[Congressional Record Volume 149, Number 42 (Monday, March 17, 2003)]
[Senate]
[Pages S3792-S3798]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  CONGRESSIONAL BUDGET FOR THE U.S. GOVERNMENT FOR FISCAL YEAR 2004--
                               Continued

  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I rise to respond briefly to my colleague 
who spoke previously on the question of the budget before us. He put up 
a chart that showed just the effects in 2004 and said that the tax cut 
was not the biggest reason for the decline in our fiscal condition. But 
let us recall that the chart he put up was for 2004 alone.
  The President's proposals are not 1-year proposals. They are 
multiyear proposals. Two thousand four is one of the years where the 
tax cuts have the least cost and the least effect. The reason for that 
is the tax cuts that have already been passed and the tax cuts the 
President has proposed are back-end loaded.
  The biggest cost comes toward the end of the 10-year period. When we 
look at the whole 10-year period of 2001 going forward, what we see is 
a much different picture than our colleague from Idaho showed.
  There we see that the biggest single reason for the decline in our 
fiscal condition is the tax cuts. We can see, just as a reality test, 
the tax cuts already passed, including the interest cost, are $1.7 
trillion. The tax cuts going forward, the President has proposed, 
including interest costs, are $1.96 trillion. That is a total of nearly 
$3.7 trillion. The decline in our fiscal circumstance is $7.7 trillion. 
So just as a reality test, the biggest single reason for the overall 
decline in our fiscal condition is the tax cuts.
  The next biggest is the spending that occurred because of the attack 
on this country, 27 percent. Twenty six percent is also revenue 
decline, revenue decline not attributed to tax cuts but because there 
was an overestimation of revenue. The smallest part of the reason for 
our declining fiscal condition is the economic downturn.
  Our colleague from Idaho also said that this budget balances by 2013. 
It does on a so-called unified basis. That is when you put all the 
money in the same pot--all the money from whatever source going in the 
pot, all the spending coming out of that pot.
  I have never believed that that is the right way to handle Federal 
revenue and Federal spending because, for example, the Social Security 
trust fund ought to be treated differently. All the money should not go 
in the same pot. You should not be taking operating expenses out of 
Social Security revenues. We didn't put on a payroll tax to raise 
revenue to pay for the other functions of Government. We raised payroll 
taxes in order to pay for Social Security benefits.
  In the year 2013, the amount of money from the Social Security trust 
fund that will be used to pay the operating expenses of the Federal 
Government will be $331 billion.
  That doesn't strike me as a balanced budget. No private sector firm 
could take the retirement funds of their employees and use them to fund 
the operating expenses of the company. If you tried to do that, you 
would be on your way to a Federal institution, but it would not be the 
U.S. Congress.
  On the issue of who benefits from the tax cut, the Senator showed 
percentage reductions for various income categories. But if we look at 
who gets the dollars, we get quite a different picture. This is from 
the Department of Treasury. It shows those earning $30,000 to $40,000 
get, on average, $252. Those earning over $200,000 get $12,500. And if 
you earn over $1 million, you get an $88,000 tax cut. It is true that 
the wealthy pay a higher proportion of taxes in this country than do 
the rest of us, but they don't pay that much more.
  Our friends always want to exclude payroll taxes. The fact is, 80 
percent of American taxpayers pay more in payroll taxes than they pay 
in income taxes. So that has been left out of the calculation 
completely.

  Finally, on the question of what do we do about our circumstance, I 
was glad that our colleague put up a chart that showed the revenue of 
the Federal Government and the spending of the Federal Government. It 
is both of those elements that create deficits. So if you have a tax 
cut that costs $100 billion, that adds $100 billion to the deficit just 
like if you spent $100 billion.
  In this budget proposal, even though we are already in record 
deficit, they propose cutting another $1.4 trillion. With interest 
costs, that will be an additional deficit of $1.7 trillion. I don't 
think you can stand up and be against deficits and, on the other hand, 
vote to explode them. You either walk the walk and talk the talk, or 
else you wind up where we are headed, which is into deep deficit and 
deep debt.
  The fact is that we are not making the choices that are going to be 
necessary. If we are going to have that level of tax cut, then you have 
to cut the spending to offset it, unless you want to put it on the 
charge card, create deficit.
  Finally, the Senator from Idaho indicated that some of us are 
advocating doing nothing. Well, I am not advocating doing nothing. I am 
advocating that, with our country in the position of record deficits, 
on the brink of war, with not a dime of war costs in this budget, it 
would be wise for us not to add new spending unless it is for national 
defense or homeland security--not to add additional tax cuts, unless it

[[Page S3793]]

is for a stimulus package for the economy, until we know more about 
what this war cost might be.
  It seems to be common sense to me that we know more about our 
circumstances. I will offer an amendment tomorrow that does that. It at 
least creates a 60-vote point of order against new spending, unless it 
is for national defense or homeland security, and it will preclude 
additional tax cuts unless they are for a stimulus package because it 
seems to me to head off the cliff on the brink of war is 
extraordinarily unwise.
  With that, I thank the Chair. Does the Senator seek time?
  Mrs. MURRAY. I do. I would like 15 minutes.
  Mr. CONRAD. Mr. President, I yield 15 minutes to the Senator from 
Washington.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mrs. MURRAY. Mr. President, I thank my colleague from Alabama and my 
colleague from North Dakota. I also thank the Senator from North Dakota 
for his tremendous work on this budget.
  Mr. President, I can really think of only one word to describe the 
budget now before the Senate. In the middle of a war on terrorism--and 
on the eve of a war in Iraq--this budget offers a huge tax cut to the 
few, projects massive deficits for decades, and ignores the cost of war 
in Iraq.
  There is only one word for that approach: reckless.
  Lacking in caution--reckless.
  Deliberately courting danger--reckless again.
  It is time for a reality check. Hundreds of thousands of our soldiers 
are poised on the knife's edge, ready to perform their duty at any 
moment. On this critical day, we hope and pray for their safety, 
security, and speedy return. There is no doubt that Congress will 
provide for our soldiers, both on and off the field of battle.
  We know it will cost a lot of money. We know the money is well spent 
in keeping our Nation's best and brightest as secure and safe as 
possible.
  But the cost of winning this war and winning the peace afterward is 
not reflected anywhere in this budget. That is irresponsible. That is 
burying our heads in the sand as the danger approaches. I cannot 
imagine any American family going out and running up their credit cards 
when they know they are going to have a major expense in the next 
months.
  Ignoring the financial costs of war will not make those costs go 
away. Driving our country further into debt will certainly make it 
harder for us to pay those bills when they come due.
  Mr. President, the only word for that approach is ``reckless.'' This 
budget would pile on record deficits, give a tax cut to the few, and 
ignore the costs of war and peace. But even worse, this budget doesn't 
even adequately fund the basics, such as homeland security, education, 
and transportation.
  A budget is a statement of priorities. In an environment where we 
cannot fund everything, we have to make choices based on our values. I 
think we have to get our priorities straight.
  Today, we are fighting a war on terrorism, we are on the brink of a 
war in the Middle East, and we have many other international 
challenges, including North Korea and Iran. Historically, when our 
Nation is facing war and so many challenges, we sacrifice, we make 
every dollar count, but not in this budget.
  I cannot recall another time in our history when we have faced so 
many challenges, yet have been so reckless with our budget. This budget 
would provide a massive giveaway to the few, while our sons and 
daughters fight a war overseas. That is not sacrifice, that is not 
responsible and I think it is wrong.
  The President's budget, with its freewheeling tax cuts and lack of 
sacrifice in the face of war, is more appropriate for the roaring 
twenties than for the challenges we face today, in 2003.
  I am very skeptical of a budget that says we can have it all, even as 
we stare down massive financial commitment for years in places such as 
Iraq. Ignoring the cost of war and its aftermath is reckless. Running 
up huge deficits to fund a misguided tax plan is reckless. Failing our 
needs at home, such as homeland security, border security, education, 
and transportation, is reckless.
  Just look at homeland security, which will become, by the way, even 
more important if our country is at war. September 11 showed us, in a 
most horrific way, that we are vulnerable at home. Our intelligence 
officials have told us that another attack at home is not a question of 
``if'' but ``when.''
  We know our first responders--our firefighters, EMTs, and police will 
be on the front lines if, Heaven forbid, there is another attack. I 
recently got a letter from Kelly Fox, president of the Washington State 
Council of Firefighters. They represent 6,500 firefighters in my State. 
These are the people who are in the trenches of the homeland security 
front. They told me they don't have the training, the equipment, or 
staffing to respond to various attacks.
  I want to share with my colleagues a letter that Kelly Fox, president 
of the Washington State Council of Firefighters, wrote to me:

       Let me assure you, we are prepared to do whatever is 
     necessary to protect the citizens of this State--even if it 
     means putting ourselves in harm's way. Although the job we 
     need to perform in this war on terrorism is familiar, the 
     magnitude of the challenges before us is unprecedented--as 
     the enemy now comes to our cities and towns.

  He goes on to write:

       Last August, Congress (led by a Democratic majority in the 
     Senate) provided President Bush $2.5 billion in emergency 
     homeland security funding, for him to release to local police 
     and fire departments if he thought it was needed. 
     Regrettably, he rejected that funding and vowed, ``we'll 
     spend none of it.''

  President Bush held back hundreds of millions of dollars for 
equipment, training, and other needs for our first responders.
  Fifteen months ago, we were told that $3.5 billion was being 
earmarked for first responders in the Bush administration's fiscal year 
2003 budget. But to date that money is nowhere to be found. 
Firefighters in Washington and across our Nation have received plenty 
of praise and accolades since 9/11. We have been invited to many photo 
ops.

       But our cities and towns, our counties, our fire districts, 
     and their fire departments are still waiting for that 
     funding. In fact, our State has yet to see a dime of money 
     that was promised by the Bush administration to help our 
     firefighters and paramedics.

  Kelly Fox speaks for 6,500 firefighters in my State. We need to heed 
his call.
  Last year, Congress passed funding for homeland security. The 
President rejected it. The President then actually blamed Congress for 
not funding homeland security.
  The bottom line is we must fund the security needs in our 
communities--from our fire departments and police departments to State 
public health labs. With States facing budget deficits, first 
responders need our help to protect our citizens. We can do better than 
this budget. I will support an amendment to adequately fund homeland 
security, and I will likely even offer my own amendment.
  I am also concerned that this budget does not provide enough funding 
for education. When we passed the No Child Left Behind Act, we passed 
it based on two commitments. First, we would hold schools accountable 
for their progress. And second, we would provide schools with the 
resources to meet those new requirements. Those two always went 
together--otherwise schools cannot make real progress. But now it seems 
that Congress and the President have forgotten about the funding part. 
We still have an obligation to fund the new requirements that Congress 
imposed on local schools. We cannot leave local schools holding the 
bag, so I intend to offer an amendment to fully fund the No Child Left 
Behind Act.
  I also think this budget falls short in supporting our transportation 
infrastructure. We know that transportation problems plague our biggest 
cities and isolate our rural communities. In my home State of 
Washington, our inadequate transportation network is hindering our 
economy, our productivity and our quality of life.
  When we make sound investments in our transportation infrastructure, 
we create good jobs today, and we build the foundation for our future 
economic growth. When we make our transportation systems more 
efficient, more productive, and safer, that will pay real dividends for 
our economy and our communities. Throughout this process, I am going to 
support efforts to adequately fund our transportation infrastructure.

[[Page S3794]]

  Another area where this budget is severely flawed is in its treatment 
of the Arctic National Wildlife Refuge. The Arctic National Wildlife 
Refuge is an important and unique national treasure. It is the only 
conservation system in North America that protects a complete spectrum 
of arctic ecosystems. It is the most biologically productive part of 
the Arctic Refuge. And it is a critical calving ground for a large herd 
of caribou, which are vital to many Native Americans in the Arctic. 
Energy exploration in ANWR would have a significant impact on this 
unique ecosystem.
  The proponents of this measure argue that over the years, energy 
exploration has become more ``environmentally friendly.'' While that 
may be true, there are still significant environmental impacts for this 
sensitive region. Exploration means a footprint for drilling, permanent 
roads, gravel pits, water wells, and airstrips.
  The oil reserves in ANWR--in fact, the oil reserves in the entire 
United States--are not enough to significantly reduce our dependence on 
foreign oil. There are four ways to really reduce our need for foreign 
oil.
  First, we can increase the fuel economy of our automobiles and light 
trucks. That will reduce air pollution and carbon dioxide emissions, 
save consumers significant fuel costs, and reduce our national trade 
deficit.
  A second way to reduce our need for foreign oil is to expand the use 
of domestically produced renewable and alternative fuels. That will 
reduce emissions of toxic pollutants, create jobs in the United States, 
and reduce our trade deficit.
  Third, we can invest in emerging technologies like fuel cells and 
solar electric cars.
  Fourth, we can increase the energy efficiency of our office buildings 
and homes.
  These four strategies will reduce our dependence on foreign oil and 
protect one of our Nation's most precious treasures.
  Let us all remember that the amount of oil in ANWR is too small to 
significantly improve our current energy problems. The oil exploration 
in ANWR will not actually start producing oil for as many as 10 years. 
Exploring and drilling for oil and gas at ANWR is not forward thinking. 
It is a 19th century solution to a 21st century problem.

  Mr. President, these are just some of the flaws that make this budget 
reckless.
  As I close, let me put this into context because I have served on the 
Budget Committee since 1993. During that time, I have seen our 
country's economy turn around twice now. In 1993, we started with huge 
budget deficits. On the Budget Committee, we made tough decisions, and 
throughout America families worked hard and got our economy moving 
again. Employment rose; the stock market soared; and Americans 
benefited from low interest rates and declining poverty.
  But today it seems as if we are back where we started: the surplus is 
gone; we are facing looming deficits; Americans are out of work, and 
they need help.
  If the President and the majority in this Congress have their way, 
their plan will grow our Nation's debt from $5 trillion to over $12 
trillion as their plan reaches full maturity--$12 trillion. And for 
what? So millionaires can get an average tax break of $90,000, 
according to the Tax Policy Center, and the rest of us get a $12 
trillion debt. That debt and our annual deficits will make it harder 
for us to fund urgent national priorities. It will hit every American 
when they buy a house or finance a car.
  I hope we can find a way to produce a bipartisan budget that 
addresses these issues for the benefit of the American people. Doing 
anything less would be reckless.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER (Mr. Chambliss). The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, how much time does the Senator from 
Alabama desire?
  Mr. SESSIONS. Fifteen to twenty minutes.
  Mr. NICKLES. I yield the Senator from Alabama as much as he desires.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. I thank the Chair for giving me an opportunity to speak 
on this important budget issue, and I thank Senator Nickles for 
yielding me time.
  Mr. President, I congratulate Senator Nickles and express my 
admiration for him, quite sincerely, for the superb job he has done as 
chairman of the Budget Committee. It is a very important committee in 
this Congress. He has handled it with great skill. He knows, and we all 
know, that this year we need a budget.
  Last year we did not pass a budget. Last year we did not pass 11 out 
of the 13 appropriations bills during the tenure of the Democratic 
leadership, and we were left to commence this year with the very 
difficult problem of funding the Federal Government by passing in an 
omnibus bill 11 appropriations bills that should have been passed last 
year before October 1 when the fiscal year began. We were operating on 
a continuing resolution and operating in a way that made no sense if 
anybody studied it. If the American people had known how poorly we had 
operated last year, they would have perhaps been even more upset than 
they have been with us.
  This year, we have a Budget Act and we passed it out of committee. We 
have it before the Senate. If we continue our timely operation, we will 
pass it according to the time limits of the Budget Act. We will have a 
framework for our spending program in the Congress, and only then will 
we know what our limits are and what we have to spend, what we can do 
in terms of tax cuts, and how we can stimulate and grow this economy. 
Those are the issues that I think are important.
  I note, in response to some of the comments, my good friend Senator 
Conrad complained that Senator Crapo had not been accurate or described 
the full picture when he discussed the problems with surpluses this 
year, the deficit this year, and how it occurred. What Senator Crapo 
said was absolutely correct. Senator Crapo pointed out that they had 
predicted a $300 billion-plus surplus this year, and with that 
prediction hanging out there, spending went up substantially the last 
couple of years. Now with the economic slowdown and the 9/11 attack, 
the stock market taking hits, those predictions have not been 
accurate. He posed a question: Why is there a deficit this year? Why is 
it being projected for next year? And he explained without dispute, I 
think, that it was not the 2001 tax cut passed by this Congress and 
requested by President Bush. It represented only 19 percent of the 
reduction in revenue. That 51 percent of the reduction in revenue to 
the Federal Government was a result of the economic slowdown, and 24 
percent of the disappearance of our surplus was the direct result of 
increased spending.

  The point he was making, and that is so important for us to know, was 
that economic growth is the way we are going to get out of deficit. It 
is not counting numbers. It is what we can do to strengthen the 
American economy, to get people working again.
  There are some good aspects in the President's package for growth, 
but one of them is ANWR. I flatly dispute the argument that if we could 
bring on the oil production out of Alaska, that the Alaskans want us to 
produce, that would not positively impact our economy. As a matter of 
fact, the National Group of Unions has come before Congress and urged 
us, pleaded with us, to pass ANWR. Their estimates are that it would 
create 600,000 jobs. That is jobs in the United States of America.
  When we buy oil from other countries such as Venezuela and Saudi 
Arabia, who gets the jobs? People in those countries get the jobs. They 
pay taxes to their countries on the income they make. If we had 
Americans working on this pipeline and steel mills build the pipe and 
do all that would be a part of this tremendous endeavor economically, 
they would be paying taxes to the United States of America. When we buy 
oil from Saudi Arabia, Iraq, Venezuela, and places such as that, it is 
a transfer of our wealth to those countries. We want to keep as much of 
that wealth home as possible.
  Does anyone think the environment is important in Venezuela? I do not 
think they would. I submit that with the technology, and control by the 
Environmental Protection Agency, and the watching by the 
environmentalist groups, there is no doubt in my mind we will produce 
oil cleaner in the ANWR region than we would in any of

[[Page S3795]]

these other countries. So I believe that is a red herring, and it is a 
tremendous economic potential for us to work on that. So growth is 
important.
  I also would point out to my friend, Senator Conrad, there is no 
dynamic scoring whatsoever in his numbers. They do not suggest there is 
any growth in the economy that comes from allowing people to have 
revenue and be able to keep money in their own pocket. It does create 
an economic growth situation. That is unaffected, and it even becomes 
more significant as the years go by in the outyears.
  Our friends across the aisle are proposing some sort of growth 
package, but it is very anemic, $300 or $350 per person. That is no 
answer at all. What we want to do is get our country back on steady 
growth progress. If we can do that on a healthy level so that we are 
leading the world, as we have and really as we do today in terms of a 
large economy that is growing, I think we can make progress that will 
begin to erase these deficits and we will not do it by taxing American 
people more.
  We have heard Senator Kennedy complain with gloom and doom that 
everything is going so horribly bad, this war is going to put us in 
bankruptcy, and the American economy is going to fail. Oddly, on the 
announcement that hostilities may be nearby, the stock market has been 
surging today. I do not think we should be so gloomy. I think we ought 
to see the possibilities for the future.

  I say this about funding this war: We voted last October, and we had 
a full debate by all the Members of this body. Senator Kennedy, I guess 
to his credit, from his point of view--and he is consistent--opposed 
the war. But overwhelmingly, we voted to support it, 77 to 23. We 
talked about the costs at that time. Everybody knew it was going to 
cost, and everybody knew it would be paid for by a supplemental because 
it is not a part of the normal defense budget.
  We made a commitment to our troops. We have a quarter of a million 
troops in the Iraq region, and they are prepared to put their lives at 
stake for us. I do not think there ought to be the slightest suggestion 
in any way that we are not going to honor that commitment. When we 
committed to put our troops there, we committed to pay the cost of it.
  I, for one, believe we ought to keep it low. I believe we ought to 
get our troops out when the war is successfully completed, if it goes 
to a conflict, as soon as we possibly can. I think we ought to do 
everything we can to strengthen Iraq. But I do not believe this Nation 
should permanently attach itself in a military way to Iraq, for a whole 
lot of reasons, and I do not think it is going to happen. I do not 
believe the Secretary of Defense believes that. I do not think the 
President does.
  Some of these figures that are being floated around have been 
exaggerated. So we voted. We are going to back him. As a member of the 
Armed Services Committee, I point out that on February 27 of this year, 
in a letter signed by our chairman, Senator John Warner, and the 
ranking Democratic member, Carl Levin, they suggested clearly that we 
would fund the costs of a war by a supplemental. In the letter they 
wrote on February 27, it says:

       The administration is expected to request a supplemental 
     appropriations for these concurrent and future military 
     operations. We urge our colleagues' consideration for any 
     such request. We must show strong support of our troops in 
     the field.

  Signed, Carl Levin and John Warner. 
  Now, that is what we have been doing all along, and everybody knows 
it. I know the Democratic leader, Senator Daschle, has been promoting 
the idea--was quoted in the paper, and it came up at the Budget 
Committee; now it has come up on the floor--that they would start 
carping about the fact that we cannot have a budget until the President 
sets forth in detail exactly what money is going to be spent on this 
conflict, a conflict that has not even occurred yet. He should not be 
expected to do that.
  We had the Congressional Research Service to check on budgeting for 
wars in the past, and they stated this, if it makes any difference to 
anybody:

       Presidents have not requested and Congress has not provided 
     funding for wars in advance of the start of operations. 
     Rather, administrations have requested funding after 
     operations have begun and Congress has subsequently 
     appropriated money to meet specific documented budgetary 
     requirements.

  Further:

       Congress has provided the executive branch with 
     considerable flexibility in financing military operations in 
     advance of specific congressional action on appropriations.

  Of course, that is the way it has been historically because that is 
the way it is. We cannot predict how these things are going to go with 
certainty. I believe that is a red herring and an improper thing to be 
saying now, to suggest that we may not be willing to fund this effort. 
We are going to keep the cost as low as possible. But this Congress, 
through its vote last fall, when Democrats were in the majority, 
authorized the President to act if he needed to and we would pay for 
it.
  I will make a couple of points in general about where we are with the 
budget and what we can do about it. The economy has been sinking. In 
fact, as I recall, during the last month of President Clinton's tenure 
in office, the economy was in negative growth. The President inherited 
an economy that began to stall. It began to make some progress, and 
then there was 9/11, and the economy has not moved.
  We do not need to get into recriminations or blame. The question is, 
What do we do now to grow this country, get our economy moving? That is 
the question we ought to deal with. When there is a robust economy, 
unemployment falls. This allows American workers choices on jobs. 
Certainly some workers will be able to find a job and other workers 
will have choices and can pick a better job.

  Growth helps employment. It provides more overtime to workers and it 
provides more revenue for the Government. That ought to make our big 
government friends happy. The more people work, the more they make 
overtime, the more they pay taxes, and the more we can spend it in 
Congress.
  We clearly are at a point where we need to strengthen economic 
growth. Americans believe and the characteristics we display as a 
Nation are to focus on growth in the private sector. Innovation occurs 
there; investment occurs there; jobs are created there. That is how we 
make progress as a nation. That is why we remain strong economically. 
We are not where we want to be.
  I saw recently unemployment in Germany was at 13 percent. The French 
economy is in trouble. The Japanese economy has been in trouble for a 
long time. Consistently, our economy has been stronger than the other 
industrialized nations in the world. We have done it because we have 
believed in the private sector. We learned through the big government 
years, it does not work. Tax and tax and spend and spend does not 
create jobs. We remember President Clinton made that dramatic 
announcement, the era of big government is over. It represented the 
collection of intellect and economic offense of tax-and-spend 
government. It was a big deal when he said that. It was an important 
change in our psychology.
  I suggest we ought not go back to tax and spend. We need to watch 
what we do. We need to contain the growth in spending. We have another 
growth plan this year. We need not follow that European model that has 
stilted their economy.
  It is the time of less taxes, less regulations, and a greater 
commitment to the free market has allowed us to be a vibrant and strong 
economy and allowed us to have money to spend on a military, have money 
to spend on incredible amounts for our research and health care, to be 
able to help the fight for AIDS around the world, because we have a 
strong economy. We need to defend and cherish that aggressively.
  There are a number of components of this tax package. I don't know 
who my colleagues refer to as the rich, but let's talk about some of 
the people who are going to benefit from eliminating the marriage 
penalty, reducing tax rates for all groups, accelerating and enhancing 
the tax credit individuals get for children, enhancing the child tax 
credit, and eliminating double taxation on dividends.
  The President has proposed moving forward the cuts in the marginal 
tax rates. Those are the rates paid, depending on your income level, 
with lower rates made retroactive to January 1 of this year, which will 
give a stimulus to the economy. What does that mean? Tax brackets in 
excess of the 15 percent

[[Page S3796]]

rate, already slated to decrease in 2004 and in 2006 based on the 
existing law, will be made effective immediately. In other words, we 
are phasing in tax cuts and the reduction of that 15 percent rate at 10 
percent and making that happen by 2006.
  The President said let's make that effective immediately. These are 
working Americans, lower-income working Americans. Currently, the tax 
brackets in this range are 27 percent, 30 percent, 35 percent, and 38.6 
percent at the top. The President's proposal will immediately reduce 
each of these tax brackets to 25, 28, 33, and 35 percent. At their 
lowest levels, these benefit married couples with taxable income 
of $47,000 and up, and single taxpayers with taxable incomes of $28,000 
and up. Who would benefit from the change? The Treasury Department 
estimated 28 million taxpayers would receive an average tax reduction 
of $1,100. That is almost $100 per month this Government will not be 
extracting from hard-working American citizens. They will be allowed to 
keep that money. There is no tax on this. Remember, there is no 
withholding on this reduction in tax. It is right off what you would be 
paying the Federal Government. A taxpayer who gets a $90 a month 
benefit receives a benefit of $90 a month.

  Second, the plan calls for acceleration of the reduction of the 10 
percent bracket expansion that has been scheduled for 2008 and brings 
it to 2003, this year. That means effective immediately, for married 
couples, their first $14,000 in taxable income is taxed at only the 
rate of 10 percent. It does not mean their first $14,000 they earn, but 
the first $14,000 taxable income after their deductions. That is a 33 
percent reduction. Under current law, only the first $12,000 in taxable 
income is allowed to be received at this preferential rate. Single 
taxpayers would see their first $7,000 in taxable income immediately 
fall under the lower rate. Who benefits? The Treasury estimates it 
would reduce taxes for over 69 million taxpayers.
  The President is also proposing an accelerated reduction in the 
marriage penalty. As we have all learned, there is a penalty on 
marriage in this country. It is the result of a quirk in the Tax Code 
which assesses additional tax liabilities on couples who choose to 
marry and file jointly rather than remaining single where they can file 
separately. The marriage penalty is an unfair and incredibly unpopular 
part of the Tax Code. In fact, we are in the bizarre position in this 
country of penalizing that which we would want to encourage--marriage. 
I know someone who got divorced in January. They said had they been 
clever and gotten their divorce in December they would have saved 
$1,800 on their taxes. We had the spectacle of the U.S. Government 
paying bonuses to people who divorced and penalizing people who marry. 
It is not good social policy. It is not good tax policy. It is 
something we ought to eliminate. It is past due to be eliminated. We 
are working on that. We were going to phase this in by the year 2009, 
and the President proposes making that effective this year so people 
get the benefit now. A married couple earning a taxable income of 
$47,000 or more will be able to claim twice the standard deduction they 
are currently allowed.
  Who benefits from this? According to the Treasury Department, 35 
million married couples would receive an average tax deduction of $574 
from this alone. That is meaningful money for any family. The economic 
principle is when you tax something, you get less out of it. When you 
subsidize something, you get more. We have been taxing marriage and 
subsidizing divorce. That is not good for this country to be doing.
  Another of the President's proposals is to accelerate the child tax 
credit, immediately raising this credit to $1,000 in 2003 from its 
current $600 level. When I got elected to the Senate in 1996, I 
campaigned on this issue. I talked to young families all over America. 
They are trying to buy a house. They have to have a car. Maybe both are 
working. They have to have two cars. They are trying to raise children 
and meet those expenses. The tax deductions that were significant for 
children in the 1950s have been totally eroded, and they are getting 
whacked in taxes. They are trying to raise the next generation of 
children taking care of us when we are drawing Social Security.

  I think this is a huge deal. I remember how excited I was when we 
passed the $500-per-child tax credit in 1997. They said this was 
cutting taxes too much. It was too much of a tax cut and we could not 
sustain it. But we continued, ending up later having the huge surplus 
we had just a couple of years ago.
  This is a fairness issue. In this country, the people who may be 
hurting the most when you look at it fairly are young couples, just 
working, just beginning in their careers. They have not raised up and 
gotten seniority, been promoted and making higher wages, but they have 
young children they are trying to take care of, to educate, to buy 
shoes for, to take to Disney World on occasion if, Lord willing, they 
have the opportunity.
  We ought to pass this tax deduction and accelerate it as good public 
policy. This will also put money in the pockets of families to spend on 
behalf of their children. It will help the economy when they buy 
products. Somebody makes those products. Somebody at the store benefits 
from that. You pay sales taxes on it. The State and local governments 
benefit from that also.
  According to the numbers I have, 26 million families would receive an 
average tax benefit of $623. That is $40-plus or $50 per month as a tax 
benefit as a result--per child under this plan.
  We have a plan for small businesses to be able to accelerate their 
depreciation, their expensing of new investments from $25,000 to 
$75,000. We want to encourage businesses to expand, to invest. When 
they do that, they hire people to do the expansion. They buy equipment. 
They expand their building. They improve their parking lot. They create 
economic growth. Small businesses, for a lot of reasons, are not being 
treated fairly in today's business environment.
  I strongly believe, in the course of passing legislation that would 
create a budget for us and that would allow for a growth package and 
would set the spending levels for America, we need to create an 
atmosphere, not of dependence on government benefits; what we need to 
do is create an atmosphere that invigorates employment in the private 
sector, creating jobs, creating choices of jobs for American workers, 
where they can get raises and leave one business and go to another one 
for a higher paying job if they want, where they can get bonuses, and 
where they can have overtime and bring home more money. That is what we 
need to do, to strengthen our economy. Our goal should be to do that.
  One of the reasons the Council of Economic Advisers has recently 
estimated that the President's plan will spur the American economy to 
create over 2.1 million jobs in the next 3 years is this focus on the 
private sector. The President is focused on assuring America's 
continued economic growth. This plan is one large indication of his 
commitment to promoting job creation.
  The President's plan also calls for the elimination of double 
taxation on corporate dividends. Under his plan, dividend income 
received by individuals would be excluded from their taxable income, if 
those dividends are paid out of previously taxed corporate earnings. 
This is a very important provision. Many people in America's investor 
class understand that when they buy stock and receive dividends, they 
are paying probably a third or more of that in taxes in addition to the 
fact that it has been paid previously by the corporation.

  According to the numbers that have been put together, the United 
States of America has the second highest tax in the world on corporate 
earnings, second only to Japan--over 70 percent when you total it up. 
So this is an unhealthy situation. What is happening for a lot of 
reasons is the American businesses realize if they distribute--after 
they make a profit and they pay their 35 percent corporate tax on 
that--if they distribute it to their stockholders, they have to pay 
another 35 or so percent on it--or more.
  So what do we think, and what do the experts think, this reduction 
would do to help the economy? I think one thing it would do, clearly, 
is it would make stocks more attractive. It would cause people to have 
an additional reason to invest in the stock market. Whatever the level 
the stock market would be, whether it was low or high, by passing

[[Page S3797]]

this tax it would make it higher than it would be otherwise.
  I don't guarantee the stock market will go up because it passes, but 
I guarantee it will be higher than it would otherwise have been. Why? 
Because when you make the purchase of a stock that produces a dividend, 
and that dividend comes to you tax free, it is a more attractive 
investment. That is why people buy tax-free bonds instead of other 
bonds. So that would be helpful in raising the stock market. It would 
make it more attractive.
  I think it important for us to recall that revenue to our Government 
is volatile. One reason revenue income to our Government is volatile is 
the stock market. When the market is up and people sell stock, they 
have to show a capital gain, and they will pay a tax on the sale--20 
percent normally. When the market is down and they sell a stock, they 
do not take a gain, so they do not pay 20 percent tax on that profit; 
they take a capital loss.
  If they have some other product they sold--real estate they sold and 
showed a gain on--they can use the loss in the market to offset that 
gain. Also, they are allowed, under the Tax Code, to take $3,000 per 
year and offset that capital loss against their ordinary income, 
reducing the ordinary income tax they would pay.
  To me, this is a clear indication that if the stock market is high 
and doing well, the Government will receive more revenue. That is not 
factored into any of these projections whatsoever, what impact the 
dividend tax reduction would have. If the market is up, revenue will be 
up. It will give businesses more value if their stock goes up, and they 
will be able to invest more and grow more. With a higher value stock, 
they can do that.
  In summary, the dividend tax is an unfair double tax. It is the 
second highest in the world. The elimination of this tax will help the 
stock market; it will help the recovery; it will help businesses be 
able to borrow and invest. It will allow individuals to receive income 
on which they do not have to pay taxes. They will have more money to 
spend. Because of the change from taking losses to growth, revenues to 
the Government will go up. I think it is the right thing to do. Dollar 
for dollar, it is a good plan.
  I tell you, there are many good things in the President's proposal. 
It is something we have to deal with this week. This budget will set 
the framework for where we are going. It will set the outline for what 
our spending and our taxing plans will be.
  I hope we will focus on two things: containing spending, making it at 
a reasonable level, and growing this economy, because it is only 
through growth we will be able to return to surpluses and eliminate the 
deficits that are now occurring.
  I thank the Presiding Officer and yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, let me just take a few moments to respond 
to my colleague, Senator Sessions, who is a valued member of the Budget 
Committee, I might add, and whom I serve with on the Ethics Committee. 
He has served there with real distinction as well. But we fundamentally 
disagree. That is what debate is all about. That is what democracy is 
all about. And that is what is healthy for the country.
  The Senator described the growth package on our side as puny, I 
think. Let me just say, here is the difference between our two plans 
for this year. I would describe the President's plan as puny for this 
year.
  Of the total cost of his plan, which is over $900 billion, less than 
5 percent of it is for this year, at the time the economy clearly is 
weak and needs a lift.
  Our plan is more than twice as large as the President's plan for this 
year: $102 billion of economic stimulus.
  An analysis has been done by the distinguished economist Mr. Mark 
Zandi of Economy.com, comparing the lift our plan will give the economy 
over this year and next over the President's plan. It shows the plan we 
have provided will give almost twice as much in terms of economic 
stimulus in 2003 and 2004 as the President's plan.
  Interestingly enough, for the long term, he finds the President's 
economic growth plan actually hurts economic growth. Why? Because it 
explodes deficits and debt. It does not offset the cost of the tax cuts 
with spending reductions. It finances the tax cuts with borrowed money.
  Our friends on the other side seem to have fallen into this notion 
that you can borrow your way to wealth and economic strength. That has 
never been true in history. You cannot borrow your way to economic 
strength. It is as if you had decided you would go out and run up the 
credit cards and make believe you are wealthy. No, no, no. No, we are 
not going to buy into that new theory.

  Our friends on the other side of the aisle used to believe deficits 
matter. Many of us on this side still believe deficits matter. I am 
happy to say some on the other side still believe deficits matter. But 
it is not just Mr. Zandi who has found that the plan of the President 
will hurt economic growth in the long term. Macroeconomic Advisers, who 
is under contract to the White House, under contract to the 
Congressional Budget Office, to do macroeconomic analysis, has 
concluded that after 2004, the President's plan actually hurts economic 
growth. We would have less economic growth than if we did nothing. Now, 
that is not my idea of economic growth.
  I would say this to my colleague: The one thing that is certain about 
the plan on the other side, the thing that is going to grow is the 
deficit. The deficit is going to grow. We are already going to have 
record deficits under this plan, and they are going to continue as far 
as the eye can see.
  According to the President's own documents, we are never going to get 
out of deficit. It is just like falling off a cliff. Because the cost 
of the President's tax cuts explodes at the very time the cost of the 
Federal Government explodes by the retirement of the baby boom 
generation.
  But it is not just my view. Newspaper after newspaper--here is the 
Deseret News, in Salt Lake City:

       War is unpredictable . . . a long, protracted campaign that 
     triggers counter-attacks by terrorists and Iraqi sympathizers 
     could be hugely expensive. Coupled with giant tax cuts, it 
     could send the budget deficit back into levels not seen in a 
     decade or more, which would stifle growth and hamper 
     investment.

  It isn't a growth plan they have on the other side; it is a grow-the-
deficit plan, a grow-the-debt plan, that will hurt economic growth.

       Congress ought to put the president's tax plan on the shelf 
     for awhile until it knows better how the men and women in 
     uniform are going to be spending their year.

  Newspaper after newspaper. Here is the Philadelphia Inquirer:

       . . . [B]e careful what's given away in the name of any 
     ``growth and jobs'' plan. Federal budget deficits are back. 
     States are reeling from their own deficits while shouldering 
     new homeland security chores. The demographic train wreck 
     facing Social Security and Medicare as baby boomers age 
     hasn't gone away just because politicians have stopped 
     talking about it. Money is so tight President Bush can't pay 
     for even his own cherished initiatives such as education 
     reform.

  This is from the News & Observer, Raleigh, North Carolina:

       When the Republicans won the White House there was a 
     projected surplus of about $200 billion for this fiscal year 
     and talk about fully protecting Social Security and even 
     digging out from beneath the national debt. Now, in large 
     part because of the earlier Bush tax cut and necessarily 
     higher spending for the anti-terrorism fight, the nation has 
     plunged into red ink again. . . .
       In the meantime, President Bush goes on pushing hard to 
     make tax-rate reductions permanent and to cease federal 
     taxation of stock dividends. Both the federal and state 
     budgets could face dire consequences from this economic plan. 
     On and on it goes. ``Unfair tax proposal rewards wrong 
     group.''
  This is from the Kansas City Star:

       There's no real debate over the fact that Bush's proposal 
     on dividends would largely benefit the rich. Some apologists 
     talk about wanting to help the elderly, which doesn't tell 
     the whole story; Bush's dividend proposal would help elderly 
     people with lots of money in the stock market.
       Bush's tax package is unfair, short-sighted and fiscally 
     irresponsible. He and members of Congress--particularly 
     Republicans, who now control Capitol Hill--must develop a far 
     better plan in the months ahead.

  Let me just finish with this one. I have many more because newspapers 
all around the country--not Democrats, not Republicans--that have tried 
to analyze the President's plan have come back and said it is a 
nonstarter. Here is the Los Angeles Times:

       . . . Bush's trickle-down package threatens to swamp the 
     economy in a wave of debt. And that's before taking into 
     account the

[[Page S3798]]

     huge but unknowable cost of preparing for and perhaps 
     fighting a war with Iraq. The White House's tax-cutting yet 
     free-spending ways defy history, and taxpayers will be the 
     ones left responsible for decades to come.

  That is just a part of what the Senator from Alabama said that I 
think requires a response. He said some are saying: Do nothing. That is 
really not what Senator Daschle has proposed nor what I have proposed. 
But I do believe it would be wise, on the brink of war, when there is 
no provision in this budget for the costs of that war--and none of us 
are suggesting--I want to make clear to my colleague, if I could have 
his attention, none of us are suggesting this administration or your 
party has any intention but to fund our men and women in uniform. I 
have no doubt of that. I want to make very clear, we make no 
suggestion, none, that there is any reluctance to back our men and 
women in uniform. That is not the point.
  The point is this: When we are on the brink of war, and there has 
been no provision in the budget for the cost of that war, even though 
we know there are substantial costs associated with it, it seems unwise 
to some of us to increase spending, to have new spending initiatives--
except for defense and homeland security--or to have new tax cuts, 
unless they are for a stimulus package.
  That is the point we are making. And I think it is a wise one and a 
prudent one.
  Mr. SESSIONS. Mr. President, will the Senator yield for a question?
  Mr. CONRAD. I am happy to yield for a question.
  Mr. SESSIONS. I understand that. I think the suggestion is our budget 
process has to stop until that occurs. And I think it is impossible for 
the President to give us a number now. I believe it does cause some 
confusion in our unity, which I would not favor.
  But I want to ask the Senator this.
  Mr. CONRAD. Let me just respond to that first.
  Look, we are not suggesting the budget process stop. No. We are 
saying there ought to be a point of order, a 60-vote point of order 
against new spending initiatives, unless for defense or homeland 
security, or for new tax initiatives, other than for a stimulus 
package.
  We are not suggesting the budget process stop. We are suggesting it 
proceed, but that it proceed with some restriction, some disincentive 
for new spending, other than for defense and homeland security, or for 
new tax cuts, other than for a stimulus package.
  Mr. SESSIONS. I know the Senator is committed to whatever figure we 
have to do to fund the effort of our fine men and women in uniform. I 
was looking at the Democratic proposed stimulus plan, and it is pretty 
anemic. I ask Senator Conrad if he knew that not only was it basically 
limited, most of it in just 1, 2, or 3 years, but that in fact in 2004, 
as a result of eliminating the depreciation provisions that are in 
existing law, it would amount to a $16.7 billion tax increase on small 
businesses in 2004 and a $14.8 billion increase in 2005?
  Mr. CONRAD. Part of the plan that I have endorsed would include 
enhanced depreciation for small business.
  Mr. SESSIONS. We passed it as part of a stimulus package before. The 
bill that has been put forward as the Democrat stimulus plan calls for 
the elimination of those which would amount to a tax increase over the 
current law of $16.7 billion in 2004 and $14.8 billion in 2005.
  I ask the Senator if he believes this kind of very large increase in 
taxes on small businesses would be wise in a time of economic slowdown?
  Mr. CONRAD. No. In fact, the plan I have endorsed would expand 
expensing for small business. I think that is a better course and would 
be a real stimulus. We should aggressively have a plan of small 
business expensing, expanding small business expensing in this year.
  I see Senator Allard is in the Chamber. Is he seeking time?
  Mr. ALLARD. I have a statement I would like to make when we get an 
opportunity during the debate.
  Mr. CONRAD. We are under a time limit. There needs to be a granting 
of time in order for Senators to have an opportunity to speak. Senator 
Nickles is not here at the moment. Perhaps he is on his way.
  Mr. NICKLES. Mr. President, I yield the Senator from Colorado such 
time as he desires.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from Colorado.
  Mr. ALLARD. Mr. President, I need time to get set up.
  Mr. NICKLES. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NICKLES. 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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