Congressional Record, Volume 147 Issue 51 (Monday, April 23, 2001)

[Congressional Record Volume 147, Number 51 (Monday, April 23, 2001)]
[Senate]
[Pages S3777-S3782]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEARS
2001--2011--Resumed

Mr. DOMENICI. Mr. President, I ask unanimous consent that the order
of April 6 with respect to conferees to the budget resolution be
modified to add Senator Bond and Senator Murray.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. Mr. President, pursuant to the agreement of April 6, I
now move that with respect to H. Con. Res. 83, the budget resolution,
the Senate insist on its amendment, request a conference with the House
on the disagreeing votes thereon, and the Chair be authorized to
appoint conferees on the part of the Senate.
The PRESIDING OFFICER. There are now 4 hours of debate on that
motion.
Mr. DOMENICI. Mr. President, I don't know why we need 4 hours. If any
Senator wants to speak to the issue, the appointment of conferees and
sending the completed package which we voted on, 65 Senators voted aye
on, to the House and seeking a conference agreement with them, that is
why we are here.
I understand that under the previous order, we are going to take up
H. Con. Res. 83 and that either this Senator or the majority leader
will be recognized to make a motion that we insist on an amendment--we
have just done that--request a conference, which we have done, on the
disagreeing votes and the Chair be authorized to appoint conferees on
the part of the Senate. We have done that.
We now have 4 hours, which have been agreed to, to debate this issue.
I don't intend to even come close to spending 2 hours on this matter.
To anyone on my side of the aisle, if they want to speak, I will be
here for a while, as long as my ranking member wants me to be here by
virtue of his speaking. If any Republican wants time, I will give it to
them. If we run out of time, I will give some of his people some of my
time.
Any time I may have, I will reserve at this time. Essentially, I
don't need very much of it.
Now we are in the process of proceeding to conference on two budget
resolutions. We begin that process with the appointment of conferees in
the Senate. The House has not done that yet. They will appoint their
conferees tomorrow. It is my hope that the conference can meet as soon
as the House has appointed its conferees, maybe as early as Wednesday.
Over the recess the two staffs of the Budget Committee on the
majority side have been meeting to organize the materials for
conference, to lay out any technical differences that can be resolved
quickly by the conferees, and to highlight the major differences
between the two resolutions. I am sure that information will be shared,
and wherever the minority thinks there should be matters changed, added
to, or in any way described differently, obviously, we will take that
into consideration.
I don't think there are very many big secrets about the differences
in the two resolutions. The House budget resolution sticks fairly
closely to President Bush's budget submission that was submitted in
some detail over the recess period. Everyone knows that over the
recess, April 15 came and went, with the American public paying their
taxes, with the few exceptions being those who get extensions. Taxes
are at an all-time high in terms of the totality of collections by the
U.S. Government. The House budget resolution assumes a tax cut over the
next 11 years of over $1.6 trillion.
The Senate-passed budget resolution assumes a tax cut of nearly $1.3
trillion over the next 11 years, including this year's $85 billion
surplus rebate, or, in some way, a refunding of 85.2, which should be
implemented quickly to provide both a stimulus to the economy as well
as longer term marginal tax rate reductions and whatever else can be
accomplished by the Finance Committee within the agreed-upon tax
number.
It is fair to say that the Senate-passed budget resolution provided
for more spending than the House-passed resolution, both in the
annually appropriated and in the accounts sometimes referred to as
mandatory spending, or sometimes referred to as entitlement spending.
In the area of appropriated accounts, the Senate-passed budget
resolution provided nearly $688 billion in budget authority, or an 8.3-
percent increase over current year funding. The House-passed budget
resolution was at the President's request of about $661 billion.
When I use these two numbers, 688 and 661, the 661 is the President's
4-percent increase. That increase is in the totality of Defense
appropriations and nondefense appropriations. And so is the $688
billion, in which the Senate approved the 8.3 percent. That includes
Defense and nondefense.
While the increase or changes in the annually appropriated accounts
have received the bulk of the attention in this debate so far, I need
to highlight the fact that the Senate-passed budget resolution
significantly increased spending for programs we refer to as mandatory
spending, compared to the resolution which I introduced and upon which
we commenced our debate, and that is before it was amended. We have
added nearly $400 billion in so-called mandatory spending, almost all
of this in the area of some kind of educational funding, principally
funding for special education.
Again, almost every dollar we added back for mandatory spending we
took away from the President's proposed tax cuts. It should be obvious
that the major challenge before the conference will be to find a
compromise in both the areas of tax cuts and spending.

[[Page S3778]]

I don't think it requires a great deal of budget or political skill
to figure out that an obvious compromise for the House is to reduce its
tax cuts and increase its spending assumptions, and the Senate to
increase its tax cuts and reduce its spending assumptions.
Finding that balance will indeed be a challenge, but I am confident
that within a week or so we will reach an agreement that meets the
challenges of drafting a budget blueprint that will allow us to get on
with putting together and implementing legislation to provide a tax
cut. There will be plenty of time to argue and debate what kind of tax
cut and what will be affected and how soon.
Obviously, we need to consider the reduction of debt held by the
public and fund national priorities such as health care, Medicare
prescription drugs, energy security needs, defense, and environmental
programs.
Mr. President, at the appropriate time, as I said before, I will
yield back the remainder of my time. I yield the floor at this point.
The PRESIDING OFFICER. The Senator from North Dakota is recognized.
Mr. CONRAD. Mr. President, I thank my colleague, the chairman of the
Senate Budget Committee. I think neither of us believes we need 4 hours
for this discussion. In fact, we need a relatively brief period of time
on our side. I just want to go through the decisions that were made in
the Senate in contrast to what President Bush proposed and in contrast
to what we proposed on our side, just to put in some perspective where
we are going as we go into the conference.
I have prepared this chart in order to help me do that in as
efficient a way as I can. In this column, we have what President Bush
proposed. The second column is what we proposed in the Democratic
alternative. The third column is what the Senate passed.
If we look at the top, this is the projected surplus over the next 10
years, and we are all in agreement. The agencies that make these
forecasts have told us we can anticipate $5.6 trillion over the next 10
years. I am quick to point out that I would not bet the farm on any 10-
year forecast or any 10-year projection. The agency that made this
forecast themselves warned us of its uncertainty. They have said very
clearly there is only a 10-percent chance that number is going to come
true. There is a 45-percent chance that there will be more money,
according to them. There is a 45-percent chance there will be less
money.
After the performance of the economy over the last 8 weeks, since the
forecast has been made, I would be willing to bet a lot more money that
there is going to be less than what is forecast. With that said, that
is the official forecast. Then we go to the various elements of the
proposals by the President, and by us on our side, and what passed the
Senate.
The next major item is the Social Security trust fund. The President
forecasts $2.6 trillion of Social Security surplus over this next 10
years. He allocates $2 trillion of it to paying down national debt. We
allocated $2.5 trillion to paying down the debt.
By the way, we had a somewhat different estimate by the Congressional
Budget Office as to the amount of the Social Security trust fund
surplus. The President's people said $2.6 trillion. The Congressional
Budget Office said $2.5 trillion. We are compelled to use the
Congressional Budget Office numbers. So we have reserved all of the
Social Security trust fund money for the Social Security trust fund
because those moneys are not needed immediately. They go to pay down
debt. The Senate passed $2.5 trillion.
In the Medicare trust fund, the President reserved none of it for the
purpose of paying down the debt. In fact, he moved all of it--in his
forecast, it is $526 billion. He moved it to an unallocated category.
That is something with which we strenuously disagree. We don't believe
that money is unallocated, uncommitted. We believe it is fully
committed to the Medicare trust fund. Unless you use it for that
purpose, you hasten the insolvency of the Medicare trust fund. So we
don't believe it is available for other spending. We don't believe it
can be used for any other purpose, nor should it be.
So in our alternative--again, there is somewhat of a different
estimate from the President's, who estimates there is over $500 billion
in that category, and the CBO estimates $400 billion--we reserve it all
for the Medicare trust fund. That is what the final Senate result did
as well.
I should make very clear that while, in total, they reserve the full
amount for the Medicare trust fund, in 4 of the years they have raided
the Medicare trust fund. In 2002, 2005, 2006, and 2007, they go into
the Medicare trust fund to fund other priorities. We don't support
that; we don't believe in it. We don't believe any private sector
company could do such a thing. We don't believe we should be doing it
either. That left, under the President's proposal $3.6 trillion and
under both the Democratic alternative and what passed the Senate, $2.7
trillion available for other uses.

The President proposed, of the $3.6 trillion in his plan that was
available, using $1.6 trillion for a tax cut. We proposed $745 billion.
The Senate passed $1.2 trillion--roughly halfway in between the two
proposals.
Then we go to the question of high-priority domestic needs. The
President proposed $212 billion of spending for high-priority areas. We
proposed on our side $744 billion. The Senate actually passed $849
billion. The Senate actually passed spending of $105 billion over and
above what we on the Democratic side proposed. If you look at the
constituent elements, you can see the President proposed on education
over the next 10 years $13 billion--a very modest sum of new money in
the President's plan. We don't believe that is sufficient. We proposed
$139 billion to strengthen education in the country. The Senate
actually passed $308 billion, which is far more than we proposed and
obviously dramatically more than the President proposed.
On prescription drugs, the President proposed $153 billion over 10
years. We proposed $311 billion, and the Senate actually passed $300
billion, very close to what we suggested.
On defense, the President proposed $62 billion above the baseline. We
proposed $100 billion above the baseline. The Senate actually passed
$69 billion more than is in the baseline assumption.
On agriculture, the President actually proposed a cut of $1 billion.
We proposed in our Democratic alternative some $88 billion to match
what our major competitors are doing for their producers or match it as
closely as we can under current trade law. One can see the Senate
actually passed an increase of $58 billion, again somewhere in between
our proposal and the President's proposal.
On health care coverage, the President proposed no new money. We
proposed $80 billion to expand health care coverage, to begin to cover
additional people who now do not have the benefit of health care
coverage. The Senate actually passed $36 billion, again somewhere in
between.
On environment, the President proposed very substantial cuts, $48
billion in cuts on environmental protection. We proposed an $18 billion
increase. The Senate actually passed cuts of $41 billion. We believe
that goes too far. We believe that is not wise given the environmental
threats we face--clean air, clean water--and this is an area that
should be addressed in the conference.
In a category we call ``other,'' the President proposed some $33
billion in spending priorities. We proposed $8 billion. The Senate
actually passed $119 billion, most of that for our Nation's veterans.
Some $68 billion of what passed in the Senate was for our Nation's
veterans, $14 billion in home health care, and the rest in other items.
Next is the category of strengthening Social Security. This is where
we have a very significant difference. The President proposed using
$600 billion from the Social Security trust fund itself to strengthen
Social Security for the long term. We believe that is double counting.
We do not believe we can take money from the trust fund itself and use
it to fund private accounts or anything else. We believe that is double
counting, that it hastens the insolvency of the Social Security trust
fund itself, and that we ought to reserve every penny of the Social
Security trust fund for Social Security, and any additional money to
strengthen Social Security should come from outside the trust fund
itself.
That to us is the more conservative approach and one that has more
prospect of working given the demographic

[[Page S3779]]

tidal wave we face when the baby boomers start to retire. One can see
under our alternative and what passed the Senate, neither of us agreed
to take money from the Social Security trust fund for that purpose.
We proposed using non-Social Security, non-Medicare trust fund money
to strengthen Social Security in the amount of $750 billion. This is
the area in which what finally passed is, frankly, most deficient.
There is not a dime in what passed in the Senate to strengthen Social
Security for the long term other than reserving the Social Security
trust fund surpluses for Social Security. That is important. It is
necessary. It is not sufficient. We simply must do more.
All of the testimony before the Senate Budget Committee made very
clear that we face a demographic tidal wave just beyond the 10-year
window of this budget resolution. That is when the chickens are going
to come home to roost. That is when we see these massive surpluses now
turning to dramatic deficits. That is why we believe not only should we
reserve every penny of the Social Security surplus for Social Security,
but in addition to that, we ought to take money out of this general
fund surplus to strengthen Social Security for the long term as well.
We believe that is just common sense.

We hope very much before this conference is done that not only will
we reserve the trust fund moneys for the trust funds but that we will
make an additional commitment in a contribution from general fund
surpluses that are projected.
Remember, these are projections. This is not money in the bank. This
$5.6 trillion is not money in the bank. This is money that is forecast.
That is why we think the President's proposal is especially unwise
because he is taking virtually all of the non-trust-fund money and
committing it to a tax cut. We just do not think that is wise. We do
not think that is prudent.
We do not think any institution, if they were faced with a similar
set of facts, would make this kind of decision. We do not think they
would say we are going to take virtually all of our non-trust-fund
money and put it out in a tax cut or, if you were a private sector
enterprise, if you were a company promising a shareholder dividend,
lock it in now for the next 10 years, virtually every penny outside the
trust funds for the retirement funds of your employees and the health
care trust funds of your employees. That is what the President has
proposed.
Is that really what people would do if they were running a company?
Is that what they would do? I do not think so. I believe they would pay
down their debts to the full extent possible. They would invest in the
future. Yes, they would have a dividend for the shareholders, but they
certainly would not commit all of their non-trust-fund money for that
purpose based on a 10-year forecast that the people who made the
forecast themselves say is highly uncertain.
Then we have the final differences in the interest costs. The
President's interest cost is $461 billion. Ours is $490 billion. The
Senate-passed package will cost $572 billion.
People say to me: Gee, what are you talking about, interest cost?
What is that about?
Simply, to the extent we provide a tax cut or we spend money, that
requires additional interest costs because to the extent we have a tax
cut, to the extent we have additional spending, that reduces the amount
that is going to pay down the debt. That means we have more debt than
we would otherwise have. That means higher interest costs.
Most of the President's additional interest cost is generated by his
tax cut. In fact, his tax cut that is advertised to cost $1.6 trillion
does not cost $1.6 trillion. It costs, just with the interest cost
associated with it, at least $2 trillion.
Then, of course, there are other things that have not been factored
into the President's proposal because we now know that because of his
proposal we are going to have to reform the alternative minimum tax.
The alternative minimum tax currently affects 2 million American
taxpayers. Under the President's proposal, 35 million people are going
to be affected, and it costs over $300 billion to fix it. It is nowhere
in the President's budget, but we know that cost is there. We know this
Congress is never going to allow one in every four taxpayers in America
to be caught up in the alternative minimum tax. It makes no sense. It
will not happen, and it should not happen. It costs money to fix it. It
is not in the President's budget, but it should be because it is a
hidden cost.
In addition to that, there are a whole series of other things the
President has not included that also cost money. We know that certain
tax breaks currently provided in law are going to be extended. Research
and development is going to be extended. We certainly are not going to
change the energy tax credits that are in current law in the middle of
an energy crisis, and we should not.
That costs money, but it is not in the President's proposal. Oh, it
is there, it is just not funded, and that is another part of the
problem of the President's plan.
He imposes a lot of costs, but he doesn't fund them. You can stick
your head in the sand and say we will not fund them, but we know the
reality is different.
Finally, on the unallocated category, the President has $845 billion;
we propose nothing in the unallocated category. What actually passed
the Senate was $129 billion. On the President's side of his $845
billion, I hasten to point out that $526 billion of that is from the
Medicare trust fund. His unallocated category is really much less than
is advertised. About two-thirds of that money is Medicare trust fund
money. All of a sudden he uncommits that money. I don't know from where
that idea came. You cannot unallocate it. You cannot uncommit it. It is
fully committed. Doing such a thing as the President proposes moves up
the insolvency of the Medicare trust fund by 16 years. By 16 years
sooner the Medicare trust fund goes broke--sooner than if the money is
left where it is supposed to be in the Medicare trust fund.
These are the fundamental differences between what President Bush
proposed, what we proposed on our side, the Democratic alternative, and
what actually passed the Senate. The major differences are in the areas
where the President proposed a tax cut, twice as big as what we
proposed. On the other hand, we proposed $900 billion more in debt
reduction than the President proposed. That is the biggest set of
differences between the President and the Democrats. He has a tax cut
that is about $800 billion more than ours. We have about $900 billion
more in debt reduction than the President. There is the fundamental
difference between the two sides.
In addition to that, there are also differences in high-riority
areas. Let's review them. In education, we propose far more in new
resources for education than does the President. The Senate agreed with
us. In fact, it went well beyond our proposal.
On prescription drugs, we proposed twice as much as the President.
And the Senate adopted a number very close to what we proposed. There
is no magic to this. There is no secret in it. What the President
proposed is totally inadequate. Only 25 percent of people who are
Medicare eligible get any help under the President's plan; 25 percent
of the people would be helped and 75 percent would not be helped. It is
no wonder the Senate adopted a number very close to what the Democrats
proposed. Most objective observers say that is what is necessary to
provide a meaningful prescription drug benefit.
On defense, we proposed more than the President and more than what
passed the Senate.
On agriculture, the final result was somewhere in between. The
President proposed a cut--a cut when we are in the midst of an
agricultural crisis. It is the worst we have seen in 50 years. The
President is proposing less resources. He is proposing the Congress not
be able to respond as we have in each of the last 3 years to pass an
economic disaster bill for our Nation's farmers. It makes no sense. We
propose to be able to fund what we have been doing the last 3 years,
and the Senate came somewhere in between.
On health coverage, another major difference, the President proposed
no new resources. We proposed $80 billion. The Senate, again, was
somewhere in between.
As I see it, those are major differences. Those are the issues that
will

[[Page S3780]]

have to be resolved in a conference committee. The House plan is close
to what the President proposed.
I say to the conferees, you will have to come pretty close to what
the Senate passed or the conference report simply will not pass in this
body. That tells me we will have to make adjustments. The President's
tax cut plan will have to be reduced. There will have to be more
resources for education, prescription drug benefits, our Nation's
defense, and agriculture than what the President has proposed and what
the House has adopted.

Also, I hope we come out with a result that is better than what
passed the Senate or the House with respect to strengthening Social
Security for the long term. Nothing has been done--nothing in the House
or Senate versions--to strengthen Social Security for the long term. It
has gotten almost no attention. It is going to receive attention. It
will receive attention at the end of this 10-year period when the baby
boomers start to retire and the surpluses today turn into massive
deficits. That is why we ought to take this opportunity with our
surpluses to strengthen Social Security for the future. That is our
responsibility. That is our obligation. We ought to take it seriously.
I hope the conferees will.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, obviously I have on numerous occasions
in the Senate Chamber discussed these issues, and on many of them I
disagree with my friend. On some I agree. I certainly appreciate his
thoughts as to what kind of conference report we will have to have in
order for it to pass. He suggests it will have to be close to the
Senate version. I don't know how anyone expects the House to accept
something like the version passed in the Senate. Nonetheless, we will
proceed. We will work carefully to make sure we have enough people in
the Senate willing to vote on final passage.
I certainly don't go there operating on the premise discussed with
the ranking member on how to get that done. We have to be careful and
accept some of the Senate wishes. We certainly don't have to accept
them all.
I will go back in history for a moment. The Presiding Officer is a
member of the committee and will probably recall on January 23 Dr. Alan
Greenspan appeared before the committee. That was the first testimony
before a committee by Alan Greenspan, Chairman of the Federal Reserve,
during this post-December era, where some serious changes in the
American economy became very public and notorious. I have confidence
that Alan Greenspan is correct in suggesting the ``new'' economy is
here to stay and the comeback will be in the new economy along with the
old economy. The future is built on the new economy which took us
through these years of prosperity and which he assumes will come back
in due course and lead us to prosperity for a very significant period
to come.
In this budget, we have to decide how we can be helpful. The Federal
Reserve Board seems, to this Senator, to be doing everything it can to
reduce short-term high interest rates. That is very important. It is
important because it is also affecting long-term rates. Money is being
made available. What is thought to be the biggest problem is
investment, capital investments by business--both the new economy
businesses and the old economy businesses. It is thought by some that
perhaps the new economy has too much inventory around to invest in new
capital and new production. We will see. We keep abreast of it as best
we can.

Now, what should we do? The Senate had a vote on a Hollings
amendment. I am not sure we can come out of the House with $85 billion
from this year's surplus because I am not sure they can figure out a
way to get that to the people. I submit we ought to get this conference
completed; we ought to direct the Finance Committee to start with a tax
cut plan. Obviously, I don't know from where that will come.
We are, under our numbers, the way we figure it, at a tax level of
1.28. I round that to say 1.3. Every time I say 1.3, I hope everyone
knows the exact number is 1.28.
The House is a little higher than 1.6 in total taxes for a 10-year
period. They don't have very much allowed for this year, the year we
are in, in which we have a very large surplus for the rest of
Government. It does not take anything out of Social Security or
Medicare.
What ought to happen is we ought to get out of this conference
quickly, resolve that tax issue, resolve some of the other issues where
clearly we disagree, and then we ought to prove to the American people
that we can get something done. I think getting something done means a
tax bill that will come out of the Finance Committee under our
reconciliation instructions, which we debated thoroughly and the Senate
decided to do that by a 51-49 vote. We decided our committee would work
under the expedited process and get us a tax bill.

I am very hopeful they will find a way to allocate back to the
American people as much of the surplus that exists for the year 2001--
which we said in our Senate resolution was up to $85 billion, which
actually in the resolution I introduced we said up to $60 billion--but
somewhere in that area. I hope they will find a way. I hope they will
apply their wills to finding a way to get back in circulation somewhere
between $60 billion and $85 billion, meaning this year Americans will
get some tax money back in their hands.
I do not hear anybody who thinks that is anything but the right thing
to do. We ought to show the American people we are working in harmony
with the Federal Reserve Board to affect the current short-term
problems in the economy, hoping if we right them, and if there is a
way, that will bring into play a long-term growth all of us very much
desire for our people.
In addition, with that same bill under the expedited process--kind of
the hurry-up-and-get-it-done process to show Americans you can do it in
a timely manner, the part which is called reconciliation--I hope we
will produce a tax bill for the remainder of whatever we agree upon.
In the House they say $1.6 trillion over 11 years. We say $1.3
trillion over 11 years. Whatever the number, I hope they do the early
stimulus as I have described and then proceed to give us some marginal
rate reductions.
Why did I start with Dr. Alan Greenspan? Because I want to close with
him. This year, on January 23, and previously to this on two occasions,
addressing the issue of surplus and what we should do with it, he said:
You should pay the debt down as much as possible, No. 1; No. 2, he did
not just say cut taxes, he said reduce or cut marginal tax rates. We
asked him, How do we help the economy? That was the precursor question
to the answer I just gave. First, pay down the debt as much as
possible. Second, reduce or cut marginal tax rates.

I know a lot of people say: Let's help the economy. But then they
say: I don't know about this marginal rate business. We would like to
do other things.
It would be nice to do other things, but the truth of the matter is
we are hearing from the very best that if you do have a surplus that
you are going to give back to the people, and you are not in a mode of
doing right-now stimulus because we already addressed that issue, do
that as much as you can, the answer has been: To help the economy,
reduce marginal rates.
I regret to say what was not said was reduce marginal rates for
halfway up the tax structure and not the other half. What has been said
is reduce the marginal rates. We hope when we are finished under this
expedited feature we will get an early stimulus and we will get a bill
that helps with the long-term economy in the mode and manner discussed
by Dr. Greenspan every year for the last three when we addressed
surpluses.
I do not choose today to get into an argument about how much debt
reduction is the right amount. My good friend thinks we should have
more than we voted in in the Senate, we should have more than I
provided in the underlying proposal, and more than the President
suggested. But we think we have a very good debt reduction proposal and
still can have a good number for tax cuts. We believe when you start
with debts--the U.S. Government has debts taking about 17 percent of
the budget--and we can say to the public at the end of this time it
will be down to between 5 percent and 7 percent, we think we are making
a giant stride in reducing the public debt.

[[Page S3781]]

I have in my mind showing a pie graph of where the Government money
goes. People always say: Why so much to the debt? Because we have a lot
of debt. How much are you going to reduce it? We are going to reduce it
down to where that sliver, that piece, is going to be between 5 percent
and 7 percent; that is going to be the cost remaining. In my opinion
that is exactly what we ought to do.
I want to close with one thought. Frankly, I hear the ranking member
from the other side, whom I admire and respect, I hear him talking
about whether we want to agree and believe that we have the surplus of
$5.6 trillion over a decade. I want to remind everybody, when the chips
are down and you have sitting before you in the committee those who
have figured the numbers and the variables on what might be the case,
when you finally ask them which is it going to be, the $11 trillion
that it might be or the $1.6 trillion that it might be or the $5.6
trillion--that 50 percent or 75 percent, I think, where the lines end
up when you do a model and ask them--if you have to decide which one is
right the answer is, use $5.6 trillion.
We can do anything we would like. We could use $2 trillion as the
starting point and say that is all we can expect. Some might say,
instead of $5.6 trillion, you ought to use $7.5 trillion or $8 trillion
because it could be much higher. I think the number that has been
chosen, $5.6 trillion, from which you will pay Medicare for sure, from
which you will pay for all the Social Security indebtedness that we
have--every penny that belongs in that trust fund is used to pay that
debt down--when you end up doing that, I think you have a very balanced
package and that leaves open the issue of how much do we spend.
Those who are interested have seen the divergence of how we spend,
how we spend under what I will call the Democratic proposal, how we
would do it under the Domenici proposal, and how we would do that under
the proposal that passed the Senate. Clearly, in the Senate, many
amendments were accepted on the side of either entitlements or
appropriation expectations--the amount we can use in appropriations.
Many were accepted on the floor and nobody should believe we are going
to take all of those and accept them all in a conference with the House
which has started with the President's number. There has to be some
give and some take. I think that will happen.
I look forward to chairing the conference in a spirit of getting it
done as quickly as we can so we can get on with passing the bills that
will carry it out and stopping as quickly as we can the debate of what
we ought to do and get into a mode of what we are going to do.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, there is clearly an area of major
agreement between the two sides. That is the need for fiscal stimulus
now. We had in our budget resolution $60 billion in budget stimulus
this year, in the year 2001. Maybe it will be helpful for people to
understand the differences between what I was talking about and the
budget for the years 2002 through 2011. But we are in the year 2001
right now. So when we compare the tax cut under the Bush budget and our
proposal and what passed the Senate, we are talking about the 10 years
from 2002 through 2011. The President proposed $1.6 trillion. For that
period we proposed $745 billion. The Senate passed something roughly in
between. But this does not cover the year 2001, the year we are in
right now.
Both Senator Domenici in his budget proposal, and me in ours,
proposed $60 billion of budget stimulus this year, financial stimulus
this year, fiscal stimulus now to give a lift to this economy. What
actually passed the Senate was even more generous, $85 billion of
fiscal stimulus for the year 2001.
What Senator Domenici is saying is perhaps we cannot do quite that
much in conference, and perhaps we cannot. But we do have $96 billion
available outside of the trust funds of Medicare and Social Security,
so we know we have budgeted already enough money to accommodate a
fiscal stimulus of up to $85 billion without invading the trust funds
of Medicare and Social Security, and we are obviously in very close
agreement on this question. I think the American people should take
heart from that, that we are going to be working together, fighting
together, trying to put together a fiscal stimulus package for this
year, the year we are in right now, 2001, to get out to the American
people to give some lift to this economy. And that would be a good
thing to do.

The chairman made mention of a number of other issues that we have
talked about in the past--how much debt reduction can you do? We have a
disagreement on this question. We believe we can do more debt reduction
than they have proposed, certainly than the President has proposed.
I note that the Senate agreed with our position. The Senate provided
a good deal more debt reduction than the President has said that he
believes is possible. That was a good outcome. I hope we do not shrink
from that.
But the place we really did not do as well is in strengthening Social
Security for the long term above and beyond the trust funds themselves.
All of us know just saving the trust fund money for the purposes
intended is important, but it is not enough.
That is why on our side we believe not only should we reserve all of
the trust fund money for the Social Security and Medicare trust funds,
but then, in addition to that, we ought to take some of the general
fund money and use that to strengthen Social Security for the long term
because that is what it is going to take to do the job and to prevent a
massive buildup of debt from occurring.
I think one thing that often gets lost in the debate is the current
indebtedness of our country. The gross debt is $5.6 trillion. Under the
President's plan, the gross debt of the United States is going to grow
to $7.1 trillion. The gross debt, under his plan, is not going to be
reduced; it is going to grow. Under our plan, we are able to keep it
about where it is because we are putting more money into debt
reduction--both short-term and long-term--than is in the President's
plan. We believe that is a wiser course.
We are reserving about 70 percent of this projected surplus for debt
reduction. He reserves about 35 percent of the projected surplus for
debt reduction. So that is the major difference. That is where we
really have a difference of opinion.
We think we ought to put more emphasis on debt reduction because,
frankly, given the uncertainty of the forecast--and that is another
area where we have a disagreement. Senator Domenici says $5.6 trillion
is the number. Well, he is right in the sense that is the number that
has been given to us by the Congressional Budget Office and the Office
of Management and Budget. That is a very professional forecast. I will
not argue with that for a minute. It is well done. But it is a 10-year
projection--10 years. The people who made the forecast said there is
only a 10-percent chance that number is going to come true.
Let's not cast that in concrete. Goodness, that should inform us; it
should not lock us into decisions to use every penny of that money. I
think what it should tell us is that we should be cautious. That is why
we put a greater emphasis on debt reduction because, then, if the
forecast does not come true, the worst that has happened is you have
reduced the debt less than you anticipated. That is the worst that
happens.
Under their plan--because they are using all the money, between their
tax cut and other priorities--what happens if that isn't true? It risks
putting us back into deficit. It risks us raiding the trust funds of
Social Security and Medicare all over again. Goodness knows, we have
been down that road. Do we have to repeat the 1980s all over again? I
hope not. Can't we learn from the 1980s--the time we had a rosy
forecast like this one, had a big tax cut, big defense buildup, and
wondered why the deficits and debts of the country multiplied
geometrically? I do not want to repeat that exercise. That put our
country in a deep hole. It took us 15 years to dig out. I do not want
to be digging out for the next 15 years.

The difference between the 1980s and now is that in the 1980s you had
time to dig out. If we make a mistake now, there is no time to dig out
because in 11 years the baby boom generation starts to retire, and then
these surpluses turn into big deficits as the number of people eligible
for Medicare

[[Page S3782]]

and Social Security double. That is what is going to happen. We know
it. It is not a projection. The people are alive. They have been born.
They are living today. They are going to retire, and they are going to
be eligible. And it is going to cost the Government a lot of money,
much more than we are currently having to pay out.
So let's be cautious. Yes, let's be conservative. The conservative
thing to do is emphasize more debt reduction and to curtail our
appetite to spend and curtail our appetite to have tax cuts, which are
both living for the moment. It is fun to live for the moment;
especially if you are a politician, there is nothing better than to
have tax cuts and spending. That is the best of all worlds. The problem
with that is that we have a need to be responsible to future
generations. Our generation ran up this debt. We have the obligation to
pay it down and to do it before we start to retire. Goodness, the last
thing we ought to be doing is shoving this debt on to our kids. We ran
it up. We ought to retire it.
Mr. President, with that, I yield the floor.
Mr. DOMENICI. Mr. President, I have nothing further to say. I do not
think there is anyone on our side who wishes to speak. If the Senator
is ready, we can yield back our time.
Mr. CONRAD. Yes. We are prepared to yield back our time on our side.
Mr. DOMENICI. I yield back any time we have reserved under the
previous order.
Mr. CONRAD. I do as well.
The PRESIDING OFFICER. Under the previous order, the motions are
agreed to.
The PRESIDING OFFICER (Mr. Nelson of Florida) appointed Mr. Domenici,
Mr. Grassley, Mr. Nickles, Mr. Gramm, Mr. Bond, Mr. Conrad, Mr.
Hollings, Mr. Sarbanes, and Mrs. Murray conferees on the part of the
Senate.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. VOINOVICH. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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