues that the small business tax 
relief package should be balanced between the expensing and 
depreciation provisions and the work opportunity tax credit. As I 
noted, that is extended for 5 years, while section 179 is extended for 
only 1 year. Small business expensing has always enjoyed strong 
bipartisan support. I don't think there is any reason now to treat this 
issue as a political issue or a partisan issue and to try to put it in 
competition with the work opportunity tax credit. They can move forward 
together.
  That is especially the case because section 179, unlike the work 
opportunity tax credit, is targeted at small businesses. Not only is 
expensing limited to $112,000, but current law actually reduces that 
amount for property that costs over $400,000, which is also indexed. 
Meaning that section 179 is simply not useful to large businesses that 
are in the business of purchasing things for far more than $400,000. 
But we know, in pure dollar terms, the work opportunity tax credit 
primarily benefits larger businesses. In fact, testimony before the 
Finance Committee was that 95 percent of the credits go to either C or 
S corporations. Since the bulk of the cost of imposing the minimum wage 
is on small businesses, since section 179 expensing is the primary way 
we can help small businesses, and since the value of the work 
opportunity tax credit primarily helps the bigger businesses, it seems 
to us that the proper balance is to extend both of them through 2012, 
and section 179, under our amendment, would be brought to that point.
  One more word about the investments that small business makes because 
this is instructive. According to the National Federation of 
Independent Businesses, 63 percent of small business owners will make 
capital improvements over any 6-month period, and this could include 
acquiring new equipment, buying new vehicles, new furniture, expanding 
existing facilities, maybe even buying a new facility. They need to 
acquire new equipment and facilities to expand their businesses and 
create jobs. That is the point of section 179. It enables job creation. 
That is probably the best antidote to the cost imposed by increasing 
the minimum wage.
  As many experts have pointed out, one of the fallouts from increasing 
the minimum wage is that some smaller businesses simply hire fewer 
people. Some even reduce the number of hours their entry-level workers 
work or even lay people off. The benefit of section 179 that everyone 
has recognized is it enables the small businesses to grow, to create 
jobs, and, therefore, the potential downside of increasing the minimum 
wage is offset, in effect, and never occurs because the jobs are 
created by virtue of section 179 and other benefits.
  Everybody recognizes that allowing first-year expensing is what makes 
it easier for small businesses to make investments. Business income is 
overstated because we require businesses to depreciate investments over 
a period of time instead of deducting the entire cost all at once. But 
the business must buy an entire machine or building all

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at once, which ties up funds that otherwise would be available to earn 
income. So allowing the immediate expensing of the $112,000 worth of 
business investment frees up funds that small business owners can use 
to grow their businesses, and those owners are likely to reinvest the 
money back into their business because they are entrepreneurs. This 
increased business investment benefits the entire economy. It is the 
job creator.
  Small business represents 99.7 percent of all employers. It employs 
over half the private sector employees. They pay 44.3 percent of the 
total U.S. private payroll. This is a very big factor in our economy. 
Small businesses generate 60 to 80 percent of the net new jobs, 
according to statistics over the last decade, and create more than 50 
percent of nonfarm private gross domestic income. Extending the 
increased limits through 2012 will provide greater stability for these 
small business owners. The best answer is to actually make the 
increases permanent, but that is not what this amendment does. It 
extends it to the same period of time that the work opportunity tax 
credit is.
  Most people would recognize that this is wise, that it is good 
policy, and that my amendment, therefore, takes us a substantial step 
in the right direction.
  The question before was whether the budget would require that there 
be a separate so-called pay-for, a permanent tax increase that would 
offset the cost of this temporary tax extension. There have been 
various types of pay-go since the statutory pay-go was enacted in 1990. 
The point of order was enacted in 1993. Statutory pay-go, which expired 
in 2002, was enforced by OMB, but Congress always enacted legislation 
to avert it. But contrary to popular belief, the Senate has a pay-go 
rule in effect right now. It was first created in 2003. The current 
pay-go rule provides a 60-vote point of order against any new mandatory 
spending or new tax cuts that exceed specified levels. This is called 
the pay-go scorecard. Those levels are set in the budget resolution, 
and the current scorecard set in the 2006 budget resolution, which was 
the last budget agreed to by the House and Senate and the one 
applicable here, currently allows no unoffset tax cuts or mandatory 
spending from 2006 to 2010. But it does allow up to $268 billion in 
offset tax cuts or mandatory spending from 2011 to 2015, without 
triggering a point of order. There is no point of order against this 
amendment because of the current scorecard and the way this amendment 
would work.

  The problem with any version of pay-go is that the CBO assumes all 
entitlement programs live forever, regardless of whether a program must 
be reauthorized. But tax cuts that must be reauthorized are not 
included in the baseline. Pay-go does not apply to appropriations. So 
that is why there is no pay-go point of order against this amendment 
because the Baucus substitute already extends section 179 small 
business expensing to 2010. It includes the necessary offsets to cover 
2010, and our amendment extends that same expensing through 2011 and 
2012, years in which the pay-go scorecard has more than sufficient 
allocation to cover any revenue that Joint Tax projects will not be 
collected in those years.
  I think all of the ends are tied up here. This is something that most 
of us would like to see done. It would help the small businesses that 
will bear the brunt of the expected passage of the minimum wage 
increase. We have a way to extend the most useful of the tax 
deductions, this expensing for small business, through 2012. That does 
not require any new permanent increases in taxes to offset the cost. It 
seems to me that this is very wise public policy. It doesn't have to be 
partisan. It would be good policy for us to extend this.
  I urge my colleagues, when we have an opportunity to vote on this 
amendment, to support it, or if there is a motion to table it, to vote 
against the motion to table.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I understand the Senator from 
Massachusetts seeks recognition. I yield to him whatever time he would 
like to take.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I thank my friend and colleague, Senator 
Baucus. As we get to the opening of this debate, I wish to provide a 
little sense about where we are on the increase in the minimum wage. 
Most of those who watched the debate yesterday saw that we had an 
overwhelming majority of Members who voted effectively for cloture. 
Usually, that means the end of debate is in sight. But because of 
various procedural situations we are facing, now we know we are going 
to have another vote required on cloture. This debate probably will 
roll on into the very end of the week. There is no reason we can't 
dispose of the amendments rapidly. There are important responses that 
should be made, and then we can get about the business of finding ways 
where we can bring the House and Senate bills to accommodation and get 
the increase in the minimum wage to those who are hard working and are 
entitled to this increase.
  This is our eighth day of debate on this issue. We have had 16 days 
of debate, outside of these last 8, so we're up to 24 days where we 
have debated the minimum wage on the floor of the Senate without 
getting an increase, 24 days we have debated, an issue as simple as 
going from $5.15 to $7.25 an hour should not take all that period of 
time. We know that here on the Democratic side we are prepared to vote 
now, today. I am sure we can get the majority leader to request that we 
vote at noontime or so today and get this process moved ahead. But, no, 
there are those on the other side who have a series of amendments and 
they have them now. The good Senator from Montana, Senator Baucus, will 
respond to the issue which is at hand.

  I want to reiterate once again that this is not an omnibus tax bill. 
This legislation is long overdue. It is not an opportunity for Members 
to present their tax cut wish list. It is Congress' opportunity to 
finally right the wrong of denying millions of hard-working minimum 
wage workers a raise for 10 years.
  Since the minimum wage was last increased 10 years ago, we passed 
$276 billion in corporate tax breaks. In addition, Congress has cut 
taxes for individuals by more than a trillion dollars, with most of the 
benefits going to the wealthiest taxpayers. Unfortunately, for some of 
our Republican colleagues, there are never enough tax breaks, and they 
have filed more than 25 amendments proposing new or expanded tax cuts 
to the minimum wage bill. Many of them would cost billions of dollars 
and most are not paid for.
  So we know our friends on the other side are attempting to hold the 
minimum wage increase hostage for more tax cuts. I believe that is a 
shameless strategy. As has been pointed out, the Kyl amendment is one 
of the most expensive of all tax cut proposals. The entire amendment 
would cost more than $45 billion over the next 10 years. Not a single 
dollar is paid for. It is $45 billion the American people cannot 
afford, and it should be rejected. I know we will hear from Senator 
Baucus as he addresses this issue.
  We have debated over the period of the last few days tax breaks for 
corporate America. Over the last 10 years, we have seen $276 billion in 
tax breaks for corporations and $36 billion in tax benefits to small 
businesses. We have increased the minimum wage nine times. There has 
only been one time we have ever added tax benefits. The House of 
Representatives, with the vote of 82 Republicans, passed a clean bill. 
That is what we should be about doing here. That is not where we are.
  A final point I will make is that it came to my attention over the 
evening that many of the spouses of our service men and women in Iraq 
are working for low wages. In looking over the numbers of spouses of 
service men and women in Iraq, there are 50,000 who will benefit from 
an increase in the minimum wage. Imagine that, 50,000 members of the 
military force and their families will benefit from an increase in the 
minimum wage. That is not a point to dismiss lightly.
  I think we ought to get about the business of doing something for 
those families and spouses. It is difficult for me to believe we have 
that number, but that is the figure--50,000 working between $5.15 and 
$7.25 an hour, so they would directly benefit from the raise to

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$7.25. These are spouses of our military forces, and we are debating 
another $45 billion in tax cuts. This is supposed to be a debate about 
an increase in the minimum wage that hasn't been raised for 10 years. 
All it will do is restore the purchasing power of those on the lower 
rung of the economic ladder. It seems to me this continued delay is 
unconscionable.
  Some have said it is necessary because our good friends on the other 
side are not prepared to get started on the debate on Iraq. There have 
been a lot of excuses and we hear all of them. But what has to be 
recognized is the increase in the minimum wage to $7.25 is going to 
benefit more than 6 million children. More than one million more 
children have fallen into poverty in the last 5 years. Six million 
children who live in homes where there will be an increase will 
benefit, with all of the implications that has in terms of nutrition, 
education, health care, and also in terms of the joy families can have 
when they get at least some small relief. These are hard-working people 
who are trying to provide for themselves and their families and trying 
to make a difference in the community. They are men and women of great 
dignity.
  We ought to be getting to a final vote on increasing the minimum 
wage, and we ought to get about it now. If there is going to be 
additional debate on taxes and other things, let's do it at another 
time. Let's not hold hostage--which is what's being done here--an 
increase in the minimum wage for additional tax breaks. Let's not do 
that. Let's say we have sufficient respect and admiration for these men 
and women of dignity. They are primarily women in our society--and many 
of these women who have children. For all these who are working hard at 
the minimum wage, let's say we have sufficient respect for them so we 
are not going to hold them hostage to get tax breaks after tax breaks 
after tax breaks after tax breaks. These men and women are entitled to 
a Senate decision. We on our side are prepared to vote on it now; the 
sooner the better.
  I am grateful to my colleague and friend from Montana for permitting 
me to say these words. I thank him very much for the courtesy.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I tip my hat to my good friend from 
Massachusetts. He is such a fighter and he is so correct in the 
statements he is making on behalf of the people who need this increase 
in the minimum wage.
  It is unconscionable that the Senate is delaying that increase. The 
House passed an increase. We have the same goal line, but we have a 
more circuitous route in getting there. The Senate is taking so much 
time in our way to get to the same goal line and raise the minimum 
wage. The Senator from Massachusetts is pricking our conscience to get 
this done quickly--now. I deeply compliment my good friend from 
Massachusetts.
  Mr. President, for the information of Senators, we are wondering what 
in the world is going on here. Let me share some thoughts on the 
schedule. We are seeking to arrange votes on two amendments by my 
colleague from Arizona, Senator Kyl. We on our side of the aisle are 
ready to vote. We want to vote. It appears, though, that there are some 
objections on the other side of the aisle. I hope we can vote in the 
early afternoon. The objections, I understand, are conflicts that 
Senators have in the next couple of hours. I hope we can have at least 
one vote in the early afternoon. Probably after that, we will have 
another vote in relation to another Kyl amendment, and we are hoping 
those rollcall votes will be all that are left.
  An agreement is not entered into yet--we are working on it--but it is 
my hope we will have an early vote this afternoon and that then there 
is one more vote after that, on another Kyl amendment. That should help 
us to reach a conclusion on this bill, although I suspect a final vote 
will not be until tomorrow. That is the state of play right now.
  A couple words on the substance of the amendment offered by the 
Senator from Arizona, Senator Kyl. This is only one of seven amendments 
he has offered. Like six of those seven, this one is not offset. We 
have already voted on one amendment by the Senator from Arizona. The 
remaining are not offset, and they would explode the budget deficit. 
The earlier amendment was soundly defeated on previous rollcall vote. 
It was offset by cutting education benefits for families who work in 
education institutions. That was defeated.
  The amendment offered by the Senator from Arizona now is similar to 
the one we have defeated. He would like to extend the section 179 
expensing provision in the law. We are doing that in the bill. The bill 
increases the length of time in which the section 179 expense provision 
would be in law. We would enable that extension to occur until 2010. My 
Lord, this is 2007. That is not a permanent extension, but it is still, 
given the constraints we have, a reasonable extension. Everybody likes 
certainty. We would like a little more certainty in the Senate than we 
have. But it is still, I think, certainly already in the law and it is 
not good policy to adopt the amendment of the Senator from Arizona 
which would extend it for a couple more years but cost about $2 
billion, which would be totally unpaid for. If there is one thing the 
American people want, it is for us to live within our means and not 
increase the deficit but to try to reduce the deficit. This amendment 
increases the deficit. We have voted on a similar amendment and it has 
been rejected. I hope the same is true here.
  At the appropriate time, I will move to table the amendment, and I 
hope we can get that accomplished in the early afternoon so we can move 
on to the next Kyl amendment and debate that and vote on that amendment 
as quickly as possible. I hope there are no more amendments. We are 
getting close. We all want to get a minimum wage bill passed, which is 
so important to so many people in our country. I think we ought to take 
the responsible action and dispose of these tax amendments that are not 
paid for and reject them and get on to final passage on minimum wage, 
which I hope will be tomorrow.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, previous to Senator Baucus speaking, we 
heard my friend from Massachusetts harangue about minimum wage not 
being considered for the last 10 years and that it is about time we get 
the job done. I am going to be one of those to vote yes to get the job 
done, to increase the minimum wage. But I think it is legitimate to ask 
a couple of questions. One, there was a period of time during that 10 
years that Senator Kennedy's party was in the majority and controlled 
the Senate. I don't recall them bringing up the minimum wage issue at 
that particular time. If it was so important that it be done before 
this period of time has elapsed, I would have thought they would be 
voicing concern about raising the minimum wage as much and have a 
responsibility to do it when they were in the majority, as it is now; 
and we are accused because we want to amend some tax provisions to it, 
which are very directly related to some of the negative impacts of 
increasing the minimum wage on small business, and it is a very 
legitimate point to bring up.
  The second point I will bring up to the Senator from Massachusetts 
is, when he talks about adding tax provisions to the minimum wage, has 
he forgotten that during the signing ceremony of the last increase in 
the minimum wage bill by President Clinton Senator Kennedy was praised 
for bringing a bill to the President that had tax provisions that were 
very beneficial to small business and also other provisions that were 
very beneficial to minimum wage workers by increasing the minimum wage?
  I read from President Clinton's statement last week during the 
debate. I know Senator Kennedy heard me say that. And yet it seems like 
it went in one ear and out the other because here he is saying it is 
wrong now, that when we are increasing the minimum wage, we have a 
small business tax provision included with the minimum wage increase.
  It makes me wonder if there is a double standard: It is okay to have 
tax bills connected with a minimum wage increase when there is a 
Democratic President, but when there is a Republican President, it is 
not okay. I don't think we ought to have those sort of double 
standards. I think if it is okay

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in the case of a Democratic President, it ought to be okay in the case 
of a Republican President.
  Plus, I could raise the issue that if it is legitimate to have tax 
changes to benefit small business at the same time we are having 
increases in the minimum wage, this tax package is very meager compared 
to the one that was in the bill that President Clinton signed. At that 
time, I believe, there was about $20 billion worth of small business 
tax changes to benefit depreciation and other things that can offset 
the detrimental impact on a minimum wage increase on small business.
  We all know there is no detrimental impact on larger businesses that 
can pass along the cost. But for smaller businesses that can't, for 
struggling small businesses, in particular mom and pops, it has to be 
something we take into consideration not only for the benefit of the 
smaller business but also for the benefit of the workers who work for 
that small business that maybe will be more underemployed or unemployed 
because maybe the small business can't afford to keep the same number 
of workers as when the minimum wage was lower. So all of these things 
seem to me to be legitimately tied together.
  But in the case of a $20 billion tax package 10 years ago, compared 
to an $8 billion tax package in this bill, and considering inflation 
over the last 10 years, there isn't a single person listening to this 
debate who doesn't know that when there are complaints about connecting 
together a tax bill with a minimum wage increase, compared to the last 
time this was done in the Clinton administration, this tax package is 
peanuts compared to what we did for small business then--peanuts. Yet 
we are having this harangue about it, that somehow this debate is not 
legitimate.
  Well, if it was legitimate in the Clinton administration, why isn't 
this debate legitimate now, particularly considering the great lengths 
to which President Clinton went to compliment Senator Kennedy for 
delivering a bill to President Clinton that had provisions benefiting 
small business, as well as benefiting the minimum wage worker?
  We are going to get a bill passed. I don't know who is complaining. 
What is coming up when we get done? Well, of course, the debate, I 
suppose, on Iraq is going to come up. And it ought to come up. We know 
what is coming up. We know there is not going to be any more votes on 
that issue this week. So if we get this bill done today or tomorrow--
and I bet it will be done today--then we know that is probably going to 
be the last vote of the Senate this week. I think the people on the 
other side of the aisle who are managing this bill know that. They know 
when we get a couple of votes on a couple of other tax provisions, that 
it is limited. We know there is finality coming. There hasn't been any 
effort by anybody on this side of the aisle to hold up this bill, 
except to make sure that the impact of the minimum wage increase on 
small business is going to be considered the same way it was in the 
previous administration.
  I am very happy that yesterday cloture was invoked on the Baucus 
substitute amendment, and it contains these two very important 
components about which I have already talked. For summary, in case 
people are now beginning to pay attention to this debate after 1 week 
in the Senate, the first component proposed an increase in the minimum 
wage.
  You can make all sorts of arguments why maybe the minimum wage should 
not be increased. Economists can make that argument about some increase 
in unemployment. Some people would say you should never have passed the 
minimum wage in the first place in 1938. But forget those economic 
arguments. It is a political decision that we have had a minimum wage 
for the last 70 years, and it has to be a political consideration that 
it ought to be increased from time to time or you shouldn't have it.
  So let's get over that argument, as legitimate as the economic 
arguments might be. They are going to be put aside because we are not 
going to eliminate the minimum wage. It is a part of the safety net of 
American society. It is part of the fabric of our society, just as 
Medicare, Medicaid, and Social Security. You can all argue about 
whether seven decades ago some of these decisions should have been made 
by Congress. But after a period of time, you accept it as a fact of 
life; they are part of the social fabric of America, and move on. It is 
a question now of how much.
  That decision has even been answered--$2.10. It is about the same 
decision that is being answered in several State legislatures around 
the Nation, including my own State of Iowa, which now has made a 
decision that it ought to be $2.10, albeit triggered a little quicker 
than is going to be done under this bill. So we move ahead and that is 
taken care of.
  The second component is not seven decades old, as I indicated. The 
Baucus substitute connects these efforts to assist small business with 
some changes in the tax law to benefit them. It has only been in the 
recent two decades that that has been an issue. But at least it 
recognizes something that maybe wasn't recognized before; that small 
business is the engine of employment in America and it ought to be 
recognized that, in some instances--and economists can back this up--
there is some underemployment or unemployment, particularly among young 
people, and most particularly among minority young people.
  I think it is legitimate to consider that because we make a great 
deal in this Congress about having programs for the unemployed, such as 
retraining. We make a big deal about education, vocational education, 
and preparing people for the workforce. But do we ever stop to think of 
something that doesn't cost the taxpayers one penny? And that is that 
vocational education goes along with a young person getting the first 
job that they have ever had so that they learn to get up in the 
morning, go to work, and be part of the workforce.
  If you are not in the workforce, you are never going to work your way 
up the economic ladder. So getting in the workforce, learning the rules 
of the workforce, treating people right, taking orders, being a 
productive citizen is very important vocational education. So if we are 
creating some unemployment, particularly among minority young people, 
because of a decision we are making, a political decision we are 
making, we ought to at least take that into consideration. But for two 
decades now we have considered that there is some negative impact.

  There is not going to be a one-for-one correlation between changes we 
make in depreciation schedules for small business that is going to 
guarantee Joe Blow or Mary Smith, teenagers working for a mom-and-pop 
grocery store, that they are going to be able to keep their jobs. But 
it is some relief across the board that is going to benefit small 
business, and there may be less unemployment of teenagers, less 
unemployment of minority teenagers so that they can get in the world of 
work and work themselves up the economic ladder. So the Baucus 
substitute is before us and will pass this body.
  Despite serious policy concerns about the efforts to raise the 
minimum wage, we all know that public support for increasing the 
minimum wage remains strong. And who can argue with that? Ten years? So 
there is a rationale for raising it. It is pretty hard to convince 
anybody that as long as Congress is setting a minimum wage, it 
shouldn't be adjusted from time to time. So it is quite obvious. That 
is why we are here for that debate. So the political reality is that a 
majority of Senators support a minimum wage increase, not based upon 
being trustees of the American people but based on the proposition of 
being representatives of the American people. And that message is 
coming very clearly from the grassroots.
  As predicted, the cloture vote last week showed there are not 60 
votes for this minimum wage bill without the small business tax 
incentives. And for Senator Kennedy, who is haranguing about the fact 
this is not being passed fast enough, the members of his own party 
voted with us on that, and that seems to show it is bipartisan.
  As I said before, tax incentives targeted to small business and other 
businesses impacted by a minimum wage increase have been linked to 
minimum wage legislation over the past couple of decades. Democrats 
have, at times, joined Republicans in supporting that linkage. Once 
again, Republicans have asked for small business tax relief, if a 
minimum wage hike is going to happen. Based on an overwhelming cloture

[[Page S1369]]

vote yesterday on this Baucus substitute, it looks as if we are going 
to get there. Democrats, in effect, agree--through that vote--with this 
linkage.
  To different groups of Senators, these topics carry their own 
benefits or burdens. Many on my side don't like the idea of second-
guessing the labor market with a federally mandated minimum wage. In 
past statements, I pointed out some of the related issues that should 
give us pause when considering such legislation. Some, mostly 
Democrats, will call this bill before us nothing but a minimum wage 
increase bill. Some, mostly on my side of the aisle, will call it a 
small business tax relief bill. But isn't that how we get things done 
in the Senate? Doesn't almost everybody have to have a win? And in this 
aren't we having a win-win situation in a bipartisan way?
  I suppose some of our Members are going to have it both ways, it is 
going to be both a minimum wage increase and a small business tax 
relief bill. President Bush, similar to President Clinton, whom I have 
already quoted, will recognize both parts of this package. If my 
friends on the other side of the aisle would review that statement, as 
I led them to review it last week, they will note that President 
Clinton saw merit in the small business tax relief package.
  If I were chairman, I might have tilted the package a bit more toward 
depreciation and less toward, let's say, that portion that we call the 
worker opportunity tax credit. It is important these incentives 
coincide with the timing when the minimum wage increase will be taking 
effect. It has been proven that a minimum wage hike without tax relief 
for small business will not fly in a body where we have to move ahead 
in a bipartisan way or nothing gets done. Let's recognize that reality. 
Let's improve this bill and complete it in a timely manner.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. VITTER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Klobuchar). Without objection, it is so 
ordered.
  Mr. VITTER. I ask unanimous consent that I be allowed to speak for up 
to 7 minutes as in morning business, and following that, Senator 
Landrieu be given permission to speak as in morning business for up to 
7 minutes.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Ms. LANDRIEU. Madam President, I ask unanimous consent that the time 
be charged postcloture.
  The PRESIDING OFFICER. The Senators' time will be charged 
postcloture.
  (The remarks of Mr. Vitter and Ms. Landrieu are printed in today's 
Record under ``Morning Business.'')
  Ms. LANDRIEU. I yield back the remainder of the time.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Durbin are printed in today's Record under 
``Morning Business.'')
  Mr. DURBIN. Madam President, I yield the floor and suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Madam President, I ask unanimous consent to speak as in 
morning business for what time I might consume, and it will not be too 
long, on two bills I am going to introduce.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Grassley and Mr. Dodd pertaining to the 
introduction of S. 467 and S. 468 are printed in today's Record under 
``Statements on Introduced Bills and Joint Resolutions.'')
  Mr. GRASSLEY. Madam President, since I do not think anybody else is 
seeking the floor, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Menendez). Without objection, it is so 
ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent to continue as 
in morning business for, I would say, roughly 10 or 12 minutes on an 
issue unrelated to what is on the Senate floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        Alternative Minimum Tax

  Mr. GRASSLEY. Mr. President, next week the President's budget will 
come to Capitol Hill. In terms of tax issues, no issue is more pressing 
in the upcoming budget than resolving the alternative minimum tax issue 
for both the short term as well as the long term.
  As many Members know, the so-called patch--the temporary fix we did 
last year for the alternative minimum tax so no more people would be 
hit by it than are presently hit by it--ran out at the end of last 
year. So right now 23 million people in the year 2007 could be hit by 
the alternative minimum tax, if we do not do something about it. Since 
we have to offset things such as this, if we patch this up again, it is 
going to take $50 billion to offset or, if it isn't offset, that means 
$50 billion that would come into the Federal Treasury under existing 
law would not come in.
  Next week I will give a series of speeches in some detail. I am going 
to look at how we got where we are on the alternative minimum tax. I 
will examine the history of the alternative minimum tax and the origins 
of the current problem. In another speech, I am going to discuss the 
fiscal effects of maintaining, repealing, and replacing the alternative 
minimum tax. And in the third speech, I will talk about options to 
remedy the alternative minimum tax problem in the short term and over 
the long term.
  Today, on a preemptive basis, I want to counter a charge that I think 
is going to be repeated by Democratic-leaning think tanks, maybe by the 
leadership of the Congress, and, more importantly, by east coast media 
who tend to be sympathetic to the views of those political 
organizations. The charge will be that the alternative minimum tax 
problem we face is a result of the bipartisan tax relief legislation 
enacted in 2001 and 2003.
  I ask unanimous consent to maintain the floor and yield to the 
majority to make a unanimous-consent request.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that the time 
between now and 2:30 p.m. be equally divided between Senators Baucus 
and Kyl or their designees; that at 2:30 p.m., the Senate vote in 
relation to Senator Kyl's amendment No. 209; that no other amendment be 
in order prior to that vote; that following that vote, amendment No. 
115 be considered in order for purposes of drafting under rule XXII; 
and that all other amendments to the bill and to the substitute be 
withdrawn accept for amendment No. 115; and that no other amendments be 
in order except the substitute and amendment No. 115.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Let me ask the majority, would they like me to yield 
the floor for that debate?
  Ms. KLOBUCHAR. No, Mr. President.
  Mr. GRASSLEY. Next week, when the President's budget comes out, there 
is going to be an awful lot of discussion about the alternative minimum 
tax. I am trying to preempt--in a sense counter--what I think are old 
arguments that are going to be repeated about that issue. They are 
going to be coming from leftwing think tanks, and maybe the Democratic 
leadership in the Congress will pick up on it. For sure, the east coast 
media, who tend to be sympathetic to the views of these political 
organizations, is going to be loudly speaking about it. I don't

[[Page S1370]]

find anything wrong with it being discussed, but I am going to make 
sure it is discussed in an intellectually honest manner.
  The charge is going to be made that the alternative minimum tax 
problem we face now is a direct result of the bipartisan--I emphasize 
bipartisan--tax relief legislation that was enacted in 2001 and 2003, 
which, by the way, Chairman Greenspan has said, both before he left the 
Fed as well as a private citizen, that these tax relief packages we 
passed back then are the basis for the economy going very smoothly in 
the last 3 or 4 years, creating 7.2 million jobs. If that is the 
argument they are going to make--and I will bet you, although I am not 
a betting man, that that is what we are going to hear--it is a 
distortion, plain and simple. So I think I am going to try to correct 
the record in advance. Maybe next week, if I have done it adequately, 
there won't be any record to correct. I have been around here long 
enough to know what is going to be said.
  To the extent the Democratic leadership and allies suggest, like 
others who have looked at this issue, that the bipartisan tax relief 
packages are responsible for the alternative minimum tax problem, I 
respond in this way: Most who have reached that conclusion have done so 
by misusing data, data that is provided by the truly nonpartisan Joint 
Committee on Taxation, an agency of Congress that you might say wears 
green eyeshades, looks at things as they are, without a Republican or 
Democratic bias. These figures of the Joint Committee on Taxation will 
be used to distort the record on the issue of the alternative minimum 
tax.
  The Joint Committee on Taxation analysis suggests an alternative 
explanation for the alternative minimum tax problem, and that is the 
failure of Congress to index the alternative minimum tax for inflation 
when it was first established 35 years ago. The critics are going to 
charge that the bipartisan tax relief packages are responsible for this 
alternative minimum tax problem. This conclusion is reached in error 
because it is based upon faulty logic. Those who have done similar 
analyses have based their conclusions on the mistaken assumption that a 
reduction in Federal receipts should be interpreted as a percentage 
causation of the alternative minimum tax problem. The Joint Committee 
on Taxation was asked to project Federal alternative minimum tax 
revenue, if the bipartisan tax relief provisions were extended but 
current law hold-harmless provisions were not extended. And what do we 
get, a $1.1 trillion issue, and a Federal alternative tax revenue, if 
neither the Bush tax cuts nor the hold-harmless provisions is extended, 
a $400 billion issue compared to the $1.1 trillion issue.
  From that data, some erroneously concluded and publicly represented 
that the tax cuts of 2001 and 2003 are responsible for 65 percent of 
the alternative minimum tax problem. In other words, this $1.1 trillion 
minus the $4 billion divided by $1.1 trillion. And conversely then, 
that the tax cuts of 2001 and 2003 tripled the size of the alternative 
minimum tax problem; again, $1.1 trillion divided by $400 billion. The 
logic used to reach that conclusion is flawed. That is what I am about 
to show.
  This is because the many variables affecting the alternative minimum 
tax have overlapping results, and the order in which one analyzes those 
overlapping variables will directly impact the outcome of the analysis.
  In that way, we can use the same Joint Committee on Taxation data in 
the analysis above to suggest that the failure to index is actually the 
dominant cause of the alternative minimum tax problem. If one were to 
first index--and that wasn't done 35 years ago--the current tax system 
for inflation by permanently extending an indexed version of the 
current hold-harmless provisions, Federal alternative minimum tax 
revenue would be reduced from $1.1 trillion to $472 billion over the 
10-year period we use to guesstimate taxes coming into the Federal 
Treasury. Thus, extending and indexing the current hold-harmless 
provision for future inflation would reduce the alternative minimum tax 
revenues by 59 percent over the same period referred to in the Joint 
Committee on Taxation letter dated October 3, 2005, as ``percentage of 
AMT effect attributable to failure to extend and index hold harmless 
provision.''
  I ask unanimous consent to print a copy of that entire letter in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                    Congress of the United States,


                                  Joint Committee on Taxation,

                                  Washington, DC, October 3, 2005.
     To: Mark Prater and Christy Mistr.
     From: George Yin.
     Subject: AMT Effects.

       This memorandum responds to your request of September 29, 
     2005, for an analysis of the portion of the AMT effect (AMT 
     liability plus credits lost due to the AMT) which can be 
     attributed to the failure to adjust the AMT exemption amount 
     to inflation, assuming alternatively that the EGTRRA and 
     JGTRRA tax cuts (``tax cuts'') are either permanently 
     extended or repealed. We also explain how this information 
     compares to information previously provided to you on August 
     31, 2005 and September 16, 2005.
       For the purpose of this analysis, we have first assumed 
     that the tax cuts are repealed. The first set of figures in 
     Table 1 compares the AMT effect under this assumption if, 
     alternatively, (1) the AMT exemption amount hold-harmless 
     provision is not extended beyond 2005; (2) such provision is 
     extended permanently; and (3) such provision is extended 
     permanently and indexed after 2005. The second set of figures 
     presents the same comparison under the assumption that the 
     tax cuts are permanently extended. All of the information 
     provided in this table was previously provided to you in our 
     September 16, 2005 memo, except in a different format.

                                 TABLE 1
------------------------------------------------------------------------
                                                              AMT effect
                            Item                              (billions
                                                             of dollars)
------------------------------------------------------------------------
Tax Cuts Repealed:
    (1) Hold-harmless provision not extended...............        399.9
    (2) Hold-harmless provision extended permanently.......        212.0
    (3) Percentage of AMT effect attributable to failure to          47%
     extend hold-harmless provision (((1)-(2))/(1))........
    (4) Hold-harmless provision extended permanently and           169.7
     indexed...............................................
    (5) Percentage of AMT effect attributable to failure to          58%
     extend and index hold-harmless provision (((1)-(4))/
     (1))..................................................
Tax Cuts Extended Permanently:
    (6) Hold-harmless provision not extended...............      1,139.1
    (7) Hold-harmless provision extended permanently.......        628.5
    (8) Percentage of AMT effect attributable to failure to          45%
     extend hold-harmless provision (((6)-(7))/(6))........
    (9) Hold-harmless provision extended permanently and           472.0
     indexed...............................................
    (10) Percentage of AMT effect attributable to failure            59%
     to extend and index hold-harmless provision (((6)-(9))/
     (6))..................................................
------------------------------------------------------------------------

       In the information provided to you on August 31, 2005 and 
     September 16, 2005, we analyzed the portion of the AMT effect 
     attributable to the tax cuts. In the analysis described 
     above, we identify the portion of the AMT effect attributable 
     to failure to adjust the AMT exemption amount to inflation. 
     There is, however, interaction between these two contributing 
     factors to the AMT effect. In order to avoid double counting 
     of interactions, a stacking order is imposed. The 
     apportionment of effects to each contributing factor will 
     vary depending on the stacking order, even though the total 
     effect remains constant.
       This phenomenon is illustrated by Tables 2 and 3 below. The 
     first two columns of Table 2 show the portion of the AMT 
     effect attributable to the tax cuts, consistent with the 
     information provided on August 31, 2005 and September 16, 
     2005. The second two columns of Table 2 show the portion of 
     the AMT effect attributable to the failure to extend and 
     index the hold-harmless provision, consistent with the 
     information provided in Table 1 above. Note that if these two 
     contributing factors were completely independent of one 
     another, the information in Table 2 would suggest that the 
     two factors together contribute to more than 100 percent of 
     the AMT effect. In fact, as shown in Table 3, the two factors 
     together contribute to only 85 percent of the AMT effect. 
     Thus, there is substantial overlap between these two factors.

                                 TABLE 2
------------------------------------------------------------------------
                                AMT effect                    AMT effect
             Item               (billions         Item        (billions
                               of dollars)                   of dollars)
------------------------------------------------------------------------
Baseline.....................      1,139.1  Baseline.......      1,139.1
Repeal tax cuts..............        399.9  Extend and             472.0
                                             index AMT hold-
                                             harmless
                                             provision.
Difference...................        739.2  Difference.....        667.1
Percentage of baseline.......          65%  Percentage of            59%
                                             baseline.
------------------------------------------------------------------------


[[Page S1371]]


                                 TABLE 3
------------------------------------------------------------------------
                                                              AMT effect
                            Item                              (billions
                                                             of dollars)
------------------------------------------------------------------------
Baseline...................................................      1,139.1
Repeal tax cuts and extend and index AMT hold-harmless             169.7
 provision.................................................
Difference.................................................        969.4
Percentage of baseline.....................................          85%
------------------------------------------------------------------------

  Mr. GRASSLEY. Let's go back to the Joint Committee on Taxation 
analysis. If we then assume that the tax cuts of 2001 and 2003 are 
repealed, alternative minimum tax revenue falls by an additional $302 
billion, from $472 billion to $169 billion. That second drop 
attributable to the repeal of the Bush tax cuts reduces Federal revenue 
by only 27 percent. Thus, one should argue that failure to index is a 
greater cause of the alternative minimum tax problem--in other words, 
59 percent versus 27 percent. If we had indexed, we wouldn't have this 
problem.
  Using logic similar to that undertaken above would also cause us to 
conclude that failure to index is responsible for 59 percent of the 
alternative minimum tax problem or, alternatively, that failure to 
index also nearly triples the size of the AMT problem. But simple logic 
suggests that the bipartisan tax relief cannot be responsible for 65 
percent of the alternative minimum tax problem and failure to index 
responsible for 59 percent of the problem. The anomaly arises because 
there is overlap between variables being analyzed. Although the 
analysis fairly demonstrates the amount of alternative minimum tax 
revenue saved by making a particular change to the Federal tax system, 
it is inappropriate to represent that such analysis accurately isolates 
causation of the alternative minimum tax. Because there is overlap in 
the variables being analyzed in these examples, indexing and the 
bipartisan tax relief packages, the order of analysis of those 
variables is crucial to whatever outcome we have.
  The Joint Committee on Taxation acknowledges this point to us in a 
letter dated October 3, from which I will quote:

       There is, however, interaction between these two 
     contributing factors to the AMT effect. In order to avoid 
     double counting of interactions, a stacking order is imposed. 
     The apportionment of effects to each contributing factor will 
     vary depending on the stacking order, even though the total 
     effect remains constant.

  To this point in time, I have not seen anything that accurately 
suggests that the 2001 and 2003 tax cuts have worsened the alternative 
minimum tax problem to date. It is my intention to ensure we continue 
to honor that commitment.
  Proponents of this charge fail to recognize that we addressed the 
problem for 2001 through 2005 in legislation that most of these 
organizations opposed. By the way, those hold-harmless alternative 
minimum tax provisions were the first significant legislative efforts 
to stem the rise of the alternative minimum tax tide, meaning affecting 
millions more people who were never intended to be affected by it.
  It was, in fact, the Finance Committee that put its money where its 
mouth was on the alternative minimum tax. Last year's bipartisan tax 
relief reconciliation did the same thing for the year 2006--in other 
words, to make sure that the alternative minute tax problem is not 
worsened. Once again, it was the bipartisan leadership of the Finance 
Committee that ensured millions of families would not face the 
alternative minimum tax problem in the tax-filing season this year.
  I might say that Republicans, last year, when we were controlling, 
were willing to add millions of people to it because they didn't want 
to hold harmless completely, just to some extent. But we in the Senate 
stuck to our guns, and we got the hold harmless kept in place, as it 
had been since 2001.
  I reiterate the importance of the last sentence in my remarks, where 
I said that the Finance Committee ensured that millions of families 
would not face the alternative minimum tax in this tax-filing season 
that we are in right now. Everyone who supported the tax relief 
reconciliation bill walked the walk on the alternative minimum tax. A 
lot of the critics I am referring to have talked that walk on the 
alternative minimum tax, but if you look at their voting records, they 
have not walked the walk on the alternative minimum tax. Thank 
goodness, then, 15 million families were put above politics, or you 
might say a bipartisan solution saw that they were not harmed because, 
otherwise, 15 million families would be dealing right now, as they file 
last year's income tax, with the AMT in their tax returns--in other 
words, paying the alternative minimum tax because we did not hold 
harmless.
  If they had to deal with that, you know how complex they think the 
tax forms are already and the tax system is already. Well, if you have 
to go through that alternative minimum tax exercise, it almost doubles 
the complexity. Every Member who voted against the bipartisan tax 
relief reconciliation bill ought to think about that bottom-line 
reality. If that group, led by--because it tended to be very partisan--
the Democratic leadership had prevailed, 15 million families 
concentrated in the so-called blue States would have been dealing with 
the alternative minute tax now. It is a fact--because higher income 
people tend to live in the so-called blue States, according to the 
results of the last two Presidential elections--they are paying more of 
this alternative minimum tax. They happen to be represented by people 
of the other political party who thought that the hold harmless 
provisions should not have been there. So 15 million people--most of 
them in those States--would be hit again.
  The clock is ticking on the alternative minimum tax problem for this 
year. In other words, we have to do something before the end of the 
year or we are going to have 23 million people hit by it. A year from 
now then, those 23 million people will be working with the complexities 
of the AMT and paying the alternative minimum tax. They are people who 
come from those high-income States, more so than the State I come from, 
although we have people who are hurt by it--or would be hurt by it--but 
not to the extent of some of the high-income States. On October 15, a 
taxpayer's first quarter estimated tax payments will be due, and they 
will have to take this into consideration. Twenty-three million 
families will have to start dealing with the AMT yet this year on these 
quarterly estimates.
  Last year, Congress acted a few weeks after April 15. Hopefully, this 
Congress will act before April 15. Mr. President, next week, Congress 
will be facing the AMT problem as the budget process moves forward. 
That is what is going to start this demagoguery about the AMT. To get a 
grip on that problem, we need to examine its history, assess its fiscal 
impact, and carefully consider our short-term and long-term options. I 
look forward to these discussions on these three topics next week. 
Let's use correct data when we discuss the alternative minimum tax. 
Let's be intellectually honest. Let's discard the partisan fuzzy math 
and partisan revisionist history.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the time 
during the quorum call be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LEAHY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           FISA Court Orders

  Mr. LEAHY. Mr. President, I received notice this morning that 
President Bush has agreed to our bipartisan request for key recent 
orders from the FISA Court. Let me explain this a little bit. I have 
been very critical now for some time of the warrantless wiretapping of 
Americans done, apparently, under the President's order. We have, as 
the distinguished Presiding Officer knows, the Foreign Intelligence 
Surveillance Act, which sets up a special court where you can go in 
secret if you suspect a terrorist is phoning into the United States, 
and you can get an

[[Page S1372]]

order to wiretap that call. But according to the press, the 
administration has not followed that law, has not gone into the court. 
They have allowed widespread wiretapping of Americans without a court 
order. This has been troublesome to a lot of people on both sides of 
the aisle.
  So we learned recently--Senator Specter and I--that the Foreign 
Intelligence Surveillance Court had issued orders authorizing NSA's 
wiretapping program, which meant the President was going back to the 
court, as he should have, of course, before. We asked the court to make 
these orders available to the Judiciary Committee. The chief judge of 
the court approved providing the orders but left the final decision to 
the executive branch.
  I made it clear, when Attorney General Gonzales appeared before us, 
that we expected to see the orders. After all, we write the law as to 
how the Foreign Intelligence Surveillance Act is supposed to work, and 
we have the responsibility to make sure it is followed. The President 
has made the right decision in changing his previous course of 
unilaterally authorizing the warrantless surveillance program. He is 
now going to follow the law in seeking court approval for wiretaps.
  Senator Specter and I, on behalf of the Judiciary Committee, will 
have to look at the contours of the wiretapping program. We have to 
look at the Court's orders to determine whether the administration 
reached the proper balance to protect Americans, while following the 
law and the principles of checks and balances. I hope the 
administration will eventually allow all members of the Judiciary 
Committee to look at these orders.
  We all want to catch terrorists, but we don't want a country where we 
have warrantless wiretapping of Americans. If we start down that slope, 
we all lose the right to privacy and the values this Nation has stood 
for for more than 200 years. So Senator Specter and I will review the 
court orders to make sure the law is being followed. I believe in this 
case, the President has taken the right first step, and I commend him 
for it.
  With that, I suggest the absence of a quorum and ask unanimous 
consent that the time be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Terrorist Surveillance Program

  Mr. SPECTER. Mr. President, I have sought recognition to join Senator 
Leahy in the acknowledgment that the Attorney General will be turning 
over to Senator Leahy and me, in our capacities as chairman and ranking 
member of the Judiciary Committee, the applications which were filed by 
the Department of Justice for the change in the terrorist surveillance 
program and the court orders issued by the Foreign Intelligence 
Surveillance Court establishing a new line of judicial review for that 
surveillance program.
  Back on December 16, 2005, the New York Times broke a major story 
disclosing that there had been a secret wiretapping program, electronic 
surveillance without the customary judicial review. The customary 
approach is to have a law enforcement official apply for a warrant 
showing an affidavit of probable cause to justify a search and seizure 
for a wiretap which is a facet of the search and seizure, and that 
disclosure back on December 16 was quite a revelation. As a matter of 
fact, we were in the midst of debating the PATRIOT Act at that time, 
trying to get that through on reauthorization, and it was a major bone 
of contention, with some Senators saying they had been disposed to vote 
for the reauthorization of the PATRIOT Act and wouldn't do so now with 
the disclosure of that program.
  Through a good bit of last year, the Judiciary Committee worked on 
efforts, through legislation, to have judicial review of that program, 
and, in fact, at one point an agreement was reached with the White 
House on a legislative package to move forward. Ultimately, that 
legislative effort was unsuccessful and the program continued to have 
these wiretaps without judicial approval. Then, on January 17--earlier 
this month--the Attorney General announced there had been a change in 
programming and there would be application made to the Foreign 
Intelligence Surveillance Board under procedures which the Department 
of Justice had established with the Foreign Intelligence Surveillance 
Court.
  I received a lengthy briefing on the nature of the program, but it 
fell short of the necessary disclosure because I did not know what the 
applications, the affidavits provided, nor did I know what the court 
had said. And there was an issue as to whether there was a blanket 
approval for the program or whether there were individualized warrants, 
and in order to meet the traditional safeguards for establishment of 
probable cause, there would have to be individual warrants.
  Senator Leahy and I then pressed the Attorney General for access to 
these documents which would give us a fuller understanding of what was 
happening. I was pleased to learn earlier today that the Attorney 
General has consented to make those disclosures to Senator Leahy and 
myself, and we will be reviewing those documents. They will not be made 
public. Until I have had a chance to see them, I wouldn't have any 
judgment as to whether they ought to be made public. My own view is 
there ought to be the maximum disclosure to the public consistent with 
national security procedures. The Attorney General has represented that 
there is classified information here which ought not to be made public, 
and I will reserve judgment until I have had an opportunity to see 
those documents.
  I know Senator Leahy was on the floor a little earlier today, within 
the past half hour or so, and I wanted to join him in thanking the 
President for this action. We have seen an expansion of Executive 
authority which I have spoken about on this Senate floor in a number of 
situations with the signing statements, where the President signs 
legislation but expresses reservations. There is a real question in my 
mind as to the constitutionality of that. The Constitution provides 
that Congress passes legislation and the President either signs it or 
vetoes it. I have introduced legislation to give Congress standing to 
challenge those signing statements or limitations therein in court and 
other examples of the expansion of Executive authority.
  So I think this is a significant step forward, and I commend the 
President and the Department of Justice for taking this stand. I am 
going to reserve judgment on the program itself, obviously, until I 
have had a chance to review it. But I did want to acquaint my 
colleagues in the Senate with what is happening and acquaint the 
American people too because there has been considerable concern about 
the protection of civil rights, and obviously our war on terrorism has 
to be fought in a vigorous and tenacious manner, because it is a real 
threat to our national security and the safety of the American people, 
but at the same time have the balancing of protecting civil liberties. 
This is a significant step forward, and I am anxious to see the details 
to be able to report further on it.
  I thank the Chair, and in the absence of any other Senators seeking 
recognition, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. THOMAS. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER (Mrs. Clinton). Without objection, it is so 
ordered.
  Mr. THOMAS. Madam President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        Simplifying the Tax Code

  Mr. THOMAS. Madam President, although it is unrelated to what we are 
doing, I wish to talk a little bit about general tax reform.
  The amendments are very important, and we are dealing with the issue, 
of course, of the minimum wage and offsetting some of those costs to 
small businesses. I support that idea. But I wanted to say that I hope 
we soon give more attention to reforming of the

[[Page S1373]]

overall tax forms. We are getting into a position where every time 
there is an issue, every time there is something we want to accomplish, 
we have some tax relief for this section of the economy and for that 
section of the economy. It has become so complex and so shortchanged in 
terms of the time, the exchanges that we have. I think we have to have 
some overall tax reform.
  I understand it is not easy because all of these issues are 
different. On the other hand, we can simplify the Tax Code, if we take 
the time. I mentioned it this morning in the Finance Committee. I 
realize we are not going to be able to address it in a short time, but 
I think we ought to set it as a long-term goal and begin to deal with 
simplifying the Tax Code. As each of us moves into our own taxes this 
year, it becomes obvious how detailed these taxes are. If you happen to 
be involved in a business, even a small business, the Tax Code is so 
difficult. I don't think we ought to be managing the behavior of this 
country through taxes. Taxes ought to be set in a general and long-term 
way so that people can understand, over time, what the tax situation 
is, and we can make it attractive enough that we don't have to change 
it for every issue that comes up.
  Again, I certainly am supportive of what we are doing now. But in the 
longer view of things, I urge that we give consideration to reforming 
the Tax Code, to making it simpler, understandable, longer term, and to 
avoid setting up the situation where each time there is some issue 
affecting anyone in this country, we don't, as a secondary action, 
change the Tax Code to encourage a particular outcome. It should not be 
the purpose of taxes to regulate behavior.
  I yield the floor, suggest the absence of a quorum, and ask unanimous 
consent that the time be divided equally.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KYL. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 209

  Mr. KYL. Madam President, unless the Senator from Wisconsin wishes to 
speak, I will proceed. I believe we have about 14 minutes remaining on 
our side. I would like to use at least some of that time to clear up a 
couple points that were made earlier in the debate. I am speaking on 
the amendment No. 209, which is my amendment to extend the period of 
time that so-called section 179 small business expensing would be 
effective. Instead of cutting off at 2010, it would be the same period 
of time that we extended the work opportunity tax credit; namely, 2012. 
The obvious reason being that businesses would have more time within 
which to plan these additions or improvements to their business and 
would be able to count on what the Tax Code treatment would be and, 
therefore, would be more likely to make the investment and, therefore, 
create more jobs and, therefore, be able to absorb the cost of the 
minimum wage that will be imposed by the legislation before us.
  I ask unanimous consent that Senator Alexander be added as a 
cosponsor to amendment No. 115 and that Senator Specter be added as a 
cosponsor both to this amendment, No. 209, and to No. 115.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KYL. Madam President, the Senator from Massachusetts made a 
couple of statements I need to correct. One was that this amendment 
would cost $45 billion. I do not know how he arrived at that figure. 
Even if you add up all of the amendments I have proposed at one time or 
another on this bill, they don't add up to $45 billion.
  The amount that this amendment would, in effect, cost to take section 
179 through the year 2012 would be about $2.1 billion over 10 years. 
That is more than absorbed by the authority that we have under the 
budget from last year, which is $278.6 billion. So there doesn't have 
to be an additional offset. There doesn't have to be an additional pay-
for. The cost for extending section 179--what we are doing with this 
amendment--is entirely subsumed in the budget we passed last year. That 
is why it is not subject to a point of order and why a mere majority 
vote will determine whether it moves forward.
  According to the Congressional Budget Office, by the way, the minimum 
wage increase will impose about $5 billion worth of new costs on 
businesses each and every year. Most of that will be on small 
businesses. The extension of this relief will benefit those very small 
businesses that are going to have to absorb this additional cost.
  When the Senator from Massachusetts said earlier, ``We have debated 
over the period of the last few days tax breaks for corporate 
America,'' I want to be very clear, that is not the tax break I am 
talking about. The tax break for corporate America is the tax break the 
majority of the Democrats on the Finance Committee have provided in the 
form of the work opportunity tax credit.
  Testimony before our committee confirmed that 95 percent, 
approximately, of the value of the WOTC, work opportunity tax credit, 
goes to bigger businesses, S and C corporations, because they have the 
wherewithal to set up the complicated accounting mechanisms for the 
work opportunity tax credit legislation to actually work. Very few of 
the small businesses are benefited by that tax relief. But almost all 
of the small businesses are benefited by the tax relief that I have 
proposed. So I respectfully correct my colleague from Massachusetts.
  What I am proposing doesn't benefit the big corporations. That is 
what is already extended under the bill through the year 2012. What we 
are doing is extending through the year 2012 these benefits for the 
small businesses--specifically, the section 179 expensing. How does 
that work? As I explained this morning, by definition, section 179 
allows businesses to write off an amount that is right now $112,000, 
when they spend that much money on a new piece of equipment or add on 
their business. If they spend more than $400,000, they cannot use this 
particular provision.
  The bottom line is that this is for the small business, it is not for 
big business. So it is simply incorrect to say that the proposal that 
is before us now, to be voted on shortly, benefits big corporations. 
They cannot, by definition, take advantage of this particular provision 
of the Tax Code.
  Again, why are we seeking to do this? All of us on the Finance 
Committee agreed that we needed to provide some tax relief to small 
businesses because small businesses would bear the brunt of the new 
expense of the minimum wage. So the committee unanimously extended 
various provisions of the Tax Code. It extended this section 179 for 
another year, recognizing its importance. All my amendment does is 
extend it another 2 years, so that it will conform with the same period 
of time that the work opportunity tax credit goes to and, thus, provide 
some balance between the big businesses, which get the work opportunity 
tax credit relief, and the small businesses, which primarily rely on 
the section 179 tax relief.

  Section 179 is probably the most used of the tax provisions because 
all small businesses can take advantage of it whenever they add value 
to their particular business. It is for this reason that several 
organizations have endorsed this proposal of mine and, in fact, have 
communicated with us that they intend to key vote this amendment. So 
when you are voting on my amendment, if you vote to table my amendment, 
you are going against the recommendations of the following groups: 
National Federation of Independent Business, NFIB; Food Marketing 
Institute; Printing Industries of America; International Franchise 
Association; and Society of American Florists.
  You can see that these are the kinds of businesses that can take 
advantage of this section of the Tax Code. So anybody who votes to 
table this amendment, as I said, will be going against the 
recommendation of these particular groups.
  I urge my colleagues--this has never been a partisan issue. Section 
179 is supported by Democrats and Republicans and Independents. Our 
committee action was unanimous. There is no reason this has to become a 
partisan issue. There is no question of pay-for. We already, in the 
budget from last

[[Page S1374]]

year, the scorecard, as they call it, have revenue available to offset 
the modest increase of $2 billion that a 2-year extension would entail 
in this particular amendment. So I see no reason for anybody to vote 
against it and, most especially, to table this amendment.
  I urge my colleagues to vote against the motion to table.
  Madam President, might I inquire how much time is now available on 
both sides of this issue?
  The PRESIDING OFFICER. The minority has 6 minutes, and the majority 
has 3 minutes.
  Mr. KYL. All right. It is also my understanding that time not used is 
to be counted off equally against both parties; is that correct?
  The PRESIDING OFFICER. For quorum calls, yes.
  Mr. KYL. Oh, I see. As the proponent of the amendment, I hope that I 
will be able to close the debate. But given the fact that there is 6 
minutes remaining on my side, if there is nobody from the majority side 
to speak to this, then I will continue the conversation, at least until 
someone arrives.
  One of the other arguments is that by extending this through 2008, we 
have provided enough certainty to small businesses that they could go 
ahead and make the investment, plan the renovation or buy the piece of 
equipment, or whatever that might be. The bottom line is that any 
amount that we extend in these tax provisions enables businesses to 
plan better. If we extend it 1 year, as the committee did, then at 
least businesses can look out 1 year. But as we all know, in the 
business environment, a 1-year horizon is very short. That is why, just 
as we extended the work opportunity tax credit through 2012, it makes 
sense to extend the small business expensing through the year 2012 as 
well. Any additional time that businesses can know what the tax 
consequences of their purchases or expenses are is an advantage to them 
and will enable them to create the jobs, as I said, that will offset 
the costs of the minimum wage.
  Madam President, I don't know of anybody who opposes the extension of 
section 179. The committee itself extended it for 1 year. I don't know 
why there would be partisan debate about extending it for another 2 
years. I think we can all agree that would represent good policy. The 
relatively modest expense of this $2.1 billion, in terms of theoretical 
lost revenue, is more than compensated for by the $278 billion in 
offset tax authority from the years 2011 and 2015 under the budget we 
passed last year. So there is no point of order and there is no reason, 
on a purely fiscal basis or balanced budget basis, to vote against 
this.
  Everybody knows it is good for small business. Adding 12 years for 
planning purposes for the business to purchase the equipment or add to 
the building is simply an improvement over existing law and enhancing 
of the small business's ability to create more jobs, expand their 
business and, frankly, to contribute to the great economic growth that 
we have right now.
  So I don't understand any of the reasons a Member of this body would 
want to oppose this particular amendment. I am not doing this for any 
purpose other than to try to support these small businesses. That is 
why the NFIB and the others are so supportive of my amendment. I would 
think that in this time when we wanted to start out the year in a 
bipartisan way, this is a provision that has strong bipartisan support; 
it always has. I just don't understand why anybody would not want to 
extend it for 2 years, especially when the costs of doing so are 
already offset in the budget that we passed last year.
  Again, I urge my colleagues to oppose the motion to table this 
amendment.
  Madam President, let me first inquire how much time both sides have 
remaining.
  The PRESIDING OFFICER. The minority has 2 minutes, the majority has 3 
minutes.
  Mr. KYL. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ALEXANDER. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. Madam President, I ask unanimous consent that I may be 
permitted to speak for 60 seconds.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. Madam President, I compliment Senator Kyl for his 
work. I expect a vote for the minimum wage with the small business tax 
adjustments that are with it. As I said on the floor of the Senate the 
other day, it is not the most efficient way for the Government to 
intervene help for the poorest people who are working. I think that 
would be an increase in the earned-income tax credit. It would be less 
expensive, more efficient, and all of us would pay the bill for that, 
not just small businesspeople.
  If we are going to raise the minimum wage, we ought to not impose the 
whole burden on just that small segment of society. I agree that 
extending these small business depreciation and expensing benefits 
would help small business men and women who are trying to compete in 
the world to be able to compete. And it gives all of us who pay taxes a 
chance to pay for this idea that we have called the minimum wage, which 
tries to help working people have more.
  I support the amendment of the Senator from Arizona, Mr. Kyl because 
it will do more to offset the increased costs imposed on small 
businesses through raising the minimum wage by making it easier for 
many small business owners to take advantage of the tax relief 
contained in this bill. In addition, the amendment will help create 
jobs by encouraging small business owners to grow their businesses and 
hire new employees.

  Under current tax law, small businesses can expense up to $100,000 of 
certain new property the year it is put in service. That figure is 
indexed to inflation, so small businesses will be able to expense up to 
$108,000 in 2006. After 2009, this expensing level will drop back down 
to $25,000 a year for these small businesses. The tax relief package 
included in the minimum wage bill would extend the $100,000 expensing 
limit--indexed for inflation--through the end of 2010. The Kyl 
amendment would add 2 years to that extension. In other words, the Kyl 
amendment would allow small businesses to expense the higher amount 
through the end of 2012.
  Last week, I spoke on the Senate floor about the burden imposed on 
the small business community by raising the minimum wage. Small 
businesses will bear the brunt of approximately 60 percent of the costs 
of a minimum wage increase. I applaud the Finance Committee including 
Chairman Baucus and Ranking Member Grassley for approving a tax relief 
package to help offset these costs. In particular, I am glad that tax 
relief package includes the expensing provision that we are talking 
about on the Senate floor today.
  The Kyl amendment would make the expensing provision even stronger by 
allowing for higher expensing limits through the end of 2012. This is 
important because continuing the higher expensing limits for an 
additional 2 years would give small businesses more time to plan and 
fully use this benefit. If small business owners can take greater 
advantage of the tax relief in this bill, that means more help in 
offsetting the added costs imposed on small business owners through a 
minimum wage increase.
  Not only does this particular tax provision help offset the costs of 
an increased minimum wage, but it will help create grow the economy and 
create jobs. Allowing small business owners to immediately expense 
critical investments encourages the purchase of new equipment, which 
helps to spur economic growth. New equipment for small businesses also 
usually leads to greater efficiency. And putting more money back into 
the hands of small business owners allows them to hire new workers.
  During this minimum wage debate, a lot of my colleagues have talked 
about the economic challenges facing working families. I can't think of 
a better way to help low-income Americans than passing legislation that 
helps grow the economy and create new jobs, and that's what this 
amendment would do. I applaud my colleague from Arizona for offering 
this amendment and urge my colleagues to support it.
  Mr. BAUCUS. Madam President, before the Senate votes on the second

[[Page S1375]]

amendment by Senator Kyl, the amendment is not offset, not paid for. It 
would add about $2 billion to our Federal deficit. The Senate rejected 
a Kyl amendment last week that was similar. I admire the Senator's 
persistence. He is a firm subscriber to the proverb that if at first 
you don't succeed, try, try again. I admire that very much.
  But there is also another reference, I think, from Ecclesiastes, that 
essentially there is a time and place for everything. This is not the 
time and this is not the place to pass this amendment, which adds $2 
billion to the national deficit.
  I urge my colleagues to support the motion I am about to make, which 
is to table the amendment. The underlying amendment not only is not 
paid for, it is unbalanced. We had it packaged together here, and we 
voted on similar amendments, and it is time to get on with final 
passage of the minimum wage bill. That is what Americans are looking 
for. They want to increase the minimum wage. We should no longer dally 
here, with no disrespect for my colleague from Arizona. We are working 
on amendments that we worked on, that we had votes on.
  I will make the motion and urge my colleagues to vote to table the 
underlying amendment.
  Mr. KYL. Let me use the last minute of my time, and then I will yield 
to the leader.
  The PRESIDING OFFICER. Actually, the time of the Senator has expired 
on the minority side.
  The Republican leader is recognized.
  Mr. McCONNELL. Madam President, on my leader time, I yield a minute 
to the Senator from Arizona.
  Mr. KYL. Madam President, I simply wanted to respond to the point the 
chairman of the committee just made, which is that this is not offset. 
The reason there is no pay-go point of order against this amendment is 
because the Baucus substitute already extends section 179 small 
business expensing through 2010 and includes the necessary offsets to 
cover 2010. This amendment merely extends that through 2012, years in 
which the pay-go scorecard has more than sufficient allocation to cover 
any revenue that Joint Tax projects would not be collected in those 
years. That is why there is no point of order and why we believe this 
is a fiscally responsible way to assist small business.
  The PRESIDING OFFICER. The Republican leader.
  Mr. McCONNELL. Madam President, using some of my leader time, 
Republicans worked hard this week to make sure we pass a minimum wage 
bill that gives everybody a lift--the American worker who earns the 
wage and the American worker who pays it. The Kyl amendment reflects 
this basic concern for the worker and the wage payer, and I encourage 
all of our colleagues to give it their full support.
  This amendment will let American business men and women deduct the 
cost of tools and equipment the same year they buy it. This is clearly 
good news for employers and for workers. By giving business men and 
women the freedom to deduct costs right away, fewer will be forced to 
choose between new equipment and new hires. Republicans like Senator 
Jon Kyl are working hard to make sure we have a bipartisan 
accomplishment with this bill. I urge all of our colleagues on both 
sides of the aisle to give this amendment their full support.
  Mr. BAUCUS. Madam President, I ask 1 minute on leader time on the 
majority side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. It is very simple. This amendment is not paid for. It is 
scored as a $2 billion additional hit to the deficit. It is not paid 
for, let's make that clear.
  Second, we are talking about extending what is called section 179, 
which is the small business expensing provisions in the law. The 
underlying bill already extends 179 through 2010. It already does. This 
adds 2 more years at the cost of $2 billion. We have time, maybe this 
year or next, to extend it when we can pay for it at the appropriate 
time.
  But, again, the underlying bill very clearly takes care of small 
business expensing needs by extending 179 through 2010. Second, it is 
not paid for. We should not adopt this amendment.
  Madam President, I move to table the amendment and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson is necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Nebraska (Mr. Hagel).
  The result was announced--yeas 49, nays 48, as follows:

                      [Rollcall Vote No. 37 Leg.]

                                YEAS--49

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                                NAYS--48

     Alexander
     Allard
     Bayh
     Bennett
     Bond
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Thomas
     Thune
     Vitter
     Warner

                             NOT VOTING--3

     Brownback
     Hagel
     Johnson
  The motion was agreed to.
  Mr. DURBIN. Madam President, I move to reconsider the vote.
  Mr. BAUCUS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Ms. MIKULSKI. Madam President, what is the pending business before 
the Senate?
  The PRESIDING OFFICER. Under the previous order, the lone remaining 
amendment is amendment No. 115.
  Ms. MIKULSKI. Madam President, I ask unanimous consent to speak for 
10 minutes as in morning business.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Ms. MIKULSKI. Madam President, I note the Senate is not in order.
  The PRESIDING OFFICER. The Senate will be in order. The Senator from 
Maryland has the floor.


                        Cloned Food Labeling Act

  Ms. MIKULSKI. Thank you very much, Madam President. I rise today to 
talk about a bill I introduced last week. It is called the Cloned Food 
Labeling Act.
  My colleagues would be shocked to realize that the FDA has announced 
that meat and milk products from cloned animals are safe for human 
consumption. My bill will require the Government to label any food that 
comes from a cloned animal or its progeny. My colleagues need to know I 
am strongly opposed to the FDA approving meat and milk products from 
cloned animals entering into our food supply, and I am not the only 
one. Most Americans actively oppose it, and scientists say we should 
monitor it. But the FDA decided food from cloned animals is safe to 
eat. And since the FDA decided it is safe, the FDA will not require it 
to be labeled as coming from a cloned animal or its progeny.
  Now, the American people don't want it. They find it repugnant. 
Gallup polls report over 60 percent of Americans think it is immoral to 
clone animals, and the Pew Initiative on Food and Biotechnology found a 
similar percentage say that, despite FDA approval, they won't buy 
cloned milk. But what troubles me is not only what public opinion says 
but what the National Academy of Sciences says. They reported that--so 
far--studies show no problems with food from cloned animals. But they 
also admit it is a brand-new science. What about the unintended 
consequences? They caution the

[[Page S1376]]

Federal Government and recommend this technology be monitored for 
potential health effects and urge diligent post-market surveillance. 
Well, you can't do post-market surveillance if the food is not labeled. 
How do you know where the cloned food is?
  So the FDA tells us once they determine it is safe, they will allow 
the food to enter the market, unidentified, unlabeled, and unbeknownst 
to us, and I find it unacceptable. Consumers would not be able to tell 
which food came from a cloned animal. So, here we have a picture of 
Dolly--the first cloned animal. Hello, Dolly! We say: Hello, Dolly. You 
have been approved for our food supply. Hello, Dolly. Welcome to the 
world of the Dolly burger. Hello, Dolly. Welcome home to Dolly in a 
glass. Hello, Dolly. Welcome to this plate of special cloned lamb chops 
when you are celebrating the 25th anniversary for your wife. I say: 
Goodbye, Dolly, the FDA's approval was baa, baa, baa.

  I can't stop this from being approved by FDA, but I want an informed 
public to know what they have before them. Most Americans do not want 
this. They should not be required to eat it. I don't think they should 
be required to eat it without knowing what it is. Therefore, my 
legislation says any cloned food or its progeny would have to be 
labeled at the wholesale level, at the retail level, and at the 
restaurant level. This would ensure informed consent. To help the 
American public make this informed decision, I introduced a bill to 
require that all food which comes from a cloned animal or its progeny 
be labeled. This legislation will require the FDA and the Department of 
Agriculture to label all food that comes from a cloned animal. The 
label simply would read, ``THIS PRODUCT IS FROM A CLONED ANIMAL OR ITS 
PROGENY.'' The public would be able to decide which food they want to 
buy--and I mean all food, not just packages in a supermarket but also 
the meals they choose from a menu.
  Now, the FDA has responsibility to guarantee the safety of our food. 
Although many aspects of food safety are beyond their control, this is 
not. Scientists and the American people have the right to know. 
Consumers need to know which food is cloned and the scientists need to 
be able to monitor it. We don't know the long-term effect of cloned 
animals in our food supply.
  What factors influenced the decision to deem food from cloned animals 
safe? Are they allowing an eager industry to force questionable science 
on an unknowing public? I am not so sure.
  The FDA used to be the gold standard, but we have heard ``it is 
safe'' for too long. What if they are wrong? We were told asbestos was 
safe. Do you want asbestos in your home? We were told DDT was safe. Do 
you want to be sprayed with DDT? We were told thalidomide was safe. No 
pregnant woman today would take it. We were told Vioxx was safe. Does 
anyone with a heart condition or high cholesterol want to take it? I 
don't think so. We have been down this road before regarding the safety 
of products.
  When it is so unclear and so uncertain, I am saying let's take our 
time. If America doesn't keep track of this from the very beginning 
with clear and dependable labeling, our entire food supply could be 
contaminated. I worry about what happens to the consumer. I worry about 
it being eaten by ordinary folks. I worry about it being in our school 
lunch program. I worry about it because we do not know enough.
  In Europe, they call this type of stuff ``Frankenfood.'' I worry, 
then, that because it will be unlabeled, more of our exports will be 
banned. My State depends on the export of food--whether it is seafood 
or chicken or other products. I don't want to hear one more thing 
coming out of the EU about not wanting to buy our beef or our lamb 
because they are worried that it is Frankenfood. We need to be able to 
export our food. If it is labeled, we will be able to do that.
  At the end of the day, I want our consumers to have informed consent, 
scientists to be able to monitor this, and Congress to be able to 
provide FDA oversight. I reject the notion that FDA or anyone else 
should allow this to go forward without some type of declaration about 
what it really is.
  Please, when we see this creature, Dolly, in this photograph--I don't 
know its purpose; I don't know what it accomplishes. We do not have a 
shortage of food in our country; we don't have a shortage of milk in 
our country. For those people who want to produce Dolly, we can't stop 
it, but I do think we should stop the FDA from putting this into our 
food supply without labeling and without an informed consent.
  I say bah, bah, bah to those who want to bring this into our food 
supply.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Webb). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 115

  Mr. KYL. Mr. President, my understanding is that the pending business 
is amendment No. 115.
  The PRESIDING OFFICER. That is the pending question.
  Mr. KYL. Mr. President, I will briefly describe this amendment. It 
extends for an additional period of time three provisions of the Tax 
Code that relate to smaller businesses that the Committee on Finance 
agreed should have this tax relief and provides for a more balanced 
bill in terms of the extension of the tax provisions. It deals with 
leaseholds and restaurant renovations, new restaurant construction and 
owner-occupied retail. It is identical to an amendment the Senate 
tabled last week except that it drops the revenue offset since Senator 
Baucus had identified that offset as the primary problem he had with 
the amendment.
  Specifically, it would extend three provisions of the Small Business 
and Work Opportunity Act of 2007 through the end of 2008. The three 
provisions are the 15-year recovery period for leasehold improvements 
in restaurant renovations, as current law provides they run through the 
year 2007; 15-year recovery for new restaurant construction, which is a 
new provision; and another new provision, 15-year recovery period for 
retail improvements.
  My chart shows what we have done in the Committee on Finance and what 
I am proposing here. These are the three provisions covered by the 
amendment before the Senate at this time. We have added the two new 
provisions in green for new restaurants and retail, and we have 
extended the leasehold and restaurant provision by 3 months. All three 
of these would expire at the end of March of next year. What we do in 
this amendment is extend them through the end of the year. The reason 
should be obvious: For businesses to plan ahead, they need a little bit 
of lead time. To provide only a 3-month extension, for example, is not 
very much tax relief.

  We all acknowledge that the point of this relief in the first place, 
which the committee unanimously agreed to, was to help small business 
be able to offset the cost of the minimum wage increase. If we are 
going to do that, it should be meaningful. This amendment simply 
extends from a 3-month period to the end of the year and extends the 
two new provisions as well through the end of 2009.
  Let me describe each of these three provisions.
  The leaseholds and restaurant renovation provision under current law 
are depreciated over a 15-year period, but this treatment only applies 
to property placed in service by the end of 2007. The amendment that 
came out of the Committee on Finance, the Baucus Committee on Finance 
substitute, would extend this 15-year recovery period by 3 months for 
property placed in service by March 31, 2008.
  Under the two new provisions, new restaurant construction, there is 
currently no law provision allowing for accelerated depreciation of new 
restaurant construction, and the Baucus Committee on Finance substitute 
provides to correct this problem with a 15-year recovery period for 
such new restaurants. It is an important and necessary change, but it 
only, under the Committee on Finance bill, provides the treatment from 
the date of enactment through March 31, 2008.
  And the same thing for owner-occupied retail. There is currently no 
provision allowing for accelerated depreciation of improvements made to 
owner-occupied retail space. The Baucus Committee on Finance provides a 
15-year

[[Page S1377]]

recovery period for improvements made to such spaces, thus putting 
these establishments on the same footing as leasehold. The bill 
provides this treatment from the date of enactment through March 31, 
2008.
  The committee had recognized the importance of these depreciation 
periods for owner-occupied retail, new restaurant construction, and 
leaseholds and restaurant renovations. There is no dispute about that, 
no debate about that. The only question is how far the relief should be 
extended.
  While obviously everyone appreciates in this case the 3-month 
extension, it is hardly enough to be able to say to these small 
businesses: We solved your problem; we put a big burden of paying for 
the minimum wage increase on you, but we have enabled you to offset 
that by depreciating your property more quickly and being able to plan 
for your future construction needs. Clearly, that provision does not do 
the trick. Even these two new provisions, as welcome as they are, only 
extend the relief through March of next year. Again, what my amendment 
does is extend it through the end of the year. That is all it does.
  Let me illustrate the importance of the tax provisions that the 
Finance Committee passed and which we are seeking to extend by this 
amendment.
  If you stop and think about it, the policy justification for a 39-
year depreciation recovery period for new construction of a restaurant, 
for example, makes no sense at all. How many of you know of any 
restaurant that has not done a thing to the restaurant for 39 years? If 
you are in the restaurant business, you have to constantly upgrade your 
facilities. Certainly, your kitchen facilities have to be upgraded. And 
new construction and renovation should obviously be treated the same 
way.
  Under this bill, they are given a 15-year depreciation schedule. Now, 
that is the same depreciation schedule as for convenience stores, of 
course--a direct competitor of quick-service restaurants. They can use 
the 15-year depreciation schedule for all construction, new or 
renovation. Under their provision of the Tax Code, it is permanent law, 
so we do not have to extend it each year.
  So what the Finance Committee has done is to try to bring some sense 
of balance and fairness into the code to treat like properties in a 
like way. If you are a fast-food restaurant, it does not matter whether 
you are a convenience store or regular restaurant, whether you build 
the place new or you simply spend the money to renovate, the expense of 
what you have done should be depreciated over the same period of time.
  Fifteen years is probably too long, but that is the period that has 
been selected. It should be the same for all. By allowing restaurateurs 
to deduct the cost of renovations and new construction on this shorter 
schedule, many more restaurant owners will be in a position to grow 
their business and to continue to create more jobs. That is the key to 
offsetting the expenses of the minimum wage.
  By definition, encouraging more new restaurants to be built means 
more new restaurant jobs. That is a tautology. This is important 
because the restaurant industry is uniquely impacted by a minimum wage 
increase. Of the nearly 2 million workers earning the minimum wage, 60 
percent work in the food service industry. Furthermore, the last time 
Congress increased the minimum wage, 146,000 jobs were cut from 
restaurant industry payrolls, according to information from the 
industry. That is why this provision I am offering today is so 
important. The very people who are going to bear the impact--namely, 
the workers in restaurants, who could see their jobs evaporate as a 
result of passage of the minimum wage increase--will find that their 
job is going to be OK when their restaurant can expand or build a new 
restaurant, thus creating more new jobs.
  Instead of having to lay people off in order to pay the increased 
minimum wage, the businesses will be able to create more jobs and, 
therefore, everyone would be able to be employed by them. This is the 
theory. The Finance Committee agrees with the theory by adopting these 
two new provisions and extending the existing provision for 3 months. 
But as I said before, it did not do the job well enough.
  This is very modest relief and hardly gives a restaurant, for 
example, the confidence it can continue to make improvements and 
receive the favorable tax treatment, the 15-year writeoff provision we 
are providing in the law. That is why it is important to continue to 
extend it. It would be nice if it were permanent, as it is for 
convenience stores. That is what it should be. It would be nice, as 
under the work opportunity tax credit, if it went out through the year 
2012 or 2013. That would be nice. We are simply taking it to the end of 
the year 2009. That is not too much to ask to help these small 
businesses.
  Let me just note a couple of the objections that came from the 
chairman. The first had to do with so-called balancing of the work 
opportunity tax credit and the tax relief for small businesses. Now, 
the work opportunity tax credit, as you can see with this red line on 
the chart, the committee bill went to the end of 2012. And these others 
only go through March of 2009. That is hardly balanced. Moreover, all 
of these provisions have always attracted bipartisan support.
  It is not like the work opportunity tax credit is a Democratic 
provision and the retail improvements are a Republican provision. We 
have all supported both provisions. Both make sense. We understand 
that. So it is not like somehow there has to be a partisan reason to 
support this but not support this, or this or this, as shown on the 
chart. We do not need partisan politics injected into this debate. So 
there is no reason now to politicize these issues, characterizing them 
as Republican or Democrat.
  It is obvious the bill is not balanced. Even if you assume there 
should be some balance, the work opportunity tax credit, as I noted, is 
extended for 5 years, while the accelerated depreciation for leasehold 
and restaurant improvements is extended for a 3-month period.
  As I noted before, the primary objection of the chairman before was 
over the offset. I understand that. It was a somewhat controversial 
offset. Of course, in the committee, when I offered this amendment, the 
chairman said unless I had an offset, it would be declared out of 
order. So we looked for and thought we had an offset that would be 
approved. But it turned out the chairman did not like that offset. That 
was his primary objection to this provision. So we will simply remove 
that offset and provide that we will extend the provisions for another 
9 months through the end of 2009, without an offset of any tax 
increase.
  But let me just make this point. We are talking about a very 
temporary extension of an important tax provision. This leasehold and 
restaurant provision has been in existence now for some time. We are 
extending it all of 3 months. Yet under the theory of those who say it 
has to be offset by a new tax increase, we would have to permanently 
find a source of revenue that would pay for this 3-month extension. 
That is a perversion of the pay-go concept. It is inappropriate, 
especially for provisions that generate jobs.
  We should not have to pass a permanent tax increase in order to be 
able to fund a temporary provision of the Tax Code that helps to create 
new jobs. As I said before, when you build a new restaurant, you are 
creating new jobs. That is obvious. And when you create new jobs, you 
can better afford to hire the people who would be at the minimum wage, 
60 percent of whom are in the restaurant business, and there is a job 
there for them.
  So it makes sense to extend these provisions. The work opportunity 
tax credit, as beneficial as it might be, does not create new jobs. So 
if anything, you would want to balance with more emphasis on these 
three provisions than you would under the work opportunity tax credit.

  So I guess the bottom line of this is that the reason for objecting 
to this provision, based on the lack of an offset, does not make sense 
in terms of practical economics, given the fact that the provisions 
that we would extend in 2008 are job creators and would create the very 
jobs that people earning the minimum wage could then move into.
  Without the creation of these new jobs, some businesses are going to 
have to lay people off, and there will not be

[[Page S1378]]

jobs for them. This would provide for those jobs.
  Mr. President, I guess the bottom line is this: We have seen, 
unfortunately, the debate over these amendments break down along 
primarily party lines. I think that is very unfortunate because a small 
business owner can be a Republican, a Democrat, or anybody else. They 
create the bulk of jobs in our society. They pay a huge amount of the 
taxes. They will be the ones most hard hit by the increase in the 
minimum wage.
  If we pass a minimum wage increase with bipartisan support, it seems 
to me we should follow the leadership of the Finance Committee in 
extending these tax provisions in a bipartisan way. And when we only 
extend a provision for 3 months, to me, it is not a good-faith 
recognition of the problem we have placed on that small business by the 
imposition of the minimum wage mandate. We need to keep faith with 
those businesses by providing a longer extension of the tax provisions 
that benefit them in a way that enables them to pay for this minimum 
wage increase. That is how we would be keeping faith with these small 
businesses.
  So I hope we can eschew the partisanship that has characterized the 
previous votes, we can appreciate the importance of extending these 
provisions which, after all, were created in a totally bipartisan way 
in the Finance Committee, and we can recognize it is possible to both 
raise the minimum wage for low-income workers and help create new jobs 
for them with these tax provisions.
  I hope when it comes time to consider a motion to table this 
particular provision that my colleagues will vote against a motion to 
table or support the provisions if we have the opportunity for an up-
or-down vote.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, on behalf of the majority leader, I ask 
unanimous consent that the time until 4 p.m. be equally divided and 
controlled between Senators Baucus and Kyl, or their designees, for 
debate with respect to the Kyl amendment No. 115, as modified; that at 
4 p.m. the Senate proceed to vote in relation to the amendment; that 
upon disposition of the Kyl amendment, without further intervening 
action or debate, all time be considered yielded back and the Senate 
proceed to vote on the Baucus-Reid substitute amendment No. 100, as 
amended; that upon disposition of the substitute amendment, there be 4 
minutes of debate equally divided and controlled between the majority 
and minority leaders or their designees, and the Senate then proceed to 
vote on the motion to invoke cloture on H.R. 2, as amended.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. KYL. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KYL. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KYL. Mr. President, I ask unanimous consent that all time under 
the previous quorum call and this quorum call and any future quorum 
call be equally divided between the two sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Montana.


                       Trade Promotion Authority

  Mr. BAUCUS. Mr. President, earlier today President Bush called for 
renewal of fast-track trade negotiating authority, otherwise known as 
trade promotion authority, otherwise known as TPA. Fast-track authority 
expires 6 months from today. Many view this date with fear and 
trepidation. I do not. I view it as an opportunity to take a hard look 
at the direction of America's trade policy. It is an opportunity to air 
differences and an opportunity to find common ground.
  Trade policy is a bargain, a bargain struck between the American 
Government and the American people. Americans trust their Government to 
use trade policy to expand export opportunities, create jobs, to fuel 
our economy. In exchange for that trust, Americans expect their 
Government to make sure that trade works for them, and they expect 
their Government to take action when it does not. That is the 
fundamental debate in which we, as a nation, must engage. Does trade 
work for the American farmer, rancher? Does trade work for American 
factory workers? Does trade work for the American economy?
  I believe it does. I believe trade creates opportunities. I believe 
trade generates American jobs. I believe trade bolsters our global 
competitiveness. I believe trade allows us to project America's values 
to the world. And I believe the alternative, erecting barriers to 
trade, is self-defeating and will not make anyone better off. That is 
why, during my years in Congress, I have long supported granting the 
President fast-track authority. The success of America's ranches and 
farms, the success of businesses big and small, requires that the 
President have this authority.
  Twelve million American jobs depend on exports. Exports account for a 
tenth of our country's gross domestic product. Montana exports 60 
percent of the wheat grown there.
  But there are other voices. Many have deep and legitimate concerns 
about the effect of trade and globalization. Many equate trade with 
ballooning deficits, stagnating wages, and job layoffs. Many view the 
growth of China and India as threats rather than as opportunities. Many 
point to abhorrent labor and environmental conditions in some of our 
trading partners. And many no longer trust the Government to do its 
part to take care of the Americans whom trade leaves behind.
  These concerns are real. They are deeply felt. And we cannot ignore 
them. True leadership requires that we address these concerns head on. 
The expiration of trade promotion authority allows us to have this 
debate. It reminds us we cannot consider renewal of this authority in a 
vacuum. It underscores the paramount importance of restoring America's 
faith and confidence in our trade policy, a huge opportunity. In the 
process, we will examine a series of critical issues. These are issues 
we must address as we consider whether to reauthorize trade promotion 
authority.
  First, we must make trade adjustment assistance, otherwise known as 
TAA, more reflective of today's innovative economy. TAA is America's 
commitment to provide wage and health benefits while trade-displaced 
workers retool, retrain, and find better jobs. A renewed TAA must do 
what today's program does not. It must be made available to the 8 out 
of 10 American workers who make their money in service professions. It 
must apply to all workers displaced by trade, not just those affected 
by free-trade agreements. The time has come to consider other ways to 
help workers displaced not just by trade but by other aspects of 
globalization, including the advance of technology.
  Second, we have to address concerns that our trade agreements 
encourage companies to move jobs to countries where substandard labor 
and environmental policies occur. We need to find common cause with 
those who abhor child and sweatshop labor anywhere. We need to 
acknowledge the justifiable ends of those who want to employ trade to 
help stop despoliation of the planet. We project our values as 
Americans when we use our trade agreements to create a race to the top. 
As our trade agreements require our partners to step up their 
protection of investments and intellectual property, so our agreements 
should lead to improvements in our partners' labor and environmental 
protections.
  Third, we cannot conclude more trade agreements without giving 
Americans the confidence that we vigorously enforce those agreements 
already on the books. Too many of our partners cheat and maintain bogus 
barriers against American exports. For example, look at Korea's 
unscientific ban on beef; look at the illegal subsidies China grants to 
its manufacturers. But the trade-enforcement tools that Congress 
created in the 1970s and 1980s, such as section 301, are outdated. They 
no longer function as intended. It is time to take a hard look at these 
tools. We should redraft them so they better address the trade barriers 
that American exporters face in today's global economy.

[[Page S1379]]

  Fourth, we cannot expect Americans to support trade when they see 
ever-ballooning trade deficits. Our trade deficit with China this year 
will approach $300 billion. That is unsustainable. We need to get our 
balance sheet back in line. That requires us to boost U.S. exports 
through better enforcement and better export promotion. That requires 
us to call out countries such as China, possibly even Japan, that use 
the value of their currency to gain a trade advantage. And it means 
action at home to improve public and private savings.

  Fifth, a successful trade policy means that America must be the most 
competitive nation in the world. American workers need to know they can 
compete and they can win on a global playing field. And we need to take 
a good, hard look at how health care costs, our education system, and 
tax policies affect America's global competitiveness. As I did in the 
last Congress, I will push competitiveness at every opportunity. I will 
work for passage of legislation that will guarantee America's economic 
preeminence for years to come.
  With trade promotion authority about to expire, the locus of trade 
policy shifts back to Congress. We have both the opportunity and 
responsibility to create the next trade policy that will guide us and 
guide this country forward. We need to work together, clearly, 
obviously, on trade to find answers to the hard questions. We need to 
work together on trade to shore up our international leadership, sorely 
needed. And most of all, we need to work together on trade to restore 
our bargain with the American people.
  I suggest the absence of a quorum and ask unanimous consent that the 
time be charged equally against both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Before the Senate today is the exact same amendment 
offered by my colleague from Arizona, Senator Kyl, that the Senate 
rejected last Thursday. The only difference is that Senator Kyl has 
modified the amendment to make it even more pernicious; that is, by 
removing the offset. Thus, the pending amendment would add nearly 
another $3 billion to the deficit in the next 10 years.
  The Senate rejected the Kyl amendment last week, but we are here yet 
again today considering these same issues. This time around, my 
colleague does not attempt to offset those cuts. Rather, his amendments 
would put another $3 billion hole in our budget. The amendment would 
pile onto a deficit that we are desperately trying to erase.
  Many of us support the policy behind these provisions. We would not 
have included them in our bill if we did not. As I told the Senator 
from Arizona at our committee markup, if we could have made these 
provisions permanent, I certainly would have done so. But the 
underlying substitute amendment is the product of a Finance Committee 
hearing, deliberation, and markup. It is balanced. It is revenue 
neutral. And all Members supported it--it passed unanimously--including 
the Senator from Arizona.
  Senators made compromises to get this bill to the floor, and we have 
done so. I must say, though, I admire the persistence of my good friend 
from Arizona. He is the original ``energy bunny'' of tax cut 
amendments. I commend him for that. But he was not successful in 
committee, and he was not successful on the floor last week. I hope and 
trust that that was because the Senate would like to provide a balanced 
package of tax incentives. I hope and trust that the Senate wants a 
package that does not worsen our deficit. Therefore, I oppose adding 
another $3 billion in tax provisions to this already $8 billion bill. 
The $8 billion is paid for. The amendment by the Senator would add 
another $3 billion and that would not be paid for.
  At the appropriate time, I intend to raise a budget point of order 
against the amendment. I strongly urge my colleagues to vote against 
the motion to waive that point of order, which I assume will occur in 
not too many minutes from now.
  I suggest the absence of a quorum and ask unanimous consent that the 
time be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Mr. President, I raise a point of order that the pending 
amendment violates section 505(a) of H. Con. Res. 95, the concurrent 
resolution on the budget for fiscal year 2004. On behalf of Senator 
Kyl, I move to waive the applicable provisions for the consideration of 
the amendment, and I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators were necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Nebraska (Mr. Hagel).
  The PRESIDING OFFICER (Mr. Salazar). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 46, nays 50, as follows:

                      [Rollcall Vote No. 38 Leg.]

                                YEAS--46

     Alexander
     Allard
     Bayh
     Bennett
     Bond
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Roberts
     Sessions
     Shelby
     Smith
     Specter
     Stevens
     Sununu
     Thomas
     Thune
     Vitter
     Warner

                                NAYS--50

     Akaka
     Baucus
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Corker
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--4

     Biden
     Brownback
     Hagel
     Johnson
  The PRESIDING OFFICER. On this vote, the yeas are 46, the nays are 
50. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected.
  Mr. DURBIN. I move to reconsider the vote.
  Mr. CARPER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The point of order is sustained and the 
amendment fails.
  Mr. KENNEDY. Mr. President, as I understand it, there is 4 minutes 
equally divided?


                     Amendment No. 100, as Amended

  The PRESIDING OFFICER. The Senator will withhold.
  Under the previous order, the question now is on agreeing to the 
substitute amendment, as amended.
  The amendment (No. 100), as amended, was agreed to.
  Mr. KENNEDY. Mr. President, I move to reconsider the vote.
  Mr. ENZI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                             Cloture Motion

  The PRESIDING OFFICER. There will now be 4 minutes of debate equally 
divided before the cloture vote on the bill.
  The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, I rise today to speak in support of cloture 
on the

[[Page S1380]]

underlying bill. I appreciate the wise direction that this body has 
decided upon with regard to the minimum wage. We have correctly 
concluded that raising the minimum wage without providing relief for 
the small businesses that must pay for that increase is simply not an 
option. I hope this is an approach that our colleagues in the House 
will not derail. This approach recognizes that small businesses have 
been the steady engine of our growing economy and they have been the 
source of new job creation. It, also, recognizes that small businesses 
in every sense of the phrase are middle class families too.
  I am proud the body has chosen a path which attempts to preserve this 
segment of the economy which employs so many working men and women and 
trains them. The Senate has recognized the simple fact that a raise in 
the minimum wage is of no benefit to a worker without a job or a job 
seeker without a prospect.
  As this Congress moves forward, we will need to confront a range of 
issues facing working families. Lessons in this debate should not be 
forgotten as we approach complex issues. Yesterday, we were referencing 
the so-called war on the middle class. That is partisan rhetoric which 
was never accurate and is now simply divisive. Who is more middle class 
than America's small business men and women? Tax relief to the middle-
class small business owners who must pay the cost of this wage increase 
mandate is no attack on the middle class. An attack would be passing 
the bill without such tax relief.

  I urge my colleagues to support cloture, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, it has been 8 days--8 days since we 
started this debate on the minimum wage. Every Member of this body has 
made $4,500, and yet we haven't been able to get an increase in the 
minimum wage from $5.15 to $7.25. Forty-five hundred dollars, everyone 
has made in this body, but minimum wage workers have still been denied. 
Eight days.
  How long does it take? How long does it take for this body to be able 
to say: Yes, we are going to increase the minimum wage. How many more 
amendments are over there on the Republican side? We have none. We are 
prepared to vote on final passage right now. But oh, no, we can't do 
that. There should be no doubt in the minds of working families, of the 
middle class, who is standing for those who are earning the minimum 
wage.
  Since we started this debate, there have been thousands of meals that 
have been served in nursing homes. There have been thousands of beds 
that have been made in hotels around this country. There are 6 million 
children who will benefit from this increase in the minimum wage, who 
can't afford books to read, who can't afford to buy a present to go to 
a birthday party, and who can't spend enough time with their parents, 
because their parents are working 2 or 3 jobs. Today there are 50,000 
wives or husbands of soldiers serving in our armed forces who are 
earning the minimum wage. We can do a favor for those individuals and 
treat them with respect and dignity by voting for the increase in the 
minimum wage. We ought to do that right now.
  Mr. President, I ask unanimous consent that we vote on final passage 
right now.
  The PRESIDING OFFICER. Is there objection?
  Mr. ENZI. Mr. President, we have a process that is set up and a vote 
that is called for, and I think we ought to follow that process. I 
think we have made a lot of progress, and as long as we continue to 
have progress in a bipartisan way, this will make it through the 
process. It has been something everybody pledged themselves to early, 
and I hope we haven't broken that pledge. I object.
  The PRESIDING OFFICER. Objection is heard.
  The majority leader is recognized.
  Mr. REID. Mr. President, before the vote is called, I wish to alert 
everyone here that the distinguished Republican leader and I are 
negotiating, trying to work something out on Iraq, which is the next 
issue we will go to when we finish this bill, which will be tomorrow 
sometime. It is very possible we are going to have a vote Monday at 
noon on the Iraq issue--everyone should understand that--Monday at 
noon. We hope that be can avoided, but we may not be able to avoid it. 
The Republican leader and I are doing our best to work something out. 
We have had a number of meetings, and we will continue to do that 
throughout the day.


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order and pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will state.
  The legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close the debate on Calendar No. 
     5, H.R. 2, as amended, providing for an increase in the 
     Federal minimum wage.
         Ted Kennedy, Barbara A. Mikulski, Daniel K. Inouye, Byron 
           L. Dorgan, Jeff Bingaman, Frank R. Lautenberg, Jack 
           Reed, Barbara Boxer, Daniel K. Akaka, Max Baucus, Patty 
           Murray, Maria Cantwell, Tom Harkin, Robert Menendez, 
           Tom Carper, Harry Reid, Charles E. Schumer, Richard 
           Durbin.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on H.R. 2, 
as amended, an act to amend the Fair Labor Standards Act of 1938 to 
provide for an increase in the Federal minimum wage, shall be brought 
to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden) and 
the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  Mr. LOTT. The following Senators were necessarily absent: the Senator 
from Kansas (Mr. Brownback) and the Senator from Nebraska (Mr. Hagel).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 88, nays 8, as follows:

                      [Rollcall Vote No. 39 Leg.]

                                YEAS--88

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Boxer
     Brown
     Bunning
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Gregg
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McCain
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--8

     Coburn
     Craig
     Crapo
     DeMint
     Ensign
     Kyl
     Martinez
     Vitter

                             NOT VOTING--4

     Biden
     Brownback
     Hagel
     Johnson
  The PRESIDING OFFICER. On this question, the yeas are 88, the nays 
are 8. Three-fifths of the Senators duly chosen and sworn having voted 
in the affirmative, the motion is agreed to.
  Mr. SCHUMER. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________