[Congressional Record Volume 150, Number 29 (Tuesday, March 9, 2004)]
[Senate]
[Pages S2404-S2430]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                            2005--Continued


                           Amendment No. 2704

  Mr. CRAPO. Mr. President, the amendment that is before the Senate 
today, and on which I expect we will vote very soon, is an amendment 
that would change the budget enforcement rules as we proceed forward in 
considering legislation. This amendment would amend title IV of the 
budget enforcement provisions of the committee-reported resolution to 
include a 60-vote point of order against the consideration of any 
direct spending or tax relief legislation that would increase the on-
budget deficit in any fiscal year, in its terms, ``until the budget is 
balanced without Social Security'' payroll tax receipts.
  The problem this amendment poses, although it sounds very admirable 
on its face, is that it is based on the faulty premise that either tax 
relief or spending is raiding the Social Security trust fund.
  I will be one of the first to agree we should control spending in 
this body, such that we do not engage in deficit spending, which makes 
it more difficult for the Federal Government to pay down its 
outstanding debt obligations.
  In fact, as I said yesterday on the floor, when I ran for Congress, I 
ran on a principle of a balanced budget, and beginning in about 1994, 
in this Congress, we were able to exert the kind of fiscal discipline 
that helped us ultimately, with the assistance of a strong economy, to 
achieve a balanced budget to start paying for what we were spending in 
Congress and to be able to pay down significant amounts of the national 
debt.
  I believe that is a very admirable principle. But to argue that 
either the excess spending or the cuts in taxes are somehow raiding the 
Social Security trust fund is to create a spin that needs to be 
clarified.
  The first point I believe the public needs to understand is that when 
proceeds come into the Social Security trust fund, by law, those 
proceeds are utilized, first, for the purposes of the Social Security 
benefits that are provided. Then, if there are excesses--and in the 
past few years there have been excesses; there will be for a number of 
years until the Social Security trust fund begins to run deficits--
those excesses or surpluses are then invested, by law, in Government 
bond instruments, in other words, Government debt instruments.
  Those Government debt instruments, as other debt instruments which 
the Government issues, are then sold to the public or to buyers around 
the world, frankly, and then repurchased at the time when they become 
due by the Federal Government.
  It will be necessary for us, when these bonds come due--for any year 
we issue them--to pay for them. The more deficit spending we engage in, 
the more debt we incur, and the heavier the debtload for future 
generations, it is true.
  The net effect of the amendment we are now debating is directed 
specifically at tax relief. There is tax relief that this Congress and 
the President of the United States have passed, and the President 
signed into law in the past few years that will expire because of the 
procedural mechanisms utilized to get it through the Senate. The 
various provisions of this tax relief that we were able to accomplish 
in the last few years expire on different dates, depending on the terms 
of the legislation we passed.
  I believe everyone should be very clear about one important fact. 
Although there has been a lot of debate in the last few days, and will 
be for the next few, primarily attacking the President for supporting 
tax relief and primarily saying that this tax relief was for the 
wealthy and the rich, the fact is the tax relief was provided across 
the board to Americans from all income categories who pay taxes. In 
fact, the highest percentage of the tax relief went to those who were 
in the lower and middle-income categories.
  We can debate the value of the tax relief that is claimed to be for 
the wealthy. Most of it went to small businesses that apparently are 
categorized as the wealthy. Most of it was that which is providing the 
incentive to invest in capital that will generate strength in the 
economy and create more jobs. But setting that debate aside, those 
provisions of the tax relief that this Congress and previous Congresses 
enacted over the past few years under President Bush's leadership that 
expire this year, those that are in jeopardy of going away this year 
are not these tax increases that everyone has been referring to in the 
last few days, these so-called tax cuts for the wealthy. They are 
instead the tax cuts that directly benefit the middle and lower income 
classes.
  What are they? First, we expanded the 10-percent income tax bracket 
so that more people are covered at the 10-percent level than the higher 
levels of taxes. That is the lowest level of tax in the income tax 
structure. The tax bracket of protection for the lowest level of 
income-tax payers was expanded. It is that tax relief that will

[[Page S2405]]

expire this year. It is that tax relief which is the target of this 
amendment. It is that tax relief which this amendment will make more 
difficult to maintain and which will result in direct tax increases on 
those who are paying taxes at the first and lowest level of income 
category in our income-tax code.
  The second tax that is going to expire this year is not this so-
called tax on the wealthy that is so excoriated in the Senate. No, it 
is the marriage tax penalty relief. Those who fought us for years to 
stop elimination of the marriage tax penalty would love to see a 
procedural roadblock put into the place of this marriage tax penalty 
relief that is expiring. We don't want to see that happen.
  What is the third and the last tax that will expire this year after 
the expansion of the 10-percent bracket and the elimination of the 
marriage tax penalty? It is the $1,000-per-child tax credit. I don't 
believe those who are attacking the President's tax relief are going to 
claim that everybody who has a child and who can take advantage of the 
child tax credit is wealthy, according to the standards they have been 
putting forth. This one doesn't impact across income categories except 
that it is phased out for those in upper income categories and is a 
primary benefit specifically to those in the lower and middle-income 
categories.
  So we have three critical tax relief provisions that are going to 
expire this year which directly benefit the lower and middle-income 
classes that will be made more difficult to extend if this amendment 
passes.

  When you look at these things on their face, it sounds very nice to 
say let's put a procedural mechanism in place to make it harder to cut 
taxes. But let's not make a mistake. The taxes they are going at are 
the taxes specifically identified in the reconciliation provisions of 
our budget; that is, the expansion of the 10-percent bracket, the 
elimination of the marriage tax penalty, and the child tax credit. For 
those reasons, I believe it is important we recognize this amendment 
must fail.
  There has been a lot of talk about what is going to happen to Social 
Security. I, for one, will vote to have strong fiscal restraint in this 
budget and to do what is necessary to stimulate and strengthen our 
economy, to make sure our economy can start gaining steam again and 
help us address these budget deficits.
  I have a small chart that shows what the Social Security trust fund 
is going to look like under the current budget or without the current 
budget, having undone the current budget. The point is, it is the same. 
The reason it is the same? There will be about $4 trillion in the 
Social Security trust fund either way. The reason it is the same either 
way is all surpluses in the Social Security trust fund are by law 
invested in government bonds and government debt instruments. Those 
government debt instruments will protect the Social Security trust fund 
in either case.
  Again, I want to make clear, the way to protect the Social Security 
trust fund is to stop overspending our budget. The way to protect the 
Social Security trust fund is to stop running deficits and start, once 
again, as we were in the late 1990s, paying down the national debt, 
giving greater strength and resiliency to our economy and confidence in 
our ability to repay these debts as they come due.
  Let's not get ourselves caught up in this debate about whether taxes 
and tax cuts are bad or good. Those who debate this issue on the floor 
and criticize the President primarily have two messages: The first is, 
they want to blame the tax relief of the past few years for all of the 
economic problems our Nation has faced in the last 3 or 4 years, when 
in reality we saw the stock market bubble pop. We were attacked on 9/11 
which drove down consumer confidence and drove spending through the 
roof in terms of the war on terrorism and the effort to defend attacks 
on our homeland. And we have seen other problems, mainly the 
uncontrolled increases in entitlement spending that drive spending in 
this budget.
  Over the next few days we will continue to have this debate over 
whether it is better to have higher taxes and higher spending and 
somehow spend ourselves into prosperity or whether it is better to have 
lower taxes and give an economic stimulus to the private sector and to 
strengthen consumption and then try to control the deficits, thereby 
stimulating the economy and controlling spending. That is going to be 
what we debate in one context or another for the rest of this week.
  I say to those who are listening, this amendment will essentially 
accomplish one thing, and that is to put roadblocks in the way of the 
kind of tax relief for which we have been fighting for the last 3 or 4 
years. It doesn't put roadblocks in the way of discretionary spending 
proposals. It doesn't put roadblocks in the way of entitlement spending 
increases. It puts roadblocks in the way of efforts to maintain the tax 
relief that we have had in the past few years. Again, primarily that 
tax relief which we are targeting and which we are projecting to the 
Finance Committee in our reconciliation bill is the tax relief that is 
intended to expire this year: The expansion of the 10-percent tax 
bracket for those at the lowest level of income tax payment, the 
marriage tax penalty elimination, and the $1,000-per-child tax credit.
  I encourage all of my colleagues to vote no on this amendment.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I almost don't recognize my amendment when 
I hear the description of the Senator from Idaho. The amendment he is 
talking about is not my amendment. My amendment says very simply: No 
new mandatory spending, and that is two-thirds of Federal spending; no 
new tax cuts unless they are paid for until we stop using Social 
Security funds for other purposes. The only way around that is a 
supermajority vote.
  So let me repeat what this amendment does. This amendment says: No 
increase in mandatory spending, no new tax cuts that are not paid for 
until we stop the use of Social Security funds for other purposes.
  Let me be clear. We have had in the past pay-go provisions, and the 
pay-go provisions operated in just this way. They were focused on 
mandatory spending, not on discretionary spending. We disciplined 
discretionary spending with spending caps. We have a cap in place right 
now. Mandatory spending we disciplined with a pay-go provision just 
like mine, and we disciplined the tax cut side of the agenda with a 
discipline just like mine. But those disciplines were stopped in 2002.
  What I am saying is they ought to be put in place. We ought to insist 
that if somebody wants more spending, new spending on the mandatory 
side, they ought to come up with a way of paying for it. If they want 
new tax cuts, they ought to find a way to pay for it until we stop the 
use of Social Security money for other purposes. We would defend those 
disciplines with a 60-vote point of order.
  Mr. CRAPO. Will the Senator respond to a question?
  Mr. CONRAD. I will in a minute. Let me complete my thought, and then 
I will be happy to yield to the Senator for the purpose of a question.
  I believe this is critically important that we put this discipline in 
place. The Senator has referenced the middle-class tax reductions. I 
have said publicly that I will support the extension of the 10-percent 
bracket. I will support the continuing marriage penalty relief. I will 
support the continuing relief that we see with the expansion of the 
child tax credit. But to do it, we ought to pay for it, just as we 
ought to pay for new spending. If we cannot pay for it, then we ought 
to have a 60-vote hurdle in front of us to discipline the spending-and-
tax-cutting process in this body.
  Look, we have record budget deficits, and under the budget that is 
before us by the majority, the increases in the debt are virtually 
unchanged over the 5-year period. The debt is being increased under 
this budget by $2.86 trillion. The increases in the debt year by year 
are never below $550 billion, $560 billion.
  I will be happy to yield to the Senator for a question.
  Mr. REID. Mr. President, may I ask a parliamentary inquiry--I guess 
it is not parliamentary inquiry--if the Senator from North Dakota will 
yield?
  The PRESIDING OFFICER. The Senator from Nevada will state his 
inquiry.
  Mr. REID. I apologize to my friend from Idaho. May I ask the ranking

[[Page S2406]]

member of the committee what the chairman and he have decided on a 
vote? We have people anxious to know when this vote is going to take 
place. Can the ranking member or the chairman respond to my question of 
when the vote will take place on the pending amendment?
  Mr. NICKLES. Mr. President, to respond to my colleague from Nevada, 
we told people to expect a vote at 2:30 p.m. I told my colleague from 
North Dakota we expected a very short summary and debate by the two of 
us. It is agreeable with this Senator to vote in the next 6 or 8 
minutes, 10 minutes, 4 or 5 minutes to a side.
  Mr. REID. Can we set the vote at quarter to 3?
  Mr. NICKLES. That will be fine.
  Mr. REID. Ten minutes, five minutes on each side.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the rollcall 
vote on the Conrad amendment occur at 2:45 p.m.
  Mr. REID. With the time to be equally divided.
  Mr. NICKLES. With the time equally divided.
  Mr. REID. And no second-degree amendments in order.
  Mr. NICKLES. That is not necessary.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time? If no one yields time, time will be charged equally.
  The Senator from North Dakota.
  Mr. CONRAD. I thank the Chair. I thank my colleagues.
  Mr. President, let me be clear. The amendment I am offering says 
this: No new mandatory spending, no new tax cuts unless they are paid 
for until we stop using Social Security money for other purposes. It 
guards that budget discipline with a supermajority point of order. That 
is how we have worked in the past with the pay-go provision, focused on 
mandatory spending and on the tax side of the ledger. It is not 
different from what we have done in the past.
  Some have said it does not discipline discretionary spending. We have 
never disciplined discretionary spending with this kind of mechanism. 
We have done that with spending caps, and we have in place today a 
spending cap. I have supported spending caps to discipline the 
discretionary side of the spending.
  Remember, mandatory spending is two-thirds of Federal spending, and 
we have nothing in place now to protect us on the revenue side or the 
mandatory spending side. That is what this amendment does.
  If we look at the President's budget, it is very interesting what we 
see. Over the next 10 years, he is taking every penny of the Social 
Security surplus and using it to pay for other items. What are the 
other items he is paying for? One is his income tax cuts. There will be 
a $2.4 trillion Social Security surplus over the next 10 years. By the 
way, it is not surplus at all. It is a misnomer because we are going to 
need that money when the baby boomers retire. But he is taking that 
money that is in surplus for the moment and using it to pay for other 
programs, including $2.5 trillion of income tax cuts.
  Income tax cuts are primarily going to the wealthiest among us. If we 
look at who benefits from the Bush income tax cuts, what we see is the 
top 1 percent, those earning over $337,000 a year, get 33 percent of 
the benefit.
  Our friends on the other side will say they pay more taxes. Indeed, 
they do, but they do not pay 33 percent of the tax burden in this 
country. They pay about 23 percent of the tax burden in this country. 
They have gotten a disproportionate benefit.
  If we look at who benefits from Social Security, we see that two-
thirds of retirees rely on Social Security for more than half their 
income; 31 percent get at least 90 percent of their income from Social 
Security; 33 percent get 50 to 89 percent of their income from Social 
Security; 36 percent get less than 50 percent of their income from 
Social Security.
  The big problem we have is shown on this chart. This shows the Social 
Security and Medicare trust funds that are now in surplus. Those 
surpluses are being used to pay for other items. The red bars show the 
cost of the President's tax cuts. What one can see is, as the trust 
funds go past negative, the expense of the President's tax cuts 
explodes, driving us right over a cliff into deeper and deeper deficit 
and debt.
  That is what has led the head of the Federal Reserve to urge cuts in 
Social Security. The head of the Federal Reserve has come before 
Congress and has said: You are overcommitted. You are spending way more 
than you are taking in, and this is going to lead to an incredible 
crunch. He said to us: One of the things you ought to consider is 
cutting Social Security benefits.
  The President said to us repeatedly that Social Security funds should 
not be used to fund other expenses of Government.
  In his 2002 budget blueprint, the President said:

       None of the Social Security surplus will be used to fund 
     other spending initiatives or tax relief.

  That is a broken promise. In 2001, in a radio address, the President 
said:

       Every dollar of Social Security and Medicare tax revenue 
     will be reserved for Social Security and Medicare.
  In a radio address on March 3, 2001, the President said:

       We're going to keep the promise of Social Security and keep 
     the government from raiding the Social Security surplus.

  That is exactly what he is doing. That is why this amendment is 
important. I urge my colleagues to support it.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I urge our colleagues to vote against 
this amendment. For those who say we are raiding Social Security, I 
believe that is absolutely false. We are protecting Social Security 
just like any other budget, just like the budget Senator Conrad passed 
out of the Budget Committee a couple of years ago. He raided Social 
Security to the tune--if one uses that terminology, and I do not want 
to use it because I do not believe it--of about $866 billion. He did 
the same thing that we are doing today.
  We knew exactly what the law says. The law says if there are surplus 
Social Security revenues, they are to be invested in T-bills, and I 
will quote the law. This is the Social Security Act, Section 201(d):

       It shall be the duty of the Managing Trustee to invest such 
     portion of the Trust Funds as is not, in his judgment, 
     required to meet current withdrawals. Such investments may be 
     made only in interest-bearing obligations of the United 
     States or in obligations guaranteed as to both principal and 
     interest by the United States.

  That is exactly what we do. I think some are trying to politically 
scare people into making a mistake. The mistake would be to say 60 
votes are needed to do anything in the future, supposedly pay-go for 
everything.
  In reality, they did not cover appropriated amounts. There could be 
an appropriation increase of $100 billion. Oh, that does not have to be 
paid for. Maybe there are caps, maybe there are not caps. We have had a 
year that we did not have a budget resolution and did not have caps. It 
would be very easy not to have a resolution and not to have caps.
  Basically, discretionary spending would be exempt from this very new 
stringent requirement. Plus, there would be almost an encouragement for 
more spending. Some people could say let's increase spending because if 
spending is increased, there will not be a tax cut. Obviously, there 
are some people who do not want to have a tax cut--not only not have a 
tax cut, they do not want to see present law extended. That is really 
what we are talking about. Some people want to have a supermajority or 
mandate where there cannot be an extension of present law. So this is 
very important.

  I heard my colleague say any increases in mandatory, those are 
covered just like tax increases. That is not the case. There are 
billions of dollars of mandatory programs that are sunset, but 
according to the CBO those are assumed to be extended. They do not have 
to be paid for after they are sunset, but taxes are sunset and they 
have to be paid for. So this makes it tough on the taxpayer.
  If this amendment passes, there is a big bull's eye on taxpayers. 
Look out, you are getting ready to be hit. Congress is making it a lot 
easier to spend money. New spending on the discretionary and lots of 
mandatory are not covered, but any taxes, even present law extension, 
those are going to be hit. Taxpayers, look out.
  I urge my colleagues to vote no on this resolution. I do not think 60 
votes

[[Page S2407]]

should be required to pass everything in the Senate, and I am afraid 
that is what this amendment would lead to.
  I urge my colleagues to vote no on the amendment. I yield the 
remainder of our time, and I ask for the yeas and nays on the 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards), the Senator from South Dakota (Mr. Johnson), and the Senator 
from Massachusetts (Mr. Kerry) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea.''
  The PRESIDING OFFICER (Mr. Crapo). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 46, nays 51, as follows:

                      [Rollcall Vote No. 33 Leg.]

                                YEAS--46

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Kennedy
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--51

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

                             NOT VOTING--3

     Edwards
     Johnson
     Kerry
  The amendment (No. 2704) was rejected.
  Mr. NICKLES. I move to reconsider the vote.
  Mr. TALENT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I don't know if any of my colleagues are 
prepared to offer an amendment at this time. If not, I would like to 
speak to the budget which is before the Senate.
  Mr. REID. I yield to the Senator from Illinois 25 minutes.
  The PRESIDING OFFICER. The Senator from Illinois is recognized for 25 
minutes.
  Mr. DURBIN. Once again, if any colleagues are prepared to offer an 
amendment, please indicate and I would be happy to give them a chance 
to do that.
  Before beginning, I notice the junior Senator from Michigan is here. 
I would like to ask, if possible, in a colloquy how much time she would 
like to use so I don't go over. I know she has waited patiently for a 
chance to speak.
  Ms. STABENOW. Mr. President, I was hoping to have 15 minutes if that 
is possible.
  Mr. DURBIN. If it is all right with the Senator from Michigan, I will 
take 15 minutes, and if there is no objection, I ask unanimous consent 
that the floor then be yielded to the junior Senator from Michigan.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, this is an important debate because it is 
a debate about promises that have been made and promises that have not 
been kept. Many Members can recall President Bush, when he came to 
office, said he had a plan for putting America's economy back on its 
feet.
  Now, understand, when President Bush took office we had gone through 
a period of amazing economic expansion in the United States. Under the 
8 years of the previous administration we had created some 27 million 
new jobs in America. We can remember the feeling of exhilaration and 
excitement as this economy charged forward. Silicon Valley was leading 
our technology and our economy, and people across the board were 
finding their retirement plans and savings were growing to historic 
levels. There was a great feeling of optimism, creation of more jobs 
than at any time in our history, lower inflation, a situation where we 
had more new businesses created than we had seen in any comparable 
period, and more for women and minorities. It was a dramatic period of 
economic expansion. It was a period when there was real confidence we 
were doing the right thing.
  Some of that is within the control of the President and some of it is 
not. Giving credit to the previous administration, I believe President 
Clinton made an important early decision. When he came to office, he 
decided his party, the Democratic Party, would do something that 
surprised many observers. He said, we will seriously and honestly 
address the deficit.
  We remember the deficit. Under President Ronald Reagan and President 
George Bush 1, we had amassed annual deficits and a national debt 
emerging from them of record proportion. In fact, there was more debt 
in that period of time than any time since the beginning of the United 
States of America. The debts just kept on coming.
  In came President Clinton who said: We can do better; but in order to 
do better, we have to do two things. One, we have to cut spending. 
Second, we will have to impose some new taxes. There were tax cuts for 
sure in the package, and I voted for it, but he said those are the 
things that have to be done. If they are done, President Clinton said 
in 1993, I believe it will be a signal to the business community in 
America that the U.S. Government will get its house in order. We will 
stop running these massive annual deficits. We will stop accumulating 
this national debt. We will be more responsible. President Clinton 
brought that proposal to Congress. I was serving in the House at the 
time. It passed the House of Representatives by one vote, without a 
single Republican Congressman voting for it. Then it came to the Senate 
where a vote was cast again on President Clinton's plan to get the 
economy back on its feet, and what happened here? A tie vote broken by 
then-Vice President Al Gore, all Democratic votes again, passing the 
Clinton plan.
  Members of the Republican Party came to the floor during the debate 
and predicted if President Clinton had his way, if his plan were 
enacted, we would lose jobs, move into a recession, and find our 
economy permanently damaged. Those speeches were coming at us like 
rapid fire out of a gun from the other side of the aisle. They did not 
provide one single vote for the Clinton plan to put this economy on its 
feet. Fortunately, it passed and, in passing, set us on course for the 
great economic expansion which I just explained.
  Now look where we are today. The first thing to do is to consider 
where President Bush was when he came to office. This chart is an 
indication of the deficits in surplus in the United States. Under 
President Reagan we can see the first deficit he ran into was in the 
range of $79 billion. Then the annual deficit increased to about $153 
billion. In other words, we were overspending that much each year.
  Then under President Bush's father, the annual $153 billion deficit 
grew to $290 billion. That was money we were spending we did not have. 
We were increasing the mortgage of the United States of America every 
single year under President Reagan and President Bush's father.
  Then came President Clinton and he said, as I described earlier, we 
need to do the responsible thing. We need to cut spending and we need 
to increase taxes on those who can afford to pay. As a result, we see 
the deficit line go from a high of $290 billion under President Bush's 
father and the annual deficit start plummeting under President Clinton 
until 1997 when we will start running surpluses. Who would have 
guessed, after all those years, 12 or 13 years of straight deficits, we 
started running surpluses in America.

  What did a surplus mean? It meant we were putting money into the 
Social Security fund instead of borrowing it. Why is that important? 
Because we

[[Page S2408]]

have a horde of Americans, called baby boomers--and I am just outside 
that class--who will show up for Social Security and Medicare soon. We 
said, let's get Social Security and Medicare stronger. We know they are 
coming. That is what President Clinton did. Because of his decisions, 
we reached the maximum point in his administration where we had an 
annual surplus of $236 billion, generating more money than we were 
spending. What a change. What a dramatic change over this period under 
President Reagan, President Bush's father, and President Clinton.
  Then look what happened when President Bush came into office. He came 
into office with an economy that was starting to show some recession, 
it is a natural thing, and came up with a plan for America which called 
for the most substantial tax cuts in our history, with a substantial 
part of them going to the highest income, wealthiest Americans. 
President Bush and his adherents in the House and Senate insisted if 
you just give a tax break to the wealthiest people in America, they 
will save it and spend it and invest it in a way that will turn the 
American economy around.
  President Bush carried the day. I didn't vote for it. Some of my 
Democratic colleagues did. He passed not one but two major tax cuts.
  Now look what happened as a result of President Bush's economic 
policy over the last 3 years and 3 months. Look at this line. We have 
gone from a $236 billion surplus under President Clinton to a $477 
billion deficit we are facing today--an abject failure of President 
Bush's economic policy.

  Every year we continue to give tax cuts we cannot afford to pay for, 
and we continue to spend money we do not have. How in the world can the 
Federal Government do that? How can we consistently act like a bankrupt 
nation and get by with it? Well, the answer is, we reach into the 
Social Security trust fund.
  This trust fund is created every single minute of every day by every 
worker in America. As they go to work and earn their wage, the Federal 
Government takes about 7 or 8 percent of it from the employee, the same 
amount from the employer, and says: We are putting that away for Social 
Security, so when you are ready to retire it will be there.
  All that money accumulates and grows. We pay the current Social 
Security recipients, and we save the balance for the future. That 
balance grows. The way we sustain a deficit is by reaching into that 
Social Security trust fund and spending it, leaving IOUs behind.
  The vote that was just taken, for those who are following it, was 
very basic. It said: Stop reaching into the Social Security trust fund 
to increase tax cuts for America or to increase mandatory spending. You 
saw what happened. The vote went down resoundingly. I guess my 
colleagues are being very honest about this. They know we have deficits 
we cannot handle, and they know you cannot sustain those deficits 
without reaching into the Social Security trust fund and taking the 
money out, and they are perfectly willing to keep doing that. In fact, 
they are willing to increase the tax cuts at a time when we are in deep 
deficit and have to rely on the Social Security trust fund to save it.
  So what do we have here? We have such a dramatic reversal in such a 
short period of time. President George W. Bush's economic policy has 
failed miserably. This red line on this chart, this dramatic increase 
in our annual debt is a clear indication.
  Now take a look at some other economic indicators. There are those 
who argue the economy is growing; good signs are on the horizon; a 
reason for optimism. Well, what happened last Friday? Last Friday we 
had a report from the Department of Commerce about the number of jobs 
created last month in our economy. The report said 21,000 new jobs were 
created. Cause for celebration? Hardly. All 21,000 new jobs were 
created by State and local governments; no net increase in jobs in the 
private sector in businesses. Businesses are not creating new jobs. The 
Bush economic policy has failed in that regard as well--21,000 new 
jobs, all with State and local governments. We need to create about 
125,000 new jobs each month just to keep up with the new entries into 
the workforce, people who are now looking for jobs for the first time. 
We are not even keeping up with the new entries.
  We have an incredible thing happening. Over 400,000 Americans have 
stopped looking. They have been on unemployment for so long they have 
given up. They are not even looking any longer. They are not being 
counted. The number of unemployed people in this economy, 
unfortunately, is growing dramatically.
  Again, the Bush economic policy has failed, with record deficits, 
higher than any time in our history. Unfortunately, this President has 
presided over the loss of more jobs during his administration than any 
President in the history of the United States since President Herbert 
Hoover in the Great Depression.

  Those are the realities of the failed Bush economic policy, and the 
budget before us today is proof positive of the fact that is likely to 
continue.
  The Bush administration has not been realistic when it comes to job 
projections. Take a look at this chart. The black line at the bottom 
shows the actual job situation, how many jobs we have had in America. 
These red lines that come shooting off, suggesting many more jobs are 
going to be created, are all predictions by President Bush's 
administration. The economic reports of 2002, 2003, and 2004 said 
recovery was on the way, around the corner, and millions--literally 
millions--of jobs will be created. Each and every time they have been 
wrong. Their policy has been wrong.
  Just several weeks ago, a gentleman by the name of Gregory Mankiw, 
who is the head of the President's Council of Economic Advisers, sent 
this Congress a report, signed by President George W. Bush, that took a 
look at the job situation. Incredibly, Mr. Mankiw reported to us that 
in fact the outsourcing of jobs, the sending of American jobs overseas, 
Mr. Mankiw says, is a good thing. It is healthy for us to see American 
jobs leave our shores to India and China and other countries around the 
world.
  His argument--I suppose among some economists this is credible--was 
that now jobs that did not used to be ``tradeable,'' in his words, are 
tradeable. Call center jobs--the next time you get a call at home from 
somebody who wants you to take a credit card or change a phone service, 
ask them from where they are calling. I started asking recently. My 
last two callers were calling from India.
  This morning we read about a small town in Virginia that is about to 
lose Travelocity, which is an agency which books travel for people 
around the world. Their jobs--several hundred in a small Virginia 
town--are going over to India. Mr. Mankiw says to Congress: Don't get 
worried. This is a good thing. This is a healthy thing. Call center 
jobs in America are tradeable.
  Well, I do not think Mr. Mankiw is living in the real world. I defy 
him to take that argument to any main street in America, in Michigan, 
in Idaho, or in Illinois, and say to the people there what we are 
facing in America today is a good thing, with jobs going overseas.
  How does that relate to this budget? Sadly, when we look at the job 
situation, you find that, as Lou Dobbs of CNN estimates, 348 companies 
in America are now outsourcing work overseas, either sending U.S. jobs 
overseas or choosing to employ cheap overseas labor instead of American 
workers.
  The President's budget, which we have today, is so deep in red ink he 
has cut back on what is called domestic discretionary programs, and by 
doing so, he has no jobs program whatsoever. He does nothing in his 
budget to end tax breaks for companies that are sending jobs overseas. 
He does not extend unemployment insurance. During the first 6 months of 
2004, that will mean an estimated 2 million unemployed workers receive 
neither a paycheck nor unemployment insurance. He does not provide the 
money for these families to keep their basics together, to pay for 
their mortgage and utilities and food and health insurance.

  Time and again, the Republicans in the Congress have refused to offer 
unemployment benefits to the casualties of the Bush economic policy. Is 
that compassionate conservatism? I do not think so. I think he is 
turning his back on hard-working people who have been victimized by his 
failed economic policy.

[[Page S2409]]

  Also, this budget shortchanges job retraining. Vocational and adult 
education programs cut by almost 25 percent, from $2.1 billion to $1.6 
billion.
  Mr. President, 2.5 million full-time, year-round workers live in 
poverty in the United States. You can talk about all the tax breaks in 
the world but, frankly, they never reach these folks. Pennies come to 
them. Thousands come to those in higher income categories.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DURBIN. Mr. President, I ask unanimous consent for 5 additional 
minutes, if the Senator from Michigan will bear with me.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, take a look at the annual growth rate of 
private sector jobs under President Bush. You have to go all the way 
back to President Hoover to see such a low growth rate, which had a 
negative growth rate of over 4 percent. Under President George W. Bush, 
we see here something that has not happened in this country for almost 
70 years: the loss of private sector jobs because of a failed economic 
policy.
  Then when you take a look at the manufacturing jobs, that is where it 
is really painful. Manufacturing jobs are the best-paying jobs in 
Illinois and Michigan. We just had a hearing last Friday. Employees of 
Electrolux--was it in Greenville, MI?
  Ms. STABENOW. Greenville, MI.
  Mr. DURBIN. Greenville, MI, a town of about 9,000 people, if I 
remember correctly, and over 2,000 jobs are going to be lost.
  Ms. STABENOW. Twenty-seven hundred jobs.
  Mr. DURBIN. So, 2,700 jobs. I am glad Senator Stabenow reminds me. 
Electrolux makes Frigidaires. They are moving to Mexico. We asked them 
whether they sold Frigidaires in Mexico. No. They are going to sell 
them in the United States. More manufacturing jobs heading over the 
border.
  Maytag, in Galesburg, IL--the stories just go on and on and on. It is 
not like these jobs are leaving and new, good jobs are coming. When we 
asked an employee of Lucent Technologies from Illinois how much he made 
an hour for Lucent after almost 30 years on the job, he said $27. When 
I asked him: What kind of job are you looking for now? He said: I am 
lucky to get one that pays $8 an hour with no benefits.
  For the Bush administration to argue there are job replacements out 
there is to overlook the obvious. For certain workers there is nothing 
that can replace a good-paying manufacturing job in a person's 
lifetime. And that, unfortunately, is the sad reality.
  When you look at this budget, you realize the obvious.
  The money is not there for health insurance, which is critical for 
unemployed workers and basically for workers and businesses large and 
small. There is no money provided here to basically take care of the 43 
million Americans who don't have health insurance. Many of them are our 
neighbors who get up and go to work every morning, many with children 
who have no health insurance protection.
  This budget fails to keep the President's promise on education. 
President Bush came to office and said: I am an education President and 
for No Child Left Behind. It was passed with a bipartisan vote. Still 
he refuses to find the money to pay for the very program he has 
mandated on State and local school districts. The President's budget 
for No Child Left Behind falls $9.4 billion short of his promise. At a 
time when the President says we have to give the wealthiest in America 
some $45 billion in tax cuts, the President has not kept his word on No 
Child Left Behind.
  The money is not there to deal with health insurance, nor is there 
money to retrain workers who have lost their jobs. That is the best we 
can get out of President Bush's budget. Is it any wonder people across 
America say: It is time for a change.
  I yield the floor to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized for 15 
minutes.
  Ms. STABENOW. Mr. President, I thank my colleague for his eloquence, 
as usual. My friend from Illinois has addressed concerns we have in 
Michigan as well. There is nothing more important to us than making 
sure everyone has a good-paying job and the health benefits, pensions, 
and other job security that go along with it.
  Last year Michigan lost more jobs than any other State. We understand 
what needs to happen for our families and how to create real economic 
security and to create jobs, to support a level playing field in trade, 
to tackle the rising cost of health care, to invest in education 
innovation. All of the things that make for the creation of a strong 
economic policy are what we should be doing. I thank my friend from 
Illinois for speaking to some very important issues.
  One of my concerns as a member of the Budget Committee is in fact 
this budget does not adequately fund education. It eliminates some 
important areas of technology innovation. A program called the Advanced 
Technology Program, which we have used in Michigan with the auto 
industry and other manufacturing industries, partnering with our 
universities to create new, cutting-edge technologies that will allow 
us to compete in the global economy, has been proposed for elimination 
in this budget, and that is of great concern to me.
  Those who don't support tackling the trade issues and creating a 
level playing field, those who say free trade, anything goes, point to 
education and innovation and say: That is how we compete. That is how 
we create jobs. Yet we see in this budget areas of tremendous need to 
invest in our people and create opportunity, areas that in fact are 
cut.

  I wanted to speak for just a moment on some things that have been 
said in the debate about the challenge for us in total as it relates to 
the budget. We are told the problem is domestic spending, that, in 
fact, if we were to have only a small amount of growth in our domestic 
programs--education, protecting the environment, family health care, 
law enforcement, homeland security--somehow that is what we ought to be 
debating because that will make the biggest difference in reducing the 
deficit.
  Certainly we want to fund programs in a way that provides 
accountability and efficiency and supports every precious dollar being 
used as wisely as possible. It is important to look at one comparison 
in terms of numbers when we look at where to go to focus our time to 
reduce the massive red ink that has been created in the last 3 years.
  First, if you exclude the Department of Defense, all discretionary 
spending--so we are not talking about Medicare and Medicaid but all 
discretionary funding, education, Head Start, children's health care, 
family health care, senior programs, environmental protection, homeland 
security, the COPS Program, supporting firefighters, the Justice 
Department, everything we do outside of defense, everything we do 
outside of defense in the discretionary domestic budget--is costing 
$445 billion this year.
  The deficit projected for this year, 1 year, the deficit during the 
same time period is $521 billion. We could eliminate every penny of 
investment in our children, every penny invested in protecting the 
environment, every penny for law enforcement and firefighters and 
homeland security, and every penny we provide to protect our parks and 
all of the other things we do in the domestic budget, we could 
eliminate every penny and we would still have a debt.
  This is extraordinary.
  I was fortunate to be in the House of Representatives in 1997 when we 
balanced the budget for the first time in 30 years. I was very proud of 
that vote. It was tough because we had to make choices about how to 
balance the budget. But we did it. We saw at the end of the decade, and 
as I began my term in the Senate, a debate about the largest budget 
surpluses in the history of the country, $5.6 trillion in surpluses. In 
3 years we have gone to the largest deficit, over $3 trillion in 
deficit in just 3 years.
  There is something else that has been talked about. We could wipe out 
every penny in domestic spending for the United States and not 
eliminate this deficit. So surely something else is at play. We have to 
look at the larger picture of what is going on.
  That relates to the number shown on this chart. We have tax cuts that 
have

[[Page S2410]]

been voted upon by this body in 2001 and 2003. Both enacted and 
proposed tax cuts over the next 10 years will take $2.5 trillion of 
revenue. So we remove that from the Federal ledger, $2.5 trillion. That 
almost equals--it is pretty darn close--$2.4 trillion in Social 
Security surpluses. We have surpluses built up here. We take dollars 
away here.
  Now we are being told, because Social Security surpluses are 
essentially being used to fund these tax cuts, we have a surplus on one 
side, we have a deficit on the other. They pretty much equal each 
other. Common sense would say the Social Security surplus is in fact 
funding these tax cuts.
  Another way to look at that is, when we look at the amount of Social 
Security surplus that is saved in the next 10 years, it is zero. It is 
another way of saying the same thing. We save zero. It is being used. 
It is not being saved. It is not being put aside in the infamous 
lockbox we used to talk about and I still think is a good idea. Instead 
we save zero, and the amount of Social Security surplus that is spent 
is in fact the whole amount, $2.4 trillion.
  At the same time this is happening, we hear from the Chairman of the 
Federal Reserve that because of the challenge in Social Security, 
because of the fact the surplus is being used because of the baby 
boomers and the long-time obligations that are coming, we should look 
at raising Social Security taxes or lowering benefits.
  There is another option. The other option is don't use this money. 
Don't use the Social Security trust fund to fund tax cuts primarily for 
the privileged few.
  There are some tax cuts--the child tax credit, the marriage penalty 
repeal, small business efforts, the lowest income tax bracket being 
lowered--that are helpful to everyone, and they make sense to help grow 
the economy. But the vast majority of the tax cuts are geared to the 
privileged few in this country at a time of war, at a time when we need 
to ask everyone to be sacrificing together so that we are not leaving 
mounds of red ink for our children.
  When we look long term at the budget cuts as compared to Social 
Security, other people say, that is not true. Let's look at the reality 
over 75 years. The actuaries look over a 75-year period at the 
soundness of Social Security. Let's look over the next 75 years. If all 
of the tax cuts that have passed are made permanent, with those being 
proposed by the President, we will see a cost of $12.1 trillion over 75 
years; $12.1 trillion of revenues essentially pulled out of the Federal 
Government.
  What is the shortfall in Social Security? Shockingly, a Social 
Security shortfall over 75 years is $3.8 trillion. So it is absolutely 
accurate to say, as we look to the future and plan, as we know the baby 
boomers are coming, of which I am one, and we know the challenges of 
having more people in retirement and fewer people working, that we 
better pay attention to these numbers and understand that, 
unfortunately, the hole that has been dug as it relates to jeopardizing 
Social Security is one that was dug consciously.
  We, in fact, can stop that. We can reverse it. We can protect Social 
Security for the future, as our leader on the Budget Committee tried to 
do in the last amendment where he said we are not going to use Social 
Security until we can totally protect Social Security; that we are not 
going to add to that deficit through either spending or tax cuts. That 
was the right amendment to adopt, and I commend him for it. I am deeply 
disappointed it was not adopted.
  The budget is all about choices. It is all about our values and our 
priorities. I believe at a time of challenge and national security 
concerns, a time of war, it is all about being in this together as 
Americans as well, not asking some to sacrifice greatly and others not 
to sacrifice at all.
  What is great about our country is that we come together and we chip 
in, and we certainly saw that after 9/11. We saw the wonderful spirit 
of what it means to be an American: people willing to chip in, be part 
of the positive solution, be part of helping each other. I believe they 
want a budget for the United States that reflects the same attitude--
all of us chipping in, all of us being willing to be responsible for 
the future for our children and not leave them trillions of dollars in 
red ink that they will then have to figure out how to pay for after we 
are gone.
  That is not the legacy I want to leave for my children and 
grandchildren yet to come. I am very interested in having us put 
forward a budget that reflects the values and priorities of all 
Americans, not just a privileged few. That is what this debate will be 
about every day this week: What choices are we going to make? Are we 
going to do more tax cuts for the privileged few or are we going to 
keep everybody safe by fully funding all of the homeland security needs 
we have? Are we going to give more tax cuts for the privileged few or 
are we going to protect Social Security for the next 75 years, for the 
next generation?
  We have choices to make, and I am very hopeful that the choices we 
will make will be ones that will make us proud when we look at the 
faces of our children in the future.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I thank the Chair. Mr. President, I thank the Senator 
from Michigan for an excellent presentation, but much more than that, I 
thank her for the superb contribution she makes on the Senate Budget 
Committee. I think she has been one of the strongest members of the 
Budget Committee in a very long time. She is somebody who has a very 
strong background in economics and business issues and understands that 
a budget is about choices, and these choices matter. They matter to the 
long-term economic security of the country. They matter to whether we 
are going to have Social Security and Medicare for our seniors in the 
future or if it is going to be dramatically reduced.
  The Senator from Michigan understands this is a matter of choices 
about national security, whether we are going to have the resources to 
fund the military in a way that keeps it the most powerful and most 
dominant military in the world.
  She understands that a budget is about choices between those issues 
that strengthen us as a nation and as a people in terms of providing an 
outstanding education because that is what it is going to take to be 
fully competitive in a modern world; whether we are going to be able to 
expand health care coverage in America to deal with the more than 40 
million people in this Nation who do not have health care coverage; 
whether or not we are going to have homeland security that is something 
that makes us as safe as we can be in the face of this terrorist 
threat.
  Frankly, we on our side question the choices the President has made 
to cut the COPS Program. The COPS Program puts 100,000 police on the 
street. The President says cut it 94 percent. What sense does that make 
when there is an ongoing terrorist threat? What sense does it make to 
cut port security by almost two-thirds? That is what the President is 
saying. What sense does it make to cut the funding for firefighters all 
across America by a third? Those are the choices the President has 
made, all of it sacrificed on the altar of tax cuts going primarily to 
the wealthiest among us. As I indicated earlier today, under the 
President's plan, the tax cuts he seeks to make permanent would add 
$1.5 trillion to the debt. The President says it is the people's money. 
Give it back. There is nothing to give back. The money is gone. This 
country is in debt. The deficit this year alone is going to be 
approaching $500 billion, and the truth is, that does not begin to 
describe how deep the hole is because that counts the $160 billion more 
he is taking from Social Security, every penny of which he has to pay 
back and he has no plan to do it.
  Now we are talking about an operating deficit in the range of $700 
billion in this year alone. And the President comes in and says: Let's 
just hold down the growth of nondefense, nonhomeland security domestic 
spending. That sounds as though he is doing something. But when you 
look at it, that part of Federal spending is just a tiny share of the 
Federal budget.
  The spending he is talking about slowing down is only 17 percent of 
Federal spending, and his savings are only about $7 billion when you 
have a $700 billion problem. I call it the 1-percent solution. He is 
not dealing with the problem in any serious way.
  Then the President says: Don't worry; I know we have run up these big

[[Page S2411]]

deficits, the biggest in the history of the country, and we have a lot 
more coming. But I am going to cut the deficit in half in the next 5 
years. But he is not. The only way he cuts the deficit in half the next 
5 years is he just leaves out everything. For example, he leaves out 
any war cost past September 30. Does anybody believe the war in 
Afghanistan, Iraq, and the war on terror ends on September 30? The 
Congressional Budget Office tells us it is going to cost $280 billion 
more, and the President has nothing to pay for it.

  I see the leader in the Chamber and I understand he is ready to offer 
an amendment, so I will cut short my remarks at this moment.
  I conclude by saying it is time we face reality. The President's 
budget is not going to cut the deficit in half in the next 5 years. If 
one looks at the additions to the debt, what they see is there is 
virtually no change over the 5 years of the President's plan. The 
additions to the debt are going to run $500 billion, $600 billion a 
year every year.
  I yield the floor.
  Mr. NICKLES. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2710

  Mr. DASCHLE. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Dakota [Mr. Daschle] proposes an 
     amendment numbered 2710.

  Mr. DASCHLE. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To create a reserve fund to allow for an increase in 
 Veterans' medical care by $2.7 billion and lower the national debt by 
   reducing the President's tax breaks for taxpayers with incomes in 
                      excess of $1 million a year)

       On page 3, line 9, increase the amount by $4,860,000,000.
       On page 3, line 10, increase the amount by $486,000,000.
       On page 3, line 11, increase the amount by $22,000,000.
       On page 3, line 12, increase the amount by $5,000,000.
       On page 3, line 17, increase the amount by $4,860,000,000.
       On page 3, line 18, increase the amount by $486,000,000.
       On page 3, line 19, increase the amount by $22,000,000.
       On page 3, line 20, increase the amount by $5,000,000.
       On page 4, line 20, increase the amount by $4,860,000,000.
       On page 4, line 21, increase the amount by $486,000,000.
       On page 4, line 22, increase the amount by $22,000,000.
       On page 4, line 23, increase the amount by $5,000,000.
       On page 5, line 3, decrease the amount by $4,860,000,000.
       On page 5, line 4, decrease the amount by $5,346,000,000.
       On page 5, line 5, decrease the amount by $5,368,000,000.
       On page 5, line 6, decrease the amount by $5,373,000,000.
       On page 5, line 7, decrease the amount by $5,373,000,000.
       On page 5, line 11, decrease the amount by $4,860,000,000.
       On page 5, line 12, decrease the amount by $5,346,000,000.
       On page 5, line 13, decrease the amount by $5,368,000,000.
       On page 5, line 14, decrease the amount by $5,373,000,000.
       On page 5, line 15, decrease the amount by $5,373,000,000.
       At the end of Title III, insert the following:

     SEC.   . RESERVE FUND FOR VETERANS' MEDICAL CARE.

       The Chairman of the Committee on the Budget of the Senate 
     shall revise the aggregates, functional totals, allocations 
     to the Committee on Appropriations of the Senate, 
     discretionary spending limits, and other appropriate levels 
     and limits in this resolution by up to $2,700,000,000 in 
     budget authority for fiscal year 2005, and by the amount of 
     outlays flowing therefrom in 2005 and subsequent years, for a 
     bill, joint resolution, motion, amendment, or conference 
     report that provides additional fiscal year 2005 
     discretionary appropriations, in excess of levels provided in 
     this resolution, for veterans' medical programs, excluding 
     construction projects and a program that provides grants to 
     states to build long-term care facilities, included in this 
     resolution for the Department of Veterans Affairs.

  Mr. DASCHLE. Mr. President, given all that the brave men and women in 
uniform have done for our country, there should not be any disagreement 
that veterans should be our top budget priority this year. This is 
especially true now during a time of war when hundreds of thousands of 
future veterans are on the front lines in Iraq in the war on terrorism 
sacrificing everything for this country.
  Unfortunately, the budget before us does not make veterans a 
priority. It does not demonstrate that we recognize and respect all 
that we have asked of them. It does not keep the commitment this Nation 
made to them when we asked them to lay their lives on the line.
  The budget before us proposes a funding level for veterans health 
care that is more than $200 million below last year's level adjusted 
for inflation. In other words, veterans do not even receive what they 
received last year. Despite our best efforts, last year's level was 
also insufficient. There are 60,000 veterans who are already wait-
listed for health care as we speak.
  This budget gets worse. The budget proposes a $250 enrollment fee for 
middle-income veterans to receive health care. The budget seeks to more 
than double the prescription drug copayment for low-income veterans. It 
would prevent priority 8 veterans from enrolling in veterans health 
care.
  Despite the fact that the average veteran must now wait for more than 
6 months to have his or her disability claim processed and a backlog of 
348,000 claims, this budget proposes eliminating 540 claims-processing 
staff. That is a remarkable development. At a time when we have 348,000 
pending claims, this budget proposes we eliminate 540 of the very staff 
whose responsibility it is to process these claims.
  As a result of this increased fee and barriers to access to the 
veterans health care system, the administration's own budget estimates 
more than 1 million veterans will drop out of the veterans health care 
system. My amendment would prevent all of this. It would give the 
veterans the resources and care they have earned. It would restore 
funding to the level called for by the Independent Budget, a national 
coalition of leading veterans organizations that have made an 
assessment of what veterans need and deserve. My amendment would add 
$2.7 billion to the veterans health care account and $2.7 billion for 
additional deficit reduction. The cost of this amendment would be fully 
offset by reducing the tax breaks for those earning $1 million a year 
or more.
  This chart illustrates how the amendment would be paid for. Taxpayers 
with incomes in excess of $1 million will receive a tax cut under this 
budget of $27 billion this year. Coincidentally, that is almost exactly 
the amount of money that veterans are now given in the health care 
budget in this year. They will receive a benefit, under these cuts, of 
about $140,000 a person under the current budget rule. My amendment 
would reduce that $140,000 to $112,000. Every millionaire in this 
country would still get a $112,000 tax cut, and we would simply use the 
difference between $112,000 and $140,000 to pay for the extra $2.7 
billion to go first to pay for the veterans health care, and the other 
to reducing the size of the debt.

  Hundreds of thousands of Americans have served their country 
honorably. Before we prevail in Iraq and the war on terror, hundreds of 
thousands of other Americans are going to be asked to lay their lives 
on the line.
  In order to demonstrate our appreciation for what so many have 
already done, and will be asked to do, we have an obligation in this 
body to do our share. We have an obligation to provide our veterans 
with the resources and care commensurate with what they have done for 
us.
  The amendment is very simple. It simply restores to the level the 
independent budget has required in order to ensure that we eliminate 
the backlog, and provide the veterans with the care they need while we 
refrain from asking them to pay additional costs. We eliminate that 
$250 annual fee some veterans will now have to pay. We eliminate the 
increase in payment for prescription drugs and the per-office visit. We 
do that simply by reducing the amount of

[[Page S2412]]

tax cut, only to millionaires, by approximately $28,000 per year. They 
still will receive $112,000 in a tax cut in the next fiscal year. That, 
in my view, is a reasonable sacrifice, given the message this amendment 
and this budget, if it were amended, would send to our veterans and to 
those soldiers in Iraq who are counting on us to do the right thing, 
who are counting on us to remember not only to support our troops, but 
to support our veterans.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Chafee). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, on behalf of Senator Conrad, I yield myself 
such time as I may consume.
  Mr. President, the ranking member of the Budget Committee, the 
distinguished Senator from North Dakota, did a brilliant job today 
responding to the false statements made by the Senator from 
Pennsylvania. He did it factually and with enough emotion to make his 
point well taken. I thought it was a stunning retort to these 
outlandish statements that have been made by the Senator from 
Pennsylvania for some time now.
  But in addition to those statements that I think need some 
discussion, there was another statement the Senator from Pennsylvania 
made about why this country is in deficit, why the President's budgets 
are so off kilter. He said it is because of, among other things, 
asbestos litigation. And he talked about how hard it was on business.
  I acknowledge that the asbestos litigation has been hard on companies 
throughout America, but not once during the statement of the Senator 
from Pennsylvania did he mention the people who are in dire physical 
condition--not once. The reason there is this litigation going on is 
because people are dying, and suffering. There are two conditions 
caused by asbestos that are fatal. One is something called 
mesothelioma. With mesothelioma, from the time that you are diagnosed 
with this dread disease until the time you die is an average of 14 
months. With asbestosis you can linger a long time and suffer a long 
time. So we shouldn't make these little passing statements about this 
asbestos litigation bankrupting companies--it has not happened. Some 
have filed bankruptcy without losing a single job in the process. The 
only people who have been hurt, with their bankruptcies, are the people 
who are sick and dying.
  My brother called me a couple of weeks ago and said: Do you remember 
Harold Hansen?
  I said: Yes, I remember Harold Hansen.
  My brother is quite a bit older than I am. I idolized my brother. I 
had two brothers older than I am. They were both wonderful. One passed 
away. But I remember the Hansens. We lived in Searchlight, far from the 
nearest high school, and when we went to high school we lived with 
other people. My brother Dale lived with the Hansen family. I remember 
Harold and Chuck. They were good athletes in high school. I remember 
them.
  He said: You know, he called me and he has mesothelioma.
  I said: Has he ever worked around asbestos?
  He said not that he knows of, no.
  So I said: We have to make sure he is taken care of because he 
doesn't have long to live.
  And he doesn't. He has about a year left, if he is average.
  So the fact is, we have to do something about asbestos litigation. 
There are some cases that are filed that should not be filed, but we 
have to make sure the people who are sick are protected. And when 
people come to this floor and just by chance mention this is causing 
the deficit of this country--let them recognize that people, while they 
are speaking, are dying from what big corporate America did to them.
  I recommend, for people who want to make statements about how bad 
asbestos litigation is, that they read a couple of books.
  Let them read ``Fatal Deception,'' a brand new book that talks about 
the deception of big companies that covered up the disastrous 
consequences of their use of asbestos. Let them read a book called 
``Libby Montana,'' also a new book that talks about a little town in 
Montana which was decimated as a result of this product. They covered 
up what would happen. For a few hundred thousand dollars, W.R. Grace & 
Company, which was making billions a year, could have created a clean 
house for these people which would have protected them from exposure, 
but they didn't want to waste the money on these people from Libby, MT. 
It is not just people who worked in the plants who got sick. Workers in 
those plants would go home with asbestos in the dust on their clothes 
and the wife would wash their clothes. Now we have wives dying of this 
disease. Children would come rushing to meet their father coming home 
from the plants at Libby, MT, and they would also come in contact with 
the dust that would come out of their clothes. Now the children are 
dying.
  I hope Members who come to this floor and make statements about 
asbestos litigation will read those two books. We want to do something 
with asbestos legislation to make a better approach to the way 
litigation takes place. But until those people with asbestosis and 
mesothelioma are taken care of, as long as I have breath I will fight 
the effort to wipe out those cases.
  My friend from Pennsylvania also didn't mention one reason for the 
deficit. Some of us on this floor think we are in a quagmire in Iraq. 
We need to spend money to make sure our troops get everything they 
need. I attended a meeting in the majority leader's office, along with 
Senator Daschle and Senator McConnell, with the Iraqi Governing 
Council. One of these Iraqi Governing Council people said: People in 
America think we have the second largest reserves of oil in the world. 
He said: I want you and them to know that we have the largest oil 
reserves in the world--not No. 2 but No. 1--and within 2 years we are 
going to be producing 6 million barrels of oil a day.
  That kind of clicked in my head. If that is the case, why don't we, 
rather than giving them the money, loan them the money and secure that 
debt with oil?
  That is what we tried to do on the floor. We were, as we say in a 
baseball game, skunked. We were unable to get enough votes to have the 
country of Iraq loaned the money; no, it was, give it to them--a 
country producing 6 million barrels of oil a day within a matter of 
months. We gave them $150 million in supplemental appropriations.
  Then the Secretary of Health and Human Services, Tommy Thompson, last 
week was asked by the press: We are spending billions of dollars on 
health care for Iraq. Don't you think we should be spending some of 
that in America? He responded by saying we have universal coverage in 
America, because if you do not have insurance you get taken care of. 
Try to explain that to the 44 million people who have no health 
insurance and who have to go begging if their child has a cold or some 
illness which they do not know what it is. And he says there is 
universal coverage. Man, I have trouble accepting that.
  My friend from Pennsylvania, in addition to not understanding the 
situation dealing with asbestos, I think doesn't understand the 
situation about where money has been going during the 3 years of this 
Bush administration. We are talking down the economy? He says we are 
the ones who are creating discomfort with the American people. We are 
telling the truth. If that is uncomfortable, that is what we have to 
do.
  He talks about arcane statistics, referring to the charts of the 
Senator from North Dakota. Sometimes statistics are arcane, if you do 
not agree with them.
  We had a situation during the last years of the Clinton 
administration where we were paying down the national debt. What does 
that mean? We were spending less money than we were taking in. We were 
paying down the debt. What do we have now? We have red ink as far as 
you can see. The surplus we had when he took office is gone. That is 
what this budget is all about. Whether the programs that this President 
has pushed forward is bankrupting the country or not, I think simple 
math says this country is going bankrupt, if it is not already 
bankrupt.

[[Page S2413]]

  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, on behalf of Senator Conrad, I yield 10 
minutes to the Senator from Florida.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. NELSON of Florida. Mr. President, later on--I do not know if it 
will be today or tomorrow--I will be offering an amendment to bring the 
account that deals with veterans health care up by $1.8 billion. This 
is the amount that was considered and agreed to in a joint bipartisan 
report in the Senate Committee on Veterans' Affairs as the very minimum 
that we need over and above the President's request to give the 
veterans of this country the very basic minimal health care they 
deserve.
  I must say I was shocked when I offered this amendment in the Budget 
Committee last week that there was a partisan rollcall vote against 
this increase. I don't think there is one Senator in this body who has 
not heard the cries and the pleas from our veterans back in our States, 
or the anguished stories of having to wait months before they could 
even get an appointment with a doctor in order to be able to get a 
prescription.
  I don't think there is a Senator who hasn't heard the anguished pleas 
from veterans about why the President's budget starts to shift a lot of 
the burden to the veterans by increasing the copays and by an 
enrollment fee, particularly at a time such as this when we are 
honoring our veterans every day because of the sacrifices we see being 
carried on by our servicemen and servicewomen around the world. Of all 
times and places, not to give our veterans the minimum health care 
which they not only expect but which they certainly deserve is just 
unconscionable.
  Interestingly, there is a double game that is being played. There is 
a lot of rhetoric going around. But when it comes time to produce, the 
votes are never there. We are going to give the Senate an opportunity 
to put their vote where their rhetoric is.
  This amendment I will be offering at a time our leadership suggests 
will, in fact, provide for the offsets for the $1.8 billion to come out 
of the tax account and out of the tax loopholes that are rampant in the 
Tax Code and in the President's proposed budget.
  I want to take this opportunity. As soon as the leader of the 
committee gives me the high sign, I will be on the floor offering that 
so all the Senators will have an opportunity to vote on that amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank our colleague, Senator Nelson from 
Florida, who has been such a valuable Member of the Senate Budget 
Committee. He did a superb job of offering the amendment he has just 
described in the committee.
  I am very hopeful that either his amendment or Senator Daschle's 
amendment will pass so we can increase the amount of money going to 
veterans million dollar care. I held a hearing in my State on this 
question. I invited all the veterans organizations. It was 
disappointing to hear what is happening to veterans across the country. 
We had testimony of people waiting 10 months to get an appointment for 
specialty care, an appointment to see an orthopaedic surgeon, an 
appointment to have certain eye care because there is a shortage of 
specialists in the VA. They testified clearly and compellingly that 
more money is needed.
  We will hear from the other side, we will hear from the chairman of 
the committee, that there have been significant increases of veterans 
medical care. There is a chart that shows that is exactly true, going 
back 10 or 12 years. We would expect just on inflation alone, over that 
extended period, we would see a doubling of the costs. Remember, when 
we come to veterans medical care, that upward slope is even sharper 
because health care expenditures have been advancing faster than the 
rate of inflation.
  In addition, the population that is in need of health care is 
expanding because we have our World War II, our Korean War veterans, 
and our Vietnam vets getting to that age when they need more intensive 
care. The result is tremendous upward pressure on the costs.
  That chart shows spending on veterans from I don't know how far back, 
1990 perhaps, $15 billion, and we are now approaching $30 billion; but 
we have to remember over that extended period of time, not only are we 
dealing with inflation, we are dealing with medical inflation that is 
running at higher levels than other inflation. The number of veterans 
who are in an age group that requires more intensive care is exploding.
  What was very moving at the hearing I conducted was to hear from 
veterans all across North Dakota. We heard of the tremendous stress on 
the veterans population because of an inadequate level of care in our 
VA facilities. No. 1, an inadequate number of VA facilities, so many 
people are traveling for specialty care in North Dakota 12 hours one 
way in a van and then 12 hours back to get a doctor's appointment. We 
had veterans testify they traveled 12 hours one way in a van, had to go 
all the way to Minneapolis to get specialty care and got there to be 
advised their appointment had been canceled and then had to get back in 
a van and drive 12 hours back to North Dakota. That is not right.
  Mr. NELSON of Florida. Will the Senator yield?
  Mr. CONRAD. I am happy to yield.
  Mr. NELSON of Florida. Mr. President, I thank the Senator for 
yielding.
  Just to add to his comments what he has described in North Dakota, 
imagine because of our size and particularly during the winter months 
when so many veterans come to the State of Florida how the problems are 
compounded. When a veteran has to wait 5 months for an appointment just 
to see a doctor to get a prescription, that is not health care for our 
Nation's veterans.
  I have had occasion to talk to the Secretary of Veterans Affairs 
quite frequently recently on problems we have in some of our hospitals 
in Florida. Listen to what he said in the House Veterans Affairs' 
Committee on February 4 of this year. Secretary Principi said:

       I asked OMB for $1.2 billion more than I received.

  Even the Secretary of the VA is calling for money.
  Then is it any wonder our Senate Veterans' Committee in a bipartisan 
analysis of the VA budget concludes that we should have at least $1.8 
billion more? That is the figure I have offered in the amendment I will 
be offering.
  I thank the Senator from North Dakota for yielding.
  Mr. CONRAD. I thank the Senator from Florida for making the point. It 
is an important point. We had testimony at my hearing where people have 
waited 10 months to see specialists.
  While it is absolutely true what the Senator from Colorado shows on 
his chart, that we have seen substantial increases already in veterans 
health care funding, veterans medical care funding, it is also true we 
are still not meeting the need. The reason for that is not only 
inflation but medical inflation and the sharp increase in the number of 
veterans being served.
  In 2002, 4.7 million were provided health services. That is expected 
to increase to 5.2 million in 2005. So we have, really, a double 
whammy. We have inflationary costs, medical inflation running far ahead 
of regular inflation. On top of that, the number of veterans seeking 
care and needing care increasing now, of course, with the operation in 
Iraq and Afghanistan. All who have been to Walter Reed have seen that 
circumstance firsthand. We have seen the wards literally filled with 
young soldiers and some not so young who have been grievously injured. 
They deserve to know they will get the best medical care this country 
can provide.
  That is what the Senator from Florida is saying in the Senate. That 
is what the Democratic leader is saying in the Senate. We have a 
commitment here. This is a priority. It is a priority that ought to be 
met.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. NICKLES. I yield the Senator such time as he desires.
  The PRESIDING OFFICER. The Senator from Colorado.

[[Page S2414]]

  Mr. ALLARD. I thank the Senator from Oklahoma.
  Mr. President, there is no doubt the veterans have sacrificed a lot 
for our freedom in this country. I am looking at this amendment where 
we have $5.4 billion we take out of tax cuts. I am assuming a lot of 
that would come out of the child tax credit, for example, and then it 
is put over in reserve, perhaps, to be used later by the appropriators.
  There are several points I will make. No. 1, this administration and 
the budgeteers in this Senate have been committed to the issue of 
veterans. This chart shows a picture is worth a thousand words. Look at 
the year 2000; before that it is very much a flat line. Then after the 
year 2000, after President Bush has been elected to office, we see a 
very distinct steady climb in the amount of benefits provided for 
veterans.
  In real figures, in 1997 we were looking at 2.8 percent increase on 
veterans medical care; in 1998, 4.2 percent; in 1999, .7 percent; in 
2001, we had 7.8 percent--and it persists--in 2002, a 7.6 percent 
increase; in 2003, a 12.3 percent increase; in 2004, an 11.1 percent 
increase. We do not have the medical cost-of-living increases for 2004, 
but prior to that most of those were in the 4 percent range, so we were 
appropriating dollars over and above what the medical cost-of-living 
figures were showing. We were sensitive to that. We all realize that 
there are a lot of needs out there for veterans. I see a lot of need 
for veterans in my State.
  Here is what concerns me about the amendment. We have young families 
right now making a huge sacrifice for us in fighting for freedom in 
Iraq, Iran. I have a lot of families in Colorado, families all over the 
State that have young children. They are taking advantage of the child 
tax credit. Do we take this away, in the way of a tax increase, do we 
take away that benefit and make it available to the veterans when we 
have been giving them a double-digit increase for the last several 
years? There are a lot of different choices they have to make between 
the balance of our needs. I guess one of the concerns I have is how 
these tax increases being proposed by the other side are going to 
impact our active military, and also making the assumption that our 
veterans do not pay taxes. They do pay taxes.

  I hear as much concern from veterans about the effect of taxes on 
their daily lives as I do from any other population. Of course, we 
don't hear too much from those who are right now serving over in Iraq 
who have dependents because they are tied up with that. But to think in 
this debate that somehow or other these tax increases are not going to 
have an adverse impact on those already serving in the military and our 
current veterans of foreign wars--we have to keep this issue in 
balance.
  My point is, in this whole debate, in trying to imply that somehow we 
have not been sensitive to the needs of the veterans of this country, 
all one has to do is look at the double-digit increases that have 
happened in the last several years for the veterans, exceeding the cost 
of living for medical care, what they call the medical care inflation 
rate. But, again, we cannot assume that veterans do not pay taxes. They 
do. We need to balance this out.
  I think what the Budget Committee has reported out is responsible. It 
is a little bit different than what the President proposed. For 
example, the President proposed a $250 enrollment fee. We took that 
out. We were sensitive to what impact today's environment is having on 
veterans. We took that out.
  I think this has a good balance. I would hate to upset that balance. 
I would hate to take away a tax cut that is going to have a beneficial 
effect for our men overseas. I think it will have a beneficial effect 
on our veterans as they are trying to save their money to meet their 
own needs with their own families at home.
  I yield the floor.
  Ms. MIKULSKI. Mr. President, I rise in strong support of the Daschle 
amendment to increase funding for VA medical care.
  America is at war, and my thoughts are with our troops. Our men and 
women in uniform have my steadfast support, and so do those men and 
women who fought before them. We need to get behind our troops and our 
veterans, and use this budget to support them. We must support the 
brave men and women who have fought for our country. Our veterans need 
to know that America is with them and that we owe them a debt of 
gratitude.
  As the ranking member on the VA-HUD Appropriations Subcommittee, my 
guiding principle for the VA budget is that we keep the promises we 
made to our veterans. This means no toll charges on veterans to get 
health care or prescription drugs, and no waiting lines for veterans to 
get medical care. But the VA's budget request puts new toll charges and 
means tests on our veterans.
  Specifically, the budget proposes four things. First, the budget 
proposes to keep the VA closed to priority 8 veterans. These are 
veterans who are not disabled as a result of their service, and who the 
VA considers to be higher-income. Second, the budget proposes a new 
$250 membership fee for priority 7 and 8 veterans. Third, the budget 
assumes that VA will increase outpatient primary care copayments from 
$15 to $20. And finally, the budget proposes to increase prescription 
drug copayments from $7 to $15.
  We have great respect for VA Secretary Principi. He's a combat 
decorated Vietnam veteran who continues to serve his country. But he's 
battling OMB now for adequate VA funding, and I am deeply concerned 
that the budget OMB gave VA this year leaves VA foraging for funding.
  Over a year ago, the VA health care system stopped accepting new 
priority 8 veterans. Manufacturing is fading and private health 
insurance is failing. And many of those affected are priority 8 
veterans. Many corporations involved in manufacturing had defined 
benefits plans that included health plans with guaranteed retiree 
coverage. For these veterans, VA healthcare is their last safety net, 
until they turn 65 and are eligible for Medicare.
  For example, in Maryland, there are 13,000 Bethlehem Steel retirees. 
Many are Vietnam veterans. They came back from serving their country at 
war, and they continued to fight for America's national and economic 
security by working in our steel mills. But now, many have lost their 
health insurance because of Bethlehem Steel's bankruptcy. They are not 
eligible for Medicare yet. Under this budget, many will be turned away 
from VA--the safety net they counted on will not be there because VA 
will continue to shut-out priority 8 veterans.
  Bethlehem Steel's veterans, and other veterans who worked in 
manufacturing or for other businesses that don't offer health 
insurance, fought for their country and now they will have to fend for 
themselves on the open-market for health insurance. I am deeply 
concerned that this policy and many other potholes in VA's budget leave 
our veterans paying toll charges, standing in lines, or without any 
healthcare at all.
  In the last 5 years, the VA-HUD Subcommittee has provided large 
increases for medical care--$1.7 billion in 2000, $1.3 billion in 2001, 
$1 billion in 2002, $2.4 billion in 2003, and $3 billion in 2004. We 
did this because we know that the failure of private health insurance 
companies and high prescription drug costs are really straining our 
veterans on fixed incomes. At the same time, our veterans' population 
is growing, and getting older. Today, VA treats 2 million more veterans 
than in 1996.
  Last year, the VA-HUD Subcommittee rejected the proposals that we see 
in the administration's budget request again this year. Instead, we put 
$1.6 billion more than the request in the Federal checkbook for VA 
medical care. Our veterans didn't stand in waiting lines when they were 
called up or they volunteered to serve our country. So they shouldn't 
have to stand in line to get medical care.
  Veterans who need specialized health care services must not be kept 
waiting--like spinal cord injury care, blind rehab, and prosthetics. 
For example, the Blinded Veterans Association tells us that there are 
over 2,000 veterans waiting up to 2 years for admission into a blind 
rehab center.
  Mr. President, I urge my colleagues to support our veterans in this 
budget by supporting the Daschle amendment.
  The PRESIDING OFFICER. Who yields time?
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. Who yields time to the Senator?

[[Page S2415]]

  Mr. CONRAD. Mr. President, I would be happy to yield time to the 
Senator from North Dakota.
  How much time does the Senator seek?
  Mr. DORGAN. Fifteen minutes.
  Mr. CONRAD. Mr. President, I yield 15 minutes off the resolution.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, first, I want to respond to the question 
posed by my colleague from Colorado. The amendment before us does, in 
fact, propose that we increase spending for veterans by recovering some 
of the tax cuts. But it does that only for those who are receiving 
incomes in excess of $1 million a year.
  So with respect to the concern that was expressed about those 
National Guard men and women who are now serving in Iraq being 
inconvenienced by this amendment, I would venture to guess there are 
very few of those who are now serving in Iraq who are making $1 million 
a year or more.
  This amendment is not about reducing the child tax credit. It is not 
about cutting aid for working families. It is not about that at all. It 
is about trying to ratchet back just a little bit of the tax cut for 
those earning over $1 million a year in income and using it to invest 
in health care for veterans.
  It is very simple. In the year 2005--that is next year--those with 
incomes in excess of $1 million a year will have received $27 billion 
in tax cuts from the President's tax cut proposal. This amendment 
proposes taking $2.7 billion of that $27 billion and using it to invest 
in veterans health care.
  The other side is saying this amendment will hurt working families, 
kids, and childcare. Don't believe any of that; just read the 
amendment. Then you will understand none of that applies to this 
debate. So the question for this Congress is, Will we ever keep our 
promise to veterans? Will we ever do that?
  We have a kind of tax that we apply for veterans who have a 
disability. Their military pensions are reduced dollar-for-dollar by 
the amount they receive in disability from the Department of Veterans 
Affairs. We tried to get rid of that offset. But the President 
threatened to the entire Defense Authorization Bill if Congress tried 
to fix the problem.
  Serve our country, we say to our veterans, and you will receive 
health care benefits. But we do not meet the promise. It is time for 
this Congress to ask itself the question: Are you going to keep 
promising? If so, are you ever going to keep the promise? Because you 
cannot promise veterans you will provide health care and then have them 
serve their country and then come back to find out we actually did not 
really mean that.

  Many of those who need this health care, these days, are those who 
Tom Brokaw calls the greatest generation, that group of Americans who, 
in his book, he describes as laying on Omaha Beach on the D-Day 
invasion, who were in Guadalcanal, who went across the sands of 
northern Africa, through France, and into Germany. That greatest 
generation fought for this country with valor.
  At the end of May we are going to dedicate a wonderful memorial to 
the World War II veterans here on The Mall. But we apparently have 
decided that we do not have enough money to keep our promise to them 
for the health care we indicated they would receive.
  Many of them are now in their seventies and eighties and are at the 
maximum need for that health care, and we say we just do not have the 
money. But we have the money to give those who make $1 million or more 
in income a year $27 billion in tax cuts next year but we do not have 
$2.7 billion to invest in health care for veterans. It does not make 
sense to me.
  One day I traveled to a VA hospital on a Sunday morning. A sister of 
a veteran had asked if I could get the medals for this veteran. I have 
already told my colleagues this story on another occasion, but it is 
worth repeating. They were medals he earned in World War II conflicts. 
So I did.
  On a Sunday morning, I went to the VA hospital to present him with 
his medals. He was an American Indian. His name was Edmond Young Eagle. 
Edmond was dying of lung cancer. I did not know it at the time but he 
would die in 7 days.
  But on that Sunday morning, at that VA hospital, the doctors came 
into the room, the nurses came into the room--his sisters were there; 
some people even drove up from the Old Soldiers Home in Lisbon, ND--and 
we cranked up the bed so Edmond Young Eagle was in a sitting position. 
He was sick but he was well aware of what was happening that morning.
  I pinned on his pajama top the medals this man had earned in the 
Second World War. He fought in northern Africa. He fought in Europe. He 
had been at D-Day, at Normandy. On that day, 7 days before he died of 
lung cancer, as I pinned the medals on his pajama top, this American 
Indian said to me: It's the proudest day of my life.
  He fought for his country. He came back, lived on the reservation, 
never had very much, never had a family. He did not have children. He 
worked odd jobs. But he was enormously proud--enormously proud--as he 
lay dying in the hospital of the service he had given to his country.
  This country can do no less, in my judgment, for all of those 
veterans than to say to them: We are proud of you. And part of that 
pride will be registered by our vote in favor of full health care 
benefits for veterans to whom we have given that promise.
  One day I was holding a town meeting in North Dakota. A man came to 
the meeting, an older fellow with kind of stubbled white whiskers. He 
had not shaved for some long while. He walked up in front of the entire 
crowd and he said: Mr. Senator, my teeth don't fit, and they cut my 
gums and cut my lips. He opened his mouth to show me the cuts in his 
mouth.
  He said: I flew in the Air Corps in the Second World War and they 
promised me health care. And they gave me teeth a long time go. Now 
they don't fit. They won't give me new teeth.
  He said: I don't have any money.
  He was nearly 80 years old, destitute, with no money. He had cuts in 
his mouth from teeth that didn't fit and a VA that said: We're sorry, 
no teeth.
  That should not happen to veterans in this country. It should not 
happen. We know better than that. If this country cannot keep its 
promise and show its gratitude to those who serve America, tell me what 
is a higher priority--not five, just one? Tell me what is a higher 
priority?
  We have seen people come to this floor breathless about giving 
millionaires tax cuts, believing if we give more tax cuts to those at 
the upper income level, somehow American's ship of state should begin 
sailing once again.

  We will spend $27 billion next year to give tax cuts to those whose 
incomes are $1 million or more a year. The question on this amendment 
is, will we spend $2.7 billion of that to provide health care for 
veterans to whom we have promised that health care?
  My colleague Senator Conrad has described the circumstances of the 
veterans health care delivery system. We have more people reaching that 
age, Second World War veterans who need health care. They come to the 
VA system to claim it, only to be told: We are sorry. It is not 
available. You have cataracts? You can wait a year or, in the case of 
North Dakota, as my colleague said, you can drive from Fargo to 
Minneapolis, 225 miles and, by the way, do it three times. Then you get 
your cataract surgery. You go down for a checkup, then go back for 
surgery, and then go back and get checked up again. And, by the way, do 
that after you have waited for 9 to 12 months, and maybe you get all 
that if you are lucky.
  Why? Because there the VA doesn't have enough money. We couldn't 
afford it. The health care system doesn't have enough money. We have 
plenty of money for people at the top of their income ladder, calling 
on their friends around here for tax cuts.
  This is about choices. It is always about choices in this Chamber. 
What do we choose to do? What is our priority. Someone once said, think 
of the task of writing an obituary for someone you never met but had a 
check register with which you could judge that person's life. What 
would you know about and what would you say about their priorities? 
Such is true of this budget of ours. One hundred years from now we will 
all be gone. Yet historians can take a look at what we decided was

[[Page S2416]]

important. What did we describe as valuable? What were our choices? 
What was our value system? You can tell something about that by looking 
at these budgets. What did you choose to spend the taxpayers' dollars 
on? What did you invest in? Did you do things that kept your promise? 
Did you do things that invested in the future?
  That is the choice when we vote on this amendment. I am pleased to 
have cosponsored the amendment with my colleague Senator Daschle. We 
live in a region of the country where people drive long distances for 
health care. We are told North Dakota is one of the least well served 
regions of America with respect to veterans health care, measured by 
the number of miles veterans have to drive to access the health care 
system. We need to change that. Senator Conrad and I and others are 
working to do so.
  One way we would change it is to decide now to make the tough choice 
and say: This is valuable. This is worth providing funding for, to 
improve health care for America's veterans.
  One final point: We talk a lot about service to country these days. I 
and many of my colleagues have been to the veterans hospitals in the DC 
area, visited with many veterans who have been injured in this Iraq 
war, injured in other circumstances. Many now will return from Iraq. We 
have the largest rotation of troops going on since the Second World 
War, 120,000 or 130,000 troops moving from that region of the world, 
Iraq, Afghanistan, back into this country, and then rotating a similar 
number into that region.
  As these veterans come back to our country, they will be welcomed. 
Our country will say: A job well done. Thank you for your service. Our 
communities will have celebrations. Families will open their arms to 
their loved ones. The question is, will this Congress celebrate their 
return? Will this Congress open its arms to our veterans by casting 
votes that say to them: We stand with you and we keep our promise with 
respect to veterans health care?
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I want to talk a little bit about the 
facts. Every once in a while we need to get back to facts. I made the 
statement in our Budget Committee no matter what level we assumed in 
the budget for veterans, some people would try to offer amendments to 
increase it. It is almost a habit. It is going to happen. I guess we 
have to expect it.
  Let me throw out a few facts. The budget we have before us increases 
veterans care, mandatory and discretionary, by 14.5 percent.
  I looked at the amendment and I said, how much does this increase 
outlays for veterans? It is zero. So we have a lot of rhetoric. It 
increases taxes over present law, certainly over the budget resolution. 
But then it tries to avoid a budget point of order by creating a 
reserve fund that says, well, if and when the appropriators spend more 
money, then we will give them more money.
  I don't know that that would pass a budget point of order. I will 
have to talk to the Parliamentarian about it. But it is life's little 
game. It doesn't increase benefits for veterans, at least directly.
  I think I heard the sponsor of the amendment say, the budget before 
us has copays on drugs for certain veterans, level 7 and 8 veterans. 
That was in the President's budget. It is not in our budget resolution. 
Frankly, when people talk about crowding, level 7 and 8 are for 
nonservice-connected and high income veterans. People who might be 
injured playing basketball or something else like that and have high 
incomes would have to have a higher copay under the administration's 
proposal. It may be a good proposal. Anyway, we didn't assume it in 
this budget. We also didn't assume that $250 deductible on the same 
category of people, high income people, nonservice connected. It was 
proposed by the administration. We did not assume it in the budget. It 
was mentioned that we did. Maybe he was referring to the President's 
budget, not the budget before us.
  Let's talk about some of the facts. The facts are, when I look at how 
the function totals have grown over the years, I look in 1993, total 
veterans benefits and services was $36 billion. In the year 2001, it 
was 47. That was an increase of about $9 billion. In 2001, it was 47. 
Today it is 70, actually 70.34. Last year it was 61. This is mandatory 
as well as discretionary. Both count, both are real dollars. Both are 
Uncle Sam writing the check. To go from $61 billion in 2004 to $70.4 
billion in 2005, that is a 14.5 percent increase.
  Even though we have allocated 14.5 percent, some people say that is 
not enough, and we would have to have 22 or 25 percent if this 
amendment was adopted and if this reserve fund was created and if it 
was released.
  I don't know when you say enough is enough. I understand there is 
demand on veterans care. Senator Allard pointed out the amount of money 
we have spent has risen dramatically. I might mention, it has grown 
more in the last few years. In just veterans health care services 
alone, it has risen from $21 billion in 2001 to $29 billion under this 
resolution. That is a very significant percentage increase. I could go 
on and on. We have done a lot.
  I might mention we have done a lot in other areas. I mentioned 
mandatory as well as discretionary. Last year we passed concurrent 
receipts, so starting for the first time this year, veterans who are 
service-connected disabled with 50 percent or more rating receive both 
military retirement and VA disability. That affects about 250,000 
disabled military retirees. We passed the Montgomery GI bill increasing 
the benefits of that 52 percent in educational benefits. They can 
receive benefits equaling up to $35,000 worth of GI benefits.

  Veterans buying their first homes, we have increased the VA home loan 
guarantee by 20 percent up to a maximum mortgage of $240,000. We have 
done a lot.
  Under this budget we increase medical care, which I have heard is 
being cut, by $1.4 billion over last year. So we have done a lot. We 
increased medical and prosthetic research by about 25 percent. I could 
go on and on. A lot has been done. Yet I see this amendment says we 
haven't done near enough. We want to it grow 20 percent.
  How sustainable is that when we are trying to do a budget that holds 
the growth of spending down close to a freeze in nondefense areas? We 
didn't hold it to a freeze in VA. VA discretionary and mandatory is 
14.5 percent. That is a big increase. Yet it is still not enough.
  I want to attack how this is being paid for. I have heard some people 
say this assumes there is only going to be a tax on millionaires. That 
is not in the budget resolution or the amendment. The amendment says, 
let's raise taxes by about $5.4 billion for 2005. One can say, our 
assumption is that is only going to be on millionaires. It reminds me 
of Russell Long: Yes, tax someone. Don't tax me, tax somebody behind 
the tree. Tax somebody else.
  Well, what we are assuming in the budget resolution, what we guess we 
might be successful in getting passed, what I hope and expect we will 
be successful in getting passed is a continuation of present law.
  In present law, most of those benefits go to low-income people, to 
families. For example, the child tax credit is $2.6 billion. The 
marriage penalty relief is $5.4 billion. So we almost pay for this if 
we eliminate the marriage penalty relief that we have given people for 
2004 and that some want to give in 2005.
  This idea we are just going to tax millionaires, do my colleagues 
think the President is going to sign a bill that is going to increase 
marginal rates? I can guarantee you he will not. I know the President 
very well. I can tell you we will not let that pass. I am not going to 
let it pass. I happen to be on the Finance Committee. I can talk for a 
long time. That is not going to happen.
  People can say: We are just going to tax these upper income rates. 
Those happen to be small businesspeople. The real tax debate is: Are we 
going to extend present law? Are we going to make present law 
permanent, or are we going to extend permanent law? Those are family-
friendly tax cuts--marriage penalty relief, child tax credit, and the 
10-percent rate.
  Some people are saying we do not want to do those cuts; we do not 
want to extend those cuts. My point is, if you look particularly in the 
last few years, since President Bush has been in office, total spending 
for veterans care

[[Page S2417]]

has risen dramatically. It has risen more than Bill Clinton's first 8 
years--substantially more. The total amount of outlays since 2001 has 
increased by $23 billion. In President Clinton's 8 years, total 
outlays, mandatory and discretionary, grew by $11 billion. Yet that is 
still not enough, according to this amendment.
  Then this amendment says let's just increase taxes. They assume it is 
going to be on those darn millionaires. For one, they cannot make that 
assumption. If you read the amendment, it doesn't say that. It tells 
the Finance Committee: Raise more taxes than assumed by this resolution 
by several billion dollars.
  Also, this is interesting: Oh, this just applies to 2005. Sure, if we 
are going to increase spending by $2.7 billion in 2005, you might as 
well multiply that by 10 plus an inflater because this is not going to 
happen for 1 year. We are not going to fund it for 1 year and drop it 
off, just as I hope we do not give a tax cut to families and then stop 
it at the end of this year. I hope we don't. So the real cost of this 
amendment over a 10-year period of time would probably be more like $35 
billion, and people should be aware of that fact.
  My guess is we will have a lot of amendments where people will want 
to raise taxes and raise spending. I happen to disagree with that. I 
disagree and will take issue with this idea of increasing marginal 
rates from 35 percent. When Bill Clinton was elected, the maximum rate 
was 31 percent. It went all the way up to 39.6, and we finally have it 
down to 35 percent. Thirty-five percent happens to be the same rate 
that corporations pay. Why should individuals who maybe own a business, 
maybe a restaurant or something, why should they pay more than the 
corporate rate? That would be bad policy. If you want to slam the door 
on the economic recovery, that is a good way to do it because about 80 
percent of the jobs are created by small business, and they are 80 
percent of the beneficiaries of that top percent.
  That top percent rate does not fly. There is nothing in this 
amendment when one reads it that says it only applies to millionaires. 
That is in rhetoric but not in reality. The reality is it raises taxes 
by $5.4 billion, and we are going to assume, yes, maybe eventually it 
is going to come to Veterans Affairs even though there is not an outlay 
for the VA in this amendment.
  At the appropriate time, I will urge my colleagues to vote against 
this amendment. I advise my colleagues my expectation is we will be 
voting on this amendment probably in the next 30 minutes.
  The PRESIDING OFFICER. Who yields time? The Senator from North 
Dakota.
  Mr. CONRAD. Mr. President, first, I ask unanimous consent that the 
following Members be added as cosponsors to Senator Daschle's 
amendment: Senator Boxer, Senator Feingold, Senator Reid of Nevada, 
Senator Lincoln, Senator Dorgan, Senator Graham of Florida, Senator 
Rockefeller, Senator Leahy, Senator Johnson of South Dakota, and 
Senator Kerry.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, as always, the chairman of the committee 
has been very articulate in his defense of his budget. The problem is 
he is defending the indefensible when it comes to the question of 
funding for veterans medical care.
  Yes, there have been increases in funding for veterans medical care. 
I think the chart the Senator from Colorado had up showed veterans 
medical care back in 1990 was about $15 billion, and now in that period 
of time--14 years, actually 15, to 2005--it is almost double, not 
quite.
  Medical inflation in that period of time would lead to a doubling 
alone--only medical inflation. Is that the only factor forcing up costs 
for veterans medical care? No.
  Let's recall in 1996 this Congress voted to expand eligibility for 
veterans medical care. In 1996, there were 100,000 in categories 7 and 
8, and by 2003, the number eligible increased from 100,000 to 1.3 
million. In categories 1 through 6, there were 2.6 million people in 
1996. By 2005, that will increase to 3.7 million people. The fact is, 
the increases for veterans medical care are not keeping pace with the 
demands.
  The chairman of the committee talks about facts. I agree. Let's talk 
about facts, and the facts are that medical inflation over that period 
of time has doubled the cost to provide the same coverage to the same 
number of people. We have not quite doubled the amount of money.
  It is not just a matter of medical inflation for the same number of 
people. The number of people eligible has been dramatically expanded by 
action of this Congress. Again, in 1996, we dramatically increased 
eligibility, and the number of those in categories 7 and 8 that was 
only 100,000 of the workload in 1996, by 2003 had increased to 1.3 
million. That is an increase of more than tenfold.
  In categories 1 through 6, 2.6 million people were eligible in 1996. 
By 2005, that is expected to reach 3.7 million people. That is an 
increase of almost 50 percent.
  The reality we are confronting is not just numbers on a page. The 
reality we are confronting is, Are we providing adequate resources for 
the medical care of the Nation's veterans? The Nation's veterans have 
looked at the President's budget and have said it is inadequate. They 
have said it is inadequate to the tune of about $3 billion.
  That is why Senator Daschle is on the Senate floor saying we ought to 
increase veterans medical care by $2.7 billion. He has said we ought to 
pay for it, and we ought to pay for it by looking to those who are 
fortunate enough to be earning over $1 million a year and ask them to 
give up 10 percent of their tax cuts.
  Their tax cuts in 2005 are going to cost $27 billion. The Senator 
from South Dakota is asking our colleagues to go to those who are the 
wealthiest among us, earning over $1 million a year, and ask them to 
give up 10 percent of their tax benefits in that year so we can more 
adequately fund veterans medical care. That is a reasonable request.
  I note the Senator from Wisconsin is in the Chamber, and I ask him 
how much time is he seeking.
  Mr. FEINGOLD. Madam President, if I could have 10 minutes.
  Mr. CONRAD. I yield 10 minutes off the resolution to the Senator from 
Wisconsin.
  The PRESIDING OFFICER (Mrs. Dole). The Senator from Wisconsin.
  Mr. FEINGOLD. Madam President, I thank the Senator from North Dakota 
for yielding me this time.
  I rise in strong support of the amendment offered by the Senator from 
South Dakota to fully fund health care programs for our Nation's 
veterans.
  America is indebted to our veterans and military personnel and to 
their families for the extraordinary service and sacrifice that they 
have so selflessly provided to our country. As we debate this budget 
resolution, our men and women in uniform put their lives on the line in 
this country and around the world, from Iraq to Afghanistan to the 
Balkans to the Korean DMZ and countless other places. We thank those 
men and women and we hope for their quick and safe return to their 
families.
  At the same time that the current members of our Armed Forces serve 
us across the globe, we must not forget those who paved the way for the 
soldiers, sailors, airmen, and marines of today. Our Nation's veterans 
and their families have given selflessly to the cause of protecting our 
freedom. Too many have given the ultimate sacrifice for their country, 
from the battlefields of the Revolutionary War that gave birth to the 
United States, to the Civil War, which sought to secure for all 
Americans the freedoms envisioned by the Founding Fathers, to the 
global fight against Nazism and fascism in World War II.
  In the last century, Americans fought and died in two world wars and 
in conflicts in Korea, Vietnam and the Persian Gulf. They also 
participated in peacekeeping missions around the globe, some of which 
are still going on.
  We owe it to our veterans to ensure that they have a decent standard 
of living and access to adequate health care. It is the least that we 
can do in return for their courageous service to our country. This is 
especially important as we welcome home a new generation of veterans 
who are serving in Iraq and in the fight against terrorism. We must 
ensure that their service and sacrifice, which is much lauded during 
times of conflict, is not forgotten once the battles have ended and our 
troops have come home.

[[Page S2418]]

  The amendment that we are considering will go a long way toward 
ensuring that the VA health care system can meet the demand for care 
from the existing veterans population and will help to ensure that the 
VA is able to care for returning veterans who will require health care 
services.
  For too long our veterans have had to wait months for appointments to 
see a doctor at a VA facility. Others are unable to access VA care 
within a reasonable distance from their homes. I cannot tell my 
colleagues how many times I have heard that comment at the town 
meetings ended all over Wisconsin. And still others are told by the VA 
that they are not eligible for care because their priority group level 
is too low. The amendment before us today would ensure that the 
Veterans Health Administration is funded at the level recommended by 
the Independent Budget for Veterans Affairs, which is drafted annually 
by a coalition of veterans service organizations. By their 
calculations, the President's budget request falls short by nearly $2.8 
billion, and the underlying budget resolution is $2.7 billion below 
what would be needed to meet demand at VA health care facilities during 
fiscal year 2005.
  The amendment that is before the Senate would increase the amount for 
veterans' health care in the budget resolution by $2.7 billion. This 
increase would ensure that all veterans, including those in priority 
group 8 who are currently barred from enrolling in the VA health care 
system, receive care at VA facilities. It would also eliminate the need 
for the proposed prescription drug co-payment increases and new user 
fees for veterans in priority groups 7 and 8 that have been proposed by 
the President.
  The Secretary of Veterans Affairs said the following about his 
Department's budget request:

       My top priority in health care is to ensure that resources 
     are available to care for those veterans who are most 
     deserving of VA's medical services. The proposals in this 
     budget will assist us in continuing that focus on our core 
     service population in our health care system.

  Let me repeat that. The Secretary said his budget would ensure that 
resources are available to care for those veterans who are ``most 
deserving of VA's medical services.''
  In my view and in the view of veterans and their families who I have 
spoken with around Wisconsin, all veterans are deserving of the VA's 
medical services. I am troubled that the Secretary's comments seem to 
pit groups of veterans against each other for health care services. The 
amendment before the Senate today will enable the VA to serve all 
veterans who wish to take advantage of their health care benefits.
  In order to offset this increase, the amendment would reduce the tax 
cut for Americans making more than $1 million annually. This is a more 
than fair exchange that will allow us to provide badly needed health 
care services to our veterans.
  I am deeply concerned that for the last several years funding for 
veterans health care and other programs for our Nation's veterans has 
been delayed as Congress and the administration wrangle over the 
Federal budget. I believe strongly that we should consider and pass a 
budget resolution and 13 individual appropriations bills each year. I 
regret that the VA budget has been rolled into omnibus measures, thus 
delaying this important funding for our Nation's veterans.
  I hope that this amendment will be the first step in providing 
adequate funding to care for our veterans in fiscal year 2005 and 
beyond. This is the very least that we can do for those who done so 
much for our country. I strongly urge my colleagues to support this 
important amendment.
  I yield the floor.
  Mr. NICKLES. Will the Senator yield for a question?
  Mr. FEINGOLD. The Senator yields.
  Mr. NICKLES. I believe I heard my good colleague and friend from 
Wisconsin, a member of the Budget Committee--and I have worked with him 
on some issues and amendments--say this is only a tax increase on 
millionaires, but I read the resolution. It says, raise taxes, but it 
does not say raise it on millionaires.
  Would the Senator not agree with me on a budget resolution the 
Finance Committee can raise revenues, but they cannot be directed how 
to do it?
  Mr. FEINGOLD. I think this amendment offered by Senator Daschle 
clearly attempts to fund this out of the most unjustified aspects of 
the tax cut that was put into place. It would simply prevent certain 
tax cuts that are for very high-income people from going forward, and 
at a minimum level make sure the Veterans Affairs budget is fully 
funded. I believe this is an appropriate amendment.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Madam President, I appreciate that answer, but the facts 
are, and my colleague from North Dakota I know will affirm this if 
pressed, we do not write tax law in the budget resolution. We may 
assume something. I am assuming we are going to continue law that is 
presently in effect. We have at least scored enough for reconciliation 
to make sure low and middle-income families do not get a big tax 
increase to the tune of, for a family of 4, about $1,600, and for a 
family of 6 about $2,200 next year. That is basically all we are 
assuming for next year. And a little AMT relief. In reconciliation, 
that is all we are assuming.
  If last year is any example, we assumed a lot but we only got what we 
reconciled. Reconciliation assumes continuation of present law. In 
other words, no tax increase on families, no tax increase on marriage 
penalty, no tax increase on families that have children. That is what 
we are assuming.
  This amendment says, no, we want $5.5 billion more in taxes. That is 
just the first year. That might as well be multiplied by 10.
  My point is, this assumes a tax increase. The proponents may say they 
assume it is only for millionaires, but that is not what the amendment 
says. The amendment says to the Finance Committee, go raise some taxes; 
increase spending in an account that is already growing by 14.3 percent 
in the budget we have before us, mandatory and discretionary.
  So I just make those points. I am a little disappointed to hear my 
colleague from Florida say he wants to do an amendment tomorrow that is 
going to raise the same function by another $1.5 billion without regard 
to how this amendment comes out. How many times do we have to vote on 
Veterans Affairs? I guess I will wrestle with that one tomorrow.
  I just tell my colleagues, in looking at what this President has done 
and what this Congress has done since the year 2001, it is a dramatic 
increase compared with what the previous Congresses did for the last 8 
or 10 years; a dramatic increase. Yet some people are still saying that 
is not enough.
  This amendment needs to be defeated for a lot of different reasons. I 
mentioned we have done a lot for veterans, including expanding the 
Montgomery Bill of Rights by 52 percent, by expanding concurrent 
receipt--last year a multibillion dollar expansion for about 250,000 
retirees. We added $1.4 billion for VA medical care under this 
resolution. We did not assume the increase in copays that some people 
have alleged.
  I urge our colleagues, in the not too distant future--my guess is we 
will be voting on this amendment within the next 20 minutes--to vote 
no.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, perhaps this would be a good time for us 
to say what a budget resolution does do and doesn't do. The chairman is 
entirely correct that when the budget resolution gives an instruction 
to the Finance Committee to raise a certain amount of revenue, it does 
not control how they do it. When the Budget Committee gives an 
allocation to an appropriations committee or an appropriations 
function, we give them an allocation of funds. We don't tell them how 
to spend it. That is true.
  What is also true is when we offer amendments on the floor we talk 
about assumptions. In fairness, the chairman has talked about 
assumptions that he has with respect to his reconciliation instruction. 
He has said he is assuming that money will be used to extend the 10-
percent rate, to extend the child care credit, to extend marriage 
penalty relief. But the fact is we do not control how the Finance 
Committee ultimately decides to use those funds any more than we 
control, with what Senator Daschle has done, reducing the tax cuts for 
those who earn over a million dollars a year by 10 percent in

[[Page S2419]]

order to fund increased resources for veterans medical care.
  The chairman's assumptions are made with respect to reconciliation. 
He has stated them clearly and directly. The Democratic leader has 
stated his assumptions clearly and directly. He has indicated he would 
fund the increased spending for veterans health care by reducing the 
tax cuts for those who earn over $1 million a year by 10 percent. That 
is his assumption. Just as the chairman has indicated, the 
reconciliation instruction that he has provided in this Budget 
resolution he believes ought to be used to expand, for the most part, 
middle-class tax cuts.
  The fact is, neither of them control what the Finance Committee does 
with their allocation. But it is an assumption and both sides are using 
assumptions, so there is really not a difference there between the two 
sides.
  With that, the Senator from Florida is seeking time. Is he asking for 
10 minutes?
  Mr. GRAHAM of Florida. If possible.
  Mr. CONRAD. I yield the distinguished Senator from Florida 10 minutes 
off the resolution.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM of Florida. Madam President, I appreciate the Senator from 
North Dakota yielding me 10 minutes. I hope he will not take offense at 
what I am going to say.
  The Senators from Oklahoma and North Dakota have just given us a very 
accurate and descriptive statement of how certain parts of the budget 
procedures operate. But let me say, I do not believe this issue is 
about the arcane features of budget policy; rather, they are first 
about choices.
  When we voted in 2001 and again in 2003 for the most massive tax cuts 
in American history, targeted primarily at the wealthiest 10 percent of 
Americans, we were making a choice. One of those choices comes home 
today, and that is, will we be able to adequately finance our 
responsibility to the health care of American veterans as well as the 
health care of those American men and women who have been injured as a 
result of the ongoing wars in Afghanistan and Iraq?
  That comes to the second thing this is about. This is about real 
people. I take a different job every month, and in November, on 
Veterans Day, I worked at a VA hospital in Miami, FL. While I was 
there, I met a returning soldier. I will use the name ``John'' in order 
to respect his confidentiality.
  John is approximately 24 years old. He was born and lived most of his 
life in Puerto Rico. The reason he is in the Miami VA hospital is 
because it has responsibility for certain specialty care that is 
provided to veterans from most of Florida, Puerto Rico, and the U.S. 
Virgin Islands.
  John was a member of the Puerto Rican National Guard and was called 
up to duty in Iraq. Prior to his reporting for duty, he married a 
beautiful young lady who I will call Linda. John was a tanker. He was 
assigned to a tank unit that led the surge from the Kuwait border into 
Baghdad. After the conflict ended, his tank crew was given the 
assignment of taking down some of the buildings Saddam Hussein had 
constructed in Baghdad, some of them because they were no longer safe 
by virtue of U.S. military action, some because of their symbolic 
importance. John's assignment was to stand by the side of the tank as 
the tank was used as a battering ram to take down these buildings. 
Unfortunately, in the course of this he was hit by a falling wall from 
one of these structures and is now a paraplegic. He is in the spinal 
cord injury program at the Miami VA hospital.
  You can imagine the devastation of John and Linda, as their plans for 
a life together, functioning as a normal couple, have been devastated 
by this spinal cord injury.
  John is who we are talking about here today and John very 
specifically is who we are talking about here today because this 
Congress, in the late 1990s, took on for the Veterans Administration 
the responsibility for 2 years after discharge from active duty for the 
care for Americans who had been injured in combat. John is one of those 
veterans.
  Last year we asked the VA how much it was going to cost to carry out 
this responsibility. They did some calculations based on, first, what 
their experience was in the first Persian war as to what percentage of 
troops would be injured and become eligible for this VA service, and 
what is the current per-capita cost of delivering this service.
  Do you know what they came up with? The cost would be $350 million. 
The administration objected to that cost, and after extended 
negotiation that figure was reduced to $100 million--less than a third 
of what the VA estimated the cost would be. Then do you know what 
happened. They didn't spend it on health care. They spent it to improve 
the processing capability of the VA for a variety of veterans 
applications. That may be desirable to do, but that is not what even 
the miserly $100 million was appropriated to do.
  John now sits there in his wheelchair facing many years--possibly a 
lifetime--as a paraplegic, and his country told him last year he wasn't 
worthy of having that service he had been promised by the Congress. Now 
we are about to tell him again he is not worthy of having that service 
financed.
  We need to be realistic. This budget for American veterans and the 
brave fighting men and women who are returning is totally inadequate. 
It does not provide even enough to cover the cost for medical 
inflation, including payroll increases for the health care of the 
current group of U.S. veterans.
  This budget, unfortunately, reflects this administration's priority. 
If enacted, it will have a devastating effect on the men and women who 
have served this country with honor and those who are currently serving 
with honor because this administration has said this is all it is 
willing to do.
  Rather than funding these programs as our veterans were promised, the 
President seeks to fund the shortfall in his request by increasing the 
out-of-pocket costs to the so-called higher income veterans. That means 
veterans who have earnings starting at approximately $24,000. We would 
raise the prescription drug copayment from $7 to $15. But, more 
importantly, we would charge a $250 enrollment fee which not only has 
as its goal to generate some additional revenue but, more importantly, 
it will artificially reduce the demand for VA services by veterans who 
either cannot or do not feel it would be advantageous to pay that $250 
enrollment fee.
  Mr. NICKLES. Madam President, will the Senator yield?
  Mr. GRAHAM of Florida. If I could just finish. The Senate Committee 
on Veterans Affairs has reviewed this on a repeated basis. The 
Presiding Officer is a member of that committee, as am I. All of the 
members of the committee, Republicans and Democrats, rejected the 
proposed increases in copayments or in the $250 annual enrollment fee.
  All Members agree Congress needs to appropriate sufficient funds to 
obviate the need for these abhorrent out-of-pocket costs to veterans.
  The committee also recognized the need to protect vital specialty 
services. These were not included in the President's budget.
  Can you believe we are not going to fund the long-term care needs of 
the veteran population which is aging in place and which will have 
increasing demands for either community-based services or institutional 
care as they are unable to be fully independent?
  It also would substantially reduce mental health services to a 
population which as it ages encounters increasing and more severe 
mental health problems.
  It is insulting to laud this budget but continue to bar veterans from 
the VA health care they have earned by their service.
  It is unfair to double prescription drug copayments for other 
veterans so some veterans can have their increased costs paid through 
that means rather than through the appropriations to the Veterans 
Administration.

  This is nothing short of hypocrisy to deliberately reduce demand for 
health care services and count that reduction in demand as if it were 
savings.
  The PRESIDING OFFICER. The Senator has used his time.
  Mr. CONRAD. Madam President, I would be happy to extend an additional 
5 minutes of time to the Senator.
  Mr. NICKLES. Madam President, will the Senator yield?
  Mr. GRAHAM of Florida. No. I will yield when I complete my remarks, 
which will be soon.
  The amendment my colleagues and I are debating today would provide 
the

[[Page S2420]]

VA with the $1.8 million which is necessary to keep the current 
services in place and would also provide the funds to meet the cost of 
these wounded returning American service men and women like John so we 
will be able to honor the commitment we have made to him. It will also 
provide the funds to continue to meet our long-term care and mental 
health needs.
  These numbers were not derived out of smoke. These numbers were 
derived by an independent budget committee. This is a committee made up 
of representatives of all the major veterans organizations looking at 
what is the realistic cost of providing appropriate service. This 
consortium of veterans organizations has set the bar as well as to how 
much VA needs will be to treat their patients.
  This administration has made the war in Iraq and Afghanistan a 
priority, appropriately so. But at the same time, this administration 
does not want to provide the resources to meet the health care needs of 
returning combatants. This war will create a new generation of 
veterans, and this budget fails to take that into account.
  This budget has the potential of creating a conflict between 
generations of veterans. It is asking the current veterans assume a 
further dilution in their medical services so the newly returning 
injured combatants will be able to receive the care for which they have 
been promised.
  It is up to us in the Congress to see service members and veterans 
alike receive the benefits they have earned. We can do no less than to 
meet our duty to their patriotic service.
  Thank you, Madam President. I would be glad to yield to the Senator 
from Oklahoma.
  Mr. NICKLES. Madam President, I wanted to clarify. I heard my 
colleague say increase in copays. You are aware, I am sure, under the 
resolution we are not assuming any increase in copay for categories 7 
or 8, and we are also not assuming the $250 deductible.
  Mr. GRAHAM of Florida. Does that mean the budget is even more out of 
balance in terms of providing services than the one the President 
submitted which would have had those increases in out-of-pocket costs?
  Mr. NICKLES. I thought I heard my colleague say you were opposed to 
these increase in copays. I was trying to make sure you are aware we 
did not assume an increase. We did not have that in our budget. I 
wanted to make sure you knew that. If you didn't, I will read it to 
you. It says the committee resolution does not assume the President's 
proposal to establish a new $250 enrollment fee for priority 7 or 8 
veterans or to increase the insurance for prescription drug copayment 
for priority 7 and 8 veterans from $7 to $15. That is not in our 
resolution. I wanted to make sure you knew that.
  Mr. GRAHAM of Florida. Does the resolution, therefore, contain the 
funds from appropriate sources to offset that which would have been 
raised had the President's recommendation of the prescription drug 
copayment increased and the enrollment fee been enacted?
  Mr. NICKLES. Madam President, I want to remind our colleague to go 
through the Chair. I warned other people. I think I need to do that.
  Our resolution, to answer my colleague's question, has a $1.4 billion 
increase in VA care. It assumes an increase in VA--and it is 
mandatory--from $61 billion to $70 billion--a 14.3 percent increase, so 
my colleague will know.
  Mr. GRAHAM of Florida. My question was not what the totality is, but 
since the President assumed a substantial additional revenue source for 
the VA through these enrollment fees and increased copayments, how does 
the budget resolution propose to fund those items or to provide the 
replacement revenue that would come from those two items?
  The PRESIDING OFFICER. The time of the Senator from Florida has 
expired.
  Mr. NICKLES. Madam President, I have a couple comments.
  We did not have the assumptions; they were not revenue raisers, as I 
understand from the administration's perspective. What they were trying 
to do is get high-income nonservice-connected disabled veterans to not 
clog the system or at least have them pay a little more. If they were 
not injured by military service--maybe they were playing basketball or 
whatever and they had high incomes, shouldn't they pay a greater 
percentage of the prescription drug? That was the assumption. It is 
more to change behavior than to raise money. We did not make that 
assumption in our resolution.
  I yield the Senator from Texas as much time as he desires. I know 
there is a reception tonight. If the Senator could keep his remarks to 
10 or 15 minutes.
  For the information of our colleagues, I suspect we will have a vote 
probably about 5:45, hopefully not much later than that.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Madam President, I will say a few words about this budget 
resolution because it is an important document. As in any budget, we 
identified what our Nation's priorities are, and we have done the tough 
job that all budget writers have to do, whether it is the Senate, a 
small business, or a family, in trying to figure out how to live within 
our means, how do we make sure we are good stewards of the taxpayers' 
money.
  I commend the chairman of the Budget Committee, the Senator from 
Oklahoma and the ranking member, the Senator from South Dakota, for 
conducting a very important debate about our Nation's priorities and 
how they are reflected in this budget and the civility with which that 
debate has taken place in the Budget Committee and in the Senate.
  There is no higher priority in the Federal Government than our 
national security. Indeed, this budget does fund an increase in 
national security; it, likewise, funds an increase in homeland security 
funding--two items which would strike me as no-brainers in a post-
September 11 world. Particularly when it comes to military spending 
with our troops in the field and with the Nation being at war, we have 
to keep our commitments to those troops in the field that we will give 
them the resources they need in order to get the job done.
  As to the rest of the nondefense, nonhomeland security spending, this 
discretionary part of the budget is essentially flat. That represents 
the considered judgment of a lot of people who have this Nation's best 
interests at heart: How do we deal with this budget deficit and how do 
we meet this Nation's commitments without killing the burgeoning growth 
of the recovery of the economy while at the same time recognizing we 
are a nation at war, a nation that needs to harden its homeland 
security.

  However, what we all need to realize when we hear amendments being 
proposed from the Senate to this budget, we are talking about spending 
more of the taxpayers' money, plain and simple. The American people are 
wise enough to understand when people talk about tax increases on the 
wealthy, if they begin to look at the numbers, ultimately what we are 
talking about are tax increases on the middle class and literally on 
all Americans.
  I referred back to some figures and discovered that last year our 
Democratic colleagues offered budget amendments in the range of $85 
billion additional spending to the budget over 1 year and it would have 
calculated $1.2 trillion over 10 years.
  I don't know how anyone can stand in front of this group or anyone 
else and say those geometric leaps in spending could be accomplished 
without raising taxes across the board. We cannot do both. We cannot 
have the kind of huge increases in spending that our colleagues across 
the aisle would want to have without raising taxes across the board.
  I know it is easier to make the class warfare argument, tax 
millionaires, but when we look at the people who are paying taxes, it 
includes small businesses that pay not as corporations but pay as an 
individual taxpayer would if they were a sole proprietor or a 
partnership or small subchapter S corporation. They essentially pay 
income taxes as if they were individuals.
  What our colleagues on the other side of the aisle are proposing when 
they talk about raising taxes against the wealthy, they are talking 
about raising taxes against the very engine that grows jobs in our 
economy. We have come off of a rough time in our history, the last 2\1/
2\ years since September 11. Of course, we were starting into a 
recession when President Bush and Vice

[[Page S2421]]

President Cheney took office. We suffered a body blow to our Nation's 
economy and to our consciousness on September 11. That had a 
devastating impact on our economy. Of course we saw the stock market 
plummet as investors lost confidence in corporate America because of 
some scandals which shook that confidence to its very core.
  So we have had what some have called, many have called, the perfect 
storm. It is as a result of the tax relief and growth package we passed 
last year in this body, something our colleagues on the other side of 
the aisle argued mightily against, but it is as a result of allowing 
the people who earn the money to keep it, to keep more of it, and spend 
it as they see fit, to save it, and to invest it in their small 
businesses that we have seen the job growth.
  We have seen the roaring back of the economy in a way we have not 
seen in the last 20 years. It comes to productivity; it comes to growth 
in the gross domestic production.
  I fear if we were to accept this formula offered by our colleagues on 
the other side of the aisle to tax more and to spend more, it would 
simply squelch the nascent recovery we are seeing in this economy.
  There is a lot of discussion about jobs. Obviously that is a core 
goal we all share. We do not grow jobs by killing the profits, by 
taxing the engine of job creation--which our colleagues across the 
aisle would do by their proposals, including this one. The only way we 
get more in this economy is by letting people who earn the money keep 
more of it and invest it, save it, and create more jobs. That is simply 
the formula that we on this side of the aisle, as well as our 
President, have said is the philosophy we should approach.
  Let the people who earn the money keep more of it. We have seen as a 
result explosive growth in our economy. We know over time we will 
reduce unemployment rates to the point that literally anybody and 
everybody who wants to work can find a job. Indeed, that is our goal.
  While we have to make tough choices in writing a budget, just as 
anyone else does, what our colleagues by this amendment seek to do is 
to add to an already substantial increase when it comes to veterans 
benefits and services. I can think of no more sympathetic or deserving 
cause than our veterans.
  My dad was a veteran of World War II. He flew B-17s in the Army Air 
Corps, was shot down after a bombing mission over Mannheim, Germany, 
was captured and served for a time in a German prisoner-of-war camp 
before General Patton and his Army came along and liberated him and his 
colleagues. As so many in this generation, he came back to this 
country, married my mom, and helped build this Nation into what is 
today the envy of the entire world. We owe a debt to all of our 
veterans to see that we address their needs, whether it is health care 
or other veterans benefits.
  But at a time when this budget resolution proposes giving less money 
than the Commander in Chief has asked for in terms of current military 
operations, I am sure all of our veterans would understand why we say a 
14.5-percent increase over last year is a reasonable increase in 
veterans benefits and services, and why they would say--at a time when 
we are looking at trying to balance the budget under tough times and 
actually giving the Commander in Chief, our Department of Defense, less 
than what has been requested because of our attempt to try to balance 
the budget, to meet our priorities to the soldiers and airmen and 
sailors and marines in the field and on the waters--that is an 
appropriate increase at this time.
  Particularly for those veterans coming back from their military duty, 
they would want to make sure there will be, once they leave active duty 
military service, jobs for them to hold to provide for their families.
  I think this is a good budget resolution. I agree with the Senator 
from Oklahoma the best thing we could do to keep faith with both our 
troops in the field and our veterans is to make sure we are 
responsible, that we meet our priorities, that we do not overtax, that 
we do not overspend, and that we continue to grow this economy so 
anyone and everyone who wants to work can find a good job.
  With that, I yield the floor back to the Senator from Oklahoma.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Madam President, I think we are about to wrap up the 
debate on this amendment. I know the Senator from Arkansas wants to be 
recognized for a couple minutes. Once she finishes, I will have the 
final comments on the amendment and we will prepare to have a vote.
  I yield the floor to accommodate the Senator from Arkansas.
  The PRESIDING OFFICER. Does the leader yield to her?
  Mr. DASCHLE. Yes. Are we under a time agreement now?
  The PRESIDING OFFICER. Yes.
  Mr. DASCHLE. Madam President, I yield time off the resolution, 3 
minutes, to the Senator from Arkansas.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mrs. LINCOLN. Madam President, I thank my colleague, the minority 
leader.
  I stand today to speak in strong support of Senator Daschle's 
amendment to the budget resolution that would ensure the U.S. Veterans 
Administration has the funding it needs to provide the best services 
possible to our Nation's veterans.
  My father passed away about a year and a half ago. He was an 
infantryman in the Korean war. Both of my grandfathers served in World 
War II.
  I believe probably one of the most important values those men 
instilled in me when I was growing up was the need to respect and honor 
our Nation's veterans, those who had put their lives on the line to 
ensure our freedoms and this incredible Nation we are a part of could 
be sustained.
  I have always treasured that lesson, and my father's example has 
guided me throughout my career in public service, as well as the 
examples of those I have met along the road of the very strong and 
determined and willing Arkansans who have also served this country.

  That lesson has always been important, but it is particularly 
poignant today. With the war on terrorism and the war in Iraq, a new 
generation of young people has stepped forward to defend our Nation and 
the world against threats to our security, peace, and stability. Many 
have given their lives in this cause. A great many more, who rarely get 
mentioned, have been wounded in action, and they will need our support 
in the years to come.
  We often hear people talk about the American military's superiority 
in weapons and technology, which is the most advanced and powerful in 
the history of the world. I know every Member in this body is proud of 
that. But there is also no getting around the fact our most important 
military strength resides in our people, in the men and women who 
serve, and in the officers who lead them. No weapon and no technology 
is as valuable to our military as our military personnel.
  One of my top priorities has been to ensure our military personnel 
gets the support they need, whether it is equity in pay, health care, 
housing, or child care.
  With an all-volunteer military, it follows you are going to have more 
career soldiers, and more of those soldiers are going to be married and 
have families. We should recognize this and provide for their needs. 
Particularly with the demands placed on our soldiers in the war on 
terror and in Iraq, we need to find new ways to better serve them and 
their families in recognition of their service and their sacrifice to 
this country. Their sacrifice today reminds of us of the sacrifices of 
earlier generations. It reminds us of the service and sacrifice of 
those who are here today. It should remind us we owe our veterans a 
much greater debt than just gratitude and respect. We also have an 
obligation to support the health and well-being and dignity of our 
veterans and their families when they need health care or when death, 
disability, and economic hardship leave them in distress.
  The cornerstone of this commitment is our Veterans Administration, 
with its numerous support programs for health care, homelessness, and 
veterans with special needs. But as many of you know all too well, our 
veterans programs have not always lived up to their promise. While 
things have improved in many respects, we still have some distance to 
travel to make our

[[Page S2422]]

veterans programs the most effective they can be.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mrs. LINCOLN. Madam President, I ask unanimous consent for an 
additional 2 minutes.
  Mr. DASCHLE. Madam President, I yield the Senator 2 additional 
minutes.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mrs. LINCOLN. One of my priorities as a Senator has been to seek ways 
we can make our Government work better. I believe one important place 
to begin is with our programs for our veterans. It is particularly true 
as our population ages, the Veterans Administration must adapt to new 
demands. Over 45 percent of American veterans are now over the age of 
60.
  In addition, the largest group of veterans, the Vietnam-era veterans, 
are nearing retirement. We are going to need innovative approaches to 
meet the needs of these veterans. A top priority should be to ensure 
our veterans benefits are more fair and equitable. The amendment 
Senator Daschle and I, as a cosponsor, offer today would increase 
funding for veterans health care by $2.7 billion. We would accomplish 
this by reducing tax cuts for people making over $1 million per year, 
so this measure would not add to the Nation's budget deficit, the 
budget deficit our children will be paying.

  One measure of a nation's greatness is how well it cares for those 
who have fought and sacrificed to protect its citizens, its values, its 
freedoms, and its interests.
  I urge my colleagues to join me in voting for this amendment to 
ensure our veterans have health care they so richly deserve, and that 
we do so without putting an enormous burden on our children.
  I would like to also comment on some of the talks we have had, both 
in the Finance Committee and here, about where those dollars are 
actually going to come from and who actually gets harmed, and remind 
our colleagues today these dollars do not come out of the small 
business arena. We have had information from the IRS which indicates 
that. We have charts which help us show that.
  I hope my colleagues will look at what is most important: The 
priorities and the choices we have to make today, and the consequences 
we will see from those choices we make. Let us support our veterans.
  Thank you, Madam President.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Madam President, I thank very much the distinguished 
Senator from Arkansas for her strong statement.
  Does the Senator from Iowa seek recognition to speak on this 
amendment, as well?
  Mr. GRASSLEY. Yes, I do want to speak.
  Mr. DASCHLE. Madam President, I yield the floor to accommodate the 
Senator from Iowa.
  Mr. NICKLES. Madam President, I yield the Senator from Iowa such time 
as he desires.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Madam President, what we have to think about when 
people suggest raising taxes is, I have hardly ever had anybody ever 
tell me they want to raise taxes. How high do taxes have to be to be 
high enough to satisfy the people asking to raise the taxes?
  Since we hear that more from the other side of the aisle than we do 
from this side of the aisle, I cannot help but ask anybody on that side 
of the aisle who is going to be suggesting during this debate on the 
budget to raise taxes, how high do they have to be to satisfy you?
  We have had marginal tax rates of 93 percent in the last 50 years. 
Was that high enough? We had 70 percent in the last 20 years. Is that 
high enough? We have had them as low as 28 percent. People felt an 
awful lot of economic good happened, particularly promoting 
entrepreneurship, when they were lower.
  I think the most important thing for my colleagues to think about 
during this debate is on the issue of process. Quite frankly, we are 
being given some direction through this amendment to raise taxes. We 
are being told the intent is to raise them on the very wealthy, but 
that is not how the budget resolution works. The budget resolution just 
says to the Budget Committee, raise X number of dollars based upon what 
that budget says. We decide where that is going to be raised.
  Anybody who believes that by voting for this amendment, they are 
putting the burden on just the wealthy, for instance, are sadly 
mistaken. What it takes to get a bill out of the Senate Finance 
Committee is a bipartisan compromise, and just taxing one class of 
people is kind of a nonstarter for our committee, if you believe in 
bipartisanship.
  In addition, if the issue of raising taxes just on millionaires is an 
issue, you need to remember you cannot just tax the wealthy. You 
confiscate all the income of people over $1 million, and you are going 
to run the Government for a few days. If you see that as a solution to 
our budget problems, you don't study the statistics, you don't study 
the impact taxation can have on the economy.
  Also, if it is the millionaires, just think in terms of the top 1 
percent, earning about 27 percent of the income, paying 33 percent of 
all of the income tax coming into the Federal treasury. Once again, how 
much is enough for the top 1 percent to pay? They make 27 percent of 
all the income. They pay 33 percent of the taxes. Should they pay 50 
percent? Pretty soon it gets to the point where maybe they ought to pay 
100 percent of it all. But that is a nonstarter. There is not enough 
income there to take care of our problems.
  What does this high tax philosophy lead us to? It eventually leads us 
to taxing the common ordinary American to a greater extent than is good 
for the country, good for economic freedom, and obviously a 
discouragement to entrepreneurship.
  I believe I saw on the chart, the one the Senator from Arkansas had, 
does taxing higher tax rates or lowering marginal tax rates really help 
small business? That is probably based on the argument that every small 
business does not pay the highest marginal tax rate. We are not dealing 
just with what is the highest marginal tax rate; we are dealing with 
fairness between self-employed, sole proprietors, and their highest 
rate of taxation and the highest rate of taxation of corporations. So 
anybody who is suggesting we ought to raise the marginal tax rate above 
where it is now at 35 percent is being unfair to sole proprietors, 
self-employed people, compared to corporations.
  We should not have a penalty against small business in America. 
Regardless of the income of that small business, there should not be a 
penalty. When you have a 38.6-percent marginal tax rate, that is a 13-
percent penalty on small business. It is unfair to sole proprietors. 
There is no reason individuals paying taxes in America ought to have to 
pay more than corporations.
  I am not arguing raising the corporation tax because we know what 
that does to our international competitiveness. That hurts our 
international competitiveness because we have high cost of capital. But 
I am arguing for fairness between corporations and sole proprietors, 
self-employed people, people who scrounge to get money to invest. They 
don't have stockholders. They can't go to the bond market like 
corporations can. They have to raise their capital. They live 
relatively moderately and maybe even low income throughout their 
livelihood to reinvest their earned income, to expand their business, 
to create jobs. Why do we want to penalize them? That is basically what 
this business of taxing the wealthy is all about.
  There isn't enough wealthy in this country to do everything they want 
to do on the other side. Eventually it filters down to hurting the 
middle class.
  We have to protect the middle class. What we are doing is talking 
about lower rates of taxation, protecting working men and women from 
having their resources confiscated by government.
  I urge we defeat the amendment.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Madam President, I have great respect for the Senator 
from Iowa. He does a terrific job as our chair of the Finance 
Committee. I would ask him to read the amendment. He gave a great 
speech on fairness among taxpayers. I am concerned about fairness in 
this budget between millionaires and veterans. That is the fairness I 
am looking for.

[[Page S2423]]

  In this budget, there is a $27 billion tax cut for millionaires 
alone. What I am asking is the $27 billion we have for veterans for 
their health care, which is also in this budget, be increased by a mere 
$2.7 billion. How do I do it? Not by raising taxes. We are not talking 
about raising taxes. Each millionaire in this budget will get a 
$140,000 tax cut this year. We are simply suggesting maybe we could 
reduce that $140,000 to $112,000 so veterans are not going to have to 
wait in line up to 6 months to get health care today, so veterans who 
are concerned about whether their VA facility is going to close do not 
have to be concerned about it, so veterans who are being told today 
they are going to have to pay $250 to walk in the front door will be 
told, you don't have to worry about that anymore because now the 
millionaires only get $112,000 and you are going to be able to walk in 
the door without having to pay that fee. That is the fairness I am 
talking about. We don't want to raise taxes, but we certainly want to 
see some fairness when it comes to veterans.
  I have seen countless bumper stickers in South Dakota, across the 
country that say support our troops. I think we ought to add three 
words: ``and our veterans.'' If we really are serious about supporting 
our veterans and our troops, we ought to be willing to say to our 
veterans: You know the billion dollars you are now being asked to pay 
for your health care? We are actually going to find a way so you are 
not going to be asked to pay anymore, that billion dollars can be 
reduced somewhat.
  I actually have had veterans in the last couple weeks ask me about 
having to pay double for prescription drugs, which is also in this 
budget. We increased the fee for each prescription drug from $7 to $15, 
each office visit to $20. We are telling category 7s and 8s they are 
now going to have to pay $250 to walk in the door. That accumulated 
amount of money is a billion dollars paid for by veterans after they 
have fought and defended their country.
  Is it fair to simply say: We are going to give the millionaires of 
this country a $112,000 tax cut so we have an opportunity here to 
provide some fairness to veterans in a budget as the war in Iraq and 
the war on terrorism go on?
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Madam President, my colleague and good friend from South 
Dakota said: This budget increases copays on veterans on drugs from 
$7.50 to $15. That is not correct. Read the resolution. The resolution 
has a paragraph that we did not assume either the $250 deductible or 
the increase in copays for category 7 or 8 veterans. It is not in the 
budget. I have only said that about three times. Maybe my good friend 
missed one of my great speeches.
  Look what we have done. I venture to say that whatever we do is never 
enough. Mr. President, I say to Senator Byrd, many times he talked to 
me about mandatories. Mandatory spending on veterans and discretionary 
are growing under this budget from $61 billion to $71.4 billion. That 
is a 14.5-percent increase. Not too many categories in this budget will 
be growing 14.5 percent.
  I want people to know we are doing a lot. We have assumed a $1.4 
billion increase in VA health care. So we have a lot already in this 
assumption that we are already expanding.
  I looked at the amendment of my colleague from South Dakota, and 
where is the increase for outlays for veterans? It is not in this 
amendment. It assumes maybe there is a trust fund, and if the 
appropriations bills come in and if they spend a certain amount, then 
maybe it will be increased and then we will increase the caps. It has a 
lot of assumptions. The only thing for sure is that it increases taxes.
  It is very hypothetical, at the most, to say we think that is only 
going to be on millionaires for a certain amount. That is not what the 
amendment says. The amendment says increase taxes next year by $5.4 
billion over the budget resolution.
  I also tell my colleagues the taxes that we are assuming for next 
year will be continued to make sure taxpayers do not have a tax 
increase are really the marriage penalty relief of $5.4 billion, and 
the 10-percent tax bracket. That is $4.3 billion for 2005, and the 
child tax credit is $2.6 billion. That is really what we are assuming.
  This idea we are going to rewrite the Tax Code is just not going to 
happen--I think my colleagues know that--not in this election year, not 
in this environment.
  What we are assuming are some profamily tax credits. It just so 
happens veterans are also taxpayers. If we do not do some of these 
things, a lot of veterans are going to have an increase in their taxes, 
if they have kids, to the tune of maybe $1,200, $1,600, $2,200, 
depending on how many kids they have. The marriage penalty alone, if 
they have taxable income of $58,000, a husband and wife, is $900.
  The only fact we are sure about in this amendment is we are going to 
increase taxes and maybe veterans might get some of it if it goes 
through this process of a reserve fund and then the reserve fund is 
released and then, depending on appropriations--that is an interesting 
way to say we are trying to help veterans.
  This budget tries to help veterans. It tries to be responsible, to 
give a significant increase, a $1.4 billion increase for veterans when 
we have very little increases period in nondefense, nonhomeland.
  I urge our colleagues to vote no on the amendment. Madam President, I 
ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. Alexander). Is there a sufficient second?
  There appears to be a sufficient second.
  All time is yielded back. The question is on agreeing to amendment 
No. 2710. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from Delaware (Mr. Carper), the 
Senator from South Dakota (Mr. Johnson), and the Senator from 
Massachusetts (Mr. Kerry) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea''.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 44, nays 53, as follows:

                      [Rollcall Vote No. 34 Leg.]

                                YEAS--44

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Kennedy
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--53

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

                             NOT VOTING--3

     Carper
     Johnson
     Kerry
  The amendment (No. 2710) was rejected.
  Mr. NICKLES. Mr. President, I move to reconsider the vote.
  Mr. BENNETT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. NICKLES. Mr. President, for the information of our colleagues, 
that will be the last rollcall vote tonight. Senator Conrad and I have 
indicated we are willing to stay to do additional business tonight, 
maybe well into the night. That remains to be seen, depending on the 
amendments that will be offered and/or discussed. If there are 
rollcalls on the amendments to be offered tonight, we will hold those 
over for tomorrow at a mutually agreeable time with our leaders.
  For the information of our colleagues, I am not sure how late we will 
work tonight. We will see. I think we are making progress on the 
resolution

[[Page S2424]]

and on the amendments. I know Senators Lindsey Graham and Jim Bunning 
have an amendment. I don't believe it is quite ready. I believe Senator 
Murray has an amendment. I also believe Senator Bennett wants to speak 
on a report.
  We will have additional business probably for some time tonight, for 
the information of our colleagues. Some of our colleagues have said 
they would like to speak tonight. That is fine with this Senator. We 
would like to get as much work done on this resolution as possible so 
we are not crammed into the last day and a half with a lot of votes.
  I do thank our colleagues. We are off to a good start in working 
through this resolution. I thank our colleagues for their cooperation.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. BENNETT. Mr. President, I am happy to yield to the Senator from 
Kentucky if he wants to lay an amendment down. Does the Senator from 
Kentucky wish to speak? I have anticipated speaking on behalf of the 
Joint Economic Committee. The ranking member of the Joint Economic 
Committee, Senator Reed, is also prepared to speak. We are here under 
the Budget Act to make a presentation to the Senate in the middle of 
the budget discussion. I don't know if that has ever been done, but we 
are going to do it. It is for that purpose I sought recognition, but I 
don't want to hold up the Senator from Kentucky if he has an amendment.
  Mr. BUNNING. Will the Senator from Utah yield?
  Mr. REID. Mr. President, I object to the Senator yielding to the 
Senator from Kentucky. It is not appropriate.
  The PRESIDING OFFICER. The Senator may yield for a question.
  Mr. BENNETT. Mr. President, if the Senator from Kentucky has a 
question, I will yield for a question.
  Mr. BUNNING. Will the Senator yield for a question?
  Mr. BENNETT. I am happy to yield for a question.
  Mr. BUNNING. The Senator from Kentucky was going to make a general 
statement on the budget resolution. If the Senator from Utah would like 
to yield, that is up to him. But I rose to seek recognition to make my 
general statement on the budget resolution.
  Mr. BENNETT. Mr. President, I would be happy to yield to the Senator 
from Kentucky if he would tell me how long he intends to talk.

  Mr. REID. Mr. President, the Senator from Utah has no right to yield 
to the Senator from Kentucky except for a question.
  The PRESIDING OFFICER. Senators may not yield control of the floor to 
other Senators.
  Mr. NICKLES. Mr. President, they can yield for a question.
  The PRESIDING OFFICER. Senators may yield for a question.
  Mr. BENNETT. Mr. President, under the circumstances, then, having 
made arrangements with Senator Reed for this time, I will proceed and 
suggest to the Senator from Kentucky he respond when we finish.
  The debate has been an interesting one since the beginning of the 
budget period. There has been a great deal said about the economy and a 
great deal said about the state of the economy. Much that has been 
said, in my opinion, has more to do with the fact this is an election 
year than it does with the situation facing the economy.
  In response to the requirement of the act creating the congressional 
budget process that says the Joint Economic Committee is to make a 
report to the Senate during the Budget Committee deliberations, I have 
asked for and received this time for myself and Senator Reed to address 
the Senate.
  I do not wish to address the specifics of the budget resolution 
because I think it is more important we lay down the background of the 
economy and what is really happening in the economy. I will do my best 
to keep it out of the realm of politics, keep it out of the realm of 
the rhetoric of this election, and stay as close as I can to statistics 
and facts so we can understand exactly what is happening in the economy 
and where the economy is headed. The basis and sources I have used in 
this situation have in every case been from outside groups. This is not 
the Republican Policy Committee or any other partisan group that has 
come up with these statistics. I will share them with the Senate 
tonight in the hope it will help the Senate and anyone who is watching 
understand exactly where the economy is.
  We begin, if we can, by reviewing exactly what happened with respect 
to the recession and the recovery. There has been a lot of rhetoric 
about this. I have heard on the Senate floor this is the worst 
recession in 50 years, the worst economy we have ever had.
  On this chart, we go back to the year 2000 and through the year 2003. 
The first quarter of 2004 is not in yet, so this goes back to the 
beginning of the softening of the economy through the recession and the 
recovery.
  These bars are by quarters. The first quarter of 2000 was a very weak 
quarter. This is measuring the growth of the economy in terms of the 
gross domestic product, the GDP. These data come from the government 
agency that tracks economic performance. These data are always 
available only after the fact. It is almost impossible to be sure of 
the data at the time it is happening, but after the fact the Bureau of 
Economic Analysis goes back and reconstructs what happens and makes 
whatever changes have to be made in order to make sure the data are 
correct. This is their current reading of what has happened in the last 
4 years.

  In 2000, in the first quarter, very weak quarter, only 1 percent 
growth; second quarter, very high. Some will say that is because of 
weather. Very often, there is bad weather in the first quarter which 
causes sales to go down. They are delayed. They show up in the second 
quarter. But in the third quarter, we spilt into negative territory; 
that is, instead of expanding, the gross domestic product contracted 
one-half of 1 percent.
  The definition, according to many observers, of a recession is two 
successive quarters of contraction, and we did not have that. We came 
up with a relatively weak fourth quarter in 2000.
  I will point out in that period of time there were those who were 
suggesting the economy was in fact weakening. They were attacked as 
having made partisan political statements trying to talk the economy 
down for political purposes. We now know in fact they were correct, the 
economy was in fact weakening. In the first quarter of 2001, once 
again, the economy contracted rather than expanded. Then in the second 
quarter, it contracted even more.
  The common definition of a recession was therefore met with two 
successive quarters of contraction, and then you have a third quarter 
where the economy contracted 1.3 percent. This, of course, was the 
quarter in which September 11 occurred.

  We have the three successive quarters of contraction. There are some 
who say this quarter, the fourth quarter of 2000, will be revised to 
show contraction rather than expansion as the data are further 
reviewed. As of now, these are the data the Bureau of Economic Analysis 
has given us.
  The fourth quarter of 2001 was positive, up 2 percent. Not robust 
growth, but at least positive. By definition, that is the beginning of 
the recovery. The first quarter of 2002 was strong and then we went 
back to anemic growth and kept that pretty much through 2002.
  In 2003, the growth starts to pick up and becomes very robust. The 
entire year showed growth of 4.3 percent which, by historic terms, is 
higher than the average growth of all of the years of the 1990s. If we 
can sustain 4.3 percent growth, we can be very happy indeed. We can see 
the economy is starting to recover, the recovery is getting traction 
and it is getting hold in 2003.
  Let's go back over the same time period and look at some of the 
spending patterns that came through the same situation. In green, the 
bars are the same quarters on the previous chart and they show consumer 
spending. A very unusual thing happened during this period of recession 
and recovery. Consumer spending remained positive in every single 
quarter. It got a little weak in the first quarter of 2001, but it 
remained positive, above the line, in every single quarter. That has 
never happened before. In recessions consumer spending goes negative, 
but in this one the consumers had enough confidence they stayed 
positive all the way through. That is one of the things that kept this 
recession from being deeper and more long lasting than it might 
otherwise have been.

[[Page S2425]]

  The blue bars, however, show a very different story and give us the 
reasons why this recession occurred. The blue bars are business 
investment. Business investment in the first and second quarters of 
2000 was very strong. A weak third quarter followed, and a very weak 
fourth quarter, and into negative territory we fell in the first 
quarter of 2001, staying there for one, two, three, four, five, six, 
seven, eight, nine successive quarters, with business investment down. 
It is not until we get to the second quarter of 2003 that business 
investment becomes positive again and very strong.
  This was an investment recession. It was not a consumer recession. It 
was an investment recession, as businesses felt they were overextended 
and cut back on their investment. After nine quarters--a long period of 
time--business investment finally began to be robust again. This again 
is from the Bureau of Economic Analysis. When this starts to happen, we 
assume we will start to get jobs because business investment has the 
biggest impact on jobs, not consumer spending.
  From the Department of Labor we have statistics on jobless claims. 
This shaded period on the chart is the period of the recession--that 
is, the three quarters when there was negative gross domestic 
production growth. The jobless claims heading into the recessionary 
period are going up. They reach their peak during the recessionary 
period. Then when the recession ends and the recovery takes place, the 
jobless claims start coming down somewhat, until you get that strong 
business investment that we saw on the previous chart. Then the jobless 
claims start coming down much more dramatically, indicating the jobs 
are on their way back.

  We have heard a lot about manufacturing. The Institute for Supply 
Management provides a composite index on manufacturing activity. In 
1999, manufacturing was up. And manufacturing follows the same pattern. 
It starts down in the second half of 2000 and comes down during the 
recession and stays down for longer than the recession itself. It is 
down in negative territory below this line, through all of 2001, gets 
up a little bit in 2002 but comes back down and again down, finally.
  When business investment starts up in 2003, the manufacturing 
activity comes up strongly. So it goes down, stays down, but when the 
business investment comes back, the manufacturing activity comes back 
very strongly.
  What about jobs, then? Where are the jobs? If this activity is coming 
back, why aren't we seeing the jobs? If there is investment activity, 
why aren't we seeing the jobs? What we are seeing is something we have 
not seen before, and that is the surveys done by the Bureau of Labor 
Statistics as to jobs--and there are two of them, one known as the 
establishment survey or payroll survey and one known as the household 
survey--have diverged in ways they have never diverged before in 
history.
  Before, they pretty well track each other. The difference is the 
payroll survey or establishment survey gets its sample entirely from 
firms and other employers, whereas the household survey does its sample 
by checking households to see who has jobs and who does not. The 
household survey picks up agricultural jobs. The household survey picks 
up self-employed and, to the degree they impact the statistics, the 
household survey would pick up illegal aliens who for one reason or 
another do not show up on the payroll survey.
  Everyone says the payroll survey is the more reliable. I will 
stipulate that everyone says that, but I ask this same ``everyone,'' if 
that is the case, how can you explain the sudden discrepancy between 
the two, a discrepancy that has come in this recession and this 
recovery? The discrepancy is not minor. If you take the entire period 
we are talking about, the payroll survey shows a loss of 2.3 million 
jobs while the household survey shows a gain of 614,000. That is a 
discrepancy of three million jobs.
  I don't have the answer as to what is causing that discrepancy. We 
have tried to do studies in the JEC staff to get the answer. I have 
asked the Commissioner of the Bureau of Labor Statistics if she will do 
some studies to find the answer. I have discussed this with Chairman 
Greenspan, and he says the Federal Reserve people are concerned about 
this and are trying to find the answer.

  If we take the period since November of 2001--this is the recovery 
period, as opposed to the entire period that included the recession--in 
this recovery period, even while we are in recovery, the payroll survey 
says we have lost 718,000 jobs; the household survey says during the 
recovery we have added 1.895 million jobs. That is a very wide margin.
  If we look at just the past six months, the period of the strongest 
recovery, the period when we are getting the strongest activity, the 
payroll survey says yes, we have finally started to add jobs. In the 
last 6 months, the payroll survey says 364,000 new jobs, while the 
household survey says 981,000. I am not saying the household survey is 
right and the payroll survey is wrong, I want to make clear. I am 
saying something is happening in the economy that has not happened 
before for which we do not have an accurate gauge. What is important is 
that our statistics be accurate so when we throw them around in a 
political debate, we know we are telling the truth.
  It is very clear to me the payroll survey needs to be adjusted 
upward. How far upward, I do not know. It is probable the household 
survey needs to be adjusted downward. How far downward, I do not know.
  Commissioner Utgoff, the head of the Bureau of Labor Statistics, has 
said the real number is probably somewhere in between the number shown 
by both surveys. But she does not know. This is one of the things we 
are pursuing in the Joint Economic Committee, to do what we can to get 
accurate data so we can make accurate analysis of what is happening in 
the economy.
  All right. Let's look at the unemployment rate. The unemployment rate 
is figured on the basis of the household survey.
  As shown on this chart, the shaded areas show the recession. In this 
case I have gone beyond the time period of the first chart. In this 
case we go back to the recession that occurred during the time Ronald 
Reagan was President, and you will see two shaded areas because Ronald 
Reagan suffered the double dip; that is, we went into a recession, had 
two quarters of negative growth or of contraction of the economy, came 
out, and went back in for an even longer period of time.
  This is the worst recession in memory. Unemployment hit a high of 
10.8 percent at that time. When it spiked up and came back down, there 
were a lot of people, with unemployment at that level, who said: Well, 
we are in good shape now. The jobs are coming back. Notice that level 
was about 7 percent unemployment, but it came down further as the 
prosperity of the late Reagan years took hold, and it was down until 
the next recession hit. As is always the case--it was the case, as 
shown on this chart here and here--it happened here. As soon as the 
recession hit, the unemployment went up and spiked up even during the 
recovery. This is the period of time when we talked about the jobless 
recovery. I had just come to the Senate, and I remember everybody 
saying: Well, if we are in recovery, where are the jobs? Unemployment 
spiked several quarters after the recession was over at 7.8 percent--
not nearly as bad as the 10.8 percent of the previous peak, but still 
pretty bad.
  All right. Then it started coming down slowly. We did not get down to 
the prerecession level for 4 years. It took 4 years for the economy to 
generate enough jobs to bring us down to the prerecession level of 
unemployment, which was just under 6 percent.
  Incidentally, that is the level where we are right now, because in 
this recession we saw exactly the same reaction. The unemployment rate 
came up dramatically during the recession, just as it did here several 
quarters after the recovery started. The unemployment rate was still 
going up. It peaked a little later than this one did, but a lot lower 
than this one did. The unemployment rate peaked at 6.3 percent and then 
started coming down, and it is now down to a level which in previous 
recessions would be considered very good.
  In the debate on the floor about the extension of unemployment 
insurance, we noted that extended benefits were allowed to run out at a 
level of unemployment that was well below the corresponding level at 
which such benefits

[[Page S2426]]

expired during the Clinton administration.
  I share all of this information to make this point: This recession is 
different. It is not different because it happened on George W. Bush's 
watch or because it happened in a Republican-controlled Congress. As 
Paul Samuelson has pointed out, if Presidents knew how to create jobs, 
every President would have a 3.5 percent unemployment number going into 
his reelection. If Congress could control jobs, every Congress would 
see to it in every October, as we were running for reelection, the 
unemployment rate would be at 3.2 percent. But unemployment is a 
reflection of what is happening in the economy. What this information 
shows us is what is happening in technology with this recession and 
this recovery is different from that which has happened in previous 
recessions.

  Let me give you my personal view of what is happening here. I believe 
the recession we have just gone through and the recovery we are now in 
represent the first recession and recovery of the information age, as 
opposed to the previous recessions and recoveries, which were the last 
recessions and recoveries of the industrial age.
  When I took economics, I was told recessions basically were a series 
of inventory buildups, and recoveries were inventory selloffs.
  For example, you got excited about how well things were going in the 
automobile industry, and you built more cars. Suddenly, the vice 
president of marketing looks out on the back lot and says: Good 
heavens, there are 40 acres covered with Chryslers we haven't been able 
to sell. Send everybody home. Lay them all off until we sell off all 
the back acres full of cars. And after some time, suddenly he looks out 
the back window and says: There aren't any cars. Quick, get everybody 
on the phone and tell them to come back to work so we can build up 
again. That is the classic, vastly oversimplified definition of an 
industrial age recession and recovery.
  It is clear from the data I have displayed here that this recession 
was different. This recession was an investment recession. This 
recession came at a time when productivity, by virtue of the 
information age and the application of high technology, was higher than 
it has ever been. This was a recession where productivity stayed 
positive and in high territory all the way through the recession, and 
productivity has stayed high during the recovery.
  In the hearing we held last Friday, I asked Commissioner Utgoff: What 
was productivity growth in 2003? She said: 4.4 percent. I asked: What 
was GDP growth in 2003? She said: 4.3 percent. In other words, 
productivity grew faster than GDP, even though GDP grew at a rate 
higher than the average of the 1990s. When productivity goes up faster 
than economic growth, you lose jobs.
  I asked: How many jobs did we lose in 2003, again according to the 
payroll survey, which is the survey she uses for this kind of 
calculation. She said: We lost 60,000 jobs in 2003. I asked: Is that 
about the right number with productivity at 4.4 percent and GDP at 4.3 
percent? She said: Yes, that is about the right number. If productivity 
is growing more than GDP, at that number you would lose about 60,000 
jobs statistically.
  That is the challenge we have as we look forward. We do not want to 
do anything in the economy to bring down productivity, because 
productivity is what gives us a higher standard of living, productivity 
is what gives us lower prices, productivity is what gives us 
economic dominance in the rest of the world. Our rate of productivity 
is higher than any other nation's, and we clearly want to keep it that 
way.

  The challenge is to get GDP growing faster than productivity. That is 
where the jobs will come from, and that is why we are having a 
different kind of recovery this time, because it is a different kind of 
recession, because it is the first recession of the information age 
when we are finally reaping the rewards of all the investment we have 
made in technology in the decades leading up to this. It is finally 
paying off in this very significant productivity.
  That is what I believe is happening. As we do our analysis around 
here, I think, therefore, it is not helpful to be using industrial age 
assumptions dealing with the first information age recession and 
recovery.
  A few other items, and then I am through.
  We have heard a lot on this floor about the size of the deficit and 
how terribly big it is. In terms of nominal dollars, I will concede--
absolutely, I will stipulate--it is the largest deficit in history.
  Now let's look at it the way you have to look at it if you are going 
to understand it intelligently, which is, how big is it with respect to 
the size of the economy?
  Going back over the same period where we have talked about previous 
recessions, only this time I have gone back and picked up some others, 
this chart goes back to the recession of 1970--again, the recession 
period is shaded--the recession of 1975, the double dip of the early 
Reagan years, the recession in the early 1990s, and now the recession 
we have just gone through. In every case, when you go into the 
recession, the deficit comes up.
  In this case the deficit is not measured in absolute dollars. It is 
measured as a percentage of the economy. In 1970, it goes up. When you 
get into the recovery, it comes back down. In the next recession, the 
deficit goes up dramatically because this recession lasted longer and 
becomes a double dip. The deficit goes up tremendously because this was 
the most serious recession we had. Then in the recovery it comes back 
down. It goes up. The recovery hits us and it starts coming down. 
Indeed, we even get into a surplus period. And we were in a surplus but 
the recession hit us, and once again the same historic pattern occurred 
as the deficit came back up and is now coming back down.
  The blue lines are history. You can see that the highest point of the 
deficit as a percentage of GDP was during the double dip that occurred 
in the early Reagan years. Then there was a pretty high point in the 
recession of the early 1990s, pretty close to the high point of the 
recession in the mid-1970s. The current point is about equivalent to 
the size of the deficit in the 1970s, below the deficits of the last 
two recessions.
  The red line and the green line on the chart are the projections of 
where the deficit is going in the years ahead. The red line is the 
President's projection. The green line is CBO's projection.
  I can't tell you which one of the two is right. I can tell you that 
both of them are wrong. Because when you try to make projections that 
far ahead with an $11 trillion economy, you are always going to be 
wrong. But I can tell you that the trend will be down.
  I remember the projections when the deficit was here. This was when I 
came to the Senate when President Clinton went to the White House. We 
hoped and prayed--and we signed the balanced budget agreement in the 
mid-1990s--that it was going to get the deficit down to zero by 2002. 
We went into surplus in 2 years. We missed it. Everybody missed it. CBO 
missed it. OMB missed it. Everybody missed it. The economy was so 
strong that the deficit turned into a surplus.
  Then we had the projections of surplus, and we missed it again. I 
hear the rhetoric on the floor: We were promised this surplus. Well, 
the only thing I can promise is that these lines are wrong. Even though 
they are CBO's best guess, they are OMB's best guess, they are wrong. 
Because the economy responds in different ways than the computers 
anticipate around here.
  Let's go directly to the question of the debt. This is the real 
issue, because deficits in one year or one business cycle don't matter 
all that much. It is the accumulation of the deficits, cycle over 
cycle, that adds up to the national debt that matters. If you have too 
many of them back to back, you have real problems. If you have one that 
is not a problem by itself, you can deal with it.
  Here is the publicly held debt as a percentage of GDP. That is the 
measure Chairman Greenspan urges us to use and so that is the measure 
we have used. People are always a little surprised to find that the 
highest level of publicly held debt in our history was 1945. We paid 
for the Second World War with debt. It was over 100 percent of the 
economy. It started coming down.

  Here we have the Korean war, and the debt kept coming down. It 
bottomed out in the mid-1970s and started to rise again. That is the 
period of time

[[Page S2427]]

when we began to get some entitlement programs built into the system, 
the later years of Richard Nixon and Jimmy Carter. Then it starts going 
up again, and it goes up again and up again and up again.
  As we saw from the statistics in the previous chart, the deficit then 
fell, even becoming a surplus, and the debt comes down dramatically. 
Then we hit the latest recession. The debt starts up again. Once again, 
the blue line is historic debt to GDP. The red line is the President's 
projection and the green line is CBO's projection.
  Once again, the only thing I know about those projections is they are 
wrong. It will be something different. It always is.
  We can see the debt at the present time is in relatively comfortable 
territory. I know Senator Conrad will then start talking about, yes, 
but what happens out here. I agree with him, what happens out here is 
going to be horrendous if we don't start to fix things. But I don't 
think that this particular year, in a time of war, in a time of 
recovery, when the economy is just getting traction, that the size of 
the deficit--which we don't know what it will be at the end of the 
year; last year we missed it by $80 billion--is going to determine what 
is going to happen out here. I think what is going to happen out here 
in terms of the Social Security and Medicare problem has to do with the 
way we restructure Social Security and Medicare around the demographic 
realities rather than what we do in this particular year. I am 
perfectly willing to vote for this budget as it comes out in this 
situation.
  There are other charts that I shall not burden you with. I will end 
with this one. We, once again, get to this question of projections. We 
have a projection of a surplus. No, we have a projection of a huge 
deficit. We always go back after the fact and the actual figures never 
match the projections. They are always high or low. Again, last year 
the fiscal year that came in $81 billion lower than the high 
projections we got in the middle of the year. You say: Gee, $81 billion 
is a huge miss.
  Not necessarily. Out of an $11 trillion economy, $80 billion is 
within the margin of error, a phrase that all of us understand.
  Here, then, is the analysis of what happened to the surplus. Yes, the 
blue shows that the surplus went for tax cuts. The 2001 tax cut took 18 
percent of the projected surplus. The economic stimulus package that we 
passed in 2002 took another 1 percent. The tax cuts of 2003 took 
another 5 percent of the surplus. Thirty-eight percent of the surplus 
went for increased spending: the war on terror, rebuilding New York, 
handling the aftermath of 9/11, homeland security, and lack of 
discipline on the Senate floor for a whole series of issues.
  I am a member of the Appropriations Committee. I know what happens in 
the conferences. I know what happens when people come in and start 
saying: We have to have this much more and that much more, and you have 
to hold the line. And the line doesn't get held and the combination is 
more red, if you will, than blue.
  But the biggest part of the chart, the reason we missed the 
projection, 40 percent was the weak economy. We just missed calculating 
what the economy would produce because we missed the recession. We 
didn't see the recession coming and we didn't see how weak the recovery 
would be.
  There are those who insist--and I happen to agree with them--that if 
we had not passed the tax cut, the economy would have been weaker than 
it was.
  Just about every economist I talk to on Wall Street says: If you had 
not passed the tax cut, you would not have had the recovery that you 
have had in the financial markets.
  That is not trivial because in the financial markets we have seen the 
recovery, if you will, in the form of between $3 trillion and $4 
trillion worth of wealth. That may very well have funded the increased 
business investment I showed on an earlier chart. You cannot say this 
is a sum zero game and if the tax cuts had not occurred, then you would 
have had that much of the surplus left, because if the tax cut had not 
occurred, there would have been more weakness in the economy. I don't 
think it is one-to-one. I think clearly the tax cuts took more out of 
the economy than came back. But, over time, it may well have been one-
to-one. The tax cuts happened at the right time and in the right places 
to produce a stronger economy and give us the recovery we need.
  So, Mr. President, I conclude with this observation once again: I 
believe that the recession we have just gone through is the first 
recession of the information age; therefore, this is the first recovery 
of the information age. It has not behaved like any previous recession, 
and it has not behaved like any previous recovery. We need to 
understand it far more than we do--we may have to go through 2 or 3 
more before we truly understand it--in order to make the right 
prescriptions as to what we should do. But we are in recovery. The 
recovery is now strong.
  GDP is now growing almost as fast as productivity, and if GDP can 
grow faster than productivity, then jobs will come. We don't want to do 
anything to destroy productivity in the effort to create jobs because 
it is the growth of productivity that is responsible for our standard 
of living and for our hope for the future.
  Overall, for the next 10 years, the prospects for the U.S. economy 
are very strong and bright. Hanging out there in the future, there is 
the baby boom retirement problem and the challenge that we have to deal 
with that in a structural fashion.
  I hope this has been useful to the chair and other Members of the 
Senate. I appreciate the indulgence and allowing me to go through this 
in detail.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Talent). The Senator from Rhode Island is 
recognized.
  Mr. REED. Mr. President, I yield myself 20 minutes from the time 
allocated.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Rhode 
Island for 20 minutes.
  Mr. REED. Mr. President, first, I thank the chairman of the Joint 
Economic Committee, Senator Bennett, for arranging this discussion on 
the economic aspects of the budget before us. Also, I thank him for his 
gracious and very thoughtful chairmanship of the committee.
  In 1992, it was popular to say, ``It is the economy, stupid.'' I 
think circa 2004 the saying is, ``It is jobs, stupid.'' I think the 
economy can be measured in many different ways. It can be measured by 
GDP, which seems to be moving along at a healthy pace. It can be 
measured in terms of productivity.
  But for most families, the true measure is a very simple one: Do I 
have a good job? Will I keep this job for the next several years, 
hopefully until I retire? Will my children, who I have attempted to 
educate and give advantages to, be able to realize even better job 
opportunities and be able to hold those jobs in the future? Frankly, 
for families across this country, those questions are very uncertain at 
this moment as a result of the record of the last several years in 
terms of job creation, the record of the administration in terms of its 
economic stewardship of the most critical factor, and that is jobs for 
Americans.
  There is much discussion about these numbers. For example, this 
morning, the distinguished Senator from Kentucky, Mr. McConnell, 
pointed out that in 1996 the unemployment rate was the same as it is 
now, 5.6 percent. He then stated that Democrats at that time argued 
that achieving that rate of unemployment was good news, but today we 
seem to be unsatisfied with the 5.6 percent unemployment rate.
  First, the Senator from Kentucky is right about that fact. In January 
1996, 3 full years into President Clinton's term, the unemployment rate 
was 5.6 percent. Now, 3 full years into President Bush's term, the 
unemployment rate is 5.6 percent. But that is where the similarities 
end.
  When President Clinton took office in January 1993, he really did 
inherit a weak economy. The unemployment rate was 7.3 percent. Three 
years later, it was 5.6 percent, a drop of 1.7 percentage points. Of 
course, Democrats regarded that 5.6 percent unemployment rate as a 
significant improvement, and based on the experience of the Reagan-Bush 
years when the unemployment rate was always above 5 percent, it was 
about as good as it seemed to get.
  What has been the experience under this President Bush? He inherited 
an

[[Page S2428]]

economy that was definitely slowing down from the very strong growth 
achieved in the late 1990s. But the unemployment rate was 4.2 percent 
when he took office in January, 2001. The unemployment rate had been 
below 5 percent for 3\1/2\ years prior to his inauguration. So 3 years 
later, when the unemployment rate was 1.4 percentage points higher than 
when he took office, a 5.6 unemployment rate doesn't look very good at 
all. That is because it is a sign of continued weakness in the economy.

  The unemployment rate has been above 5.5 percent for over 2 years. 
Put simply, under President Bush, unemployment went up. Under President 
Clinton, it went down. Families throughout this country recognize the 
difference.
  Let's look not just at unemployment rates, but at job creation. When 
the unemployment rate stood at 5.6 percent in 1996, the economy had 
already created nearly 7 million new jobs under President Clinton. As 
we all know, the unemployment rate may be the same for President Bush 
at a comparable point in his Presidency; but instead of presiding over 
the creation of 7 million jobs, he has presided over the loss of 2.2 
million jobs--one of the most significant records of job loss of any 
President of the United States in our history.
  My colleagues on the other side sometimes think it is unfair to 
compare President Bush's job record with President Hoover's. We are not 
saying that the economy today is the same as it was in 1930. We are 
saying what the facts show. This is the most persistent jobless 
recovery since the 1930s. The unemployment rate is lower now, but we 
are not creating jobs.
  One of the worst aspects of the job slump we are experiencing is a 
large faction of the unemployed have been unemployed more than 26 weeks 
and are no longer eligible for regular State unemployment insurance 
benefits. This morning, Senator McConnell argued that the President and 
our Republican colleagues were justified in not reviewing the Federal 
temporary extended unemployment compensation program because the 
unemployment rate was so low. But here again, the numbers tell a 
different story.
  When President Clinton discontinued the temporary Federal extended 
benefits in 1994, the unemployment rate was 6.4 percent, as Senators 
McConnell and Bennett said. But the economy was creating jobs at a 
rapid pace at that time. The situation is starkly different now. The 
official unemployment rate may be 5.6 percent, but when you include 
people who want to work but have dropped out of the labor force and 
people who are working part-time because of the weak economy, you are 
talking about an unemployment rate that is 9.6 percent, and that is a 
function of one I think important point that must be made again and 
again: The way we measure unemployment in the United States is based 
upon the number of people who are in the workforce who are actively 
seeking work, either have work or are actively seeking it.
  What the number really disguises is the number of people--hundreds of 
thousands of people--who have given up or are working part time. Let me 
say this again. If we were looking at all the people who historically, 
in the last several years, have been in the workforce, and we looked at 
the number of jobs, the rate of unemployment would be closer to 9.6 
percent.
  That is the difference between creating jobs in the mid-1990s when 
the waiting period for a job was much shorter and today when very 
talented, highly trained individuals are having a very difficult time 
to find any employment whatsoever.
  With respect to the budget resolution at hand, the President's 
economic policies have failed, and the budget being proposed by the 
majority will lock us into that failed policy.
  What the economy has needed for the past few years is short-term job-
creating policies and long-term growth-creating policies. What we have 
instead are tax cuts that go disproportionately to upper income 
taxpayers and create a legacy of large budget deficits and mounting 
debt.
  Those tax cuts have provided very little job-creating stimulus 
relative to their huge costs, and they will depress growth in the long 
run.
  All of the economic analysis I have seen says that when the economy 
is in a slump with excess unemployment--which is the situation we have 
been in for several years now--the immediate policy objective is to 
stimulate job creation. Giving tax cuts to high-income taxpayers who 
are more likely to save those tax cuts than to spend them is exactly 
the wrong approach.
  If this is an investment recession, then our policies have not been 
particularly geared to stimulating directed investment. These large 
income tax cuts to wealthy Americans have not translated into jobs.
  If we really were interested in creating jobs, we could have targeted 
much more of these tax cuts to lower income Americans who would consume 
and thus drive up demand. We could give specific incentives to industry 
to provide investments in new plant and equipment. This approach, which 
would make much more sense if you are trying to deal with a lack of 
demand and an investment slump, could have been done, but it was not.
  Last year, when we debated a similar stimulus package, the 
President's Council of Economic Advisers estimated that nearly 2 
million jobs would be created in the second half of last year, with 
about half a million of those jobs coming as a direct result of the tax 
cuts.
  Again, these are the projections of the Council of Economic Advisers: 
2 million extra jobs and a half million jobs directly related to the 
tax cut.
  In fact, however, in that period, only 124,000 jobs were created. We 
got the tax cuts--actually most of the tax cuts went to the wealthiest 
Americans--but we did not get the jobs.
  I do not know when we will see a truly sustainable job-creating 
recovery, but I know it will not erase the legacy of large structural 
budget deficits that the policies of the past 3 years have produced.
  Economic analysis tells us that persistent structural deficits are 
bad for the economy. They drain national savings and slow down or crowd 
out private investment. That means our standard of living grows more 
slowly and becomes more costly.
  Analysis by the Congressional Budget Office and the Joint Committee 
on Taxation has found that tax cuts that add to the budget deficit are, 
on net, harmful to long-term growth.
  Some have tried to distract our attention from the deteriorating 
long-term budget outlook by talking about cutting the deficit in half 
in 5 years. Such an approach completely ignores the real story, which 
is what happens to the budget when the baby boom generation starts to 
retire in just a few years.
  In my opinion, the charts Senator Bennett showed historically looking 
back at the highs and lows of deficits miss a very important point. In 
the mid-sixties, in the mid-seventies, and even in the mid-eighties, we 
were not on the cusp of a huge number of Americans being entitled to 
Social Security benefits and Medicare benefits in the foreseeable 
future. I think failing to recognize the onset of the baby boom 
generation into these programs and reserving funds to deal with it is a 
tremendous mistake.
  I read, as many did, a book about Secretary of the Treasury Paul 
O'Neill's tenure in the Bush administration, and I was struck by the 
fact that he and Chairman Greenspan apparently saw this onslaught of 
the baby boom generation with respect to Social Security, and they were 
working very diligently to reserve $1 trillion from our surplus to do 
the structural reforms about which so many talk. But what happened on 
the way to structural reforms? That trillion-dollar surplus turned into 
a trillion-dollar deficit, and our opportunity to deal honestly and in 
a timely fashion with Social Security, and also Medicare, evaporated 
along with the evaporating surplus.
  The budget before us represents a continuation of the failed policies 
of the past 3 years. It has no effective programs to provide short-term 
job-creating stimulus and does nothing to address the problems faced by 
large numbers of American workers who see their jobs disappearing.
  By making the tax cuts permanent, it locks us into a legacy of 
deficits that could leave us unprepared to deal with the demographic 
challenge of the baby boomers' retirement.

[[Page S2429]]

  Those deficits will depress future standards of living by draining 
national savings, discouraging investment, and adding to our foreign 
indebtedness.
  This is a situation that argues for different policies. I agree, I 
think, with the Senator from Utah that we are in a different type of 
economic climate. The information technology has transformed radically 
what we do in our economy, but the policies and programs espoused by 
the President and embraced by this budget do not recognize, in my view, 
this new reality, and certainly I do not think we can content ourselves 
with the view that in the long run everything will be fine because, as 
Maynard Keynes pointed out, in the long run we are all dead.
  Our constituents expect us to act in the short run prudently and 
realistically to help them, and I hoped we could be here debating a 
budget that would invest in our people, would reassure the American 
people that we are working to help stimulate the creation of private 
jobs in this economy.
  Finally, I point out what was most alarming to me in the last report 
from the Bureau of Labor Statistics last Friday is that not only was 
there negligible job growth--21,000 jobs--virtually none of these were 
in the private sector. They were public sector jobs.
  We can do more, and we should do more, to ensure that every family in 
this country feels confident in their job and in the ability of their 
children to obtain meaningful work in this country. That should be the 
first priority of any government. This budget does not represent that 
type of priority.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island yields the 
floor. Who seeks recognition?
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, maybe I can engage in a colloquy with the 
chairman for a moment. I am going to speak in response to Senator 
Bennett for probably 20 or 25 minutes, and I do not want to unduly take 
the time of the chairman. Perhaps he wants to stay and listen to this. 
He has heard much of this before. I want to tell him what my intention 
is.
  If there are arrangements we can make for tomorrow at this point, 
that would be useful. We have just been talking about that point. Maybe 
we can talk some more later. I wanted to tell the chairman that I 
sought recognition for the purpose of speaking for some amount of time 
giving an alternative view of what we heard from Senator Bennett. I do 
not know how the chairman wants to proceed. I do not want him to just 
have to sit here and listen to what he has heard several times before.
  Mr. NICKLES. Mr. President, I appreciate the comments of my very good 
friend, Senator Conrad. I will suggest the absence of a quorum and see 
if he and I can work out an arrangement for finishing tonight.
  The PRESIDING OFFICER. Does the Senator from North Dakota, who has 
the floor, suggest the absence of a quorum?
  Mr. CONRAD. I will be happy to suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, I want to make a couple of comments. I 
heard my very good friend, Senator Reed from Rhode Island, call 
President Bush's economic policies failed. I take issue with that.
  Last year we passed an economic stimulus package and it happened to 
work. The proof is in the pudding. We have the results. The last three 
quarters have been phenomenal growth. The third quarter of last year 
grew at over 8 percent. That is record growth for the last 20 some 
years, which is phenomenal growth. A quarter after that, it was 4.4 
percent. So if we look at the GDP, we can see real significant growth 
as a result of the growth package we passed last year.
  Look at the stock market. The stock market was a precursor for the 
decline in the economy that happened in the year 2000-2001. NASDAQ, as 
I mentioned a few times, declined by almost 50 percent in the year 
2000, kind of sending a signal there was a recession coming. 
Subsequently, we saw two or three quarters of negative growth in 2000-
2001.
  We made these changes last year in economic policy by accelerating 
the rate cuts by saying we should not tax individuals more than 
corporations. I thank my colleagues for their vote on that last 
amendment saying we really should not tax individuals, doctors, 
lawyers, entrepreneurs, or self-employed individuals at a rate higher 
than Exxon. That was one of the things that was voted on just a minute 
ago, and I thank my colleagues.
  I think reducing the tax on dividends has helped the economy. The 
stock market has now shown significant growth. Dow Jones a little over 
a year ago was at 7,700. Now it is at 10,500. NASDAQ went up by 50 
percent last year. The stock market has sent some good signals and we 
have seen good economic growth for the last few quarters.
  When my good friend, and he is my good friend, my marine buddy, 
Senator Reed from Rhode Island, said President Bush's economic policies 
are a failure, I beg to disagree. I think we have evidence the changes 
we made last year have caused very significant, positive economic 
growth, and I mention that with great respect, but I wanted to give a 
different viewpoint.
  Momentarily, we are going to be locking in an order for tomorrow. We 
made good progress on the budget today. We worked a lot of the day. 
Senator Conrad and I both have been on the floor since 9:30 this 
morning, and we are really starting to work our way through the budget. 
I thank all of our colleagues, Democrat and Republican, for their 
cooperation in doing so.
  Tomorrow I believe Senator Ensign from Nevada wishes to make a 
speech, and shortly after that I believe Senator Murray will be 
recognized to offer an education amendment. After that, I believe 
Senator Lindsey Graham and Senator Bunning have an amendment, and we 
will consider that. There will be a mutually agreeable time to vote on 
those amendments. We do not expect the debate on those amendments to be 
too prolonged. That is not in our interest. Our interest is trying to 
complete this budget and to conduct business in an appropriate, orderly 
manner so we can avoid the vote-aramas that have happened in the past.
  I want to let our colleagues know there will not be any more votes 
tonight. We will be on the floor for a little while longer. We do have 
in the queue a couple of the amendments ready. It will be Senator 
Murray's amendment and Senator Lindsey Graham's amendment tomorrow 
morning.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Is it the chairman's intention we not ask for a unanimous 
consent in terms of that basic structure or could we at least have a 
unanimous consent agreement to the extent Senator Ensign would be 
recognized for up to 30 minutes and then we would turn to Senator 
Murray's amendment, and after the disposition of that amendment we 
would go to the amendment of Senator Graham of South Carolina?
  Mr. NICKLES. I am happy to enter into such an agreement. That would 
be fine. I can state the agreement. I think the staffs are working on 
it. Why do we not let staff complete it because we will also yield back 
some time and complete that. I am happy to agree to such a request.
  Mr. CONRAD. I thank the Chair. I think it will help our colleagues 
understand there is a basic order and structure tomorrow so they can 
make their plans accordingly in terms of seeking recognition if they 
understand Senator Ensign will first be recognized for a period and 
then we will turn to the Murray amendment on education and then to the 
Graham amendment.
  Senator Wyden is here. I yield to Senator Wyden 5 minutes off the 
resolution.
  The PRESIDING OFFICER. The Senator from Oregon is recognized for up 
to 5 minutes.
  Mr. WYDEN. Mr. President, I thank Senator Conrad of North Dakota, and 
also thank Senator Nickles, whose staff has been working with me.
  Many Senators know last year we put a tremendous amount of effort in 
trying to get a bipartisan bill passed to

[[Page S2430]]

get our forests healthy again. We have seen much of our country just 
devastated by staggering forest fires.
  A key part of that legislation was to authorize $760 million in 
hazardous fuels reduction programs. The amendment I have filed--and I 
will be asking the Senate to vote on it tomorrow--has generated 
interest among many colleagues of both political parties. It would add 
$343 million to last year's $417 million for hazardous fuels reductions 
to reach the $760 million authorization in title I Healthy Forests 
legislation.
  It seems to me what we have seen over the years is essentially a 
shell game, where various Forest Service programs are robbed in order 
to fund the hazardous fuels reduction programs and we end up without 
adequate resources across the board in the forestry area. I am hopeful 
we will be able to agree with our Republican colleagues on this effort.
  Suffice it to say, it was a Herculean task to get Healthy Forest 
legislation passed last session. I think many thought it was 
impossible. It seems to me the Senate owes it to the people who are 
waiting to see improvements in their communities to fully fund this 
important legislation.
  I am going to work with colleagues on both sides of the aisle on this 
particular piece of legislation. This amendment will ensure we really 
get some health back into this idea of healthy forests. We are not 
going to be able to do it if we consistently underfund these programs.
  In the past, it seems to me, we played sort of a ``rob one fund in 
order to fund another fund'' kind of program. That is not going to do 
the job responsibly for the long term. We are talking about millions 
and millions of acres that we are going to have to thin in the days 
ahead.
  After the Senate passes historic legislation, legislation that is 
going to be good for the environment, good for the economy, promote old 
growth, involve local communities, protect the rights of citizens--for 
example, being involved in forestry policy--what we have to do is fund 
this properly.
  There will be interest among colleagues on both sides of the aisle on 
the legislation. I thank Chairman Nickles for being willing to work 
with me on it, and Senator Conrad as well. On the other side of the 
aisle, Senators Domenici and Burns are intensely interested in this 
matter. On our side of the aisle, Senators Daschle, Feinstein, 
Bingaman--all of us have cooperated with the ranking member, Senator 
Conrad, and the chairman, Senator Nickles.
  My amendment has been filed, and I am hopeful we will be able to pass 
it without controversy tomorrow.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from Oklahoma.
  Mr. NICKLES. I thank my colleague from Oregon, Senator Wyden, for his 
gracious comments. It is a pleasure working with him on a multitude of 
issues, this being one, forest fires.
  Mr. WYDEN. I thank the Chairman.

                          ____________________