[Congressional Record Volume 149, Number 59 (Friday, April 11, 2003)]
[Senate]
[Pages S5266-S5293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               FISCAL YEAR 2004 BUDGET--CONFERENCE REPORT

  Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of the conference report to accompany 
H. Con. Res 95, the concurrent budget resolution for fiscal year 2004.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The clerk will report the budget resolution conference report.
  The assistant legislative clerk read as follows:
       The Committee of Conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the concurrent 
     resolution (H. Con. Res 95), establishing the Congressional 
     budget for the United States Government for fiscal year 2004, 
     and setting forth appropriate budgetary levels for fiscal 
     years 2003 and 2005 through 2013, having met, have agreed 
     that the House recede from its disagreement to the amendment 
     of the Senate, and agree to the same with an amendment, 
     signed by a majority of the conferees on the part of both 
     Houses.

  Mr. REID. Mr. President, I ask the Budget Committee chairman if he 
will yield for a question.
  Mr. NICKLES. Certainly.
  Mr. REID. As I said a few minutes ago, on our side there is real 
angst as to when we might finish this budget conference report. We have 
5 hours on our side. At this stage, we have the intention of using most 
all of that time. I am wondering, from your perspective, how much of 
your time are you going to use? It is important for people who are 
bouncing around the country.
  Mr. NICKLES. Did the Senator say they have the intention of yielding 
most of their time?
  Mr. REID. Using the time.
  Mr. NICKLES. I am happy to work with my colleagues to find a mutually 
agreed upon time for debate and for final passage. We have up to 10 
hours, as my colleague knows. That would have us voting at 8 o'clock 
tonight. I hope we can reduce that. I will work with colleagues on both 
sides to make it mutually agreeable.
  Mr. REID. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, for the information of our colleagues, I 
urge our colleagues to stay in town today on this particular Friday 
before an April Easter recess. We have a vote on the Senate budget 
conference report, which we are now debating. We have a vote on the 
urgent DOD request, the war supplemental. That will be voted on today. 
I expect we will also have a vote on debt limit extension. Maybe that 
can be done by voice, maybe not. I urge colleagues to be here today.
  Those are the three very important issues to be resolved today. We 
will try to work with all of our colleagues to expedite consideration 
of all three measures, and I will be happy to accommodate and yield 
time and work with people. We need to pass all three bills. I look 
forward to working with all involved Senators to come to the conclusion 
of all three bills.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, if I may direct a question to the chairman, 
we are willing to work in any way possible to get the budget passed and 
the supplemental passed.
  I think the Senator should be forewarned that I doubt very seriously 
if there will be a debt extension passed today. We spoke at some length 
a week ago with the majority leader. We will be happy to work with the 
leader on a freestanding bill. We need a day on that, but that doesn't 
mean 30 minutes or an hour. We have a number of people who have 
indicated to us that they want to offer amendments on the budget 
extension.
  The majority leader is quoted in the press as saying he thinks we can 
do the supplemental and the budget resolution, but he doesn't think we 
can do the debt limit. I want the chairman to know we agree with the 
majority leader.
  Mr. NICKLES. Mr. President, I appreciate the comments of my colleague 
and friend from Nevada. I will bump that up to a higher level between 
the majority leader, minority leader, and my friends. It was my 
understanding it needs to be done this week before we left. I have not 
consulted with Treasury--the Secretary of the Treasury in the last week 
or so. It was my understanding it really needed to pass before the 
April break. Maybe that is not the case. It may be my friend from 
Nevada and others have done their tax returns and paid such enormous 
taxes that we are in great shape. There is usually an April bump in 
revenues. That is my main concern. We don't like being in the situation 
where we are borrowing funds from civil service retirements and so on, 
which has happened in the past, and may be happening now. I will be 
happy to bump that up to the majority and minority leaders. It was my 
understanding it needed to be done prior to our leaving for this break.
  Mr. REID. Mr. President, very briefly, if I may, I think every time a 
debt limit extension has come before the Congress, I have voted for it. 
I believe we have debts and we should pay them. I will likely vote for 
this one. But there are some people who don't think as I do and they 
want some time to talk on this.
  The majority leader has the commitment of Senator Daschle and myself 
and Senator Conrad that we will work with them to get the debt limit 
extension passed. We need a little bit of time to do that.
  Just on a personal note, I have been checking my banking on line 
every morning to see if my return is back. I am expecting that money to 
come back soon. It has been 4 weeks now and it is not here. I am a 
little disappointed.
  Mr. NICKLES. I yield the floor and 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.
  Mr. NICKLES. Mr. President, as we begin the debate on the budget for 
fiscal year 2004, I will make a couple of comments. One, I compliment 
my colleague, Chairman Nussle, in the House. It has been a pleasure to 
work with him.
  Passing a budget is never easy. I have been critical in the past, 
such as when last year we did not get a budget passed, but I have a 
better appreciation for how difficult it is. Particularly when we have 
a great big number of 51 on our side, it is not an easy job. So I 
compliment Chairman Nussle and thank him for his work and cooperation.
  We had many hours working together trying to formulate a budget that 
would pass both the House and the Senate. It is a great deal easier 
said than done. We have come forward with a budget this year that 
accomplishes a lot of major objectives. We balance the budget. We 
balance the budget in 9 years, not 10. When we brought it before the 
Senate, it was balanced in 10 years, in 2013. Now we balance it by the 
year 2012.
  It is a budget that allows and encourages growing the economy. The 
economy has not been growing. Frankly, we will never balance the budget 
if the economy is not growing. This budget allows and provides for a 
growth package.
  This is a budget that will help us win the war on terrorism. We fully 
fund the President's request for national defense and homeland defense.
  It includes the war supplemental that Congress is going to pass 
tonight. The Senate passed it a week ago, and we will end up passing it 
as well today. It fully funds homeland security and the President's 
request.
  It also is a budget that allows us to modernize Medicare. We did not 
get that done last Congress. We should have, but we did not. Almost 
everybody says they are in favor of it, but because we did not have a 
budget, we did not have protection on the floor. We did not even have 
markup in the committee. We did spend some time on it on the floor, but 
we were not successful. This is a bill that says we will

[[Page S5267]]

spend up to $400 billion not just to provide a drug benefit but also to 
strengthen and improve Medicare, not just for the current beneficiaries 
but for future generations as well.
  It is a budget that maintains spending discipline. It grows domestic 
nondefense discretionary, but barely--about 2.3 percent over 2003 
levels before the supplemental. We limit spending with enforceable caps 
for the next 2 years.
  Budgets are not easy. They are not pretty. The process is difficult. 
It is long. It is tedious. It is tough. It is not the easiest committee 
of which to be a member. I thank all members of the Budget Committee 
who helped us build this budget.
  When we convened early this year, we had seven Budget Committee 
hearings. The President submitted his budget on February 3. We passed a 
large appropriations bill, the 2003 appropriations bill, on February 
13. These were appropriations from the previous year. We did not get a 
budget last year, and we did not get appropriations last year.
  Why did we not get the appropriations bills done? Because the House 
and the Senate were arguing what the appropriate level would be. There 
was never a budget, so this was not an agreement on how much we should 
spend. And because we did not have the agreement, we could not manage. 
It just did not work. And the Congress did not work. Last year was a 
very frustrating year, largely because we did not have a budget. In 
February of this year, we ended up passing last year's appropriations 
bill. Eleven of the thirteen bills passed in February. On March 7, CBO 
submitted the reestimate of the President's budget, and then on March 
12 and 13, the Senate Budget Committee marked up the President's 
budget. We had 2 days of markup. We had 32 amendments considered, 23 
rollcall votes, and we passed it out of the committee on March 13.

  Then we had the longest consideration of the budget maybe in Senate 
history. I will have to look back, but we had 7 days of debate on the 
floor. The Budget Act provides for 50 hours, but we had 50 hours plus 
many more hours because we had a very extended number of rollcall 
votes. We had 81 amendments considered on the floor. Fifty-one were 
decided by rollcall votes, and 31 by voice votes which adds up to 82, 
including final passage.
  We have had a challenging conference. We had a very challenging 
conference, after both the House and Senate passed a bill, because we 
had differing expectations of what could pass, particularly as it 
related to the growth package. The House wanted, and they passed, a 
growth package of $726 billion. The Senate passed a package of $350 
billion. The Senate could not pass more than $350 billion, it looks 
like, and the House would not accept $350 billion. It is kind of hard 
to have reconciliation in a conference agreement if there are 
irreconcilable differences.
  What did we do? Well, we were a little innovative and we came up with 
giving different instructions to the House and the Senate, certainly 
legitimate in parliamentary procedure. It has not been done before, so 
we gave an instruction to the House. The House has an instruction of 
$550 billion on the growth package. The Senate has an instruction of 
$350 billion on the growth package. The difference is to be decided by 
the conference. I think I know where the votes are. I will tell my 
friends and colleagues, I know Chairman Grassley very well. I expect 
that I will be a conferee, and we do not expect to bring a bill out of 
conference unless it will pass the House and the Senate. We want it to 
become law. We do not want to make political statements. We want to 
help the economy grow. That is our objective.
  So hopefully we will have a budget and a growth package. I think it 
is more important to have a budget than even having a growth package. I 
think we have to have fiscal discipline. The budget amounts to $2.2 
trillion. The growth package is somewhere between $350 billion and $550 
billion over 10 years. Over 10 years, we are going to spend about $30 
trillion. I think we have to have some management of that $30 trillion 
in the next 10 years.
  If we did not pass a budget last year and we do not pass a budget 
this year, then we have really no budget. The former Director of the 
Congressional Budget Office said the budget process is dead. I called 
him and told him: I beg to differ with you, but if we were not 
successful in passing a budget this year, it would be dead. If we had 2 
consecutive years and Congress did not pass a budget, then certainly it 
would be dead, for all practical purposes. There would be no budget 
enforcement. There would be no pay-go. There would be no rules against 
spending on extraneous measures. This budget has enforcement.
  I will mention a couple of other things. We have inherited a very 
difficult thing. A lot of people are going to come to the floor today 
and they are going to decry how large these deficits are and say: Woe 
is me, how come we have all of these deficits? It is because of the tax 
cuts.
  That is not actually factual. The fact is we have large deficits 
because revenues have declined dramatically--not because of tax cuts 
but because of the economy. Revenues fell 2 years ago, 1.7 percent. 
Last year, they fell 7 percent. Combined, that is about a 9-percent 
reduction in revenues in the last 2 years. Simultaneously, spending 
went up 12 percent; revenues went down 9 percent. Spending went up 12.2 
percent, and we went from a surplus of $129 billion to a deficit of 
$159 billion in 1 year.

  What caused that? A soft economy, a stock market collapsing. People 
will later say that is because of President Bush's policies. That is 
not correct. The NASDAQ fell 50 percent between March of 2000 and 
December of 2000, so the market started collapsing under President 
Clinton. I want to make sure people know where this collapse came from. 
Revenues started falling like a rock because the stock market started 
collapsing. Maybe the stock market had irrational exuberance going up, 
but it fell dramatically and that cut off revenues. A lot less capital 
gains, less personal income tax, and revenues declined to the Federal 
Government.
  Also, we had something called a terrorist attack on the United States 
on September 11 in the year 2001. That has cost this economy and it has 
brought a lot of outlays to the Federal Government--outlays to respond 
to terrorism, outlays to protect us against terrorism, outlays to 
rebuild both New York and Washington, DC. As a result, outlays have 
gone up and expenses to the economy have been dramatic. It is hard to 
calculate how significant it has been.
  So we have the confluence of several things. We already had a stock 
market declining dramatically, we had a soft economy, then we had 
September 11 on top of that, which has made revenues go down and 
expenditures go up.
  What can we do? We have to show fiscal discipline. We have done that 
in this budget. Despite attempts by many to increase spending by over 
$1 trillion, we held the line on nondefense spending. It will only grow 
by a couple of percentage points. That is compared to spending that has 
been growing at dramatic increases in past years. The year before last, 
it was 12 percent alone in discretionary spending. When I talk about 
spending, sometimes we talk about discretionary and sometimes we talk 
about entitlements, but discretionary spending, the amount of money we 
control, had been increasing at enormous levels. We contained that 
growth. In nondefense, as I mentioned, spending growth has been limited 
to a couple of percentage points.
  We do a couple other things. We reinstill discipline. We have caps on 
discretionary spending. We have enactment of changes. If you want to 
call something emergency, you have to have 60 votes. We prohibit 
advance funding which was done more often than it should have been, 
advance funding where you not only appropriate for the next fiscal year 
but maybe for the next couple of years. We prohibit that.
  Let me mention a few more. Spending growth in 2004 will be 4 percent. 
Defense spending in 2004 is 2.4 percent in budget authority. The last 5 
years it has been 7.6 percent; nondefense spending growth in 2004, 2.9 
percent. The average was 7.9 percent. In defense, I mentioned we fully 
fund the President's request to fight the war on Iraq. We have included 
the war supplemental. We fully fund homeland security. That is an 
increase of 18.4 percent in 2004. We have a $3 billion increase over 
the President's request in 2000 for the Department of Education. Those 
are programs such as IDA, title I, No Child Left Behind. Veterans 
health

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care is the largest increase ever, 14.7 percent. I have mentioned 
Medicare and our efforts there. We also have a pay-go point of order, 
to limit mandatory increases or revenue decreases in excess of those 
provided in the budget.

  We did something else, and I want to make sure my colleague from 
North Dakota listens to this because we can work together on this. The 
House--to their credit, I would say--proposed hundreds of billions of 
dollars in savings in entitlements. The President did not propose 
those; we did not propose those. I had to think maybe we need to be 
looking at entitlements. We did not get that done in this budget when 
we had the opportunity. We did not do it. And I did not call for it to 
be done because I didn't think Congress was ready. I want Congress to 
get ready. I want the authorizing committees to start doing oversight.
  We require in this resolution the House and the Senate authorizing 
committees to submit findings to the Budget Committee identifying 
instances of waste and fraud and abuse in programs within their 
jurisdictions. There are a lot. We have not had extensive oversight on 
a lot of programs in years, for whatever reason. Blame me, blame all of 
us; we need to do more. We are requesting and actually directing each 
of the committees to give us identified areas where they think we can 
make savings. Those need to be submitted by the authorizing committees 
by September 2 of 2003, and we will use those in the Budget Committee 
to develop future budget resolutions. We do not want to dictate to the 
authorizing committees, but we want to work with the authorizing 
committees to get real results, real savings, real oversight.
  It bothers me a lot when we find out we have actually hundreds of 
billions of dollars estimated to be lost in errors or waste--in some 
programs it is 20 or 30 percent.
  Regarding the earned-income tax credit program, I believe CBO did a 
study, and it was something like an error rate of close to 30 percent. 
That is not acceptable. We need to make sure Government is more 
efficient and more effective.
  I look forward to the debate on this resolution. I hope our 
colleagues consider it vitally important to pass a budget. We will be 
grossly irresponsible if we do not. It is easy to throw stones and 
sticks and say I don't like this so we will just vote no. But, 
conversely, we have to govern. We considered alternatives, and they did 
not pass. I urge our colleagues to consider this budget. I urge Members 
to vote for final passage some time later this afternoon.
  Mr. President, I ask unanimous consent that quorum calls be charged 
equally from now on during the course of the debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, this is, I believe, the worst budget this 
Chamber has considered perhaps in its history. It is radical, reckless, 
dangerous, and extreme. At a time of record budget deficits, it 
proposes to cut revenues by over $1.3 trillion and increase spending by 
over $1.1 trillion, driving us deeper into deficits and debt.
  It explodes deficits when we are at war, the cost of which is 
unknown, and right on the eve of the retirement of the baby boom 
generation which will dramatically increase the cost of Social Security 
and Medicare.
  Make no mistake, the cost of the massive tax cuts in this budget 
explode at the very time the cost to the Government of the baby boom 
generation's retirement explodes. There can only be one result, and 
that is to drive this country off the cliff into deficits and debt on a 
scale and magnitude never seen in this country's history. That is not 
just irresponsible, it is wildly irresponsible.
  This budget is not a document that represents a conservative approach 
to governance. It is radical and it is extreme. It says deficits do not 
matter, that taking virtually every penny of the Social Security trust 
fund surpluses to fund tax cuts for the wealthiest among us, is the 
priority for this Nation.
  This budget flunks every test of fiscal responsibility and basic 
fairness. This budget proposes taking trillions of dollars raised from 
the payroll taxes of middle-class Americans, generated to support 
Social Security, and uses them to fund an income tax cut overwhelmingly 
for the benefit of the most wealthy among us.
  The President's proposal, which this budget resolution seeks to 
support, would give a $90,000 tax reduction to those earning over $1 
million a year and funds it by taking the payroll tax money of middle-
class Americans to pay for it. To the extent it is not paid for by that 
mechanism, it borrows the money and charges the cost to future 
generations. That is class warfare of an extreme nature. It takes from 
the many to give to the few.
  The proponents of this budget claim it contains a growth package. It 
does not. It contains a radical expansion of deficits and debt that can 
only undermine our long-term economic strength and security. Oh, yes, 
it will give a momentary and modest lift to the economy. But like the 
drug addict who gets a momentary high, it will be inexorably followed 
by the lows brought on by the deadweight of deficits and debt.
  The best economists in America tell us that this budget proposal 
hurts long-term economic growth and threatens our economic security 
because it is all financed by borrowed money. It is a borrow-and-spend 
philosophy that doubles our gross national debt over the next decade, 
right before the baby boom generation retires. This is the time we 
should be paying down debt or prepaying the liability we all know is to 
come. Instead, this budget says: Forget about what we know is happening 
and what is about to happen; let's live for the moment and not worry 
about the future.
  As bad as this budget is--and it is bad--the process that brought it 
here is even worse. I believe it represents an attack on the 
Constitution itself. Our Founding Fathers intended the Senate to be the 
place where a determined minority could slow down and perhaps even stop 
measures that the minority believed could damage our country. So the 
Senate adopted the right to unlimited debate and the ability to offer 
unfettered amendments. The budget process used in this conference 
report has never been done before and fundamentally denies Senators 
those basic rights. The process, called reconciliation, which restricts 
Senators' rights to debate and amend, has been twisted like a pretzel 
into something unrecognizable from what was intended.
  Reconciliation was meant to provide a fast-track process to reduce 
deficits, and now it is being used to explode them. Understand that 
this budget says both bodies, under the reconciliation provisions, are 
instructed to cut taxes by $550 billion. If anybody believes this is a 
measure to cut taxes by $350 billion under reconciliation, that person 
is profoundly misled. The instruction says clearly: Cut taxes by $550 
billion under these fast-track procedures that mean Senators are denied 
the basic protection of unlimited debate and amendment.
  In the next breath, the Senate is told to forget that instruction 
because there will be a supermajority point of order in the Senate if 
it is followed. But in the conference committee, the higher tax cut can 
be adopted and come back to the Senate and be passed on a simple 
majority vote under special time limits and with restrictions on 
amendments that deny every Senator their most basic rights.
  All this was made possible by a procedure never considered or debated 
in either body. This scheme was concocted in the conference committee 
without a single member of the minority present--not one. We were 
locked out. So four members of the Senate majority, with two members of 
the House majority, have constructed a procedure, never contemplated in 
either Chamber, which allows the special restrictions and limitations 
of reconciliation to apply to a tax cut that never passed this Chamber.

  This stands the plain meaning of reconciliation on its head. No true 
reconciliation between the House and the Senate has ever occurred. 
There was no true meeting of the minds. So they conjured up a new point 
of order in the conference committee as a figleaf to hide their 
failure.
  Colleagues should understand the extreme nature of what is being 
done. If a conference committee can add new provisions never debated or 
contemplated in either Chamber, and do so without the minority, where 
does it end? Could an abusive minority of the

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majority, in a conference committee, decide that a supermajority point 
of order would apply to an individual Senator's right to offer an 
amendment? Could just a handful of Senators and House Members in a 
conference committee create a supermajority point of order against 
amendments on a particular subject? What is to prevent a minority of 
the majority in a conference committee from fundamentally altering the 
rights of individual Senators?
  This way lies chaos and a descent into unconstitutional government. 
Mark my words, the Senate will live to regret this day. Unintended 
consequences, we have seen in the past, flow from very little things.
  In 1975, a tax cut of $6 million was used as precedent for using the 
reconciliation process that was designed for deficit reduction. It was 
used as a pretext to allow tax cuts of over $1 trillion, tax cuts that 
have pushed us now into deep deficit and growing debt.
  This is what has been agreed to in the conference committee. The 
reporting has been almost uniformly wrong.
  They say the tax cut permitted is $550 billion. That is not true. The 
tax cut in this budget resolution is $1.3 trillion, and that does not 
count the associated interest costs. It is only one part of the tax cut 
which is $550 billion. That is the so-called reconciled amount. Those 
are the amounts that will move under special protection, that will 
restrict Senators' right to amend, restrict Senators' right to 
unlimited debate, fundamentally restrict the determined minority's 
ability to stop what they believe will damage this country in a 
fundamental way.
  I hope anybody voting on this understands. If you vote for this 
budget resolution, you are voting for $1.3 trillion of tax cuts, of 
which $550 billion is reconciled, moving under special protection that 
fundamentally restricts the Senators' basic rights to amend and debate.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. If you count in the additional interest costs which 
would have to be incurred to do this tax cut because of the borrowing 
that would be necessary to fill the deficit gap created by the loss of 
revenues from the tax cut, what would the cost of this tax cut be?
  It seems to me eminently reasonable that one also ought to factor in 
the interest costs associated because you have to borrow money in order 
to do the tax cut. Am I correct that we would have to borrow money in 
order to do the tax cut?
  Mr. CONRAD. The Senator is on to something very important. Really, 
this understates the cost of the tax cut. The tax cut that is in this 
resolution, $1.3 trillion, has an additional cost, the associated 
interest cost, because this is all borrowed money. That would be 
another about $300 billion.
  So the total cost goes to $1.6 trillion--truly stunning when we are 
already at record budget deficits, when we are at war, the cost of 
which no one knows, and when we are on the eve of the retirement of the 
baby boom generation. So there can only be one result; that is, to 
dramatically explode deficits and debt.

  Mr. SARBANES. May I ask the Senator one more question about his chart 
before he puts it down?
  Mr. CONRAD. Yes. I would be pleased to yield.
  Mr. SARBANES. There is all this focus about this $550 billion figure 
being the amount of the tax cut. But as I understand it, the $550 
billion figure is only part of the tax cut that is in the budget 
resolution. This is the part that would proceed under the special 
procedures, the so-called reconciliation, which prevents extended 
debate in order to address the issue. The budget resolution provides 
$550 billion there, but it also provides an additional $725 billion in 
additional tax cuts. Now, they would have to go through the regular 
procedure, but, nevertheless, that is $1.3 trillion. And then you add 
the interest, and you are talking about $1.6 trillion tax cuts, at a 
time when we are in budget deficit.
  Mr. CONRAD. Record budget deficit.
  Mr. SARBANES. I understand. In fact, I understand that the budget 
deficit for this year is now projected to be twice as much as it has 
ever been before--an absolute record budget deficit.
  Mr. CONRAD. Yes. We now estimate the budget deficit, under this 
budget resolution, will be between $500 and $600 billion for this year 
alone on a $2.2 trillion budget. Some have said these deficits are 
small. There is nothing small about them. They are massive. They are 
record. They are the biggest we have ever had in dollar amount.
  If we look back to 2 years ago when we were told that we could 
expect--instead of deficits--nearly $6 trillion of surpluses, we now 
know, if we adopt what is before us, instead of $5.6 trillion of 
surpluses--if we adopt the budget resolution before us--we will have 
over $2 trillion of deficits over that same period.
  Mr. SARBANES. Will the Senator yield for a question on that chart?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. In January of 2001, when this administration first came 
in, we were projecting out, over the 10-year time period, a surplus of 
$5.6 trillion. At the time, President Bush, and his Republican 
supporters, said: Well, we are going to run this huge surplus. We 
should do a tax cut because we don't want to be taking taxes just to 
build up a surplus.
  Well, a lot of people said: Don't be so sure about that. Let's not 
rush into it. Why don't we pay down the debt some more? We are finally 
doing that.
  No, no, they wanted to do this big tax cut because we had a projected 
surplus. Well, they did their tax cut. They rammed that through here.
  Now we are projecting big deficits, and they want to do another big 
tax cut, even though they are projecting big deficits.
  Whatever the fiscal situation is--big surpluses or big deficits--it 
makes no difference; they are bound and determined to do tax cuts for 
very wealthy people.
  As I understand it, analysis of the President's tax proposal shows 
that almost 50 percent of the benefits of that tax cut go to the top 1 
percent of the population. Almost 75 percent of it goes to the top 5 
percent of the population.
  So there is this absolutely zealous drive for big tax cuts for very 
wealthy people regardless of the Nation's fiscal situation and 
regardless of the fact that this proposal is going to drive us deeper 
into deficit and deeper into debt. Isn't that the situation?

  Mr. CONRAD. It is the situation. And what is most stunning about it 
is that it is all done at the worst possible time: at a time we are at 
war, the cost of which none of us can know; and also on the eve of the 
retirement of the baby boom generation, a cost we do know because the 
number of people eligible for Social Security and Medicare are going to 
double.
  And I believe this proposal is very clear. If this is adopted, this 
will head us in the direction of massive cuts in Medicare, in Social 
Security, and most of the rest of Government as we know it.
  I think it is absolutely foreordained, if this is adopted, you will 
see proposals that will be cloaked in the soft language of reform which 
will hide deep cuts in Social Security, in Medicare, and all other 
parts of Government. You can really have no other outcome because you 
have record budget deficits now; and what this proposal is, is to cut 
taxes by $1.3 trillion, not counting the interest cost, to increase 
spending by $1.1 trillion over the so-called baseline, including the 
interest cost. What you are left with, then, is even deeper deficits, 
right on the brink of the retirement of the baby boom generation which 
starts in 2008, which we all know what it will lead to. And I will 
show, as we go through this presentation, where that leads.
  Mr. SARBANES. Will the Senator yield for a further point?
  The Senator made reference to the context in which we find ourselves. 
I am frank to tell you, I think this is a reckless budget resolution. I 
think the President's budget proposal was reckless. I think this 
resolution is reckless. As the very able Senator from North Dakota has 
pointed out, we are in a war, and we have not only the war costs but 
the reconstruction costs. We are about to do a supplemental of about 
$80 billion, most of it devoted to that purpose. And there is no one 
who contends that is anything other than the initial downpayment on the 
cost.
  But, furthermore, we still have the worldwide battle against al-Qaida 
and

[[Page S5270]]

international terrorism. We have to confront the challenge of providing 
for homeland security. We have other threats around the world, to 
mention but one, North Korea.
  No prudent person would give away their fiscal ability to deal with 
those situations the way this budget resolution does. It is 
extraordinary what this budget resolution is doing.
  I ask my friend from North Dakota, isn't this an abject failure to 
reserve fiscal strength to deal with these pressing problems which we 
know are right there in front of us?
  Mr. NICKLES. Mr. President, just a parliamentary inquiry: I would 
like to remind my colleagues the rules of the Senate are to address the 
Chair, ask questions through the Chair, not to have colloquies between 
two Senators.
  Mr. CONRAD. I would be happy to answer my colleague by saying this: 
This process and this budget, to me, is totally disconnected from 
reality. In fact, I have never seen a greater disconnect with reality 
than is represented by this budget. Here we are, with record budget 
deficits, approaching $500 to $600 billion this year, and what we do is 
increase spending under this resolution, cut the revenue, plunging the 
country deeper into deficits, when we are at war, the cost of which we 
do not know, and when we are on the eve of the retirement of the baby 
boom generation.
  Let me just say, this fiscal turnaround that we have seen--when 
people ask us, well, where did the money go? Here is where it went. 
Over the period in question, 36 percent went to the tax cuts--both 
those already passed and those proposed.
  The second biggest reason for the disappearance of the surplus is the 
additional spending caused by the attack on the country and the war; 
that is, the increased defense spending and the increased homeland 
security spending.
  The third biggest reason is that revenue is coming in below 
expectation, apart from the tax cut; that is, the tax cut is the 
biggest single reason. The third biggest reason--close to the second--
is that revenue is coming in below what was anticipated.
  And the smallest reason, over the 10-year period, is the economic 
downturn at 9 percent.
  The result of all this is that the budget before us--after many of 
the Members of this body pledged not to take Social Security for other 
purposes--this is the total amount of Social Security surplus over this 
period: $2.7 trillion.
  This budget takes $2,698,000,000,000 from the Social Security trust 
fund surpluses and uses it for other purposes, uses it to fund the tax 
cut, uses it to pay for other things. This budget has deficits. Some 
have said they are small and short term. Here is what they are. They 
are not small, and they are not short term. This year we now anticipate 
a deficit on an operating basis of $558 billion, by far the biggest we 
have ever had. You see throughout the rest of the decade, we never get 
below $300 billion in deficits. Again, that is not counting Social 
Security, not taking Social Security and using it to pay for other 
things.
  Mr. SARBANES. Will the Senator from North Dakota yield for a question 
about one of his charts?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. I would like to go back to the previous chart. As I 
understand it, because of the tax cut and also because we are 
constrained to do these programs for the war and for homeland security, 
over this 10-year period we are going to be using $2.7 trillion from 
the Social Security trust fund to cover those costs; is that correct?
  Mr. CONRAD. That is correct.
  Mr. SARBANES. As I understand it, if we didn't do that, that $2.7 
trillion would be in the Social Security trust fund to help us take 
care of the extra stress on the system that will come from the 
retirement of the baby boomers, this upsurge in people taking 
retirement, so that one needs to understand if you didn't do the tax 
cut or if you constrained some of these other programs, you wouldn't 
then be drawing down the Social Security trust fund and, therefore, it 
would be in a better position to address the extra stress that will 
come when the baby boom generation retires. Is that the connection one 
should be making here?
  Mr. CONRAD. Let me just say, the Senator has put his finger on what 
to me is so stunningly irresponsible about this budget. If this money 
was not being taken and used for other purposes, the surplus money, it 
could then be used in one of two ways. It could be used to pay down 
debt that would better prepare us for what is to come, or it could be 
used, some portion of it, to prepay the liability of what we know is to 
come. That is what other countries are doing. Other countries, 
recognizing the same demographic time bomb, are taking the surpluses 
being generated now in their trust funds and are investing them or they 
are prepaying the liability.
  Instead of paying down debt or prepaying liability, we are using the 
money for tax cuts and for other expenditures of government that leave 
us less capable to deal with what is to come.
  That is a profound mistake, and we will live to regret it. And we 
will then face a circumstance in which we will be asked to make even 
more draconian reductions in the benefits of those programs, or drastic 
tax increases.
  Let me say, the President told us 2 years ago his budget would pay 
down a record amount of national debt. He said:

       We will pay off $2 trillion of debt over the next decade. 
     That will be the largest debt reduction of any country, ever.

  He said then:

       Future generations shouldn't be forced to pay back money 
     that we have borrowed. We owe this kind of responsibility to 
     our children and grandchildren.

  I believe the President was absolutely right in saying that. But look 
at what is happening. There is no record paydown of debt. There is no 
paydown of debt. Instead the gross debt of the United States is 
exploding. From $6.7 trillion in 2003, instead of being virtually paid 
off, which he said would occur by 2008, we are nearly doubling the 
national debt just in this 10-year period. So the national debt would 
be $12 trillion at the end of 2013 if this budget is adopted, the plan 
that it contains.

  The President this year told us:

       This country has many challenges. We will not deny, we will 
     not ignore, we will not pass along our problems to other 
     Congresses, to other presidents and other generations.

  In this very budget, what we see contained is a call for the biggest 
increase in the debt limit in the history of the country. They are 
asking for a $984 billion increase in the debt limit as part of this 
proposal. That is the biggest increase in the national debt in the 
history of America.
  Mr. SARBANES. Will the Senator yield?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. This budget conference report is seeking an increase in 
the debt limit of just under $1 trillion; is that correct?
  Mr. CONRAD. Yes, $984 billion. The previous record increase was under 
the previous President Bush, November of 1990, when they got a $915 
billion increase in the debt limit. As you know, the House has 
different rules than the Senate. We will not conclude action on the 
debt limit here probably until sometime later. But that is what this 
budget resolution contemplates, an increase in the debt limit now of 
$984 billion, nearly a $1 trillion increase in the debt.
  Mr. SARBANES. If the Senator will yield further, until when is this 
additional $1 trillion increase in the debt limit supposed to last? 
Will they not come back at any point, or are they going to come back 
again and again seeking increases?
  Mr. CONRAD. Under this budget proposal, they will probably have to 
come back as early as next year----
  Mr. SARBANES. Oh, my.
  Mr. CONRAD. Late next year and ask for even more expansion of debt 
because this budget resolution is one constructed on deficits and debt. 
It is a testimony to deficits and debt. It can only get worse.
  It is interesting, the effect on the rest of the budget. For example, 
the interest costs, we were told 2 years ago the interest costs to the 
Federal Government over this next decade would be $622 billion. 
Instead, because of the failed fiscal plan, the interest costs alone 
will be $2.3 trillion. That is an increase in interest costs of $1.7 
trillion. Obviously, we have to pay it because we have borrowed it, and 
we owe it. But those are dollars that can't buy a

[[Page S5271]]

single tank. They can't buy a single weapons system. They can't buy a 
single airplane. They can't educate a child. They can't house the 
homeless. They can't do any of the other things the Federal Government 
has responsibility for. They can't pay down debt. Those are dollars 
that are just used to service the debt we are running up.
  Mr. SARBANES. Would the Senator yield on that point?
  Mr. CONRAD. I am happy to.
  Mr. NICKLES. I remind my colleagues, they need to ask questions 
through the Chair, and they need to ask questions and answer questions.
  Mr. SARBANES. Mr. President, I would like to put a question to the 
Senator from North Dakota.
  Mr. CONRAD. I am happy to yield.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from North Dakota.
  Mr. SARBANES. Mr. President, when this administration came into 
office, it was my recollection that the Federal budget was running a 
surplus. Therefore, there was not only no increase in Federal interest 
costs, but we were, in fact, year to year, reducing Federal interest 
costs and had done so for 2 or 3 years prior to President Bush coming 
into office; is that correct?
  Mr. CONRAD. The Senator is correct. We had actually been in the happy 
circumstance of not only running a balanced budget, but running a 
surplus. In fact, we had stopped the practice of taking Social Security 
trust fund surpluses to fund other functions of Government. It was 
critically important that we do that because we are getting close to 
the retirement of the baby boom generation.
  Some of our colleagues say to us that, you know, deficits don't 
really matter anymore. What a profoundly wrong notion that is. 
Obviously, deficits matter. When the Federal Government is compelled to 
borrow money, that puts us into competition with others who want to 
borrow money, that drives up the cost of interest rates, and that slows 
the economy. That is why when I reviewed this budget, it is not an 
economic growth budget, it is a budget that will hurt long-term 
economic growth because of the deadweight of these deficits and debt. 
That is not just my opinion.
  I will get to the point in the presentation where we talk about 
others who are economists who have been hired by the White House, by 
the CBO, to tell us the implications of what is being done; and what 
they have concluded is that this will hurt economic growth because it 
is all being financed by borrowed money.
  What does that mean? When the Federal Government borrows money, we 
are in competition with the private sector, and that reduces the pool 
of societal savings. That is a dissavings. When you reduce the pool of 
societal savings, that reduces the amount of money available for 
investment and that hurts long-term economic growth.
  It is not just this Senator who says that. Interestingly enough, the 
CBO is headed by a man chosen by our colleagues on the other side, who 
came directly from the White House. He has done seven long-term models 
looking at the effect of this budget. In four of the seven, he said 
deficits would be even worse as a result of this budget proposal. In 
three he found it would be better, but only on the assumption that 
Americans, over the next decade, would work harder in preparation for 
the massive tax increases that will inevitably flow from the adoption 
of this kind of a budget.
  I hope people understand where this is all headed because it is as 
clear as it can be. Nobody can vote today and say they didn't know. 
Nobody can vote today and not have their record reviewed and have 
people look back and say these people led us down a path of deficits 
and debt that fundamentally weakened the country.
  This is a chart from the President's own budget document. This comes 
from his analytical perspectives, page 43. This is his long-term 
outlook. We never escape from deficit under the President's plan--
never--according to his own estimates. In fact, we are in the sweet 
spot now. You can see that the deficits here are the smallest they are 
going to be. Yet these are record deficits. It may look like a small 
amount of red, but it is the most red we have ever experienced, and it 
is going to get worse. Under the President's own analysis of his plan, 
it gets worse because the cost of the tax cuts explode at the very time 
the cost of the Government explodes because of the retirement of the 
baby boom generation.

  Mr. SARBANES. Will the Senator yield for a question on that chart?
  Mr. CONRAD. Yes.
  Mr. SARBANES. As I understand it, this chart shows the deficit as a 
percentage of the gross domestic product and it is almost 14 percent at 
this point out here; is that correct?
  Mr. CONRAD. That is correct. If this were in dollar terms, I could 
not put it on a chart. The sea of red ink that would follow would not 
fit on any chart that I am allowed to use on the Senate floor.
  Mr. SARBANES. The European Union, when they made the economic 
agreement with respect to all the European Union countries, set as a 
requirement that the deficit that a country was running could not be 
greater than 3 percent of GDP; and countries had to go through a 
rigorous effort to get below the 3 percent of GDP figure as a deficit.
  Yet what the President has given us, and what is reflected in this 
budget resolution as a first significant step in that direction, is a 
policy that is going to put the deficit as a percentage of GDP in the 
double figures. It will well exceed 10 percent.
  Mr. CONRAD. What is interesting is that, right now, we would not be 
eligible to join the European Union because our deficit is in excess of 
what is required for a member state to join the European Union. We 
would be disqualified. We are headed for a circumstance in which we 
would not be qualified for decades to come.
  The fundamental reason is contained on this chart, I say to my 
colleague. This, to me, is the single most important thing to 
understand. This chart shows the Social Security surplus, Social 
Security trust fund, the green bar. The blue bar is the Medicare trust 
fund. The red bar is the cost of the proposed and already-enacted tax 
cuts. What one can see is that right now we are running big surpluses 
in the Medicare and Social Security trust funds. In fact, the tax cuts 
right now, in this part of the time period, are less than the trust 
fund surpluses.
  Look what happens when the baby boomers start to retire and those 
trust funds go cash negative. It is at the very time that the cost of 
the President's tax cuts explode. What does that do? That leads us into 
deep deficits and debt.
  I don't want anybody to conclude from this that this Senator doesn't 
favor some tax cuts because I do. I think they are necessary right now 
to stimulate the economy, give lift to the economy. But we have to 
balance the need for short-term additional stimulus both by way of 
spending and tax cuts, with the long-term need to return to fiscal 
balance and to prepare for retirement of the baby boom generation.
  What is being done here does neither because only 5 percent of the 
cost of the President's proposed tax cuts in the stimulus package are 
effective this year, when we need the stimulus, when the economy is 
weak. Ninety-five percent of the cost is in future years, when it is 
only going to explode deficits and debt. It will lead to a weakened 
economic position and will fundamentally alter this country's ability 
to meet its obligations.
  Mr. SARBANES. I am struck in looking at that chart by the extent to 
which the cost of these tax cuts explodes, as the Senator says, in 
future years.
  For instance, take the year 2023, this is all deficit. But all of 
this part of that deficit is from the explosion of the tax cut. The 
balance is from what happens in the trust funds for Medicare and Social 
Security. But this chart so clearly demonstrates that these tax cuts 
that are being talked about have built into them a tremendous expanded 
cost in future years.
  It is extraordinarily dramatic because all of that is exploding tax 
cuts. We are being set on a path that is dooming us to large deficits 
and large debt.
  Mr. CONRAD. Mr. President, I say to my colleague, what this means is 
not just numbers on a page, not just deficits, whether people care 
about deficits or not, they matter a lot to the functioning of the 
economy. They matter a lot to the ability of the United States to keep 
its obligations.

[[Page S5272]]

  The implication of all this is much more direct. This is going to 
compel at a future time, according to the former Congressional Budget 
Office Director, massive cuts in benefits of Social Security and 
Medicare, massive tax increases, and massive debt. That can be the only 
outcome because none of this adds up in any serious way.
  For those who say deficits do not matter, Chairman Greenspan of the 
Federal Reserve believes deficits matter. This is what he said in 
testimony before the Banking Committee, where my colleague is the 
ranking member:

       There is no question that as deficits go up, contrary to 
     what some have said, it does affect long-term interest rates. 
     It does have a negative impact on the economy, unless 
     attended.

  It is not just the view of the Chairman of the Federal Reserve, but 
the Committee for Economic Development, which is made up of some of the 
most prominent business leaders in the country, has looked at these 
budget proposals, and this is what their conclusion is:
  No. 1, current budget projections seriously understate the problem;
  No. 2, while slower economic growth has caused much of the immediate 
deterioration in the deficit, the deficits in later years reflect our 
tax-and-spending choices;
  No. 3, deficits do matter;
  And No. 4, the aging of our population compounds the problem.
  The other day in the New York Times, some of our most able former 
colleagues and former members of administrations, both Republican and 
Democrat, put out this op-ed. This is former Senator Kerrey, former 
Senator Nunn, both Democrats, former Senator Rudman, a prominent 
Republican, Pete Peterson who was in the Cabinet of a Republican 
administration, Robert Rubin, former Secretary of the Treasury, and 
Paul Volcker, the distinguished former head of the Federal Reserve.
  They asked the question:

       Will Congress stand up for fiscal responsibility?

  They said in this article:

       Tax cuts are the primary focus of this year's budget 
     debate. To speed enactment, Congress is planning to use a 
     special fast-track procedure called reconciliation. While 
     determining the size of the tax cut to be given fast-track 
     protection in the budget is sometimes dismissed as a 
     procedural matter, it is not. Whatever its size, a tax cut 
     that receives this protection is almost certain to be enacted 
     in later tax legislation. Given the rapidly deteriorating 
     long-term fiscal outlook, neither proposal--

  Neither the House nor the Senate proposal--

     is fiscally responsible. It is illogical to begin turning 
     back toward balanced budgets by enacting a tax cut that will 
     only make the long-term outlook worse.
       Furthermore, the proposed tax cuts are not useful for 
     short-term fiscal stimulus, since only a small portion would 
     take effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits 
     will eventually slow the economy.
  When our friends say this is a growth package, it is not a growth 
package. This is a package that undermines long-term growth. We have 
six of our most distinguished colleagues, former Senators and former 
members of the Cabinet, on a bipartisan basis telling us that is the 
case.
  We do not have to just look to the Chairman of the Federal Reserve or 
former Cabinet members or former Senators; we can look at the people 
who have been hired by the White House to tell them the effect of their 
policies. This is what they said.
  They showed that the policy being proposed will give a short-term 
bump, but after 2004, we will get less economic growth than if we did 
nothing. We would be better off to do nothing than to adopt this policy 
because it explodes deficits and debt. The deadweight of those deficits 
and debt will hurt long-term economic growth.
  We have another distinguished economist, the head of Economy.com, who 
did this analysis of two competing proposals, what the Democrats 
proposed and what the President proposed. This is their conclusion.
  The Democratic plan will give almost twice as much economic growth in 
2003 and 2004 and not do the long-term harm of the President's proposal 
because we do not explode the deficits and debt in the way the 
President's plan and the budget plan before us does.
  If we just want to look at reality, since we pursued this course, 
since we have gone to this notion of borrow and spend, here is what has 
happened. We have lost 2.6 million jobs.
  Mr. SARBANES. Mr. President, will the Senator yield on that point?
  Mr. CONRAD. I will be happy to yield.
  Mr. SARBANES. My understanding is that the unemployment rate in the 
course of this administration has gone from 4 percent to almost 6 
percent, and that the number of long-term unemployed, people out of 
work for more than 26 weeks, is now at almost 2 million people. 
Consumer confidence in the latest survey is at a 10-year low. So we are 
facing serious economic challenges.
  Of course, the Senator suggested, as did the quote from our former 
colleagues, that you could do some effort to boost the economy this 
year and next year to try to bring us out of this situation, but the 
President's proposal does very little of that.
  What the President's proposal does is put into place these exploding 
tax cuts out into future years that will significantly boost the 
deficit and the debt problem, rather than addressing the immediate 
challenge we have of trying to give a boost to the economy now. So not 
only does this budget proposal commit the Nation to a serious long-term 
fiscal problem, but it fails to do what needs to be done in the short 
term, in terms of trying to restore jobs and economic growth. I ask my 
colleague, is that not correct?
  Mr. CONRAD. I believe that is correct. I say to the Presiding Officer 
in response to my colleague, I really do not know what could be more 
clear. We do not need to just look at economists' projections. We can 
look at our own history.
  We had this attempt in the 1980s to pursue the economic policy that 
is now being attempted. It did not end happily. It exploded the 
deficits and debt of the country. It quadrupled the national debt.
  Then in the nineties, we took a different approach, the approach of 
balancing budgets, of investment in technology, of bringing down 
Federal spending, of raising revenue to balance budgets. What it kicked 
off was the longest economic expansion in our Nation's history. We 
turned deficits into surpluses, and we had the lowest unemployment rate 
in 30 years, the lowest inflation rate in 30 years, and the strongest 
period of business investment in our Nation's history.
  That is a real-world example of two competing views of how to 
strengthen the economy. Now we are going back to the failed policy of 
the eighties and doing it at the worst possible time.
  Then there was time, before the baby boomers started to retire. Now 
there is no time. The mistakes that are made now will be paid for by 
increased debt, by reduced benefits, by increased taxes. That is where 
we are headed.
  And I would quote again our most distinguished colleagues warning us:

       Congress cannot simply conclude that deficits do not 
     matter. Over the long-term, deficits matter a great deal. 
     They lower future economic growth by reducing the level of 
     national savings that can be devoted to productive 
     investments.

  That is the argument I have been making this morning.

       They raise interest rates higher than they would be 
     otherwise. They raise interest payments on the national debt. 
     They reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an unsupportable tax burden for the next 
     generation.

  I guess we are in this mode now where we live for the moment. I guess 
we do not worry or care about what we do now, how it affects the 
future. But we ought to. The lessons are clear. The warning signs are 
there.
  Every Senator is going to be responsible for their vote. Every 
Senator can be held accountable in the future for what they did to 
either strengthen this country or to weaken it. Every Senator is going 
to have a very clear choice in a few hours: Do they support a budget 
that plunges us deeper into deficits and debt, or do they say it is 
time to pull back?
  This is the economic record on job creation of administrations going 
back to President Eisenhower. Every one of them created jobs. This is 
the first one to lose private sector jobs in 50 years. If we look to 
public opinion, the American people are saying:

       On the home front, Americans strongly agreed with the past 
     week's Senate action to

[[Page S5273]]

     slash the President's proposed tax cut. Two in three 
     respondents--Republicans, Democrats and independents alike--
     favored the Senate plan to reduce Bush's $726 billion tax cut 
     by more than half to help pay for the war, shore up Social 
     Security and reduce the deficit.

  That is two-thirds of the American people sending us a message. I do 
not think we should do budgets based on polling, but I do think we 
ought to do it based on common sense, and common sense ought to tell us 
that exploding deficits and debt when we are at war, exploding deficits 
and debt when the baby boom generation is about to retire, exploding 
deficits and debt when we know it will harm long-term economic growth, 
is truly a fool's errand, and we will live to rue the day we made 
shortsighted decisions.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. I yield whatever time he may consume to the Senator from 
Maryland.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I thank the very able Senator from North 
Dakota, the former chairman of the Senate Budget Committee and now 
ranking member, for an extraordinarily perceptive opening statement 
with respect to this budget resolution.
  The Senator from North Dakota has taken a long-term view of where the 
American economy is going and the challenges we face. He has assumed 
that role repeatedly, and I think it is extremely important that we not 
simply live for the moment and that someone point out the direction in 
which we are going and what the consequences will be.
  The vote we are about to cast has consequences. It has consequences 
for today, tomorrow, and many years into the future. Members of the 
Senate need to fully appreciate the import of this decision.
  I will speak a few minutes about equities in this budget resolution. 
What needs to be understood is that the whole driving thrust of this 
budget resolution is to put in place a large tax cut which, under the 
President's proposal, will go overwhelmingly to people at the very top 
of our income and wealth scale in this country.
  The drive to do that is carried so far that my colleagues on the 
other side of the aisle are prepared to twist the procedures of this 
institution like a pretzel in order to push through their large tax 
cuts because they are encountering considerable resistance to them by 
people who are stopping and looking at them and saying this is not the 
responsible thing to do. Indeed, it is a reckless thing to do.
  One of my colleagues looking at what they are trying to do said: It 
never occurred to me, I never thought I would see the day when they 
would be using these kinds of gimmicks in order to push their agenda.
  This is no proper process. This is simply a twisting of process in 
order to try to get to this tax cut result.
  Let's look at what the tax cut does and its implications. The budget, 
of course, sets all our national priorities. We make fundamental 
decisions within the budget: How much support we will provide for 
particular programs, what we will do on the tax side. Of course, the 
aggregate amount of the budget can have a profound effect upon our 
overall economy, not only this year but extending well into the future. 
The Senator from North Dakota very carefully and lucidly spelled out 
those large budget consequences, as is, of course, the responsibility 
of the leader on the Budget Committee to do.
  We know the fiscal situation has deteriorated drastically since this 
administration took office. In January of 2001, when President Bush 
took office, the Congressional Budget Office was projecting a budget 
surplus over 10 years of $5.6 trillion. The President pointed to that 
surplus as a rationale for doing the 2001 tax cuts. Now, over that same 
period, the Congressional Budget Office is projecting a $2.1 trillion 
deficit, assuming that the President's tax proposals are adopted. This 
is a swing of $7.7 trillion in our fiscal position, a swing from a 
projected surplus of $5.6 trillion to a projected deficit of $2.1 
trillion.
  Yet facing this, the whole focus of this budget resolution has been 
whether to create room within it for another very large tax cut which 
the President is seeking. This is not going to be a growth package. In 
fact, there is hardly any stimulus in the President's proposal for this 
year or next year. Instead, this budget is going to drive us deeper 
into the deficit and debt hole. It is going to leave us with deficits 
projected out into the indefinite future. We are really mortgaging away 
our economic future. This is very bad macroeconomic policy.
  In addition, within this budget our urgent national priorities are 
not being adequately addressed. There is not enough for homeland 
defense. We have a pressing health care problem in this country with 
regard to both the uninsured and prescription drug benefits for our 
senior citizens. We have an affordable housing crisis in which millions 
of working families cannot afford even a modest apartment in many high-
cost cities. The mayors across the country are saying they are getting 
inadequate support to meet their responsibilities. Our first responders 
also have very large demands placed upon them. And instead of providing 
fully for education to give meaning to the Leave No Child Behind 
educational policy, we are focused on a tax cut proposal seeking to 
make sure no millionaire is left behind.

  It must be understood that if you do these large tax cuts that 
benefit primarily wealthy people, you will not be able to support a 
number of programs which people all across the country are crying out 
for, and you will be boosting the deficit in a completely unreasonable 
fashion. There is no magic formula; it is all a question of balance. My 
own view is that a more sensible balance would be not to do these large 
tax cuts, and instead to strengthen some of these programs, and then to 
use the balance--most of the money--to hold down the deficit and not 
boost the debt and not commit the Nation down that path.
  Let me talk about one other issue of fairness and equity. I want to 
note that in almost every previous instance when the Nation went to 
war, not only did we not cut taxes, we raised taxes in order to help 
pay for the war and meet its costs. There is a conference committee 
meeting at this very moment on the supplemental appropriations bill. We 
expect it to be somewhere in the vicinity of $80 billion, most of that 
directed to the Department of Defense for the costs of the war and some 
for reconstruction. It is obvious to everyone this is but a 
downpayment. No one is asserting this is anywhere near meeting what the 
full costs will be. So we know there is more to come.
  That raises the question of whether this is the appropriate time to 
commit away significant resources for a tax cut to benefit wealthy 
Americans. As I said, analysis indicates that almost half of the 
benefits of the President's proposal would go to the top 1 percent, 
almost three-quarters to the top 5 percent. Is this the fair and 
equitable thing to do at the very time when the Nation is being 
rallied, as it should be, to support our men and women in the Armed 
Forces?
  This is the time when we are talking about sacrifice, and it is 
appropriate we should be talking about sacrifice at a time like this 
because one cannot follow the events taking place now in Iraq without a 
deep appreciation of the sacrifice our fighting men and women are 
making and the risks they are taking every minute.
  Let me ask this question: What sacrifice are those who are most 
favored in our society in terms of their economic position making at 
this critical juncture in our Nation's history? Not only are they not 
making a sacrifice, but indeed they are getting a very large tax cut 
which will place our economy in a more difficult position as we move 
into the future. What a sad commentary that these excessive tax cuts, 
which will contribute to deficits, which will build up the debt and the 
burden of paying the interest on that debt and, indeed, paying down 
that debt, will fall upon the fighting men and women when they return 
home and undertake their economic activities moving out into the 
future.
  They are now being called upon to make a double sacrifice, the 
sacrifice of serving in the Middle East and the sacrifice when they 
return home of helping to pay off this debt that has arisen in large 
part because of these enormous tax cuts that are being given to those 
at the very top of our income

[[Page S5274]]

scale. Where is the fairness and the equity in this approach?
  The Nation faces serious challenges. We have our men and women at 
this very moment in danger abroad. It is a time for all to sacrifice. 
What sacrifice here at home will the beneficiaries of the tax cut be 
making? This is such a sharp contrast with previous occasions when the 
Nation has gone into war. In most instances, not only did we not give a 
tax cut, recognizing we had to pay for the war, we, in fact, increased 
taxes in order to meet that burden.
  At the beginning of World War II when Winston Churchill became Prime 
Minister, he told his nation, ``I have nothing to offer but blood, 
toil, tears and sweat.'' Our young men and women positioned in the 
Middle East are called upon to sacrifice even as we debate this budget 
resolution. There will be sweat, there will be tears, there will be 
toil, and there will be blood on their part. What sacrifice will be 
made by those who are the most well off in our society under this 
budget resolution? None whatsoever. In fact, not only are they making 
no sacrifice, but they are programmed to reap benefits, extensive 
benefits, at a time when the Nation is facing critical challenges. 
Should not those most advantaged be making their own sacrifice instead 
of seeking to reap a large economic benefit?

  I urge the defeat of this budget resolution. I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I would like to go back to the editorial, 
the opinion piece that was in the New York Times written by three of 
our former colleagues: Senator Kerrey, Senator Nunn, Senator Rudman--
Senator Rudman, a Republican who was on the Budget Committee. Senator 
Nunn and Senator Kerrey took great interest in budget affairs here in 
the Senate. Also, Pete Peterson, the former Secretary of Commerce, 
Republican; former Secretary of the Treasury Robert Rubin; and the 
former head of the Federal Reserve, Mr. Volcker; warning us that what 
we are about to do here is not fiscally responsible.
  They said in this article--and I want to read an extended version of 
this for my colleagues because I think it is critically important it be 
in the Record before we vote. They said:

       The fiscal outlook is much worse than official projections 
     indicate. These projections assume that the tax cuts enacted 
     in 2001 will expire at the end of 2010. They also assume that 
     discretionary spending, the part of the budget that pays for 
     national defense, domestic security, education and 
     transportation, will shrink continuously as a share of the 
     economy. Neither of these assumptions is realistic.
       Moreover, the official projections do not include the costs 
     of war and reconstruction in Iraq. And they ignore the 
     inevitable need to reform the alternative minimum tax, which 
     is not indexed for inflation and will apply to some 40 
     million households within 10 years--up from two million 
     today.

  Let me just say with respect to the alternative minimum tax, boy, 
have a lot of people got a surprise coming. They think they are going 
to get a tax cut under this plan. But there is this little thing nobody 
talks about called the alternative minimum tax that only applies to 2 
million taxpayers today. By the end of this period of the budget, it is 
going to apply to 40 million taxpayers. It costs $600 billion to fix. 
Not a dime of it is in this budget.

       Under more realistic assumptions--

  They go on to say in their opinion piece--

     the deficit projections are cause for alarm. A recent study 
     by Goldman Sachs includes this forecast: if the president's 
     proposed new tax cuts are enacted, a Medicare prescription 
     drug benefit is approved, [which he has also proposed], the 
     A.M.T. is adjusted and appropriations grow modestly, the 
     deficits over the next 10 years will total $4.2 trillion--

  That is double the amount I have been talking about in my assessment 
of this budget this morning--twice as much as what I have been warning 
my colleagues about--

     even if the Social Security surplus is included.

  It will be $4.2 trillion of deficits. In other words, if the Social 
Security trust funds are used to pay for other things, the deficit will 
be $4.2 trillion.

       If [the Social Security trust fund] is not included, the 
     deficit would be $6.7 trillion.

  That is just over the next decade.

       Under these circumstances the ratio of publicly held debt 
     to gross domestic product climbs within 10 years to near 50 
     percent, from 33 percent just two years ago.
       And all of this happens before the fiscal going gets tough. 
     Looming at the end of the decade is a demographic 
     transformation that threatens to swamp the budget and the 
     economy with unfunded benefit promises, like Social Security 
     and Medicare, of roughly $25 trillion in present value. Our 
     children and grandchildren already face unthinkable payroll 
     tax burdens that could go as high as 33 percent to pay for 
     these promised benefits.

  They conclude:

       It is neither fiscally nor morally responsible to give 
     ourselves tax cuts and leave future generations with an even 
     higher tax burden.
       And yet tax cuts are the primary focus of this year's 
     budget debate.

  Mr. President, in just a few hours we will vote on this budget. This 
will be a time of choice. This won't be a decision just for this year. 
This will put in place revenue hemorrhages and increased spending that 
will put us on a never ending escalator, going in just one direction--
straight down into deeper deficits, in deeper debt, right on the brink 
of the retirement of the baby boom generation. It will only escalate 
those trends, leaving us in a totally unsustainable position.
  The tax cut that we are voting on is not what has been advertised, 
$350 billion in the Senate--oh, no. The tax cut in this plan, in this 
budget resolution that is before us, is $1.3 trillion; $550 billion 
reconciled to the Finance Committee, $725 billion provided elsewhere in 
the resolution--a tax cut of $1.3 trillion, with an additional interest 
cost of some $300 billion, for a total reduction in revenue of $1.6 
trillion just over the next decade, when we are already in record 
budget deficits.
  This is a proposal that borders on the preposterous. It borders on 
the absurd. I sometimes come to work thinking the Senate of the United 
States has become like Disneyland: It is all illusion here. It is 
totally detached from reality. It has all become the politics of sound 
bite. Substance has absolutely fallen by the wayside, and there is no 
serious concern where all this leads. But it is inevitable. This leads 
to massive deficits and debt that can only undermine the strength and 
security of this economy, that can only endanger the economic lives of 
the American people.
  This is profoundly wrong, and I urge my colleagues to think--to 
think, to pause. I know there is a rush to judgment here. We are on a 
Friday afternoon right before a 2-week break. Members want to leave.
  But what is going to be decided here has profound consequences for 
the future of our Nation; a $1.3 trillion tax cut--not paid for, not 
offset by spending reductions, but paid for by borrowed money and by 
looting the trust funds of Social Security and Medicare. That is what 
is about to happen here.

  Virtually every economist has told us, when you take tax cuts like 
this and, instead of paying for them with spending reductions, you 
borrow the money, you weaken the economic vitality of this Nation. You 
take money out of the societal savings, the pool of societal savings, 
thereby reducing the money that is available for investment, thereby 
weakening the economic strength of our Nation.
  That is exactly what our former distinguished colleagues are telling 
us. I repeat their concluding paragraph:

       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be otherwise. 
     They raise interest payments on the national debt. They 
     reduce the fiscal flexibility to deal with unexpected 
     developments [such as the terrorist threat on this country].

  ``Terrorist threat on this country''--that is not part of their op-
ed. I add that because we all now know the devastation that something 
unanticipated can cause to this country.

       If we forget these economic consequences, we risk creating 
     an insupportable tax burden for the next generation.

  Now, I know, in politics, we often live for the next election and 
there is not too great a concern for the future. But, colleagues, I 
urge you to think carefully about the decision that is about to be made 
because it will have profound consequences for this Nation. I believe 
it will weaken our country, not strengthen it. I believe it will damage 
long-term economic growth, not improve it.
  Does that mean that on this side we are against any tax reduction? 
No. I

[[Page S5275]]

would actually support more tax reduction in this year than the 
President proposes in order to give lift to the economy at a time of 
serious weakness. But, over the 10-year period, we simply cannot afford 
$1.3 trillion out of the revenue stream, when we are already in record 
deficit, and when we face the retirement of the baby boom generation, 
and we are at war, the cost of which is unknown.
  I know the other side must believe it has the votes to pass this 
budget. We have had no role in it. We were locked out of the conference 
committee. Oh, we were invited to the first meeting, and never invited 
back. So this is a budget that was constructed in a conference 
committee that excluded the minority.
  That is not the way the business of Congress is supposed to be done. 
There was not one member of the minority present when this scheme was 
hatched to come out here with a budget reconciliation number that 
suggests there is a different number in the Senate than in the House. 
In fact, both committees have been given an instruction of $550 billion 
for the reconciliation provision. But then, in a sleight of hand, the 
Finance Committee is told, there will be a supermajority point of order 
if you carry out the instruction you have been given.
  Never been done before. Never been done before.
  And when the package comes back from the conference committee, even 
though there never was a reconciliation, never was a working out or a 
meeting of the minds between the House and the Senate, the higher House 
number will still enjoy privileged protection on this floor.
  That is a total perversion of the reconciliation process. And, my 
colleagues, it may benefit you today, it may hurt you tomorrow, because 
what goes around comes around. And the real victim is fiscal 
responsibility. The real victims are going to be those who are asked to 
pick up the tab for what we are going to be spending; the real victims 
are going to be those who have to shoulder the burdens that we all know 
are coming. And we are telling them: We are taking our money while the 
getting is good, and we are sticking you with the tab.

  I guess that is the message that is going to come from this Senate 
today. I find it profoundly disappointing that is the way, apparently, 
the votes will fall, that it is OK to run up the tab, forget about the 
future, stick it to the kids. That is what this vote will be about.
  Mr. SARBANES. Mr. President, will the Senator yield on that point?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. I just note, the kids they are sticking it to are the 
ones who are fighting now in the Middle East. They are out there making 
a sacrifice now, and they are going to come home and be called upon to 
make a further sacrifice in order to carry this deficit and this 
increased debt.
  And why are we having the deficit and the increased debt? In order to 
give a large, excessive tax break to very wealthy people. Where is the 
equity in that or the fairness in that? None whatever. None whatever.
  But when you connect it all together, that is exactly what is 
happening. In order to give these large, excessive tax cuts, we are 
going to run these deficits and debt. And the burden on these young men 
and women who are there fighting, will be greatly increased, and they 
will have to pay it off over the rest of their lifetimes when they come 
home, having made that sacrifice.
  Where is the sacrifice, in this budget resolution, on the part of 
those most advantaged in our society? Where is their sacrifice at this 
critical juncture in our Nation's history?
  Not only is there no sacrifice, but they are reaping excessive 
benefits. This budget resolution ought to be defeated.
  I thank the Senator for yielding.
  Mr. CONRAD. I say, Mr. President, in response to my colleague, I 
believe this budget really is a triumph of ideology. And it is a sad--a 
sad--commentary on this body that we pass something that is this 
disconnected from reality.
  At some point we are going to have to join together to try to dig out 
of this mess because this is going to damage the country in a profound 
way. I just hope that at some point reason returns.
  This is not a conservative document. There is nothing conservative 
about this. This is radical and reckless and dangerous, and it should 
be defeated. We should go back, and we should restrain spending, and we 
ought to restrain our appetite for tax cuts. We ought to have the 
courage to stand up and tell the American people what we all know is 
true: That when this Nation is already facing record budget deficits, 
and we are at war--the cost of which we cannot know--and on the brink 
of the retirement of the baby boom generation, we simply cannot do 
everything they would like us to do.
  We cannot have every spending program that they would like. We cannot 
have every tax cut that they would like and be responsible to the 
future. The result will be a weakened America, not a growth package. 
There may be a little bit more growth in the short term--not as much as 
if we had a more robust stimulus package--but, over time, the 
deadweight of those deficits and debt, because all of this is being 
borrowed--is all borrowed money--the deadweight of those deficits and 
debt suppresses economic growth, weakens our economy, reduces 
investment.
  If you do not have investment, you cannot grow. You cannot have 
investment unless there are savings that are available to invest. When 
the Federal Government runs deficits, that reduces the pool of societal 
savings that are available to invest.
  This is an economic package that simply cannot stand scrutiny.
  I am happy to yield.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, as this presentation draws to a close, I 
ask unanimous consent to print in the Record a column by David Broder 
from March 23 entitled ``Cutbacks To Our Children.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Mar. 23, 2003]

                        Cutbacks to Our Children

                          (By David S. Broder)

       Under the shadow of war with Iraq, the House and the Senate 
     last week fought a series of skirmishes over the federal 
     budget for next year. One big, overriding question was at 
     stake: Would President Bush and the Republican majorities in 
     Congress step up to the costs of battle, of homeland defense 
     and of national obligations at home, or would they pass the 
     costs on to future generations?
       The answer, sadly, is that youngsters yet to be born will 
     see their choices limited and their prospects blighted by the 
     decision of today's politicians to press ahead with an 
     unaffordable tax cut even while the costs of war and 
     reconstruction make earlier spending estimates wildly 
     unrealistic.
       The possible doubling of the national debt in the next 
     decade will drive up interest costs that must be paid every 
     year--billions of dollars that will not be available for 
     Social Security, Medicare or any of the myriad 
     responsibilities of the government here and abroad.
       But the squeeze is not all prospective. Some dangerous 
     economies are being forced this year--cutbacks that will have 
     long-term damaging consequences for American society.
       This was brought home to me from an unexpected source in a 
     group interview last week with six state attorneys general--
     four Democrats and two Republicans--who were in Washington 
     for a professional conference. Their theme was one I had 
     heard before, not just from social workers, academics and 
     supposed bleeding-heart liberals but from police chiefs, 
     prosecutors and other hard-nosed denizens of the criminal 
     justice system.
       It is the irrefutable evidence that the most effective 
     anti-crime strategies--and the least expensive--are early 
     childhood education, after-school programs and serious 
     mentoring of youngsters who otherwise are almost certainly 
     fated to be dropouts, delinquents and, yes, prison inmates.
       Larry Long, the South Dakota attorney general and a 30-year 
     career prosecutor, put it this way: ``I can tell you that by 
     the time kids of 12 or 14 are brought into the juvenile 
     justice system, they are lost. All I can do is warehouse 
     them--at huge expense. The sooner and faster we reach kids, 
     the better the chance of their being saved.''
       Long and his counterparts from Colorado, Delaware, Maine, 
     Montana and New Mexico described what they are doing to reach 
     vulnerable youngsters--especially those being raised by 
     single mothers still in their teens--and to help those 
     parents stabilize lives often blighted by drugs or other 
     addictions. But they also confirmed that many of their 
     initiatives are on the chopping block, as states struggle 
     with declining revenue and runaway health care costs for the 
     elderly.
       ``These are proven programs that work,'' said Montana 
     Attorney General Mike McGrath, ``but our budget crisis is so 
     severe we may not be able to meet the federal matching 
     requirement''--the dollars a state must put up to qualify for 
     a grant from Washington.

[[Page S5276]]

       That is why they express such dismay at what they are 
     hearing out of thee Washington budget proceedings. The 
     briefing paper that all the state law enforcement officials 
     were given by the advocacy group Fight Crime: Invest in Kids 
     spelled out some of the cuts included in the Bush budget.
       Funds for the 21st Century Community Learning Centers 
     after-school program would be cut form $1 billion to $600 
     million. The memo to the attorneys general says that cutback 
     would take a half-million children each year out of those-
     centers, even though unsupervised youngsters make the hours 
     form 3 p.m. to 6 p.m. the peak time for serious and violent 
     juvenile crime.
       The Bush budget increases Head Start funding by $148 
     million, just about enough to keep pace with inflation, but 
     the program now serves only six out of 10 preschoolers who 
     are eligible. Several other early childhood block grants and 
     programs are ticketed for reduction or elimination.
       The picture is similar for other Justice Department an 
     Education Department programs aimed at preventing juvenile 
     delinquency.
       ``This is so shortsighted,'' said Maine Attorney General 
     Steven Rowe. ``For $300 billion, one-fifth the [10-year] cost 
     of the new tax cut, we could fully fund all of these 
     programs'' for the next decade.
       That kind of investment would not only save lives, the 
     attorneys general said. It would save money. ``We are 
     spending $75,000 a year every time we incarcerate someone 
     under 18,'' said Delaware Attorney General Jane Brady. ``We 
     have to jail them, educate them, counsel them and try to 
     rehabilitate them. It would be so much better to help them 
     while they are young.''
       It's another example of the long-term costs will incur 
     today's budget decisions.

  Mr. SARBANES. I want to quote a couple of paragraphs from the column:

       Under the shadow of war with Iraq, the House and the Senate 
     last week fought a series of skirmishes over the federal 
     budget for next year. One big, overriding question was at 
     stake: Would President Bush and the Republican majorities in 
     Congress step up to the costs of battle, of homeland defense 
     and of national obligations at home, or would they pass the 
     costs on to future generations?
       The answer, sadly, is that youngsters yet to be born will 
     see their choices limited and their prospects blighted by the 
     decision of today's politicians to press ahead with an 
     unaffordable tax cut even while the costs of war and 
     reconstruction make earlier spending estimates wildly 
     unrealistic.
       The possible doubling of the national debt in the next 
     decade will drive up interest costs that must be paid every 
     year--billions of dollars that will not be available for 
     Social Security, Medicare or any of the myriad 
     responsibilities of the government here and abroad.
       But the squeeze is not all prospective. Some dangerous 
     economies are being forced this year--cutbacks that will have 
     long-term damaging consequences for American society.

  He then cites conversations he had with a number of attorneys general 
of the States, pointing out that cutting back on programs for young 
people will have disastrous consequences.
  Once again, that is the connection that has to be made to giving 
these large tax cuts. I listened to my colleague from North Dakota as 
he talked about the procedure. I put a question to him. It strikes me 
as all a charade, is it not? As I understand it, we are going to pass a 
budget resolution that is going to have a tax cut figure in it. The 
Finance Committee in the Senate will be told they cannot reach that tax 
figure. They have to have the lower tax figure, as I understand it. But 
then when they go to conference to reconcile their tax figure with the 
higher House tax figure, let's say they settle at the higher tax 
figure, the House tax figure, the full amount, then they can bring it 
back to the Senate and that is protected under the special 
reconciliation procedures. Is that how it will work?
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. I would say to the Presiding Officer, in response to my 
colleague, it is truly a perverted result we have here. Aside from the 
substance of this budget, which I find appalling, the procedure is even 
worse. The procedure that was designed to provide a fast-track 
procedure to reduce deficits has now been seized upon to expand 
deficits. If that isn't standing history on its head, I don't know what 
is.
  What they have done here is, they couldn't get a vote out of this 
Chamber to have a tax cut bigger than $350 billion. So what they did 
is, they went into a secret meeting in a room with the minority locked 
out, and they conjured up a scheme that says both committees are given 
an instruction, the tax committees, to cut taxes under these special 
fast-track procedures by $550 billion and another $725 billion on top 
of that outside of the fast-track procedures.
  And with respect to those that are given the special protection, the 
$550 billion, the Senate Finance Committee is told, oh, wait a minute, 
there will be a supermajority point of order if you report anything 
more than $350 billion. But don't worry about that because when it goes 
to a conference committee between the House and the Senate, you can 
come back with the bigger number and still enjoy the protections, the 
special provisions of reconciliation that take away a Senator's 
fundamental right to debate and amend. That is what is happening here.
  I say to my colleagues, we will rue the day this procedure is 
adopted. It has never been done before--never. What is going to happen 
here is going to fundamentally alter the Senate. The Senate was 
designed by the Founding Fathers to be different than the House of 
Representatives. It was designed to let a determined minority slow 
things down, to reconsider. But when it comes to reconciliation, forget 
it, because we have become just an extension of the House of 
Representatives. It will render the Finance Committee of the Senate 
irrelevant. All the Members of the Finance Committee should be aware of 
that. They are going to be irrelevant to this discussion because what 
is going to matter is what comes out of a conference with three or four 
people from both Chambers. They will come back here with whatever they 
decide. It will be an up-or-down vote, and a simple majority will pass 
it. And the fundamental role of the Senate is altered and diminished, 
and the strength of our Founding Fathers, the constitutional structure 
they created to protect this Nation, weakened. This is big stuff that 
is about to happen here. This is history-making stuff that is about to 
happen here. It is a dark day for this Chamber and for this country, in 
this Senator's view.
  I yield the floor and 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. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. While the Senator is waiting, I would like to show my 
colleagues what we have faced, what we were told would be the surpluses 
over the next decade. The Congressional Budget Office made their 
estimates 2 years ago, when they gave us a range of outcomes they said 
we could expect over the next decade. This is what they told us 2 years 
ago. They said this gray area were the possible outcomes, from least 
favorable to most favorable. They adopted as a prediction the midline. 
That is what told us we were going to have $5.6 trillion of surpluses 
over the next decade.
  I showed this chart repeatedly back in 2001, when we were considering 
the tax cuts, and warned my colleagues that we should not count on any 
10-year projection. Some of my colleagues said: You are being way too 
conservative. We won't have the midpoint of this range of possible 
outcomes; we will have much more than that because the tax cuts will 
produce more revenue.
  That is the same song we are hearing now. They said: No, we won't 
have $5.6 trillion in surpluses; it will be much more than that because 
the tax cuts will kick off additional economic activity and that will 
bring us even more revenue.
  Well, let's go back to a reality check and see what happened. This 
red line is what has happened. It is below the bottom of the 
projections that were made just 2 years ago. That is where we really 
are. We are not at the midpoint. We are not at the low point of the 
range of projections. We are below the bottom. All those who said if 
you just cut taxes, you get more money, that is dream world stuff. It 
didn't work. It didn't come close to working. They were wrong. They 
weren't just a little bit wrong, they were totally wrong. The result is 
deep deficits and debt that will burden this society for decades to 
come. That is the fact.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I want to give a little different vantage 
point

[[Page S5277]]

on some of these issues, and then maybe other colleagues will wish to 
speak.
  I have heard kind of a continual part of the debate offered by our 
colleagues in opposition to this resolution that this is a terrible 
budget resolution. They say it is bad, worse, evil, preposterous, and 
absurd.
  Wait a minute. At least we have a budget. Frankly, budgets are not 
easy. How much money are we going to spend, and how much are we going 
to tax? You always have a lot of people who want to spend more, maybe 
tax less, maybe tax more. I have heard a lot of comments that maybe we 
should be taxing a lot more. In the budget resolution, we assume the 
tax cuts we passed in 2001 would be continued in years 2011, 2012, and 
2013. They would sunset at the end of 2010. I guess my colleague on the 
other side would like to have those tax cuts made tax increases in the 
years 2011, 2012, and 2013. That is about half of the tax cut that is 
in this bill. We need to do that. We need to address those tax cuts 
sometime between now and 2010. I doubt it is going to happen this year. 
If it does--I guess a bill could be offered and, if it is, it is 
debatable. I doubt that will be part of the tax bill that will be 
proposed under the reconciliation procedure.
  In the President's proposed reconciliation growth package, he would 
like to have that happen quickly so we can get the economy moving. The 
economy is not moving very quickly. Some people presupposed that they 
knew exactly what was going to be in the tax bill. We tell the Finance 
Committee to cut up to $350 billion in the Senate. The House is $550 
billion. We go to conference.

  Most people count votes. I count votes around here. I think I know 
where the votes are going to be. I know Chairman Grassley pretty well. 
I doubt we will come back from conference with something we cannot pass 
in the Senate. We will make that decision probably 5 weeks from now, 
not today. I hope we do things to grow the economy. The economy is 
going down. It needs help. I will mention to our colleagues that our 
colleagues had a stimulus or growth package. Theirs was almost all 
spending; 75 percent was spending, with very little tax relief. I guess 
their idea of a growth package is to grow government.
  Our idea is, wait a minute, let's contain the growth of Government 
and have some incentive to grow the economy. Historically, in the tax 
arena--I happened to be elected in 1980, so I go back to that point. In 
1980, the Federal Government took in $517 billion, and the maximum 
personal tax rate per individual was 70 percent. Ronald Reagan was 
elected President, and 8 years later the maximum tax rate was 28 
percent. If you listen to the dialog we just had, you would think 
revenues would have fallen. We reduced tax rates from 70 percent to 28 
percent. That happened over the first several years of the Reagan 
administration.
  In 1990, total revenues to the Federal Government almost doubled, 
from $517 billion to over a trillion dollars. So we cut tax rates 
dramatically. But guess what. Revenues went up. Then I looked back a 
little closer. Well, President Bush increased the rate from 28 percent 
to 31 percent in 1990. When President Clinton was elected in 1992, he 
raised the rate from 31 percent to 39.6 percent. I have heard 
discussion about all these ``massive'' tax cuts for the wealthy and 
benefits to the wealthy. So far, the wealthy, the higher income tax 
brackets, are reduced a great big 1 percentage point, from 39.6 to 
38.6. That is all that happened. Evidently, they say that is the reason 
we have this enormous deficit, which is absurd.
  What do we do on the lower income? We took lower income rates that 
were 15 percent and made those 10 percent and made that retroactive. 
Then we passed a $500 per child tax credit. That is law. Now it is 
$600. So we have done a lot of things for lower income, to make them 
basically not pay Federal income tax, some of which was retroactive, or 
pay a lot lower rate.
  I keep hearing all this class warfare and that these deficits are 
caused by the tax cut, and some people don't like tax cuts and they 
want to have tax increases, I guess, in the outyears. But I don't think 
that will help the economy. Some of us want to help the economy.
  I looked back and, historically, we have done some things in this 
body, with bipartisan support, that helped the economy. We reduced 
capital gains rates in 1997 over the objection of the Clinton 
administration. They eventually signed the bill. We reduced the rate 
from 28 to 27 percent and it helped create and foment a lot of growth.
  If you look at total growth in revenues in the last several years, in 
1998, 1999, and 2000, revenues exploded to the Federal Government--I 
think in part because we cut capital gains rates. So we can cut rates 
on occasion and it will help the economy. I am absolutely convinced 
that it had a great deal of economic stimulus when we cut the rates in 
1997 and revenues exploded to the Federal Government. Unfortunately, in 
the last couple of years, revenues have declined a lot, mostly because 
the stock market has declined a lot.
  So people talk about, wait a minute, we expected $5.6 trillion 
surpluses over the next 10 years. That was estimated by CBO. They were 
way wrong because the stock market had already started crashing. 
NASDAQ, which was exploding in the late nineties, declined by 50 
percent between March of 2000 and December of 2000. CBO missed it. They 
didn't know what that would mean as far as projections. CBO did not 
forecast the terrorist attack on 9/11 and the disastrous impact that 
had on the economy and what that has caused in outlays.
  I wanted to make a couple of those points. We need to grow the 
economy and we have a stimulus package that I believe will pass the 
Senate--and probably a comparable figure will pass the conference. It 
is a little bit more than our colleagues on the Democrat side wanted, 
except it is mostly on the tax side, not the spending side.
  The other criticism is, wait a minute, this budget is so terrible. 
Well, at least it is a budget. It is critically important that we pass 
it. Last year, we didn't even have a budget on the floor of the Senate. 
One passed through the Budget Committee; my compliments to the chairman 
for that, but we didn't have a chance to even vote on the floor of the 
Senate. I think people can be pretty critical, but I think we need to 
be a little more reserved. It is important that we pass a budget.
  I urge our colleagues to be mindful, if we do not pass a budget, one 
example would be: One could come up on a bill next week, and the bill 
might be a small authorization bill. Someone can offer an amendment to 
it and say: Let's spend $1 trillion on a new program, maybe it is 
prescription drugs or some other type of program that sounds really 
good. Let's spend hundreds of millions of dollars on education. Sounds 
good. Let's spend hundreds of millions of dollars--we could do all 
those things, and if we do not pass this budget today, there would be 
no 60-vote point of order. Spending would be running rampant. We would 
be totally out of control. We would have no caps on appropriated caps 
and no limit on the $2.2 trillion we are spending today, and there is 
no limit on the demand for Federal spending. It could get out of hand 
very easily. The only limitation we would have would be the potential 
threat of a Presidential veto.
  We need to govern better than that, and we need to show some 
discipline. If we remember those 51 votes when we passed the budget 
resolution, there were countless amendments, almost all of which on the 
Democrat side were: Let's grow spending; let's increase spending. 
Deficits are not caused just on the revenue side, they are caused by 
spending more than we take in.
  I wanted to make those points in response to our friends and 
colleagues on the other side.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, we can debate economic theory for a long 
time. What is not open to debate is what has factually occurred. Let's 
go back. Two years ago, we were told this was the range of outcomes 
looking forward in terms of the budget surplus. The Congressional 
Budget Office and the President's Office of Management and Budget said 
they adopted the midpoint of this range. We are going to have $5.6 
trillion of surpluses. Our friends on the other side said: Oh, no, it 
is going to be better than that because we are going to cut taxes; it 
is going to lead to bigger surpluses; it is not going to be the 
midpoint of the range of possible outcomes, it is going to be even 
better than that.

[[Page S5278]]

  That was fantasy world stuff. We tried their approach. It failed. It 
did not even come close, not even hailing distance of what happened. 
Here is what happened. We wound up below the bottom of the range of 
projected outcomes with deficits and debt as far as the eye can see.
  What is the answer of the other side? Let's do it again. Let's try it 
again. Let's dig the hole deeper. Let's run up more deficits, add more 
debt, and that will strengthen the country. Does anybody honestly 
believe that more deficits and more debt are going to strengthen the 
country when we are on the eve of the retirement of the baby boom 
generation that is going to explode the cost to the Federal Government, 
and these folks come forward with tax cuts that explode at the very 
same time when we are already in record deficit? I tell you, is there 
no common sense left?
  Here is what our Congressional Budget Office, headed by their 
appointee, straight from the Council of Economic Advisers of the 
President of the United States, tells us if we adopt this proposal. He 
has done seven different models. He used their dynamic scoring, the 
idea that we are going to get more money if we cut the taxes. What did 
he find? In four of the cases, the deficits are even bigger. In three 
of the seven, the deficits are somewhat smaller, although all of them 
massive.

  What does he say:

       CBO estimates show lower deficits relative to so-called 
     static scoring only by assuming large tax increases beginning 
     in 2014.

  Hello, is anybody listening? He is saying, all those who said the 
problem is they are not using dynamic scoring, they are not showing the 
positive effects of the tax cuts, if we just do that, we will see the 
deficits are not going to be so bad. So we turned it over to their guy, 
straight from the President's Council of Economic Advisers, and he 
comes back and says to us: Oh, no, the deficits are not going to be 
smaller, they are going to be bigger because of the deadweight of 
deficits and debt. You cannot take on all this borrowing and strengthen 
the country. You weaken the country.
  Then he looked at three other possibilities. He ran three other 
models. Do you know what he said: Yes, the deficits could be somewhat 
smaller than would otherwise be the case, but that is on the theory 
that people are going to work harder over the next decade in 
preparation for the massive tax increases to come.
  Let me repeat that: The only way the deficits are smaller than so-
called static scoring is if you assume the American people are going to 
work harder in anticipation of the massive tax increases to come to 
deal with these deficits that are exploding out of control.
  If anybody can seriously come out here and justify this proposal and 
these budgets, come on out, let's debate it. I do not see them. Where 
are they? Come on out here; let's debate. Let's debate what the effect 
of this budget is, $1.3 trillion of tax cuts on top of an initial $1.1 
trillion of spending when we are already in record deficit on the eve 
of the retirement of the baby boomers, we are at war, a cost of which 
we do not know.
  There is only one possible outcome: More deficits, more debt in a way 
that is totally unsustainable, and that will lead to massive cuts in 
Social Security and Medicare and all the rest of Government. That is 
what is coming next.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I have sought recognition to comment 
about the pending budget resolution. I was very much impressed with the 
comment by the distinguished Senator from North Dakota who really 
questioned if anybody is listening. I think the answer to that question 
is generally no. The positions in this Chamber are really frozen. We 
are looking at a 50-50 vote to be broken by the Vice President, and, 
realistically, we are going through the motions of a debate.
  Then the Senator from North Dakota says: Let's have a debate. We have 
been having a debate today. We have debates lots of days, but most of 
the time we talk right by each other. The proliferation of charts adds 
more confusion than clarity. I do not know that there are very many 
viewers on C-SPAN2 who even flick on their sets with the monotony of 
the kind of debates which we have in the Senate, which I would say is a 
blame attached universally on all sides and to all Members.
  The one factor I think is most important is that we get a budget just 
to get a budget. We have a lot of argument about tax increase, no tax 
increase, what is the amount of the tax increase. An arrangement has 
been worked out really to sort of save face with all parties involved 
here so we could come to some terms and move on.
  Last year, we did not have a budget. When the Democrats were in 
control of this Chamber, there was no budget resolution offered on the 
floor of the Senate, and I do not say that in a partisan way. I think 
too often there is debate and there are arguments which are partisan 
Democrats versus Republicans bickering, much to the dissatisfaction of 
the American people. But not having a budget resolution was very 
detrimental to the whole appropriations process where we could not 
curtail spending and have a discipline. For those who may be listening 
on C-SPAN2 or for a few people in the galleries, there are no Senators 
on the floor to listen, 60 votes are required to increase spending 
beyond the budget allocation if there is a budget.
  Sixty votes are hard to come by, but if only 51 votes, or a majority 
of those present, are required, then spending goes up.
  I visited Israel earlier this year, and the Palestinian Authority has 
a new finance minister. I was delighted to learn that the Palestinian 
Authority has a budget. I exchanged views with him that the Palestinian 
Authority had something the Senate did not have. The Senate did not 
have a budget. It was not reported out last year by the Budget 
Committee. It is vital we have a budget.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I would like to correct the record with respect to one 
thing the Senator from Pennsylvania said, I think inadvertently. The 
Budget Committee did report a budget last year. It did not come to the 
floor, but the Budget Committee did report a budget. The determination 
was made not to bring it to the floor. That determination was made 
because the Senate had a 10-year budget, the House had a 5-year budget. 
The Senate had used the more conservative OMB estimates. The House had 
used the more liberal OMB estimates.
  It was very clear there would not be a reconciliation between the 
two.
  I will be happy to yield in a moment.
  The Senator, the ranking member of the Budget Committee, and I 
determined that we would bring a 2-year budget to the Senate. We did 
that. That required 60 votes to pass because it was not a product of 
the committee. We got 59 votes for that 2-year budget in the Senate; it 
required 60 votes.
  The further facts are that we had all Democrats voting for it, we had 
8 Republicans voting for it, including the ranking member of the Budget 
Committee, the ranking member of the Appropriations Committee, and 
others, but because we did not have 60 votes, it did not prevail.
  It should also be known that the Appropriations Committee, on a 
unanimous vote, adopted the spending recommendation contained in the 
budget resolution passed in the committee. They adopted it on a 
unanimous vote.
  Because of differences in the House, there was no final conclusion on 
most of the appropriations bills. They were held over to this year. And 
interestingly enough, the conclusion was a total that was within $2 
billion of what we had proposed from the Budget Committee. So there was 
almost no difference--on over $700 billion of spending--almost no 
difference between what we proposed and what was ultimately passed in 
the early part of this year.
  I am happy to yield.
  Mr. SPECTER. Mr. President, when the Senator from North Dakota says 
there was ``almost no difference,'' $2 billion, I respectfully disagree 
with him that that means ``almost no difference.'' Regrettably, around 
the Senate Chamber, and the House Chamber, we think $2 billion does not 
amount to very much.
  The question I have for the Senator from North Dakota is in a context 
where the 2-year budget was turned down and there had been a 1-year 
budget prepared by the committee, as articulated by the Senator from 
North

[[Page S5279]]

Dakota who was the chairman last year and who specifies differences 
between the House and the Senate where there were different assumptions 
made and many differences; that is what a conference is about. If the 
Senate had passed a budget, having failed on a 2-year budget, and had 
gone back and brought to the floor a 1-year budget with differences, 
that is what a conference is about.
  Why didn't the distinguished Senator from North Dakota, then-chairman 
of the Budget Committee, proceed to get a budget, take it to the House, 
and have a conference so we could have a budget?
  Mr. CONRAD. I didn't make that determination. That was made in a 
higher pay grade than mine.
  The budget we had done in the committee was a 10-year budget, and the 
budget in the House was a 5-year budget. We had used the more 
conservative CBO assumptions, and they used the Office of Management 
and Budget assumptions. We went to a 2-year budget because we thought 
that had the best prospects of securing the votes necessary to actually 
have a budget blueprint in the Chamber. We did get 59 votes. We did get 
a unanimous consent agreement from the appropriators to stick to that 
number.
  For other reasons there was disagreement with House appropriators 
outside of the budget with respect to priorities.
  I say to my colleague, no question, we would be better off to have a 
budget. That is a fundamental responsibility. It did not happen last 
year for lots of reasons. I have tried to enumerate some of those.
  I personally am committed to the budget process. I think it is 
critically important. I agree with the Senator with respect to that 
observation.
  Mr. SPECTER. Mr. President, my followup question is, Would the 
Senator from North Dakota identify who made the decision? The 
distinguished Senator from South Dakota is on the floor now. Was the 
decision made by Senator Daschle, the majority leader?
  Mr. CONRAD. The decision, it is fair to say, was a collective 
decision and probably was the wisest course given the circumstances we 
faced at the time.
  We could ask the 41 who voted against the 2-year budget: Why did they 
fail to vote for what was a bipartisan budget proposal right here on 
the floor of the Senate that would have provided the budget blueprint? 
They had the chance; 59 Members voted for it, for a budget outline; 41 
did not. The question ought to be directed to the 41 who voted no.
  Mr. SPECTER. If I may proceed to question one step further. I think 
the Senator from North Dakota talked about apples and oranges. This 
body does not have to go to a 2-year budget, if it does not choose to, 
to produce the 60 votes when the customary practice is a 1-year budget.
  I don't recollect with precision, but my instinct is that I supported 
the 2-year budget. I have supported votes to try to get this to 
conference to be resolved.
  When the Senator from North Dakota says probably it was a wise 
decision, there is a lot of disagreement about that. I believe it is 
the duty of the majority party to bring a budget to the floor. I admire 
an effort to bring the 2-year budget. I think we ought to have a 2-year 
budget so we can spend more time on oversight, a subject sorely 
neglected. If that does not succeed, it does not take 59 votes to bring 
a 1-year budget to the floor. That is the duty of the party that 
controls the Senate.
  When you talk about a majority of the appropriators agreeing to stick 
to the budget, or unanimous among the appropriators, that does not mean 
a whole lot because that does not bind the Senate to the figure.
  I note the presence of the distinguished Senator from South Dakota on 
the floor. Might I inquire if the Senator from South Dakota would care 
to respond as to why we did not have a budget?
  The PRESIDING OFFICER (Mr. Allard). The Senator from North Dakota has 
the floor.
  Mr. CONRAD. The Senator from North Dakota reclaims my time, and I say 
to the Senator from Pennsylvania, the Senator from Pennsylvania voted 
no. We had a 2-year budget. The Senator said he supported a 2-year 
budget; he voted no. The Senator had a chance last year to vote for a 
2-year budget. He voted no; 59 Senators voted for it. We had an 
opportunity.
  Mr. CRAPO. Will the Senator yield?
  Mr. CONRAD. I will not yield until I finish. The Senator had an 
opportunity. Every Senator had an opportunity. And it is not the 
typical order to have a 1-year budget in the Senate. We deal with 5-
year or 10-year budgets, not 1-year budgets.
  Last year, in an attempt to achieve a budget on a bipartisan basis, 
we brought a 2-year budget to the floor. It was rejected; 59 Senators 
voted aye. It was a bipartisan vote; 41 voted no. They had their chance 
to have a budget, and they decided not to.
  The PRESIDING OFFICER. The Democratic leader has sought recognition 
and is recognized.
  Mr. DASCHLE. Mr. President, I appreciate this colloquy.
  The distinguished Senator from North Dakota did everything within his 
power to reach the bipartisan consensus required to achieve a budget 
last year. I give him great credit for the efforts he made, in so many 
ways, to reach across the aisle, to find that bipartisan consensus 
throughout the year.

  Unfortunately, we had very little response or help.
  When we came to the conclusion, finally, that perhaps the best thing 
to do would be to move a 2-year budget resolution, as he correctly 
noted, we did get a bipartisan consensus on that but not enough to 
reach the 60 votes. Unfortunately, had the Senator from Pennsylvania 
chosen to support that resolution, we would have had the necessary 60 
votes and hopefully worked out the remaining differences with our House 
colleagues in spite of the chasm that existed between their proposal 
and ours.
  I appreciate very much the clarification made by the Senator from 
North Dakota. I again thank him for his efforts and the contribution he 
has made to this debate.
  I also thank him for his earlier presentation to the Senate. My only 
regret is that more people could not have had the opportunity to see 
it. I think it is very instructive. I am inclined, almost, to go 
through the charts once again just because they are so good and they 
have such a compelling message, but I will leave that to our 
distinguished manager on budget matters. I appreciate very much the 
presentation he has made.
  Mr. President, I come to the floor with sadness and with great regret 
at the position the Senate finds itself in today. I don't know that we 
have a clear indication whether the votes are there for this 
resolution. I hope we do not. But I assume our Republican friends would 
not come to the floor if they didn't have the votes.
  I am troubled by this resolution for a number of reasons. First, I am 
troubled by the obsession with tax cuts that appears to be so much a 
part of the motivation behind the construction of this resolution, an 
obsession with tax cuts that led the majority leader of the House a 
couple of days ago--I guess it was last week--to say:

       In the face of war, nothing is more important than cutting 
     taxes.

  I have thought about that quote on so many occasions:

       In the face of war, nothing is more important than cutting 
     taxes.

  I assume by that he meant nothing in terms of the commitment we make 
to our military, nothing in terms of the commitment we make to homeland 
security, nothing in terms of the commitment we make to education, to 
the needs of people at every level.
  So it is troubling to me, first, that this obsession with tax cuts 
articulated so succinctly by the House majority leader could be so much 
a part of this resolution. This obsession with tax cuts, as noted by 
the distinguished Senator from North Dakota, will cause us to 
experience deficits and accumulated debt unprecedented in this country. 
We are told, as a result of this resolution, we will see unified 
deficits exceeding $300 billion. We anticipate under this resolution 
there will be a $1.95 trillion increase in the accumulated debt for the 
period 2002 through 2011.

  We began, 2 years ago in the 107th Congress, with a projected surplus 
of $5.6 trillion. We will now experience accumulated deficits of $1.95 
trillion, leading us to a $7.6 trillion swing in our

[[Page S5280]]

fiscal circumstances in just 24 months. That, too, is unprecedented.
  As the distinguished Senator from North Dakota noted, the ranking 
member of the Budget Committee, close to 40 percent of that swing is 
attributed to the tax cuts previously enacted or incorporated within 
this resolution. I don't know the degree to which we can calculate a 
direct connection between higher interest rates and the demise in our 
economy as a result of the fiscal problems we are likely to face if we 
adopt this resolution. But the deficits and the debt anticipated and 
actually outlined in this resolution present unprecedented and 
extraordinarily complex--in some ways, unimaginable--fiscal challenges 
as we look to the future over the next decade or so.
  I suppose some would argue that the tax cuts of this magnitude could 
generate an economic recovery that could bring about an improvement in 
both the deficit and debt projections and the economy. We will hear 
that argument, I am sure, throughout the day.
  But in a letter that addressed the President's economic stimulus 
package, 450 economists have said this package will not generate 
economic activity and will probably cause a loss of jobs. The CBO has 
actually reported that it is possible we could see a net decline in 
economic growth of just under 1 percent if the President's economic 
proposal, as it has been presented, goes into law.
  There is no economic stimulus involved here. The CBO says it. Most of 
the major mainstream economists say it. Therefore, we can't be 
motivated by any expectation that economic stimulus somehow drives the 
need for these tax cuts.
  On Wednesday, in the New York Times, there was an article coauthored 
by five public servants who, between them, helped pull our country out 
of four severe recessions in the last 30 years: former Secretary Robert 
Rubin, former Commerce Secretary Peter Peterson, former Senators Warren 
Rudman and Bob Kerrey, and former Chairman of the Federal Reserve Paul 
Volcker. This is what they had to say about the economic stimulus and 
the tax cuts incorporated in this particular resolution:

       Given the rapidly deteriorating long-term fiscal outlook, 
     neither proposal is fiscally responsible. It is illogical to 
     begin the journey back towards balanced budgets by enacting a 
     tax cut that will only make the long-term outlook worse. 
     Furthermore, the proposed tax cuts are not useful for short 
     term fiscal stimulus, since only a small portion would take 
     effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits will 
     eventually slow the economy. . . .
       They lower future economic growth by reducing the level of 
     national savings that can be devoted to productive 
     investments. They raise interest rates higher than they would 
     be otherwise. They raise interest payments on the national 
     debt. They reduce the fiscal flexibility to deal with 
     unexpected developments. If we forget these economic 
     consequences, we risk creating an insupportable tax burden 
     for the next generation.

  You can't be any more unequivocal, any more clear than that. Our 
best, most experienced minds in the country urge us, advise us, plead 
with us: Do not make this choice. Five percent of the tax cuts 
incorporated in the reconciliation package that we anticipate will be 
before us in a few weeks--5 percent of the total tax cuts assumed in 
this resolution will be realized this year: $61 billion, less than 1 
half of 1 percent of our GDP.
  Yet what do the economists tell us? The economists tell us: First, if 
you are going to have an economic stimulus package, do it now. Make it 
immediate. Make it broad based. Make sure it is fiscally responsible.

  On those three counts, the tax cut legislation anticipated within 
this resolution all fail. So that leaves me with a third concern. The 
third concern is what it does to our national investment.
  This resolution assumes a $168 billion cut in domestic investments 
over the course of the next 10 years. That means there will be cuts in 
homeland security, cuts in education, cuts in law enforcement, cuts in 
health care for veterans, cuts in infrastructure--cuts in all of those 
specific needs that make this country stronger.
  I am troubled by that. I am troubled by the realization that, in 
part, I believe supporters of this resolution wish to reduce the flow 
of Federal funds to these investments for ideological rather than 
economic or fiscal purposes.
  So, Mr. President, this is a very difficult day for our country, a 
day when we will commit to deficits unlike we have ever seen before, a 
day when, as a result of those deficits, we are likely to see economic 
circumstances get worse, not better, a day when, by the admission of 
those who support this resolution, we can anticipate dramatic cuts in 
the investments in those areas for which there is great need.
  We have talked at length on the floor over the course of the last 
several months about homeland security and how badly our first 
responders need help and the importance of addressing the needs of the 
States as they confront their own immense fiscal challenges.
  We have talked about the need for providing additional funding for 
the No Child Left Behind Act, how critical it is that we find a way to 
bridge the shortfall between the expectations and the unfunded mandates 
incorporated within that bill, and the reality that funding for these 
programs does not just materialize unless we appropriate it.
  Serious problems with regard to law enforcement: As crime goes up, 
our investments in law enforcement, under this resolution, go down.
  Problems in Medicaid for the States: The shortfall has never been 
greater. And the health concerns that nursing homes and hospitals are 
experiencing, all through rural America in particular, are commensurate 
with the shortfall that we find in this resolution.
  So we can do better. While there are those who continue to talk about 
the budgets of last year, I think our focus now must be on the budget 
before us. And I think the first test legislation must pass before we 
support it ought to be: Do no harm. There is a lot of harm done in this 
resolution, and that is regrettable.
  I hope our colleagues will think very carefully prior to the time 
they cast their vote. I will be casting a vote in opposition to the 
resolution. I urge my colleagues to join me.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, there has now been an opportunity to 
obtain the vote referenced by the Senator from North Dakota, and it was 
not a resolution for a 2-year budget at all. It was an amendment made 
by Senator Feingold which would set caps for 2 years. But that is not a 
2-year budget resolution.
  The idea of a 2-year budget resolution has been discussed widely in 
this body for many years and has been advocated by the distinguished 
Senator from New Mexico, Mr. Domenici, who chaired the Budget Committee 
for many years. It is a proposal that I have long supported.
  I, frankly, did not remember any resolution for a 2-year budget 
coming to the floor when it was mentioned by the Senator from North 
Dakota. But if it had come to the floor, if there had been a resolution 
for 2 years, I would have supported it because of my longstanding sense 
that the Congress does an inadequate job of oversight, finding out what 
is happening in the executive branch, because we spend so much time on 
the budget and then on the appropriations process.
  As chairman of the Subcommittee on Labor, Health and Human Services, 
and Education, it occupies months of time. So if it can be done in 2 
years, then it would be a big savings.
  But I recall very well when the Feingold amendment was offered. And 
there was a major effort by appropriators, significantly, to adopt it, 
which would set a cap. I refused to back that because I thought it was 
inappropriate to have a way out for the Budget Committee, which had not 
established a budget.
  The budget law was passed in 1974, and for 27 years, this body has 
had a budget--until last year. And if the Budget Committee could avoid 
or evade its responsibility in coming up with a budget, and then have a 
simple cure by having an amendment offered which would set a cap, what 
motivation would there be for a budget?
  To set a cap is not to have a budget resolution. A cap simply means 
what the total expenditure will be. It does not mean what the budget 
will allocate for various categories of expenditures.
  We spend a protracted period of time in establishing a budget, and we 
have

[[Page S5281]]

many votes. In the last, during what we called a vote-a-rama, we voted 
dozens of times on specific amendments. So you do not have a budget 
resolution when you establish a cap.
  I ask unanimous consent that the Record Vote Analysis be printed in 
the Record--this is compiled by the staff of the Republican Policy 
Committee--and that a similar document be printed in the Record, 
provided to me by the Senator from North Dakota, which repeats that the 
Feingold amendment establishes discretionary spending caps for fiscal 
year 2003 and fiscal year 2004, which is the same 2-year period.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          [From the 107th Congress, 2d Session, June 20, 2002]

               Senate Record Vote Analysis--Vote No. 159


       Defense Authorization/Budget Enforcement, Higher Spending

       Subject: National Defense Authorization Act for Fiscal Year 
     2003 . . . S. 2514. Feingold motion to waive the Budget Act 
     for the consideration of the Feingold amendment No. 3915, as 
     amendment.
       Action: Motion Rejected, 59-40.
       Synopsis: As reported, S. 2514, the National Defense 
     Authorization Act for fiscal year (FY) 2003, will authorize a 
     total of $393.278 billion in new budget authority for 
     national defense programs (last year's bill provided $343.284 
     billion). The Administration requested $396,396 billion, 
     including $3.5 billion pay for a shift to accrual accounting 
     for civilian employee health and retirement benefits; this 
     bill will not make that shift. The bill was reported on 
     largely party lines due to a cut in the Administration's 
     request for funding for missile defense programs. Democrats 
     favored the cuts and Republicans opposed them.
       The Feingold amendment, as amended, would modify and extend 
     various budget enforcement mechanisms. It would extend the 
     statutory discretionary spending cap points of order through 
     2007, but would set caps for only the next 2 years. It would 
     cap discretionary spending budget authority for FY 2003 at 
     $768.1 billion and for FY 2005 at $784.4 billion (the cap for 
     FY 2002 was $710 billion); for FY 2003, separate spending 
     caps (a firewall) would apply to defense and non-defense 
     spending. The ``pay-go'' point of order on revenues and 
     mandatory spending would be extended through 2007 (the pay-go 
     point of order requires any decrease in revenue or increase 
     in mandatory spending to be offset with either a 
     corresponding increase in revenue or decrease in mandatory 
     spending; it takes a three-fifths majority (60) vote to waive 
     this point of order). The pay-go point of order would expire 
     at the end of the year following a year in which an on-budget 
     surplus was reported. $25.4 billion in advance appropriations 
     would be permitted in FY 2003. The current bar on delayed 
     obligations would not be extended.
       Senator Gramm raised a point of order that the Feingold 
     amendment violated section 306 of the Budget Act. Senator 
     Feingold then moved to waive the Budget Act for the 
     consideration of the amendment. Generally, those favoring the 
     motion to waive favored the amendment; those opposing the 
     motion to waive opposed the amendment.
       Note. A three-fifths majority (60) vote is required to 
     waive the Budget Act. After the failure of the motion to 
     waive, the point of order was upheld and the amendment thus 
     fell.
       Those favoring the motion to waive contended:

                               Argument 1

       This amendment would extend expiring budgetary restraints. 
     Those restraints, which apply to both mandatory and 
     discretionary spending, are urgently needed. Most of the 
     provisions of this amendment are non-controversial. However, 
     some Senators have objected to a few of its provisions. The 
     main objection they have raised is that the amendment would 
     supposedly allow too much discretionary spending. They have 
     suggested that if we had adopted a budget resolution as a 
     free-standing measure we could have avoided this supposed 
     problem. In response, we concede that a budget resolution has 
     not been adopted by the full Senate this year, but the Budget 
     Committee did pass such a resolution. It set spending at a 
     level that was just $9 billion higher than the President 
     requested. Both the Budget Committee's resolution and the 
     President's proposed budget increased discretionary spending 
     significantly over last year's level of $710 billion in order 
     to increase defense spending by $45 billion and homeland 
     defense by $4.5 billion. When one takes those numbers out, 
     one finds that the spending cap proposed in the Budget 
     Committee will increase non-defense spending by less than 1 
     percent this year. Further, we think that in many respects it 
     is just a more honest version of the President's budget, 
     because the largest differences are that it will not assume 
     spending cuts in particular areas requested by the President 
     because everyone knows Congress is going to fund those areas. 
     Overall, non-defense discretionary spending will rise less 
     than 1 percent under the Committee's budget. This amendment 
     would take the discretionary limits in the Committee's budget 
     for 2 years. We believe that those limits are very frugal. 
     Our colleagues' only other substantive objections to this 
     amendment are that it would allow an increase in advance 
     funding and would not retain current restrictions on delayed 
     obligations. Neither of those objections give sufficient 
     reason to vote against this amendment. The proposed increase 
     for advance appropriations is marginal, and the delayed 
     obligation restrictions would not be renewed by this 
     amendment solely because they are so complex they are never 
     applied. The final argument against this amendment is that it 
     should not be offered to the defense authorization bill. We 
     disagree. This bill sets a limit on the amount that can be 
     appropriated for defense; the defense appropriations bill is 
     the largest spending bill considered each year. Considering 
     an amendment regarding total Federal spending on this 
     authorization bill therefore makes sense. The point of order 
     that has been raised is that this amendment is not germane. 
     This point of order should be waived.

                               Argument 2

       Congress has been spending discretionary funds like drunken 
     sailors the last few years, but the fact remains that the 
     biggest threat to our Nation's long-term solvency is 
     entitlement, not discretionary, spending. Yes, this amendment 
     would allow $9 billion more in discretionary funds to be 
     spent than the President requested, but we are more than 
     willing to accept that increase in our $2 trillion budget if 
     it means we are able to retain the pay-go point of order. If 
     we do not retain that point of order, we will soon be faced 
     with massive increases in entitlement spending, primarily on 
     health care, that will need only simple majority votes to 
     pass. Further, we note that once we put back in place that 
     binding point of order, the President would still have his 
     veto power to strike down any bill that he thought spent too 
     much. We urge colleagues to be realistic. If we do not 
     reinstate the pay-go rule, we will net end up $9 billion 
     deeper in debt, but hundreds of billions of dollars deeper in 
     debt. The trade-off is very acceptable.
       Those opposing the motion to waive contended:
       The Democrats, who are in the majority, have utterly failed 
     in their responsibility to bring up and pass a budget 
     resolution this year. Because of that failure, budget 
     enforcement mechanisms that are expiring will not be renewed. 
     When we consider spending bills in the coming weeks, we will 
     be doing so without any budget blueprint to restrain spending 
     and without rules to keep spending in check. Given this 
     dismal situation, many Members may be tempted to vote for the 
     Feingold amendment under the principle that some restraints 
     will be better than nothing. However, it would be a mistake 
     if they were to do so. This amendment would reinstate 
     spending restraints only after substantially increasing the 
     amount of money that could be spent. First, for next year, it 
     would increase spending by $9 billion more than the President 
     requested. Second, it would increase to $25 billion--a new 
     record level--the amount of ``advance appropriations'' that 
     could be passed. A third problem is that it would not renew a 
     ban on a particular type of budget gimmick--deferred 
     obligations--that was passed in the 106th Congress.
       All of these matters could have been resolved if they had 
     been dealt with appropriately on a budget resolution. We 
     could have offered amendments and had debate on a wide 
     variety of ideas instead of debating little bits and pieces 
     on unrelated bills. Our Democratic colleagues have created a 
     terrible mess, but they are still trying to push through 
     budget enforcement procedures that would allow them to spend 
     more money. We are not going to go along with these efforts. 
     We encourage them to bring a budget to the floor; it is not 
     too late. All Senators would have their rights to debate and 
     offer amendments protected, and the resolution would be 
     considered under the normal procedures that would ensure it 
     would pass (or be rejected) by a time certain. If they were 
     to follow that course, a bipartisan result would be likely. 
     If they continue with this path, though, they are not going 
     to get anywhere. The President has made clear that, unlike 
     last year, he is not going to accept any increases in 
     spending over his request. Spending has been going through 
     the roof; it is time to draw a line against further 
     increases. Therefore, we oppose the motion to waive the 
     Budget Act for the consideration of this amendment.

                                YEAS (59)
 
             Democrats (51 or 100%)
                                                  Republicans (8 or 17%)
 
 
Akaka                    Inouye                   Chafee, L.
Baucus                   Jeffords \1\             Collins
Bayh                     Johnson                  Domenici
Biden                    Kennedy                  Gregg
Bingaman                 Kerry                    McCain
Boxer                    Kohl                     Shelby
Breaux                   Landrieu                 Snowe
Byrd                     Leahy                    Stevens
Cantwell                 Levin
Carnahan                 Lieberman
Carper                   Lincoln
Cleland                  Mikulski
Clinton                  Miller
Conrad                   Murray
Corzine                  Nelson (FL)
Daschle                  Nelson (NE)
Dayton                   Reed
Dodd                     Reid
Dorgan                   Rockefeller
Durbin                   Sarbanes

[[Page S5282]]

 
Edwards                  Schumer
Feingold                 Stabenow
Feinstein                Torricelli
Graham                   Wellstone
Harkin                   Wyden
Hollings
 


                                NAYS (40)
 
                                     Republicans (40 or 83%)
  Democrats (0 or 0%)
 
 
                         Allard                   Hutchinson
                         Allen                    Hutchison
                         Bennett                  Inhofe
                         Bond                     Kyl
                         Brownback                Lott
                         Bunning                  Lugar
                         Burns                    McConnell
                         Campbell                 Murkowski
                         Cochran                  Nickles
                         Craig                    Roberts
                         Crapo                    Santorum
                         DeWine                   Sessions
                         Ensign                   Smith (NH)
                         Enzi                     Smith (OR)
                         Fitzgerald               Specter
                         Frist                    Thomas
                         Gramm                    Thompson
                         Grassley                 Thurmond
                         Hagel                    Voinovich
                         Hatch                    Warner
 


                             NOT VOTING (1)
 
          Democrats (0)              Republicans (1)
 
                                   Helms \2\
 
\1\ Official Business.
\2\ Necessarily Absent.

  Mr. SPECTER. And I conclude, Mr. President, by asking the Senator 
from North Dakota if establishing caps for 2 years amounts to a budget 
resolution for 2 years.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I suppose reasonable people could differ 
on what constitutes a budget for 2 years. The amendment that was 
offered last year was an attempt to adopt the budget that had been 
formed in the Budget Committee.
  And what that amendment provided--and I have it before me now and the 
Senator is correct--was caps on spending.
  It provided, for fiscal 2003, an overall amount for discretionary 
spending of $764,722,000,000. For the highway category, it provided 
$28.9 billion in outlays. For the mass transit category, it provided 
$1.445 billion. For the conservation spending category, it provided 
$1.922 billion.
  It provided the framework--perhaps that is the best way to say it--of 
the budget that we had constructed in the committee. It was an attempt 
to give the appropriators the budget framework to go forward so they 
could do their work.
  That is what the attempt was. I think it is fair to say it was not a 
full budget resolution. I would say that to my colleague. A full budget 
resolution is not a 2-year document. What the Budget Committee does 
with the full budget resolution is either a 5-year or a 10-year 
allocation of resources, both for taxing and spending. But it became 
evident we did not have the votes for that.
  So what we tried to do was put in place this framework of a budget 
for 2 years, with caps set for 2 years, with the categories specified 
for the 2 years; but, more than that, to also provide an extension of 
pay-as-you-go provisions to include the budget enforcement mechanisms 
that were otherwise going to lapse and to provide the other elements 
that were important for the consideration of the individual decisions 
that the appropriators have to make.
  I note my colleague from Massachusetts is here. He has asked for 
time. I yield 15 minutes to the Senator from Massachusetts.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Very briefly, Mr. President, I frankly expected more 
from the Senator from North Dakota. When he says, and I read his words, 
adopt a budget formulated in the Budget Committee, there was nothing in 
the Feingold amendment about a budget formulated in the Budget 
Committee. When the Senator from North Dakota recites a long list of 
categories and then says they provide a framework, there were no 
categories in the Feingold amendment. There was no framework there. 
When the Senator from North Dakota says it was not a full budget 
resolution, he really ought to say there was no budget resolution at 
all because that is the fact.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I tried to be as frank and forthcoming as 
I could be. When the Senator says there were no categorizations, there 
were. I would be happy to enter it into the Record. It is not true to 
say there were not. There were.
  You had the discretionary spending amount and the other elements that 
I described for the highway category, for the discretionary category. I 
don't know what the Senator is looking at.
  Mr. SPECTER. Will the Senator yield for a question?
  Mr. CONRAD. Let me finish the thought and then I will be happy to 
yield.
  Maybe we are looking at different things, but I offered an amendment 
to the Feingold amendment providing for these categories, providing for 
the discretionary amount, providing for these other categories. That 
appears in the Record as an amendment numbered 3916 to amendment No. 
3915.
  That is what I am discussing here.
  I do yield 15 minutes to the Senator from Massachusetts. I am sorry. 
Would the Senator from Massachusetts withhold. The Senator from 
Pennsylvania wanted to ask a question. I am happy to yield to him.
  Mr. SPECTER. I discussed this informally with the Senator from North 
Dakota, and he handed me a vote, which I read from, which was the 
Feingold amendment which established caps for 2 years. The Conrad 
amendment had nothing to do with what the Senator from North Dakota 
handed me. But these will be in the Record, and people who read the 
Record can come to a conclusion themselves. I think there is absolutely 
no doubt not only that this is not a full budget resolution but that it 
is no budget resolution at all.
  I yield the floor.
  Mr. CONRAD. Mr. President, perhaps it does no good to prolong this. 
But this was the chance we had to put in place the spending limits for 
last year and this. It was our chance to establish what a budget 
resolution does. A budget resolution outlines what are the resources 
available, and it was our best chance to put in place that structure, 
to have the Appropriations Committee know what was available to them. 
That vote was held.
  I am happy to yield to the Senator from Massachusetts.
  The PRESIDING OFFICER. The acting minority leader has the floor.
  Mr. CONRAD. I have yielded to the Senator from Massachusetts for 15 
minutes.
  The PRESIDING OFFICER. Has the Senator from Pennsylvania sought 
recognition?
  Mr. SPECTER. Mr. President, when the Senator from North Dakota said 
the amendment put in limits, he is correct. The Feingold amendment did 
seem to put in limits. When he says that is what a budget resolution 
does, he is correct also. A budget resolution does put in limits. But a 
budget resolution does much, much more. A budget resolution specifies 
categories. It is an elaborate document that specifies categories of 
expenditures, and that was not in the Feingold amendment.
  Mr. CONRAD. Mr. President, the Senator is correct on that. I have no 
interest in saying it is something it was not. The Senator is correct 
on that. But I would say to the Senator, this was our best chance to 
put in place a budget framework to give the Appropriations Committee an 
indication of what was available to them to spend and not to spend more 
than that and to put in place the pay-as-you-go restrictions and to put 
in place the other budget enforcement mechanisms so that the 
functioning of the Congress could go forward.
  I understand the Senator, for whatever reason, decided to oppose 
that. I just say to him, that was our best chance of putting in place 
the framework for a budget. It didn't happen. All of us can take 
responsibility. I will take my share of responsibility. I regret very 
much that the budget that I took out of the committee didn't come

[[Page S5283]]

to the floor and we didn't have a chance to conclude action on it. I 
was pleased that we were able to get bipartisan agreement, at least 
with respect to that budget framework. I wish it would have passed. I 
think that would have been a good thing. But it did not.
  I yield 15 minutes to the Senator from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, the budget that passed the Senate 2 weeks 
ago was not a good one. The budget which returned from conference today 
is much, much worse. It provides for far larger tax cuts--totaling more 
than a trillion dollars. It provides less resources to meet our urgent 
domestic needs in education, in health care, and in homeland security. 
It relies on an unprecedented parliamentary gimmick in a desperate 
attempt to force a bigger tax cut through a reluctant Senate. The 
Republican leaders who controlled this conference had a single goal--
more and deeper tax cuts primarily benefitting the wealthiest 
taxpayers. This budget clearly shows that they are willing to sacrifice 
the well being of the American people and make a mockery of the budget 
process to achieve their goal. We should have the courage to reject it, 
and enact a responsible budget in its stead.
  The conference report nullifies nearly all of the improvements which 
were made to the budget on the Senate floor. A majority of Senators 
reduced the size of the overall tax cut. The Republicans in conference 
raised it back up by $400 billion, from $857 billion to $1.23 trillion. 
A majority of Senators reduced the amount of tax cuts which could be 
fast-tracked under the reconciliation process to $350 billion. The 
Republicans in Congress are attempting to substantially increase that 
number through a parliamentary gimmick. On the floor, a majority of 
Senators voted repeatedly to provide additional resources for our top 
domestic priorities. The Republicans in conference eliminated most of 
those gains, reducing domestic spending this year by $7 billion. Less 
for education. Less for health care. Less for homeland security. A 
majority of Senators should now defeat this irresponsible conference 
report.
  The manner in which the conference report deals with the size of the 
tax cut is particularly disturbing. It has been designed to maximize 
the amount of new tax breaks which can be fast-tracked through the 
Senate. The $350 billion limit on the amount the Finance Committee can 
report out under reconciliation is a sham. Under this budget 
resolution, when the tax bill returns from conference, it can provide 
for up to $550 billion in new tax breaks and still be protected by 
reconciliation. That is outrageous. Only 2 weeks ago, a bipartisan 
majority of Senators said $350 billion would be the limit. It was all 
the Nation could afford. In just 2 weeks, the number has grown by $200 
billion. Why? Because the Republican leadership is desperately trying 
to save the President's ill-advised elimination of the tax on dividend 
income. That is not a tax cut to help working families and stimulate 
the economy. That is a tax boondoggle for the wealthy few. Half of all 
the tax benefits from the elimination or reduction of the dividend tax 
would go to the richest 1 percent of taxpayers, and 80 percent of the 
benefits would go to the wealthiest 10 percent of taxpayers. It is 
unaffordable. It is grossly unfair. No one can claim with a straight 
face that this is a moderate budget.
  The impact on education is devastating. The Republican conferees cut 
$20 billion in education and training resources over the decade from 
the Senate passed budget. They stripped the Murray amendment which 
would have increased funding to make real the promise of No Child Left 
Behind. They stripped the Kennedy-Dodd-Collins amendment which would 
have increased the Pell grants of 4.8 million students struggling to 
pay higher tuition costs. To my constituents in Massachusetts this will 
mean a loss of $24 million in Pell aid. The Republican leaders who 
dictated this conference report ignored the education concerns of a 
bipartisan majority of Senators. And that same bipartisan majority 
should now reject this shameful budget.
  The budget resolution before us actually reduces funding for the No 
Child Left Behind Act school reform and cuts over half a million 
children from after school programs. How can President Bush abandon his 
unequivocal promise of full funding for the school reforms required by 
the No Child Left Behind Act? That legislation was signed into law with 
great fanfare by the President just a year ago. But when the klieg 
lights go out and the bunting comes down and the cameras leave, the 
money isn't there. The Republican budget provides $8.9 billion less 
than we promised America's children. Six million children are being 
left behind.
  On the floor of the Senate, we added an additional $40 billion to 
help the uninsured obtain health coverage. This was an expenditure 
which even the White House supported. But not the Republican conferees. 
They deleted it so there would be $40 billion more to finance their 
reckless tax cut scheme. Helping families get health care is obviously 
not a priority for them.
  This budget has far less funding than is necessary to provide a 
meaningful prescription drug benefit for all seniors. It follows the 
administration's grossly unfair plan requiring the elderly to give up 
their family doctors and go into HMOs in order to obtain any real 
assistance with the cost of their drugs. Yet Republicans defeated 
amendments to increase the amount of money available for the 
prescription benefit and to make the benefit available to all seniors, 
not just those in HMOs. As a result, many seniors will continue to go 
without the medication they need every day to stay well.

  The budget also contains the administration's plan to convert much of 
Medicaid into a block grant, reducing the long-term funding which is 
available to provide health care for the needy. The Republican block 
grant program would leave many innocent victims in its wake--sick and 
needy children and their parents, the disabled, and low-income workers 
and elderly. States are, in fact, being given a financial incentive to 
cut back coverage for those in need.
  The administration plan would even abolish the highly successful CHIP 
program, which is providing five million children with a healthy start 
in life. CHIP would be rolled into the block grant, with no guarantee 
that all of these children would continue to receive health care 
coverage.
  Budgets are the way a nation sets its priorities, and the priorities 
in this Republican budget are profoundly wrong for America. It fails to 
address the real problems of real families. It appears to have been 
drafted in a sound-proofed room so that the voices of working men and 
women, students and senior citizens could not be heard.
  In the 2 years since President Bush took office, the well-being of 
American families has declined at an alarming rate. Ask most Americans 
how their lives have changed since President Bush took office, and they 
will tell you: declining job security; disappearing retirement savings; 
plummeting school budgets; rising college tuition; skyrocketing health 
care and prescription drug costs; Federal budget deficits threatening 
the future of Social Security and Medicare.
  With the economy stagnating and continuing threats from terrorists, 
these are not normal times. Our responsibility in Congress is to pass a 
budget that meets the challenges of our time. Instead of more tax 
breaks for the wealthy, we should be concentrating on our national 
security and our economic security.
  Surely, when our troops come home from Iraq, we want them to come 
home to a strong economy, with jobs that let them care for their 
families and save for a secure retirement. We want them to come home to 
better schools for their children, not schools facing drastic budget 
cuts, fewer teachers, and crowded classrooms. We want them to be able 
to afford health insurance, and know that their families will receive 
the quality health care they need.
  This budget fails all these tests. It rejects the steps needed to 
restore the economy, and instead embraces ideologically rigid policies 
that have not worked and will not work. In 2001, President Bush pushed 
a $1.3 trillion tax cut through Congress that disproportionately 
benefits the wealthiest taxpayers. Now, at his urging, this Republican 
budget calls for an additional $1.3 trillion in tax cuts, even more 
heavily slanted toward the rich. That

[[Page S5284]]

is not the solution to the problems facing America's families. That is 
a strategy that will only add to their problems.
  Huge numbers of working men and women have lost their job security. 
As layoffs mount, they live in fear of being the next to be let go. 
There are 2\1/2\ million fewer private sector jobs in America today 
than there were just 2 years ago. Those looking for a job are finding 
it increasingly difficult to obtain one. The number of long-term 
unemployed workers has increased by nearly 200 percent since President 
Bush took office.
  Health insurance is becoming less and less affordable for millions of 
workers and their families. Over two million more Americans are without 
health insurance today than there were 2 years ago. One in ten small 
businesses which offered their employees health insurance in 2000 no 
longer do. The average cost of health insurance is rising at double 
digit rates--up by 11 percent in 2001 and another 12.7 percent in 
2002--nearly four times the rate of inflation. The health care squeeze 
on working families is getting tighter and tighter.
  The cost of higher education is rising beyond the reach of more and 
more families. The gap between the cost of college tuition and the 
tuition assistance provided by the Federal Government has grown by 
$1,900 in the first 2 years of the Bush administration. As a result, 
the number of worthy students being denied the chance to go to college 
is growing each year.
  For millions of families, their retirement savings have seriously 
eroded in the last 2 years. The value of savings in 401(k) plans and 
other defined contribution plans has declined by $473 billion in the 
last 2 years. Many middle-aged workers who thought their retirements 
were secure are suddenly being forced to consider staying in the 
workforce longer and reducing their standard of living in retirement.
  These are the realities American families face today. It is no 
surprise that consumer confidence has dropped more than fifty percent 
since President Bush took office.
  To all these problems, the Bush administration has one answer--more 
and more tax cuts predominately benefitting the wealthiest taxpayers.
  In this current situation, the most irresponsible action Congress 
could take would be to accept the proposal of the Bush administration 
to enact major new permanent tax cuts. Yet, that is what this budget 
resolution does. The combined cost of the President's plan to exempt 
dividend income from taxation, accelerate the tax cuts for the upper 
income brackets, and make the 2001 tax cuts permanent would be over 
$1.3 trillion in the next 10 years. The conference report provides full 
funding for this plan. It will lead to an immense increase in the 
deficit which would trigger an additional $300 billion in interest 
costs on the larger national debt. We cannot afford the loss of an 
additional $1.6 trillion from the Treasury. Temporary tax cuts to 
stimulate the economy are affordable, but the President's large, 
permanent tax breaks are not. If the Republican plan is adopted, the 
Federal Government will not have the resources to meet urgent domestic 
needs in education, in health care, and in homeland security. The 
Republican plan will raid the Social Security Trust Fund for $2.6 
trillion over the decade, threatening the benefits of future retirees.
  If Congress accepts the Republican budget resolution, the on-budget 
deficit will be nearly $4 trillion by 2013. More than three-quarters of 
that amount is directly attributable to the Bush tax cuts enacted in 
2001 and the additional cuts proposed in 2003.
  The impact these new tax cut proposals will have is clear from this 
budget. When the President says ``no'' to obviously-needed spending on 
urgent domestic priorities such as education and health care, he says 
the war on terrorism requires us all to tighten our belts. The burden 
of these sacrifices falls mainly on low and middle income individuals 
and families. Yet the President refuses to ask the wealthiest taxpayers 
to share the burden. In the midst of his repeated calls on others to 
sacrifice, he is advocating over $1.3 trillion in new tax breaks 
primarily for those with the highest incomes. Such a policy is wrong 
and unfair.
  Under the President's ``economic growth'' package, households with 
annual income over $1 million would receive an average tax cut of 
nearly $90,000 each year. In contrast, households in the middle of the 
income spectrum would receive an average of less than $300 a year in 
tax benefits. Exempting dividend income from taxation will take $400 
billion out of the Treasury over the next 10 years. Half of that 
enormous amount--$200 billion--will go directly into the pockets of the 
richest 1 percent of taxpayers. The White House apparently sees no need 
for the wealthiest taxpayers to share in the national sacrifice. It 
cannot be wartime for middle America but still peacetime for the rich.
  Despite the enormous amount spent on tax cuts, this budget resolution 
still does not provide the kind of stimulus that is needed to get the 
economy moving, nor does it provide help to those who are hurting the 
most. Under the Republican plan, less than $40 billion of the $1.3 
trillion in new tax cuts will go into the economy this year when a 
stimulus is needed--less than $40 billion. There is no extension of 
unemployment compensation benefits to help the long-term unemployed.
  There is no aid to States and local communities which are struggling 
with an increased demand for the health care and human services they 
provide, at the same time their revenues have sharply declined. This 
budget will not help to bring an early end to economic stagnation.
  A recent analysis of the President's proposal to eliminate the income 
tax on corporate dividends determined that it is one of the least 
effective forms of stimulus, generating less than a dime of stimulus 
for every dollar of Federal revenue lost. This is further proof that 
the Republican tax cut plan is not about stimulating a stagnant 
economy, it is about further enriching the already wealthy.
  The Nation cannot afford the tax breaks in this Republican budget. 
The President's tax cut proposals must be scaled back substantially to 
a far more affordable level.
  Which of these choices will make the American community stronger and 
better able to face the challenges of the future? The decision to pass 
more and more tax cuts for the richest among us is a decision to ignore 
America's greatest needs. Now is the time for Congress to bring our 
policies back into line with our national values. Rejecting this 
conference report would be a good start.
  Unfortunately, most Congressional Republicans have made their choice. 
For them, bigger tax cuts have a higher priority than educating kids, 
providing a secure retirement for seniors, and making health care 
available and affordable to more Americans.
  The priorities clearly revealed in this Republican budget are not the 
priorities of the American people. Their voices have been shut out of 
the room where the real decisions are being made. If Congress does not 
change this budget, the American people will change Congress next year.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, I ask unanimous consent that the vote on 
the adoption of the pending budget conference report occur at 4 p.m. 
today, with the time until then divided equally for debate.
  The PRESIDING OFFICER. Is there objection? The Senator from North 
Dakota.
  Mr. CONRAD. Mr. President, I am constrained to object. We hope to 
have agreement in the very near future, but apparently somebody needs 
to be contacted who has not yet been contacted. I say to my colleagues, 
I apologize. I thought we had agreement, but I am just informed we need 
to wait another few minutes before we can reach agreement.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Idaho.
  Mr. CRAPO. Mr. President, I wish to speak on the conference report. I 
think it is important we put into perspective the debate we are having 
today. You heard a lot of talk, if you listened to this debate, about 
the potential danger of tax relief at a time like this in our economy. 
You heard a lot of talk about skyrocketing deficits and what is the 
responsibility or the cause of those deficits, and the circumstances 
around which this budget has been brought to the floor.

[[Page S5285]]

  I wish to step back a bit and look at my personal experience in 
Congress as an example of what it is we are really looking at, what the 
perspective is with regard to this debate.
  I ran for Congress in 1993. At that time, we had massive deficits, in 
the neighborhood of $200 billion, $300 billion, $400 billion, $500 
billion, and had been having those deficits for years. I ran on a 
balanced budget platform. I argued for a lot of other issues, but one 
of the main issues I talked about was the need to balance our Federal 
budget. I got elected, got here to Washington, and have been involved 
in a debate over a budget each year since I served in Congress. Now I 
am in my 11th year.
  In each year, what happens is, whoever is the leadership in Congress 
proposes a budget. The budget can be a 5-year budget, which is what we 
used to have, or a 10-year budget, such as the one before us. The 
important point to note about all these budgets is the year that 
counts, particularly with regard to spending, is the first year of the 
budget.
  Yes, we are here talking about a 10-year budget, but next year we 
will be back in front of the Congress with a new budget, and the first 
year of that new budget will not necessarily be the same year, the same 
as the second year of this year's budget. In other words, we do not 
just adopt this 10-year budget and then go on from there and live with 
the budget constraints contained in each of those 10 years. We do a new 
budget every year. So what really counts is the first year of the 
budget. It is important for people listening to this debate to 
understand that dynamic in order to understand what is really being 
said by those who are arguing about what should be the policy of this 
budget.
  It is true that with regard to tax relief, once tax relief is 
adopted, it is permanent until a Congress changes it, and it plays out 
for a period of years. But it is the spending side of the budget that 
gets changed, especially the discretionary spending side of the budget 
that gets changed and redone by Congress every year. You have to look 
very carefully at the spending proposal. What happens, frankly, is that 
those who want to see more Federal spending, those who want to see our 
economy basically nationalized, with the Federal Government controlling 
ever-increasing aspects of the economy and spending ever-increasing 
dollars, frontload the spending into that first year of the budget. 
Then they have very prudent spending patterns in the second through the 
tenth year of the budget or the second through the fifth year of the 
budget, knowing they can come back next year with a new first year and 
change the whole spending dynamic.

  The debate we are in right now is just another aspect of the 
traditional debate we have been having in Washington for the last 
couple of decades between those who do not want to see tax relief and 
those who want to see tax relief, and between those who want to see the 
Federal spending increase versus those who want to hold spending down.
  We have heard a lot of talk, as I have said, about budgets and 
deficits. There has been a lot of accusation made about who caused the 
deficit that we face. President Bush, as you know, when he first became 
President proposed major tax relief which this Congress adopted. It was 
adopted for a 10-year timespan and will expire at the end of 10 years 
from the day it was adopted in 2001, if it is not continued.
  That tax relief has provided needed relief to the American people. 
That tax relief is today being attacked on this floor as a cause of the 
budget deficits when, in reality, I think most Americans are very well 
aware we have had dramatic increases in spending required by the attack 
on 9/11 by terrorists against our Nation and the significant increases 
in spending on homeland security, by the war in Iraq, and the increased 
spending for our national security that has been driven by the need to 
make sure we have the strongest military we can to protect and preserve 
our Nation against terrorists and rogue nations overseas.
  We have seen spending increases in other categories that have been 
far beyond the growth of the economy. In the categories discussed by 
Senators on this floor today--education, health care, the environment--
spending has gone through the roof for very good reasons: the defense 
of the war on terrorism, the defense of our homelands, the defense of 
our Nation. Nevertheless, spending has skyrocketed at the same time the 
economy has collapsed. So we see revenue going down at a time when 
spending is going up. That is what is causing these deficits. It was 
not President Bush's tax relief.
  We can argue about whether giving tax relief is going to actually in 
a dynamic economy strengthen revenues or reduce revenues, and I would 
like to talk about that a little bit in a minute. The fact is, wherever 
one comes down on that debate, the true core of the causes of the 
deficits we are dealing with right now was not the tax relief; it was 
the increases in spending and the collapse of the economy we have seen 
not only in the United States but across this globe.
  There has been a lot of talk about the fact we really have an 
obsession with tax cuts. There is definitely a strong commitment on the 
part of many of us to obtain tax relief because we believe strongly 
that it is through proper management of the tax collection side of our 
budget that we will provide the economic stimulus to our Nation that is 
needed. But if there is an obsession on the one side for tax relief, 
then it must also be said there is an obsession on the other side with 
spending.

  Those very Senators who stand on the floor and talk about the fact we 
cannot support increased tax relief, we cannot have more tax relief, 
are the very same ones who when we debated this budget in the Senate 
they proposed over 80 amendments. There were over 80 amendments that we 
dealt with. If we tally up the increased spending that was proposed in 
the bevy of amendments when we considered this budget, it was almost an 
additional trillion dollars of spending that was proposed.
  This budget is a lean budget, but it is one that meets the needs of 
this Nation in the critical areas that we must address. Again, we are 
having that age-old battle between whether we should keep taxes low 
and, in fact, even reduce them further or whether we should keep taxes 
high and stop tax cuts from being made and allow previous tax relief to 
expire and thereby let taxes go up so we can sustain higher levels of 
Federal spending in the budget. That is what this debate is about.
  If we do nothing, if we let the current law stay as it is and have no 
tax relief and have no additional spending, we will still see deficits 
in the neighborhood of $200 billion in the budget year 2004 we are 
working on. So, again, I think it is important to set the parameters.
  If we look at the proposals of the one side who are now objecting to 
the President's tax relief, they also have a stimulus package. Their 
stimulus package, however, does not contain so much tax relief. It 
contains mostly spending, on the theory, apparently, that we can spend 
ourselves into prosperity by having the Federal Government put a 
massive focus on spending to strengthen our economy.
  We simply disagree with that. Notably, the spending in this stimulus 
package is frontloaded. Recall what I talked about with regard to how 
these budgets work. It is the first year of the budget that we really 
have to focus on on the spending side, and the frontloaded spending in 
the alternative stimulus package that is proposed results in a deficit, 
if it were to be adopted, that is even higher than the deficit that is 
contained with the President's tax relief proposal in this budget. 
According to the analysis, the deficit would be $382 billion, but it 
would not be because of tax relief. It would be because of spending. 
That is the key difference, again, in the debate we are having today.
  There has been some discussion about the fact that we did not get a 
budget last year, and why we did not get a budget. The Senator from 
North Dakota asked some of us who voted against what he calls a 2-year 
budget that was proposed last year, why we voted against it. Well, I 
will tell my colleagues, it was the same old debate. That proposal, 
though it was not actually a full-blown budget, was one which extended 
the caps and it extended the point of order for the budget points of 
order that we need as protection in this budget and had some increased 
spending in some categories. The spending

[[Page S5286]]

proposals were, once again, too high. They were far beyond what the 
President had proposed in his budget that was focused on building a 
path back toward balance.
  The reason we voted against it was because we did not believe in the 
spending levels they had proposed. With regard to those important 
budget protections, the extended caps on the budget and the budget 
points of order and the like, we did later on adopt those and extend 
them into April of this year. It is those spending caps and budget 
points of order that this budget now proposes to put back into place.

  There has also been some talk about whether the manner in which this 
budget is being brought forth with the reconciliation instructions, 
being different between the House and the Senate, is proper. Frankly, I 
have looked at it. As I see it, it is very straightforward. The 
reconciliation instructions provide for $550 billion of tax relief over 
the next 10 years. With regard to that proposed tax relief, it is very 
clear that with the current support in opposition to that proposal, the 
Senate cannot pass that kind of tax relief. So it is proposed in this 
budget reconciliation that the Senate committee cannot exceed $350 
billion, as the Senate committee puts together the tax package 
contemplated by this budget, and the House committee cannot exceed the 
$550 billion. The reconciliation between those two numbers will occur 
when the tax committee in the House and the tax committee in the Senate 
write the actual detailed tax language and they seek, if those bills 
are passed, to conference those bills.
  It is a very normal and standard approach, in my opinion, of bringing 
together the differences between the House and the Senate, letting that 
debate be resolved at a time when the House and the Senate have put the 
details to the tax packages.
  As has been said many times, what we are adopting today is a budget. 
It creates a number for tax relief. It does not say what kind of tax 
relief will occur. There are proposals and I am going to talk about 
those proposals, but the budget that we are talking about allows the 
House and the Senate tax committees to write their own proposals. We do 
not know what they are likely to adopt--well, let me say we think we 
know what they are likely to focus on, but we do not know the details 
of how they will adopt it.
  I will talk about the tax relief argument for a minute. It has been 
said again today, multiple times, that we are talking about tax relief 
for the wealthy. As I said, I have served in Congress now for over 10 
years, and during each of those 10 years--the 6 years I served in the 
House and going on 5 years I have now served in the Senate--we have had 
debates over tax relief. We have had tax relief proposals of all 
different kinds, everything from proposals to reduce the income tax 
rates to proposals to eliminate the marriage tax penalty, to proposals 
for child tax credits, and so forth. Every single time that a proposal 
for tax relief has been made, since I have served in this Congress, it 
has been attacked as tax relief for the wealthy. Even the proposal to 
eliminate the marriage tax penalty was attacked as tax cuts for the 
wealthy.
  Why? Because that is something that seems to work when people do not 
look at the details behind what kinds of tax relief are being proposed.
  Well, what kind of tax relief is being proposed by the President? 
First, he is proposing that we accelerate the tax cuts that were put 
into place in 2001. That includes expansion of the 10-percent bracket, 
hardly a tax cut on the wealthy; acceleration of the 2006 rate 
schedule; acceleration of the 15-percent bracket; and an increase in 
the standard deduction for married filing jointly, hardly tax cuts for 
the wealthy; acceleration of the child credit increase, hardly tax 
relief for the wealthy; an increase in the AMT exemption amount. There 
is one where people from all different categories could get caught up 
in it but particularly I hear about this one from small business 
owners. I certainly hope all small business owners in America and 
others are not considered to be wealthy simply because they own their 
own business.

  It also includes an increase in the expensing options for small 
businesses and other businesses, all businesses.
  Mr. President, I have just been notified I can now make a unanimous 
consent request, and I will do so.
  Mr. REID. Mr. President, if I could direct a question through the 
Chair to my friend, who is acting majority leader.
  The PRESIDING OFFICER (Mr. SUNUNU). The Senator from Nevada.
  Mr. REID. Could I have some indication how much longer the Senator 
from Idaho is going to talk? We may not be able to make the 4 time.
  Mr. CRAPO. Maybe 5 minutes.
  Mr. REID. We have four speakers, and if the time is equally divided 
between now and 4, I am not sure we have enough time for all of our 
speakers.
  Mr. CRAPO. I do not expect to go more than another 5 minutes.
  Mr. REID. I am wondering if the majority is going to use all of their 
time, if we decide to vote at 4, which will be beyond 15 minutes. Does 
the Senator think he would have authority to allow us to have another 
hour of that time and the majority have what remains?
  Mr. CRAPO. I am not authorized to make that agreement at this point. 
Should I forego making the unanimous consent request?
  Mr. REID. Yes.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. The point I was making is that the first thing the 
President was talking about doing was accelerating the tax relief that 
was implemented in 2001, tax relief which was attacked then for being a 
tax cut on the wealthy but certainly was not so.
  The other thing the President has proposed is to make all of that tax 
relief permanent. That would be making the elimination of the marriage 
tax penalty permanent, making the elimination of the estate tax 
permanent, making the increase in the expansion of the 10-percent 
bracket and the other tax relief provided for all taxpayers in America 
permanent. These proposals benefit every taxpayer in America. On a 
percentage basis, they favor those in the lower income brackets far 
more than those in the upper income brackets.

  The bottom line is, whether you use percentages or numbers, people 
can play with the numbers and say this is a tax cut for wealthy or 
middle income or whatever, but on a percentage basis these tax relief 
proposals benefit those in the lower income tax brackets more than any 
other bracket.
  In order to facilitate our effort to conclude this debate at the 4 
p.m. time, I will forego the remainder of my comments.
  I conclude by pointing out this is another angle on the traditional 
debate we have virtually every year between those who want to see 
spending maintained and increased and those who want to see the Federal 
budget controlled and implement tax relief. The American people can see 
through these arguments. The American people understand the value and 
stimulus tax relief can provide to the economy of this Nation at a time 
when our economy dramatically needs the right kind of fiscal policy to 
be adopted by this Congress.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I yield 10 minutes to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, the budget before the Senate, like the 
President's budget which it reflects, represents the wrong priorities: 
Too many ill-advised cuts in too many critical area to help pay for a 
tax cut which is too large, too inequitable, and which will worsen our 
fiscal situation without providing our economy the jump-start it needs.
  The budget resolution that passed the Senate, while irresponsible, 
was a small improvement over the one reported from the committee. The 
Senate managed to make an irresponsible budget resolution slightly less 
irresponsible. The huge tax cuts the President proposed, a majority of 
which would go to upper income folks and which most economists agree 
would provide our economy with almost no jump-start that it so 
desperately needs, were scaled back some. But the conference report 
before the Senate today pushes us right back to where we started.
  Notwithstanding our current record deficits, a war in Iraq and its 
expected aftermath, the full cost of which is not

[[Page S5287]]

yet known, and a baby boom generation that will soon retire in record 
numbers, the conference report contains tax cuts that total about $1.3 
trillion over the next 10 years and, with the expected interest costs 
added in, $1.6 trillion.
  As recently as January of 2001, the Office of Management and Budget 
projected a 10-year surplus of $5.6 trillion. Now we are back into a 
huge deficit hole and will be there for the foreseeable future. In 
fact, this conference report projects total deficits of $1.4 trillion 
over the next 10 years, including record deficits of over $300 billion 
this year and next.

  The right type of small tax cuts could stimulate the economy by being 
effective in the short term and going to working families and small 
businesses who will spend the money now, instead of mainly going to the 
wealthiest among us who do not need tax cuts. Tax cuts that drastically 
worsen our long-term fiscal situation, that will not help out in the 
short term, and that would require cuts to many other priorities are 
not what our economy needs and not what our people are asking us to 
adopt.
  How much money is going to whom in 2003? The President's tax cut 
proposal gives about half of the tax cuts to the wealthiest 5 percent 
of American taxpayers. People can try to put a different gloss on 
numbers, but there are two bottom lines: One bottom line is this 
proposal puts us deeper into a deficit ditch and pays for tax cuts 
mainly going to upper income folks by borrowing; the other bottom line 
is that the 2003 tax cut proposal of the President gives the wealthiest 
5 percent about 50 percent of the money involved in these tax cuts.
  Simple equity, as well as an economic stimulus, suggests if we are 
going to have tax cuts, they should be broad based, providing, for 
instance, every working family of four with an immediate tax cut of 
$1,200. That would be an economic stimulus. That would be equitable. 
That is not what is before the Senate.
  There are a number of other things we ought to do in talking about 
equity and economic stimulus. We ought to extend unemployment benefits 
for those whose benefits have expired and were not previously extended. 
We ought to provide short-term incentives for businesses to invest 
immediately. We ought to provide some assistance to our struggling 
states for education, homeland security, Medicaid, and highway and 
other infrastructure improvements. Those measures would be better for 
our economy today, our fiscal situation in future years, and the many 
other challenges that lie ahead. They would also address today's 
problems today without passing the costs on to future generations. One 
symbol of those future generations are the men and women who now are 
putting their lives on the line for us in the war in Iraq. It seems to 
me unthinkable that when we welcome them home--hopefully with the 
parades and the welcome and the hugs they deserve--we would also tell 
them: By the way, the war you are fighting is going to be paid for by 
you and your kids, not by us; we are going to borrow money, not to pay 
for this war; we are going to borrow this money to pay for a tax cut 
that mainly goes to the wealthiest among us.
  This approach in this budget is wrong on three counts. Number one, we 
should not be cutting taxes. We ought to be paying for the war now. 
Number two, if we are going to borrow money, if we have to borrow money 
for the war, we obviously should borrow it for the war, not for a tax 
cut. Finally, if there are going to be tax cuts, the tax cuts ought to 
go not only to those who need the tax cuts the most but those who will 
spend the money now, giving our economy the jump-start it needs.
  We need a lift in this economy, not one that will kick in years down 
the road or will further explode the deficit, but a fiscally 
responsible lift that will kick in now. The job loss numbers released a 
week ago by the Labor Department reinforce the need for a stimulus plan 
that will create jobs now, in 2003, when we need it.
  The proposed tax cuts are not only sharply slanted toward the 
wealthiest among us, they would do virtually nothing to assist our 
financially strapped States. As a matter of fact, the tax cuts as 
proposed may harm them. Just the proposed dividend tax provision alone 
would actually strip my home State of Michigan of over $100 million in 
revenue in 2004. And economists, including multiple Nobel Prize 
winners, agree the tax cut will not provide the boost that this economy 
needs.
  I was also very disappointed to see the conference report excluded an 
amendment that I offered and that was adopted by the Senate in the 
budget resolution which we adopted.
  Mr. REID. Mr. President, I ask my friend to yield. I am rising for a 
unanimous consent request so Members have an idea when this will be 
concluded.
  Mr. President, I have been in discussion with the majority, and I ask 
unanimous consent the vote on adoption of the pending budget conference 
report occur 2 hours from this time, and that Senator Levin be allowed 
to complete his statement on our side, and Senator Durbin would have 15 
minutes, Senator Graham of Florida 15 minutes, Senator Feinstein 10 
minutes, Senator Biden 10 minutes, and Senator Byrd 30 minutes.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I also need some time to wrap up, I say to my colleague, 
in maybe 10 minutes. Maybe we can work these all down in a way that 
fits within the time constraints.

  The PRESIDING OFFICER. Is there objection?
  Mr. REID. I think it is totally appropriate.
  The PRESIDING OFFICER. Is there objection to an additional 10 minutes 
being allocated to the Senator from North Dakota?
  Mr. REID. We need to make sure we have enough time for the majority. 
If we do 2 hours, they would be limited, instead of 30 minutes, to 20 
minutes. The only reason I say that is Senator Nickles, when he started 
today, said they would not need a lot of time. I know 110 minutes 
compared to 20 minutes is not very much.
  Mr. CAPO. I am authorized to agree to 90 minutes for the Democrats 
and 30 minutes for the Republicans. But I am not authorized to reduce 
that 30 minutes at this point, so I would have to object.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. If I could modify my request, I will try to pare down the 
time here. Let's make it 95 minutes here and 35 minutes on the other 
side.
  The PRESIDING OFFICER. Is there objection?
  Mr. DORGAN. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Reserving the right to object, I just had a chance to 
visit for a moment with the Senator from Nevada. I would like to be 
able to speak for 20 minutes between now and the time the vote occurs.
  Mr. REID. I withdraw my request.
  The PRESIDING OFFICER. The request is withdrawn.
  The Senator from Michigan has 3 minutes remaining.
  Mr. LEVIN. The amendment to which I referred, which was adopted by 
the Senate, was aimed at closing down certain abusive tax haven 
loopholes. We would have taken the money which we would receive by 
closing down these abuses and applied half of it to the deficit, the 
other half going to education in areas where we are cutting education.
  It is unconscionable to me that corporations, too many of them, have 
renounced their United States citizenship and opened phony offices in 
Bermuda from which they can then pretend that their businesses operate, 
keep doing their business here in the United States, using our police 
departments, our fire departments, our schools, and all of our other 
services--inverting, as it is called--getting the benefits of 
citizenship here but avoiding paying taxes.
  People ask, how come revenues are going down? There are a lot of 
reasons why revenues are going down. One of them is the tax cuts which 
were adopted here which were proposed by President Bush. Obviously, a 
slowing economy has had an effect, too. But one of the other reasons we 
lost revenues is that we have too many corporations that are avoiding 
paying their fair share of taxes through a very large number of tax 
avoidance schemes.
  We have seen some of these tax shelters. We have seen some of these 
special-purpose entities used by Enron and

[[Page S5288]]

others. We have seen a whole host of ways folks can avoid paying their 
fair share of taxes. It seems to me, in the middle of a war, the most 
unconscionable one of all is those corporations that renounce their 
citizenship and open up a fake office somewhere else in order to avoid 
paying taxes which they should be paying, and at the same time using 
our roads, our schools, our banks, our patent laws, our law 
enforcement, our fair trade laws, our workforce, and not contributing 
their fair share to pay for those benefits. It was really unfortunate 
that the conferees decided to strip this budget resolution of language 
that was aimed at closing down that particular loophole.
  This budget emphasizes the wrong priorities. It burrows us deeper 
into the deficit ditch. It continues our reliance on the Social 
Security surplus. And it fails to provide the stimulus which is needed 
to improve our sputtering economy. It rises to a new level of 
irresponsibility and it should be defeated.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I want to respond to something my 
colleague from Idaho indicated during his remarks when he stated that 
marriage penalty relief has been attacked as a tax cut for the wealthy. 
I know of no example of that. I do know that on our side, Democrats 
moved to accelerate that relief in 2001, but virtually every Republican 
voted against it.
  I would be happy to have that vote printed in the Record at this 
time, so people can check the record and determine whether or not that 
allegation has merit or not. I ask unanimous consent that be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    [Record Vote 112, May 17, 2001]

              Reconciliation (Tax Cut), (Marriage Penalty)

       H.R. 1836--Amendment No. 654: ``Economic Growth and Tax 
     Relief Reconciliation Act of 2001''.
       Conrad-Kennedy-Johnson amendment which accelerates the 
     elimination of the marriage penalty in the standard deduction 
     and the 15 percent tax bracket to fully eliminate the penalty 
     in 2002; offsets by delaying the reduction of the top two tax 
     brackets from 2009 to 2010; and provides a trigger mechanism 
     to protect the Medicare HI trust fund, requiring the Treasury 
     Secretary to adjust the marginal tax rate reductions in any 
     fiscal year in which the rate cuts would result in an on-
     budget surplus smaller than the Medicare HI trust fund 
     surplus.
       Amendment Rejected.


                               YEAS (44)

       Democrats (42 or 84%): Akaka, Bayh, Biden, Bingaman, Boxer, 
     Byrd, Cantwell, Carnahan, Clinton, Conrad, Corzine, Daschle, 
     Dayton, Dodd, Dorgan, Durbin, Edwards, Feingold, Feinstein, 
     Graham, Harkin, Hollings, Inouye, Johnson, Kennedy, Kerry, 
     Kohl, Landrieu, Leahy, Levin, Lieberman, Mikulski, Murray, 
     Nelson (FL), Reed, Reid, Rockefeller, Sarbanes, Schumer, 
     Stabenow, Wellstone, Wyden.
       Republicans (2 or 4%): Chafee, L., McCain.


                               nays (56)

       Democrats, (8 or 16%): Baucus, Breaux, Carper, Cleland, 
     Lincoln, Miller, Nelson (NE), Torricelli.
       Republicans (48 or 95%): Allard, Allen, Bennett, Bond, 
     Brownback, Bunning, Burns, Campbell, Cochran, Collins, Craig, 
     Crapo, DeWine, Domenici, Ensign, Enzi, Fitzgerald, Frist, 
     Gramm, Grassley, Gregg, Hagel, Hatch, Helms, Hutchinson, 
     Hutchison, Inhofe, Jeffords, Kyl, Lott, Lugar, McConnell, 
     Murkowski, Nickles, Roberts, Santorum, Sessions, Shelby, 
     Smith (NH), Smith (OR), Snowe, Specter, Stevens, Thomas, 
     Thompson, Thurmond, Voinovich, Warner.


                             NOT VOTING (0)

       Democrats (0).
       Republicans (0).

  Mr. CRAPO. Will the Senator from North Dakota yield?
  Mr. CONRAD. I am happy to yield.
  Mr. CRAPO. I believe what I said was that, as I had been here over 10 
years, we debated that proposal several times and every time it has 
been debated it has been attacked as a tax cut for the wealthy. I can 
tell you from my own personal experience, that is the case. In fact, 
today it is part of the proposal being talked about and it is being 
attacked as a tax cut for the wealthy.
  Mr. CONRAD. I say to my colleague, as I indicated, we on this side 
moved to accelerate that relief in 2001. In fact, I offered the 
amendment.
  Mr. CRAPO. We will take a look at that and see why the vote was 
different.
  Mr. CONRAD. All but two on your side voted against it.
  Is the Senator seeking time?
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. I yield 10 minutes to the Senator from Illinois.
  The PRESIDING OFFICER. The Senator from Illinois is recognized for 10 
minutes.
  Mr. DURBIN. Mr. President, I reduced the time I requested because I 
know I have colleagues on the floor seeking recognition and we want to 
wrap this up in a timely way.
  Let me say to those following this debate, one, the greatest 
Illinoisan of all times once said:

       A speech the world will little note nor long remember.

  I think the same can be said of this debate. The United States will 
little note nor long remember this debate on the Senate floor. But it 
will remember what happened today when we see the outcome. The outcome 
is going to be devastating for the economy of the United States for 
years to come.
  The reason is, of course, America is preoccupied, as it should be, 
with the war in Iraq. We are so proud of the achievements of the men 
and women in uniform. We have watched every single day the wonderful 
unfolding of the change in Iraq, offering a new opportunity. I think 
the reason we are focused and so positive about the military 
accomplishment is we know the men and women involved in that decision 
showed both courage and vision.
  Sadly, when it comes to the economy of the United States, the other 
party and the administration in the White House show political 
calculation and myopia. Instead of dealing with the real economic 
challenges of America in a sensible, fair, and evenhanded way, we have 
a Republican budget resolution which will be devastating. It will be 
devastating in creating the largest deficits in the history of the 
United States of America.
  What happened to this Grand Old Party, this party of fiscal 
conservatism? Today, we find it is the party of record deficits and 
record debt. A party which once said, we don't want to leave a legacy 
to our children of debt, is in fact creating that debt with this budget 
resolution.

  There are some things you can argue are beyond the control of the 
White House or anyone in Congress. One of those things is the cost of 
this war and the war on terrorism. I will gladly concede that those are 
things which could not be calculated 2 or 3 years ago and cannot be 
calculated today in terms of their cost. But the real problem with this 
budget resolution is this President's fixation with creating massive 
tax cuts for the wealthiest people in America. It is the age-old 
Republican answer to every single problem: When in doubt, cut taxes for 
wealthy people.
  This is done in the belief that if the wealthiest people in America 
just had a little more money to spend, things would get so much better. 
We tried this. A little over 2 years ago, the President came in with 
the first round of his tax cuts for the wealthy, and he said: Just 
watch what happens.
  We watched. The economy continues to plummet. We continue to lose 
jobs. In fact, if you look at the Bush record since the President took 
office: 2.5 million fewer private sector jobs under this President; 
long-term unemployment up 184 percent; over 2 million more Americans 
without health insurance; 1 in 10 small businesses has dropped health 
insurance for their workers; the average cost of health insurance rises 
by double digits; the gap between tuition and Federal student aid has 
grown $1,900 more under President Bush, retirement savings have been 
decimated, consumer confidence dropped by 51 percent, and the Bush 
budgets have turned a projected $5.6 trillion Federal surplus into a $2 
trillion deficit.
  How can one President in 2 years and 3 months have dealt such body 
blows to the American economy? He did it with the wrong policies, a 
policy of tax cuts for the wealthy that failed in the first round and 
will fail again. This budget resolution enshrines those tax cuts and 
says to our children and future generations: Get prepared to pay off 
this debt because we have to give tax breaks to wealthy people today.
  My friend from Idaho says: Oh, that's just class warfare. I am 
reminded we were recently visited by Warren Buffett, one of the most 
wealthy men

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in America. He said: If this is class warfare, I have something to 
report: My class is winning.

  It certainly is, because if you look at the President's overall tax 
cuts, and the amount of money that average taxpayers can expect, look 
at these numbers: $265 for the typical taxpayer in tax relief; and yet 
for people with over $1 million, $88,873 on an annual basis.
  Think about that for a moment. We are saying to the average taxpayer: 
We are going to give you a modest bicycle and some roller skates. We 
are saying, for the millionaires: You need a luxury car.
  That is the idea of fairness and justice when it comes to the 
Republican side of the aisle.
  Well, it has been absolutely devastating. When you take a look at it 
in terms of the Bush tax plan, nearly 50 percent of American taxpayers 
will receive less than $100. They just get the roller skates. The 
people who are millionaires end up with the luxury limos.
  Is that what America is all about, particularly in time of war, when 
we have children from average, middle-income working families risking 
their lives for this Nation? Is this the best we can do? To offer a tax 
cut to the wealthiest people in this country? To say at this time of 
uncertainty about the cost of the war, and what we will need as a 
nation, that the best we can come up with is a plan from the White 
House to give tax breaks to the wealthiest people?
  Take a look at this budget conference report and I will tell you what 
you will find. The Republican approach shortcuts education 
dramatically. The President passed No Child Left Behind. He said: We 
are going to help our schools move forward.
  We need $9 billion, Mr. President, next year. Your budget provides 
$400 million--not nearly enough. While school districts face 
bankruptcy, States are deep in deficit, this administration cannot find 
the money for education. But it can find the money for tax cuts for 
wealthy people.
  I will tell you, the No. 1 issue I find among families and businesses 
in Illinois--the No. 1 issue--is not this whole question of tax cuts; 
it is the cost of health insurance. This administration, in this 
budget, has done absolutely nothing to deal with the most serious 
problem that businesses and families face today--nothing. It is better, 
they believe, to give a tax cut to wealthy people than to deal with 
real issues that families and businesses face every single day.
  You want to deal with tax cuts? Let me tell you one that I find 
overwhelmingly popular in my town meetings. The Senator from New York 
has suggested it, Mr. Schumer: a $12,000 deduction each year for 
college education expenses. Think about working families whose kids get 
into good schools and face tuition that they never would have dreamed 
of and debt that they couldn't imagine. Imagine if we could give them 
tax assistance, give them tax help: $12,000 deductibility.
  But, no, the Republicans say that isn't the way to invigorate 
America. That isn't the vision of the future. Their vision is to make 
sure the wealthiest among us have more money to spend.
  I don't get it. It is classic Republicanism, but it is a classic 
failure--a failure which over 2 years and 3 months has driven the 
American economy into the rut.
  In my State, we have lost tens of thousands of manufacturing jobs, 
faced record unemployment rates, and this administration believes the 
way out of it is to provide tax cuts for the wealthiest people.
  I salute the Senator from North Dakota. His leadership on this has 
been extraordinary. He and the Congressman from South Carolina, John 
Spratt, have spoken out in honest terms about what we face as a nation. 
Some of the things the Senator said during the course of the debate are 
not necessarily politically popular, but they are courageous and they 
show vision. That is what our military forces are doing in Iraq. That 
is what we should do here, nothing less. Instead, we are dealing with 
political calculation and kind of shortsightedness that we will pay for 
for many generations.
  I will vote a resounding no on this budget resolution.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the Senator from Illinois.
  Does the Senator from Florida seek time?
  Mr. GRAHAM of Florida. Yes.
  Mr. CONRAD. Mr. President, I yield 12 minutes to the Senator from 
Florida.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM of Florida. I thank the Senator.

  Mr. President, the real priorities of the President and those who 
wrote this budget can be seen by comparing two numbers: The tax cuts 
authorized in this resolution total $1.3 trillion over the next 10 
years. Over the same 10 years, the Federal budget will run deficits 
totaling $1.4 trillion.
  The priority of those supporting this resolution is crystal clear: 
tax cuts today, in exchange for an even higher mountain of debt that 
will be paid by our children and grandchildren.
  So strong is the lust for tax cuts, the conference committee on the 
budget has gone so far as to develop an unprecedented gimmick by which 
the Senate and the House of Representatives will consider a portion of 
these tax cuts later in the year.
  Under normal procedures, a conference report is to be a consolidated 
single resolution of all of its issues. We are presented with what is 
called a conference report, which has a dramatic difference between tax 
cut allowances in the House--$550 billion, over 10 years--and tax cuts 
allowed in the Senate--$350 billion.
  The goal of the majority is to give the appearance of limiting tax 
cuts to the Senate-passed limit of $350 billion, while paving the way 
for fast-track tax cuts of $550 billion.
  During the debate on the Senate's budget resolution a couple of weeks 
ago, I voted against any tax cut in the budget. Why? Because, in my 
judgment, they do not reflect our Nation's priorities.
  This budget should seek to reduce the national debt. It should seek 
to strengthen and reform Social Security. It should seek sufficient 
funds to modernize the Medicare Program and add a meaningful 
prescription drug benefit. It should provide funds for programs the 
Federal Government has committed itself to which are so critical in the 
lives of our children.
  This budget includes no adequate money for these priorities. It is 
laser like in its focus on tax cuts. The tax cuts allowed by this 
budget are not only irresponsible, they are misdirected. Although their 
advocates claim their purpose is to create jobs and stimulate economic 
growth, these tax cuts will not do the job. That is especially true of 
the proposed tax cut on stock dividends.
  To truly stimulate the economy, any tax cuts should be targeted so 
they boost demand for consumer goods and services. Most economists 
agree that this is best achieved by directing the tax cuts to low- and 
middle-income families and small businesses.
  I personally would prefer a short-term reduction in the payroll tax, 
paid for by general revenue, holding the Social Security and Medicare 
trust funds whole.
  The tax cuts contemplated by this resolution are directed at upper 
income families who are the least likely to boost their purchases of 
goods and services.
  We had a debate a few moments ago as to whether this was class 
warfare. That is in the eyes of the beholder. But one thing that it 
clearly is: It is intergenerational warfare.
  It is warfare against children, with cuts in education, the failure 
to fund the No Child Left Behind Act, which we passed 2 years ago, cuts 
in childcare, cuts in women's, infant's, and children's health care.
  The irony of this intergenerational warfare against children is that 
they will end up paying, during their adulthood, the cost of the 
deficits which we are adding today.
  It is also intergenerational warfare against older Americans. Some 
would argue that this budget includes $400 billion for a Medicare 
prescription drug benefit. They know full well that $400 billion is 
inadequate to provide an affordable, comprehensive, universal 
prescription drug benefit for America's seniors.
  Why do we know this? Last year, 52 Senators voted for a plan, which I 
had

[[Page S5290]]

offered, to provide to Medicare beneficiaries real drug benefits, with 
no gimmicks, no gaps, no hidden ``gotchas.''
  With inflation and the change in demographics of the older 
population, such a benefit would now cost $619 billion over 10 years.
  Limiting a prescription drug benefit to $400 billion means that 89 
percent--89 percent--of Medicare beneficiaries, those who have elected 
to stay in the fee-for-service Medicare Program, will go without 
prescription drug coverage, unless they either have very low incomes or 
very high drug costs.
  The only way to provide a drug benefit within this budget's framework 
is to limit the benefit to a relatively small number of Medicare 
beneficiaries.
  If they should happen to live in an area that offers health 
maintenance organization coverage--and millions of our seniors do not--
Medicare beneficiaries will have no choice but to move into managed 
care plans because there is no other way that they will be able to 
access the lifesaving prescription drugs they need. It is wrong to 
force seniors to make this choice. It is irresponsible to approve a 
budget that ignores vital priorities such as modernizing the Medicare 
Program, securing Social Security's future, reducing the national debt, 
while promoting massive tax cuts for the wealthiest of Americans.
  I urge my colleagues to take responsibility for our actions, to pay 
for our obligations now--not to pass a budget that promotes 
unaffordable tax cuts, tax cuts with consequences that will be felt 
now, particularly by children and older Americans, tax cuts with costs 
that will be passed on to future generations to pay.
  Therefore, I shall vote no on this budget resolution and hope that we 
might have an opportunity later in the year to reconsider this 
misguided proposal.
  I ask unanimous consent that an item which appeared in the New York 
Times of April 9, titled, ``No New Tax Cuts,'' which was authored by 
former Senators Bob Kerrey, Sam Nunn, and Warren Rudman, as well as 
Peter Peterson and Robert E. Rubin, and Paul A. Volcker be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Apr. 9, 2003]

                            No New Tax Cuts

(By Bob Kerrey, Sam Nunn, Peter G. Peterson, Robert E. Rubin, Warren B. 
                      Rudman and Paul A. Volcker)

       With a war in Iraq and looming post-war costs, growing 
     pressures for a prescription drug benefit, increased expenses 
     for domestic security and a ballooning budget deficit, 
     Congress must exercise restraint on both revenues and 
     spending to prevent fiscal policy from spiraling out of 
     control. The consensus in favor of long-term budget balance 
     must be re-established. This issue is now directly before 
     Congress as it debates the federal budget.
       The fiscal outlook is much worse than official projections 
     indicate. These projections assume that the tax cuts enacted 
     in 2001 will expire at the end of 2010. They also assume that 
     discretionary spending, the part of the budget that pays for 
     national defense, domestic security, education and 
     transportation, will shrink continuously as a share of the 
     economy. Neither of these assumptions is realistic.
       Moreover, the official projections do not include the costs 
     of war and reconstruction in Iraq. And they ignore the 
     inevitable need to reform the alternative minimum tax, which 
     is not indexed for inflation and will apply to some 40 
     million households within 10 years--up from two million 
     today.
       Under more realistic assumptions, the deficit projections 
     are cause for alarm. A recent study by Goldman Sachs includes 
     this forecast: if the president's proposed new tax cuts are 
     enacted, a Medicare prescription drug benefit is approved, 
     the A.M.T. is adjusted and appropriations grow modestly, the 
     deficits over the next 10 years will total $4.2 trillion--
     even if the Social Security surplus is included. If it is not 
     included, the deficit would be $6.7 trillion. Under these 
     circumstances, the ratio of publicly held debt to gross 
     domestic product climbs within 10 years to nearly 50 percent, 
     from 33 percent just two years ago.
       And all of this happens before the fiscal going gets tough. 
     Looming at the end of the decade is a demographic 
     transformation that threatens to swamp the budget and the 
     economy with unfunded benefit promises, like Social Security 
     and Medicare, of roughly $25 trillion in present value. Our 
     children and grandchildren already face unthinkable payroll 
     tax burdens that could go as high as 33 percent to pay for 
     these promised benefits. It is neither fiscally nor morally 
     responsible to give ourselves tax cuts and leave future 
     generations with an even higher tax burden.
       And yet tax cuts are the primary focus of this year's 
     budget debate. To speed enactment of tax cuts, Congress is 
     planning to use a special fast-tract procedure called 
     ``reconciliation'' in the budget resolution. While 
     determining the size of the tax cut to be given fast-track 
     protection in the budget is sometimes dismissed as a 
     procedural matter, it is not: whatever its size, a tax cut 
     that receives this protection is almost certain to be enacted 
     in the later tax legislation. Members of Congress should not 
     therefore approach the budget decision with the idea that a 
     tax cut given such status now can be easily scaled back 
     later.
       The president has proposed a cut of $726 billion, which the 
     House has already approved. The Senate has reduced the cut to 
     $350 billion.
       Given the rapidly deteriorating long-term fiscal outlook, 
     neither proposal is fiscally responsible. It is illogical to 
     begin the journey back toward balanced budgets by enacting a 
     tax cut that will only make the long-term outlook worse. 
     Furthermore, the proposed tax cuts are not useful for short-
     term fiscal stimulus, since only a small portion would take 
     effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits will 
     eventually slow the economy.
       The tax cuts now before Congress do not pay for themselves. 
     No plausible array of matching spending cuts or offsetting 
     revenue increases has been, or will be, proposed to close the 
     gap resulting from a large new tax cut.
       We believe that there should be no new tax cuts beyond 
     those that are likely to provide immediate fiscal stimulus, 
     and that avoid growing revenue loss over time. If, however, 
     Congress decides it must approve a tax cut, it should pass 
     the Senate's. While a $350 billion tax cut does not fit our 
     definition of fiscal responsibility, it comes closer than a 
     tax cut of $726 billion. Moreover, Congress should 
     reestablish the pay-as-you-go rule in which tax cuts and 
     entitlement expansions must be offset. The discipline of this 
     rule greatly contributed to the elimination of budget 
     deficits in the 1990's and is clearly needed again.
       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be other 
     otherwise. They raise interest payments on the national debt. 
     They reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an insupportable tax burden for the next 
     generation.
  The PRESIDING OFFICER. Who yields time? The Senator from Florida.
  Mr. GRAHAM of Florida. Mr. President, how much time would the Senator 
from Florida like?
  Mr. NELSON of Florida. The good ranking member of our committee was 
going to allocate 10 minutes to me.
  Mr. GRAHAM of Florida. Taking the position of the ranking member of 
the Budget Committee, I shall allocate 10 minutes to my colleague.
  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
  Mr. NELSON of Florida. For that to come from the senior colleague of 
my State, who not only can I call friend but also my senior Senator, my 
mentor, I am very grateful. I find that as in most of the cases, his 
and my ideas are very similar, as he has just expressed so about this 
budget.
  I want to start my remarks by telling a story. In 1978, I came to the 
House of Representatives and became a freshman member of the Budget 
Committee. Twenty-two years later, I come to the Senate, and I am a 
freshman Senator put on the Budget Committee.
  In the second term I had in the House, we had a newly elected 
President, President Reagan. I felt that the President, having won a 
significant victory, was owed a certain deference with regard to his 
tax policy. On a very close vote, I was one of the handful of votes 
that allowed President Reagan to pass his budget in 1981, and his tax 
cut.
  In a couple of months, I realized that I had made a mistake. I took 
to the floor of the House of Representatives and stated that I had made 
a mistake because what we had done was to cut the tax revenues so much 
so that the revenues were plummeting at the same time we were 
increasing expenditures of Government. Prior to the Reagan 
administration we were still running deficits, but it was about a $20 
billion deficit, annual deficit--that is, $20 billion more that the 
Government was spending than it had coming in tax revenue--but if you 
look on a chart, what happened after that was the expenditures were 
going up and the revenues were coming down. And the annual amount of 
borrowing that the Government had to do was all the greater,

[[Page S5291]]

swelling the national debt, causing a huge expenditure for the 
Federal Government of annual interest on the additional amounts that we 
were borrowing each year. It was taking us into the economic ditch. We 
were in fiscal chaos. I will never forget one of my dear friends in the 
House, who shall remain nameless but who was one of the preeminent 
economic spokespeople of the time for the trickle-down, supply-side 
economics theory, stated--and I found it revealing--We do not worship 
at the altar of the balanced budget anymore.

  Well, that was certainly true because in the decade of the 1980s, the 
annual deficit swelled to around $250 billion a year. The national debt 
doubled and tripled, and that big tax cut I said was a mistake in 1981 
had to be undone--not once, not twice, but three times over the course 
of the decade of the 1980s--ultimately, into the 1990s. Then sounder 
fiscal minds prevailed. The budget was ultimately balanced to the point 
at which almost nirvana was achieved in the late 1990s and the year 
2000. And lo and behold, here we were in a surplus.
  Had we been fiscally conservative--let me repeat that statement--had 
we been fiscally conservative, we could have been good stewards of 
those surpluses, and we could have provided for the additional spending 
that clearly we were going to have to do, particularly in the defense 
of the country, even though we didn't know at the time that September 
11 would happen. And we had the very real probability that we could pay 
off the national debt over the course of 10 or 12 years.
  I tell that story because that is a personal story I have lived. It 
is a story of personal experience that I come to this Senate Chamber 
today to tell as to why I voted against this budget resolution when it 
came through the House and why I am going to vote against it today. 
Because it is not sound fiscal policy; it is not conservative fiscal 
philosophy. It is exactly the opposite. It is reckless fiscal policy 
when you drive revenues down, increasing expenditures, particularly in 
time of war and the kinds of occupational expenses that we are going to 
have to be expending, that we are already expending in Afghanistan, 
that we have been expending in Bosnia for 7 years, and how many years 
are we going to have to expend it in Iraq, which I support.
  It brings us back to this mindless fiscal policy driving us into the 
economic ditch.
  I say to the ranking member of the committee, I am just getting wound 
up. I know you have lots of others to talk.
  I am just getting into my message, but you get the drift of my 
message. I know you want to allocate time to other folks. I will sum 
up.
  I have always tried to conduct myself in public office looking to 
what is the workable solution, what is the commonsense solution. Most 
folks want Government to work, and they want their elected 
representatives to perform so that Government will perform and function 
well.
  When you adopt fiscal policy such as this, driving the annual deficit 
higher and higher, when there is no prospect in the future anytime soon 
of bringing it into fiscal balance and getting close to a balanced 
budget. That just doesn't comport to common sense. You can do all of 
the legislative sleight of hand and fiscal ``now-you-see-it-now-you-
don't,'' as has been done by this budget resolution, but that doesn't 
get away from the hard economic fiscal reality that we are going in the 
opposite direction.
  Do I support tax cuts? Of course I do. In the first year, I voted for 
a version that went as high as $1.2 trillion over a 10-year period. 
What we passed was supposedly $1.35 trillion. But the reason I didn't 
vote for that was that we knew that wasn't accurate; that it was going 
to be closer to $2 trillion in tax cuts over 10 years.
  Would I like to have those tax cuts? Of course, but every decision we 
make here has to be balanced as to how is it going to perform in the 
functioning of the economy. What you want is an economy that hums. You 
want an economy that functions, that is a robust economy.
  We are going in the opposite direction, where we fall off revenues so 
much at the time of expenses going so high that it causes the markets 
to get shaky because people do not have confidence in the markets.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. CONRAD. Mr. President, I yield an additional few minutes to the 
Senator.
  Mr. NELSON of Florida. Mr. President, I will not take the time 
because so many others have such beautiful ways of expressing 
themselves and they want to speak and I want to hear. I will conclude 
by saying I love this Senate, and I love these Senators. I love the 
Senators on this side of the aisle, and I love the Senators on that 
side of the aisle.
  The only disappointment I have had is when this place gets too 
partisan so it cannot work out a solution, and when this place gets too 
ideologically rigid so that you cannot find a consensus in the 
commonsense middle ground, and that is what is happening to us in this 
budget debate.
  Someday we will learn because we will have to make Government 
function in the way that the people all across America want it to 
function.
  I would venture that every single Member of Congress, on both sides 
of the aisle and both sides of the Capitol, can agree on one thing: We 
need to get the economy moving again.
  Every priority that we speak about up here--whether it's health care, 
retirement security, national defense, battling terrorism or even 
cutting taxes--every one of our priorities is easier to achieve when 
the economy is booming.
  The fundamental disagreement is on how we get the economy going 
again.
  When talking about the economy, I tend to trust economists. But these 
tax cuts that are the centerprice of the administration's economic 
growth package, don't have a lot of fans among the Nation's economists. 
In fact, 450 economists, including 10 Nobel laureates, oppose his tax 
cuts because they won't create jobs or stimulate the economy. Meantime, 
the President was able to find just 13 who support his ``stimulus'' 
plan.
  And still, here we are, ignoring not only the better judgment of 
experts, but ignoring a majority of Senators who were able to agree on 
a smaller tax cut package. Only 2 weeks ago, this body agreed to reduce 
the reconciled tax cut package from $726 billion to $350 billion. Yet, 
in 2 short weeks, the administration and the majority party have found 
a way to game the system of reconciliation to ram through a higher tax 
cut number against the collective will of the Senate and the budget 
process.
  Over the years the budget process has endured many changes, but 
always with the intention of creating procedures that allowed Congress 
to be fiscally responsible as we plan for 10 years of spending 
priorities. The games that were played with the system this year have 
completely undermined the purpose of our budget process. As a result, 
we are in grave danger of plunging the country off a cliff into massive 
deficits and debt--threatening the education of our children, the 
financial security of our seniors, and the strength of the Nation.
  Given all the uncertainty we face, this tax cut we're forcing through 
is irresponsible. If the economy doesn't improve, or it peacekeeping in 
Iraq takes longer than expected, or if we face another conflict or 
terrorist act, we're going to have to find a way to pay for it. Fiscal 
responsibility cannot be predicated on a hope that all goes right, it 
requires planning to ensure financial stability should anything go 
wrong.
  This is no way to budget. We are not planning for the rainy days 
ahead. We're hoping that the economy gets going again. We're hoping 
that America doesn't have to defend itself again. We're hoping that 
homeland security costs don't mount or that more terrorists don't 
strike.
  Meantime, unemployment is growing, there are more uninsured 
Americans, we're about to have more veterans, our schools are not 
receiving the funds they need, the baby boomers are retiring, and we're 
cutting taxes?
  Sooner or later, we are going to have to pay for all of this or, more 
likely, our children will.
  If any of these worst-case scenarios occur, we will have to raise 
taxes or we will have to cut programs such as Medicare and Social 
Security or we will have to keep up deficit spending.

[[Page S5292]]

  No matter what, future generations are going to be forced to pay for 
the sacrifices we have refused to make.
  Our budget process and sound fiscal policy have become the latest 
casualties of political expedience. This is not the time for a tax cut, 
and certainly not one this large.
  Mr. CONRAD. Mr. President, I thank the Senator from Florida, Mr. 
Nelson. He is a very valuable member of the Budget Committee. He has 
been steadfast and resolute on fiscal responsibility. As he has made 
clear, he does not believe this budget represents that. The truth is, 
it does not. This is a budget that is going to explode the deficits and 
debt of the United States at a time of already record deficits. It 
takes $1.3 trillion away in revenue and increases expenditures by $1.1 
trillion. There can only be one result, and that is more red ink, more 
deficits, more debt, and a threatening of the economic security of the 
Nation.
  How much time does my colleague from North Dakota need?
  Mr. DORGAN. About 15 minutes.
  Mr. CONRAD. I yield 15 minutes to the Senator from North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 15 minutes.
  Mr. DORGAN. Mr. President, I recall an article by David Broder some 
while ago. He is one of the thoughtful columnists in the Washington 
Post. I think perhaps he is considered the dean of thinkers in 
Washington, DC, who write regular columns. He said in the first 
sentence:

       I am going to commit class warfare--not because I want to, 
     but because that is the only way I can describe what is 
     happening.

  Let me not act as a volunteer to commit class warfare, but I will say 
some things that others who are in a habit of doing so will describe as 
class warfare. We have proposals to cut taxes before us. We have plans 
offered by those who support this budget that will say to those who 
make $1 million in income in this country that we want to give you an 
$80,000-a-year tax cut. That is what they are proposing if you are 
lucky enough to receive $1 million in annual income. And if you are, 
God bless you. I am sure you work hard for it. But if you are lucky 
enough to be in that category, the majority party plan says we think 
you should have an $80,000-a-year tax cut. If we say that, is that 
class warfare? Is that what it is called?
  It seems to me it is logical for us to ask a question. When you are 
deep in debt, should you be talking about giving the most affluent in 
this country another tax cut? They got a very large tax cut 2 years 
ago. Should you talk about another one that will go largely to the most 
affluent in the country? I don't think so.
  Let me go to the specifics. Everybody speaks in generalities. We use 
a lot of charts and we talk about the numbers on the charts. But we 
seldom go right to the resolution itself. We have a budget resolution 
before the Senate. It comes from a conference between the House and the 
Senate, which our side was not part of because the conference was not 
bipartisan. It was a conference of the Republicans in the House and in 
the Senate, deciding together what kind of a budget they wanted to 
bring to the House and Senate from that conference.

  Let me describe what they brought to the floor of the Senate. Here is 
what they propose. Ask yourself: Is this Republican economics, is this 
conservative values, or a conservative doctrine? It is not a part of a 
conservative doctrine with which I am familiar.
  On page 5, they say: (4) Deficits (on budget).--For purposes of the 
enforcement of this resolution, the amounts of the deficits (on-budget) 
are as follows:

       Fiscal year 2003: $512 billion.
       Fiscal year 2004: $558 billion.
       Fiscal year 2005, $487 billion.

  If I keep going to fiscal year 2013, there are very large budget 
deficits year after year after year.
  Does anybody care about that around here? Is there anyone who calls 
themselves a conservative who is willing to stand up and say this 
matters? No. The only thing you hear is the chanting from the other 
side that says you know what this is, this is a growth plan.
  Let me be the first to admit this is the financial fertilizer that 
promotes growth. The problem is it promotes growth in deficits and debt 
and nothing else. Even the nonpartisan Congressional Budget Office 
reviewed this nonsense and said this is not a growth plan. This isn't 
going to promote growth in the economy. Don't take it from me because I 
belong to a political party. Take it from the nonpartisan Congressional 
Budget Office. They say it is not a growth plan. Take it from 10 Nobel 
laureate economists. They say this is not a growth plan.
  My colleague from Florida just described a bipartisan op-ed piece in 
the New York Times. Former Senators Kerrey and Nunn; former Senator 
Rudman; former Treasury Secretary Rubin; former Chairman of the Federal 
Reserve, Paul Volcker; former Commerce Secretary, Peter Peterson--
Republicans and Democrats alike--say this is not a growth plan. This is 
a serious problem for this country. We have people on the conservative 
side telling America let's spend money we do not have, often on things 
we don't need, and let's have the kids fighting the war come back and 
be saddled with the debt. This is fundamentally irresponsible.
  It is not a surprise then I am not going to vote for the conference 
report. This does not make sense.
  On page 5, for fiscal year 2003, they propose with this budget a $512 
billion debt. Do you know what they will say? ``How on earth can you 
say that? We are not proposing $512 billion in debt.'' What they do is 
take the Social Security trust funds for that year and reduce this and 
say: Our debt is only in the $300 billion range. You can do that if you 
want to loot the Social Security trust fund and use those revenues for 
a purpose for which it is not intended. I guess you can do that, but 
how many people are you fooling in this country? What does the word 
``trust'' mean? Is ``trust'' a forgotten word in this town, in this 
Chamber?
  They are the ones who say in the budget on which we will be voting 
that they want $512 billion in debt for fiscal year 2003 and $558 
billion in 2004, and on and on. In fact, what they are also saying on 
page 6 is very interesting. I would just love for one of them to stand 
up and say: Sign me up for this, count me in, I am a big cheerleader; 
in fact, bring some pom-poms to the floor. We believe we ought to 
double the national debt from $6 trillion to $12 trillion. Sign us up. 
In fact, put on some sweaters. Put the letters on the sweaters: We are 
for higher debt; we are for doubling the debt; we are for giving tax 
cuts mostly going to upper-income people to increase Federal 
indebtedness.
  I would just like somebody to stand up and be honest about that. Just 
tell us that is what you are for. Instead, we get this nonsense: We are 
for a growth plan. Growth of what? The only thing you are growing is 
debt. Deny that. Then take a look at your resolution. Stand up with 
pages 5 and 6 and deny it. Do I hear anybody denying it? I guess not. I 
guess they understand page 5 and 6 is what they wrote because this was 
not a bipartisan conference. Democrats were not involved in writing 
this. It is what they wrote, page 5 and 6, let's double the Federal 
debt and decide it does not matter. I just do not understand this 
thinking.
  This is a remarkable country. In the McCullough book about John 
Adams, he writes about how John Adams used to write back to Abigail 
when he was posted in Europe as they were forming this new country of 
ours. He would plaintively ask Abigail in his letters: Where is the 
leadership going to come from? Where will the leadership be to help 
create this new country of ours? Who will be the leaders?
  Then he would say: There is really only us. There is just me, George 
Washington, Thomas Jefferson, Ben Franklin, Madison, Mason--just us, he 
would say. It turns out, with two centuries of hindsight, it was some 
of the greatest human talent ever assembled, and they created a 
remarkably strong democracy.
  It is important from time to time to ask the same question John Adams 
asked: Where is the leadership? Where is the leadership going to come 
from? Who will stand up and say: Let me lead; let me make tough 
choices? Regrettably, we do not see many leaders say that. My 
colleague, Senator Conrad, is one of those leaders. There are precious 
few others.
  Some of my colleagues who have stood up and fought valiantly to say 
this budget resolution will hurt this country, it will move this 
country deep

[[Page S5293]]

in to debt, are willing to assume some leadership in saying that, but 
there are not enough in the Senate who want to say: Let me assume some 
leadership. There is not enough here. I regret that.
  This country is not going to move ahead by leaving some behind. In 
this plan, they say, we must increase defense spending, we must 
increase homeland defense spending, we must cut taxes deeply, and we 
will shrink all other domestic discretionary spending to pay for it. 
That is not a plan.

  What we are seeing in Iraq today is something quite remarkable, 
something that makes all of us enormously proud, first of all, of what 
our soldiers have done to liberate the Iraqi people. But then it 
bothers us a lot to see this looting all over the country of Iraq. That 
is what happens when you do not have civil order in a country, when 
there is no civil authority and no government.
  Government means essential functions. It means law enforcement. It 
means building schools and educating children. It means roads, 
providing for the common defense--that is what government is. So when 
people talk about let's just give very large tax cuts and we will just 
decide to shut everything else down, I say, yes, let's cut some 
spending, let's tighten our belts in the right way. But let's not 
decide in this country to provide a budget resolution to America that 
on page 5 and page 6 says at this moment in America when we are at 
war--the war in Iraq and the war against terrorism--when we have an 
economy that is sluggish, when we have so many difficulties, let's 
embark on an irresponsible fiscal policy that doubles the Federal debt 
and has budget deficits every year as far as the eye can see.
  As John Adams would ask: Where is the leadership? Where is the 
leadership to move this country responsibly toward the future of 
economic opportunity and growth and hope?
  When this war is over and the young men and women, sons and daughters 
of America, come home to their loved ones--and we hope and pray that is 
soon--we have to get about the business of taking care of business at 
home. We have an economy that is a mess. Those who make investments in 
our country, those who work for a living, those who build businesses--
all of them want to be American people who are confident about the 
future because our economy is all about confidence. If they are 
confident, then they do the activities that manifest that confidence. 
They take a trip, buy a car, buy a home, make a purchase, and the 
economy expands and new jobs are created. If they are not confident, 
they do exactly the opposite.
  This budget document takes us toward deep Federal debt, and deeper 
Federal deficits year by year. This is not a document that is 
responsible. This is not a document that is a growth document. This is 
a document that takes America backward, not forward. None of us here 
would come to the Chamber of the Senate and say, Let's have higher 
income taxes. But at the very least we ought to decide we should not 
have very large tax cuts at a time when we are doubling the Federal 
debt, at a time when we are at war in Iraq and at war against 
terrorism.
  The easiest lifting in American politics is by those who shuffle 
around saying: I am for tax cuts; it does not matter what the 
consequences are, I am for tax cuts. The consequences are, of course, 
to say let's do now what we want to do and have our kids pay for it. 
Let's have America's children bear the burden of the responsibility of 
this mistake. I think that is a horrible mistake. I wish very much I 
could come to the floor to support this budget. My colleague, Senator 
Conrad, made a persuasive argument earlier today. He used a great deal 
of charts.
  Let me use two of them. I mentioned what is on page 5 and 6. Here is 
the chart on debt. That is where it is headed, from $6 trillion to $12 
trillion. That is not my number, that is on page 6 of the budget 
resolution. That is not my number, that is what the Republicans are 
proposing. I do not mean that just because they are proposing this, I 
am saying this is irresponsible. It would not matter to me who proposed 
it. If my side was proposing it, I would say it is irresponsible. It is 
a fiscal policy that does not add up, and everybody in this room knows 
it.
  There is debt every single year, unless you loot the Social Security 
trust fund. We can make a chart that is a little better than this if 
one takes the Social Security money and misuses it. But we keep the 
Social Security trust fund in a trust fund, where the word ``trust'' 
means something to everybody.
  This is what we have for 10 years. One can paint a barn with this red 
ink. Red ink is all we see. It is not a growth plan. The only thing 
that grows in this plan is debt and deficits, and that is why I am 
going to vote no.
  I appreciate the time my colleague has offered me to describe my 
strong feelings about what this budget will do to this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. I yield 12 minutes to the Senator from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa.

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