Congressional Record, Volume 149 Issue 59 (Friday, April 11, 2003)

[Congressional Record Volume 149, Number 59 (Friday, April 11, 2003)]
[Senate]
[Pages S5295-S5316]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page S5295]]

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Senate

FISCAL YEAR 2004 BUDGET--CONFERENCE REPORT

(continued)

Mr. GRASSLEY. Mr. President, I rise to address an aspect of the
budget resolution that we are debating today. I am going to focus on
one of the Finance Committee's tasks that is included in the
resolution. I am referring to growth package and reconciliation
instruction to the Finance Committee. I would first like to put all of
this into context. After that, I will describe an agreement with
Senators Snowe and Voinovich.
When I was thinking about the budget, Former Senator Barry
Goldwater's words came to mind. Among legislators, you will find
purveyors of perfection and those who practice the art of compromise.
Reflecting on Senator Goldwater's words, I came up with a new version
of Senator Goldwater's famous statement. With a little bit of poetic
license, here is the version that I think sums up where we are:

Let me remind you that extremism in tax policy at the
expense of no budget resolution is a vice. Moderation in tax
policy in pursuant of a budget resolution is a virtue. Fiscal
conservatism is a virtue. No budget equals no spending
ceilings and that equals a vice against taxpayers.

Our economy has not recovered as we had hoped. Too many factories are
shut or running below capacity. Too many workers are looking for work
and need jobs to provide for their families. Stock prices have remained
well below the ``bubble'' prices of the late 1990's. Americans wonder
when their 401(k) accounts will bounce back.
To me, there is a clearly demonstrated need for bold fiscal policy to
give our economy a ``kick start.'' President Bush took the initiative
and the responsibility. The President put forward a bold plan that
focused on consumer demand and lagging investment. Let me be clear. I
am with the President and supported his proposals in committee and on
the floor.

Keep in mind, press reports indicated administration officials
pursued ever larger resources for the growth package. Last fall, the
figure seemed to be $150 billion. In early winter, the Wall Street
Journal reported one day the figure had gone up to $300 billion.
Finally, when the President announced his plan the figure had grown to
almost $700 billion. In fact, Joint Tax scored the plan at $726
billion.
I supported the President's number at each step and support it today.
Unfortunately, there is not now a majority of Senators in support of
the President's figure. Based on countless conversions I have had that
majority is not going to materialize over the next few weeks. As much
as I wish it were no so, that is the political reality.
The reality is that the Republican caucus is split. Most of the
Senate Republican caucus supports the President's number. My moderate
friends, such as Senators Snowe and Voinovich, think the President's
number is too large. Our Democratic colleagues who want to be
constructive legislators, such as Senators Baucus, Breaux, Ben Nelson
and others, share our Republican moderates' view. Unfortunately, there
are many on the other side who appear to view this exercise solely from
the political objective of destroying part of the President's agenda.
They seem less concerned about addressing the needs of the people.
My moderate friends base their views on concerns about future
deficits. Those are sincere concerns. Likewise, I do not like the
prospect of deficits. My difference is that fiscal discipline needs to
come from the spending side as well. I do want to differentiate these
moderates who are deficit hawks from those that claim the title of
deficit hawk and seem to be advancing political objectives.
I would ask a question of those hard line opponents of the
President's growth package who claim to be deficit hawks. How often
have they offered to restrain spending? Did they offer any fiscally
responsible spending restraints during the budget debate? I think we
know the answer on that one.
We all need to focus on getting spending under control.
Unfortunately, the reality is that a majority of the Senate wants to
focus only on the tax relief side. That is where we find ourselves. We
only see restraint on the revenue side of the ledger.
There is a more fundamental issue at stake. Republicans have a
responsibility to govern. Aside from 135 days in the 2001, Republicans
have not had control over both the Congress and the administration for
almost half a century. The American people gave us the authority to
govern in the last election and we owe it to them to produce. Senators
Snowe and Voinovich understand this.
Senators Frist and Nickles also understand this responsibility. I
want Iowans to know I understand it as well. The people are tired of
the partisan games and want us to govern. That is one of the reasons
why I have said, as the growth package emerged, I want a bipartisan
product. Senators Baucus and Breaux have told me they want to help me
get a bipartisan growth package. They, along with other Democrats, made
a down payment on this pledge with their support of the Senate budget
resolution. I will work with them and like-minded Democrats in the
bipartisan tradition of the finance Committee.
In this context, the governing comes down to a couple of pieces of
the peoples' business. One, producing a budget and, two, advancing an
economic growth package. We cannot go through the chaos of last year
when, under Democratic control, we did not have a budget. Chairman
Nickles has made it his priority to restore the order that comes with
the fiscal blueprint of a budget resolution.
A few moments ago, I discussed the importance of the second item, the

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growth package. That is my job, hopefully with my friend and colleague,
Senator Baucus, to get a bipartisan economic growth package out of the
Finance Committee, out of the Senate, out of conference, and on its way
to the President.
So, the reality is these two items, the budget and the growth
package, will not happen unless a majority of the Senate support the
effort. Last night, a majority of the Senate did not support the budget
resolution that passed the House early this morning. In order to get
the necessary support, we made an agreement with Senators Snowe and
Voinovich. Let me be clear, without this agreement, the budget
resolution conference report would not pass the Senate today. There
would be no budget and no growth package without our agreement. That is
why the leadership supports my efforts.
The agreement is simple. It relates to the revenue number for the
growth package. I agreed that I would not return from the conference on
the growth package with a number greater than $350 billion in revenue
reductions. This means that, at the end of the day, the tax cut side of
the growth package will not exceed $350 billion over the period of the
reconciliation instruction.
Now, some on the other side will characterize this agreement as a
``defeat for the President.'' Those who say it is a defeat for the
President may reveal their objective. It appears that they view this
important responsibility solely from a political angle. I would say the
same thing about my Republican friends who use that same
characterization.
This is not about the President. It is not about the House. It is not
about the Senate. It is about doing our job. It is about doing the
people's business. As a matter of fact, if you review where the growth
package started, at about $150 billion, you could say the ball has been
moved substantially. Why is that? Common sense will tell folks on both
sides of the aisle are a lot more concerned about the economy now than
they were when we started. The reality is that we have the resources to
do a very good growth package.
We have the tools to cut taxes that burden workers. We have the tools
to cut taxes that burden small business. We have the tools to make
investment decisions more attractive. That is where my focus will be--
on workers, small business, and investors. I hope that my colleagues
will join me and focus on doing the people's business. They can start
by supporting the budget resolution conference report.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, first, I compliment my friend and
colleague, the chairman of the Finance Committee, for his leadership,
for his courage, for his service on both the Finance Committee and on
the Budget Committee. He full well realizes we need both a budget and a
growth package, and he has helped us and enabled us to do that. I also
thank my colleagues from Ohio and Maine as well.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, while I welcome what I have just heard the
Senator from Iowa say, no one should be under any illusion that there
will only be $350 billion in tax cuts provided for in the budget
resolution. This budget resolution provides for $1.3 trillion of tax
cuts. Focusing on the reconciled tax cuts is only half of the story. It
is a very important part of the story because those are the provisions
that have special protection. There is a whole other part of the tax
cut package part of this budget resolution that gets little reported.
We are still left with well over $1 trillion of tax cuts.
People keep asserting it is a growth package. This is the work of the
people who determine the effect of various packages, the very people
who are under contract to the White House, the people who are under
contract at the Congressional Budget Office who have looked at the
President's plan. This is what they say:

Initially the plan would stimulate aggregate demand
significantly by raising disposable income, boosting equity
values and reducing the cost of capital. However, the tax cut
also reduces national saving directly while offering little
new, permanent incentive for either private saving or labor
supply. Therefore, unless it is paid for with a reduction in
Federal outlays, the plan will raise equilibrium real
interest rates, ``crowd out'' private-sector investment, and
eventually undermine potential GDP.

Not a growth package, it is a package that hurts economic growth.
That is the hard reality.
The fundamental reason for it is revealed in the President's own
budget that shows his long-term outlook with respect to budget deficits
if his budget plans are adopted. This is from his budget document. It
shows we never get out of deficit. It shows the deficits explode
because the baby boom generation retires and the cost of his tax cut
package explodes.
The result is a heavy load of deficit and debt that burdens this
economy and prevents the kind of economic growth for which we had all
hoped.
The Senator from Montana is seeking time. I yield 15 minutes to the
Senator from Montana.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, so often Members of Congress, the
President of the United States, and members of the press refer to an
event as ``historic.'' The vote we are about to take on the budget
resolution is one of those events. If this resolution passes, then
April 11, 2003 will be included in the history books as the day the
Senate relinquished part of its Constitutional purpose and power.
On March 31, a little over a week ago, I attended the funeral service
of the late Senator Daniel Patrick Moynihan. I had the privilege of
serving in the Senate with Senator Moynihan. He was a visionary, a
leader, a teacher, and a statesman. Senator Moynihan reminded us to pay
attention to our history. And he protected the historical purpose of
the institutions of our nation's government the executive branch, the
judicial branch, and especially the legislative branch.
Article 1, Section 3 of the Constitution designates the Senate as our
Nation's deliberative body. As such, Senators are the only elected
officials in our Federal Government with the power to impeach, approve
treaties, and have 6 year terms.
In Federalist paper No. 63, the Founders explained that 6 year terms
were important because the Senate would serve ``as the cool and
deliberate sense of the community.'' The Framers believed this was
important to prevent the Federal Government from making hasty decisions
about matters that are central to the future of our country.
Let me quote directly from Federalist 63:

. . . so there are particular moments in public affairs
when the people, stimulated by some irregular passion, or
some illicit advantage, or misled by the artful
misrepresentations of interested men, may call for measures
which they themselves will afterwards be the most ready to
lament and condemn.

In short, our Founding Fathers saw the Senate's obligation to
deliberate the important issues of our time:

Until reason, justice, and truth can regain their authority
over the public mind.

I believe we are at such a critical juncture.
Several Senate rules facilitate the Founders intent. First, Senators
generally are allowed to offer amendments to any bill brought before
the Senate. This is not generally the case in the House of
Representatives.
In order to limit debate and reduce amendments, either all 100
Senators must agree to the limitations or the promoters of the
legislation must file a motion to close debate and get 60 votes for
that motion. That means that a simple majority is simply not good
enough. The magnitude of our decisions requires a larger number of the
Members of this body--60--to agree that it is the right thing to do for
our country.
These Constitutional protections are fundamental to ensuring that the
Senate maintains the role envisioned by our Founding Fathers. We must
be very cautious when diminishing these protections in any way.
The enactment of the Budget Act of 1974 is one of the very few
instances when the Senate has cut back on these protections. This was
done with another important goal in mind--reducing deficits.
Let me take a minute to touch on the budget and budget reconciliation
protection process.

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When Congress passed the Congressional Budget and Impoundment Control
Act of 1974, the purpose of the legislation was to help Congress
control its budget.
Among other things, the Budget Act allows Congress to enact a budget
blueprint each year. That blueprint, contained in what we call a budget
resolution, is considered under special rules and must be passed by
April 15th of each year.
One of these rules is that, instead of requiring 60 votes for
approval, the resolution requires only 51. After a limited amount of
time for debate, the Senate moves to a final vote.
The Budget Act set up a streamlined process--reconciliation--to make
it easier for the Senate to pass legislation pursuant to the directives
of the budget resolution.
Those provisions such as cutting spending or increasing taxes, are
critical to reducing deficits.
Thus we agreed to significantly diminish the right of Senators to
debate and amend measures brought to the Senate floor when done as part
of the budget resolution and reconciliation. We agreed to give up these
rights for a very important goal--that of deficit reduction.
Things changed, though, in 1996. In 1996, the Senate parliamentarian
ruled that the budget resolution's streamlined reconciliation
protection could also be used to pass tax cuts, that is, provisions
that increase deficits.
The budget resolution can now include instructions to the Finance
Committee to report tax cuts that can be passed in subsequent
legislation with only 51 votes in the Senate. That ruling turned the
Budget Act on its head. Unfortunately, today's parliamentary maneuver
goes even further; it turns Senate procedure on its head.
The instructions in this budget resolution regarding the tax cut
establish new precedents that will expand the power of the House and
the leadership of the Senate at the expense of Senators. The precedents
will diminish the power of any individual Senator, the Senate's
committees, and whichever party happens to be in the minority at any
given time. This new budget resolution scheme runs counter to intention
and rules governing Congress since Congress first convened in 1789.
The tax cut instructions direct the Finance Committee to pass a bill
with a maximum of $550 billion in tax cuts.
However, if the Finance Committee passes a bill greater than $350
billion, then the bill will not be permitted to pass the Senate unless
it garners 60 votes of support instead of 51. This is accomplished
through a new point of order that will apply during Senate
consideration of the Finance Committee bill.
So, for example, if the Finance Committee passes a tax cut bill
costing $450 billion, any Senator could raise a point of order on the
Senate floor. The point would be sustained by the chair, unless 60
Senators voted to waive the point of order.
The point of order, however, is not applicable in conference under
this resolution. Accordingly, a conference report that comes back above
$350 but no more than $550 would need only 51 votes. No known points of
order would lie against it--a dramatic change from current Senate
practice.
At this point, I might say the architect of all these provisions
which were designed to maintain Senate procedure and to maintain
control of the deficit in a meaningful way is now seated on the floor,
Senator Robert Byrd from West Virginia. I pay great respect to the
Senator from West Virginia, who I am sure right now is lamenting a lot
of new procedures that this body is about to adopt.
Under the Byrd Rule, the Senate could not exceed the instructions to
the Finance Committee unless there were 60 votes to waive the
objection.
But there is a significant difference. The Byrd Rule applies to both
Senate consideration of the tax bill and Senate consideration of the
conference report. But there is a big twist. The new point of order
will apply only to Senate floor consideration of the Finance Committee
tax cut legislation. It won't touch the conference report.
Now, you may ask, why doesn't the Byrd Rule still apply to the
conference report? I believe that the Chair would rule that it does
apply. This was confirmed in a letter sent from the Parliamentarian to
Senator Daschle on April 9, 2003, which stated in part:

During Senate consideration, the conference report on this
measure [the tax cut bill] would be subject to the level of
the reconciliation instruction given to the Finance
Committee. If that conference report exceeded the instruction
to the Finance Committee, the Byrd Rule would be available to
remove provisions from that report sufficient to bring the
measure into compliance with the reconciliation instruction
to the Finance Committee.

I ask unanimous consent that the entire letter be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,

Office of the Secretary,

Washington, DC, April 9, 2003.
Hon. Thomas A. Daschle,
Democratic Leader,
U.S. Senate, Washington, DC.
Dear Senator Daschle: I am writing to you in response to
your question about the consideration in the Senate of a
revenue reconciliation bill pursuant to H. Con. Res. 95, the
budget resolution currently in conference, if the conferees
on that budget resolution give different revenue
reconciliation instructions to the Senate and the House.
The Senate during its consideration of a Senate measure
would be bound by the reconciliation instruction given to the
Finance Committee. As you know, the Senate must pass a House
originated revenue measure, and therefore the Senate must
consider a suitable House revenue measure as a vehicle to be
passed and sent to conference. The Senate could consider as a
reconciliation bill a House passed measure which complied
with the higher reconciliation instruction given to the House
Ways and Means Committee. During Senate consideration the
conference report on this measure would be subject to the
level of the reconciliation instruction given to the Senate
Finance Committee. If that conference report exceeded the
instruction to the Finance Committee, the Byrd Rule would be
available to remove provisions from that report sufficient to
bring the measure into compliance with the reconciliation
instruction to the Finance Committee, subject to subsequent
House action.
Sincerely yours,
Alan Frumin,
Parliamentarian.
Mr. BAUCUS. That is what the Senate Parliamentarian wrote in a letter
to Senator Daschle 2 days ago.
The operative question is, What is the instruction given to the
Finance Committee? I suggest there are two possibilities: $550 billion
and $350 billion. The case for the $550 billion is technical. Section
201(b) of the bill before us states:

The Senate Finance Committee shall report a reconciliation
bill not later than May 8, 2003, that consists of changes in
laws within its jurisdiction sufficient to reduce revenues by
not more than [$550 billion].

The case for $350 billion--that is what is the instruction given to
the Finance Committee--is substantive. The instruction to the Senate
Finance Committee is conditional. The very next section of the budget
resolution, Section 202(a), provides:

It shall not be in order for the Senate to consider a bill
reported pursuant to section 201, or an amendment thereto,
which would cause the total revenue reduction to exceed [$350
billion] . . .

Taken together, the instruction to the Senate Finance Committee
regarding reconciliation is $350 billion. I believe if you were to ask
100 Senators what the size of the tax cut is going to be in the Finance
Committee-reported bill, they will tell you, it will be $350 billion--
not more. Everyone in this Senate, this body, knows that is what is
going to be reported.
The budget resolution says it is not in order to consider a tax bill
greater than $350 billion. If the Chair rules that the instruction to
the Finance Committee is for $550 billion, then I believe that approval
of this resolution would eviscerate a significant part of the Byrd
rule.
The Senate will have created a mechanism to, at a minimum, eliminate
the effect of the Byrd rule provision in consideration of conference
reports.
Under this ruling, there would be no basis for stopping further
erosion of the Byrd rule. The drafters could eliminate the use of the
Byrd rule provision by setting a very high instruction number to the
committee, and setting points of order at lower amounts at whatever
steps along the way were necessary to command the votes sufficient to
pass a bill.
For example, the budget resolution could instruct the Finance
Committee to report a bill costing $1 trillion. The resolution could
then set a point of order applicable to the Finance Committee bill at
$200 billion, set a point of

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order applicable to Senate floor consideration at $300 billion, and set
a point of order applicable to the conference report at $400 billion.
The Byrd rule would then be inapplicable provided the cost of the tax
cut bill was not more than $1 trillion, an artifice. That is exactly
what is going on here in this budget resolution.
That result is absurd, and I believe this interpretation renders
portions of the Budget Act moot or ineffective. If these actions go
forward, this ruling will come back to haunt the Senate. It may enhance
the Senate's ability to pass bigger tax cuts. It may enhance the
Senate's ability to pass larger spending increases. It may do both. But
it will not help the Senate reduce the deficit, which was the purpose
of the reconciliation provisions.
I urge every Member of this body to fully examine the effects this
ruling will have on the Senate and on our Nation. It is irresponsible
to go forward with this plan, and I cannot support the procedural
scheme cooked up in this budget. I urge my colleagues to look at the
long run, not the immediate short run, and vote against this
resolution.
In addition to my earlier comments expressing my disappointment and
serious concern regarding the procedures adopted with respect to this
budget, I would like to also speak against certain funding provisions
included in this budget conference report. I'm especially concerned by
the insufficient level of highway funding and by Title III.
Highway funding is one of the most effective ways to create jobs and
send needed assistance to the States--in my State of Montana and across
the nation. It is unacceptable to cut transportation funding at this
time when states are facing record deficits and unbalanced budgets. In
addition to highway funding levels being set too low in the budget
resolution, the reserve fund provisions won't allow us to increase the
highway program unless we raise taxes.
In order to build on the success of TEA 21 and pass a TEA 21
reauthorization bill, we must ensure that our budget resolution can
accommodate higher levels of spending for highways and transit. These
higher levels of spending will enable the successor to TEA 21 to become
law.
Increasing funds into the Highway Trust Fund is the sole
responsibility of the Senate Finance Committee. Senator Grassley and I
have been working very hard to find ways to grow the highway and
transits programs, without raising taxes.
I can't emphasize enough how the single principal feature of any new
highway reauthorization bill has to be its increased funding for the
program, something that will help Montana and help our country. The
blueprint that the budget resolution sets for our fiscal year 2004
budget fails when it comes to transportation funding.
I am also troubled by provisions that were included in Title III of
the budget resolution. Similar to the deceptive procedures that are
being used to rush this budget to a final vote, Title III includes
misleading findings in order to justify possible future cuts to
programs that are essential for working Americans. Title III includes
findings on waste, fraud, and abuse in Federal programs and
instructions for the tax-writing committees to examine these programs
for savings.
Many of the programs included in Title III involve aid to low income
Americans. Included in this group are millions of veterans and members
of our current armed forces. Title III includes findings addressing the
earned income tax credit (EITC). EITC works to reduce the tax burden on
low income Americans, while giving a powerful incentive to work. I am
concerned by a section of Title III that would crack down on erroneous
payments of the earned income tax credit, stating that the OMB has
found that $8 billion a year is paid erroneously for EITC claimants.
I have no tolerance for people who commit fraud and steal benefits
paid for with the tax dollars of hard working Americans. However, I
believe the OMB findings are largely due to errors, not fraud. And I
believe that the complexity of the tax credit and complex living
situations are responsible for the high error rate. Publication 596,
the instructions and forms for the EITC, are 54 pages long. The number
of pages explaining the EITC is longer than those describing the
alternative minimum tax. Many of the claims paid ``erroneously''--
according to the study on 1999 tax returns--are not paid fraudulently.
Often a payment made in ``error'' is simply made to a mother living in
the same house as her grandmother--who should have claimed the credit--
and is consequently marked as paid in ``error.''
Senator Nickles argued earlier today that we have never addressed
these issues before. With all due respect for my good friend from
Oklahoma, we have worked in a very bipartisan way over the last several
years to address the issue of EITC noncompliance. In 1997, we passed a
provision allowing the IRS to access the Federal Case Registry to
determine if a child is qualifying. This registry is still a work in
progress. We also established kid-link, which as of today, only affects
children aged four and up.
In 2001, Senator Grassley and I worked together to include
significant provisions in the bipartisan tax cut that were aimed at
reducing error. These changes include the AGI tiebreaker provision and
giving the IRS math error authority to prevent deadbeat dads from
claiming the EITC.
It should be noted that almost none of these changes were in place
when the study Senator Nickles refers to was done on 1999 returns.
President Reagan hailed the expansion of the EITC in 1986 as ``the
best anti-poverty, the best pro-family, the best job creation measure
to come out of Congress.'' It has been estimated that nearly 4.8
million people, including 2.6 million children, are lifted out of
poverty every year because of the earned income tax credit.
In 1999, then Presidential candidate, Governor Bush, told reporters
``I don't think they ought to balance their budget on the backs of the
poor.'' Mr. President, I hope we take these words to heart when we
consider this budget.
The PRESIDING OFFICER (Mr. Alexander). The Senator from North Dakota.
Mr. CONRAD. Mr. President, I salute the Senator from Montana, the
ranking member of the Finance Committee, the former chairman of the
Finance Committee, for, with great specificity, pointing out the
extraordinary danger of what is being proposed here.
In order to accomplish a short-term goal, we are endangering the
ability of this body to responsibly manage the budget of this Nation. I
believe this is a dark day for the Senate. I believe we will live to
regret the day this was adopted.
It is a sham. It will create enormous problems in the future. Whoever
is in the minority--whoever is in the minority--is going to face a
dramatic diminution of the power and the ability to influence outcomes.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, I take issue with our colleagues. I
regret the decision they made. But that is not the way this resolution
reads. It may have been the way we were looking at having it a couple
days ago, but because of some changes that were made, this resolution
reconciles both committees to $550 billion, both Houses to $550
billion.
It also has additional language that says the Senate will be limited
to $350 billion, both out of committee and on the floor. The chairman
of the Finance Committee said he would not report, he would not sign a
conference report that was greater than $350 billion. You can take the
word of the chairman of the Finance Committee. If he says it is not
going to be more than $350 billion, it is not going to be more than
$350 billion.
But to say we are starting something different, if the resolution was
drafted correctly and it said $550 billion for both Houses, it did have
limitations on the Senate. We have the right to put limitations. We put
instructions to various bodies, either the House and/or the Senate, and
various committees. That is what a Senate resolution does.
I just want to make sure people understand both the commitment our
colleague from Iowa made and also that the resolution--and it was not
done haphazardly. It was not done with malice or trying to distort the
budget process. We were trying to pass a budget in both the House and
the Senate. That is what we are going to do. We are going to have a
budget.
We did not have a budget last year. We are going to have a budget
this

[[Page S5299]]

year. We are going to have a budget that will have caps on
discretionary spending and points of order against entitlements. It
will be able to keep people from offering entitlements on any little
bill that comes down that costs billions of dollars and acting as if it
did not cost anything. We are going to have budget enforcement. We are
going to have fiscal discipline. We are going to have a reconciliation
package that will be reported out of the Senate Finance Committee on
the floor of the Senate, and I believe out of the conference report, at
$350 billion.

I will also say, I heard my colleagues say: Well, there is really
$1.2 trillion. Mr. President, $600 billion and some of that is for the
last 3 years of the reconciliation period--the years 2011, 2012, and
2013. That will be to extend present law. If we do not extend present
law, you are going to have people who are paying 10 percent, who will
be paying 15 percent. You are going to have people who are paying 25
percent who will have to go back up to 28 percent. You will have an
increase or reinstatement of the marriage penalty. You will have people
who were receiving a $1,000 tax credit per child who will only get a
$500 tax credit per child.
I just mention these. Everybody keeps talking about these fabulous
tax cuts for the wealthy. The highest income tax bracket has been
reduced a great big 1 percent. It has gone from 39.6 percent to 38.6
percent. Hopefully, eventually it will be at 35 percent. How high is 35
percent? I might remind my colleagues, in 1990, the maximum rate was 31
percent. So even after all of these enormous personal income tax cuts
proposed by President Bush, the rate is going to be 35 percent, which
is still about 13 percent--or maybe higher than that--well, the old
rate was 31 percent. So you are still about 15 percent higher than it
was under President Clinton.
I just mention, with all these rate reductions--I have been in the
Senate not nearly as long as Senator Byrd, but when I came to the
Senate, the maximum personal income tax rate was 70 percent. In my
first 8 years in the Senate, it was reduced to 28 percent--a pretty
significant reduction.
Incidentally, Federal revenues in that 10-year period of time,
between 1980 and 1990, doubled. So even though we reduced personal
income tax rates dramatically, total revenues to the Federal Government
rose dramatically--doubled--in that timeframe. So it can happen.
We reduced capital gains rates in 1997 from 28 percent to 20 percent,
and revenues rose, and rose dramatically, because we cut tax rates.
President Bush is now proposing additional tax cuts to stimulate the
economy. The chairman of the Finance Committee said the reconciliation
package would be $350 billion. Colleagues on the other side offered tax
bills and spending bills--mostly spending--that was $140 billion. I
guess that was OK but this is not OK.
We are looking at an economy that is $11 trillion per year. We are
looking at total revenues to the Federal Government over this same
period of time of $28 trillion. We are trying to move the economy by
having a slight reduction of $350 billion. The House would say $550
billion. That is hard to do. Some of us think it should be more, but we
also know we have to count votes. We also know we have to pass a
budget. That is our objective, to pass a budget and to get the biggest
growth package we can. That has been my objective for a long time. I
think it would be very foolhardy to say: Well, we can only get half a
growth package; therefore, we will not have a budget. I think that
would be a mistake.
We need to have a budget. We need to have a growth package.
I just tell my colleagues as well that there are still opportunities
to do additional tax cuts outside of reconciliation. I encourage that.
I was very close to recommending we not have reconciliation and just do
a tax cut, period, the old-fashioned way, without the expedited
procedure, Senator Byrd, because I believe we can pass one. I think we
should pass one. It would be amendable and debatable. We could do it,
and we would help the economy. I hope we will, in addition to what we
do on reconciliation. I don't think you can stimulate the economy as
big as this economy is. I don't think you can do enough with $350
billion. I agree with our President. It may well be we will have to do
some inside of reconciliation, and we will have to do some outside of
reconciliation. Fine. I would imagine the House can pass a tax bill,
and I hope and look forward to taking it up in the Senate. Yes, there
will be unlimited debate and unlimited amendments. Fine. Let's take it
up. Let's vote. Let's find out, do we really want to grow the economy.

I hope our colleague, the ranking member of the Finance Committee,
will work with the chairman to make that happen.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I say to my colleague, he may get a budget
resolution, but there is no fiscal discipline here. Let's not mislead
anybody. This is a prescription for record budget deficits, for red ink
as far as the eye can see, for the explosion of deficits and debt. This
may be a budget resolution, but it is not a prescription for fiscal
discipline.
People can make all the deals they want. We are going to vote on a
budget resolution. This budget resolution authorizes $1.3 trillion in
tax cuts. That is what is provided for here. And they can do this
fandango dance that they instruct on one hand the Finance Committee to
do $550 billion of tax cuts, then turn around and make a supermajority
point of order against any actual product of that committee over $350
billion, and the chairman of the committee can come out and commit not
to bring back from conference committee anything more than 350. I have
respect for the chairman of the committee. When he gives his word, I
believe it. I commend him for it. But let's not be under any illusion
that that restricts what is happening to $350 billion of tax cuts. It
does not.
What is in this budget we are going to vote on is $1.3 trillion of
tax cuts when we already have record budget deficits, and it also
increases spending by $1.1 trillion. Guess what? You are going to have
deficits as far as the eye can see. And they are not small deficits;
they are huge deficits. And they are going to mushroom when the baby
boom generation retires.
Is the Senator from West Virginia seeking time?
Mr. BYRD. Yes.
Mr. CONRAD. How much time would the Senator like?
Mr. BYRD. Twenty minutes.
Mr. CONRAD. I am happy to yield 20 minutes to the Senator from West
Virginia, ranking member of the Appropriations Committee, and also an
extraordinarily valuable member of the Budget Committee.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. BYRD. Mr. President, I thank the distinguished Senator from North
Dakota, the former chairman of the Budget Committee in the Senate on
which I serve. I thank him for the time. I may not use the 20 minutes.
I will yield back to him whatever I do not use.
I also thank the distinguished Democratic whip for his courtesies and
his characteristic accommodating mood.
With the final passage of the fiscal year 2004 budget resolution, I
expect that many in Congress will congratulate themselves for a job
well done. I expect a whole flurry of press releases to emanate from
Washington about who is or is not a friend of the taxpayer, and who is
or is not a friend of the President.
Those characterizations underscore just how ridiculous this budget
debate has become.
The economy is floundering. Economists are warning that it could
begin to contract in the months ahead, raising the risk of a disastrous
double-dip recession. The airline, manufacturing, and tourism sectors
are already in outright recession.
More than 2 million jobs have been lost nationwide since January
2001, and 3.5 million workers are drawing unemployment benefits.
During that same time frame, the Dow Jones Industrial Average--a
symbol of the retirement holdings of millions of Americans--has
declined by a disastrous 23 percent.
Budget deficit projections are soaring, with some private-sector
projections for the current fiscal year topping $400 billion. Yes, $400
billion. That is $400 for every minute since Jesus Christ was born.

[[Page S5300]]

The trade deficit remains disturbingly high, with the economy losing
tens of billions of dollars every month in growth to other nations. We
often hear the other distinguished Senator from North Dakota speaking
on this subject, Mr. Dorgan, about the trade deficit. His pleas fall on
deaf ears.
The dreaded twin deficits plaguing the U.S. economy have raised
alarms around the globe, with the world's economic leaders pleading
with this Administration to reverse its policies and trim its deficits.
Now the Senate is on the verge of passing a budget to authorize over
$1 trillion in new tax cuts while we are in a war. It would be funny if
it were not so serious; over $1 trillion in new tax cuts. How long
would it take you to count to a trillion dollars at the rate of $1 per
second--1, 2, 3, 4, 5, at the rate of $1 per second--how long would it
take you to count to $1 trillion? Anybody want to guess? Thirty-two
thousand years. So here we are on the verge of passing this budget to
authorize over $1 trillion in new tax cuts before the American people
can even begin to come to grips with just how badly our fiscal position
has deteriorated. This budget deliberately obscures from the American
public the mounting levels of deficits and debt we are accumulating.
Have we no shame? This budget resolution is a sham. The spending and
deficit numbers it contains are phony. I doubt there is a Member of
this body who believes the assumptions that are included in this
budget.
We haven't even figured out yet how we are going to pay for the war.
Ask Secretary Rumsfeld what the cost of the war is going to be? He will
say that is not knowable; these things are not knowable. Well, we
haven't even figured out yet how we are going to pay for the war, a war
that began 3 weeks ago that this administration has been eyeing since
it took office 2 years ago.
The budget is in deficit. Under this so-called balanced plan, the
national debt will almost double in just 10 years, reaching $12
trillion by 2013. That is trillion dollars, trillion with a capital
``T.'' We are borrowing hundreds of billions of dollars and exhausting
the Social Security surpluses just to finance the current operations of
Government.
I pity those three little great-granddaughters I have, and other
Senators should weep alike. If you don't have granddaughters or great-
granddaughters now, if the Lord blesses you, you will have them.
The Congress will soon pass a roughly $80 billion supplemental, but
those funds are just a downpayment on the war--just a downpayment, a
small one at that--on the war, and post-war reconstruction there is
likely to cost hundreds of billions of dollars.
This budget resolution includes only $75 billion for the war in Iraq
and pretends that not budgeting for this effort will not have long-term
consequences for our troops and humanitarian relief efforts.
The economy is faltering, the budget is deteriorating, and all this
administration says is tax cuts will save us. Well, I have been in
Congress for over 50 years. I have been in politics almost 60 years.
The easiest votes that I ever had to cast were votes to cut taxes. The
administration says tax cuts will save us. They append their hopes to
ideological rhetoric. Meanwhile, the poor, beleaguered, hard-pressed,
downtrodden American taxpayer gets stuck with bigger and bigger debt
and more and more interest costs.
The Congress has struggled for weeks about whether to endorse the
President's tax cut proposal. For a while, there appeared to be a
glimmer of hope on the horizon. A number of Senators, despite immense
pressures from the White House, despite immense pressures from their
party leadership, voted their conscience. Tax cuts were trimmed so
funds could be set aside to pay for the war, pay for the deficit
reduction, and pay for the other priority needs of the Nation.
What's more, the Senate sought to create parity between emergency
designations for homeland security and defense spending. That was my
amendment.
This budget resolution effectively erases those decisions--wipes them
out--and replaces them with a lot of nonsense that has already been
rejected by this Senate.
We haven't the funds to pay for a war, and the administration knows
that. They didn't even budget one thin dime in the budget for the war.
We haven't the funds to pay for a war, let alone a massive new tax cut.
Our only option is to go deeper and deeper into debt. How deep we are
going to go is anybody's guess, but one thing is sure: Mr. President,
your children, my children, my grandchildren, my great grandchildren,
your grandchildren, your great grandchildren, and theirs--those people
looking at the Senate Chamber today through those electronic eyes--your
grandchildren, their children, and their children's children will still
be paying the tab many years hence.
We hear the cry for stimulus through tax cuts. I say bunk. Economic
stimulus is a code word for covering your political backside--if you
know what the code word ``backside'' is for. Economic stimulus is the
code word for covering your political backside. The economy of this
Nation has been mismanaged by those who put protecting their political
base ahead of enacting sound economic policy. If all we had to do was
to pass massive tax cuts every time the economy began to stumble, if it
were just that simple, we would have done away with recessions in the
last century.
President Ronald Reagan had the common sense to recognize the
consequences of long-term deficits and the courage to repeal portions
of his own 1981 tax cut. President George Herbert Walker Bush likewise
recognized the dangers of long-term deficits and signed legislation to
increase taxes in 1990. But this administration refuses to recognize
how badly its economic policies are failing. This administration can
only stubbornly argue for more of the same--more tax cuts.
It was unwise, unfair tax cuts that helped to push the budget into
deficit in the first place. The much touted stimulus to the economy did
not happen. The only thing these tax cuts will stimulate is campaign
contributions from fat cats.
The budget process is supposed to provide this Congress with a
roadmap that will guide us toward reasonable spending and tax policy.
But under this budget resolution, the war and postwar reconstruction
will not be paid for, deficits and debts will continue to pile up, and
the American taxpayer won't even know that the Nation has veered off
the cliff, off the road, until the economy is on its back--spinning its
wheels deep inside the deficit ditch.

In the New York Times on Wednesday, Sam Nunn, Warren Rudman, Bob
Kerrey, Peter Peterson, Robert Rubin, Paul Volcker--Republicans and
Democrats, moderates and conservatives, former Federal Reserve and
Treasury officials, and former Members of the Senate--all joined
together to warn us not to do exactly what we are about to do. They
urged us not to rely on unrealistic budget assumptions, not to ignore
the deteriorating long-term fiscal outlook, and not to enact these
fiscally irresponsible proposals.
This budget makes promises to the American people that we know we
cannot keep. This budget piles years of interest and debt payments on
the public and then tries to obscure them with the promise of economic
stimulus. I oppose that kind of manipulation. I oppose not being
forthright with the American people. I oppose this budget resolution.
I yield back to the distinguished manager of the bill on this side of
the aisle whatever time I did not use.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I thank the very distinguished senior
Senator from West Virginia. As I indicated, he is a very valuable
member of the Budget Committee and the ranking member of the
Appropriations Committee. He has said very clearly what this budget
before us represents: a plunge off the cliff into unending deficits and
debt--at the worst possible time.
Here we are at war, the cost of which we cannot know, right on the
brink of the retirement of the baby boom generation. We are already in
record budget deficits. The Senator said the budget deficit, as some
private forecasters indicate, will be over $400 billion this year. That
doesn't count the $160 billion they are going to take out of the Social
Security trust fund.
On a true operating basis, we are going to have a deficit this year
of more than $600 billion. Is anybody listening? And it doesn't end
this year.

[[Page S5301]]

We don't see the deficit on an operating basis, if this budget is
adopted, ever getting below $300 billion to $400 billion a year. This
is the sweet spot--the time the trust funds are throwing off big cash
surpluses. When the baby boomers retire, we will go into cash deficits.
Then the cost of the President's tax cuts truly explode, driving us off
the cliff into deficits, and deficits that are totally unsustainable.
I note the Senator from New Jersey is seeking time. He is also an
extraordinarily valuable member of the Senate Budget Committee. He is
somebody whose expertise in financial matters has been demonstrated in
the private sector and public sector. Very few have been as successful
as he has been in the private sector, and he was successful in
understanding how the economy works. How much time does the Senator
seek?
Mr. CORZINE. I would like 10 minutes. I might go a few minutes beyond
that.
Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from
New Jersey.
Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. Fifty-two minutes.
Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from
New Jersey and any additional time he requires.
Mr. CORZINE. I appreciate it very much.
Mr. BYRD. Mr. President, before the distinguished Senator yields to
the very distinguished Senator from New Jersey, will he allow me to
thank him, the Senator from North Dakota, for the leadership he
continues to provide to the Senate in these budget matters. I thank him
for his kind words. Future generations will not rise up to call us
blessed.
Mr. CONRAD. I thank the Senator. I yield now to the Senator from New
Jersey.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. CORZINE. Mr. President, I appreciate the time from the Senator
from North Dakota. I say to both my colleagues, they are laying out for
the American people the nature of a budget resolution that really does
undermine our future. Before the Senator from West Virginia leaves, I
heard one of the most direct analogies about what we are doing dollar
for dollar and that it would take 32,000 years to count the deficit if
we went to a $1 trillion deficit. We are actually creating a $1.6
trillion deficit, which I think is 50,000 years. It is very hard for
any of us to understand the dimensions of the fiscal irresponsibility
we are taking on here.
I compliment the Senator in trying to put this debate in terms which
people can picture in reality.
Mr. BYRD. Mr. President, I thank the able Senator.
Mr. CORZINE. Mr. President, I add my strong opposition to this
conference report on the budget resolution before us today from a whole
host of perspectives. I am certainly no expert on procedural rules, but
I have heard a description of an approach to the debates we have had
about the budget. It is hard to accept if this is the process by which
we want to bring discipline to our budgetary process.
The area I do understand clearly is fiscal matters, and this budget
resolution, in my view, is fiscally irresponsible to the extreme. Maybe
more important than the accounting issue is it risks enormous harm to
our economy in the short term and in the long term. It poses a clear
danger to the future of Social Security and Medicare, and it threatens
our ability to provide for critical priorities, such as homeland
defense and education for our children.
This budget calls for a tax cut of $1.3 trillion over the next 10
years. When we add in the extra interest costs--that is using the
assumptions we use now of low interest rates--which are required to pay
for that cut, the real cut is $1.6 trillion. It raises the obvious
question: Where is the money coming from? It is a question one has to
ask when doing budgets: Do we have $1.6 trillion to fund these cuts
without raiding the Social Security trust fund or undercutting
consensus-driven priorities for the American people?

A few years ago, we had the resources and the ability to evaluate
whether we wanted to have tax cuts. We had a $5.6 trillion projected
surplus. That surplus was built on sound fiscal policies, ones that
accompanied an extremely strong economy for many years. It is hard to
understand why we needed to change policies since the economy was doing
very well and it had probably the greatest run in the 20th century. But
we felt there was a need to tinker with this $5.6 trillion surplus.
Guess what. It has disappeared, and we have added $1.6 trillion--that
50,000 years the Senator from West Virginia talked about if you count
$1 a minute. We do not have the extra dimes, nickles, and dollars--a
blank checkbook--to fund these tax cuts or increase any of the spending
we might want for homeland security, national defense, making sure we
invest in our future so that when our men and women come home from the
war, they will have an economy that works for their children and their
future.
By the way, we are looking at those deficits before these tax cuts,
and this proposal in the budget resolution undermines that baseline. So
the huge tax cuts proposed in this resolution are going to be relying
on payroll taxes that are supposed to be dedicated to Social Security
and Medicare. Then they will be financed by putting the remainder on
our national credit card.
Who is going to get those credit card charges? It is hundreds of
billions of dollars that come with the additional interest we will be
paying in the years ahead. As we have heard, it is not this generation,
it is the next generation--our children and our children's children. We
are laying the burden right out on their shoulders.
I find it completely irresponsible. You certainly would not do that
in your own life. That would border on immorality at a family level.
This generation, or at least the most fortunate members of this
generation, in my view, have no right to transfer the benefits of
America for which we all worked so hard and so many have fought for and
given their lives for at the expense of future generations.
I do not get it. Just this morning I was at a funeral for a heroic
young man in the State of New Jersey who lost his life in Iraq. He made
the ultimate sacrifice so we would have a positive future and to
protect America. We are doing just the opposite in economic security
with respect to this budget.
Beyond the raw, in my view, inappropriateness of this
intergenerational transfer of wealth, it is also terrible economic
policy. That is why we have had--one of the few times in history--10
Nobel Prize economists--hardly 10 economists can agree on anything--and
500 others signing up to say this does not provide short-term stimulus
and really does undermine our long-term credibility, our long-term
fiscal health.
It is very simple what it is going to do. It actually creates
antigrowth policies in the sense we are going to create deficits, and
as the economy takes off, interest rates will rise and there will be
this crowding out--which has gone on off and on when we have run these
big budget deficits over time--and undermining of private sector
initiatives, and that will depress future economic growth. There are
many models that verify this and many people making those arguments. We
heard that in the group the Senator from West Virginia talked about in
the article on Wednesday--a Republican, a Democrat, conservative,
liberal. This is not a policy that is in the mainstream of economic
thought, of business thought about how we are going to grow the economy
over time.
Unfortunately, these negative effects of heavy fiscal deficits are
going to last for decades. We have this baby boomer situation where we
are going from 40 million 65 and older to 80 million, give or take a
couple million on both sides of those numbers, and they are going to
raise the cost of Social Security and Medicare in future years.
If we are going to maintain those programs, we have an incredible car
crash coming with regard to our fiscal conditions, even before these
tax cuts.
It is not as if we do not have a need to do something about the
economy now. I could go through the employment situation. We have lost
460-some-odd thousand jobs in the last 2 months. I check these weekly
unemployment numbers, and they are startling. We have people out of
work, working part time, dropping out of the labor force. It is not a
pretty picture. We need stimulus now. We are having serious shortfalls
in the ability for the economy to

[[Page S5302]]

produce those jobs, and I do not see anyone saying that in the near
term this package of proposed tax cuts is going to have much, if any,
impact on creating jobs.
It might be talked about in some kind of long-term context. At least
there is a legitimate debate about whether that works. I actually think
the mainstream comes out and says that does not even work in the long
run, but there can be an argument about it. In the short run, it is
almost universal it has little, if any, impact.
We have lost 460,000 jobs in this economy in the last 2 months.
President Bush could very well end up being the first President in 50
years to preside over a decline in the total number of private sector
jobs in the economy. I do not see this in the self-interest of the
President and the administration with regard to good economic stimulus
programs.
There are plenty of problems we can talk about. Business investment
has declined in all but one quarter in the period of time we have been
here. The stock market has obviously plummeted. We are now using only
about 75 percent of our Nation's productive capacity. We can go on and
on. There are just a series of problems.
So we have a continuing sense of lack of direction about dealing with
the economic circumstance we have, and just at a time when what we are
doing is pushing more of the same policies that we have been following
for the last 2 \1/2\ years. At least in the world I come from, when
something is not working, you admit it, you change it, you move on; you
do something else.
All we are doing is changing the level of the red ink we have already
put on the paper, and we are going to have greater red ink. It is going
to hurt this country's economic well-being in the years ahead.
Like my colleagues, I hope we will stand back, evaluate this budget
resolution, think about that $1.3 trillion that is going to put us
deeper in debt--$1.6 billion if we count the interest--and say no to
this budget resolution because it undermines the health of the American
economy, it does not improve it.
I think we are going to be looked at in the history books as a
Congress that has really put us into the tipping point of fiscal red
ink for as far as the eye can see, for generations to come, and I think
it is just wrong that we are funding it out of Social Security, funding
it out of payroll taxes. It is an intergenerational transfer, to future
generations, of the obligations. I think historians will say we are not
doing what it is our responsibility to do, which is to bring fiscal
sanity and responsibility to the American budget.
This is a system that depends on the rising tide lifting all boats.
This budget, and particularly the tax cuts that are implied in it, do
anything but lift all boats. They are targeted at a very narrow group.
I hope my colleagues will stand up and say no to this budget and do the
right thing. I really do hope we can reconsider this and move forward.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. NICKLES. I yield such time as he may consume to the Senator from
Colorado.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. ALLARD. Mr. President, I thank the chairman of the Budget
Committee for yielding me some time. I also want to thank him and let
him know how much I appreciate the yeoman work he is doing in regard to
this budget.
I am a member of the Budget Committee. I had an opportunity to serve
with him during the deliberations in the committee, and at the very
start the chairman of the Budget Committee, Senator Nickles, said: We
are going to work in a bipartisan way. We are going to work with the
President, we are going to work with the House of Representatives, we
are going to work with the Members of the Senate. But his most
important priority is to get a budget passed.
I think he had it right because the most important thing we can do in
this Senate is to pass a budget. Now, it may not be a perfect budget
that I would envision or the chairman would envision or somebody in the
House or the President would envision, but we need to have a blueprint
that will lay out the plan for this Senate and how we are going to
handle those valuable tax dollars that get sent to Washington, DC.
People refer to the sham in this budget. The sham is when we do not
pass the budget. The big failure in the last Congress was that we did
not pass a budget. There was an attempt to try to pass appropriations
bills and spending bills through the process, but they did not have a
blueprint to follow. We did not have a budget. Well, we are working
hard to get a budget passed now so we will have a blueprint.
I was struck by the comments that Senator Grassley, the chairman of
the Finance Committee, made when he said, I do not recall an amendment
that was ever put forward by those who oppose the President's tax cut
plan that suggested we ought to cut spending.
There were some Republican amendments, particularly the traditional
one offered by Senator McCain, where he goes after porkbarrel spending
that was actually working to cut spending, but I do not recall any
others.
Then I got to thinking about when we started this process this year,
we came back in, we got sworn in, and the first two weeks we are
working on an appropriations bill in an omnibus bill. There were 11
appropriations bills we did not get passed in the last session because
we did not have a budget, we did not have a blueprint.
While that omnibus bill was going through, there were some $50
billion in amendments that were offered by that group of individuals
who are opposing the President's plan. So we move on further and then
we bring up the budget resolution itself, and if we look at the number
of amendments from those who oppose the budget and oppose the
President's plan, there was $1.6 trillion at the desk to be acted on.
It ended up being about $950 billion, all spending increases, all
increasing the deficit, all increasing the total debt. I am speaking of
the 40 amendments we ended up acting on, on the last day when we had
our voting marathon.
Then we had the supplemental bill that came up and now is in the
conference committee this week that we have been working on, and here
we have $12.3 billion in new spending that was put in the supplemental
that was supposed to take care of just emergency spending. Many who are
opposing this budget today, who oppose the President's plan, the
amendments they offered increased spending. They did not cut spending,
but they added to the deficit, and they did not have to comply with the
budget rules because it was an emergency supplemental.
When we have an emergency supplemental, that means that the budget
rules do not apply. So we have Members of this body who cannot wait to
have an opportunity to have an emergency supplemental bill come through
because amendments or legislation that fall under the budget guidelines
that we should pass with every Congress every year, that gives them a
chance to get out from under those rules because they increase
spending.
The only time we hear from many of the individuals who are opposing
this budget, opposing the President's plan, and who speak about how
important it is to eliminate deficit spending is when we are talking
about tax cuts.
I think we need to have tax cuts. I think we need to have something
to stimulate the economy. How are we going to stimulate the economy? I
do not think we do it by increased spending. We started our spending
binge as early as 2002.
If we look back at what has been happening to the gross domestic
product, it has been growing, probably peaked out somewhere around
2001, 2002--our spending binge started about 2000 actually, and all the
agencies that want to increase spending always wanted to talk about how
much they were spending as a percentage of gross domestic product
because gross domestic product measured all the goods and services that
happen in our economy. There has been phenomenal growth. So it made
their budgets look relatively small in relation to the total economy of
this country.
The taxpayers in this country are paying a burden that is among the
highest it has ever been in the history of the country as a percentage
of gross domestic product, especially since World War II. That tells me
we have to do something to stimulate the economy. The only solution is
to cut taxes.

[[Page S5303]]

Increased spending will not do it. Doing nothing is not acceptable. We
need to cut taxes.
I strongly support any effort we have to cut taxes. I don't think our
tax cut package is big enough, considering how big our gross domestic
product is. It really needs to be more to stimulate the economy.
Finally, we need to get this bill passed. The longer we delay getting
it passed, the more it tends to delay our efforts. We need to get our
money to take care of the needs of our men and women on the military.
I was as disappointed as anyone about the increased spending driven
because of September 11, and increased spending as a result of trying
to maintain peace in the world in the Iraq crisis. It is a need we had
to face. As a businessman, I realize sometimes you have to incur debt
to take care of immediate problems in the business. You always had a
plan to pay off the debt. There is a plan in this budget to pay off
this debt. That is not easy to come up with.
The chairman of the Budget Committee worked hard to have a plan laid
out to meet what the President was wanting to see as far as tax cuts to
meet the increased needs, and then to have a plan out there to
eliminate deficit spending within 10 years. I compliment the chairman.
He is doing a great job. I support the budget.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I take issue with my colleague on this
question of spending. This chart demonstrates the long-term
relationship between spending and outlays going back to 1981. This is
the outlay line, the spending of the Federal Government. It was over 23
percent of gross domestic product in 1982 and has been brought down
steadily. When Democrats were in control in 1993, we put in place a 5-
year plan. Look what it did to spending.
I hear the allegation that Democrats are the spenders. Let's look at
the historial record. When Democrats had control in 1993, this is the
trajectory we put spending on--down as a percentage of our gross
domestic product, which economists say is the right way to measure
spending over time because you are taking out the effects of inflation.
We did increase revenues because we faced massive deficits. These
deficits during this period were huge as a percentage of gross domestic
product.
So we cut spending; we raised revenue; we balanced budgets; we turned
deficits into surpluses; we stopped raiding Social Security trust
funds. We kicked off the longest period of economic growth in our
Nation's history. We had the lowest unemployment in 30 years, the
lowest inflation in 30 years, the strongest business investment in
history. That is our record. We are proud of it.
When the talk is about spending, let's look at the comparison. This
chart looks at, from 1981 going forward, the difference in the
Democratic alternative and the Republican budget before the Senate.
Here is the difference. They are at 19 percent of gross domestic
product, and we are at 19.3. We are both dramatically down from the
peak of 23.5 percent in 1982. We have demonstrated spending restraint.
This increase in spending that occurred was totally bipartisan. The
increase in spending that occurred was for defense and homeland
security almost exclusively. We participated in that spending increase
together. We all agreed we ought to increase defense and we ought to
increase homeland security.

I hope my colleagues, when we talk about the record around here, will
reflect on the whole record, and Democrats, despite what we hear all
the time, were disciplined in spending, reduced spending when we were
in a position to control it, reduced it for 5 years in a row as a
percentage of gross domestic product, and balanced the budget.
I give them high marks for getting a budget resolution. But what is
in this budget resolution deserves low marks. It is red ink as far as
the eye can see, with absolutely no concern for balancing budgets,
ever.
Our friend on the other side said this has a plan to pay off the
debt. There is no plan to pay off the debt. If this budget is adopted,
it doubles the debt. He is talking about a plan to pay off the debt;
there is no plan to pay off the debt. This exploded the debt. If they
want to get partisan about fiscal accomplishments here they are: The
deficits of the Reagan administration, the Bush administration, the
Clinton administration, and now this Bush administration. The only time
we have been out of deficit, the only time was when the Democrats were
in charge and we actually not only got out of deficit, we stopped the
raid on the Social Security trust fund. That is a fact.
And the deficits this President proposes are deep and long lasting
and could not be timed in a worst way. Here we are on the eve of the
retirement of the baby boom generation that will absolutely explode the
deficits, and the President's tax cuts will explode in costs at the
same time, putting us into a sea of red ink.
How much time does the Senator from Delaware seek?
Mr. BIDEN. Up to 15 minutes.
Mr. CONRAD. I yield 15 minutes to the Senator from Delaware.
The PRESIDING OFFICER (Mr. Cornyn). The Senator from Delaware.
Mr. BIDEN. Mr. President, the country is truly well served by having
the Senator from North Dakota as ranking member. I don't know anyone
who knows more about facts relating to our budget this year, last year,
or in the last decade than the Senator from North Dakota. I am not
being solicitous.
A good friend of ours from the State that was much closer to North
Dakota than Delaware--from Wyoming, Senator Simpson--used to say in the
Senate repeatedly, in his colloquial way: You know, everyone is
entitled to their own opinion but not entitled to their own facts.
It seems as though some in the Senate think they are entitled to
their own facts.
I will repeat some things that have been said here. They are so
consequential I don't know how they cannot be repeated because they
have not seemed to have broken through the ether, not here necessarily,
but even in the country. To state the obvious, these are very serious
times, just as they were at the dawn of the atomic age when Einstein
observed ``that everything had changed except our way of thinking.'' We
face mortal threats to our Nation from terrorists from rogue nations,
expanding international commitments, a looming and gigantic democratic
transition--a fancy word for saying there is going to be a bulge in the
retirement-age people, myself included, and part of this baby boom
generation--and our thinking must now change, not just about how we
secure our safety in this dangerous new world but how we maintain our
economic security, as well.
And we are here today with yet another budget resolution that calls
for more than $1 trillion in new taxes.
One definition of insanity is trying the same thing over and over
again and expecting a different result. This budget meets that
definition.
Thanks to the people of Delaware, I have been here now for three
decades and I have shared this floor with many of my colleagues--well,
not that many, actually--who are still here today. How many of my
colleagues came to this Chamber back in the 1980s and talked about the
need to balance the Federal budget? It was a fervor at the time.
The President of the United States of America, and many on this
floor, the most ardent supporters of this outrageous budget deficit,
were insisting on--and I remind everybody--a constitutional amendment
to balance the budget. Does everybody remember that? A constitutional
amendment to balance the budget.
When some of us voted for an exception to that amendment for war, our
Republican friends, by and large, overwhelmingly our conservative
Republican friends, voted it down and said that is a loophole we cannot
sustain.
The President, this President of the United States, indicated that.
When we said that when there are exceptional economic circumstances
requiring us to deficit-spend as an exception to the constitutional
amendment, our Republican friends said no, no, we want to enshrine it
in the Constitution of the United States of America. I think the leader
of the Budget Committee was probably for a constitutional amendment--
without exceptions, we tried to put in.
Now what are we doing? Here we are. Back in the 1980s we were told
that

[[Page S5304]]

Government needs to run more like a business and like a family; that
business and families are under the danger of extending beyond their
means and they should stop.
I know it is kind of trite to say it, but I guess we are modeling
this after Enron businesses, instead of what we used to know as
businesses back in the 1980s.
It took some time, but we eventually took that sound advice and we
did balance the budget. As the old political saw goes, ``I have the
scars on my back to prove it.'' It took discipline. It took some hard
choices that made my constituents angry and my most ardent supporters
angry--because we cut their programs.
Here we are again. But this time the Nation is at war--in case
someone on this floor hasn't noticed. We are at war. We face ballooning
deficits, far larger than anyone could have imaged, especially, I might
add, in the wake of our jubilation just 2 years ago about a projected
$5.6 trillion surplus over 10 years.
This year alone, counting the costs of the war, our deficit, if we
pass this budget, will reach, in the unified budget, which means
counting the surplus in Social Security, a $350 billion deficit. If you
take out Social Security like we all promised you we would do, and
don't count the surplus in Social Security, it is a $587 billion
deficit this year.
In the face of this $587 billion deficit, or what everybody likes to
talk about now, the unified budget, which takes the Social Security
surplus and spends it, the $350 billion deficit that this budget
resolution calls for in the face of this more than a third of a
trillion dollar deficit, for 1 year we are adding another $1.3 trillion
tax cut.
In my 30 years in the Senate I can honestly say, from my perspective,
I cannot recall a more reckless or irresponsible proposal to come
before this Senate.
Where are the deficit hawks now? Where are those who were demanding
for decades that we balance the budget; those who said we couldn't
sustain our economy in the face of massive deficits? Where are those
who were telling me we cannot let our children and grandchildren foot
the bill for our excesses? Where are they now? Where have all--not the
flowers--where have all the balanced budgeters gone? What happened to
them? They all died and were reincarnated as kings. All my conservative
Republican friends--where are they? Where have they gone?

Instead of a careful, conservative approach to our finances, instead
of caution and a sense of responsibility in these dangerous times, this
budget throws caution to the wind and simply dumps the bill for our
choices today on our children and our grandchildren.
A lot of people around this place, since I got here--it is a
dangerous habit we tend to--and I hope I don't do it--question one
another's motives, not just their judgment. I am not questioning the
motive of my Republican colleagues here. I believe that,
notwithstanding that the rich benefit the most from this--I don't think
that is their purpose. It is a result of what they do. I think their
purpose is they truly believe somehow, if they go along with this
budget, somehow it will cause the economy to grow so significantly that
everybody is going to be all right. We are going to be able to pay for
everything and balance the budget.
They even went so far--I will do this in a separate speech since I
don't have time--they even went so far as to get someone from the
President's Council of Economic Advisers and place him, hire him with
the Congressional Budget Office to make a case that this could be done.
As I understand it from my Ph.D. economist on my staff, he ran, I
don't know how many--two, three, five, a half dozen econometric models,
a fancy term for seeing how this would work out under dynamic scoring,
and still could not come up with a balanced budget. Even the
Republicans can't, through this new voodoo, come up with a balanced
budget--not this year but long term.
We are now in a position where we ask, when we are fully engaged on
the ground in Iraq in a war that is not truly over and will not be over
until the reconstruction and nationbuilding the President rightly calls
for is accomplished, where are they now? Where are my deficit hawk
friends now when the $75 billion the President has requested is just
the first downpayment on the war?
Let me be clear about the numbers at the outset, before we find
ourselves under the weight of deficits that will begin to crush us,
before we have to have our old ``cut the deficit'' conversation again,
because I promise you it is coming up. We are going to have our ``we
have to cut the deficit'' conversation when reality finally sinks in,
unfortunately probably too late.
In the face of all the new, massive domestic and international
commitments that are staring us in the face, this resolution calls for
a $1.3 trillion tax cut. The additional interest charges we will pay on
the increased national debt as a consequence of the tax cut and the
budget deficit will total over $1.5 trillion. It will bring the amount
up to $1.5 trillion, the cost of the tax cut; over $1.5 trillion in
dollars that will not be available to meet the new commitments we face.
These funds will not be available, to take one example close to home,
to give the Adjutant General of the Delaware National Guard, General
Vavala, the medivac helicopters he needs or the civil support he needs
in case of biological or chemical attacks.
Sadly, there are countless more examples of tax cuts shortchanging
vital programs such as the hundreds of thousands of eligible veterans
still waiting 6 months to enroll in a health care system, not to
mention 400,000 claims by disabled vets that are still backlogged, not
to mention no money for the COPS Program, or underfunding nearly $10
billion in the President's own No Child Left Behind education law,
signed just last year and heralding the President as the President of
Education.
Forget about Social Security. Virtually all of these tax cuts are
borrowed straight from the Social Security system on the very threshold
of the time when that system will need not just the borrowed surpluses,
but even hundreds of billions of dollars more to meet the commitments
to a retiring generation of baby boomers.
Let's be clear now at the outset what we are about to do and the
choices we are about to make. I remember clearly those conversations
with many of my colleagues. You can be sure as I am standing here today
we will be having them again soon.
Mark Twain said a lot of things, but one of the things he said is
very appropriate today, in my view. He once said:

History doesn't repeat itself, but it does rhyme.

Boy, am I hearing a rhyme here today. It does rhyme. It rhymes with
all the nonsense of the supply-siders of the 1980s. It rhymes. It
rhymes: massive tax cuts and deficits as far as the eye can see. They
rhyme.

Mr. President, at its core, a nation's budget reflects its basic
values. More than any speech, more than any campaign promise, our
budget reveals who we are, what we believe in, what we think is
important, what we think is not. It reveals our real values, our real
priorities.
I do not say this as a criticism, but my value system and that of the
Senator from Oklahoma are fundamentally different. My value system and
the value system of my friends who are supporting this massive deficit
are very different. And that is legitimate. I am in no way casting an
aspersion but stating the obvious.
Budgets reflect our values. In these historic times, in my view, our
budget policy should reflect two of our most fundamental American
values. The first is facing up to our responsibility.
I love all my friends, Democrats and Republicans, who talk about that
we have to have more individual responsibility in this Nation. I just
ask the average person listening to this debate: Tell me how
responsible you think we are being individually. It means putting
together a responsible budget that makes hard but necessary choices,
just like they are making in their families right now, as I speak. It
means doing what is right. And by that I am not saying my Republican
friends are doing what is wrong. They mean well, but I think it is
wrong.
The PRESIDING OFFICER. The Senator has used 15 minutes.
Mr. BIDEN. Mr. President, I ask unanimous consent that I be allowed
to proceed for 5 more minutes.

[[Page S5305]]

Mr. CONRAD. Mr. President, I say to my colleague, I do not have that
additional amount of time. I will give him an additional 2 minutes.
Mr. BIDEN. I will take the additional few minutes.
It means doing what is right . . . and not handing the bill for our
actions to our children and grandchildren.
By returning us to the failed policies of massive deficits this
budget does exactly that. It hands it to the generation of young men
and women who are fighting in Iraq.
The second value is fairness--a sense that we're all in this
together.
In a democratic society like ours, under threats like those we face
today, that means having a shared sense that paying our fair share of
the bill is not just a partisan buzz-phrase . . . it is not just window
dressing . . . It is who we are . . . It is what we are about. It is
what this budget should be about, fairness and responsibility.
No one's definition of fairness is a tax cut that gives a taxpayer in
the middle income bracket about $250, while those with incomes over a
million dollars get a cut of over $90,000.
No one's definition of fairness is a tax cut that gives almost half
of all taxpayers a cut of less than $100, while the top one percent of
taxpayers get a cut of over $24,000.
Take a look at the income bracket of the men and women who are
fighting now in Iraq--the young people who will be handed the bill for
the future deficits in this budget. They will be getting less than $100
in tax cuts.
Is there anyone here who will argue that is fair, Mr. President?
In my view, as far as reflecting our values, this budget fails.
It is written as if we faced no new threats to our physical and
economic security and it ignores the--small ``d''--democratic standard
of fairness that we are fighting for.
I remember when the President was running for office . . . when he
was still facing a primary challenge from Steve Forbes and his flat
tax, then Governor Bush proposed cutting taxes. The problem back then,
as he saw it, was that we were piling up budget surpluses and we were
paying off--yes, paying off--the national debt.
So what did he say? He said it would be better to cut taxes, above
every other possible use of those resources.
He did not say we should use those resources to fix Social Security,
for example, or to restore the integrity of Medicare, or beef up and
reorganize the military, or build up homeland defense to meet the new
threats we face, or paying for his own priorities such as a missile
defense system.
At that time, at the end of the second Clinton Administration, the
Federal budget was in surplus. We had actually paid down over 150
billion dollars of the national debt, and we were on schedule to
eliminate the national debt altogether by 2010.
Think about that. In seven years, we were going to completely
eliminate the national debt . . .
If there was any question about what the government could do if it
balanced the budget and ran a surplus--if there was any question why
surpluses are better than deficits--it was answered on the morning of
September 11.
That morning we learned the nature of the new threats we might face .
. . We realized what it would cost to defend the Nation against them .
. . It wasn't long before we saw the pricetag for rebuilding
Afghanistan . . .
And now we are winding down a war in Iraq that the budget doesn't
fully account for . . .
Not to mention the pricetag for nation building which--from the looks
of news reports of massive looting this morning--will be substantial.
In his first year in office the President promised that he could cut
taxes . . . pay off the national debt . . . add new funds for education
. . . launch a missile defense system . . . and--he insisted--take care
of any emergency that might come along.
A lot of us were skeptical. We thought the tax cuts were too big . .
. that the surpluses were overestimated . . . that the future was too
uncertain. But unfortunately it was a vote we lost. He got what he
asked for: a tax cut totaling $1.7 trillion, counting interest, over
the next decade.
We have seen the results of that mistake--the results are right there
in the hundreds of billions of dollars of red ink we are spilling every
year.
Simple common sense tells us we must not make the same mistake again.
In ordinary times, these proposals would be bad tax policy, and bad
budget policy . . . In these times, they are irresponsible, a failure
to confront the challenges we face.
In the face of threats to our security, we are offered weaker Federal
finances, with deficits as far as the eye can see . . .
In the face of a weak economy, we are offered a tax cut program that
is a windfall for a few instead of jobs for the many who need them . .
. In the face of a demographic wave that will overwhelm our Social
Security system, we are told to borrow the system's reserves . . .
Let me conclude by suggesting that at a time when our Nation is
challenged as never before, we are offered a budget policy that was
devised to win a party primary 3 years ago.
Finally, we must be concerned--in these times above all others--about
the question of fairness. When we are putting the lives of our men and
women in uniform on the line, when we face security threats here at
home, in the Middle East, and in Korea, when deficits are once again
imbedded in our budget, we have to pull our Nation together.
It does make a difference how we pay for these goals. It is important
that America believes we are in this war all together. We cannot send
the bill for this to our children and our grandchildren--returning from
this war--by returning to another era of deficits. And they are young
men and women in their teens and early twenties.
We cannot--in these times above all other times--cut taxes for a
small fraction of Americans while we face the unknown costs of
reconstructing Iraq and maintaining our security.
Right now, I think the best thing we can do is forego any tax cuts
that are not paid for and that are not part of a short-term stimulus
package, and forego spending increases, as well, unless they are for
homeland security and national defense because anything else--anything
else we do, in my view--is just wrongheaded.
In terms of the fairness of this, I will conclude by saying, if one's
definition of fairness in a tax cut is to give taxpayers in middle
income about $250 this year--with this tax cut--while those with
incomes over $1 million get $90,000, and those in the top 1 percent--
meaning people making over $317,000 a year--get $24,000 a year, and the
kid coming home--with the average pay being paid for a kid who is
fighting over there in Iraq now--their tax cut will be $100 on average,
give me a break about how this is fair--beyond being wrongheaded and
counterproductive economic policy.
I thank my colleague for the time.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, just for the information of our
colleagues--I appreciate the comments that have been made by many of
our colleagues--I think we are close to wrapping this up. I inform
people it is our expectation we will be voting probably no later than
5:30. So if colleagues are off Capitol Hill, at least they can have
that in mind. The rollcall vote will probably be starting maybe at
5:20, 5:25, 5:30. So I just want to make that notification.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, I thank the chairman and want to echo that
for Members on our side. We are very close now to being able to go to
the final vote.
How much time remains on our side, Mr. President?
The PRESIDING OFFICER. Fifteen and a half minutes remains.
Mr. CONRAD. Fifteen and a half minutes.
Could I yield 10 minutes to the Senator from New Jersey?
Mr. LAUTENBERG. I would appreciate that. And I will make sure that I
do not run longer than that.
Mr. CONRAD. I appreciate very much the Senator from New Jersey, who
is the former ranking member of the Budget Committee, and, of course,
has a history of extraordinary success in the private sector as well as
tremendous contributions in the public sector.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. LAUTENBERG. Mr. President, I thank my good friend and colleague

[[Page S5306]]

from North Dakota. I think perhaps my tenure as ranking member was the
last time we had a balanced budget. But that is intended to be a joke,
and I hope the Parliamentarian so notes it.
Mr. President, the conference report to the fiscal year 2004 budget
resolution is a curiosity at best. This piece of legislation, if it is
adopted, will likely become as notorious, perhaps, as the Smoot-Hawley
Tariff Act of 1930.
When President Bush assumed office in January of 2001, he inherited a
10-year surplus forecast, according to the nonpartisan Congressional
Budget Office, of $5.6 trillion.
Now, if this budget resolution is adopted, instead of a surplus, we
are going to wind up with close to a $2.0 trillion deficit, according
to CBO.
A Republican President and a Republican Congress are presiding over a
10-year $7.6 trillion reversal of economic fortune. And they are going
to blame it on the recession that began in March of 2001, and they are
going to blame it on 9/11, and they are going to blame it on the war
against terrorism, the war in Afghanistan, and the war in Iraq.
No, no, no. The single biggest contributor--and everybody should
listen carefully and look at the numbers to confirm this--the single
biggest contributor to that deficit is the 2001 tax cut, which the
President wants to make even bigger, even longer.
The administration and its allies in Congress will say that tax cuts
are necessary to ``grow'' the economy. The only things growing in our
economy are the number of people without jobs, the budget deficits,
publicly held debt, and interest payments on that debt.
There is an old saying: When you're in a hole, quit digging. And that
is what we ought to do.
One would think that much would be obvious to the administration and
its Republican friends in Congress. Hundreds of prominent economists--
literally hundreds--including 11 Nobel prize winners, have come out
against these tax cuts.

It sounds like plain, old common sense to me. But the administration
and those who control Congress seem immune to that kind of common
sense--the kind of common sense that ordinary working families and
business leaders from the smallest to the biggest companies use every
day: spend less than what you take in.
I will tell you why the administration and the Republicans in
Congress seem to be immune to common sense: It is the triumph of a
political ideology over good fiscal management. Our Government,
paradoxically, is now in the control of people who hate Government.
The tax cuts are not really meant to stimulate the economy; they are
deliberately intended to reward well-heeled friends and create a budget
crisis that forces us to cut important programs and permits them to
turn the jobs of hard-working, loyal Government employees over to
private sector contractors who claim they can do things at a cheaper
price.
There's a problem with this scheme. People who depend on the programs
will get hurt and on the job front, we just converted a huge baggage
screening operation at airports across the country, with 28,000
employees, to the Federal Government because the private sector was
handling it so poorly.
Republicans have a name for this ``deliberate deficit'' strategy.
They call it ``Starving the beast.'' Don't take my word for it. Listen
to the words of two influential Republicans, economist Milton Friedman
and activist Grover Norquist.
On January 15, the Wall Street Journal ran an op-ed piece written by
Milton Friedman, entitled, ``What Every American Wants.'' Part of what
he wrote reads as follows:

. . . how can we ever cut government down to size? I
believe there is one and only one way: the way parents
control spendthrift children, cutting their allowance. For
government that means cutting taxes.

That's Milton Friedman's interpretation of Congress: spendthrift
children.
He went on to say:

. . . Resulting deficits will be an effective--I would go
so far as to say, the only effective--restraint on the
spending propensities of the executive branch and the
legislature.

He concluded by saying:

. . . a major tax cut will be a step toward the smaller
government that I believe most citizens of the U.S. want.

The last part is a pretty breathtaking statement for someone who has
never been elected to any public office. But more important, the op-ed
piece reveals the utterly cynical strategy of deliberately creating
deficits ``as far as the eye can see'' until the public becomes
sufficiently alarmed to demand some responsibility out of its elected
officials.
I also mentioned Grover Norquist who heads Americans for Tax Reform.
On May 21, 2001, Mr. Norquist appeared on National Public Radio's
``Morning Edition'' and said:

I simply want to reduce it [government] to the size where I
can drag it into the bathroom and drown it in the bathtub.

Interestingly, Mr. Norquist, who is another person who has never been
elected to any public office, denied making such a statement in a more
recent interview with Bill Moyers. But, as the saying goes: You can
look it up. I have the transcript.

I simply want to reduce it [government] to the size where I
can drag it into the bathroom and drown it in the bathtub.

So, according to Messrs. Friedman and Norquist, elected officials are
nothing more than spendthrift children and government--Social Security
and Medicare, environmental protection and Pell Grants, national parks
and the Coast Guard, veterans' benefits and disaster relief, the SEC
and the FBI and all other hard-working, loyal Federal employees--are
all things that should be drowned in the bathtub.
If this budget resolution is adopted, unified deficits will reach
record levels in 2003 and 2004 of $347 billion and $350 billion,
respectively, and will total more than $1.7 trillion through 2013.
Excluding Social Security, deficits will reach $558 billion in 2004--
that is the coming year--and will exceed $400 billion in every year
through 2008, and will total more than $4.5 trillion by 2013.
When the government runs deficits long enough, then Congress has to
raise the debt ceiling. That is what happens. If we spend too much or,
in this instance, cut revenues too deeply, the government has to go
ahead and borrow money to meet its needs.
The majority doesn't have the courage and probably doesn't have the
votes to bring up free-standing legislation to increase the debt limit.
So they resorted to a ploy: Under House Rule XXVII, adoption of the
conference report before us will result in the House being ``deemed''
to have passed a joint resolution increasing the statutory limit on the
public debt.
This conference report states that the conferees anticipate that the
debt ceiling will be raised from $6.4 trillion to nearly $7 trillion,
an increase of $984 billion. That is the single biggest increase in the
debt limit in history, surpassing the $915 billion increase the first
Bush administration needed in 1990.

The debt ceiling was under $6 trillion when this administration took
over, and we were actually moving away from it because we were running
budget surpluses. If we adopt the administration's budget blueprint
today, the debt ceiling will have to be doubled to $12 trillion by
2013. That is an extra $6 trillion in debt.
The amounts are staggering. It is hard to put them into a format that
everybody can understand, but I'll try: this extra $6 trillion amounts
to $21,429 worth of debt for every man, woman, and child in America.
This is what is happening while we are at war and with the baby boom
generation on the verge of retirement. It would be impossible to mangle
things so badly by accident. It can only be done by design.
The triumph of ideology may bring joy to those currently in power;
the ideologues in control may think that their ``starve the beast''
strategy will make our country stronger. But the problem with
ideologues is that they shape reality to fit their ideology. It should
be the other way around.
To paraphrase Ronald Reagan, ``the trouble with our conservative
friends isn't that they are ignorant, it's just that they know so much
that isn't so.''
Destroying the Government will not stimulate the economy. It will
cripple it. Starving the beast will not strengthen our Nation. It will
weaken it, immeasurably and perhaps permanently.
I urge my colleagues to vote against this budget resolution
conference report that is as cynical as it is reckless.

[[Page S5307]]

I yield the floor.

Mental Health Parity Assumption

Mr. DOMENICI. Mr. President, I compliment my friend from Oklahoma and
the Chairman of the Senate Budget Committee on a job well done. He has
skillfully navigated a difficult course to produce the budget
conference report before us today. Congratulations.
I would like to raise the issue of mental health parity as the Senate
debates the FY 2004 Budget Resolution Conference Report.
It is my understanding the conference report before us assumes the
revenue impact of enacting a mental health parity law by using the
Congressional Budget Office score for S. 543 from the 107th Congress of
$5.4 billion over 10 years. However, I want to make sure that this is
indeed the case because the assumption I just mentioned is not
specifically referenced in the conference report. Rather, the overall
revenue number is such that it assumes Congress will pass mental health
parity legislation.
Mr. NICKLES. I understand the concern of the distinguished senior
Senator from New Mexico about mental health parity, and I would concur
with my colleague's assessment. The conference report does assume the
revenue impact of enacting mental health parity legislation.
Mr. DOMENICI. I thank the distinguished Chairman for his
consideration and explanation of this important matter.
Mrs. MURRAY. Mr. President, I rise today to express serious concerns
about the budget resolution conference report. This is a 10 year
blueprint for disaster that ignores the real priorities of working
families. It eliminates all of the gains we made in the Senate that
addresses the real fiscal challenges we face, while setting the Nation
on a course of fiscal irresponsibility. This budget's contents and
consequences will hurt the health of our nation.
The budget agreement before us, which I want to point out was filed
late last night, takes us back to the failed economic policies of the
1980's that resulted in a tripling of the national debt. It also builds
on the failed economic record of this administration.
Since the President took office in 2001, we have lost 2.6 million
private sector jobs. Many of these jobs were in the high tech and
manufacturing industries so important to Washington State, which is one
of the reasons our State has one of the highest unemployment rates in
the Nation. The number of people unemployed for 6 months or longer has
tripled. Real business investment has fallen. And finally, the $5.6
trillion 10 year surplus that this administration inherited has been
converted to a $2 trillion deficit in a little over 2 years.
America's finances are deep in a hole, but rather than reaching for a
ladder, this budget proposes a bigger shovel. Rather than trying to
reverse the downward spiral, this budget drags us deeper and deeper
into debt.
The agreement is also deceptive and uses parliamentary tricks to
achieve a $550 million tax cut for the few. It also calls for hundreds
of billions more in tax cuts to make permanent the failed 2001 tax cut.
After 2 years, we are still waiting for the ``economic stimulus'' that
was promised from that tax cut.
Despite the claims of my Republican colleagues, these new tax cuts
will provide little relief to working families and will have little, if
any, economic stimulus. We need a real economic stimulus plan now. We
need to invest in the American workers and businesses now, not 5 years
from now. The only way to get this economy going is to invest in
economic development and growth, not in ineffective tax cuts targeted
to the most affluent.
This budget agreement not only fails our families, it will leave
millions of children behind. When the President signed the No Child
Left Behind Act, he made two promises: First, schools would be held
accountable for their progress. And, second, schools would be given the
resources to meet these new requirements.
These two always went together--otherwise schools can't make real
progress. But the Republican leadership in Congress and the President
have broken their promise to our children by not providing the
necessary resources.
I was proud that the Senate accepted my budget amendment to increase
funding for No Child Left Behind by $2 billion. But the House conferees
have stripped out even that modest increase in education.
Congress still has an obligation to fund the new requirements that we
imposed on local schools. This commitment means we must provide $9
billion to fully fund the No Child Left Behind Act. Unfortunately, this
budget agreement will reduce funding for education over the 10 years.
It holds domestic spending on education to roughly half the rate of
inflation over 10 years. That means that each year our commitment to
education will be less than the rate of inflation. This is the wrong
direction. In order to strengthen our economy, we need to invest in
tomorrow's workforce by investing in education.
This budget agreement also falls short in supporting our
transportation infrastructure. We know that transportation problems
plague our biggest cities and isolate our rural communities. In my home
State of Washington, our inadequate transportation network is hindering
our economy, our productivity and our quality of life.
When we make sound investments in our transportation infrastructure,
we create good jobs today, and we build the foundation for our future
economic growth. Making our transportation systems more efficient, more
productive and safer, we will pay real dividends for our economy and
our communities.
This agreement provides little hope to seniors for a comprehensive,
affordable Medicare prescription drug benefit. This agreement will
allow for the block granting of Medicaid and the elimination of the
entitlement. It offers no long term increase in the Federal match for
Medicaid. In my home State of Washington, Medicaid could be faced with
a $2 billion shortfall. This will mean cuts in programs for the
uninsured and massive reductions in nursing home reimbursement. I fear
this could lead to hospitals and nursing homes being closed, and that
more doctors could refuse to see new Medicare and Medicaid patients.
There are many of us in the Senate who have worked hard to strengthen
public health and increase our investment in biomedical research. This
is a commitment in prevention and long term savings in health care. We
have seen the results of doubling NIH and the impact this is having on
conquering diseases such as cancer, MS, Parkinson's and diabetes. Yet
this agreement leaves little hope that we can maintain this investment.
I would have to echo the comments of the Senator Conrad. This budget
is reckless, extreme and backwards. Perhaps the saddest conclusion is
that this budget fails to invest in our families and our communities.
I urge my colleagues to oppose this dangerous course and work today
to strengthen our economy and invest in real economic development.
Mr. DODD. Mr. President, I rise today in strong opposition to the
budget resolution which my colleagues and I will be voting on this
afternoon.
First of all, I take serious exception to what has gone on here with
respect to this year's budget resolution process. In all my years in
Congress I have never seen anything quite like it.
The budget resolution we are voting on today is different than the
resolution passed by the House early this morning. This resolution
creates an unprecedented ``point of order'' which ties the hands of the
Senate by creating competing procedural paths between the House and the
Senate for approving the size and nature of these proposed tax cuts.
This is like a business keeping two sets of books. That is shady
practice for a business and it is awful policy for this Nation's
economy.
But, more importantly, I believe that no matter how you look at this
budget resolution it is extraordinarily fiscally irresponsible and will
lock our Nation into years of record deficits and a skyrocketing
national debt.
I believe this resolution is profoundly unfair--providing hundreds of
billions in tax cuts for the most affluent Americans who need them
least, while slashing critical services from the American families who
need them most.
I believe that this resolution will be fundamentally ineffective in
addressing the major challenges our Nation currently faces.
I was in this Chamber in the early 1980s, when we debated the utility
of

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enormous tax breaks benefitting mostly the wealthiest Americans and
richest corporations. I was in this Chamber the last time we heard
arguments about how passing large tax breaks and accepting huge
deficits now will lead us to economic prosperity down the line.
And I was here to witness what those breaks and deficits wrought on
the American people: greater unemployment, lower growth, more
homelessness, more poverty.
For many of us, this budget resolution is--to quote Yogi Berra--
``deja vu all over again.''
President Reagan was a remarkable man, who filled America with a
sense of pride and optimism, at a time in our history when such
feelings were sorely lacking. But that doesn't mean his fiscal policies
were good for America. They were reckless policies that led us down the
wrong path.
I was one of a handful of Senators who voted against the Reagan tax
cuts in 1981 and 1982. And history shows that the budget policies of
the early 1980s were enormously destructive to the fiscal health of our
Nation--the shameful legacy of which lasts to this very day.
Our Nation's Federal budget deficit rose from $74 billion in 1980, to
$221 billion in 1986, and peaked at nearly $300 billion in 1992.
In 1980, our national debt stood at $712 billion. By 1990 it had
reached $2.4 trillion.
Well, ``here we go again.''
Here we are, once again, voting on an extraordinarily reckless
budget, based on disproven and discredited economic theories.
The philosopher George Santayana once said, ``Those who fail to
remember the past are condemned to repeat it.''
Our collective failure to remember the past, will be, in my view, far
worse this time around than the first time we made these mistakes in
the 1980s.
This budget resolution locks in the largest deficits in our Nation's
history. This year alone, the budget deficit could reach as high as
$600 billion. That's more than twice as high as the highest annual
deficit ever recorded in American history.
According to the Republicans' own analyses, if these tax cuts are
enacted, the deficits over the next 10 years will total as much as $6.7
trillion.
If these tax cuts are enacted, our national debt, which currently
stands at a whopping $6.4 trillion--thanks, again, to the budget
policies of the 1980s--will rise as high as $12 trillion.
Frankly, I am shocked that we are about to pass a bill that is almost
universally recognized as an enormous fiscal mistake.
Even many of the Republican's own hand-picked economic officials
concede that the Bush economic package will likely do little to spur
growth, and could well stifle it.
This is profoundly unfair--tax cuts for the wealthiest Americans
while all others are making enormous sacrifices--including some in Iraq
who are right now prepared to make the ultimate sacrifice.
During past Congresses and past administrations, the American people
have always been called upon to share the burden that is brought about
from conflict.
They have done so by buying government bonds and by even paying
higher taxes if necessary to support our troops in times of war.
Americans made these sacrifices with a sense of pride because they
recognized it as their responsibility.
What past administrations and Congresses did not do was consider tax
cuts for the wealthiest Americans while their troops were in battle,
which is what this administration and the majority in Congress are
doing.
I believe we missed an enormous opportunity here. I believe that we
had an historic obligation and an historic opportunity to set our
fiscal house in order this year.
We had an opportunity to take enormous steps toward fiscal
responsibility, a balanced budget, and economic prosperity. Instead,
the agreement that we are voting on today will bring about record-high
deficits and will significantly shortchange families across America.
As I said, this resolution is irresponsible, unfair, and ineffective.
It is highly irresponsible in the middle of a war, and in the midst
of a severe economic downturn, to have a budget reconciliation bill
with more than $1.2 trillion in tax cuts as its centerpiece.
The other centerpiece of this budget resolution is, of course,
cutting crucial funding for our national priorities--including homeland
security, education, and health care.
And for what? To pay for a tax cut for the wealthy.
While offering tax breaks of up to $90,000 for the most affluent
among us, this resolution cuts more than $7 billion over 10 years in
services for America's veterans.
As tens of thousands of our young men and women return from the
Persian Gulf, we will reward them with cuts to their health care
benefits, their education grants, and their opportunities to get ahead.
While assuring the richest of the rich will receive an unprecedented
financial windfall this year and over the next 10 years, we are
severely shortchanging our children's education--underfunding Title 1
by $5.8 billion, falling short of funding for the ``No Child Left
Behind Act'' by roughly $8 billion, and slashing $400 million from
after-school programs, which will force nearly 600,000 children out on
the street after school.
While making certain the bank accounts of the wealthiest Americans
are secure, this budget fails to provide the funding necessary to make
certain our homeland is secure.
Money has been slashed for the FIRE grants program--which helps fire
departments nationwide obtain the equipment and training they will need
to effectively respond to new threats.
And cuts have also been made to the COPS program and other programs
critical to our defense against terrorism.
We must attack head-on the argument that says that this tax cut is
essential to our economic recovery. Just saying it is, does not make it
so. Contrary to the belief of some on the other side of the aisle,
deficits do matter. They lower future economic growth by reducing the
level of national savings that can be devoted to productive
investments--because more and more of the budget will be used to pay
past debts, not to put into productive investments.
They exert upward pressure on interest rates, which will mean higher
rates for mortgages, new cars, business loans, and education loans--
which serve as a de-facto tax on our hardest-working families. They
raise interest payments on the national debt. And they reduce our
fiscal flexibility to deal with the unexpected.
If we do not take action now to bring these growing deficits under
control, those who endorse this document, in so doing, help to create
the first generation of Americans less well off than their
predecessors.
The prosperity we had in the 1990s did not just come about from one
day to the next. It came about through wise and tough decisions from
the private and public sector. It took decisions to put an end to smoke
and mirror accounting and budget gimmicks. It took tough decisions
geared toward fiscal discipline and long term prosperity.
Just 2 years ago, when President Bush first came into office, the
Congressional Budget Office projected a surplus of $5.6 trillion over
10 years. And now we are projecting record deficits of up to $6.7
trillion over 10 years. That's a $12.3 billion decline in our Nation's
budgetary health and economic prospects.
This administration and the majority of this Congress are digging an
enormous hole for our national economy. Their solution is more shovels
and more digging. This does not strike me to be the wisest or most
responsible course of action to take.
I strongly oppose this budget resolution and urge my colleagues to
vote against it.
Mr. HARKIN. Mr. President, our nation is at an economic crossroads.
This budget resolution conference report is an important document,
setting out a course of policy for the coming decade. I oppose this
resolution. I believe it takes us dangerously in the wrong direction as
a country.
We face a demographic shift as the baby boomers retire. We need to
provide for the costs of Social Security and Medicare in the coming
decades. I believe the elderly deserve a decent prescription drug
benefit. We must provide a quality education for our children in an
ever more competitive world

[[Page S5309]]

where a large part of our advantage is the skills of our workforce.
Prior to the 2001 tax bill, we were on a path to eliminate publicly
held debt and to meet those needs. Now, the President is again
proposing tax cuts of a similar size despite the fact that the
surpluses predicted in 2001 have totally disappeared. Those projected
surpluses have been replaced by record deficits. We may have historic
deficits near $400 billion this year and next.
The ranking member of the Budget Committee explained earlier today on
the floor that the largest single factor in turning surpluses to
deficits has been that 2001 tax cut. That tax cut, which I opposed, is
more responsible for deficits in the long term than the downturn of the
economy, and more responsible than the new spending on defense and
homeland security that was made necessary by the attacks of 9-11.
The President's new proposed tax cuts are largely provided for in
this budget resolution--over $1 trillion worth. If made permanent,
their cost to the Treasury will be larger than the entire projected
shortfall in both Social Security and Medicare over the coming 75
years.
The proposal before the Senate is radical. So-called supply-side
economics, manifested in the 1981 tax cut, brought us huge deficits in
the 1980s. Unemployment skyrocketed from 7.4 percent to 10.8 percent in
just 15 months. Supply-siders tried again in 2001, and we have lost 2
million jobs. Now we are being asked to bet the farm for the third try.
The economists who are so sure that this third bet will work are the
same ones who predicted economic destruction when we passed measures to
balance the budget in 1993, which led to strong economic growth.
The budget resolution will produce $1.7 trillion in new Federal
Government debt. That debt will compete with the private sector for
funds, driving up interest rates. And it puts a break on economic
growth, especially harming the housing, auto and agriculture sectors.
The Congressional Budget Office has concluded that the President's
plan--which is very similar to this resolution--would actually reduce
economic growth by almost 1 percent. The CBO, now under a just-departed
member of the President's Council of Economic Advisors, did an analysis
of the budget proposal under so called dynamic scoring. The
supplysiders say that economic analysis will show how much good the
budget will do. What did it show? More debt.
I believe that a short term economic growth package could be very
helpful. We could make temporary tax relief available to working
families immediately and provide financial assistance to states facing
fiscal crisis. That would be stimulative. But the budget resolution
proposes that only 5 percent of the tax cuts will be available this
year. The proposal assumes that a huge share of the tax cuts will go to
the very wealthy, those making $300,000, $500,000, and far more than a
million dollars a year. There is nothing stimulative about such a
proposal.
We need a budget that is balanced, that takes the approach that we
need to reduce the debt to take care of the baby boomers and provide
for a decent drug benefit for the elderly. Clearly, the $400 billion
proposed for prescription drugs and other medical reforms is far too
low for that purpose. The total drug cost of the elderly in the coming
10 years is estimated to be $1.8 trillion. While we should not cover
all of that cost, far less than a quarter is not enough.
We need a budget that provides for more for the education of our
children. This budget calls for education spending that is $4 billion
less than the Senate measure for the coming year and $20 billion below
that level over the coming 10 years. No Child Left Behind is not
adequately funded. IDEA, a program Congress promised to provide 40
percent of the funds for decades ago is still grossly underfunded,
meaning higher property taxes in almost every school district in the
country.
Mrs. FEINSTEIN. Mr. President, I rise to state my opposition to the
fiscal year 2004 budget conference report.
At a time when the United States is engaged in a war and will shortly
begin a massive reconstruction effort whose costs are still unknown, at
a time of growing deficits and rising debt, and at a time of increasing
entitlement spending and increasing interest payments to service that
debt, it is highly irresponsible for Congress to engage in such
unprecedented maneuvering and gamesmanship to try to force through an
overlarge, unstimulative, and unnecessary tax cut.
The parliamentary maneuvering is unprecedented. A conference report
is supposed to reconcile differences between the two bodies, but this
conference report sets up a mechanism by which two different figures
for a tax cut can be considered. It is a clear effort to make an end
run around the Senate rules and procedures by advocates of large and
irresponsible tax cuts to avoid a vote they know that they simply can't
win. It makes no sense, and I urge my colleagues to vote against this
conference report.
When President Bush assumed office in January 2001, the Congressional
Budget Office projected a budget surplus of $5.6 trillion for fiscal
years 2002 through 2011. But under this budget resolution, there will
be a deficit of $1.95 trillion. That is a $7.6 trillion turnaround in 2
years.
For fiscal years 2003 and 2004 alone, deficits will reach $347
billion and $385 billion respectively if this budget resolution is
adopted, and this does not include the cost of the war or the
reconstruction of Iraq.
This conference report provides for tax cuts of $1.3 trillion over
the period 2003-2013. With interest the full cost of this tax cut is
$1.6 trillion. And in an unprecedented move, the amounts of the tax cut
that are reconciled are different in the House and Senate. The
reconciliation instructions to both the Senate Finance and House Ways
and Means Committee say that tax cuts up to $550 billion over 11 years
can be reported.
A special rule prohibits consideration in the Senate of the
reconciliation bill that costs more than $350 billion, but it allows
the Senate to consider a reconciliation conference report that costs up
to $550 billion. This would establish a precedent that could be used in
the future to play all kinds of games with the budget resolution. It is
a bad solution to an impasse and should be rejected.
There is also an urgent need to fund many priorities which are not
dealt with in this budget, and those needs are not likely to disappear
over the next decade. Those priorities include, among others: The war
in Iraq and the subsequent reconstruction of Iraq, including a 90
billion supplemental appropriations conference report coming to this
body shortly; the President's No Child Left Behind education
initiative; homeland security; a full prescription drug benefit in
Medicare.
Many priorities that are important to Californians are either cut or
eliminated altogether, most notably funding for the State Criminal
Alien Assistance Program. If that program is eliminated, the burden of
processing and incarcerating criminal aliens will fall entirely on
thinly-stretched State law enforcement budgets.
When faced with the choice between supporting a bad budget and no
budget at all, I must choose the latter.
I support a budget which faces our fiscal needs head-on, even when an
economic downturn forces us to make tough choices, and which resists
the temptation to further increase the debt burden on future
generations of taxpayers. This is not that budget. I urge my colleagues
to vote against the budget conference report.
Mrs. BOXER. Mr. President, the budget that passed the Senate was bad.
This budget is worse. Though the budget is supposed to set priorities,
this budget does not reflect America's priorities.
Overall, for domestic needs, this budget cuts $6.9 billion from what
was passed by the Senate. That means less for education, less for
health care, less for homeland security. It means $4 billion less next
year for education than what passed the Senate--and $20 billion less
over the next 10 years.
This budget begins by failing our kids. It provides $8.9 billion less
than what was promised in the No Child Left Behind Act, which was
signed into law with great fanfare just 1 year ago. That would leave
millions of kids behind, and in the program to help States educate
disadvantaged children, it would leave more than 600,000 California
kids behind. This budget also cuts afterschool programs by 40 percent--
kicking

[[Page S5310]]

570,000 kids nationally and over 81,000 kids in California out of their
afterschool programs.
This budget fails our young people struggling with rising college
tuition. Conferrees stripped out the Senate provision to increase Pell
grants for 4.8 million students nationwide and for almost 600,000
students in California. That means a loss of $165 million in Pell grant
aid for California students.
On health care, this budget fails to address national needs. This
budget stripped out the Senate provision adding $38 billion to help the
uninsured get health care. On prescription drugs, this budget accepts
the President's plan to force seniors into HMOs in order for them to
get help to pay for needed medicines. It cuts $100 million over 10
years in Medicaid--putting at risk health care for sick and needy
children, their parents, the disabled, low-income workers, and the
elderly.
On homeland security, this budget leaves us less secure. This budget
stripped out the Senate provision providing an additional $2 billion
over the next 2 years for port security. This budget cuts support to
State and local law enforcement by over $1 billion, including
eliminating all funding to hire more police officers and put more
police in the schools and eliminating funding for the local law
enforcement block grant program. It provides no increase in funding for
first responders--those on the front lines of a possible terrorist
attack.
Incredibly, this budget eliminated the Senate provision that set
aside almost $400 billion to strengthen Social Security.
For highways, this budget is nearly $25 billion less over the next 6
years than the Senate bill. For transit, it is over $7 billion less
over the next 6 years. These cuts will make it difficult to pass a
transportation bill--a key to economic growth and alleviating the
traffic problems in California.
On the tax cut, the budget does too much for the wealthy when more
targeted tax cuts with broad benefits would bring dramatically more
positive results. This budget increases the overall tax cut to $1.3
trillion over 10 years. The reconciliation tax cut was increased from
$350 billion to $550 billion. This was done in order to pass a tax cut
that provides 80 percent of the benefits to the richest 10 percent of
Americans--and a dividend tax cut that gives 49 percent of the benefits
to the richest 1 percent of Americans.
I support tax cuts. I support tax cuts that help working people and
target growth. I support Senator Schumer's effort to make up to $12,000
per year in college tuition costs tax deductible and create a $1,500
tax credit to help college graduates pay off their student loans. I
support increasing the child tax credit and providing a $2,000 tax
deduction to help people pay for health insurance. I also support
lowering the tax for 1 year on the transfer of capital from abroad for
companies willing to invest the savings in jobs at home. And I support
increasing the expensing deduction for small businesses. But we can do
all of that in a fiscally responsible manner. That is not this budget.
This budget favors the wealthy, turns our priorities upside down, and
returns us to the days of exploding deficits and debt. I will vote
against it.
Mr. FEINGOLD. Mr. President, I will vote against this budget
resolution. The Senator from North Dakota has stated that this may be
the worst budget this body has ever considered. It is hard to dispute
that statement.
The tax and spending policies outlined in this resolution are
reckless. There is no other word for it. Over the 11 years covered by
this document, from FY 2003 through FY 2013, the budget resolution
produces annual deficits that by themselves would cause concern in any
one year. In total, their effect is far worse. The additional debt run
up over the 11 years covered by this budget resolution is an absolutely
astounding $4.5 trillion.
That is simply an astounding number, $4.5 trillion in debt created
just by this document.
According to Budget Committee staff, the budget resolution policies
will produce a $2.4 trillion deterioration in the budget outlook for
2003 through 2013 relative to the Congressional Budget Office March
2003 baseline projections. Most of that comes from the $1.3 trillion in
tax cuts provided for by this resolution.
Let me quickly add that the true cost of the tax cuts is even higher
because we are just charging their cost on the government credit card.
If you include the interest costs that arise because we don't pay for
these tax cuts but borrow it by running up more debt, then the true
cost is $1.6 trillion.
Who will pay for all of this? As the Nobel Prize winning economist
Milton Friedman famously said, ``there is no free lunch.'' Someone will
be stuck with the credit card tab this budget runs up.
The answer is that our children and grandchildren will have to pay
for all of this. The tax cuts and spending increases we pass today will
be paid for by our children and grandchildren. That is precisely the
tradeoff this budget makes. Tax cuts and increased spending for us, and
our kids will have to pay the bill.
The budget policy advanced by this resolution is not sustainable. The
$4.5 trillion in new debt produced by the policies outlined in this
budget does not include the long term costs of the Iraq war or the cost
of postwar occupation and reconstruction. It does not include the cost
of addressing one of the most significant problems in the tax code, the
expanding impact of the alternative minimum tax. And it makes
fundamentally unrealistic assumptions about the spending accounted for
in the discretionary accounts, the part of the budget where we find
spending for defense, education, transportation, and other critical
programs.
In a column that ran in the New York Times earlier this week, several
distinguished members of the nonpartisan Concord Coalition offered some
telling comments about the future we face under the deficits produced
by this budget. This is what they said:

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

The Concord Coalition is right. This budget resolution is a
prescription for fiscal disaster. The tax cut and spending policies it
provides are grossly irresponsible. The budget enforcement rules
included in the resolution are no better. Instead of extending the
budget rules that have helped impose some fiscal restraint on Congress
and the White House since 1990, this resolution rips a $1.5 trillion
loophole in them for this year, and opens the door for unlimited fiscal
mischief in future years.
It will be extremely difficult to recover from this budget
resolution. As we have seen, our economy is resilient, but the damage
done by this resolution will be with us for many years. The deficits
resulting from the budget policies in this resolution extend as far as
we can project. We can only hope that Congress will show more restraint
than it has in the recent past, and forego the opportunity provided by
this resolution to engage in a binge of fiscal self-indulgence.
Mr. REED. Mr. President, in 2001, at the President's urging, Congress
passed the Economic Growth and Tax Relief Reconciliation Act, which
provided $1.35 trillion in tax cuts over 10 years. While I have
consistently voted to reduce the tax burden of working families, I
voted against the President's tax cut because it left too few resources
for debt reduction and came at the expense of reforming Medicare and
Social Security, providing a prescription drug benefit, and supporting
critical investments like education, the environment, and national
defense. A year later, the economic evidence indicates that the
President's 2001 tax breaks have had little positive effect on the
economy.
The economy continues to be in a slump and, now, we are in the midst
of considering another large round of tax cuts that would help wealthy
Americans. These tax cuts would also come at a time of record budget
deficits and would break from the longstanding congressional practice
of not passing tax cuts in times of war.
The Republican budget resolution calls for $1.3 trillion in
additional tax cuts over the next 11 years. In an unprecedented move,
the House and Senate Republicans are including two reconciliation tax
numbers--rather than

[[Page S5311]]

one so they can use the reconciliation procedure to pass a bigger $550
billion tax cut. These tax cuts will add to long-term deficits and
further impede economic growth.
Last week, the newly released labor market data confirmed again that
there is a crisis facing America's working families. Mr. President,
108,000 more jobs were lost in March, including 68,000 in the private
sector. There are 2.6 million fewer private payroll jobs than there
were when the recession began.
Nationally, the number of long-term unemployed rose to 1.8 million in
March, far higher than the 660,000 long-term unemployed in January
2001. There were 445,000 new unemployment insurance claims filed last
week, up from 407,000 the prior week.
The economy is in as much trouble as it was in the early 1990s, if
not worse. The latest study by the Joint Economic Committee shows that
during the last 4 months that private sector job loss in the current
recession is now larger and more serious than the private sector job
loss in the 1990 recession.
With so many Americans out of work for far too long, the persistence
of job losses and the clear signs of no economic recovery anytime soon,
the need to pass another extension of unemployment insurance benefits
is overwhelming. These benefits are set to expire on May 31, and the
last time the extension was passed, it did not even include assistance
to approximately one million workers who had exhausted all of their
unemployment benefits and still found no work. Yet the budget
conference report fails to provide for further extensions to help
victims of this recession who are struggling to take care of their
families and struggling to find work.
Furthermore, just yesterday the IMF, in its annual report, projected
that the world economy would grow 3.2 percent this year, down from its
previous projections. It expects the U.S. economy to grow 2.2 percent
this year and 3.6 percent next year. Commenting on the current
administration's economic plans, IMF research director Kenneth Rogoff
said, ``Suppose for a moment we were talking about a developing country
that had a gaping trade deficit year after year as far as the eye can
see, a budget ink spinning from black into red, open-ended security
costs and an exchange rate that has been inflated by capital inflows.
With all that I think it's fair to say we'd be pretty concerned. The
U.S. isn't a developing country, but nonetheless, for the global
economy, the tax cut . . . on top of ongoing security expenditures
seems awkwardly timed.'' This comes from the IMF that was supportive of
President Bush's first round of tax cuts.
With all this negative data and with no upturn in the economy in
sight, this budget resolution also makes too many cuts to vital
programs and services to pay for the administration's oversized tax
cuts. The conference agreement endorses a majority of the tax cuts that
were in the President's proposal at the expense of domestic investments
that are integral to the recovery of the economy and the welfare of our
citizens.
As columnist Bob Herbert observed in the New York Times last week,
``With the eyes of most Americans focused on the war, the Bush
administration and its allies in Congress are getting close to agreeing
on a set of budget policies that will take an awful toll on the poor,
the young, the elderly, the disabled and others in need of assistance
and support from their government . . . It mugs the poor and the
helpless while giving unstintingly to the rich.'' The Senate budget
includes a reduction of approximately $168 billion in funding for
domestic discretionary programs in fiscal year 2004. Approximately two-
fifths of this funding consists of grants in aid to State and local
governments. These cuts will worsen the already severe budget crises
that States are facing.
This is a restrictive funding level for domestic discretionary
spending, given the continued needs in the homeland security area, the
underfunding of the education reforms in the No Child Left Behind Act,
need for aid to the States, and the severe structural burdens facing
Medicare and Social Security.
The administration and the majority need to stop pushing economic
plans that reward the wealthiest Americans and abandon fiscal
responsibility. Instead, they need to support real economic stimulus
that would provide immediate one-time tax relief for working families,
extend unemployment benefits and provide desperately needed fiscal
relief to the States.
Lastly, this conference report includes a gross misuse of the
reconciliation process which was intended to facilitate deficit
reduction not deficit increases. Due to the majority's obsession with
supersized tax cuts, they have devised a heretofore, unheralded
mechanism, to subvert the Senate's right to amend legislation. Indeed,
while many of my colleagues can say that while the Senate can enact
only $350 tax cut, the sad truth is that this contrivance paves the way
for a tax cut that is much larger than many of my colleagues on both
sides of the aisle are willing to support.
The budget before us is lamentable, and I only hope that those who
support it today will reassess their positions in the weeks ahead.
Mr. HOLLINGS. Mr. President, this is not a conference report, because
we never conferred. This is not a concurrent resolution, because we
never concurred. To stimulate the economy, the Republicans doubled the
debt from $6 trillion to $12 trillion, which will wreck the economy.
This budget is a fraud.
Ms. SNOWE. Madam President, I rise in support of this conference
agreement on the fiscal year 2004 budget.
Before I begin, I first want to commend the President for his
leadership in initiating the debate on the necessity of stimulating our
economy. From the beginning, I have shared his belief that we need to
take steps in the short-term to strengthen our economic outlook, and
the conference report before us provides us the opportunity to do just
that.
I thank our majority leader for his unflagging perseverance in seeing
this budget through to a final passage of this conference report. He
has shown incredible patience, understanding of the various issues and
viewpoints, and he has been willing to work tirelessly to ensure a
budget resolution around which we can coalesce.
And in that same light, I want to commend my friend and colleague,
Chairman Nickles, for his Herculean efforts in forging and producing
this budget. As I have said in the past, as a former member of the
committee I know what goes into this process and Chairman Nickles has
tried to move Heaven and Earth to avoid the colossal failure we had
last year under Democrat control when we failed to pass a budget for
the first time. And I did not want to see a repeat performance; that
would have been exactly the wrong message and completely counter to the
interests of our Nation at a time when we are experiencing a troubled
economy and when we are at war in Iraq.
The bottom line is, the budget is critical, because it imposes
structure and discipline and defines the priorities in Federal
expenditures. That should be a fundamental responsibility of Congress,
and it was a regrettable lapse of leadership last year that we failed
to pass such a resolution. So I want to thank Chairman Nickles for his
commitment to getting this done.
I also want to thank Senator Grassley for his willingness to listen
and to work toward a resolution of the concerns I have raised along
with Senator Voinovich about the size of the tax cut package. It is
because of their dedicated efforts--and let me say that Senator
Voinovich has been steadfast in holding to his deeply held principles--
that we have reached the compromise I will now discuss. In fact, it
would be entirely accurate to say that without Senator Grassley, we
wouldn't have a budget.
I will be voting today for the budget resolution conference report we
have before us because the resolution--in concert with commitments I
have secured from Finance Committee Chairman Grassley and from Majority
Leader Frist--and I ask unanimous consent that the letter from the
majority leader detailing that commitment be placed in the Record--will
both ensure that we impose on Federal spending the discipline of a
budget blueprint, and that tax cuts will be limited to $350 billion
through the Senate Finance Committee and floor consideration of any
growth package, including any final conference report.

[[Page S5312]]

These are the two critical goals I have been working to achieve for
the past 6 weeks of this budget debate--and I will ask unanimous
consent that a copy of the letter I signed with Senators Voinovich,
Breaux, and Baucus calling for a limited tax cut of $350 billion as
part of reconciliation be printed in the record. I am pleased that,
with the assurances I have been given from Senator Grassley and Senator
Frist both men of their word--my goals have been fulfilled.
One of the functions of our letter was to prompt a bipartisan budget
resolution, and today that is what we have before us. Senator Grassley
has said very eloquently that the people want us to govern--that is our
obligation, and I think by coming to this compromise agreement we have
fulfilled that responsibility when it comes to the budget.
With the commitment we received, the budget provides funds for a
strong, reasonably sized economic stimulus package that can create jobs
and opportunities in the short term. At the same time, this agreement
will assure that this tax package will be limited to $350 billion--an
amount we believe is the right size to achieve this growth without
ballooning budget deficits. Let it be remembered that Senator Daschle
was proposing $112 billion and many in this Chamber wanted nothing at
all, so $350 billion is a significant victory.
I want to be clear about what this budget does. The budget agreement
provides instructions for both the Senate and the House of
Representatives to write growth packages not to exceed $550 billion,
and the Senate is further instructed that no tax package under budget
reconciliation rules may be more than $350 billion.
To guarantee our position, I have secured language and commitments
that neither the tax reconciliation bill reported by the Senate Finance
Committee nor the tax bill voted out of the Senate may be more than
$350 billion unless additional tax cuts are specifically offset or paid
for. And, importantly, Senator Grassley, the Finance Committee
chairman, who will also chair the conference committee on the tax
reconciliation bill, has provided his personal commitment that Senate
conferees will not support reporting of a bill with tax cuts greater
than $350 billion, unless additional tax cuts are specifically offset
or paid for.
Once again, just as I trusted the word of the majority leader as we
agreed to address extraneous special interest provisions in homeland
security legislation last fall, so I trust the good word of Chairman
Grassley and Majority Leader Frist. Moreover, this agreement provides
written confirmation that the Senate will at no point consider the
House-passed legislation, except when it is necessary to be sent to
conference, and provides the protections we have sought to ensure a
responsibly sized tax package.
I feel strongly about my commitment to a lower tax cut, and this
agreement reflects the principles on which I have held firm throughout
consideration of the budget.
As I said, from the start I have shared the President's belief that
economic stimulus is demanded by the wavering conditions of our
economy, which was already on shaky ground before the horrific attacks
of September 11. We've lost 2.3 million jobs since the recession began
in March 2001--nearly half a million in the past 2 months alone. And
comparing today's employment situation with the one prevailing after
the 1990-1991 recession--which was followed by a ``jobless recovery''--
Charles McMillion, chief economist of MGB Information Services in
Washington, recently told the Financial Times, ``The current jobless
recovery has now lasted longer and is far worse'' than the aftermath of
the 90-91 downturn.
Just this week, the Business Roundtable released results of a survey
of CEOs on the economy that revealed a more pessimistic outlook for the
economy than just 6 months ago. For example, CEOs were very concerned
about employment growth and weak consumer demand. According to the
survey, CEOs, on average, expect GDP growth to be only around 2.2
percent over the next 6 months.
We can't afford another ``jobless recovery'' like we had just over a
decade ago--or, worse, a ``double-dip'' recession. At the same time,
with the demands of our action in Iraq, with the need to fund pressing
domestic issues such as the necessity for prescription drug coverage
for seniors and for strengthening Social Security and Medicare, and
with the deficits we have already seen in a dramatic turnabout from 4
years of surpluses--we also cannot allow ourselves to be drawn into
another downward spiral of perpetual deficits.
This is a matter of principle, and one upon which I have stood since
I first came to Congress--that a cycle of deficits must not be allowed
to continue. If we act wisely, I believe we can provide significant tax
relief to help taxpayers and business to get the economy moving, while
also achieving fiscal discipline.
This budget is a responsible, well-balanced approach to stimulate our
economy in the short term, and to protect our economy from the effects
of unnecessary deficits in the long term. As we continue to confront
global uncertainties that have cast a shadow over a domestic economy
already on shaky ground even before September 11, I believe an
immediate growth package is absolutely essential to help create both
consumer demand and new jobs. As we move to the next phase in this
process, I look forward to working with Chairman Grassley and my
colleagues on the Finance Committee to craft such a plan.
We must work to maintain a carefully calibrated plan that will
produce short-term benefits for our economy, without jeopardizing long-
term fiscal responsibility and economic growth. By capping the size at
$350 billion, I believe we can do so without risking the types of
deficits that could come from deficit-financing of long-term tax cuts.
At the same time, we will also pass a budget, which I believe is
critical because it imposes structure and discipline on Congress, and
defines the priorities in Federal expenditures. This is a fundamental
responsibility of the Congress, and I am pleased we will be successful
in passing a budget this year.
So I believe we should have a growth package in this budget. At the
same time, given these unprecedented times and the confluence of
circumstances by which they are defined--the economic uncertainties,
the war in Iraq, new projections of higher budget deficits, the
domestic fiscal challenges that lurk on the horizon with Social
Security and Medicare, our responsibility to carefully evaluate the
impact of any tax reductions and spending increases in this budget is
that much greater.
That is the context in which we must shape a budget--indeed our
projected deficits are at historic levels. What is required in this
budget resolution is a careful calibration if we are to produce short-
term benefit for our economy without jeopardizing long-term fiscal
responsibility and economic growth. And let there be no mistake, just
as the need for short-term economic stimulus is compelling, so, too, is
the need to return to balanced budgets and indeed surpluses as soon as
possible.
What it all comes back to is setting priorities. That is what we
talked about all those years we were fighting for balanced budgets. We
are here to draw lines and make distinctions so as not to exacerbate
our economic situation and thereby lead to even greater problems down
the road.
A look at the administration's budget shows substantial out-year
deficits, even if productivity growth turns out to be higher than
expected. If growth is just ``average'' we still face unsustainable
budget deficits. This year, given the slow economy and the war costs,
our deficits could be near 4 percent of GNP.
Recently, the Social Security and Medicare Board of Trustees reported
that between 2010 and 2030, the costs of these programs will increase
rapidly, with annual costs exceeding dedicated tax revenues beginning a
dozen years before this `baby boom' wave is over. And the trustees
estimate Medicare will become insolvent 4 years earlier than predicted
just last year. Importantly, these estimates do not include the
addition of a necessary prescription drug benefit.
The bottom line is, we cannot diminish our ability to strengthen
Social Security and Medicare. We were looking to the window of
opportunity presented by a return to surpluses to prepare for these
future challenges. But as we have

[[Page S5313]]

seen over the past 18 months, projections of surpluses or deficits can
change dramatically, and that opportunity has evaporated. Given the
uncertainties we are facing today, given the challenges we face
tomorrow--we must exercise caution now so that we do not exacerbate
long-term deficits in the years to come, and threaten our ability to
address America's long-term priorities in the future.
Once again, the President was right to offer a growth plan. But, we
cannot ignore the impact of all of the challenges we face--the cost of
war, higher defense spending, the retirement of baby boomers, higher
health care spending, and homeland security.
This agreement gives us the chance to unite behind a consensus
figure. A figure that is ``right-sized'', a figure that strikes the
right balance and one that will allow us to stimulate the economy in
the short-term. It represents the most effective and responsible way to
stimulate the economy, while advancing a growth package that can
achieve the strongest bipartisan support.
If we are to restore balance to the Federal budget, we must exercise
fiscal discipline. This budget provides an important step in that
direction and I urge my colleagues on both sides of the aisle to join
me in supporting this conference agreement.
I ask unanimous consent that the letters that I referred to be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. Senate,

Washington, DC, April 10, 2003.
Hon. Charles Grassley,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Mr. Chairman: This will be a further clarification to
the letter I sent to you earlier today.
It once again confirms my conversation with you and Senator
Baucus concerning the consideration of a possible revenue
reconciliation bill.
Should the Congress adopt a conference report for the FY
2004 Concurrent Resolution on the Budget, and should that
conference report include reconciliation instructions to your
Committee to report changes in laws to achieve tax reductions
of no more than $350 billion, your Committee will not be by-
passed, it will be responsible for reporting that
reconciliation bill, and that bill will be the vehicle
brought to the Senate floor for consideration.
After the Senate reconciliation bill has been advanced to
third reading, you or I will move to the consideration of the
House a bill, solely for the purpose of amending it with the
Senate measure. I will prevent any effort including any
unanimous consent requests to move to the House bill except
for this purpose.
This is the historic and correct procedure for
consideration of such legislation in the Senate. Further,
both as a member of the Committee and as Leader, I look
forward to working with you to comply with any reconciliation
instructions to your Committee.
Sincerly yours,
Bill Frist, M.D.,
Majority Leader.
____

U.S. Senate,

Washington, DC, March 13, 2003.
Hon. Bill Frist,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Tom Daschle,
Minority Leader, U.S. Senate,
Washington, DC.
Dear Majority Leader Frist and Minority Leader Daschle:
With the international challenges our nation faces, including
a possible military engagement with Iraq, continuing tension
on the Korean Peninsula, and the ongoing war on terrorism,
coupled with sluggish economic growth, we believe it is
critical a budget resolution for Fiscal Year 2004 (FY2004) be
enacted this year. We are committed to working in a
bipartisan manner to this end.
We believe that our nation would benefit from an economic
growth package that would effectively and immediately create
jobs and encourage investment. We appreciate President Bush's
leadership in identifying this need and beginning this
important debate with his economic growth proposal.
Given these international uncertainties and debt and
deficit projections, we believe that any growth package that
is enacted through reconciliation this year must be limited
to $350 billion deficit financing over 10 years and any tax
cuts beyond this level must be offset. All signatories to
this letter are committed to defeating floor amendments that
would reduce or increase this $350 billion amount.
We look forward to working with you on a bipartisan budget.
Sincerely,
John Breaux.
Max Baucus.
Olympia Snowe.
George V. Voinovich.

Mr. JEFFORDS. Mr. President, I had hoped to be here today to say that
the Congress is enacting a blueprint for spending that would improve
education, invest in our transportation and water infrastructure, and
deal prudently with our ever-increasing projections of budget deficits.
Unfortunately, this budget will accomplish none of these goals, and may
in fact put this country in dire fiscal straits just as the baby boom
generation places new and unprecedented demands on our Social Security
and Medicare systems.
Let me begin by saying that I oppose the tax cuts authorized by this
budget conference agreement. To call this a conference ``agreement'' is
a misnomer; there has been no agreement. In the House, the tax cut
allowed under the reconciliation procedure will be $550 billion; in the
Senate, $350 billion. If the conferees on the tax bill ultimately agree
to a cut larger than the Senate figure, the vote we take on that
conference report will be a vote on tax cuts never approved by the
Finance Committee or the full Senate.
Perhaps more importantly, this is not the right time for a tax cut.
When we passed the 2001 tax cut, we were facing a 10-year budget
surplus of $5.6 trillion. It made sense to return some of that
projected surplus in the form of a tax cut. But things have changed,
and changed dramatically. Unless there are dramatic cuts in spending--
which no one realistically expects--we are facing deficits as far as
the eye can see. On top of that, we face the unknown costs of the war
in Iraq and its aftermath. It is irresponsible to cut taxes under these
circumstances.
Perhaps some sort of tax cut could be justified if it stimulated the
economy or if it furthered important national interests like education
or health care. But the tax cuts being contemplated in this budget will
go overwhelmingly to those at the top of the economic ladder--those who
are least in need of help. These tax cuts will mean bigger deficits and
a higher national debt. The costs for this folly will be borne for
years by our children and grandchildren. And areas of national need
will get short shrift.
Our Nation's transportation needs get short shrift in this budget.
As ranking member of the Environment and Public Works Committee, I am
very disappointed by the treatment afforded to our Nation's roads,
bridges, and transit systems in the conference report.
Just over a week ago, 79 Senators recognized the importance of our
Nation's infrastructure and the vast need for investment by supporting
a bipartisan amendment to increase surface transportation spending.
What has come back from conference is a dramatic cut in funding from
the levels put forward by the Senate. We agreed in this body to highway
program contract authority for reauthorization of $255 billion. The
conferees set the level at $231 billion. While presented as a simple
``split-the-difference'' compromise with the House, the conference
inserted provisions that will in fact reduce funding to levels only
marginally greater than those authorized for TEA-21 and would barely
cover inflation during the next six years.
Our highway program expires this year. Traffic congestion is a
growing problem and freight needs are expanding rapidly. The States
want us to review the program on time. The strength of the Nation's
economy and literally hundreds of thousands of jobs are at stake.
I foresee great difficulty in enacting a transportation
reauthorization bill with the numbers proposed in this budget
resolution.
Our environmental programs get short shrift in this budget.
I am most disappointed that conferees refused to agree to the
additional $3 billion in funding for the Nation's water infrastructure
approved by the Senate. As I said during debate on the Senate floor,
the estimates of the current funding gap in the areas of water and
wastewater infrastructure are enormous. Accounting for inflation,
overall funding for environmental programs will be $770 million below
fiscal year 2003 levels. Real cuts in programs that keep our water,
land, and air clean will have to be made.
Finally, education gets short shrift in this budget.
Earlier this year, the President emphasized that education and
homeland

[[Page S5314]]

security are integral to having a secure nation with a well-educated
and training workforce that would grow and strengthen our economy.
At a time in our history when we are all focused on homeland
security, it must be noted that education should be considered the
centerpiece of our homeland security efforts. The best security for a
nation is to ensure that every individual has the opportunity to
receive a high-quality education, from prekindergarten to elementary
and secondary education, to special education, to technical and higher
education, and beyond.
The budget resolution before us severely underfunds key education
programs. The Title One program, which is the heart of the Federal
effort in elementary and secondary education, is $6 billion below the
level authorized under the No Child Left Behind Act. The resolution
also fails to provide for any increase in the Pell grant maximum award.
By authorizing large tax cuts in the budget conference report, we are
severely damaging our education delivery system. This Nation has
overwhelming needs in education, healthcare, and infrastructure. The
tax cuts in this resolution should have gone to meet these needs.
Mr. President, a budget is a statement of priorities. As is clear
from my statements, I will vote against this budget because I believe
this budget's priorities are dangerously misguided.
Mr. FRIST. Mr. President, let me first congratulate Senator Nickles.
This is the chairman's first budget resolution, and I particularly
thank him and his staff for all their hard work these last nearly 7
weeks to bring us to this point today.
It has not been easy, but the committee has met its schedule and
completed the budget resolution ahead of the statutory deadline of
April 15.
I understand this is the second fastest budget resolution conference
agreement ever considered. Senators might be reminded that the last
time we adopted a budget resolution in the Senate was almost 2 years
ago on May 8, 2001, under the chairmanship of Senator Pete Domenici, at
a time when the Senate was 50-50.
The Senate, for the first time in the 27 years of the Budget Act, did
not adopt a budget resolution last year, did not even consider one here
on the Senate floor. And I truly believe that our failure to complete
11 appropriations bills for fiscal year 2003 until just 8 weeks ago,
was a direct result of not adopting a budget last year.
So having a budget resolution that we can vote on today, is not only
important for how it will allow the legislative calendar to move
forward in a more orderly manner, it is also important to the
institution. The congressional budget process now is back in operation
and that is important not only for today but for the future of how
business is conducted particularly in this chamber.
Without a budget, chaos would rein in the legislative calendar.
Without a budget, there would be no fiscal discipline on our return
from the upcoming recess.
Without a budget, we would have no enforcement provisions to control
mandatory or discretionary spending. It would be open season on
spending increases.
Without a budget, interestingly to my colleagues who are opposed to
even the modest tax cuts assumed in this resolution, there would be no
restrictions on any tax cuts, just as there would be no limit on any
spending increases without a budget in place.
But more importantly, the fiscal blueprint before today, is the
correct blueprint to provide for economic growth and job creation.
It is going to be absolutely critical that once we return from the
upcoming recess that we focus quickly on adopting a tax reconciliation
bill that will stimulate investment, increase demand, and begin to
create needed jobs.
Equally as important this budget will provide for increased spending
where it is needed to provide for homeland security and national
defense.
And nondomestic spending will not decline but actually increase over
3.6 percent next year. A rate of growth consistent with the average
American family's pay check growth. Government spending should grow no
faster than families' income growth.
Mr. President, this is not, as the minority leader suggested, a
difficult day. This is a good day to adopt a budget, the first one in
over 2 years.
The PRESIDING OFFICER. Who yields time?
Mr. CONRAD. How much time remains on our side?
The PRESIDING OFFICER. Six minutes five seconds.
Mr. CONRAD. Mr. President, we anticipate now that the vote will start
at 5:20. We want to alert our colleagues to that. Let me just wrap up,
if I may. And then would the chairman like to conclude this debate?
Mr. NICKLES. Thank you.
Mr. CONRAD. All right. Mr. President, let's all understand what we
are voting on. This is not a tax cut of $350 billion. There is a tax
cut contained in this budget resolution for $1.3 trillion. There may be
some side deals that have been arranged to reduce the reconciled amount
of that tax cut, but the budget resolution before us provides $1.3
trillion in tax cuts. This is at a time of record budget deficits. We
have the biggest budget deficits we have ever had.
The budget deficit for this year will be between $500 and $600
billion, not counting Social Security. If we treat Social Security the
way it was intended and we don't take it and use it for other things,
the operating deficit is between $500 and $600 billion this year.
This is advertised as a growth package, something that will grow the
economy. In our analysis, nothing could be further from the truth. The
deadweight of these deficits and debt will burden the economy for
years. It threatens the economic security of our country.
This is the analysis of the people who were hired by the White House
and the Congressional Budget Office to do the economic analysis. This
is what they say:

Initially the plan would stimulate demand by raising
disposable income, boosting equity values, and reducing the
cost of capital. However, the tax cut also reduces national
saving while offering little new permanent incentives for
either private saving or labor supply. Therefore, unless it
is paid for with a reduction in Federal outlays, the plan
will raise real interest rates, crowd out private sector
investment, and eventually undermine potential gross domestic
product.

In other words, this plan hurts the economy. It doesn't help it. It
hurts it. That is the analysis of the people who are paid to do it by
the White House themselves.
The White House's own budget document reveals the long-term
circumstance we face: Exploding deficits as a result of exploding costs
to the Federal Government from the retirement of the baby boom
generation, coupled with exploding costs of the tax cut that is
proposed and contained in this budget. The result: we never get out of
deficit, ever, at least until the year 2050, according to the
President's analysis. The deficits just get deeper and deeper and
deeper, threatening the economic security of the country.
I close with this piece that appeared in the New York Times op-ed
page on Wednesday. This is a piece done by six of our most
distinguished colleagues: three former Senators--two Democrats, one
Republican--two members of President's Cabinet in the past--one
Republican, one Democrat--and Paul Volcker, former head of the Federal
Reserve. I don't know his political affiliation.
They are warning us of the direction we are going. They conclude by
saying this:

That is what is at stake here.
Are we really going to pass a budget that contains authorization for
another $1.3 trillion in tax cuts, when we are already in record budget
deficits, when we are in a war, the cost of which we do not know, and
we are on the brink of retirement of the baby boom generation, which is
going to explode the cost to the Federal Government?
Mr. President, anybody who votes for this budget is voting to
increase the

[[Page S5315]]

deficits by $2.4 trillion. It is precisely the wrong thing at this
time. It is precisely the wrong thing. I urge my colleagues to vote no.
The ACTING PRESIDENT pro tempore. The Senator from Oklahoma is
recognized.
Mr. NICKLES. Mr. President, for the information of our colleagues, we
are going to be voting momentarily. I have a lot of colleagues who say
they want to catch planes, and a lot of the debate has cycled around
once or twice. It has been a pleasure to work with Senator Conrad. I am
not totally surprised that he will not vote for the budget resolution--
maybe a little disappointed.
I hope we return to the days of having bipartisan budget resolutions.
There will be some Democrats who will vote for this. I hope there are
several. When we passed this budget 3 or 4 weeks ago in the Senate,
there were several Democrats who voted for it. I hope we will get
several to vote for it today.
I have heard a lot of complaint about it, most of which is excessive
tax cuts. I beg to differ. We have tax revenues over the next 10 years
of about $28 trillion, and the reconciled portion of this tax cut, at
maximum, would be $550 billion, but probably more like $350 billion.
That is a small percentage. Some colleagues say: Wait a minute, there
are more; in the outyears, there is $600 billion, and that is basically
continuing present law. If you don't do that, you are going to have
massive tax increases in 2011, 2012, and 2013. A lot of those tax
increases will be on low-income people, raising their rate from 10
percent to 15 percent, reinstating the marriage penalty, or it would be
eliminating the $1,000 tax credit per child. I don't want to do that. I
don't know that we are going to do it this year. We don't have to do it
this year. We should do something to stimulate the economy. We have a
small stimulus package--$350 billion for the Senate.
So I hope our colleagues will support this package.
I will make one comment about deficits. Are deficits too high? You
bet. Some people say--and I have heard this a lot--they were caused by
excessive tax cuts in 2001. But I disagree with that. There are two
equations: how much revenue you are taking in, and also how much money
you are spending. We have been spending a lot of money because of
national defense needs, because of homeland security and, frankly,
Congress got in the habit of spending a lot of money during the later
years in the Clinton administration when we had a lot of growth
revenue. We had spending compounding at double-digit levels--12, 13, 14
percent. We cannot continue doing that.
This budget has fiscal discipline. It does say that the discretionary
amounts, compared to last year prior to the supplemental, will grow at
about 2.5 percent. We have caps on entitlements, points of order
against growing entitlements, and we say that entitlement changes in
Medicare should be limited to $400 billion after a bill is reported out
of the Finance Committee. We didn't put that in reconciliation. We want
Medicare, and we want a prescription drug bill, and we think we can get
it as a result of this bill.
Last year, we had no budget. When we had no budget, we didn't get
appropriation bills done. We didn't pass 11 of 13 appropriations bills
last year because the House and Senate didn't have numbers with which
they concurred. We didn't get a prescription drug bill. We didn't
function or manage.
I urge my colleagues, let's not be totally focused just on the size
of the growth package--and a lot of people have different opinions,
such as it is not large enough, it is too big; some want zero, some
want $350 billion, some want more, and some may want more than that.
Let's also keep in mind that that is a tax figure over 10 years, and it
is a very small percentage compared to what we are spending per year,
which is $2.2 trillion.
This budget is the only game in town if you want to have any control
over the growth of that total expenditure. We didn't pass the budget
last year. If we don't pass one this year, the whole budget process is
dead. I urge my colleagues, let's be fiscally responsible. This is the
only game in town. For people to say, wait a minute, this is too high--
the only thing they are talking about being too high is on the tax
side. That doesn't count the trillions of dollars they were trying to
add on spending.
I urge my colleagues to be responsible. Let's work together and pass
a budget that can pass. This can pass. Let's reinstate some discipline
that we didn't have last year. I urge my colleagues to support this
budget.
I yield back the remainder of my time and I ask for the yeas and nays
on the conference report.
The ACTING PRESIDENT pro tempore. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the conference report.
The clerk will call the roll.
The legislative clerk called the roll.
The VICE PRESIDENT. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 50, nays 50, as follows:

[Rollcall Vote No. 134 Leg.]

YEAS--50

Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Campbell
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Kyl
Lott
Lugar
McConnell
Miller
Murkowski
Nickles
Roberts
Santorum
Sessions
Shelby
Smith (OR)
Snowe
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner

NAYS--50

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Breaux
Byrd
Cantwell
Carper
Chafee
Clinton
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
McCain
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Rockefeller
Sarbanes
Schumer
Stabenow
Wyden
The VICE PRESIDENT. On this question, the yeas are 50, the nays are
50. The Senate being equally divided, the Vice President votes yes, and
the conference report is agreed to.
Mr. NICKLES. I move to reconsider the vote.
Mr. SANTORUM. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. NICKLES. Mr. President, I thank all of our colleagues. This has
been a challenging process. I especially thank Senator Conrad. We have
had a good debate, a challenging process, needless to say, but we now
have a budget. I thank all of my colleagues for their support in making
that happen.
The VICE PRESIDENT. The Senator from North Dakota.
Mr. CONRAD. Mr. President, we welcome the Vice President to the
Chamber. We congratulate you on the success of our forces half a world
away in Iraq. We deeply appreciate that success.
We have concluded action now on the budget resolution. This has been
an item of significant debate in the Chamber, and disagreement, but we
respect the outcome. Everyone had a chance to express their view.
Everyone hopes this works out for the best for our country.
I conclude by thanking the chairman of the committee, who worked very
hard in difficult circumstances to produce a budget resolution. We
congratulate him on his success. We also thank his excellent staff, who
were terrific to work with. Although we had, obviously, disagreements
on the two sides, the tone of this debate has been excellent.
I also thank all of my colleagues who expressed themselves, who
participated in this debate and made their feelings known.
I conclude by thanking my own staff, my staff director, Mary Naylor,
Jim Horney, Sue Nelson, my counsel, Lisa Konwinski, and all of the
other staff members who worked long and hard as we considered this
resolution.
I yield the floor.
The ACTING PRESIDENT pro tempore. The majority leader is recognized.
Mr. FRIST. A brief announcement now for the benefit of our
colleagues. The supplemental is currently being

[[Page S5316]]

discussed, debated, amended, worked on very hard as it has been over
the last several days, and will likely go into tonight. We expect to
pass that supplemental by unanimous consent later tonight, and thus the
vote we just took will be the last vote prior to the recess. The next
vote will be on Tuesday, April 29. I will notify Members of the exact
time on Tuesday, the 29th.
Again, there will be no further rollcall votes between now and the
recess.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico is
recognized.
Mr. DOMENICI. Mr. President, I rise to congratulate the distinguished
chairman of the Budget Committee. Frankly, no matter how difficult, we
did produce a budget resolution. Obviously, it is less than unanimous
in terms of the likes and dislikes for this proposal, but I submit it
is far better for the Senate and for the people of this country that we
have a budget resolution than we not have one at all.
Obviously, there will be opportunities to differ during the year, and
there are provisions that will be difficult to maintain and to enforce.
The truth is, we do know when we do not have a budget resolution,
regardless of how contentious it is, we are inviting chaos. We are
inviting a delay in almost every one of the processes that are ordinary
and normal to this case without a resolution. There are plenty of
Senators who do not agree with that. That is why the vote is 50/50.
That is exactly what voting is for. Someone wins; someone loses. In
this instance, the Vice President did what is provided for in our
Constitution, provided the one-vote majority, and now we have a budget
resolution.
I am hopeful that the implementation of that budget resolution,
contrary to what has been said this evening by the other side, will be
good for this country. I am confident that it will be better for this
country than not to have one. Of that, I am positive.
Could there be a better one? Maybe, but there cannot be a better one
and get votes in the Senate to have that as a budget resolution. If we
could, we would have. This is the best we can do.
I compliment Senator Nickles, the new chairman, and all who worked
with him. Obviously, the decorum, the demeanor, in getting this done
requires more than a chairman. It requires a ranking member and the
ranking member deserves our accolades.
In addition, I guarantee there are plenty of staff hours and toil and
work on both sides of the aisle that went into this resolution. I
commend each and every one of the staff who worked so hard to get us to
this point.
Last but not least, I commend the majority leader for his dedicated
and diligent work in helping the chairman get us to where we are today.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
Mr. NICKLES. I thank my colleague, Senator Domenici. Personally, my
admiration for him has gone up dramatically, recognizing that he was
either chairman or ranking member for 22 years of the Budget Committee,
and every year he was chairman, he was able to get a budget passed. It
is not an easy process. I also thank him because he has given me some
excellent staff and they have been a great asset. Hazen Marshall is the
chief of staff who put together a great team, many of whom were former
employees of my very good friend.
Senator Domenici, who is now chairman of the Energy and Natural
Resources Committee, is doing a fabulous job. This year we will have an
energy bill and it will be passed out of the Energy and Natural
Resources Committee. When marking it up, it had a lot of amendments. We
had a lot of amendments on the budget package in committee and on the
floor, and I am sure we will in the energy bill, but I am sure we will
have an energy bill to contribute to our country's energy security.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BYRD. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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