[Congressional Record Volume 152, Number 51 (Wednesday, May 3, 2006)]
[Senate]
[Pages S3973-S3977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             FISCAL HEALTH

  Mr. VOINOVICH. Mr. President, I rise today to speak on our Nation's 
fiscal situation. Today, the Senate is considering about a $100 billion 
supplemental funding bill that our Federal Government requires to 
fulfill its domestic and foreign obligations. While I acknowledge this 
funding is needed in many areas at home and abroad, most notably with 
our commitments to fight the war on terror, rebuild after the 
devastations of Katrina and Rita and protecting our borders, the 
occasion of passing a $100 billion supplemental bill is an opportunity 
that I cannot pass up to remind the Senate of where our Nation's 
overall fiscal health lies.
  In a nutshell, our fiscal health is in dire straits. In the most 
simple terms, the Federal Government continues to spend more than it 
takes in. I hope my colleagues agree that the running the charge cards 
for today's needs and leaving the bill for our children and 
grandchildren should not be the policy that this body pursues.
  When I came to the Senate in 1999, the national debt stood at $5.6 
trillion. Today, as the chart shows, the national debt stands at $8.4 
trillion. Since I came to the Senate in 1999, we have had an increase 
in the national debt of about 50 percent. The chart shows the last 4 
years how we have climbed the ladder, and the Treasury will be back 
asking us to raise the debt limit.
  As a percentage of gross domestic product, our national debt has 
grown from being 58 percent of gross domestic production at the end of 
2000 to an estimated 66.1 percent of gross domestic production by the 
end of 2006.
  Undoubtedly, the United States has undergone unprecedented challenges 
that have spurred these fiscal issues. The tragedy of September 11 to 
fighting the war on terror at home and abroad, to hurricanes Katrina 
and Rita, to the rollout of the new Medicare prescription drug plan, 
the largest

[[Page S3974]]

expansion of Medicare Programs since its creation, our Nation has had 
to respond to challenges of tremendous magnitude. In responding to 
those challenges, the Federal Government has had the responsibility to 
provide the resources so that the country could confront these 
challenges head on.
  The Federal Government rightly appropriated $20 billion to help New 
York, hundreds of billions to provide our war fighters with the 
necessary equipment to provide for our national security and now well 
over $100 billion to help rebuild the gulf coast. We are dealing with 
all of these expenses, but we are ignoring the 800-pound gorilla in the 
room, the impending tidal wave of entitlements coming due.
  I was pleased this President in the State of the Union Address 
acknowledged that:

       The retirement of the baby boom generation will put 
     unprecedented strains on the federal government. By 2030, 
     spending for Social Security, Medicare and Medicaid alone 
     will be almost 60 percent of the entire federal budget. And 
     that will present future Congresses with impossible choices 
     staggering tax increases, immense deficits, or deep cuts in 
     every category of spending.

  I am pleased the President decided to focus on what some call the 
demographic tsunami coming our way and the necessity to reform 
entitlement programs before it hits. The 77 million baby boomers coming 
into the Social Security and Medicare Program will put the Federal 
budget under unprecedented pressure. Chairman Gregg took the courageous 
steps to take on entitlement spending through the Deficit Reduction Act 
of 2005. I supported his efforts.
  However, this was just the tip of the iceberg. The truth is, we have 
not been serious about entitlement reform. The President called for a 
bipartisan commission to examine the full impact of baby boom 
retirements on Social Security, Medicare, and Medicaid in his State of 
the Union Address. It is imperative we move on this quickly. 
Unfortunately, we are still waiting for the commission to be appointed. 
Time is of the essence, and I hope that Secretary Snow and the 
administration will move quickly on creating that commission.
  Social Security, Medicare, Medicaid, make up a significant portion of 
mandatory spending and mandatory spending is crowding out other parts 
of the budget. This chart shows in the year 1965 mandatory spending was 
27 percent of our budget. In 1985, now we see mandatory spending makes 
up 42 percent, 44 percent is discretionary, and 14 percent is the 
interest on our debt. Now, in the year 2005, from 1985 to 2005, 
mandatory spending has jumped from 42 percent to 53 percent, and 
defense is 20 percent, nondefense is 19 percent, interest is 7 percent, 
and we have been lucky in terms of the interest costs because of the 
fact that our interest rates are very low today.
  If we ever see an uptake in interest costs, we can go back to what 
percentage went toward interest. When I came to the Senate in 1999, our 
interest costs were about 13 percent, so they have gone down, but the 
fact of the matter is we need to be realistic about the fact that they 
are not always going to be as low as they are today, and if they go up, 
they will just gobble up more of the Federal budget.
  According to the reports from Medicare and Social Security trustees, 
the trust funds for these programs will be exhausted even earlier than 
previously thought. According to the trustees report that came back 
last week, the cost of Social Security and Medicare will grow from 
nearly 7.4 percent of the economy today to 12.7 percent by 2030, 
consuming approximately not just 60 percent as predicted by the 
administration but 70 percent of all Federal revenues, crowding out all 
other discretionary spending. No matter which way you look at it, if we 
leave reform of entitlement programs for future Congresses to solve, as 
well as a mountain of national debt to pay off, it will have 
devastating consequences on the economy and on our children and 
grandchildren.
  Some Members believe that the solution is to grow the economy out of 
the problem, that by cutting taxes permanently the economy will 
eventually raise enough revenue to offset any current losses to the 
U.S. Treasury. I respectfully disagree with that assertion. I do not 
believe that in the current situation our country faces, we can 
continue to spend more than we take in.
  By the General Accounting Office's own estimates, about 35 years from 
now, that is when my grandchildren have their own children to care for, 
balancing the budget would require actions as large as cutting total 
Federal spending by 60 percent or raising taxes 2.5 times what they are 
at today's level.
  Our friends overseas and Europe are experiencing what we will 
experience if we do not get a hold of our finances.
  In November 2005, former Federal Reserve Chairman Alan Greenspan 
testified before the Joint Economic Committee and told Congress:

       We should not be cutting taxes by borrowing. We do not have 
     the capability of having both productive tax cuts and large 
     expenditure increases, and presume that the deficit doesn't 
     matter.

  That is exactly what we have been doing the last several years.
  I have said many times on this floor that our major problem is we are 
unwilling to pay for or go without what we want to get done. We have 
been willing, time and time again, to put the cost of our current 
spending on the credit cards of our children and grandchildren. To be 
candid and fair, we had no choice in much of the spending since 9/11. 
The Federal Government had to rebuild after 9/11. We have made the 
decision to increase security for the homeland. We have to fund the war 
in Iraq and Afghanistan. And we have to rebuild after the devastation 
of dealing with Hurricanes Katrina and Rita. In other words, our costs 
are something we have not been able to control because of the war 
abroad, securing our homeland, and these hurricanes which were 
unprecedented in our country's history.
  While we have had to spend hundreds of billions of dollars on these 
events, the Senate has made the decision to squeeze the nondefense 
discretionary budget. In fact, the pendulum has swung from the Senate 
spending money like drunken sailors during the first years I was here 
to now cutting these nondefense discretionary accounts to the bone in 
the name of fiscal responsibility.
  Unfortunately, fiscal responsibility cannot be defined solely by 
restraining and cutting nondefense discretionary spending. These 
accounts are only one-fifth of the budget and, frankly, with some of 
the cuts to these accounts, I believe we are eating our seed corn in 
the name of fiscal responsibility.
  I would be the first to cut the excess out of the budgets. I only 
have to think back to my mayoral days and my Governor days. As mayor of 
Cleveland, we inherited the first major city in the United States to 
default on its loans since the Great Depression. By making tough 
choices, we turned the city around.
  As Governor, we faced a no less daunting challenge. We came into 
office in a $1.5 billion hole. We scoured through line by line and went 
through four rounds of cuts in the State budget. After the fourth cut, 
the math still did not add up. We had to raise revenues to meet the 
responsibilities of the State--a solution that was not easy. But at the 
end of the day, it was necessary because--do you know what--we had to 
balance our State budget.
  I had to balance my budgets when I was the mayor of the city of 
Cleveland. Unfortunately, we do not have to balance our budgets here in 
Washington. After getting back on even keel, we were able to reduce 
taxes in each of the last 3 years of my administration. But we had to 
get back on even keel.
  I view the situation our Nation faces today in a very similar light. 
We are in a heck of a spot. Our Nation has faced extraordinary costs 
that could not be foreseen. And at the same time, we are talking about 
reducing revenues. We have cut nondefense discretionary spending, and I 
am sure there are those who believe we can cut more. I think we have 
come to the point where we need to face reality. These numbers just do 
not add up.
  Now, I want to say that I am not against tax cuts. In other words, I 
have been for it. I supported tax cuts in 2001, 2002, 2003, 2004. In 
2001, we were facing a starkly different fiscal picture than we have 
today. I think it is really important to understand that. The fiscal 
picture today is entirely different than when we started the tax cuts 
in 2001. The surplus over 10 years was estimated to be $5.6 trillion--a 
lot of money. Congress, as I mentioned, spent

[[Page S3975]]

more money in 1998, 1999, 2000, and 2001 than they should have. This 
led most of us to want to get that money off the table so it could not 
be spent. I supported this because of what I referred to as the three-
legged stool: pay down the debt, fiscal responsibility, and tax cuts--
the three of them.
  On June 7, 2001, the President signed the Economic Growth and Tax 
Relief Reconciliation Act. I voted for this bill which reduced the 
individual income tax rates that apply to taxable income, increased the 
child tax credit to $1,000, and extended it to smaller families, 
addressed the marriage penalty, phased out the Federal estate tax over 
the period 2002 to 2010, provided a temporary reduction in the 
alternative minimum tax, and provided some savings incentives and 
childcare credits.
  After 9/11, I joined the Centrist Coalition to accelerate these cuts 
to provide a short-term stimulus to our economy. The House passed this 
bill, but it stalled in the Senate because of partisan politics.
  In 2003, our country was still reeling from September 11, the war 
against terror, and corporate accounting scandals. We were in 
recession. We needed additional stimulative medicine. But I fought to 
ensure that the tax cuts were the right amount. I joined with Senators 
Olympia Snowe, John Breaux, and Max Baucus to get the $350 billion that 
we passed in 2003.
  On May 28, 2003, the President signed the Jobs and Growth Tax Relief 
Reconciliation Act into law. We accelerated the cuts from the 2001 tax 
bill, such as the individual income tax cuts, the marginal rates, the 
child tax credit, the marriage penalty relief, extended the AMT again, 
and reduced the rate on both dividends and capital gains to 15 percent 
for higher tax brackets and 5 percent for those in the lower tax 
brackets for 2003 to 2008.
  One of the reasons we said only $350 billion was that we were 
concerned about the cost of the war and homeland security. And we were 
right. Our national defense and homeland security costs have added up 
to $2.3 trillion since then.
  Since 2003, when we decided to provide accelerated tax cuts, our 
national defense and homeland security costs have added up to $2.3 
trillion.
  Can you imagine where we would have been if the $1.57 trillion the 
administration initially proposed or even the $725 billion tax cut that 
was being considered at the time by the House of Representatives was 
actually passed? Just think what our deficit and national debt would be 
today. The negative consequences of such cuts adding to our national 
debt would have outweighed any positive stimulus effect.
  I said that $350 billion in tax cuts would be enough to get the 
economy and the stock market moving then and now, and it worked. In 
other words, what we did is we front-end loaded that $350 billion tax 
cut to really give us some oomph so we would kick this economy into 
gear. And it worked. The economy and the stock market have moved.

  I can still remember people saying: The market is never going to 
recover. I heard, several years ago: It is never going to get back to 
where it was. And the fact is, it has. The Nation's GDP grew by over 4 
percent in both 2003 and 2004, and 3.5 percent in 2005, and 
unemployment has dropped since we enacted tax cuts from 6.6 percent to 
the current 4.7 percent. And we just announced that in the first 
quarter of this year, our GDP growth is over 4 percent and more 
Americans are working. Unfortunately, we are not seeing this in the 
State of Ohio. We are still under a great deal of duress because of the 
loss of our manufacturing jobs.
  However, the world does not stand still, and we now face different 
challenges. While this tax cut stimulation worked, making these tax 
cuts permanent should be subject to pay-go, as Alan Greenspan said, or 
``serious economic disruptions'' will result. We need to cut expenses 
or pay for them with other tax increases.
  Now, let's look at the costs of some of the tax cuts we passed. These 
are all going to be under consideration, and we will have people 
saying: We have to extend all of them.
  The credit for research and experimentation, that is $81.2 billion; 
deduction of State and local sales taxes is $41.5 billion; increased 
AMT exemption amount, $437.5 billion; hurricane relief--I will leave 
that one alone; subpart F for active financing income, $45.2 billion; 
reduced tax rate on repatriated dividends, $57 billion; section 179 
expensing, $15.9 billion; reduced tax rates on capital gains, $63.4 
billion; empowerment and renewal zones, $11.7 billion; child tax 
credit, $184.8 billion. Let's see. I won't hit them all. Estate and 
gift tax changes--estate and gift tax changes. Do you hear that? We are 
talking about killing the death tax? We are talking about $357 
billion--$357 billion. And the income tax rates of 25, 28, 33, and 35 
percent, if we keep those, will cost us $384.8 billion.
  All I am saying is, if you add up all of the things that are going to 
come to us during the next couple of years, we are talking about--what 
is that--$2.353 trillion. Do you hear that? It is $2.353 trillion. It 
just does not make sense.
  As we see on the chart, according to CBO, the dividend and capital 
gains tax cuts will result in roughly about $193.1 billion in revenue 
loss to the Treasury. If we were to permanently repeal the estate tax--
I have already mentioned that. Consider that the alternative minimum 
tax will cost us $511 billion. I support recent statements from the 
White House that AMT should be considered as part of tax reform, but 
until that happens, we are forced to confront this issue every year.
  Everybody is complaining about the AMT. They want the AMT. They want 
the dividend tax reduction to continue, the capital gains. You name it. 
They want it all. And just these tax items on this chart--to repeat--
$2.35 trillion over 10 years. Are we willing to add to our deficit and 
debt to continue these cuts?
  Let's list the numbers again, look at them again: unbalanced budgets 
since 2001 last year's deficit was $318 billion; a rising national debt 
of $8.4 trillion--and that has increased, as I have said, by 50 percent 
since 1999--the war on terror has cost us $450 billion, plus $160 
billion on homeland security since 9/11.
  One of the things people do not understand is that Homeland Security 
has 22 agencies, 180,000 employees. They have doubled the budget of 
those 22 agencies since 9/11. As a matter of fact, if you look at other 
money we spent on homeland security, they have actually tripled the 
budget since that time.
  Katrina has cost us over $100 billion and continues to rise, and the 
Medicare Part D plan is now projected to cost over $1 trillion from 
2006 to 2015.
  With significant unmet domestic needs and the looming cost to the 
Treasury of the baby boomers' retirement programs--which by 
conservative estimates from the administration will consume 70 percent 
of the entire Federal budget by 2030--what kind of economy is lurking 
around the corner in 2011?
  Instead of making the tax cuts permanent, we should be leveling with 
the American people about the fiscally shaky ground we are on. What we 
should be doing is spending our time on tax reform. We all know that 
fundamental tax reform is critical, and as we consider the tax 
provisions, such as the AMT, as I just mentioned, it becomes clearer 
and clearer we need to overhaul our Tax Code. So I simply cannot 
understand why some of my colleagues want to make so many provisions of 
the current Tax Code permanent or add new tax cuts when we very well 
may be eliminating precisely the same provisions as part of fundamental 
tax reform. No homeowner would remodel their kitchen and bathroom right 
before tearing down the house to build a newer and better one.
  As the one who amended and pushed for the creation of the task force 
on tax reform in 2003 and 2004, I was delighted when the President, in 
his convention acceptance speech, said he would move forward with tax 
reform. In fact, 2 days after the convention--Ohio was sitting right in 
front of the President when he was giving his acceptance speech. He 
said: When I mentioned tax reform, I watched you, Voinovich. He said: 
You jumped out of your seat, and I thought you were going to run up and 
hug me because you were so happy we were going to do the tax reform.
  I have to say that I am disappointed. I feel bad that the 
administration has backed away from tax reform as a priority, since 
simplifying the Code to make it more fair and honest could, by some 
estimates, save taxpayers over

[[Page S3976]]

$265 billion in costs associated with preparing their taxes. That would 
be a real tax reduction. And do you know what. It would not cost the 
Treasury one darn dime. It would be a tax cut that would guarantee that 
people are paying their fair share and would bring more money into the 
Federal Treasury.
  According to the Tax Foundation, we lose about 22 cents of every 
dollar of income tax collected in compliance costs. It adds up to the 
combined budgets of the Departments of Education, Homeland Security, 
Justice, Treasury, Labor, Transportation, Veterans Affairs, Health and 
Human Services, and NASA.
  In a recent conversation with Rob Portman, a longtime friend of mine, 
who is our new OMB Director, I communicated my call for Tax Code 
reformation. I said if the President wanted to leave a real lasting 
legacy, a real lasting legacy to the American people, something he 
could point back to and be very proud of, he would keep his promise to 
the American people to undertake tax reform.
  If we keep going the way we are, his legacy may be a big tax increase 
in 2009 or 2010 or 2011, one like his father was forced to make in 
1991. I believe--and I have the greatest respect for the President and 
his father--his father was a profile in courage. He bit the bullet and 
did what was right for the country and, in the process, probably lost 
an election.
  If we are going to provide the American people a clear picture of the 
shape of our fiscal house, we should be honest about the long-term 
problems underneath the facade of our fiscal house. Currently, we are 
distorting our Federal financial statements by borrowing from hundreds 
of Federal trust funds. In addition to the $1.6 trillion we have 
borrowed from the Social Security trust fund, we have borrowed over 
$660 billion from the Civil Service Retirement and Disability Fund, 
$177 billion from the military retirement fund, and smaller amounts 
from almost 130 Federal trust funds. In all, we have borrowed almost 
$3.3 trillion of funds intended for other purposes. All of this has 
added to our $8.4 trillion national debt.
  I believe we should keep the shrinking Social Security surplus 
separate. It is important to set these funds so that the Federal 
Government will have real assets that can be used to redeem existing 
special issue Treasury bills when Social Security stops generating 
surpluses in 2017. When we were looking at Social Security reform, it 
occurred to some of us that it would be useless to reform the program 
if the surplus money still went to general revenues. If we shore up the 
system without keeping the funding for it separate, the benefit of 
Social Security reform could simply be spent on other related programs. 
In other words, if we bite the bullet, reform Social Security, take in 
more money and don't put it aside so we can't touch it, we will just 
use it. We will be back where we were before. So we have to figure out, 
if we are going to do this, how we put the money aside.
  One of the things I have worked on--and I have introduced a bill with 
Senator Conrad--is that we would stop the raid on Government trust 
funds. It not only holds revenues designated for Social Security 
programs separate from general revenues, it also would make Federal 
financing more transparent. People would know what the public debt is. 
In other words, we would fundamentally borrow from the public the money 
that we have been taking from the trust funds, and we would know that 
the money in the trust funds would be there because it would not be in 
Federal investments.
  At this time we need reliable financial and performance information 
to make sound policy decisions. If we were in business, we would be in 
subchapter 11, absolutely. We need to bring transparency to our budget 
so that all the American people have a better understanding of the hard 
choices we have to make.
  Typically the American people have not tolerated a tax level of any 
more than 20 percent of GDP. We reached that level of almost 21 percent 
when the tax cuts we enacted made revenues decrease quickly. The real 
danger is the divide between our revenue and spending once the baby 
boomers start to retire. This dotted line is going to rise to levels 
not given on this chart. In other words, this dotted line is going to 
go way up in terms of dealing with our outlays. The revenues, as you 
can see, they were up pretty high. This is 1980. They went up. Then we 
got over here when we were flush, and they went up to here. Now the 
revenues are down here and then coming here. This line of spending is 
going to go right off the chart, as I mentioned before, because of 
Medicare, Medicaid, and Social Security.
  The American people should understand what this is about. We are 
really in trouble. The question is, if we don't have enough revenue to 
pay our current bills, how in the world are we going to prepare to 
cover much larger future promises? How are we going to take care of 
this? In the big picture of where the United States stands, it is clear 
to me that the economic framework of our Nation needs to be 
refurbished. There are certain investments and responsibilities that 
this Senator believes we can no longer ignore and must address.
  We should be rebuilding an infrastructure of competitiveness so that 
future generations at least have the same opportunity that we had for 
the standard of living and quality of life we have. We need to build 
what I referred to earlier. We are in a competitive global marketplace. 
What we have to understand is, if we don't build the infrastructure of 
competitiveness to compete in that marketplace, our children's standard 
of living is going to be less than what ours is today.
  One of the things I also think we need to understand is the fact that 
our infrastructure has been ignored for too long. It is a critical 
piece to making America more competitive. I have introduced the 
National Infrastructure Improvement Act with Senators Clinton and 
Cochran. The bill establishes the National Commission on the 
Infrastructure of the United States which would study infrastructure 
throughout the Nation, including surface transportation facilities such 
as roads, bridges, mass transit facilities, freight and passenger rail, 
airports, wastewater collection, and treatment facilities, waterways 
and levees. I was a cosponsor of the highway bill, but I thought the 
legislation was modest given the need.
  Frankly, it falls far short of the level that would improve or even 
maintain our Nation's highway system. According to the Federal Highway 
Administration, $107 billion is needed annually to maintain and improve 
our highways and bridges. The enacted highway bill provides $70.4 
billion below what is needed to improve and $38.8 billion below what is 
needed to maintain our highway system. We also desperately need to 
provide increased funding for the Army Corps of Engineers, including 
funding for levees and funding for additional civil engineers. This 
Nation has an aging national water resources infrastructure. We saw it 
with Katrina. If we continue to ignore the upkeep, the deterioration of 
our locks and dams, flood control projects and navigation channels, we 
risk destruction of waterborne commerce, decreased protection against 
floods, as we saw in Katrina, and other environmental damage.
  I have been concerned about the backlog of unfunded Corps projects 
since I was chairman of the Subcommittee on Transportation and 
Infrastructure in 1999. When I arrived in the Senate in 1999, I was 
chairman of that committee. The backlog of unfunded corps projects for 
operation and maintenance was $250 million. Today the backlog is $1.2 
billion. In 2001, there was $38 billion in active water resource 
projects waiting for Federal funding. Today it is $41 billion in active 
construction and general projects that need Federal funding. This 
budget is only going to increase this backlog. Our budget proposes a 
33-percent cut in the Corps construction budget. Can you imagine? After 
Katrina and what we saw in New Orleans in terms of not spending the 
money to maintain the levees and build them the right way, we are 
cutting the construction budget 33 percent, and a 42-percent cut in the 
Corps investigations budget.

  Currently, the Corps is able to function only at 50 percent capacity 
at the rate of funding proposed by the budget. Can you believe this? It 
is incredible. We also cannot remain competitive without a workforce 
full of educated and motivated young Americans.
  As a Nation, we have to invest in our children and enable them to 
fully develop their God-given talents in order

[[Page S3977]]

to compete in a knowledge-based global economy. We have to have 
knowledge-based jobs if our people are going to work. This means we 
have to place more emphasis on careers in science, engineering, and 
math. Right now we are not getting the job done.
  Globally, the United States ranks 17th in the proportion of the 
college-age population earning science and engineering degrees, down 
from third place several decades ago. In fact, the percentage of 24-
year-olds with science or engineering degrees is now higher in many 
industrialized nations. Countries such as England, South Korea, 
Germany, Australia, Singapore, Japan, and Canada all produce a higher 
percentage of science and engineering graduates than we.
  The National Academy of Sciences released a report this fall, 
entitled ``Rising Above the Gathering Storm,'' that recommends action 
the Federal Government should take to enhance our ability to compete in 
a global marketplace. The recommendations range from those that will 
improve our Nation's math and science course work and establish a 
workforce of qualified teachers who will prepare our students for 
futures in highly innovative careers to the critical need for energy 
independence and investment in research. It is hard for me to believe 
the statistics that came out of the report. Half the teachers who teach 
math and science today are not qualified to teach the subjects.
  I did a survey of our State universities to find out how many people 
graduated to teach physics. Thirteen was the number. How in the world 
can we keep going with that kind of record?
  I am encouraged that the President recognized that America needs to 
wake up and build a new infrastructure for competitiveness, and I 
applaud his American competitiveness agenda. Also, I joined a number of 
my colleagues as an original cosponsor of the Protecting America's 
Competitive Edge Act, or PACE. This legislation is aimed at improving 
our Nation's competitiveness through advancement and emphasis on math 
and science education. Like the President's initiative, this 
legislation is comprehensive and it is aimed to increase our Nation's 
research capacities and emphasize strong science and math education. 
However, it will require a larger national commitment to reengage our 
Nation's youth in science and math, similar to our response in the late 
1950s to Russia's launch of Sputnik and the ensuing space race.
  Here the President's budget falls far short of what is necessary to 
fulfill the recommendations of the report. In other words, if we are 
going to really do something about this crisis that we have in terms of 
math and science, we are going to have to fund the recommendations from 
the National Academy of Sciences. The only thing that is being funded 
right now in the President's competitiveness agenda is retraining of 
teachers in high school, making the research and development credit 
permanent, and doing some work in research that will help us deal with 
our energy crisis. The portion of the report that talks about 
scholarships from the Department of Energy is not funded. The report 
calls for 25,000 scholarships out of the Department of Energy at 
$20,000 a year to encourage people to study engineering.
  It also provides out of the Department of Education $20,000 a year 
for students to take math, science, information technology, and 
education courses. And they commit that after 5 years they will teach 
for 5 years. In other words, they will get their undergraduate degree 
and teach for 5 years. During those 5 years, the National Science 
Foundation will pay them $10,000 more than what the local school 
district pays them. So it is a real comprehensive effort to deal with 
the crisis that we have today in terms of providing the scientists we 
need to get the job done.
  The bottom line is, we don't need less revenue; we need more revenue. 
As a Wall Street Journal article states:

       Federal taxes amounted to 17.5 percent of gross domestic 
     product, up from a modern low of 16.3 percent in 2004.

  That is one of the reasons the debt has gone up so much, like a 
rocket. It is because in 2004, we were only taking in 16.3 percent of 
our GDP in revenue. But it was well below the high of 21 percent that 
we had in 2000. That was too much.
  Continuing from the Wall Street Journal:

       Keeping the tax burden low is going to be difficult. Last 
     year, the federal government's spending exceeded its tax take 
     by about $318 billion. And the retirement of the baby-boom 
     generation starting in 2011 could cause spending on big-
     ticket federal retirement programs to jump.

  That is the quote from the Wall Street Journal. The only thing that 
bothers me about the quote is that they reported the debt last year of 
$318 billion. That is what they reported. The fact is, from an accrual 
basis--it comes out of the Department of the Treasury--we increased the 
debt by $740 billion. But we only report to the American people $318 
billion. Several weeks ago, we were talking about the fact that the 
Treasury announced that on an accrual basis we increased our debt by 
that amount of money. Someone said, why don't we keep our books on the 
accrual basis? Somebody said, for goodness sakes, we cannot do that 
because they will find out how much in debt we are and how much our 
budgets are not balanced.

  So I think that with the baby boom generation starting to retire in 
2011, we will have some real problems. The simple fact is we cannot 
have it all. We need to set priorities and make hard choices; 
otherwise, our children will end up paying for it. Our forefathers 
recognized the inequity of passing on debt to future generations. 
George Washington in his Farewell Address stated:

       [Avoid] the accumulation of debt, not only by shutting 
     occasions of expense, but by vigorous exertion in time of 
     peace to discharge the debts which unavoidable wars may have 
     occasioned, not ungenerously throwing upon posterity the 
     burden which we ourselves ought to bear.

  Again, he said ``not ungenerously throwing upon posterity the burden 
which we ourselves ought to bear.''
  I have to say this, and I know it is controversial, but if you look 
at the extraordinary costs that we had with the war and homeland 
security and Katrina, the logical thing that one would think about is 
to ask for a temporary tax increase to pay for them. Did you hear that? 
Ask for a temporary tax to pay for it, instead of saying we will let 
our kids take care of it; we will let our grandchildren take care of 
it. No, we are not doing it. The people who are sacrificing today in 
this country are the ones who have lost men and women in our wars. The 
people who have sacrificed today are the ones who have come back 
without their arms and legs--thousands of them. They are making the 
sacrifice.
  The question I ask is, what sacrifice are we making?
  Anyone in the know who is watching us has to wonder about our 
character, our intellectual honesty, our concern about our national 
security, our Nation's competitiveness in the global marketplace now 
and in the future and, last but not least, our don't-give-a-darn 
attitude about the standard of living and quality of life of our 
children and grandchildren.
  The question is, are we willing to be honest with ourselves and the 
American people and make these tough decisions? My two models when I 
was mayor and Governor were ``together we can do it,'' and our State 
motto, ``With God All Things Are Possible.''
  I am prayerful that the Holy Spirit will inspire us to make those 
tough decisions and do what is right for our country.
  I yield the floor.

                          ____________________