March 01,2010

Press Contact:

Scott Mulhauser/Erin Shields

Baucus Floor Statement on Expiring Provisions and Job Creation

Mr. President, Martin Luther King Jr. said:

“Life’s most urgent question is: What are you doing for others?”

Mr. President, pretty much all of us came here to the Senate to work on that urgent question. Pretty much all of us came here to help other Americans.

And Mr. President, on a number of levels, the legislation before us today is urgent legislation.

The legislation before us today is urgent because it would prevent millions of Americans from falling through the safety net.

The legislation before us is urgent because it would extend vital safety-net programs that expired yesterday.

The legislation before us is urgent because it would put cash in the hands of Americans who would spend it quickly, boosting economic demand.

The legislation before us today is urgent because it would extend critical programs and tax incentives that create jobs.

And the legislation before us today is urgent because it is an important thing that we here cando for other Americans.

Mr. President, since the recession began, more than seven million Americans have lost their jobs. The unemployment rate remains nearly 10 percent.

For Americans without a job, this Great Recession is a Great Depression.

Last week, with a solid, bipartisan vote, we passed legislation to help create jobs. But we canand should do more. And by extending this package of vital provisions, we can do just that.

The provisions in this bill are important to American families. They are important to communities that have suffered a natural disaster. They are important to businesses competing in the global economy. And they are important to furthering America’s commitment to energy independence.

And Mr. President, the need is urgent. Yesterday, many of these important provisions expired.

Millions of Americans are being put at risk. The expiration of these provisions has left gaping holes in the safety net.

Among the provisions that expired yesterday are these: expanded Unemployment Insurance benefits, COBRA subsidies to help people keep their health insurance, a provision that keeps folks right at the poverty line form losing their benefits, the small business loan program, the temporary measure to prevent a 21 percent cut to doctors under Medicare, the Flood Insurance program, and the Satellite Home Viewer Act.

Unless we reinstate the programs in this bill, there will be real-world consequences for the people who depend on these programs today.

Take unemployment insurance. This bill would extend the program for expanded unemployment benefits. These benefits expired on Sunday.

This bill would extend what’s called Federal Emergency Unemployment Compensation.

This bill would extend 100 percent Federal Extended Benefits. That’s a program where state governments normally have to pay 50 percent.

And we also would extend the additional $25 a week for each beneficiary receiving unemployment benefits.

According to the National Employment Law Project, 5.6 million people are currently benefitting from one of the Federal unemployment benefits. Between March and November of last year, we distributed nearly $8.3 billion in additional benefits through the additional $25-a-week supplement.

For example, my office received word about one unemployed Montana worker who had been living in a homeless shelter for more than a month. This Montanan used Emergency Unemployment Compensation benefits to move closer to an out-of-state relative. The relative helped the Montanan through this difficult time. With the help of Emergency Unemployment Compensation benefits and the help of family, this Montanan was able to find work again.

Unemployment benefits also make good economic sense. The nonpartisan Congressional Budget Office estimates that every dollar spent on unemployment benefits generates up to $1.90 in additional Gross Domestic Product. This makes unemployment benefits one of the most cost-effective policies for stimulating the economy.

By helping our unemployed neighbors through this long recession, we help to keep the neighborhood gas station operating. We help to keep a house from foreclosure. And we help to keep our economy from further damage.

We must act immediately to help the more than one million people who lost their benefits yesterday. My heart goes out to them and their families. And hope that they can hold on, while we work to clear this bill and bring the help they deserve and depend on.

A second vital program in this bill that expired yesterday is the program that provides a tax credit for COBRA health benefits. That’s the program that helps workers who lose their jobs to keep their health insurance.

When workers lose their jobs, they lose more than just their paychecks. Unfortunately, they often lose their ability to afford health coverage, as well.

Today, roughly 60 percent of the non-elderly population receive health insurance through their jobs. In most cases, unemployed workers have the right to keep their work coverage for up to 18 months through the COBRA program.

But to receive COBRA health benefits, workers must typically pay all of the premium costs, plus an additional 2 percent for administrative costs.

For a family of four, the average monthly COBRA premium is roughly $1,100. For most people who are out of work, that’s simply unaffordable.

The Recovery Act helped unemployed workers and their families to cover the costs. This assistance has helped millions of unemployed workers and their families to maintain health insurance while they look for a new job.

Unfortunately, COBRA assistance expired yesterday. This means that workers who lose their jobs today or after will not be eligible for COBRA assistance.

They can still buy health insurance through the COBRA program, if they can find the dollars topay the full freight. That’s 102 percent of their current premium. So for many folks, that’s simply unaffordable. And so unless we act, the ranks of those living in fear without health insurance will grow even more.

Third, without this legislation, physicians who treat our seniors and military families will face animmediate 21 percent pay cut. You heard me right — 21 percent.

That’s more than families lost in net worth during the worst of the recession in 2008. Andthat’s nearly twice as much as home prices fell last year.

This cut would force doctors to stop seeing patients. This cut would mean less access to care for our parents and grandparents. This cut would mean that our doctors would be forced to cut their own costs — potentially forcing them to layoff staff.

Thankfully the administration announced on Friday that it will use its existing authority to delay the effect of this cut for the immediate future.

But we cannot delay action any longer. Seniors, military families, and physicians deserve better. In Montana, 2,000 doctors serve 140,000 seniors who depend on Medicare for lifesaving health care. And Montana has 32,000 military families who should not be turned away from their doctor’s door. They deserve access to the best health care we can give them. They deserve a Congress willing to put politics aside and put them first.

This bill would avert the 21-percent cut because of the so-called “Sustainable Growth Rate.”We adopt here another short-term stopgap. Next time, we hope and expect that we will come back to a long term solution.

By exempting part of the SGR from the new statutory pay-go rules, the Senate recently recognized that a long-term solution will require a short-term investment. The House followed suit. I hope that this push will aid us in finding a permanent solution — for the sake of our seniors’ continued access to medical care.

A fourth provision in this bill affects the 2009 poverty guidelines. Why is this important? I’ll tell you why.

Dozens of programs are available to help lower-income Americans. We all know the important role these programs play in keeping those less fortunate fed, healthy, and safe. I’m talking about programs like Medicaid, the Supplemental Nutrition Assistance Program — formerly known as food stamps, the school lunch program, and the Low Income Home Energy Assistance Program — or LIHEAP.

Eligibility for these and many other programs is based on the Federal poverty guidelines. These guidelines are updated every year for inflation. But the update for this year — 2010 — will cause people who are currently eligible for and benefitting from these programs to lose their eligibility. You may wonder why in a time of economic crisis poverty-based program eligibility would decrease. You may think that sounds counter-intuitive.

One of the effects of the current economic crisis is that inflation went down. That means that the average cost of everyday things like clothes, transportation, and rent is less than it was the year before. However, because the Federal poverty guidelines are based on the average cost of everyday goods, the poverty level for 2010 would be less than it was for 2009. This is the first time in the history of the guidelines that such a decrease would occur.

That is not the right outcome, though. We should not make fewer people eligible for poverty based programs at precisely the time when those safety-net programs are serving the very purpose for which they were created. Safety-net programs are there to help people when times are tough.

But there is a simple solution. We can simply leave the guidelines developed for 2009 in place.That way, people who were eligible can remain eligible.

Leaving the 2009 guidelines in place would mean that people would not lose their health care by being kicked off of Medicaid. It would mean that families would not go hungry because they lost their eligibility for a number of nutrition programs. It would mean that low-income folks could still heat their homes this cold and snowy winter thanks to LIHEAP.

Keeping the 2009 guidelines in place would not increase eligibility. It would mean that we would avoid pulling the safety net out from under the people it is there to protect.

Fifth, for individuals and families, this bill provides much-needed tax relief in a time of economic uncertainty.

For example, many students don’t have the books or supplies that they need. Some teachers have to buy classroom supplies using money from their own pockets.

This bill extends the teacher expense deduction for teachers buying school supplies for their classrooms. And it extends the qualified tuition deduction to help with college costs.

The bill provides much-needed relief to families who have suffered from natural disasters. It extends a package of disaster relief provisions developed to address all Federally-declared disaster areas with immediate, reliable, and robust tax relief.

And it extends important business provisions to help create jobs and make our companies competitive in a global economy.

America accounts for one-third of the world’s investment in scientific research and development. We rank first among all countries.

But relative to the of our economy, America is in sixth place. And the trends show that maintaining American leadership in the future depends on increased commitment to research and science.

And yet our R&D tax credit expired at the end of last year. This will put American corporations at a competitive disadvantage. Corporations are unsure if they will be able to obtain R&D credit next year. And they need to plan for the future.

American financial services companies successfully compete in world financial markets. W eneed to make sure that the U.S. tax rules do not change that.

This legislation extends the active financing exception to Subpart F. In so doing, it preserves the international competitiveness of American-based financial services companies, while including safeguards to ensure that only truly active businesses benefit.

This provision will put the American financial services industry on an equal footing with foreign based competitors who are not taxed on active financial services income.

Several energy tax incentives also expired at the end of last year. This bill extends those incentives to encourage continued investment in technologies that promote energy independence. For example, the bill extends incentives for new hybrid battery technology and the construction of new energy efficient homes.

Sixth, in addition to these important provisions that provide direct assistance in job creation, the bill includes other proposals that will provide relief for businesses and individuals. One such provision is pension funding relief.

These days, American employers are faced with the need to make higher pension contributions.Several factors have combined to require these higher contributions. There’s the funding changes of the Pension Protection Act of 2006. There’s the slide in the stock market in 2008.

And then there’s the ensuing Great Recession.

These requirements for higher contributions are coming upon employers just when they are facing lower asset values and lower cash flow. Meeting these requirements could divert resources that employers could use to keep workers on the payroll.

We addressed this bind temporarily in the Worker, Retiree, and Employer Recovery Act of 2008. But employers are still facing the prospect of closing plants and stores. Employers are still faced with the possibility of terminating workers in order to make up for lost asset values.

The bill contains additional temporary, targeted, and appropriate relief for these employers.And at the same time, the bill still maintains the pension security system.

Seventh, this bill would also extend several important health provisions that expired at the end of 2009. Notable among these provisions is the exceptions process for the Medicare therapy caps. Extending this provision will help ensure that Medicare beneficiaries will continue to receive access to the therapy services that they need. And several rural policies are also extended.

Eighth, these tough economic times have hit the states hard, as well. So, included in this bill is asix-month extension of the additional Federal financial assistance for state Medicaid programs.This will allow states to plan for their next fiscal year with the certainty of continued help from the Federal government.

Additional Federal Medicaid match money — known as FMAP — helps the economy grow. According to the economist Mark Zandi, this funding has a return on investment of about $1.40 for every dollar invested.

The Nation’s Governors have repeatedly asked for an extension of this Federal assistance. And this bill answers their pleas.

With so many Americans out of work, our country needs Congress to enact this legislation.This bill continues valuable tax incentives to families and businesses that will help them in these difficult economic times. And the bill sustains vital safety-net programs that will also help foster economic growth.

Mr. President, this is urgent legislation. It would prevent millions of Americans from falling through the safety net. It would extend vital programs that expired yesterday. It would put cash in the hands of Americans who would spend it quickly, boosting economic demand. It would extend critical programs and tax incentives that create jobs. It is an important thing that we here can do for other Americans. 

And so, let us help America’s businesses to create more jobs. Let us join together to work across the aisle on this common-sense legislation. And let us enact these tax incentives and safety-net provisions into law.