[Congressional Record Volume 153, Number 129 (Tuesday, September 4, 2007)]
[Senate]
[Pages S11010-S11019]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MILITARY CONSTRUCTION AND APPROPRIATIONS ACT, 2008
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to the consideration of H.R. 2642, which the clerk will report
by title.
The legislative clerk read as follows:
A bill (H.R. 2642) making appropriations for military
construction, the Department of Veterans Affairs, and related
agencies for the fiscal year ending September 30, 2008, and
for other purposes.
Mr. REED. Mr. President, I believe the Senator from Arizona has a
request.
The PRESIDING OFFICER. The senior Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the
Senator from Arizona, who has given up his 10 minutes in morning
business, be allowed to speak between 2:20 and 2:30 this afternoon.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2656
(Purpose: In the nature of a substitute)
Mr. REED. Mr. President, on behalf of the Appropriations Committee, I
call up an amendment in the form of a committee substitute which is at
the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Rhode Island [Mr. Reed] proposes an
amendment numbered 2656.
Mr. REED. 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 printed in today's Record under ``Text of
Amendments.'')
Mr. REED. Mr. President, I am pleased to bring the fiscal year 2008
Military Construction and Veterans Affairs, and related agencies
appropriations bill to the Senate. This is a unique bill for many
reasons, not the least of which is it is the first appropriations bill
that will be considered under the requirements of S. 1, the Honest
Leadership and Open Government Act of 2007. On August 2, 2007, the
Senate approved S. 1 by a vote of 83 to 14, clearing the measure for
the President's signature. When signed by the President, this ethics
reform legislation will significantly improve the transparency and
accountability of the legislative process.
Although the White House has requested the Senate not submit the
legislation to the President until he returns from his overseas
travels, I wish to assure Senators we intend to abide by the
requirements of S. 1 during the consideration of this bill. The
legislation requires that the chairman of the committee of jurisdiction
certify that certain information related to congressionally directed
spending be identified and that the required information be available
on a publicly accessible congressional Web site in a searchable format
at least 48 hours before a vote on the pending bill.
The information required includes identification of the
congressionally directed spending and the name of the Senator who
requested such spending. This information is contained in the committee
report numbered 110-85, dated June 18, 2007, and has been available on
the Internet for over 2 months.
In addition, pursuant to the standards required by Chairman Byrd and
Senator Cochran, letters from each Member with a congressionally
directed spending item in this bill or accompanying report are
available on the Internet certifying that neither the Senator, nor his
or her spouse, has a pecuniary interest in such spending item.
I am submitting for the Record the certification by the chairman of
the Committee on Appropriations.
There being no objection, the material was ordered to be printed in
the Record, as follows:
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Senator Byrd: I certify that the information that will be
required by S. 1, when it becomes law, related to
congressionally directed spending, has been identified in the
Committee report numbered 110-85, filed on June 18, 2007, and
that the required information has been available on a
publicly accessible congressional website in a searchable
format at least 48 hours before a vote on the pending bill.
Mr. REED. Before yielding to Senator Hutchison, I would like to thank
Chairman Byrd and Senator Cochran for their leadership in bringing this
bill to the floor. Also, I would like to thank the ranking member of
our subcommittee, Senator Hutchison, for her support and assistance,
her knowledge and experience on the subcommittee, and her dedication to
veterans and the military have been tremendous assets in developing
this bill. I am particularly pleased to bring the bill to the floor
today in anticipation of welcoming Senator Johnson back. He is our
subcommittee chairman. He will return tomorrow. This bill is a
testament to Senator Johnson's tenacity in the face of adversity and to
his leadership, even though as he recuperated, he was involved in the
process and proceedings and he too shared the deep concerns of the
Nation's military families and our Nation's veterans. I am deeply
honored to be managing this bill on the floor for him.
I yield to the Senator from Texas.
The PRESIDING OFFICER. The senior Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I wish to first thank the Senator from
Rhode Island for allowing me to speak before he gives his major talk
about the bill itself because of time constraints. I appreciate that.
It was very nice of him to do that.
Let me first say it has been very helpful--it has been terrific--
working with the Senator from Rhode Island. He was, as he said,
substituted. This was thrown at him early this year. I know it is
something he wanted to do because he has a great record serving in the
military himself, but to step in for Senator Johnson because of his
illness was a great thing that Senator Reed was able to do, and he has
done a great job. I might add that his able staff has had a lot of
experience on this bill and were also very helpful. Tina Evans, B.G.
Wright, and Chad Schulken have been subcommittee staff members for a
long time--longer than any of us, I might say--and it has been very
helpful to have that knowledge and experience working with us. Of
course, my own staff, Dennis Balkham, Christine Heggem, Yvonne Stone,
and Sean Knowles have also contributed greatly to this complicated
bill. It is a big bill that affects all our veterans and our military
personnel because we do deal with military construction as well as
veterans affairs.
This bill, I think, balances all the needs that are necessary very
well. We have to take into account, of course, the Active-Duty
servicemembers in making sure they have the military construction they
need to do the job we are asking them to do. The Guard and Reserve,
which I will mention later, is well funded in this bill, and it is
something we must do because they are carrying such a huge burden in
the war against terror. Local communities, family members of
servicemembers, and taxpayers all have a part in balancing any
appropriations bill and especially this one.
This bill does address the infrastructure requirements as well as
health care and benefits of our veterans. We hope to move it
expeditiously across the floor today, I think because Senator Reed and
I have worked so well on the bill that we have solved most of the
issues that have come forward, and I believe we have done a good job in
funding everything that was necessary.
Let me mention a couple of the main points. This subcommittee, with
Senator Feinstein and myself, were instrumental in the rebasing effort
that has occurred in the Department of Defense. We are bringing back
70,000 of our troops from overseas to be able to train in the United
States. This was part of an overseas basing commission bill that
Senator Feinstein and I cosponsored that was adopted by Congress and
results in 70,000 troops coming back--mainly from Germany and South
Korea.
That also has had an impact on military construction because we found
when we went overseas that there were training constraints in the bases
overseas. We had capacity in America for better training and better
opportunities for families. So in this bill we had to address the needs
of the military construction for those troops that will be moving back
home over the next 5 to 6 years.
In addition, Congress has the responsibility to fund the BRAC. We
have a time limit for the Department of Defense to implement BRAC. That
requires building not only in the places where troops will be moving in
and facilities that will be needed for additions to bases, but also to
take care of the needs of bases that are going to be closed. We did
fully fund BRAC, and I am pleased that we did. It was our
responsibility to do it because we put a deadline on the Department of
Defense for the implementation of BRAC. We certainly have to do the
required construction in order to meet the deadline.
Army modularity: We are changing the concept. There are smaller
fighting units now. We have accommodated that modularity effort through
our military construction efforts. Of course, in the global war on
terror, which is the major overlying conflict that is going on today
with our military personnel, we certainly have to meet the needs of
those who are being trained and are going to be deployed in the war on
terror, and we have to take care of their families.
The military construction section of the bill provides over $21
billion for construction projects, and it is very strong. It is very
important in our transformation effort that we have increased the end
strength of the military, as well as changed the types of fighting
units that we will have in the military. So that has also provided
requirements for different military construction. We are doing exactly
what we should be doing in the bill, and we worked very closely with
the authorization committee to assure that their priorities and our
priorities were the same.
I am very pleased that we also have addressed the needs of the Guard
and Reserve. I have to say--and I think everybody who knows the subject
would agree--that the funding needs of the Guard and Reserve have not
been well represented in the Department of Defense budget submission in
the past because of other high priorities for our defense dollars. But
the Guard and Reserve are doing so much in the war on terror. They are
being deployed and redeployed. We need to make sure they have the
facilities and support they need to fulfill their very vital function
in the war on terror.
The other part of this bill, which is a major responsibility, is, of
course, the Department of Veterans Affairs. The veterans affairs
portion of the bill has many good features. As we move forward in the
process, I am committed to continuing to work with my colleagues to
make sure that every dollar is spent wisely and efficiently to serve
the needs of our veterans. We have expanded resources to treat the
types of injuries and illnesses that our veterans are facing today. We
are doing more in mental health and trying to help people with post-
traumatic stress syndrome.
We are trying to make sure our facilities are kept up. We have a huge
building program. Minor construction will be $751 million. Major
construction will be $727 million. It is going to be a major effort to
make sure these facilities are cutting edge.
Severe trauma and brain injury is another area we are addressing more
fully in this bill than we ever have before. Also, research into
prosthetics and the use of artificial limbs is another important focus
because we know more of our young soldiers are losing limbs, and we
need to make sure we are doing the very best for them to be able to
lead normal lives.
We are doing more research into gulf war illness and, as well,
geriatric care for the older veterans. These are critical needs. We
will never quit looking for answers, and this fully funds the research
for the areas in which we need to do more and better for our veterans.
We must continue to adapt to the types of injuries that our warriors
experience in the different theaters in which they serve. We must also
prepare for future weapons, such as chemical and biological, that may
be used against our soldiers.
Mr. President, I think every Member of Congress shares in the desire
to fairly compensate, medically treat, and
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honor the veterans who have sacrificed and borne the responsibility of
military service. The VA provides health care free of charge to address
any and all service-connected illnesses or disabilities, mental or
physical, including those conditions which may manifest decades after
military service.
The VA also provides health care free of charge to low-income
veterans regardless of service-connected disability or illnesses. We
always have--and always will--take care of our Nation's veterans.
In summary, this Congress has shown its resolve time and again to
care for our men and women in uniform, as well as the more than 7
million veterans in America. We owe them our gratitude. We owe them
what they deserve, and that is that we take care of their needs.
I appreciate working with Senator Reed. I appreciate that we have
done everything we could with the dollars we had. I will just note that
President Bush has said if the bill stays as it is now, he plans to
sign it so that we can implement it quickly. But I do hope as we go
through the conference process and finish the bill on the Senate floor
that we will keep to the intention of the bill, that we will make sure
we stay within the guidelines we have.
We have added $4 billion above the President's request already. That
money is allocated, so there will be relatively few changes I think we
should make if we are going to expeditiously send the bill to the
President for his signature and assure that he will sign it.
Once again, I thank Senator Reed and his able staff for accommodating
me and allowing me to make my statement. I look forward to getting this
bill out tomorrow and on to the President very soon.
The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
Mr. REED. Mr. President, I ask unanimous consent that the substitute
amendment be considered and agreed to; that the bill, as thus amended,
be considered as original text for the purpose of further amendments;
and that no points of order be considered waived by this agreement.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REED. Mr. President, I commend Senator Hutchison for her hard
work and that of her staff. She has been a very positive and laudable
member of the committee. She has vast experience, having served on the
committee many years, and has made a major contribution to this
legislation, and she should be acknowledged for that contribution.
Mr. President, this is a critically important piece of legislation,
and I hope that the Senate will act on it expeditiously. Both the
Department of Veterans Affairs and the veterans service organizations
have urged prompt action on this bill, and the President himself has
cited the importance of not delaying crucial funding for our Nation's
veterans and military forces.
The Military Construction and Veterans Affairs Appropriations bill
funds urgently needed investments in the facilities in which our
military forces and their families live and work and train for battle.
It also provides funding for the benefits and medical care acutely
needed by our Nation's veterans.
The bill before the Senate today provides a total of $109.2 billion
in funding, including $64.7 billion in discretionary funds. In all, the
discretionary funding is $4 billion over the President's budget
request. As Senator Hutchison said, the President is prepared to sign
the legislation as it is.
Funding for the Department of Veterans Affairs totals $87.5 billion,
of which $44.5 billion is for mandatory programs and $43 billion is for
discretionary programs, an increase in discretionary funding of $3.6
billion over the President's budget request.
We have independently determined additional needs for military
construction and veterans affairs, and we found a responsible way to
meet these additional needs.
More than 70 percent of the increase--$2.6 billion--is for the
Veterans Health Administration. This increase will allow the Department
of Veterans Affairs to dedicate additional resources to deal with
spiraling health care needs for veterans, including the urgent needs of
Iraq and Afghanistan war veterans. Chief among needs, in terms of
widespread impact, is the treatment of traumatic brain injury and post-
traumatic stress disorder.
The extent of these problems among returning veterans--and the strain
that the treatment of them is placing on the Veterans health care
system--is only now coming to be fully understood. The Defense
Department estimates that as many as 30 percent of returning Iraq and
Afghanistan war veterans suffer from traumatic brain injury or post-
traumatic stress disorder--or both. This is a startling statistic and a
looming crisis that needs to be addressed immediately.
The urgency of this problem was among the top findings cited in the
report of the President's Commission on Care for America's Returning
Wounded Warriors, better known as the Dole-Shalala Commission. The
commission's report, which was released earlier this summer, spotlights
the need to aggressively prevent and treat post-traumatic stress
disorder and traumatic brain injury, including preparing for the long-
term consequences of these injuries.
Many of the veterans wounded in Iraq and Afghanistan will require
years, if not a lifetime, of medical care from the Department of
Veterans Affairs. And this new influx of veterans is occurring at a
time when the veterans from previous wars are aging and requiring
substantial increases in medical services as well as long-term care.
It is vital that the Department of Veterans Affairs have adequate
resources to address these emerging and unanticipated requirements
without draining funds from other needed and high priority programs,
such as long-term care for aging veterans.
Unfortunately, for too long, the President's Office of Management and
Budget has ignored the financial impact of the wars in Iraq and
Afghanistan on the Department of Veterans Affairs, and has continued to
penny pinch the Department's budget.
As a result, the Department of Veterans Affairs has struggled over
the past several years--often unsuccessfully--to keep pace with the
rising demands for veterans health care. It has been Congress that has
had to lead in providing the resources to bail out the Department when
its projected health care costs fell abysmally short of the mark. And
it has been Congress that has led the effort to provide the Department
with more resources for mental health care programs at a time when the
requirement for such services is soaring.
I am pleased to report that the bill before the Senate today corrects
the deficiencies of the past and provides the necessary investment to
guide the Department into the future.
And there is more good news for veterans in this bill. This
legislation provides $1 billion over the President's budget request for
minor construction and nonrecurring maintenance of veterans hospitals
and clinics. Last February--after the President submitted his fiscal
year 2008 budget request and after the deplorable conditions at Walter
Reed Medical Center were revealed--the Veterans Affairs Department
released a report identifying roughly $5 billion worth of deficiencies
in its facilities system-wide. If we do not want to see another Walter
Reed horror story in veterans' facilities, we need to move aggressively
to correct these deficiencies, and the funding in this bill will allow
the Department to do so.
The bill also includes $131 million to hire at least 500 new claims
processors to reduce the growing backlog of veterans' disability
claims. The Veterans Benefits Administration currently has a backlog of
almost 400,000 pending claims, with the average claim taking almost 6
months to process. In testimony before the Senate Veterans Affairs
Committee in March, the GAO highlighted the need for the VA to take
steps to reduce the existing backlog of claims and improve the accuracy
and consistency of decisions. This bill takes dead aim at correcting
those problems.
I know, as all my colleagues do--because we get the calls in our
State offices from veterans who need help and have an unusually long
time in which their claim is being processed--that sometimes the claims
are rejected and have to be resubmitted or are pending
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appeals. All of this is going to be corrected, and it is going to help
the people who need help, veterans who need access to the veterans
system quickly and efficiently, and we hope this bill will do that.
On the military construction side, which is the other major provision
in our legislative agenda, the bill provides $21.2 billion. While this
is a substantial increase over last year's funding level, it should be
noted that more than half of the budget request was to fund the 2005
base realignment and closure program and the President's Grow the Force
Initiative. For military construction associated with conventional
mission requirements, the budget request, following the trend of the
past 5 years, was basically flatlined, but we have two major
initiatives--the BRAC of 2005 and the new initiative of the President
to increase principally the size of the Army--and those initiatives
have required additional funding.
The Senate bill fully funds the President's $8.2 billion request for
BRAC 2005 and for his Grow the Force Initiative, and it increases
funding for the regular military construction program by nearly $400
million over the President's request. Especially in a time of war, we
must not skip on funding the basic infrastructure needed to support our
men and women in uniform.
The Senate bill also provides $320 million--that is $100 million over
the President's budget request--for the BRAC 1990 legacy program. This
goes back to the prior BRAC in 1990.
It is important that the Government keep its commitment to the
communities affected by prior BRAC rounds and ensure that environmental
cleanup of closed military installations is completed as thoroughly and
rapidly as possible. Although it has been nearly 13 years since the
last round of closures under the previous BRAC rounds, the backlog and
environmental cleanup remains at $3.5 billion. At the current rate, it
will take decades to return some of that property to a safe and usable
condition. In the meantime, affected communities cannot use much of the
land on which these bases sit.
I am particularly pleased that this bill adds $234.6 million above
the President's budget request for Guard and Reserve military
construction projects. The Guard and Reserve are central components of
our Nation's military forces. Yet the President's request for military
construction to support these components has been steadily declining.
The Senate bill corrects that deficit.
Because of the enhanced scrutiny of earmarks under the requirements
of S. 1 and the guidance of Chairman Byrd and Senator Cochran, it is
important to understand how the military construction portion of this
bill is funded. The vast majority of military construction funding is
project based. That means Congress cannot correct deficiencies in the
President's budget request simply by increasing the top line of
individual accounts. Military construction funding is allocated by
project and by law. Each and every major construction project must be
individually authorized and individually funded. The President's
military construction budget request is composed primarily of earmarked
projects, and congressional increases to the budget request must also
be earmarked for specific projects.
The 2008 Senate bill includes 665 individual earmarks, of which 580
were requested by the President. The staff of the Military Construction
and Veterans Affairs Subcommittee worked diligently to identify every
earmark in the Senate bill. Every Senator was required to submit to the
committee both a written request and a letter of financial interest
before a request would be considered. Moreover, the military
construction title of this bill is developed in close coordination with
the Senate Armed Services Committee, and every congressionally directed
project in the appropriations bill is authorized in the Defense
authorization bill. The process could not be more open and aboveboard.
It has been reported that the Senate bill harbors $6.5 billion in
undisclosed earmarks, which comprises the funding for construction
projects in the BRAC 2005 account. This characterization reflects an
unfortunate misunderstanding of the BRAC account which I am pleased to
clarify for the record.
Unlike the regular military construction program, the BRAC account
does not require line-item authorization and appropriation for
individual projects. Instead, the account receives lump-sum funding
from which the Defense Department develops a spending plan to implement
the recommendations of the Base Closure and Realignment Commission.
Neither Congress nor the Defense Department has the authority to
deviate from the Commission's recommendations. It is the policy of this
committee to not earmark or accelerate funding for specific projects
within the BRAC account because of the complicated domino effect of
closing and realigning facilities among installations. Thus, each of
the BRAC 2005 projects identified in the committee report was
determined by the administration, in accordance with the BRAC law. The
account includes no congressional earmarks.
I regret that due to a lack of understanding of the BRAC process, the
Military Construction and Veterans Affairs appropriations bill has been
used as a poster child for undisclosed earmarks. Such an assertion is
inaccurate on its face, but to correct any lingering misconceptions, I
have prepared a list of the 189 BRAC 2005 projects that were published
in the report accompanying the bill, annotated to show that each
project, since it was funded through the President's budget request,
was requested by the President.
I ask unanimous consent to have the list printed in the Record so
there can be no question as to the origin of these projects.
There being no objection, the material was ordered to be printed in
the Record, as follows:
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Mr. REED. Mr. President, it has been a remarkable process putting
this bill together, principally because of the staff of the
subcommittee on both sides. I wish to particularly thank Christina
Evans, B.G. Wright, and Chad Schulken for the majority, and Dennis
Balkham, Chris Heggem, and Yvonne Stone for the minority for their hard
work and cooperative effort to produce this bill.
I believe the 2008 Military Construction and Veterans Affairs and
Related Agencies Appropriations Bill is an excellent piece of
legislation, one that is needed now, not later. It is needed to fund
programs that are crucial to our national defense, to the defense of
the Nation, and to the well-being of our veterans. I hope and urge that
the Senate quickly pass this bill.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The junior Senator from Texas is recognized.
Nomination of Jim Nussle
Mr. CORNYN. Mr. President, the August recess has given us all an
opportunity to return to our constituents and reconnect with the people
of our States and listen to what is on their minds, not just what we
hear inside the bubble in Washington, DC. For my part, the issues I
encountered wherever I went in Texas were concerns about the economy,
about jobs, about Government spending. Many people are concerned, and
given, unfortunately, the recent history of the Congress and the budget
that has already passed, I don't blame them for their concerns. There
are some very real reasons they should remain concerned about taxing
and spending in the Congress.
Mr. President, you will recall that in 2001 and 2003, when
Republicans were in the majority, Congress passed well-timed tax relief
that helped the economy overcome the fallout from corporate accounting
scandals of the late 1990s, the bursting of the tech bubble, and the
horrific attacks of September 11, 2001. This well-timed and important
tax relief put money back into the pockets of working families all
across America, in the pockets of small businesses and entrepreneurs,
and as a result, the economy has bounced back in an incredible and
impressive way. Items such as bonus depreciation and the $100,000
expensing have allowed entrepreneurs and small businesses to grow, not
only helping their owners and their families but also creating jobs for
their community.
We doubled the child tax credit for working parents. We provided tax
relief to all taxpayers from higher marginal tax rates. We reduced the
marriage tax penalty and protected millions of taxpayers from the
alternative minimum tax. We also provided capital gains and dividends
tax relief for small investors, which have helped increase economic
activity and fill the Government's coffers.
We continue to benefit from this tax relief we are enjoying by seeing
8.2 million new jobs created, nearly 6 years of uninterrupted economic
expansion, and surging tax revenues that have far outpaced projections
and helped lower the deficit. In fact, last month, the Congressional
Budget Office reported that the budget deficit will fall by more than
one-third this year and is almost $20 billion lower than its previous
estimate. Meanwhile, it was reported that the economy grew by 4 percent
last quarter alone.
Unfortunately, there are some on the other side of the aisle who want
to fix what is not broken and roll back the progress we have made with
the tax relief passed in 2001 and 2003. Instead of talking about tax
relief for hard-working Americans, there are those who are talking
about raising taxes on Americans. Instead of talking about supporting
the American entrepreneurial spirit, some are talking about expanding
the size of Government and increasing Government spending.
First, we passed a budget a few months ago that contemplated the
largest tax increase in our Nation's history, not as a result of the
vote of Members of the Congress but by allowing the temporary tax
provisions I mentioned a moment ago to expire without taking a single
vote. This budget stacked the cards against taxpayers by making it
easier for Washington to raise taxes. Then the Senate considered tax
policies on a so-called Energy bill that produced no new domestic
sources of energy. Instead, it would have reinforced America's
dependence on foreign energy sources. At the same time, we have seen
legislation pass that raises taxes that especially hits low- and
middle-income individuals hard.
Next, we saw proposals rejected that would have forced Congress to
err on the side of the people by making it more difficult for the
Senate to raise taxes. For example, a 60-vote point of order against
legislation that raises income taxes that overwhelmingly passed the
Senate but was later stripped out during the conference committee on
the budget.
In addition, some on the other side of the aisle have proposed to
raise the Federal gas tax at a time when the price of gasoline remains
around $3 a gallon. They have also proposed legislation that slaps what
I believe could accurately be called a competition tax on America's
entrepreneurs and small businesses by making it more difficult to keep
capital at home and to attract capital from abroad. After all, capital
formation is the lifeblood of domestic job creation.
Finally, some have actually advocated rolling back the 2001 and 2003
tax relief that has done so much good for American businesses and
provided my home of Texas with historically low unemployment rates.
As this chart shows, American workers will have to work 79 days just
to pay for their Federal taxes this year. And that, of course, is on
top of the 41 days to pay their State and local taxes--which we can see
far exceeds any other category, whether it is housing and household
operation or health and medical care or transportation, clothing, or
other items. They are far exceeded by the Federal tax bite taken out of
the average taxpayer's paycheck.
We have been treated to an interesting debate during the Presidential
primaries already to see how leading Presidential candidates compare on
various tax issues. We have seen proposals from the top Democratic
candidates to actually raise the individual tax rate to 39.6 percent
from 35 percent. We have seen proposals from the top Democratic
candidates to tax private equity, carried interest at higher ordinary
income rates, and we have seen a proposal to preserve the death tax.
On the other hand, top Republican candidates have proposed to
preserve the tax cuts, including the 35 percent top rate, preserving
the lower capital gains rate for carried interest, and we see on the
bottom the difference in the way the top Democratic candidates for
President and top Republican candidates for President would treat
capital gains and other taxes.
Invariably, it seems as if the differences are between those who
would take more of a tax bite out of the hard-earned income of the
American taxpayer and spend more on Federal Government and those who
believe the people who earn the money deserve to keep more of what they
earn. This tax relief has given rise to an unprecedented expansion of
the economy and job creation beyond some of our wildest dreams.
The politics of tax and spend has unfortunately crept back into
Washington and threatened to undo a lot of good work that has been done
over the past several years. One rather confusing example is the recent
passage of the reauthorization of the Children's Health Insurance
Program. This bill increased the CHIP budget by 300 percent,
effectively raising taxes to cover the expenditure. But this program
has also increased the scope of CHIP coverage to include families of
four with an income of more than $80,000, some 400 percent of the
poverty level. This creates the double standard of such families being
in need by CHIP standards but wealthy under the Tax Code. Our laws
should never contain such a ridiculous double standard.
This battle for higher taxation and fiscal irresponsibility is
nowhere more evident than it is with the confirmation of Jim Nussle as
the head of the Office of Management and Budget, a nomination we will
be voting on later today. Despite the progress and economic boom that I
have described, many Members of Congress are fighting against this
nomination, even though this former chairman of the House Budget
Committee was a major architect of these successful tax policies which
I have described. The House majority leader even remarked that from
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2001 to 2006 Congress had ``pursued the most fiscally irresponsible
policies.'' And while our current economy seems to contradict that
statement, the American taxpayer must certainly disagree.
Congressman Nussle has a long and well-established history of
financial responsibility and is considered by many to be a leading
expert on budget issues and the Federal budget process. Congressman
Nussle has worked hard to try to pass meaningful earmark reform, even
before it became a popular political rallying cry. He was instrumental
in writing the welfare reform bill, and he successfully passed six
budgets. Finally, Congressman Nussle has been repeatedly praised for
his work on taxes by national organizations such as Americans for Tax
Reform, the National Taxpayers Union, Citizens Against Government
Waste, the Council for the Committee on Government Reform, and the
National Tax Limitations Committee.
As we move forward, the last thing we should do is to reverse the
policies that have helped bring around America's economy, reduced the
deficit and put more money in the pockets of Americans. Indeed, we must
pursue economic policies that encourage growth and protect the
interests of America's taxpayers. The best way to do that is by
maintaining the tax relief that has already helped millions of hard-
working Americans and by confirming Jim Nussle as head of the Office of
Management and Budget.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Carper). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KYL. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator is recognized.
The Economy
Mr. KYL. In just a few minutes, we are going to start the discussion
of the confirmation of Jim Nussle as head of the OMB--the Office of
Management and Budget. And since a lot of what he has to work with in
terms of budget depends upon decisions we make in the U.S. Congress, I
thought it might be a good time to review some of the economic news and
information that has been coming out over the course of the last
several days and weeks. The majority of this information is very
encouraging for our future, and I will go through briefly and explain
why it matters.
It shows, first of all, that we had 4 percent economic growth in the
second quarter of this year. That is phenomenal and well above the
historical average. Continuing low unemployment; now it is 4.6 percent.
More than 8 million jobs have been created in the course of the last 5
years. And though the stock market has been up and down in recent
weeks, it is still growing at better than 7 percent this year, which is
very good. In fact, since 2003, the stock market has grown at an
average of 12 percent, which is at about the historical average of the
stock market. The poverty rate has declined to 12.3 percent. By
contrast, for example, under the Clinton administration, it averaged
13.3 percent, so it is 4 percent lower than it was during that time.
Clearly, the economic growth that has characterized our economy
generally has benefitted many segments of our society. Nearly 70
percent of Americans now own their own homes. That is higher than at
any time, for example, during the previous administration. And the
average home price has increased by more than 50 percent since 2001,
meaning that a home worth $200,000 in 2001 is, on average, worth about
$300,000 today. That kind of appreciation for housing has obviously
increased the wealth of American homeowners by literally billions of
dollars.
Those are just some of the numbers, Mr. President, but I think they
illustrate a very important point, and that is that success in the
economy is not an accident, first of all. We in Washington need to
appreciate that we don't create success. That is created by the
American people--the entrepreneurs, the people who work hard, and the
thousands, millions, literally, of decisions made every day in working
through our free market economy. But government can also have a big
impact on whether that success exists or not by decisions we make
relating to regulatory and tax-and-spend policy. And what we do here, I
think one would have to acknowledge, can have a big impact on the
decisions that working Americans and investors make in their economic
lives.
It is now undeniable that one of the key factors in the economic
growth that I referred to earlier is the 2001 and 2003 tax relief
passed by the Republican Congress and signed by President Bush, and it
has been a big boon to the economy.
Let me explain what we have done to create the conditions for growth,
in other words. We have rewarded work and investment through lower tax
rates. We have refused to punish success by taxing the rich even more.
We have given small businesses financial incentives to grow and to add
jobs to the economy, and we have encouraged investors to move their
capital around efficiently so that businesses can get the money they
need to grow.
We need to continue to encourage hard work, savings, and investment.
We need to protect the pocketbooks of working families and the cash
registers of the small businesses by protecting them against tax
increases. And, frankly, we need to stop wasteful Washington spending
because when Washington goes on a spending spree, the next thing that
happens is politicians start looking to raise taxes.
Now, what are the economic plans of the Democrats by comparison? Are
they also aimed at encouraging growth? I would, unfortunately, say, no,
I don't think so. Under the budget that was passed, the Democrats will
raise taxes by $716 billion. Those new taxes would discourage
investment, punish hard work, and block jobs from being created. And
repeatedly this year the Democratic Congress has overspent the budget.
The war supplemental included billions in agricultural pork projects.
The omnibus continuing resolution included billions in extra spending,
and the appropriations bills that have passed out of the House of
Representatives and are being considered in the Senate are all over the
President's budget request. This is going to make Jim Nussle's job a
lot more difficult.
And how do the tax-and-spend plans of the Democrats help economic
growth? The answer is simple: not at all. The fact is, my Democratic
colleagues rarely talk about economic growth. They don't claim the $716
billion in new taxes would be a boost to the economy, of course,
because it wouldn't. Instead, they advocate new taxes and new spending
programs and just assume that economic growth will occur regardless of
whether they bust the budget and raise taxes on the American people.
It pains me to say it, but I don't think these folks understand why
economic growth matters to the average family. Otherwise they wouldn't
be proposing this kind of counterproductive policy. Let's look at what
would happen if we abandoned the current economic policies that have
enabled our economy to grow in the last quarter, as I said, at over a 4
percent clip.
If the economy is not expanding, there will be very few new jobs.
Most obvious and painful are the job losses. If the economy is
contracting, people will be losing their jobs. And there is a
multiplier effect. When one worker loses his job, his family and
community suffer. All the money he or she has been earning was either
being spent or invested. Now, the people relying on those dollars
suffer as well. Those who keep their jobs will see very little wage
growth, cuts in their benefits, such as health care, longer work hours,
for example, more people working multiple jobs and spending even less
time with their families.
You can see the multiplier effect of this kind of economic loss. And
there is a flip side. Without economic growth, there is no expansion of
existing business facilities, such as expansions to factories, which
would lead to more local jobs. No new businesses. For the most part,
you don't see large-scale business startups during economic downturns.
And it is not just the potential worker for that company who loses out,
it is the supplier and vendor and every business partner who would also
have the opportunity to thrive if
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the conditions were better. And your retirement suffers. Retirement
savings don't grow; 401(k)s and pensions and savings accounts remain
stagnant and can even lose money. Even your Social Security suffers
because government depends on economic growth for increased revenues.
With lower Social Security tax receipts, the date when the Social
Security trust fund goes bankrupt gets even closer.
You can talk about these multiplier effects all day. They are very
real. And that is why we have to support policies that strengthen
economic growth and assure that American families continue to have
opportunity rather than problems. Economic growth drives higher tax
revenues to the State and local and Federal Government. The economic
growth since the Republican tax cuts went into effect has led to
dramatic increases in State and Federal income taxes. Think about it--
we lowered taxes on everyone, but our Federal revenues to the Treasury
have increased. That just doesn't happen in times of recession. Just
the opposite occurs--there are lower tax revenues.
Even at the local level, with schools, for example, and cities--the
roads, the police, the libraries, the parks--all of these things depend
upon collecting tax revenues. Economic growth is essential at all
levels of government. So if you care about good schools, for example,
you care about economic growth.
Let me talk just one more little bit about the increase in taxes
because this is one of the key factors that can inhibit economic
growth, and it is one that concerned me most about the budget that was
passed by the Democrats. The plan, as I said, is to repeal the 2001 and
2003 tax rate reductions--that tax relief. Every American benefitted
from those tax cuts, so this would be a big mistake for two reasons.
First of all, everyone received some benefit. Even those who didn't
pay taxes received money back from the Federal Government, and we
created a new 10-percent bracket for the very lowest bracket of
taxpayers so they wouldn't have to pay as much in taxes. So it wasn't
just people at the upper economic stratum that benefitted. It was all
Americans, including even some who didn't pay taxes.
Second, everyone benefitted not just because of the specific relief
they got but because the economy grew. It was John F. Kennedy who said,
in 1963, in supporting the tax rate cuts that he proposed at that time,
that a rising tide lifts all boats. What he meant by that was as
economic growth continues, it helps everybody in our society--more jobs
created, wages increased, business investment increased, and money put
back into the communities. So even if we just passed the tax relief for
lower income people, our economy would still be hurt. Our priorities
should be about encouraging economic growth and preventing a recession.
High taxes and spending send us in exactly the wrong direction.
Well, Mr. President, let me conclude with this thought. We still have
challenges, obviously. We are fighting a global war against Islamic
extremists. It is enormously costly. But that is another reason we need
a strong economy, so people have good jobs and our government has the
revenue it needs to address that conflict.
While overall inflation is extremely low, in certain specific areas,
such as gasoline prices, they are too high. So we need to work on
creating energy independence and look at the viability of alternative
fuels. We face rising health care costs with insurance premiums that
continue to rise. This is a big issue, and obviously we are working on
it. But Republicans know that Americans don't want radical changes that
turn our health care into some kind of Washington-run bureaucratic
government program--a one-size-fits-all. We need patient-centered
health care in this country. We can debate about these specific
solutions to these other problems, but without a vibrant and growing
economy producing more and more wealth, any of those things will be
difficult to address. We can help solve these problems, but the last
thing an American family needs is the economic policies that would
result in higher taxes, more spending, and all of the devastating
consequences of economic recession.
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