costs to americans. it's been reprinted in the "wall street journal" this morning. he in, what, 5 or 6 minutes encapsulated really what this legislation does laying in his view a true 10-year cost of $2.3 trillion. and he points out the gimmickry and run of them, of course -- the elephant in the room is that you have 10 years of tax increases for a half of a trillion dollars and cuts and half a trillion dollars to pay for six years of spending. now where in the world would you have a program that you pay for 10 years in taxes and cuts in benefits and have six years of benefits? so the true cost, the true cost over 10 years without the budget

gimmickry is $2.3 trillion. and things like $72 billion in claims of money from the class act, the list goes on and on. and what -- and what i would ask dr. barrasso that we all trust the congressional budget office. there's no doubt that these people -- we all trust them and their estimates. but their estimates are only as good as the -- as what they are given as far as what the proposal is. and i might add, again, i'd request dr. barrasso's comments on this that the president's proposal that was online was really an 11-page statement and the congressional budget office said they could not give a cost estimate because they didn't have sufficient information. and it's very clear when you delay revenues to the years 2016

that obviously that has budgetary impacts and finally, i would ask again dr. barrasso to talk about the so-called doc fix. which has been counted in the budget as reducing costs and everybody knows we are not going to cut physician payments for treatment of medicare patients. i think it would be an important one for dr. barrasso to discuss because i think it really encapsulates this. >> i would ask unanimous consent to continue for an additional 5 minutes. >> without objection. >> thank you, madam president. if i could, several things. it is a wonderful paul ryan op-ed in today's "wall street journal." i would recommend that for everyone to look at that because he specifically points out that

the president's own chief medicare actuary says the senate and house bills are bending the cost curve up. making the costs go up, which is what happens if you go to a down meeting in arizona or in wyoming and you ask people if this passes, will the cost of your own care go up? and the hands go up, too. well, how about the quality? will the quality of your care go down? and again the hands go up. so that is a continual concern of people all across america which is why three-quarters of all americans have told cnn that it is time to either just completely stop or stop and start over and only one-quarter of americans support this proposal 'cause they realize this is going to do that. you mentioned -- it was interesting you mentioned in the 11 pages from the president. the gimmicks are still there. they may have taken out one of the gimmicks, but the spending gimmicks are there plus, the louisiana purchase, the special carve-out for 800,000 people in

florida who are on medicare advantage. they're protected but there are other 10 million americans who are going to lose their medicare advantage and the question came up which is called the doc fix. the way that the numbers are moved around. >> could you explain exactly what the doc fix means and how we got to it. >> right now -- and we just passed an extension -- a one-month extension the other night. medicare is supposed to cut the fees for all doctors across the country by 21%. now, seniors know that medicare underpays right now. and as one of my colleagues in the state senate in wyoming used to say, government is the biggest deadbeat payer 'cause they don't even cover enough of the cost that's delivered in our hospitals. with ambulances, they don't cover enough to pay for the gas to fill up the ambulances to go

the long distances, in arizona or in wyoming. but right now to deal with some promises that were made years ago, the fees for physicians should be cut 21% according to medicare. a number of years ago they were supposed to cut it 1 or 2%. they said they are not going to cut it. next year we'll cut it by 4% and no, next year, 8% and then 10%. they continued to kick the can down the road enough that this year they are supposed to cut fees for physicians 21%. >> it could not happen. >> and they're supposed to keep them according to the president's budget numbers the way that this bill has part of the financial gimmickry they are supposed to cut physicians fees for medicare 21% and keep them frozen there then for the next 10 years. so it's cut and freeze for 10 years. and they use that as one of the additional financial gimmicks.

well, you do that to the doctors and the country who are already reluctant to see medicare patients because the payment is so low, mayo clinics said we're not going to see new medicare patients because the reimbursement at today's rates are so low. to drop them 21% additionally at a time when the congressional budget office one-fifth of the hospitals and one-fifth of the doctors offices in this country will be unable to continue to be solvent 10 years from now if this bill goes into place. we know without a question that we cannot allow this to happen. congress knows that. the doctors know that. the american people know it. everybody knows it except the people in the healthcare bill that say, oh, this is actually going to save money in the long run when the people who look at it in an honest way know that this is going to drive up the cost of care and make the quality of care for our american citizens go down. >> and finally i'd ask -- madam

president, i'd ask unanimous consent that congressman paul ryan's piece in the "wall street journal" be made part of the record. >> without objection. >> and finally, it's incredibly cynical to say -- tell the american people that the cost of this reform is going to be $371 billion, i believe, less than we all know it actually it will be. and if those cuts were enacted, what's the prospect of the overwhelming majority of doctors just saying i'm not going to treat medicare patients? >> we're going to see that. we will see that across-the-board. i was at our hospital in wyoming on monday. talking to physician whose take care of everyone, great concerns because they say at that rate they can't afford to keep the doors opened if the medicare cuts go through. that the president says will have to go through if, in fact,

he wants to hold up the numbers that he continues to talk about. >> well, i hope that we will continue to be on the floor. and again we need to talk about when the president talked in the campaign about many things but includingly i saw this morning on fox news that you shouldn't govern with 50 plus 1 votes. that he was in opposition to that. i'm sorry he not remains in opposition. i thank dr. barrasso and i yield the floor. >> the senator from montana. >> madam president, we're now on a bill to extend tax cuts to extend certain payments on unemployment insurance, subsidies and so forth. as a jobs bill, this is a safety net extenders bill. this is not a healthcare bill.

four senators just spoke -- i think there were four. there's six together basically being very critical of the healthcare reform bill that passed the senate and very critical of the president's decision to pass health reform. i think the misstatements deserve a response. the senator of mississippi called it the senator healthcare bill a massive tax increase. simply the senator is mistaken. that's not correct. the healthcare reform is, in fact, a major tax cut, not a tax increase but a major tax cut. the senate passed a healthcare bill and provided more than $400 billion in tax cuts for americans to buy insurance. $400 billion in tax cuts. those are credits, tax credits given to americans by health insurance. it sounds like a tax cut to me. this is the largest tax cut for individuals since the record tax cuts of 2001.

the junior senator from wyoming said that we need to stop and start all over again. anyone who's paid any attention to the debate on healthcare reform for any amount of time knows that the opportunity to pass healthcare reform comes around about once in a generation. it doesn't happen all the time. in fact, i think with teddy roosevelt was the first attempt to pass healthcare reform was 60, 70 years. we're on the cusp of passing major healthcare reform now madam president. we all know healthcare reform must pass. why? to address the draconian cost increases that families, companies and budgets are facing to reform the health insurance industry. and if we don't do it now, don't reform healthcare now, believe me, this country is going to be digging itself into a pretty deep hole. this comes along once in a lifetime. so a call to stop and start all

over again is in reality a call to kill healthcare reform. that's what that is. and when you hear anybody saying let's start and stop all over again, really what they want to do is kill healthcare reform. that's the whole point of it all. i mean, stopping and starting all over again sounds to me like nobody is paying any attention to where we are. it reminds me, too, madam president how -- this senator does not to be partisan and most senators don't like to be partisan but the other side of the aisle never presented a comprehensive healthcare reform proposal. there's no alternative. it was a disservice to the american people that the other side did not present anything that could be called a comprehensive healthcare reform so that we could debate it. the proposal offered by the finance committee and by the health committee merged together could be one that was basically a democratic version.

and it would be an opportunity to debate that as well as the one offered by the other side but they never offered one. instead, what did they do? they just picked and tried to find holes to criticize. well, madam president, it's easy, easy to criticize. anything can be criticized. and if you're halfway intelligent you can make any criticism that's inaccurate sound pretty good. and that's basically what's happened. the constant barrage of criticism, criticism, very little good-faith effort to try to find a common solution. there was an effort a while ago when senator grassley myself, senator enzi, senator conrad, senator snowe worked hard to try to find a solution. we met for months and days but, frankly, just to be totally candid about it, the other side decided it was better politics just to kill healthcare reform than it was to try to find a solution. and so that's why the three republicans that i was working

with, frankly, had to withdraw. they withdrew because there was so much political pressure on them from their leadership to kill the bill. senator snowe stayed with us for a while. but even -- i don't want to put words in senate snow's mouth. -- senator snowe's mouth but she came under tremendous pressure not to find a solution. so any effort to start all over again is really a very thinly veiled call to kill healthcare reform. senate passing healthcare reform, the senator from wyoming said he wanted a series of ideas. well, one idea he talked about allow people to buy health insurance across state lines. now, i'm sure he didn't really mean this. but if he thinks that's the sole solution to healthcare reform, i think most americans who are denied coverage because of preexisting conditions, who face all kinds of problems from the health insurance industry wouldn't agree with that.

but nevertheless, i might say, madam president, the bill that passed the senate does allow insurance to be sold across the state lines. maybe not quite as freely as the opponents of the other side of the aisle but we do allow insurance to be sold across state lines. why? because we want competition. we want people to choose. people should have the ability to choose what health insurance plan they want. there's very little competition now. in one or two states there's companies that dominate. there's very little competition. that's not right. and allowing insurance companies to sell across state lines will provide more competition. it will allow people better choice. but it should be done in a way that's fair. fair to the american public. what's one of the big problems if companies are allowed to willy-nilly sell across state lines without some protections? i'll tell you what's going to happen. it's going to be a race to the bottom. insurance companies are going to race to find the state that has

the lowest standards and that's where they'll set up. then they'll sell across the country. and what that means somebody who resides in a state that has pretty high standards but finds the only policies being sold are those sold by a company that's registered in a state with low standards is going to have very low quality insurance. what we want here is fairness. even-handedness. a balance here so that insurance people are able to buy insurance freely and to buy it and have the choice to buy insurance. which is to say, madam president, the basic approach that the majority has taken in health insurance reform is to basically maintain the current system. today we spend about 2.4, $2.5 trillion in healthcare. that's a total figure. about half public, half private.

half public is medicaid, it's medicaid. children's health insurance. that's about half. the other half is private. it's commercial insurance. that's the way it should be. that's our american way. we're not canada. we're not great britain. we're not sweden. we're not japan. we're america. in america we have a system that's basically 50/50 half public and half private and before this state maintains that allocation, maintains that ability for people to continue to buy private insurance, maintains the ability for people to have more choices, more competition, more availability to buy insurance especially when the exchanges are set up. and i just -- and so i say to my good friend from wyoming, gee, here's an idea. why not allow people to buy insurance across state lines. we do that. we allow companies to sell across state lines. but that's after we have a level

playing field to make sure it's quality insurance. we want to make sure that insurance sold across state lines is quality insurance, not insurance that's very, very low quality. and we also allow in major legislation to have insurance sold across state lines when the exchange is set up. the senator from wyoming he talked about something else. it talked about tort reform. i must say when the senator from oklahoma who talked about tort reform speaks, first of all, he says our bill ignores the loss of reform. that too, madam president is not true. our legislation does not ignore tort reform. frankly, we begin with a series of steps. we begin -- the bill begins with a state-by-state programs to try out some of the best ideas that address lawsuit reform.

basically states have the ability to try different measures. they can try courts, health courts, or they can try something similar to workers' comp or they can set up systems for like tort reform and lawsuit reform in the state of michigan it's called sorry works. if it's a bad outcome, the physicians go to the patients say i'm sorry. it didn't work out and they have talk about how to associate a settlement and they reach an agreement, that's great. if they don't, then the statements used by the physician -- if there's a subsequent suit cannot be used. so we do begin to go down the road of a lawsuit reform in the major bill. now, the senator from wyoming also talked about people joining together to buy insurance in associations. i might say again, madam

president, our bill allows that. it allows that and much more. now, when you hear people talk about the ability to join together in associated health plans, it's important to also point out to people that's quite restrictive. first of all, it's restrictive in the sense it's only available to members of that association. it's not available to other people. i think we want to make sure that we set up pooling arrangements that all americans have the availability of pooling arrangements. in addition, who joins the associations? well, the companies join. what about the employees? the employees might -- companies might have be members of the association, pooling but it might not be what's in the best interest of what the employees want. it really cuts out the employees. so we allow in our underlying bill is pooling and real pooling

will occur when the exchanges are set up because then we'll be able to sell across the lines. and the insurance exchange and also where a lot more people will be involved nd will enable us to have the same benefits and pooling. i might also say a point about the exchange. right now, madam president, you get on your computer. if you want to find the lowest airline ticket, what do you do? you go to orbitz. you go to expedia. you will to travelocity and you get on the computer and you say i like this air fare. wrong day. you can shop online. that's basically what we're talking about with insurance exchange. just like orbitz, just like expedia. you get online and you can shop and find the right fares. and it's going to be easier because we're requiring

insurance forms to be standardized, much more simplified so people can understand the choice that they're pursuing and make the choice if they want to. so i just want to make clear that the senate knows that when the senator from wyoming talks about associations, he's really talking about pooling. our underlying bill has pooling. and i think even better pooling. the senator from oklahoma, mississippi and wyoming express shock at the prospect of healthcare being addressed in the budget reconciliation process. the senator from oklahoma said the reconciliation process means, quote, ramming it through. well, what my colleagues failed to remember is that this body has used budget reconciliation 22 times. this is nothing new. and in 17 of those times is the republican party controlled either the congress or the white house. when reconciliation was used.

and in most of the times that we had reconciliation bills, they included measures on healthcare. healthcare is no stranger to the reconciliation process. i'll make that clear. healthcare is no stranger to the reconciliation process. and i'm just not talking about minor provisions. budget reconciliation was a process by which the republican senate passed the cobra health insurance bill. reconciliation, republican senate passed the cobra health insurance bill under reconciliation when they were in charge. cobra after all stands for cosol -- there's a very significant health program created under reconciliation was in 1997. so healthcare is no stranger to this reconciliation process. it's actually an exception when congress has done health reform outside of reck silliation. -- reconciliation. that's the real truth.

now the senator from arizona questioned the constitutionality to buy insurance. my colleagues actually -- i want to say -- they want healthcare to be thrown out. if these charges are true. the fact of the matter is, that the vast majority of scholars have considered the matter have said that commerce clause and the revenue clause in the constitution give the congress ample authority to address the responsibility of people to buy insurance. this has been addressed many, many, many times. now certainly some can trot out a law professor or somebody who can make a contrary claim. madam president, our committee, the finance committee looked at this issue very, very thoroughly. we searched out lots of law professors. we're going to find out is this constitutional or is it not? and the weight, the far weight of a constitutional scholarship

is it, in fact, it is constitutional. and so when senators stand up and say it's not constitutional, they're entitled to their own opinions. that's fair. that's why we debate. but i might say when studies of literature and they quiz constitutional law professors, the vast, vast majority -- the balance of opinion it is constitutional. i might also add that most states require people to buy auto insurance right now. is that unconstitutional? is that unconstitutional for a state to require the purchase of liability insurance if you want to operate a car? i don't think so. now, the senator from wyoming said our bill would bend the cost curve. he said the bill would raise healthcare costs. that's not true, madam president. flatly, simply, categorically, positively not true. the nonpartisan congressional

budget office says that the underlying bill would reduce the federal government of healthcare. reduce, reduce, that doesn't sound like costs going up. the budget office says, no it will reduce it. and our bill according to the congressional budget office would also cut costs for the taxpayer. first of all, the budget -- the cbo said that the legislation, the healthcare legislation, reduced the deficit by $132 billion the first 10 years and between $631 billion and $1.3 trillion in the second 10 years. that's cut, cut deficits. now, let me just make a point there. we have large budget deficits as basically the world knows. they've got to be reduced. healthcare reform is a step toward reducing our fiscal deficits. it's a very significant step.

and as peter orszag said once at a congressional budget office and the head of omb, he said the path to reducing our fiscal deficit situation is through healthcare reform. we need healthcare reform to get our -- get budgets, family, company and governments under control. just to repeat, our bill according to cbo will cut costs to the taxpayer, reduce budget deficits by $132 billion and then a trillion in the next 10. to summarize, our bill provides real cost control. that's what's needed, real cost control. our bill reforms incentives under the tax code to encourage smarter shopping for health insurance. and i might say, madam

president, if this side over here wants us to stop and start over again, what's going to happen? it's going to mean all those people today, and there are millions of them, who are denied of quality health insurance because of a preexisting condition and will be enable to get good health insurance. basically those who say stop and start over are saying, we want you who can't get good health insurance because you of a preexisting condition can continue not to get good health insurance because of a preexisting condition. that's basically what they're saying. that's not right. that's not right at all. it reminds me, too, of a fellow in my home state in montana. he just said, max, he said it's just awful. i'm a small construction firm. i have six or seven people in my firm and there's one person who has been with me, you know, 20 or 30 years. the insurance company informed me that my premiums are now going to go up 40%. why i asked is because one of

your employees -- your long time employees has a preexisting condition and you got to either let him go and then your rates will only go up 20% or if you keep him, your rates will go up 40% and put this owner in the firm, the guy i was talking to, in an untenable firm? what did he do? he shopped around and looked and looked to find another insurance company and finally he found one. his rates went up but not a full 40. i've forgotten what they went up by. but it was -- it was wrong for him to be in that position 'cause he was not going to fire that person who was such a good person who had been with him for such a long period of time. so our bill will begin reforming the way the government pays for healthcare. right now the government pays for the number of services performed. our bill will begin to have the government pay for quality. very important point, madam president. i think this is the real game-changer. this is what's going to really make a difference over time. is how do we pay for healthcare?

and about four, five, six, seven years from now when these provisions will kick in, we're going to be very, very happy that we took the first step because that's what's going to make a big difference here. so i say, madam president, that my colleagues on the other side of the aisle threw a whole lot of criticisms but just because you say something doesn't mean it's true. and, frankly, that is why i felt it important to stand up and set the record straight. because what they're saying is just not true. madam president, i yield the floor. >> live now to the u.s. senate where members return to work on a bill that extends tax breaks and unemployment benefits. no roll call votes are expected today and it's possible majority leader reid will file a motion to limit debate on that measure before the day ends. several amendments have been offered and are currently pending but it's already been

announced there won't be any roll call votes until tuesday. live now to the floor of the u.s. senate here on c-span2. the presiding officer: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer.

the chaplain: let us pray. eternal lord god, we thank you for the beauty of our world. we're grateful for the dawn of the morning, for the stars in the night sky, for the gift of love and friendship, for the sublime splendor of the sacred, and for every radiant hope that inspires us to persevere. today, help the members of this body to live worthily of your grace, rising above worry, fear, and contention.

may they see the best that glimmers through the worst, aware that you continually work for the good of those who love you. if there are any broken relationships with others that need healing, we ask for your reconciling power. throughout this day, may our lawmakers submit the work of this senate to you and seek your guidance. we pray in your merciful name. amen. the presiding officer: please

join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c., march 5, 2010. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jeff merkley, a senator from the state of oregon, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: following leader remarks, the senate will resume consideration of the tax extenders bill. there will be no roll call votes

today. the next vote will be tuesday morning. mr. president, we had a good, hard week working on this legislation dealing with the tax extenders' expiring provisions, cobra, unemployment compensation, fmap. so that those watching don't think this is some kind of a coded message, these are very important provisions. tax extenders are measures that come at the end of the year. many of them should be extended for much longer than a year, but we're in a moment now of paying for things, and as a result of that, we don't have the money to do it for more than a year. expiring provisions are very important issues. they deal with satellite tv, which is important to about a

million and a half people in america. many in the rural west depend on this. unemployment compensation. today is a big day in america. only 36,000 people lost their jobs today, which is really good. unemployment rate around america has not changed. prognosticators thought it would go up and has not, so we need to extend -- there are about 15 million people in america out of work. these extended unemployment benefits will help millions of those people. we were fortunate enough for earlier this week to get the 30-day extension which saved them so that when we finish this legislation, we should finish it hopefully on tuesday, we can go to conference with the house and quickly work out our additions. in addition to unemployment compensation, we talk about cobra. that's a provision that allows people who are unemployed to buy at a decent rate health insurance. there have been some excellent

amendments offered to this legislation which will really improve it as we send it to the house. but one of the provisions that is very important -- i met a few days ago with 12 governors. every one of them want us to pass something called fmap which is money that states get from the federal government to help them with their medicaid programs. many of the standards that they have for medicaid we set back here, so it's only appropriate that we help them with the money that's so important to the state, especially in these trying times. these governors handed me a letter signed by 48 governors asking that we extend fmap, and we would do that -- not unemployment compensation, cobra is for one year. fmap is six months. that is fungible money. they can use it for things other than medicaid, so we're working to get that done. i think we can get it done. we have had a good debate here this week, and we hope to be able to end this tuesday. later in the day i will file cloture on the bill. people have had time to offer

all the amendments they want. some amendments we haven't been able to get to a vote and there won't be votes on those. rather than have individual cloture on -- cloture on various amendments, we simply don't have time for that, so i'm going to file cloture on the bill. those amendments we're having trouble getting votes on will likely fall, those that are germane to the subject matter at hand. mr. president, i wanted to talk a little bit about the house of representatives yesterday passing our jobs bill. that was really important. we had a bipartisan jobs bill here. they will -- they have already sent us a message, and so we can work on that even though there may be people objecting to it, we can do that with one cloture vote. we can do that, interrupt the work we're doing when that message gets here, when we decide to move to it. it's important because even

though we have a short-term extension of the highway bill, this would extend it for one year, saving a million jobs in america. very important. build america bonds. the governors that i met with i mentioned a few days ago also really love our buy america bonds which is part of our american recovery act. the money is gone there. we're going to replenish that. it's important to governors and local officials because it has done great things for creating jobs. we also have a provision in here to allow people to be hired by employers if they are out of work for 60 days. they hire them for 30 hours a week. they do not have to pay their fica tax. and at the end of the year, they get a $1,000 tax credit. this is going to create thousands and thousands of jobs across america. now, mr. president, one of the reasons i wanted to mention this specifically, the house voted this bill out yesterday. virtually every republican in the house voted against it.

i heard interviews on national public radio this morning. one republican congressman said this bill was so bad because we need small businesses to be able to write off purchases they make. i would suggest to the man whose name i know -- i'm not going to try to embarrass him here -- i'm going to suggest to him he read the bill, because if he read the bill, he would understand that that's one of the paramount provisions we have in this legislation. that is, if a small business purchases something, they don't have to -- to depreciate it. they can write it off to up to to $250,000. that is terrific. i had a telephonic conference call late last week explaining this to him. i had quite a few small businesses on the telephone. they love this. they are waiting to buy things. as soon as this is signed into law, they will run out that day and buy stuff. they need stuff. this will give them an incentive

to do that. so i would suggest to the person who i guess rushed to the microphones to talk about how bad this bill was, he should try reading it first, and maybe if he did that, he wouldn't be making a fool of himself across america by talking about small business being able to write things off when that's really in the bill. now, mr. president, we hope to when we finish this legislation move to the federal aviation administration legislation. this -- we have had all over capitol hill the last few days -- i'm sure the presiding officer has had people from oregon visit with him, people who run airports. they want this f.a.a. bill so very, very much. why? because there are -- you would have to search hard for an airport in america that doesn't have already the design and plans ready to do work on that airport. as soon as we pass this f.a.a. bill, there will be lots and lots of jobs. the first year they estimate as

many as 150,000 jobs will come from our passing this legislation. there are runways that need to be resurfaced. there is all kinds of terminals that need to be built and refurbished. they are wait to go do this. but more importantly than that, it will make america air travel safe, much safer. i won't go into a lot of detail here, mr. president, but most countries now use global positioning systems to determine where their aircraft are. modern. the way it is. but not in america. we're still using world war ii radar. and so this legislation is very important. we're going to try to get to that very quickly. we're going to, as i indicated, do the jobs message from the house. we're going to do small business. i had a long conversation with the distinguished senator from maine, senator snowe, who used to be chairman of the small business committee and now is the ranking member. i talked to her at some length

last night, and she is anxious, as we are, to move to this legislation. and as i told her, i told the senior senator from maine, don't think that you're alone in this. i have -- i get calls from the white house several times a week about moving forward on another small business jobs package other than the one i just talked about. so we have a lot of work to do. we're trying to work out our differences with the house on the health care bill, and we will be able to do that. there will be a decision made very shortly as to how we're going to proceed on that. so, mr. president, i look forward to the week. it's a heavy schedule legislatively, but i think we're ready to do that and with all these important things, it's very important that we return here next week with the anticipation that we're going to do some things to help america. and i would say to my friends on the other side of the aisle, it appears we're breaking through and getting a few more things

done on a bipartisan basis. i certainly hope that's the case because simply saying no as has happened the last year and a half has accomplished nothing for our country. would theha be good enough to announce morning business now? there is no morning business, so we're going to turn to the bill, i guess. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will resume consideration of h.r. 4213, which the clerk will report. the clerk: h.r. 4213, an act to amend the internal revenue code of 1986 to extend certain expiring provisions, and for other purposes. mr. reid: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

the presiding officer: without objection. mr. baucus: mr. president, we're now in our fifth day of consideration of this important legislation to create jobs and extend vital safety net and tax

provisions. as a reminder, this legislation would prevent millions of americans from falling through the safety net. it would put cash into the hands of americans who would spend it quickly, boosting economic demand. it would extend critical programs of tax incentives that create jobs. we had another productive day on the bill yesterday. we conducted three roll call votes on amendments. we adopted four amendments. as i count it, there are nine amendments pending. those amendments are the underlying substitute amendment, senator landrieu's amendment on the go zones, senator murray's amendment on summer employment for youth, senator coburn's amendment on transparency, senator webb's amendment on executive bonuses, a feingold-coburn amendment to rescind unused transportation earmarks, an amendment by senator reid of nevada on

geothermal receipts, a mccain amendment on the use of budget reconciliation, and a lincoln amendment on energy disaster assistance -- excuse me, on emergency disaster assistance. now, a piece of legislation like this is a long distance run. it starts out with a lot of energy and a lot of activity. after a while, it reaches its stride, plateaus, moderates its pace. then the pace picks up again near the finish, that is, if we have much energy left. with this bill, most of the activity is behind us, the bill has reached its stride, we see the finish line ahead. it's tuesday, and we expect a final push then. we will work today to clear as many of the pending amendments as we can, and if senators have other noncontroversial amendments, we're happy to try to clear those today as well. the senate will conduct no roll calls today. the majority leader indicated that we would see a cloture vote on this bill on tuesday, and we

would hope to conclude action on this bill on tuesday as well. i thank all senators for their cooperation. mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. nelson: mr. president, i had hoped to call up an amendment that i have and, of course, i would have had to have gotten unanimous consent to set aside the pending amendment in order to do that. it is my understanding that we will attempt to do that parliamentary procedure at a later time, so what i would like to do at this point is explain the amendment that i will be offering, and may i proceed? the presiding officer: you may. mr. nelson: thank you, mr. president. this is an amendment to restore some sanity and common sense to the executive pay practices that have outraged all of us that we have seen on wall street, among

the biggest financial institutions in this country. it's very simple and straightforward. it encourages large banks and financial institutions to adopt widely accepted and sound compensation practices. banks, under this amendment, that would fail to adopt those standards would lose the benefit of certain tax deductions like the tax deduction of their executive compensation as a cost of doing business over $1 million per executive. in other words, they could no longer deduct the large compensation payments that they make to highly paid employees, but we don't limit it to $1

million compensation. the bank could pay whatever it wanted. we're just going to get some commonsense practices in here. mr. president, with the status of financial reform legislation uncertain, i believe that we're going to have to deal with this issue immediately, and because of the angst in the country, i think all of us have read with astonishment the recent reports that wall street banks continue to pay outlandish bonuses to the executives that may not be so deserving and then, just to add insult to the injury to the american taxpayer, many of those institutions are still living on

taxpayer-funded life support. in most business professions, pay for executives should chase performance. managers and executives are rewarded for creating lasting value to their company. unsuccessful managers and executives are shown the door. but these basic commonsense principles have been lost in these major wall street financial institutions that we have seen uncovered over the last several months. this year, total wall street bonuses exceeded $20 billion. in less than a year and a half after the fall of lehman brothers, it's back to business as usual for some of our major banks.

and that is inexcusable. we've been here before. we've had this same debate, mr. president last spring. remember when a.i.g. paid absurd bonuses to financial traders that had managed one major accomplishment. and what was that accomplishment? they drove their company into the ground. and although we talked and talked out here on the the floor of the senate and legislation was introduced, congress failed to act back then a year ago, and here we are again. well, mr. president, there's an old saying that comes to mind. fool me once, shame on you. fool me twice. shame on me. and so if we're going to write

this financial ship of state, we're going to have to tackle all of the flaws in our financial system, and that includes executive pay. and executive pay specifically on wall street. there is now almost unanimous recognition that poorly crafted executive pay practices at major banks and financial institutions contributed to the near collapse of the financial system and the need -- and the need that we had to step up to that almost caused financial meltdown, the need of a $700 billion taxpayer-funded bailout called tarp. toxic assets relief program. now, think ...

just last week the general counsel of the federal reserve board of governors testified that the compensation practices in the banking sector were a contributing cause to the crisis, and in january the federal deposit insurance corporation, fdic, found that -- quote -- "excessive and imprudent risk taking remains a contributing factor in the financial institution failures and losses to the deposit insurance fund." end of quote. the fdic attributes these losses in part to bank compensation practices. current pay practices encourage this excessive risk taking because short-term gains are

heavily rewarded, even if they're unsustainable. and the negative consequences of severe losses are often externalized and shifted to the shareholders and, ultimately, when we have to bail them out to the public taxpayers. the federal safety net for financial institutions encourages traders and executives to take unnecessary risk, and the most obvious example is the $700 billion wall street bailout, which i and other senators here initially opposed. executives that should have been left without their shirts instead were left with golden parachutes. so let's take an example:

the c.e.o. of bank of america resigned at the end of last year with a $73 million severance package. bank of america, mr. president, is one poster child for a poorly managed financial institution. why? it received $45 billion in taxpayer funds to avoid insolvency. to put this in perspective, that is almost $150 from every man, woman, and child in this country. it is the equivalent of every american writing a check for $150 to bank of america's mngts -- to bank of america's management. and, mr. president, the c.e.o., once he was basically asked to step down, he walks away with

$73 million severance package. now, did bank of america respond by ramping up lending to small businesses to help get the economy going? that's what we begged them to do. that's what we've been begging through the tarp and the stimulus bill to make programs for loans to small business available. did bank of america do that? no. but they did manage to find $73 million for their c.e.o.'s severance package. and so what we find is that wall street all too often has rewarded failure with bloated bonuses and outrageous severance packages. so if we want to get to real and meaningful financial reform, it's going to have to include

changes in the existing compensation culture in the financial industry. and i know what the response is going to be. why should you penalize us in order to get good executives, we're going to have to pay these big compensation packages. mr. president, as far as this senator is concerned, that is fine, but we need to make sure that that huge compensation package is tied to performance. and so the amendment that i'm offering is going to put an end to the reality disconnect on that street known as wall street that has rewarded failure and that emphasizes short-term stock appreciation over long-term

growth. and this amendment does so by putting some basic and well-accepted principles of sound compensation practices in the tax code. so, for example, major banks and financial institutions would only be able to deduct their large executive compensation payments if the pay complies with the rules that focus on rewarding long-term performance. the principles established, they were developed by the financial stability board, the council of major central banks. these are fellow bankers that set up these principles. the federal reserve was instrumental in developing those compensation principles, so the

tax deductions for major banks would be conditioned on the following. if you're going to have a compensation executive package over a million dollars, it must be performance based, and at least half of the performance-based compensation must invest -- vest over an extended period of five years or more, and this will tie compensation not only to performance but to long-term performance. for executives at public companies, at least half of the performance-based compensation must be paid in employer stock. and compensation agreements for top executives must include a clawback provision that will retract deferred compensation in

the event of ethical misconduct. and the compensation agreements must prohibit employees from engaging in personal hedging strategies such as compensation and insurance that undermine the risk alignment principles. and in addition, the employer's bonus pool must take into account the institution's liquidity needs, reserve requirements and the risks that future projected revenues will not materialize. and finally, this amendment that i'm going to offer creates new and meaningful executive compensation disclosure requirements so that shareholders can be empowered and investors can be empowered

to hold banks accountable for compensation practices, practices that fail to fully comply with these new tax rules that are there by virtue of the principles adopted. mr. president, of course the special interests are going to come in and argue that congress should not get involved in compensation decisions, that the market knows best. they'll argue if congress passes measures like this that wall street is going to pack up its bags and it's going to move to greener pastures abroad. unfortunately, right now what the market knows is that big short-term gains lead to big bonuses and big losses lead to taxpayer-funded bailouts, and the american taxpayer is fed up.

mr. president, this is only going to apply to the largest 57 banks in this country. this is not going to apply to most of the banks in this country. we need to take real steps now to reform compensation practices , and it's my hope that the chairman of the finance committee is going to be able to get this amendment accepted without opposition. it's common sense. it's desperately needed, and the american people are crying out for reform. mr. president, i yield the floor and i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: the presiding officer: the senator from montana. mr. baucus: mr. president, --

has a quorum call been called? mr. president, i request that the quorum call be rescinded. the presiding officer: without objection. mr. baucus: mr. president, i rise in mourning and remembrance on the first anniversary of a devastating natural gas explosion in downtown bowsman, montana -- boseman, montana. at 8:11 in the morning one year ago, downtown bozeman was quiet, under a thick blanket of snow. one minute later, a blast ripped through the silence, killing a young woman named tara reistad bowman and devastating most of the 200 block of east main street. windows were shattered as far as four blocks away. a passing cyclist commuting to work was thrown off his bike by the blast.

9/11 calls show that the explosion was felt miles away. the firefighters and rescue crews that responded to the blast later found that a natural gas line behind montana trails gallery was cracked and the gas leak had caused the explosion. ten businesses and several apartment units were leveled by the blast or engulfed in the flames that followed. the rocking r bar, starkey's, the american legion all destroyed. city assistant manager chuck wynn described it as the worst catastrophe he had ever seen in the city. firefighters from bozeman, from big sky, three forks, nearby communities all came to the rescue to put out the blaze. these brave men and women stopped the fire from spreading to nearby stores. the montana national guard was called upon to help provide security. one year after this tragedy, we

pause to recognize today as a day of mourning and remembrance. we join the men and women of bozeman who observe a moment of silence this morning. today montanans will mourn the loss of tara bowman. our thoughts and prayers go out for her friends and her family and all who knew her. i never met tara, but i understand that she was a very special woman. she was a talented artist and a mentor to other artists in bozeman. tara liked to paint in the quiet morning. she had come into work early at the montana trails art gallery the morning of the blast. her family and many friends around bozeman miss her dearly. today as we mourn, we also remember the actions of the people of bozeman after the blast. oftentimes, in the routine of

everyday life, we forget that we may be called upon at any moment to act heroically. there were many heroes that day in bozeman. more than 70 firefighters and departments throughout the county answered the call for help. although it took hours to shut off the natural gas that caused the initial blast, the volunteers continued to fight the blaze. many had left their day jobs to perform their duties. the calls for help continued long after the blaze was extinguished. residents had lost their homes. small business owners had lost their livelihood. in the truest expression of what it is to be a montanan, the people of bozeman pulled together to help the victims of the blast and rebuild downtown. local businesses donated food to emergency workers. they donated lumber to cover shattered windows. a community relief fund

provided $200,000 to help those left homeless find shelter and replace paychecks of those left jobless. the story of a man named chris kundy fully illustrates this generous spirit. chris was left homeless after the explosion and the subsequent fire destroyed almost everything he owned. chris even lost the tools of his trade, his musical instruments, several electronic keyboards, a grand piano, but then the community stepped in. the red cross met his immediate needs -- toothbrushes, soap, towels, debt cards. musicians around bozeman raised funds to help replace his instruments. a fellow renter borrowed a saxophone from a local music store so he could keep playing to pay the bills. after the explosion, chris started playing music full time and even performed to raise

funds for the victims of the earthquake in haiti. chris has proven that good can come from tragedy. he told the bozeman chronicle that the stop and depth of the community support detickets values that exist only with people who truly care about one another. a year later, i'm glad to report that downtown bozeman has made great strides. the american legion has already begun to rebuild and plans have been submitted to reconstruct many of the other destroyed businesses as well and working to make sure federal dollars help fund the reconstruction. at this time next year, city officials expect every business impacted by the blast to be back on their feet and in operation. that is the resiliency of bozeman and the spirit of montana. today we pause to remember last year's blast in mourning of our loss. we remember the actions taken by

the great people of bozeman, and we proceed with renewed hope for the future. mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from virginia. mr. warner: mr. president, i rise today to talk about an amendment that i hope will eventually get considered in this very important bill -- the presiding officer: we are in a quorum call. mr. warner: i'm sorry. i ask unanimous consent to vitiate the quorum call. the presiding officer: without objection. mr. warner: mr. president -- mr. president, i'd like to rise today to talk about an amendment that i hope will ultimately be -- get a chance for consideration on this very

important piece of legislation we're working on right now. i want to commend the chair of the finance committee for his good work on trying to focus this next round of job-creation activities that will be created, i believe, as we move forward on extending some of the tax provisions that expired last year. some of these tax provisions were part of our stimulus bill that just about a year ago we passed to help jump-start job activity, a stimulus bill that i sometimes think the american public -- and perhaps we -- never fully explained. the fact that close to one-thighed of that bill was tax cuts, another third was direct assistance to localities, and the final third was a series of new initiatives, many of which are just starting to come to pass. i can recall, mr. president, about a year ago i dime the senate floor -- i came to the

senate floor as we were debating the stimulus -- or american recovery act, to talk about fiscal recovery and to make some recommendations on how we might better track the performance and outcome of the american recovery and reinvestment act -- i think most folks commonly refer to it as the stimulus. well, here we are one year later, and, unfortunately, it appears that critical recovery act reports and plans have gone missing or have been long ignored. -- or were never fully developed in the first place. mr. president, as we debate this important piece of legislation that extends a number of tax provisions, i think we ought to take this moment as well to correct some of the deficiencies in the reporting, in the fiscal accountability that i think all of us on both sides of the aisle would like too see in the overall recovery act activities. mr. president, we have this chance at this point to correct course and to ensure that we can

account for every dollar. now it's time to correct management and transparency gaps that still exist. i have a longer statement for the record that i'd like to submit, without objection. the presiding officer: without objection. mr. warner: but i'd like to simply today very briefly go through a couple of things that my amendment would do. and moafll hopefully, again, thr -- the committee chair, the finance committee, and folks on the other side will agree to have these amendments incorporated. my amendment will in three very important ways correct the management and transparency gaps that still exist in the recovery act. first, it will require agencies to update the implementation plans they had developed last year for high-risk programs. now, high-risk has this connotation that it's somehow a bad area or bad idea. no, i think the high-risk programs i'm defining are those programs that are over $2

billion, that saw a funding increase of over 150% more than their fy 2008 funding, are brand-new programs. these programs will be required to update their plan by july 1 of 2010. now, let me take a moment and describe what kind of prams a talking about. as i -- what kind of programs i'm talking b as i mentioned a few moments ago, the stimulus broke into tax cuts, assistance to states and then finally, an agreement that we ought to take a series of areas that have for years been talked about in this country but candily we've -- but candidly we've never done much about -- broadband technology, high-speed rail, tech information technology, all areas that have broad support on both sides of the aisle but only in the case of the stimulus were there actually funds put behind these initiatives. the challenge was that a year ago many ever these areas had had very little funding or had no problematic experience so the

administration took some time to gear up these programs. we're just starting to see some discoursement on high-speed rail, we're just carting to see discoursement on the president's race-to-the-top education grants. but these new programmatic areas, we need to make sure there is a flan place, that there are metrics in place, and that we know how these dollars are being spent out. so the first part of my amendment will require these programs in the high-risk areas to update their plans by july 1 of this year. second, my amendment will require these high-risk programs to report back to congress and the public quarterly beginning september 30, 2010. and these reports must include performance and financial data to let us know whether these programs are working and meeting the goals that they define in their initial business plan that they would lay out to us in july of this year. i think this is terribly

important. these are areas because they are new, because i think they have enormous popular support, but because they are new, we need to make sure that at the front end of this program implementation, we have got that business plan in place, we have the metrics and. the second part of my amendment is we have been working with the inspector general around the recovery act, mr. devaney and others. i think many of us in this chamber would be disturbed to find out that the recent quarterly report showed that over a thousand recipients of stimulus funding, a thousand agencies, departments, grantees have failed to report back the legally required data on how those dollars have been distributed, what kind of tracking is in place, and consequently when we hear critiques particularly from the other side about the stimulus,

about whether it's job creation or efficiency, well, an appropriate rebuttal requires facts being in place, and for over a thousand of the recipients that have received stimulus funds, they basically have ignored the law and failed to report back. so my amendment imposes financial penalties of up to to $250,000 for recipients of the stimulus funds who knowingly fail to comply with the existing quarterly reporting requirements. we have got to ensure that our agencies, congress, and the public are getting the information they need to know if these important investments are working. the amendment requires agencies to notify recipients if they miss a deadline, they will provide an opportunity for the recipient to report and offer technical assistance. if they need to assistance to get back on track. but if recipients knowingly don't file the required reports or if they ignore these agency requests for this information, agencies may impose a penalty to

hold these recipients accountable. the amendment provides sufficient discretion for agencies to set penalties such as consideration of whether the recipient is a nonprofit, government or small business entity. we don't want to add on any burden, but we simply want those who are receiving financial assistance from the stimulus funds that they actually fulfill their obligation in making sure they report back to us and the public on how those dollars are being spent. mr. president, i repeat, it's not too late to correct the gaps in program management and transparency in the american recovery and reinvestment act. so much of the recovery act funding is still in the pipeline. as a matter of fact, at the end of last fiscal year, last october, only 18% of our recovery dollars had been spent out. even at the end of this fiscal year, at the end of september of 2010, only about 54% of the dollars had been spent out. we still have literally hundreds of billions of dollars to be

spent out from this program. we have to make sure we owe it to ourselves, we owe it to the public that we have in place the appropriate metrics on the high-risk programs and that those other organizations that are receiving dollars, that they do what is their legal requirement on reporting back this terribly important data. so, mr. president, i hope again that the -- that we can get this amendment adopted. i look forward to working with my colleagues on both sides of the aisle to bring this added transparency and this added management oversight to this very important activity. mr. president, i yield the floor and notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

the presiding officer: the senator from utah.

mr. bennett: mr. president, i ask unanimous consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. bennett: mr. president, i ask unanimous consent that i be allowed to proceed as if in morning business. the presiding officer: without objection. mr. bennett: thank you, mr. president. i appreciate the courtesy. we got some numbers this morning, mr. president. unemployment seems stuck at 9.7% nationally. we last more jobs. in my home state of utah, unemployment is at a 23-year high at 6.8%. i know there are states represented by senators here that would love to have 6.8% as their unemployment rate, but we in utah don't like it. and i want to talk about one aspect of the unemployment rate that i think has been ignored in the debate that we've had around the country. the president says we are out of the woods. not far out of the woods, to be

sure, but that we have turned around, that the recession has started to fade and we're starting to come back. and he looks at macro numbers and makes that statement with respect to g.d.p. and all of the rest of that. he is missing a very important fact that i want to highlight here today and that is leading me to the introduction of a bill that i will offer at the conclusion of my remarks. the economy is driven by a variety of forces, but the one thing we do know about economic activity is that jobs are created primarily by small businesses. when i say "small," i mean really small. since over 7 million jobs have been lost in the -- since the beginning of the recession, we must ask, how many of those have been lost in small businesses. and the answer is, over half of that number.

over 3.5 million of the jobs that have been lost have been lost in small businesses. we hear and look at the reports that are in the newspaper about big companies that have had layoffs and big companies that have stropped hiring, but it is the -- that have stopped hiring, but it is the small businesses in the united states that have been the engine of economic growth and the engine of hiring all the way through. i've talked before about my own experience as a small businessman and i will revisit it here for just a moment to put this in context. i have been involved in the creation of a number of businesses. most of them have failed. that is the -- the norm for small businesses. people get an idea, people get excited, they get caught up in the idea of having their own business, they start their own business, they find it's much harder than they thought, they find the challenge is much more difficult than they thought or they simply run into challenges that are beyond their control

and they end up failing. it's all summarized in a comment made by a woman who attended a meeting of "ink" magazine. "ink" magazine every year chooses the entrepreneur of the year across the country in the various states, and i was honored enough to be chosen as the entrepreneur of the year when i was c.e.o. of a business in utah, and as a reward for that, we went to this convention down in miami beach. and a panel was being held of small business people and just prior to the panel, they announced that after the panel was over, there would be a wine and cheese tasting event to be held on the patio of this hotel. and then they turned to the panel and one of the women on the panel said, entrepreneurs do not drink wine. entrepreneurs drink vodka neat. we can't do with this gracious

living stuff. we are caught up in the tremendous pressure of trying to keep our businesses open. i don't drink wine or vodka but i identified with her comments and her sentiments about how tough it is. well, the president may think that the g.d.p. numbers show that we've turned the corner. the people in small business recognize that in their part of this economy, we have not. let me quote from the national federation of business small business optimism survey. it was in december of last year, and they noted -- quote -- "small business owners grew even more pessimistic in the final month of 2009, capping off what was a trying year for their businesses. regular borrowers -- those assessing capital markets at least once a quarter -- also continued to report difficulties in arranging credit at the highest frequency since 1983, according to the report."

1983, for those of us who remember, was the depth of the recession that followed the great inflation of the jimmy carter years. as president reagan and the congress were dealing with the dreaded double dip. we came out of the jimmy carter years with a recession, a recovery and then another recession, the dreaded double dip or the w-shaped recession. and 1983 was a very challenging year. i was running a small business at that time as well and i remember it very well. all right. the worst attitude with respect to their opportunities in small business since 1983, according to people who are on the firing line in small business. so what do we need to try to help small business recover and start creating jobs again? again, the point i made earlier, more than half of the jobs that are created in america are created with small business, and these are small businesses that

are doing less than $5 million a year. i've -- as i say, i've been involved in creating many of these businesses. many of them fail. fortunately the small businesses i was involved in in creating that didn't fail earned enough money to repay me back for all of that which i lost and the ones that did and created enough jobs created enough jobs to overcome the loss of jobs in the ones that failed and the small business we created, for which i won the award at "ink" magazine, ultimately went to the new york stock exchange and employed 4,000 people. not bad for a small business that started in somebody's basement with originally four full-time employees. i was number five in that business. so i have seen it happen on both sides, the failure side and the success side, and i know what it takes. and i can tell you, mr. president, that the kinds of things the president is talking about and that we have been doing here in this chamber are

not the things that small business needs to survive. and let me talk about some of those and they are in the bill that i will offer here this morning. one of the first things we have to recognize is that the worst thing that can happen to a small business financially is to earn a profit. you say, now, wait a minute, obviously you want to earn a profit. yes, you want to earn a profit but the worst thing that can happen to you is that as you are struggling on a cash flow basis to keep this business going and you cross the line into profits, the government shows up and sa says, we want half your profit immediately and we want it in cash. you want your profit invested in inventory. you want your profit invested in the capital investments that will allow your business to survive, and the government says, no, you have earned a profit, and we want it in taxes and we want it in cash.

and we won't take a percentage of your inventory and hold it to let you make the business grow. you've got to liquidate that inventory to pay your taxes. we want it in cash. so, the first thing that is in my bill will provide a ten-year net operating loss carryback provision for qualifying businesses whose average gross per year is less than $5 million. you struggle with the business. you lose money the first year. you struggle with the business. you lose money the second year. you struggle with the business. you lose money the third year. but you keep it afloat. and the fourth year you start to earn money. and there's the government saying we want our share of your profits, and we don't care that you have been losing money while you're building this business. you've been losing money on an accrual money while you've been borrowing from your brother-in-law and your credit card and your bank.

and finally you're at the point where you're making a profit. wu won't give you any consideration for the losses while building the business. we're going to take our bite out of this year's process and that can be enough to sink the business. a net carry-back for the average business gross business is less than $5 million. this is not a break for american airlines. this is not a break for general motors. this is a tkpwraeubg for the person who is -- this is a break for the person who is trying to duplicate the success that i was lucky enough to be involved in where we start something in a basement or a garage and see it grow to the point where it can go to the new york stock exchange. you can say, well, senator bennett, you didn't need this net loss carry-back provision when you did that business. and that's true. because we grew that business in

what the "new york times" and our publications called the decade of greed. it was the years of ronald reagan, when the top marginal tax rate was 28%, which meant even paying taxes, we got to keep 72 cents out of every $1 we generated in profit. and that was enough to allow us to fund the growth of that business. today the net -- the top marginal tax rate is over 40%. there's a great deal of difference. if we had had to try to grow that business in today's tax environment and it went up to that level when bill clinton became president, we probably would not have been able to grow the business, and we would not have created those jobs, and we would have been able to ultimately build a company big enough to go to the new york stock exchange. all right, i can't deal with the marginal tax rate. we don't have enough votes to do that. if i could, i'd like to get it

back to the 28% it was with ronald reagan. if we're going to have the tax rate where it is, we need at least some kind of relief for small business. and the ten-year not operating loss carry-back provision is a way to give them some kind of relief in this time of great economic stress. number two -- and this gets a little technical -- i want to expand the definition of section 129 expensing to include structural changes to the physical property and make the current $250,000 deduction limit permanent. when you're making an investment in your business of a capital good you need, whether it's a lathe at a machine shop or whether it's a warehouse in something that requires you to stockpile material before you send it out to retailers -- whatever it might be, you don't want to have to start paying taxes on the money that you put into that capital good. you need the deduction for

expensing that right now. that's another way to hold your taxes down. this second provision is tied to the first. the the first gives you the net carry -- operating loss carry-back provision. this one says you can expense in a much better fashion the money you're putting up up front for your structural activity. then number three, it sounds very minor, but to a business of the size we're talking about, it can be significant. i want to increase the current start-up cost deduction from $5,000 to $20,000. and this will encourage entrepreneurs to invest right now rather than wait for the economy to improve. well, mr. president, these are the three primary things that will be in the bill that i will send to the desk when i finish my remarks and introduce here today. i want to conclude with these comments as i move around my state and as i move around the country talking about the state of business.

back to the reference of the nfib and their survey about optimism or pessimism among small business owners. i have never seen a time of more pessimism than we have now. even back in the 1980's when i described the businesses that i was involved in then in the dreaded double dip, businessmen were not as pessimistic as they are now. they still had hope that we could come out of this, but now, even while the national g.d.p. numbers are looking good to the people at the white house, to the people on main street, it doesn't look so good. and this is what i hear: the venture capitalists tell me, we are not making venture capitalist investments anymore. why? because the venture capitalists is there to capitalize and to finance the start-up, and then the system is supposed to take over and finance the growth.

we pick the entrepreneur who has the widget or the gadget, whatever it might be that's going to change the world. we say, yes, your widget is marvelous and we're going to fund that so you can get that thing going. but once you get it going, the system takes over. the banks give you the loan that you need for your capital investment. other investors come in that are not taking as big a risk as we are because they see now that your widget really does work, so the level of risk is lower. the system takes over and we can take our venture capital and go out and look for the other entrepreneur who has a new invention. and that's how the whole thing works. they said we discover now the system doesn't take over. we discover now the money we have put in to the widget, the entrepreneur, the inventor isn't followed on by additional funding. and if this investment we have put in is going to survive, we have to double down our debts.

and instead of our venture capital now going to the inventor and the entrepreneur, our venture capital is going to places where it's never been required before. and as a result, we don't have any left over for the true venture capital and the whole system is shutting down in terms of job creation. we're getting to a circumstance where new jobs are not coming as a result of venture capital activity. the job creation that i talked about of these small businesses is being stifled. that's a first part of the pessimism. the second part of the pessimism, of course, is that the stimulus money that we have put into the system isn't getting down to small businesses at all. i got a letter from a small businessman in utah. i identify with him because he's created a business of the same kind that i tried to create over my career before i came here. and he says, "i am writing as i am frustrated. i own a small business here in

utah." he names it. "we employ 20 people. in the macro of the world, 20 people isn't very many, not enough to worry about; except that this fellow and his 20 paoerpl representative of -- people are representative of more than half of the job creation going on in this country historically. "i have a small business here in utah that employs 20 people. now i am down to four people as i can't get financing. i put close to $2 million in technology development. there is the venture capital side of it. we are ready to launch our new system and services but have run out of funds and can't find investor groups that would be willing to take a risk on technology and a relatively new company. why can't some of the stimulus money come to us? i would hire 25 to 30 new people if i could receive funding that

i need to launch my product and services. banks won't lend. individuals are holding on to cash. v.c. groups are looking for companies that have been around a few more years. i don't want to violate s.e.c. rules. raising funds are difficult. i don't have a solution to go everything he's saying, but i do believe that the kinds of reforms that are in the bill i'm introducing will create a better environment for small business and make it easier for him and others like him to go to investors and say, look, if you put some money into our business, we won't have to pay taxes as soon as it turns the corner because we'll have this net operating carry-back for ten years. we can expense some of the capital developments we make so we won't have to worry about paying taxes on it, and we have a current start-up cash deduction that has gone up to

$20,000. these are modest kinds of proposals, but they are the kinds of proposals rooted in real experience, in main street rather than wall street, from real people that are creating jobs, have created jobs, who are hurting the most in this economy, and upon whom we depend primarily for the new job creation. as i said at the outset, bad numbers today. unemployment has not come down in the nation. more jobs have been lost. and in my home state of utah, we've hit a 23-year high in unemployment. we must look to where the jobs come from, and the answer to that is small business. and we must do everything we can to try to help small business get started and get going and get growing. and that is the way we will get out of this recession. with that, mr. president, i yield the floor. mr. sessions: mr. president, will the senator yield for a question? mr. bennett: i would be happy to yield. mr. sessions: i value the

senator's views on these issues so much. i recall when the senator chaired the joint economic committee, select committee in the house and senate. he was our chairman. and since then, he's been known to -- as the authoritative voices on our economy as well as senate business. and i guess i was, first would say i'm very intrigued by your legislation. it sounds like something that's exactly what we need. and i don't, i guess, want to be in a political tit for tat. but i remember and recall the senator from utah opposing the stimulus package that was on the floor and voting against that and raising concerns about it. and i think the general concern most often raised was one that nobel prize laureate gary becker

raised: it wasn't going to create jobs. and i guess i would just ask, based on your experience in the senate, the amount of money that went into that bill, the purpose was supposed to be to create jobs, give us your honest evaluation of how well it's performed, senator bennett. mr. bennett: i thank the senator from alabama for his kind words. my own impression is that the stimulus package has created a few jobs in a very marginal kind of effect. most of the money, it seems to me, has been spent in efforts aimed at research which may or may not produce jobs three years, four years, eight years, ten years from now. as a member of the appropriations committee, we held a hearing just yesterday with the department of energy and looked at the amount of

stimulus money that was going in to fund research at the department of energy and pointed out to the secretary of energy that only 7% of the stimulus money had been spent because to get ready for the energy research that they were going to do, they had to hire new people for the government, perhaps has created some government jobs, and get ready to examine all of the grants and look at all the proposals and so on. i'm not opposed to research, but this is not an immediate creation of jobs in the middle of a recession to be spending stimulus money in this fashion. i've also come to the conclusion that the jobs that have been created or saved, as this administration tries to add that word to it, have primarily been government jobs.

now, i don't object to people working for the government. we have many, many civil servants who provide great value added in the work that they do for the government. but the long-term projection of jobs that will add to the economy, create new jobs and create new wealth, i do not see that the stimulus has produced any significant difference in that arena. mr. sessions: i would thank you for those comments. what a tragedy that is. i don't think people realize how much $800 billion is. so your legislation would be far less expensive, would immediately help small businesses create jobs without a government bureaucracy telling them what to do? is that fair to say? mr. bennett: i would say to the senator, that is the whole purpose of this. let entrepreneu