[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[Senate]
[Pages 18153-18219]
[From the U.S. Government Publishing Office, www.gpo.gov]



                      TAXPAYER REFUND ACT OF 1999

  Mr. LOTT. I ask unanimous consent the Senate begin consideration of 
the reconciliation bill, which is the Tax Relief Act, and that the 
first 3 hours of debate be equally divided in the usual form for 
purposes of opening statements only.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative assistant read as follows:

       A bill (S. 1429) to provide for reconciliation pursuant to 
     section 104 of the concurrent resolution on the budget for 
     fiscal year 2000.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. ROTH. Mr. President, I yield myself 30 minutes.
  Mr. President, I don't think there is any parent who hasn't had the 
experience of sending a child into a store with a $20 bill to buy a 
carton of milk, a loaf of bread, or perhaps a dozen eggs, and the child 
returns with the few essentials. In a demonstration of maturity and 
responsibility, the child returns the change to his or her parent. 
There is no question who the change belongs to. After all, the parent 
earned the money; it is needed to support the family; the family will 
certainly have important uses for it later. The child understands this. 
So does the parent. Most often, the change is returned to the household 
budget to take care of other important needs.
  Washington needs to demonstrate the same responsibility when it comes 
to determining what to do with the change that is left over from 
running the government. There are surplus revenues in the Treasury. As 
with a child emerging from the grocery store, there is change--big 
change--left over after Congress has met the necessities of running 
government.
  In trying to balance the budget in 1997, Congress miscalculated the 
revenues that would be generated by the economy. At the same time, the 
hard work, the thrift, investment, and risk-taking of Americans 
combined to create an unexpected windfall of revenue. Now the question 
Washington seems to be grappling with concerns who rightly deserves the 
windfall. It is a question any parent or child can answer. American 
families, those who created the wealth in the first place, those who 
need their precious resources to meet future basic needs at home, are 
rightly entitled to the revenues they have earned, revenues Washington 
did not plan for to meet the expense of government, from which 
Washington had budgeted.
  Now, as the child returning change for the $20, we must hand back the 
money. We must do it in a broad-based way that is fair to those who 
provided the funds to Washington in the first place. We must do it 
through broad-based tax relief that helps individuals and families at 
all income levels meet real needs.
  The broad-based tax relief plan that passed out of the Finance 
Committee with bipartisan support will do just that. It will benefit 
nearly every working American. It will help restore equity to the Tax 
Code and provide American families with the resources they need to meet 
pressing concerns. It will help individuals and families save for self-
reliance and retirement. It will help parents prepare for educational 
costs. It will give the self-employed and underinsured the boost they 
need to pay for health insurance. It will begin to restore fairness to 
the Tax Code by eliminating the marriage tax penalty.
  Let me state exactly how the plan works and why it has received 
bipartisan support. This tax cut package will provide broad relief by 
reducing the 15-percent tax bracket that serves as the baseline for all 
taxpayers to 14 percent. In other words, no matter which tax bracket a 
family may be in, by cutting the 15-percent bracket, everyone will 
benefit as they will pay 14 percent on their first portion of taxable 
income. At the same time, this plan expands the 14 percent bracket, 
dropping millions of Americans who are now paying taxes at 28 percent 
down to the lower bracket.
  For a middle-income family of four, these two changes will mean a tax 
savings of over $450 a year. And these provisions have already found 
bipartisan support.
  To restore equity to the Tax Code, this plan targets another 
bipartisan objective by eliminating the marriage tax penalty. For too 
long, husbands and wives who have worked and paid taxes have been 
penalized by their dual incomes. I have heard of some couples who have 
actually chosen not to marry because of the tax penalties their 
marriage would incur.
  This plan will fix that by giving working married couples the option 
of filing combined returns, using separate schedules to take advantage 
of the single filer tax rates and the single filer standard deduction.
  This is a change that is long overdue. American families have been 
suffering under the unfair burden of the marriage tax penalty for too 
long. A simple example shows us why:
  Robert and Diane are two single Americans who have fallen in love and 
want to marry. They are not considered wealthy. In fact, Robert is a 
hardworking foreman at an auto factory. Susan, his fiancee, is an 
experienced nurse. Each makes roughly $50,000 a year. Now, under 
current law--when the file their separate tax returns--they each take a 
personal exemption and the standard deduction, giving them a taxable 
income of $43,000. After applying the tax rates for singles, they each 
owe tax of about $8,745.
  If, however, Robert and Diane follow their hearts--get married and 
start a family--they realize that their total combined income would be 
$100,000. Should they marry, they would no longer be considered middle-
class individuals, but many would regard them as a wealthy family, and 
under current law their combined income would be reduced by their two 
personal exemptions and by the standard deduction for married couples.
  And here is where they would hit their first marriage penalty 
problem, discovering that their new standard deduction is significantly 
less than the combination of the two standard deductions they receive 
as singles.
  But the marriage penalty does not end there. In fact, it gets worse. 
With their combined income, Robert and Diane--now considered by many to 
be wealthy--would have a taxable income of $87,400. This is where they 
would hit their second marriage penalty problem.
  The lowest tax rate bracket for married couples is less than twice as 
wide as the lowest tax rate bracket for singles. In other words, more 
of their income would now be taxable at higher rates. The result would 
be a total tax bill of $18,967, almost $1,500 more than they would have 
paid as singles. That steep increase would come at a time when they 
could least afford it, a time when just starting out as a married 
couple they would be looking to buy a home, raise a family, and save 
for education.
  The legislation we introduce today--this broad-based tax relief--
completely eliminates the marriage penalty for

[[Page 18154]]

Robert and Diane. The Senate Finance Committee bill will allow Robert 
and Diane to file a joint return, but to calculate their tax liability 
as if they had remained single. They would each get the benefit of the 
more generous standard deduction and of the more generous rate 
brackets. Under this new approach, they would pay a total tax of 
$17,490 which is the combination of what they had each paid before. 
This saves them almost $1,500.
  But in restoring equity to the tax code, we do not stop with the 
marriage penalty. Another important measure contained in this broad-
based tax relief plan is the elimination of the alternative minimum tax 
for middle-income families--families like David and Margaret Klaassen. 
Most of us know their story. The Tenth Circuit recently affirmed that 
under the current law, the Klaassens are required to pay the 
alternative minimum tax despite the fact that it may not have been 
Congress' intent to impact families like the Klaassens when Congress 
passed the AMT.
  David and Margaret Klaassen are the parents of 10 dependent children. 
They had an adjusted gross income of $83,000 and roughly $19,000 of 
itemized deductions relating to state and local taxes, medical 
expenses, interest, and charitable contributions. Their reported 
adjusted gross income was $63,500, and with 12 personal exemptions 
their taxable income was $34,000, resulting in regular tax of $5,100.
  That would seem fair. And the Klaassens paid the bill. However, the 
IRS flagged the return and determined that the family was liable for 
the alternative minimum tax, a provision in the code that was passed to 
make sure that wealthy individuals and families do not escape at least 
some liability through tax shelters and other tools they might use to 
minimize their liability. The IRS determined an AMT deficiency of 
$1,100. For AMT purposes, the Klaassens were disallowed a $3,300 
deduction for State and local taxes.
  In addition, $2,100 in medical expenses were disallowed because of 
the 10-percent floor for AMT purposes. And finally, the Klaassens' 
entire $29,000 deduction for personal exemptions was disallowed because 
of the AMT. These adjustments resulted in alternative minimum taxable 
income of $68,000--twice the taxable income that the Klaassens had 
without the AMT.
  This simply is not fair. It is not what Congress intended. The 
Finance Committee bill will help return fairness to the tax code by 
allowing families to receive the full benefits from their personal 
exemptions. This will also restore taxpayers' ability to receive their 
$500 per child tax credits, and other benefits that were intended to be 
available to middle-income families.
  These are changes that are long overdue. Again, they have strong 
bipartisan support. But our broad-based Taxpayer Refund Act of 1999 
does so much more.
  This plan will also help individuals and families find self-reliance 
and security in retirement through expanded individual retirement 
accounts, as well as through enhanced 401(k) plans, 403(b) plans and 
457 plans. These are critical programs--programs that along with Social 
Security and personal savings help individuals prepare for their golden 
years.
  For savings through the workplace, there are 401(k) plans, 403(b) 
plans and 457 plans, each of which can be sponsored by different types 
of employers. For individual savings, there is either the traditional 
IRA or the Roth IRA. And all these different savings vehicles have 
different limits on how much individuals can save. However, our current 
system can do more, and the limitations that we placed on retirement 
savings in times of budgetary restraints should be reexamined in light 
of the current surplus. For example, the IRA contribution limit has not 
changed since 1982.
  Had it simply been indexed for inflation, it would be almost $5,000 
today. What an opportunity that would present middle-class families to 
prepare for their futures. And that's exactly who benefits from IRAs--
middle- and lower-income Americans.
  Fifty-two percent of all IRA owners earn less than $50,000. This same 
group makes about 65 percent of all IRA contributions, and right now 
they are limited by the $2,000 cap on contributions. IRS statistics 
also show that the average contribution level in 1993 for people with 
less than $20,000 in income was $1,500.
  Clearly, if the average contribution of modest-income taxpayers is 
$1,500, this demonstrates that many of these Americans want to make 
contributions of more than the $2,000 limit. This tax relief bill will 
incrementally increase the amount that people can contribute to IRAs 
from $2,000 to $5,000.
  In the area of employer-provided savings vehicles, the current 
maximum pre-tax contribution to a 401(k) plan or a 403(b) annuity is 
$10,000.
  In addition, the maximum contribution to a 457(b) plan is $8,000. 
Finally, the maximum contribution to a SIMPLE plan is $6,000. These 
limits are indexed for cost-of-living increases.
  There has traditionally been a differential in contribution limits 
among the various types of plans: IRAs having the lowest limits; SIMPLE 
plans having a greater limit, but not as much as a 401(k) plan; and 
401(k) and 403(b) plans having the highest limits, but the greatest 
number of regulations.
  Since the IRA limit will be raised to $5,000, the bill will increase 
limits for 401(k) and 403(b) plans to $15,000 and for SIMPLE plans to 
$10,000; thereby continuing the differential. The limit for 457(b) 
plans for government employees will increase to $10,000.
  There is no question, with rising concerns about security and self-
reliance in retirement, that these changes are needed. They will go a 
long way toward helping individuals and families achieve their economic 
goals. But the benefits this legislation has for retirement planning do 
not stop here.
  There are other provisions that will add new retirement vehicles, 
provide greater ability to transfer retirement savings between plans, 
promote retirement plans for small businesses, and simplify the 
retirement plan system for both employers and employees.
  One provision will allow employees 50 years old or older to make 
catch-up contributions to their retirement plans. This will be most 
important for women, benefiting those who may have started their 
retirement savings late or who may have taken time off to raise 
children.
  Whatever the reason, once these individuals have reached 50, they 
will be eligible to make additional contributions to their retirement 
plans that are equal to 50 percent of their plans' maximum allowable 
contribution. In other words, their total annual contribution could be 
150 percent of the normal contribution.
  Beyond restoring equity to the tax code and helping Americans prepare 
for retirement, the Taxpayer Refund Act of 1999 will also help 
individuals and families gain access to health care--particularly those 
who are self-employed, or who are not covered by their employers--this 
legislation will enhance the tax deductibility of health insurance. It 
does this by accelerating the full deductibility for health insurance 
for the self-employed and by providing the same benefit on a phased-in 
basis to employees who are not covered by their employers.
  In detail, the Taxpayer Refund Act of 1999 will provide an above-the-
line deduction for health insurance and for long-term care for which 
the taxpayer pays at least 50 percent of the premium. It will allow 
long-term care insurance to be offered in cafeteria plans and provide 
an additional dependency deduction to caretakers of elderly family 
members. To benefit small businesses, this legislation will accelerate 
the 100 percent deduction for health insurance of self-employed 
individuals beginning in 2000.
  To help make education more affordable for families and students, the 
Taxpayer Refund Act of 1999 strengthens educational savings 
opportunities by making college tuition plans tax-free. In other words, 
families--including grandparents, aunts, and uncles--can invest their 
after-tax income into a child's educational future. And when that money 
is used by the child, it will be tax-free on buildup and withdrawal.
  This legislation also increases student loan interest deduction 
income limits for single taxpayers by $10,000

[[Page 18155]]

and adjusts the beginning income limits for married couples filing 
joint returns to twice that of a single taxpayer. Beyond these 
important changes, this tax relief plan promotes education by making 
deductions for employer provided assistance permanent, and by allowing 
employer assistance to be used for graduate-level courses.
  Again, these are necessary changes--changes that will help families 
meet their priorities.
  Another important component of this tax relief package involves its 
treatment of estate and gift taxes. Here, our objective is to protect 
families, farmers, and small business men and women who have worked 
their whole lives to build a future for their posterity. Members of the 
Senate Finance Committee can recall the heartrending testimony of Lee 
Ann Goddard Ferris whose 71-year-old father died in a tragic farming 
accident in Lost River Valley, Idaho. For more than 60 years, her 
family had worked the land.
  They owned over 2,600 acres--2,600 acres that had been purchased 
through decades of toil. In Lee Ann's own words, ``My father's death 
was the most devastating event that any of us has ever gone through. 
The second most devastating event was sitting down with our estate 
attorney after his death. I'll never forget his words. The estate 
attorney said, `There is no way you can keep this place, absolutely no 
way.' ''
  Still suffering from her father's accidental death, Lee Ann couldn't 
believe what she was hearing. ``How can this be?'' she asked. ``We own 
this land. We have no debt! We just lost my father, and now we are 
going to lose the ranch?'' According to Lee Ann, ``Our attorney 
proceeded to pencil out the estate taxes . . . and we all sat in total 
shock.''
  Where is the fairness, Mr. President? Here a family works for more 
than half a century to build a ranch, only to hear that estate taxes 
would rob them of their legacy, their heritage, their home.
  ``This tax situation has put a tremendous strain on my mother,'' Lee 
Ann testified. ``Mother worries constantly and has had many sleepless 
nights. I don't know if any of you could ever imagine how hard it has 
been on her. She doesn't have her husband anymore. She worked hard her 
whole life and gave up a lot of material things to put her after-tax 
dollars back into the land to pay it off. Now, unless this tax law is 
changed or abolished, she will have to leave her home, which she loves, 
and our family will not have a base from which to carry on.''
  With this legislation, Congress will do something to protect these 
families. The Taxpayer Refund Act of 1999 turns the unified estate tax 
credit into a true exemption, and it increases the exemption from $1 
million to $1.5 million. This legislation also significantly reduces 
the actual estate tax rate, and it increases the annual gift tax 
exclusion from $10,000 to $20,000 by the year 2006.
  Each of the measures I have outlined as part of the Taxpayer Refund 
Act of 1999 is vitally important to the well-being of all families; 
each is a key component of this tax relief package. Again, our purpose 
is to be broad-based--to provide the most meaningful tax relief 
possible--to do it in a way that families can meet their individual 
needs--and to present a plan that can receive strong bipartisan 
support.
  With this major tax relief package--$792 billion over 10 years--we 
meet all of these criteria. And, in the process, we leave over $500 
billion to meet pressing concerns here in Washington, such as 
preserving and strengthening Medicare.
  We are able to do all this and to keep the budget balanced for a 
simple reason: the work, the investment, and the job creation achieved 
by Americans everywhere have succeeded in creating long-term economic 
growth.
  It is not right that the reward for this success is that today our 
taxes are the highest percent of our gross national product than at any 
other time in postwar history. These same Americans--the authors of 
this success story--are rightful heirs to the wealth they are creating. 
After paying for the Government programs for which Congress has planned 
and budgeted, the change must now be returned to the taxpayer.
  This legislation not only returns the change by cutting taxes, it 
increases access to healthcare; it makes education more affordable; it 
helps taxpayers prepare for self-reliance and retirement; it keeps 
their home, farm, and family business safe from death taxes. These are 
objectives that are shared by everyone. They are objectives that can be 
embraced by Senators and Congressmen on both sides of the political 
aisle. They are objectives that can be made realities by being passed 
into law.
  Mr. President, I reserve the remainder of my time.
  I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Burns). The Senator from New York.
  Mr. MOYNIHAN. First, I congratulate our revered chairman, Senator 
Roth, for the manner in which he has presented the Taxpayer Refund Act 
of 1999, for the manner in which he brought our committee together in 
consultation and deliberation, and who, indeed, produced a measure 
which was bipartisan. It has many elements which would commend our 
support across the aisle--certainly mine. But it is not to that issue 
that I will speak today, but to the question of the doctrine.
  I would like to put this debate in a doctrinal perspective, which is 
to say, the development in the 1960s which holds that the only way to 
restrain the growth of Government is to deliberately create a 
protracted fiscal crisis.
  This begins, of course, with a view of Government that is so very 
different from what traditional conservatism would hold. It is a new 
and radical idea. I will discuss how it emerged.
  But first I will cite an article from this morning's New York Times 
op-ed page by Gertrude Himmelfarb, one of our preeminent historians and 
an avowed conservative. She writes so much of what goes on. She says:

       In their eagerness to do away with the nanny state, some 
     conservatives risk belittling, even delegitimizing, the state 
     itself. A delicate balancing act is required: to dismantle or 
     diminish the welfare state while retaining a healthy respect 
     for the state itself. For good government is the precondition 
     of civil society, providing a safe space within which 
     individuals, families, communities, churches and voluntary 
     associations can effectively function.

  But, as I say, the debate on this tax bill is not just a debate about 
tax policy; for it is far less a debate on taxes than a debate on 
economic and budget policy and the larger understanding of the role of 
Government in our society, the role of Government in an advanced market 
economy.
  At the outset of this debate, we should be mindful of some painful 
mistakes we have made in the not too distant past and which we 
evidently mean to repeat.
  In August of 1993, just 6 years ago, we began to correct a colossal 
budget mistake. The President signed into law a deficit reduction act 
without precedent in size that dramatically changed the budget 
outlook--turning deficits of $290 billion a year, as far as the eye 
could see--to anticipate my friend David Stockman--into the surpluses 
we now project of $200 billion and more--surpluses on budget--leaving 
aside the Social Security revenue stream.
  At the time of its passage, it was estimated that the 1993 
legislation, the Omnibus Budget Reconciliation Act of 1993, would 
reduce the deficit by $505 billion over the 5 years, 1994 through 1998.
  The Office of Management and Budget, in its fiscal year 2000 edition 
of ``Analytical Perspectives,'' estimated that the total deficit 
reduction has been more than twice this. I quote: ``The total deficit 
reduction has been more than twice this--$1.2 trillion.''
  That suggests the extraordinary quality of that moment when we stood 
on this floor and waited for the final vote that would allow the Vice 
President to cast the determining vote, 51-50. The act was passed 
without one Member of the Republican Party of either House of the 
Congress.
  In 1997, we had a more bipartisan effort in the Balanced Budget Act 
of 1997.

[[Page 18156]]

Again, we see larger revenue benefits than were originally anticipated.
  As for the fiscal year that ends this September, the OMB projects a 
budget surplus of $99 billion and the Congressional Budget Office 
projects a surplus of $120 billion. With the end of the fiscal year 
just 2 months away, we can expect, with great confidence, a budget 
surplus for the second consecutive year.
  What explains this huge gap, this pleasant surprise between budget 
expectations and outcomes in recent years? As is often the case in 
economic analysis, there are interrelated factors which cannot always 
easily be disentangled but which provide clues.
  To begin with, we appear to be in what has been described by our now-
Secretary of the Treasury, Lawrence Summers, at his confirmation 
hearing as a ``virtuous cycle.'' I put a question to him, and he 
responded:

       Senator, I think it very important that, as you suggest, we 
     do reduce the national debt by the full amount of the Social 
     Security surpluses, which would continue this virtuous cycle 
     by reducing interest rates, which makes possible more growth, 
     which makes more tax collections, which makes larger 
     surpluses, which makes lower debt, which reduces interest 
     rates, which starts the cycle going again. That is an 
     enormously important process.

  The Honorable Robert Rubin, who was Mr. Summers' distinguished 
predecessor, often spoke of a term which is not in ordinary usage, but 
it is a term known by Secretaries of Treasury and by persons who deal 
in securities, in markets. Mr. Rubin would use the term the ``risk 
premium on interest rates.'' That is to say, the extra charge if a 
person is lending money, if they are not certain of the fiscal 
stability of the Federal Government, in this case, and, thence, of the 
economy at large.
  It was, first of all, this risk premium that we broke in 1993, the 
fear that down the line, if these deficits of $290 billion in the 
previous year went on and on--the debt had quadrupled over the previous 
twelve years--that the day would come, again, to use an economist's 
term, when we would ``monetize'' the debt through inflation. We would 
get rid of it by wiping out the value of the dollar. That is that 
premium, that risk premium on interest rates.
  We began to see this effect. I was here on the Senate floor on 
February 10, 1995. I remarked:

       . . . the economy performed better than expected, in part, 
     because Congress adopted a credible deficit reduction plan. 
     In part, also, because, as Secretary of the Treasury Rubin 
     remarked to the Finance Committee this Wednesday [that is, 
     Wednesday, February 8, 1995], the deficit reduction program 
     squeezed the risk premium on interest rates out of real long-
     term interest rates. If financial markets do not believe the 
     deficit is under control, they will levy a risk premium on 
     capital lending. In 1993 and 1994, we clearly persuaded the 
     markets that we were finally serious.

  From a slightly different perspective, the Congressional Budget 
Office also took note of the importance of reducing interest costs. For 
most of the post-World War II period, interest costs have been the 
second or third largest item in the budget, behind Social Security and 
national defense.
  In commenting on this, the CBO said, of the effects of that 1993 
legislation:

       Remarkably, the biggest single change lies in . . . 
     interest--now projected at 3.3 percent of GDP in 2003 
     compared with 4.5 in the earlier report, a testimonial to the 
     efforts to rein-in the debt's growth [which had taken place].

  For the record, CBO, in its latest budget update issued earlier this 
month, now projects interest costs at just 1.7 percent of GDP in the 
year 2003, a reduction by half from its September 1993 projection when 
we had just passed that legislation of that year.
  Outlays for net interest peaked at $251 billion 2 fiscal years ago. 
They are now projected to decrease to $222 billion, and if we can just 
keep from squandering the surplus, we will repay the debt incurred in 
those years and that interest cost will again go down, almost to 
disappear.
  Now, I do not mean to suggest that the budget outlook is solely due 
to changes in budget policies. Factors other than deficit reduction are 
at work, making for a strong, sustained economic expansion. The economy 
brings higher receipts and lower outlays for unemployment and other 
such programs that automatically expand in a recession.
  Last week, in testimony before the House Committee on Banking and 
Financial Services, Alan Greenspan, our world-renowned Chairman of the 
Board of Governors at the Federal Reserve, provided some insights into 
what is sustaining this period of remarkable growth. Observing the 
absence of production bottlenecks, shortages, and price pressures that 
inevitably occur in an expanding economy, he noted a number of the 
possible explanations for the good fortunes involved; notably, just-in-
time inventories and such like; but they have come about fortuitously 
at a time when the deficit was under control, deficits were declining, 
and the prospects were much better all around.
  The question is, Can we not keep this? Can we not sustain the 
extraordinary economic expansion on which we have embarked?
  Unemployment is now at 4.3 percent. May I say, as someone who in the 
Kennedy administration was Assistant Secretary of Labor for Policy 
Planning, we would have said, sir, that a 4.3-percent unemployment rate 
was unsustainable. It would lead to an outbreak of inflation. Yet here 
we have it, 4.3 percent, real economic growth at 4 percent. We are in 
the ninth year of an expansion, and we have no inflation. This is 
something that is going to require that the economic textbooks be 
rewritten. But we have done it, and a lot of it comes about from what 
we did on the Senate floor in August of 1993 and which our great hope 
on this side of the aisle is that we not undo in this short time that 
has passed.
  Alan Greenspan, in that testimony, was very clear. He said tax cuts 
are to be reserved for recessions. That will be the most effective 
means we can have to regenerate the economy and keep the long-term 
growth path moving high.
  The New York Times editorialized this past Sunday, on the Oracle of 
the Fed:

       Mr. Greenspan is treated reverently on Capitol Hill, but it 
     appears that the Republicans do not want to heed his advice 
     to run a surplus and pay down the national debt, while saving 
     a tax cut for when it is needed.

  How come this sudden resurgence just now, when it would seem so clear 
that a quite opposite policy has had such very desirable effects? Well, 
sir, I go back, as I said I would earlier, to matters of political 
doctrine.
  We don't talk much of doctrine on the Senate floor, but there are 
times for it. In 1995, for example, we debated a constitutional 
amendment requiring a balanced budget. I presented a series of papers 
in which I tried to describe the idea of ``starving the beast,'' as the 
term was; that is to say, depriving the Federal Government of the 
revenues needed, putting it simply, to govern.
  The argument is quite simple. It goes back to the 1970s when a number 
of theorists on the conservative wing of the Republican Party 
determined that it was not going to be possible for the Federal 
Government ever to be controlled in its size as long as it had the 
revenues to sustain, or even to increase, that size. And so it came 
about that a policy doctrine developed which argued that deficits, if 
sizable enough, had acquired a new utility--deficits that had 
presumably been the horror of conservative financial thought now became 
something attractive because they could be used to reduce the size of 
Government itself.
  E.J. Dionne, Jr., in an op-ed article in yesterday's Washington Post, 
clearly recognizes this idea is still afoot. He writes:

       The long-term goal, about which Republican leaders are 
     candid, is to put Government in a fiscal straitjacket for 
     years to come.

  In fairness, I think this is more to be encountered on the House side 
than in this body, but it still would be the cumulative effect, in 
fact, of the tax cuts that have been proposed in both bodies.
  I can remember the onset of this. In the late 1970s, it was clear. 
One could write about it, and one did. Then came the administration of 
President Reagan in which, in effect, the policies were carried out--or 
they began to be

[[Page 18157]]

carried out. In a television address, 16 days before his inauguration, 
President Reagan said:

       There will always be those who tell us that taxes could not 
     be cut until spending was reduced. Well, you know, we can 
     lecture our children about extravagance until we run out of 
     voice or breath, or we can cut their extravagance by simply 
     reducing their allowance.

  There you have President Reagan in his most agreeable and heart-
warming quality. He thought this could be done because he thought there 
would, in fact, be reductions in Government. There were none. Moreover, 
very shortly, his economic advisers realized the economic analysis they 
had used to project revenue increases from tax reductions weren't going 
to work, and they faced a prospect of deficits of, as David Stockman 
once said, ``$200 billion as far as the eye can see.''
  Haynes Johnson, in his superb book, ``Sleepwalking Through History: 
America Through the Reagan Years,'' writes:

       The Reagan team [not the President] saw the implicit 
     failure of supply side theory as an opportunity, not a 
     problem.

  Now, this we have to absorb. They saw the failure of supply side 
theory--which said that the more you cut taxes, the higher the revenues 
will be--as an opportunity, not a problem. The secret solution was to 
let the Federal budget deficits rise, thus leaving Congress no 
alternative but to cut domestic programs. But in the end, they were not 
cut. Some grew. There was a view, and certainly a respectable one, that 
defense had to be increased. We now, incidentally, suggest there be a 
20-percent reduction in defense spending over the next 10 years.
  The Reagan administration increased defense spending, and they had a 
perfectly good argument for doing that-- but not simultaneously with 
huge tax cuts. There, very shortly thereafter, had to be tax increases. 
But the course was set for the 1980s and the deficit quadrupled, from 
under a trillion dollars to about $3.7 trillion now in publicly held 
debt. So I rise again to say, as I have done before, that what we did 
in 1981 with that tax cut--for which I voted because projections of 
huge surpluses in the future--was so ruinously wrong. We now have a 
debt that will level off at about $6 trillion, while the debt held by 
the public will fall by $2 trillion, or more, depending on the size of 
this tax cut.
  The other important reason, which I will close on, is that the 1997 
balanced budget amendment left us with what the Washington Post this 
morning calls an ``accounting illusion,'' that we can reduce the 
spending on domestic programs by 20 percent in real terms over the next 
10 years. The illusion is coming apart already. Just the other day, the 
House of Representatives determined that the money to pay for the 
decennial census in the year 2000 required an emergency appropriation 
outside of those limits. We have had that census for many years. That 
census is provided in the Constitution. It has taken place every decade 
since 1790. All of a sudden, we have made it into an emergency.
  In this morning's Washington Post, our former majority leader, our 
beloved colleague, Robert C. Byrd, has an article called ``Time for 
Truth In Spending.'' He said:

       What we need to jettison is the political rhetoric. What we 
     need to impose is truth in spending.

  And he set down a few principles. He said:

       First, watch our investments carefully and manage them 
     prudently. We should continue our best efforts to manage the 
     economy and watch out for inflation.
       Second, do not spend our money before we make it. Before 
     the surplus is spent, whether on tax cuts or continuing 
     important priority programs, wait for the money to be in the 
     bank.

  We are proposing to spend a surplus, sir, that does not exist.

       Third, pay our debts. The United States should take 
     advantage of this opportunity to retire the national debt.
       Fourth, cover the necessities. Congress should not 
     shortchange the Nation's core programs, such as education, 
     health care, veterans, and the like.
       Fifth, put aside what we need for a rainy day. Congress 
     should take steps to reserve the Social Security and Medicare 
     surpluses exclusively for future costs of those programs.
       Sixth, don't go on a spending spree. Resist the temptation 
     to create costly new government programs.
       Finally, take prosperity in measured doses. Congress should 
     reduce taxes without pulling the rug out from under projected 
     surpluses.

  I can think of no wiser counsel.
  In that regard, and with great respect for the chairman of the 
committee, I would suggest that the budget reconciliation process was 
devised to expedite consideration of deficit reduction measures.
  The bill before us uses those same expedited procedures to secure 
enactment of a deficit-increasing measure.
  Section 313(b)(4)(E) of the ``Byrd Rule'' provides that any provision 
in any reconciliation bill which would decrease revenues used beyond 
the budget window--in this case beyond the year 2009--may be 
automatically stricken from the bill upon a point of order being 
raised.
  Section 1502 of the bill before us provides for permanent 
continuation of tax cuts in the years beyond 2009, causing revenue 
losses of hundreds of billions of dollars.
  Accordingly, sir, at the appropriate time, I intend to raise the 
``Byrd Rule'' point of order against section 1502 of the bill.
  I thank the Chair for his cordial consideration of my remarks.
  I see my friend, the chairman of the Budget Committee, is on the 
floor. I yield the floor.
  Mr. DOMENICI. Mr. President, I ask the distinguished chairman of the 
Finance Committee if he will yield up to 20 minutes.
  Mr. ROTH. I am happy to yield to the distinguished chairman of the 
Budget Committee up to 20 minutes.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
20 minutes.
  Mr. DOMENICI. Mr. President, before my friend, Senator Roth, leaves 
the floor, let me say to the Senate that Senator Roth has come through 
again for the Senate and for the people of this country.
  His tax bill is clearly one that recognizes fairness, that puts the 
money where it ought to be put, gives back to the American people some 
of their money, and it does it in a way that clearly is prudent and 
responsible.
  It will be very difficult when we are finally finished explaining 
this bill for the President of the United States to veto this bill.
  We are going to talk about that a little later in the day. Since he 
has challenged us, we will tell the American people loud and clear what 
he is going to be doing when he vetoes this bill.
  Mr. President, I rise today to discuss the budget blueprint that 
Congress has passed for the first decade of the 21st century. It 
embodies three major things: Social Security, first and foremost. Much 
will be said about it. But nobody can deny that with this refund to the 
American taxpayers, we have left intact every single penny of surplus 
that belongs to the Social Security trust fund, and we will even debate 
on the floor locking it up so it is very hard to spend.
  The budget before us and that we adopted demanded that 100 percent of 
all the funding that Social Security recipients will need will be 
exclusively set aside for that purpose.
  Second, it sets aside enough money to meet the demands of Medicare 
for the next 10 years. Medicare is fully funded under the budget that 
was adopted by the Congress this year. That means there are no cuts. 
The program is fully funded for the decade. As a matter of fact, the 
President cut Medicare in the first 5 years of his budget. We did not 
do that. Then we would have a rainy day fund to implement any Medicare 
reform that Congress might enact. I will allude to that soon.
  Third, after all the bills of the decade have been paid, after Social 
Security recipients have their money set aside, after we have funded 
every penny anticipated for Medicare, and have an ample rainy day fund 
available, if we want to do something on prescription drugs, then we 
would send back the excess to the American taxpayers--to the working 
families--and those in middle- and low-income brackets will get a very 
substantial tax reduction.

[[Page 18158]]

  The budget resolution recognized economic conditions now, and the 
projected economics including the planning for an inevitable recession 
that might occur in the future. It outlined a decade-long, phased-in 
tax cut. Only a very small tax cut was envisioned in the first 2 years 
of this budget timeframe because the economy is already operating above 
optimum capacity. We want to keep inflation subdued and interest rates 
low. The budget expected Congress to pass a tax bill that was very 
small in the first 2 years and grew as the decade wound its way through 
into the next millennium.
  I congratulate again the chairman of the Finance Committee and the 
members of that committee for producing the kind of tax cut for our 
budget for the 21st century. I think it is appropriate, prudent, and 
fair. Chairman Roth has produced a tax cut that starts small and ends 
up larger, reflecting economic conditions. He has produced a tax cut 
that targets help to those who really need it--those with children in 
school, those with elderly and ill parents who need long-term care, 
those who are trying to save for their own retirement instead of 
Government reliance, and many more items of that nature and of that 
significance.
  Yes. The same old class warfare arguments like tired, defeated 
soldiers of past wars have begun to stagger across the Senate debate 
again--and they will be here before us again--that we are only helping 
the rich. We are told we must spend the surplus. That is essentially 
the argument against our tax refunds--we must spend the surplus. We 
must grow Government. It is the same old debate.
  One party wants to give money to programs. And we want to give money 
to the people. That is exactly the way it has been, and that is exactly 
the way it is on this floor.
  I believe there is a degree of arrogance in those who argue against 
tax cuts. They say to working families: I know what to do with your 
money better than you do. Give it to me so I can spend it.
  Can you imagine the arrogance of that position? They have grand 
schemes now with the surpluses.
  Republicans, through their dedicated efforts, and Dr. Greenspan and 
his fantastic ability to manage the money supply in our country, and to 
control interest rates, have given the Nation this enormous surplus. 
The President of the United States thinks they have the money to 
implement new, grand schemes and to grow government. That is the issue.
  A government big enough to give you everything is a government that 
takes everything away in the form of high taxes.
  I didn't originate that quote. I can't imagine and I can't fathom 
anything more frightening to the average taxpayer than the sight of a 
grand government schemer rushing toward a $1 trillion pile of extra 
taxpayer dollars.
  Republicans say it is the best of times for tax cuts. Democrats say 
it is the worst of times. Everyone quotes Dr. Alan Greenspan.
  The Taxpayers Refund Act before the Senate is the best of plans.
  It lowers rates.
  It encourages savings.
  It eliminates the worst of a bad Tax Code. It eliminates the marriage 
penalty for many Americans. It begins the death of a death tax. It ends 
the alternative minimum tax, to rescue the full benefit of child care, 
foster care, education, and other needed tax credits for families who 
otherwise unavoidably would end up in the alternative minimum tax 
brackets. They are sick of this. They are worried about it.
  You will get more mail on this issue because it is grossly unfair to 
give credits and then take them away--to run across the land saying: We 
are delighted to have given you a credit for your children's education 
only to find that middle-income Americans by the hundreds of thousands 
are falling into this alternative minimum tax trap.
  I say: Tax cuts, if not now, when?
  The Democrats say not now.
  I say: If not tax cuts now, then what?
  The President's answer is: Spend it all. It does not matter what he 
says he wants to spend it for; he wants to spend it all.
  Can you imagine if we did not have this surplus? What will the 
President be doing--asking for tax increases to pay for these programs 
he thinks we need? I doubt that. I doubt that very much.
  I support prudent tax relief, and I must say this is prudent tax 
relief. It is synchronized to our business cycle and the condition of 
the economy. It improves our tax policy and moves us toward a system 
that taxes income that is consumed instead of income that is earned. It 
moves America toward a tax system that allows business to deduct 
investments in the year they are made. It encourages investment in 
retirement, education, and health care.
  Congress' budget allocates 75 percent of the projected surplus over 
the next 10 years for paying down the debt and long-term priorities. If 
the surplus were a dollar, two quarters would go for Social Security, 
one quarter for high-priority spending--education, research, and 
defense--and the remaining quarter for tax cuts.
  Without tax cuts, who would spend the surplus?
  Not the American people. The Government in Washington would spend it. 
Without tax cuts, we will ``grow'' Government. There can be no denial 
of that. The President plans to grow Government substantially rather 
than give back anything to the American people. He now says he would 
veto a $500 billion tax cut. What about $200, Mr. President? That means 
giving the American people back about 6 cents of the surplus, at $200. 
Can we afford that? I believe we can afford 25 cents out of every $1 of 
surplus.
  Democrats say the question is: tax cuts versus Social Security. Tax 
cuts or Medicare. Tax cuts or domestic spending. Tax cut versus debt 
reduction.
  The right answer: It is not ``this'' versus ``that.'' The correct 
answer is, we can do all of the above. The size of the surplus lets us 
do it all. That is the reality. Save Social Security, reform Medicare, 
provide adequate funding for domestic and defense spending, pay down 
the debt, and give the American people who earned the money a decent 
tax cut. Do that in a manner that phases in, which will probably be 
very complimentary to the American economy.
  Even with the tax cuts and refunds we are talking about, our surplus 
will steadily climb as a share of GDP and our national debt will 
ultimately be paid off, falling dramatically from 40 percent of GDP 
this year to only 12 percent in 2009. Under the proposal we make, the 
external debt--the debt to the public--will go from 40 percent of the 
gross domestic product to only 12 percent by the end of the decade.
  I am amazed the President's political advisers allege this budget is 
reckless. Nothing is reckless about steadily rising surpluses and 
paying down our debt by more than 50 percent over the next decade. In 
fact, our plan lowers the level of debt more than the President's plan. 
Some may wonder why. That is because the President spends heavily in 
the first 5 years. We have tiny tax cuts. Thus, he incurs more debt 
than we do at that time, and he cannot make it up in a decade.
  I have been amazed by the administration and other opponents who 
claim our tax cut will lead to higher interest rates because the 
economy will overheat. That is just not true. The Fed is most concerned 
not with the economy as it is today but what it will be in 18 months 
and thereafter. Our tax cut is slow, a total of $28 billion over the 
years 2000 and 2001. I repeat, if they are worried about stimulus, it 
is $28 billion in tax cuts. It is almost unrecognizable in terms of 
impact one way or the other on the American economy. It saves 92 
percent of the projected surplus during these first 2 years. As a 
result, our budget surpluses will rise sharply from 1.4 percent of the 
gross domestic product to 2 percent by 2001.
  It is clear that the budget plan is not expansionary, which some 
people now talk about. It truly is not. Ask any economist to look at it 
in its true sense, phased in as it is, and ask if it is an expansionary 
budget. I cannot imagine this tax bill would be defeated on

[[Page 18159]]

such a preposterous economic observation.
  In House testimony last week, Chairman Greenspan cautioned against 
expecting any rapid stimulus as a result of this tax relief package. I 
can assure the American people that Congress' tax plan will not 
overheat the economy. As a matter of fact, Chairman Greenspan cautioned 
against expecting a rapid stimulus as a result of this package, given 
the long phase-in of the tax cuts.
  I can anticipate the response of my Democratic colleagues who are 
likely to say: If your plan is so ideally suited for the economy, why 
did Alan Greenspan argue we should let surpluses run for a while before 
cutting taxes?
  Listen carefully. I have two responses. First, I believe the Congress 
is doing exactly what the Chairman advised. Our budget plan delivers 
only $28 billion in tax cuts over the next 2 years. Most of that relief 
is scheduled to arrive only after surpluses have mounted on a 
consistent basis. Second and more important, Chairman Greenspan is 
advising what policies would be best in an ideal world. However, he is 
fully aware that ideal may not be politically feasible.
  Let me read a quote he made last week which I think was insightful:

       There is nothing that I can see that would be lost by 
     allowing the process to delay unless, as I have indicated 
     many times, it appears that the surplus is going to become a 
     lightning rod for major increases in outlays. That's the 
     worst of all possible worlds from a fiscal policy point of 
     view. That, under all conditions, should be avoided. I have 
     great sympathy for those who wish to cut taxes now, to 
     preempt the process. And indeed if it turns out they are 
     right, I would say moving on the tax front makes a good deal 
     of sense to me.

  The worst of all fiscal policies will materialize if the President 
gets his way. The President proposes to increase spending by more than 
$1 trillion over the next 10 years. Most of this new spending would go 
to create 80 new, often repetitious, often local-government-
prerogative-infringing Government programs, with services already being 
handled at the local or private sector. The President's spending 
proposals are the worst of all proposals from the standpoint of what is 
good for America during the next 2 years. That time horizon must 
concern the Federal Reserve.
  The President proposes to use $53 billion of the surplus for new 
spending. It is nearly twice as large as our tax cut in the next 2 
years. Thus, the President's plan would be far more stimulative than 
the Congress' measured tax cut. I ask my colleagues on the other side 
of the aisle if they are worried about interest rates rising because 
the economy is overheating, why support the President's Government-
growing agenda over tax cuts? The money is there. We have a surplus.
  The last question is the $792 billion question: Who is going to spend 
it? When faced with the President, who wants to spend the surplus, 
Congress has no choice but to cut taxes. However, we have to be 
careful. While we are still saving the majority of the surplus for 
shoring up our long-term fiscal health, we must be careful in that 
regard.
  To sum up, I leave two messages today. Our budget is prudent, and it 
is synchronized for where we are in the business cycle. Be skeptical of 
the administration's criticism of our tax plan. They want to grow 
Government well in excess of Congress' tax cut. Most of the spending 
has nothing to do with Social Security or Medicare. This is what should 
most concern the American people when faced with the surplus, excluding 
Social Security funds, and I have already indicated what will happen to 
them. The Republicans want to give it back to the people who earned it 
and worked so hard.
  The big question then is, Who is going to spend the surplus?
  With tax cuts, the answer is you; without tax cuts, the answer is big 
government.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, the minority yields 10 minutes to the 
Senator from Minnesota.
  The PRESIDING OFFICER (Mr. Bunning). The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, 3 weeks ago, President Clinton visited 
some of the poorest communities in our country and he spoke eloquently 
of our obligations to America's most disadvantaged children. Now, with 
our economy booming and record surpluses, we have a chance to do better 
for all of our children. This budget fails America's children. I want 
to speak as loudly and boldly as I can about this reconciliation bill, 
first about the Republican proposal, and then about what we are 
proposing as Democrats.
  If you look at the non-Social Security surplus, about three-quarters 
of it really assumes cuts in future domestic spending. The Republican 
proposal on the floor does not restore any of these cuts. In fact, they 
add another cut of roughly $200 billion. The Republican plan would 
require a 38-percent cut in domestic spending in the year 2009, and the 
Republican tax bills are loaded with corporate welfare for 
multinational corporations, banks, insurance companies, Wall Street 
securities firms, and tax giveaways for the wealthy. That is a 
disappointment. It is a very harsh budget.
  But even the Democratic plan fails to fully fund or restore these 
cuts. Senate Democrats have reserved $290 billion of the surplus to 
soften the blow on our discretionary priorities like education, but we 
still allow cuts of several hundred billion dollars. In our plan, with 
our $300 billion of tax cuts, we do not make up the assumed cuts in our 
domestic priorities either.
  Since defense spending will go up, and there will be spending for 
transportation which also will go up significantly over the next 10 
years, our other domestic priorities will be squeezed even more.
  How can we, as Democrats, say we are for addressing the needs of 
America's children, for fighting poverty, for fully funding Head Start, 
for equal access to quality education, for helping working families 
afford the cost of health care and child care, for cleaning up the 
environment, for community policing, and for veterans' health care, 
when we are assuming domestic spending cuts of several hundred billion 
dollars? Something has to give. To use the old Yiddish proverb, you 
can't dance at two weddings at the same time.
  I do not understand this. There are 14 million children who are poor 
in our country--14 million. There are 6.5 million children who live in 
households with income of one-half the poverty level. Close to one out 
of every four children in our country under the age of 3 are growing up 
poor. Close to 50 percent of children of color under the age of 3 are 
growing up poor. And now we are being told by both parties--the 
Republican Party much more so than the Democratic Party--but both 
parties, that we cannot afford to renew our national vow of equal 
opportunity for every child? Where in these proposals do we, as a 
Senate representing the United States of America, live up to our 
national vow of equal opportunity for every child?
  Right now, in Early Head Start, for children age 3 or younger, 1 
percent of the children who could be helped and given a head start are 
able to get this assistance. We are funding this program at a 1 percent 
level.
  For the Republicans, you have $800 billion of tax cuts. You make no 
investment in any of these areas. Your budget and your proposal will 
lead to Draconian, really brutal cuts in these programs. Not only will 
we not be doing anything to make sure poor children have a chance in 
America, to make sure that there is equal opportunity for every child, 
but the proposal of the majority party will be making cuts in these 
programs.
  And to the Democratic Party, my party, we have a better proposal. It 
is less harsh. But there has to be some connection between the 
convictions we profess and the budgets we propose, and a willingness to 
fight for them. At some point, the chasm between our words and our 
actions becomes too wide. If we do not fight hard enough for the things 
we stand for at some point, we have to recognize we really do not stand 
for them. We really do not stand for them.

[[Page 18160]]

  I cannot believe with record economic performance, that the 
Republican Party can come to the floor of the Senate with a proposal 
that calls for $800 billion of tax cuts, most of them flowing to our 
wealthiest citizens, but with a proposed 38-percent cut in Head Start, 
child care, community policing, and cleanup of the environment.
  And to my party, I cannot believe the Democrats come out with a 
proposal where we, too, are essentially proposing cuts in some of these 
key domestic priorities. Why did we become involved in politics? What 
do we believe in? What are our values? Can we not at least make some 
investment to make sure every child, no matter the color of skin or 
income of family, urban or rural, or boy or girl, will have a chance to 
reach her full potential and his full potential?
  What ever happened to the Democratic Party's strong commitment to 
equal opportunity for every citizen? I do not see it in these 
proposals. We ought not to be talking about tax cuts that benefit the 
most affluent citizens, when we cannot even live up to our national vow 
of equal opportunity for every child.
  I hope we will do better as we move forward in this debate. I yield 
the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. The Senator from West Virginia is yielded 45 minutes.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, recently both the Office of Management and 
Budget and the Congressional Budget Office released their so-called 
``Mid-Session Reviews'' on the state of the Federal budget. Both of 
these new forecasts project even better performance for the nation's 
economy in the coming ten years than they had predicted just a few 
months ago. In fact, the Congressional Budget Office projects unified 
budget surpluses totaling just under $3 trillion over the next ten 
years. Of the $3 trillion, approximately $2 trillion results from 
surpluses being paid into the Social Security trust fund. The remaining 
$1 trillion--or $996 billion to be exact--is what is called the ``on 
budget'' surplus. That is the non-Social Security trust fund surplus. 
The question before Congress is what do we do with this good news--our 
government is about to be awash in money, if these projections come 
true.
  Before we get too far along with our grandiose plans for massive tax 
cuts, a dose of reality is in order. Sometimes a dose of castor oil is 
in order. We may not like it so much, but it has to be taken. So a dose 
of reality is in order.
  These future budget surpluses are, of course, based on ``pie in the 
sky'' projections. But I don't think ``pie in the sky'' is quite right. 
The projections are so far out into the Stratosphere--more than a 
decade away--that we would need the Hubble Telescope to track them 
down.
  Mr. President, the fact is that they have not yet occurred, the money 
is not yet in hand--and may well never occur--for a number of reasons. 
First, one needs to keep in mind that budget projections for even 1 
year are likely to be missed by a substantial margin over the normal 5-
year period of congressional budgets. Estimates of deficits and 
surpluses have been off by billions of dollars. This year, for the 
first time, instead of 5-year budget projections, we have 10-year 
budget projections upon which all of the surpluses are being forecast, 
and upon which tax cut proposals by Democrats, Republicans and the 
administration are being based.
  Does anyone really believe that these 10-year projections will be any 
more accurate than the usual 5-year numbers? In looking at these 
incredible amounts of surpluses and tax cuts, I would think that one 
needs more of an astrologer than an economist to read the tea leaves 
and to come up with these figures.
  Mr. President, consider these facts: CBO's estimate of revenues over 
the period 1980 through 1998 was off by an absolute average of $38 
billion per year. The estimates were off by an average of $38 billion 
per year during the period 1980 through 1998. That is a pretty fair 
piece of change! This isn't just chicken feed. Some years, the 
estimates were closer to the projection than other years, but, as I 
say, the average difference one way or the other, was $38 billion per 
year. Similarly, for outlays, the projections over the past two decades 
were off the mark by an absolute average of $36 billion per year. The 
resulting deficit projections by the Congressional Budget Office over 
the period 1980 through 1998 were off by an absolute average of $54 
billion per year. Extend that figure over 10 years, and that is what we 
are doing now in this bill, and we can see that $540 billion of the $1 
trillion projected surplus could melt away faster than last year's 
snowball.
  So what about these latest ``rosy'' forecasts of budgetary surpluses 
for the next 10 years? It is obvious that we need to be very careful 
when relying on such projections to make decisions about whether and if 
we can afford a tax cut.
  CBO officials would be the first to tell you that they have widely 
missed the mark in their budgetary forecasts, as would the folks at 
OMB. No one on the face of God's green Earth can predict accurately for 
even 1 year, much less for 5 or 10 years, what revenues will come into 
the Treasury, or what expenditures will go out of the Treasury. That is 
because no one knows what the unemployment rate will be next year, or 
the inflation rate, interest rates, whether there will be a recession 
or the duration or virility of such recession. In virtually every CBO 
report, the following cautionary footnote can be found: ``Cyclical 
disturbances could have a significant effect on the budget at any time 
during the projection period. A recession would temporarily push down 
taxable incomes, thus reducing federal revenues. A recession would also 
cause a boost in spending for unemployment insurance and other benefit 
programs. CBO estimates that a relatively mild recession (similar to 
the one in the early 1990s) that began this year could reduce the 
projected surplus by $55 billion in 2000.''
  Mr. President, there is no reason to believe that CBO's current 
forecast of the budgetary picture over the next 10 years will be any 
more accurate than have been its previous forecasts over the past two 
decades.
  With that dose of reality in mind, let's now turn our attention to 
the Republican tax cut proposal now before the Senate. Earlier in my 
remarks, I noted that the Congressional Budget Office projects an on-
budget surplus of $996 billion over the coming 10 years FY 2000-2009. 
The on-budget surplus calculations, it should be noted, are the monies 
not needed for Social Security or the Postal Service, and not otherwise 
spent. The Republican tax cut plan proposes to use virtually all of 
these projected on-budget surpluses for tax cuts of $792 billion and 
for paying the increased interest on the federal debt of $179 billion. 
This leaves only $25 billion in projected surpluses for the next 10 
years.
  What happens if we enact cuts of $792 billion and the CBO projections 
turn out to be wrong? What happens if they turn out to be wrong, as 
they have always been? What will Congress do then? The money will by 
law be leaving the Treasury everyday in the form of tax cuts, but there 
may be an inadequate surplus to cover them. Will Congress repeal the 
tax cut? It is easy to vote for a tax cut. Will Congress repeal the tax 
cut? Will it be able to cut spending even further than the Republican 
budget--which I will say more about later--already calls for? Will it 
dip into the Social Security trust fund then? Or, will Congress find it 
easier to revert back into the bad old days of the 1980s and simply run 
up massive annual deficits? Those are the four choices we will have. 
All of them are unacceptable. We must not mislead the American people 
by promising them massive tax cuts which may well be based only on 
phantom surpluses which never materialize.
  Even if the surpluses do happen, this Republican tax plan could 
emasculate national security, public investments, and the operations of 
government. As this chart shows, these areas of the Federal budget 
could suffer real cuts each year, beginning in fiscal year 2000, 
drastically below what would be necessary to continue them at the 
levels

[[Page 18161]]

provided in fiscal year 1999. In fact, over the whole 10-year period--
over the 10-year period--the real reductions would total $775 billion. 
In other words, the bulk of the $792 billion Republican tax cut is 
likely, in reality, to be financed by cuts in critical domestic 
priorities--critical domestic priorities--such as education, health 
care, infrastructure, child care, the environment, agriculture--that 
will affect you, the people of this country--old, young, white, black, 
male, female. They will affect you--you--because they will be financed 
by cuts in critical domestic priorities.
  Mr. President, to give the American people some sense of what I am 
talking about, let me focus on just three critical areas of the Federal 
budget that would be thus affected.
  First, however, let me point out that the cuts in these programs are 
based on the assumption that the Republicans will fund defense at the 
levels requested by President Clinton over the next 10 years. If that 
is so, and the tax cuts are also enacted, according to the Office of 
Management and Budget, an across-the-board cut of 38 percent--that is 
more than a third--in outlays will be required in the other public 
investments and operations of the Federal Government.
  For example, let us take a look at the VA medical care program. That 
gets close to home. We are already getting lots of mail, lots of 
telephone calls, e-mails, and so on, from veterans and their families. 
So let's take a look at the VA medical care program.
  What would happen to veterans' health care under the Republican tax 
cut plan if these cuts are administered in an across-the-board manner? 
The cuts will rise from $931 million in fiscal year 2000 to over $11.5 
billion in fiscal year 2009. In total, the cumulative cuts to the VA 
medical program--as I say, we are already hearing a lot from veterans 
because they see these cuts coming--the cumulative cuts to the VA 
medical program for this 10-year period will be more than $53.5 billion 
below what it would take to continue current VA medical care services. 
I might add, as I say, some veterans are already feeling it, and this 
figure is woefully inadequate.
  What do those cuts mean in human terms? As we can see from this 
chart, OMB projects that 3,252,735 veterans--not talking about dollars 
now; we are talking about real people, veterans in particular--OMB 
projects that 3,252,735 veterans will seek treatment at VA medical 
facilities in fiscal year 2000. That is just over the horizon, fiscal 
year 2000. Under the Republican tax plan, though, 102,278 of these 
veterans are going to have to be turned away: Sorry, that program has 
been reduced, or that program has been cut out; we do not have room for 
you.
  As we can see, over the 10-year period the number of veterans to be 
turned away--sorry, sorry, we have to turn you away--will increase each 
year until fiscal year 2009, when, according to these figures, 
1,430,985 veterans will be denied critical health care benefits. Is 
that how a grateful Nation treats its soldiers, sailors, and airmen?
  Now, let's look at national crime-fighting programs.
  Mr. President, the budget for the Federal Bureau of Investigation was 
approximately $3 billion in FY 1999. Paying for the Republican tax cuts 
would require reductions in the FBI budget below what would be needed 
to continue current services over each of the next 10 years. Those cuts 
get progressively worse until in FY 2009, the Republican tax cut would 
require a cut of almost $1.9 billion below the $4.3 billion that would 
be necessary just to maintain--just to maintain--the same level of 
service being provided by the FBI in 1999. Over this 10-year period, 
total cuts to the FBI's budget would equal almost $9 billion.
  That is $9 for every minute since Jesus Christ was born. Nine billion 
dollars, that is a lot of money!
  Again, Mr. President, what does this translate to in services to the 
American people? Forget the dollars for a moment. As this chart shows, 
the FBI will need 10,687 agents in each of the next 10 years in order 
to just continue its current law enforcement efforts. But, that will 
not be possible if we enact the Republican tax cuts. Instead, we can 
look forward to progressively--progressively--deeper reductions in the 
number of FBI agents in each of the next 10 years. In FY 2009, rather 
than being able to employ 10,687 agents, the FBI will only be able to 
employ, 5,878. Is that what the American people want? And what does 
that do to our efforts to prevent another World Trade Center bombing? 
What does it do to our efforts to prevent another Oklahoma City 
bombing? What do cuts of that magnitude do to our programs to fight 
organized crime, or the insidious proliferation of child pornography on 
the Internet?
  Sadly, the picture is no better for the effort to patrol our Nation's 
borders. Progressively deeper budget cuts will have to be made over the 
next 10 years totaling more than $3.5 billion because of the massive 
Republican tax cuts. As a result, as we can see displayed in this next 
chart, the number of INS agents--Immigration and Naturalization Service 
agents--protecting the Nation's borders will decline from the needed 
level of 8,947 to only 4,921 in the year 2009. How does that help 
address the problem of illegal immigration? And that is a big, big, big 
problem. How do those kind of cuts help our drug interdiction efforts? 
What kind of message does that send to the Colombian drug lords?
  Mr. President, these are just three--just three--examples of the 
short-sheeting that will take place throughout the entire Federal 
Government because of the Republican tax plan. As if this weren't bad 
enough, the real kicker in the Republican tax cut plan is that not only 
does it cut taxes by almost a trillion dollars over the next 10 years 
but--get this--this tax cut package would explode in the following 10 
years, costing roughly an additional $1.8 trillion, according to 
preliminary projections by the Treasury Department. Also, the Treasury 
Department points out that interest on the national debt in the second 
10 years caused by the $1.8 trillion in lost revenues would be roughly 
$1.1 trillion higher.
  Let me say that again. The Treasury Department points out that 
interest on the national debt in the second 10 years caused by the $1.8 
trillion in lost revenues would be roughly $1.1 trillion higher.
  That makes a total cost of the Republican tax cut plan in the years 
2010 through 2019 of $2.9 trillion. The increased interest due on the 
national debt of $1.1 trillion caused by the Republican tax cut plan is 
greater than the total amount of their tax cut for the first ten years, 
which was $792 billion. These massive drains on the U.S. Treasury would 
take place at the very time when the baby-boom generation is retiring 
in huge numbers and placing a great strain on the Social Security and 
Medicare trust funds. This tax cut plan, in my view, represents the 
absolute omega of irresponsibility. It passes on to our children and 
grandchildren in the years 2010 through 2019 a $2.9 trillion drain on 
the U.S. Treasury. The Republican tax cut would have us spend $2.9 
trillion over the decade 2010 through 2019 right now, regardless of 
whether that drain makes it impossible for the country to meet its 
Social Security and Medicare obligations for its senior citizens.
  Recently the Washington Post carried a political cartoon by Herblock 
on one of its pages, which I have here on this chart. As one can see, 
at the top of the cartoon appeared these words: ``Back for an 
indefinite run!''
  Let me say that again: ``Back for an indefinite run!'' ``Rosy 
Scenario''--whoopee, we have heard of her, haven't we? ``Rosy 
Scenario--and her long line of stunning surplus sugarplums.''
  The cartoon depicts Rosy--there she is, all ready for the show--in a 
costume with dancing girls and throwing dollar bills in the air. There 
is a song, ``Pennies from Heaven.'' But Mr. President, these are dollar 
bills! Holy Smoke! Rosy Scenario is throwing them all about us. In 
front of the theater in which she is appearing, what do we see? We see 
two eager customers about to buy their tickets for the show. One 
appears to be an elephant; one appears to be a donkey. They are both 
depicted in business attire. The ticket salesman seems to have a 
cynical smirk on his

[[Page 18162]]

face, as though he knows something that the elephant and the donkey, 
who are waiting for their tickets, don't know.
  When I saw this cartoon, it brought back memories about Rosy. She 
first appeared on the scene in 1981 as a major player in the Reagan 
revolution. When President Reagan took office, that so-called 
revolution was based on supply-side economic ideology that called for 
massive tax cuts. That was before more than two-thirds of the Senators 
here today arrived--almost two-thirds, to be exact. Sixty-three 
Senators are here today who were not here when I was majority leader 
the third time, 1987 and 1988. But we are talking about 1981. Even more 
Senators were not here then.
  That so-called revolution was based on supply-side economic ideology 
that called, again, for massive tax cuts, a large buildup in defense 
spending, and balancing the Federal budget; all were going to be done. 
Those were the principal budgetary concepts the Reagan revolution put 
forth.
  There were many skeptics at the time as to whether those policies 
would actually work. I was one of those skeptics. The Senate majority 
leader, Howard Baker, called it a ``riverboat gamble.'' Nevertheless, 
in 1981 Congress did enact a huge tax cut, and it did increase defense 
spending. Entitlement spending also continued to grow. What was the 
result? The result was an era of the largest Federal deficits by far in 
history.
  Furthermore, ``Rosy Scenario'' worked her magic numbers in the budget 
under the direction of President Reagan's chief financial adviser, OMB 
Director David Stockman. As a result of those policies, rather than 
ridding the country of Federal deficits, the country saw for the first 
time in history triple-digit billion dollar deficits in each of Mr. 
Reagan's eight years in office.
  In fact, the national debt stood at $932 billion on January 20, 1981, 
the date President Reagan took office. Unfortunately, on the day that 
President Reagan left office on January 20, 1989, the national debt 
stood at $2,683,000,000,000.
  This chart depicts the major causes of increased Federal debt for 
fiscal years 1981 through 1991. It shows that the 1981 tax cut over 
that 10-year period, cost the Treasury $2.1 trillion. Those tax cuts 
were offset by a series of tax increases that became necessary during 
the Reagan years in an attempt to decrease Federal deficits. Those tax 
increases equaled $800 billion. Entitlement and defense spending each 
grew by $600 billion above inflation over this 10-year period. Interest 
on the climbing national debt increased by $500 billion. The S&L 
bailout cost $200 billion. And, domestic spending was cut over that 10-
year period by $400 billion below inflation. That was a very 
unfortunate and difficult period in our national history.
  The folly of the Reagan Revolution's fiscal policies is set forth in 
great detail in the book entitled, ``The Triumph of Politics'' by David 
Stockman. As I previously pointed out, David Stockman was the principal 
architect of the Reagan budgets until he left the Administration in 
1985. Perhaps the best summary of the conclusions reached by Mr. 
Stockman is found in the epilogue of the book found on pages 378-379.

       The fundamental reality of 1984 was not the advent of a new 
     day, but a lapse into fiscal indiscipline on a scale never 
     before experienced in peacetime. There is no basis in 
     economic history or theory for believing that from this 
     wobbly foundation a lasting era of prosperity can actually 
     emerge.

  Will we never learn!
  Cicero said, ``To be ignorant of what occurred before you were born 
is to remain always a child.'' That is the value of history. That is 
what we are talking about, history, and history is about to repeat 
itself.
  This can be a year of great opportunity for the Nation if Congress 
and the administration can work together on our budget priorities for 
the coming decade. I do not think Congress needs to choose an all-or-
nothing course of action, but we do need to jettison the political 
pandering that is going on. This should not be an ``us versus them'' 
battle; it is not a ``big government versus little people'' battle. So 
what should Congress do? The same as any wise investor would do:
  1, watch our investments carefully and manage them prudently. Manage 
the economy and watch out for inflation; 2, pay our debt. Pay down the 
national debt; 3, cover the necessities. Don't short change our 
Nation's core programs, such as education, health care and the like; 4, 
put aside what we need to put aside for a rainy day. Reserve the Social 
Security and Medicare surpluses exclusively for future costs of those 
programs; 5, take prosperity in measured doses. Ease up on taxes 
without pulling the rug out from under projected surpluses.
  After years of struggling to overcome a sluggish economy and mounting 
deficits, America is well-launched on an economic renaissance. I hope 
we in Congress can rise to the challenge and serve as wise stewards of 
this economic prosperity. I hope we can put aside our political 
posturing and act in the best interests of the American people and the 
American Nation.
  Before the Congress takes this folly of a plunge, perhaps it is a 
good time for a bit of a history lesson. It was more than 50 years ago 
when the Republican-controlled 80th Congress approved a massive $4 
billion tax cut. That was a massive tax cut--$4 billion--in those days. 
President Harry Truman--one of my favorite Presidents--vetoed that tax 
cut, calling the Republicans ``bloodsuckers with offices on Wall 
Street.'' I am quoting Mr. Truman as saying that. It took three times, 
but the Republican majority overturned that veto.
  In his nomination speech before the Democratic National Convention, 
President Truman put forth an idea that we need to recall today. He 
said that ``everybody likes to have low taxes, but we must reduce the 
national debt in times of prosperity. And when tax relief can be given, 
it ought to go to those who need it most and not those who need it 
least, as this Republican rich man's tax bill did.''
  Just as an aside, not only did Mr. Truman upset Mr. Dewey that year, 
but the Democrats regained control of the Congress. The American people 
know when the Congress is dealing with them squarely and wisely. They 
also know when the Congress is playing political games with their 
futures.
  I am reminded, in closing, of the lesson conveyed by Chaucer in ``The 
Pardoner's Tale.'' Three young men, searching to find and destroy 
Death, were directed to a tree under which they found bushels of gold 
coins. They immediately forgot all about their quest to find and murder 
Death, and they set to plotting how to get the gold safely home. They 
decided to wait until darkness fell, and they drew lots to see which of 
the three would be sent into town to buy food and wine for all of them. 
The youngest was chosen. While he was gone, the other two decided to 
kill him upon his return so as to keep more of the gold for themselves. 
In the meanwhile, the youngest, as he went into town, decided to poison 
the other two so as to keep it all for himself. When he returned to the 
tree, the two waiting men pounced upon him and killed him. And then 
they drank the poisoned wine and died.
  Let us heed the warning of ``The Pardoner's Tale'' and not allow the 
glitter of gold to blind us to the common good of the Nation. Congress 
has the ability, the wisdom, and the means to chart a wise budget 
course for our Nation's future. Let us hope that Congress can also 
muster the maturity to put aside election year rhetoric in favor of 
sound fiscal policy.
  Mr. President, I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from 
Nebraska.
  The PRESIDING OFFICER (Mr. Fitzgerald). The Senator from Nebraska is 
recognized.
  Mr. KERREY. Mr. President, I thank the distinguished Senator from 
Delaware, the chairman of the Finance Committee. I rise 
enthusiastically to speak in favor of the legislation that is before 
us, the proposal to give Americans a $790 billion increase in our 
after-tax income. I want to, first of all, address this question about 
the size,

[[Page 18163]]

which is one of the things I hear most about when I go home. Can we 
afford to do it? The distinguished Senator from West Virginia, the 
ranking Democrat on the Appropriations Committee, has just spoken about 
that as well.
  I believe this is a prudent amount. I do not believe this is going to 
undo the great progress we have made beginning way back in 1990 and the 
first balanced budget proposal for which I voted. We had another one in 
1993, and another in 1997. Taken together, they have all contributed to 
the elimination of our deficit and the very strong economic growth 
which we have to be careful not to undo.
  The Congressional Budget Office, though they obviously will from time 
to time make mistakes, forecasts that there will be $3 trillion more 
coming in over the next 10 years than we have in obligated 
expenditures. While I favor significant debt reduction, I think one 
would have to imagine some pretty unusual economic circumstances to 
imagine a downturn in the economy that would eliminate a $3 trillion 
forecast. It is asked: To what level do we have to get? Does it have to 
be $5 trillion before we can give the American people back some of 
their money?
  This, it seems to me, is a reasonable proposal, a moderate proposal. 
One could make a case for an even larger cut in taxes, and the best way 
of illustrating that is if we were to imagine that the budget was 
balanced and CBO said that over the next 10 years we anticipate exactly 
the amount of revenue coming in that is needed to meet the expenditures 
that are forecast, and I walked down here to the floor and offered a 
piece of legislation to increase taxes $2 trillion, I doubt I would get 
a single vote.
  Well, I would actually have to offer a proposal to increase taxes 
$2.1 trillion to find myself in a situation where we are today. We are 
talking about reducing the projected surplus from $2.9 trillion down to 
$2.1 trillion. This is an increase in the after-tax income for the 
American household. I calculate that, in Nebraska, it means about $4 
billion worth of increased income for households that is not taken into 
Washington, DC. That is a significant amount of money.
  Not only is there broad-based tax relief in here with a reduction in 
the rate from 15 to 14 percent, but there are a number of other things 
that will happen that I consider to be good. We have about 130,000 
Nebraskans without health insurance. One of the reasons is that our tax 
policy doesn't favor an individual who makes a purchase of health 
insurance. This proposal will enable many of those 130,000 people to be 
able to afford that because there is an above-the-line deduction in 
this proposal for individuals. There are 400,000 households in Nebraska 
that I estimate will benefit from the savings section in the proposal 
of the distinguished chairman of our committee--people who are trying 
to figure out how do I save for my own retirement. I know Social 
Security doesn't provide me with everything I need. I know I need some 
kind of savings or pension.
  This has significant reform in our pension laws, making it extremely 
likely that people right now who don't have pensions for small 
businesses will have pensions in companies that employ relatively small 
numbers of people.
  So in addition to providing $4 billion worth of additional after-tax 
income to the people of the State of Nebraska, this proposal will also 
help them save for their retirement. It will result in an increasing 
number of Nebraskans who have health insurance, and, in addition, it is 
going to make it easier for working-class families to send their 
children to college.
  There is a deduction here for interest on student loans. One of the 
most alarming things I see today in the State is the amount of debt 
students are acquiring in order to be able to get a college degree. It 
will increase the amount of charitable giving in Nebraska. We have a 
problem with that today. The charitable giving is flat, and we have 
questions being asked about how we can increase that amount. This 
proposal will increase the charitable giving.
  There are 180,000 Nebraskans who will applaud this piece of 
legislation because it eliminates the current tax penalty on them as a 
consequence of their being married.
  This is a good proposal.
  There is a $3 trillion surplus being forecast over the next 10 years.
  This is a moderate proposal. One could have argued for a larger one.
  Not only did the chairman of our committee put together a piece of 
legislation that is moderate in size, but he attempts to, in addition, 
have broad-based tax relief to solve real problems we have in our 
country--that is, individuals who are struggling to plan for their own 
retirement, individuals who are trying to send their children to 
college, individuals who are trying to purchase health insurance, 
organizations throughout our State that are trying to solicit 
charitable contributions, and families who are angry because they pay a 
penalty once they get married.
  This proposal will not result in our undoing the great progress we 
have made since the first piece of legislation dealing with the deficit 
was enacted in 1990, followed with the 1993 effort, and followed by the 
1997 effort.
  This is moderate tax relief. It will be significant for the people of 
the State of Nebraska. It will not bring back inflation that Mr. 
Greenspan talked about because of the way the chairman has drawn the 
bill.
  I have been asked by people: How can you possibly do this? It is not 
even a close call for me. It is not even close.
  I feel extremely enthusiastic about this proposal, about both the 
dollar size and the makeup of the things that are in it.
  I think one of the things that would have made this thing very 
attractive to Senators on this side of the aisle, and I believe many on 
the Republican side as well, is if we could have found a way to include 
an increase in the standard deduction--that is in Senator Moynihan's 
proposal that he will offer later--that would haven taken 3 million 
people in America completely off the tax rolls. It would take 9 million 
people that are currently itemizing deductions and put them in a 
standard deduction category.
  The proposal would have made it even better from the standpoint of 
working families.
  In the small amount of time I have remaining, there are three 
remaining problems this proposal doesn't even pretend to address and 
should attempt to address. I have heard people talk about it a lot.
  No. 1, discretionary spending. This tax cut is not the threat to 
discretionary spending.
  We have tremendous discretionary spending problems right now.
  Everybody knows VA-HUD is in trouble.
  We have significant cuts to veterans that are not what anybody wants.
  We have problems in Labor-HHS as well.
  We know we have problems. There is no tax cut that preceded them. 
What is causing that is the growing cost of mandatory programs that in 
the budget we passed in 1997 says that between now and 2009, 56 percent 
of our budget currently going to mandatory programs will grow to 70 
percent. The discretionary programs will go from 31 percent to 27 
percent, if we are able to reduce the national debt and reduce the net 
interest figure as well.
  That is what is putting pressure on discretionary spending.
  I know it is difficult to face it because it means we have to make 
changes in those mandatory programs to reduce their cost, or you have 
to come to the floor and propose increased taxes to pay for all of the 
things we want to pay for.
  There is a problem with growing mandatory and declining discretionary 
program expenditures.
  Second, there is a problem with Medicare--not just for the need to 
modernize the program, not just the need to provide health insurance 
for prescription benefits, but we should not, with the growing 
economy--4 percent real growth and 3 percent real growth in quarter 
after quarter--we should not with growth in the economy see the number 
of Americans who are uninsured go up.
  There are an estimated 41 million Americans without health insurance,

[[Page 18164]]

and 24 million of them are in the workforce. We tax their wages to pay 
for health insurance for everybody else, but they don't have it.
  That, in my judgment, is the problem with Medicare. It is not just 
Medicare. It is all health care that needs to be fixed.
  Lastly, Social Security. Senator Thompson, I, and others intend to 
offer an amendment at the appropriate time. We know Social Security 
needs to be fixed.
  This is not like youth violence or Medicare or lots of issues that 
are extremely complicated--global climate change and others. This is a 
very straightforward, simple, actuarial problem.
  I am astonished that we are able to survive around here without 
answering the question, What do you think ought to be done? The 150 
million Americans under the age of 45 should not like a delay because 
every year of delay means you have a larger cut in your benefits as a 
consequence. That is the result of not doing anything.
  Our proposal will cut payroll taxes by $1 trillion and increase the 
net worth. It fixes Social Security and increases the net wealth and 
worth of American households by $1.5 trillion over 10 years.
  That is the third remaining problem that needs to be addressed. We do 
not address it by locking the money in a lockbox. That doesn't do 
anything to extend the solvency of Social Security, and I hope during 
the progress of this debate we are able to make that clear to the 
American people.
  I yield the floor.
  Mr. ROTH. Mr. President, I yield 14 minutes to the Senator from 
Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I thank the Chair. I thank the chairman.
  First of all, I want to align myself with the comments of our 
previous speaker, Senator Kerrey. I think he is right on all points.
  I think the question really boils down to a very simple one; that is, 
whether or not with a $3 trillion surplus it is reckless and dangerous 
to give 25 percent back to the people who created it. Or stated another 
way, now that we apparently are going to be in surplus, is this a time 
for a tax cut or a tax increase.
  The President actually over the next 10 years proposes a tax increase 
and $1 trillion more in spending as opposed to the tax cut we have 
proposed.
  So it is really a very basic philosophical difference that we have 
here.
  First of all, I look at the tax burden we have today.
  The reason we have this surplus, of course, is because of 
unprecedented revenues that are flowing into the Federal Treasury.
  The primary reason for that is the unprecedented portion of Federal 
income tax revenues that are flowing into the Treasury.
  The income tax portion of the gross domestic product has now reached 
10 percent, which is an all-time high in the history of the United 
States of America.
  The average two-earner income family is paying 38 percent in taxes.
  Someone reminded me the other day that even the serfs in feudal times 
only had to pay a third to their masters, and these families are paying 
38 percent.
  Tax day now is May 11. We are working for the Government until May 11 
of every year. Tax revenue has doubled just since 1987. We have this 
record level of tax revenues as a share of our gross domestic product.
  What do we do about that? This bill, first of all, is addressed to 
the lower and middle-income taxpayer. It is addressed to the small 
businessperson who is out there working every day to make a living.
  It gives some relief to those who want to save. It gives some relief 
to folks who want to invest. It gives some relief to folks who want to 
marry. And it gives some relief to folks who maybe after paying taxes 
all of their lives, when they die, don't want to have the family farm 
or their business sold just to pay the tax man again.
  It gives some relief to all of those folks. It will not hurt the 
economy, as previous speakers have pointed out. As Chairman Greenspan 
has pointed out, it is phased in. It is only about $38 billion for tax 
relief for the first 2 years.
  The President has more spending in his proposal--over $50 billion 
during the same period of time. If you worried about the stimulus 
effect of the economy, talk to the President. Don't talk to us about 
this bill. It reduces the Federal debt more than the President's 
proposal does.
  But in response to this kind of tax burden, and in response to this 
reasonable--as Senator Kerrey said ``no brainer,'' really not even a 
close call--response to a situation like that where we have this 
unprecedented situation, we have seen an unprecedented amount of 
inside-the-beltway hyperventilation.
  The President, the Vice President, and members of the White House 
have taken to the airwaves wringing their hands, and a different part 
of the sky has fallen every day. We are going to pollute the streams, 
our kids are not going to be educated, our military is going to go in 
disrepair, and the Republicans are not looking out for the military 
anymore. And, that old reliable standby, ``We are going to harm Social 
Security and Medicare if we have tax cuts.'' It is called 
``dangerous''--a ``dangerous tax cut.''
  I think that assumes a level of ignorance among the American people 
that does not exist. I don't have time to talk about all of the 
accusations and charges and points that have been made to do anything 
but have tax relief this year. I will discuss one or two in the limited 
amount of time we have. Perhaps we can address the others later.
  With regard to Social Security and Medicare, of course we all know it 
is a problem. Senator Kerrey pointed out the nature of the problem a 
minute ago again. It is not as if we don't understand the problem. It 
is not as if we will not have to face up to it. The question is when.
  We have a demographic time bomb on our hands that will affect Social 
Security and Medicare. We are an aging society. Some people say that is 
not a bad problem, that we are living longer. That is right. However, 
we have to make some changes precisely because of that if we are not 
going to ruin our kids and grandkids.
  In the year 2030, we will have twice as many people over the age of 
65 as we have today. Currently, we have almost four workers for every 
retiree; in 2030 we will have two workers for every retiree. After the 
baby boomer generation we will have a smaller population, and a smaller 
and smaller workforce, with a doubling of the people drawing out these 
funds. It will not work.
  We have made some progress, at least in advancing the debate on these 
issues on a bipartisan basis. It is the first time I have seen issues 
of this magnitude and of this importance seriously addressed on a 
bipartisan basis. It is very encouraging.
  We had a Medicare commission with Democrats and Republicans, chaired 
by Senator Breaux, that addressed this Medicare problem in a serious 
fashion. The President's response to that was to scuttle the majority 
will of that Medicare commission trying to make fundamental reforms 
because they told us something we already knew; that is, we can't just 
keep pouring money into a broken, worn out, outdated system.
  I think as Senator Breaux once said: You put gasoline into an old, 
beat up, worn out car and it is still going to be an old, broken down, 
beat up old car. Instead of pouring more money on top of the system, we 
need fundamental reform. We tried to do that. The President's response 
was to scuttle it.
  On Social Security, we had bipartisan bills in the Senate, with 
Democrats and Republicans working together for serious Social Security 
reform biting the bullet. It is not the easiest thing politically to do 
but somebody has to do it. The Democrats and Republicans together are 
doing it.
  The President was looked upon to have a little leadership. Perhaps in 
these last couple of years he will want to exert some leadership when 
he is not having to run for reelection. His response was not to show 
leadership, but to back away from serious reform, saying he will put 
$100 million worth of

[[Page 18165]]

IOUs into the Social Security trust fund which does nothing to save 
Social Security, and represents nothing more than a tremendous tax 
burden down the line when those treasuries are redeemed by our kids and 
grandkids.
  While they are saying you can't have a tax cut, you can't have a tax 
cut, we have to save all this money for Social Security and Medicare, 
at the same time they are doing everything in the world over at the 
White House to prevent any real reform for Social Security and 
Medicare.
  What about the question should we be saving all of the surplus for 
Social Security and Medicare and others? The short answer is we are 
taking 75 percent of these surplus dollars and devoting it to those 
very areas by means of a lockbox, by means of setting aside Social 
Security, Medicare, other spending priorities. Mr. President, 75 
percent goes to those things.
  I think the more important point we will hear time and time again is 
the President and Vice President on the airwaves hoping people will 
believe we are doing something bad to Social Security and Medicare if 
we pass a tax cut. The primary point is that these surpluses we are 
talking about are pretty much irrelevant to Social Security and 
Medicare. As the Comptroller General pointed out, if we put every penny 
in savings, if we put every penny of surplus into Social Security and 
Medicare, it would do nothing to change or rectify the fundamental 
inherent problems we face with those two programs.
  I think we can cite the Comptroller, as well as GAO, in saying the 
President's proposal actually makes the Social Security and Medicare 
situation worse by pouring additional water into a leaky bucket with 
the hole in the bottom getting bigger and bigger and bigger, and all 
the time having to pour more and more water on top. What we are doing 
is buying a little time from the day of reckoning and convincing people 
in the short run all they have to do is concentrate on the short run. 
Don't think about down the road. Don't think about your kids or 
grandkids. We will not address serious reform but we will start dipping 
into general revenues instead of having some control with dedicated tax 
dollars, FICA tax money, dedicated to these particular programs. Then 
we can keep up with it and see how we are doing, know when we are in 
trouble. Forget that. We dip into general revenues. We have an extra 
amount and we will dip into general revenues without any control, 
without any way to tell how we are doing.
  That is totally, totally irresponsible. Yet after doing everything 
they can to undermine the Social Security and Medicare long-term 
problem solution the Democrats and Republicans have been trying to work 
on, after doing everything they can to work against that, they, in 
turn, use that as a shield to say: Because we are not willing to 
address that, you have to go along with us and spend an extra $1 
trillion to temporarily buy a few more years. Then they hope somebody 
will come down the road later on with more political courage to address 
the problem.
  I think that is outrageous. Tax cuts have nothing to do with that 
problem. We set aside 75 percent of the surplus for those matters to 
start with, but tax cuts have nothing to do with the fundamental 
problem we are facing.
  The only reason I can see for this kind of overreaction to a tax cut 
with these unprecedented surpluses is that the administration feels 
like a person who has been wronged, an injustice has been done to them, 
on the premise that it is the Government's money to start with and 
somebody has improperly tried to take that money away from them.
  For some folks, there will never be a good time for a tax cut. Over 
the last few years, the President recommended three tax increases in 
times of deficits. Now we have a time of surpluses and his response is 
more tax increases. I think it is a debate not just over tax dollars; 
it is a debate over power. The folks in Washington don't want to give 
up power. It is a question of who is going to make decisions with 
regard to people's lives. Will Washington collect money and dole it out 
as we see fit? Or are we going to leave it in the taxpayers' hands, at 
least 25 percent of the amount of money about which we are talking?
  It is not this tax cut that is dangerous. What is dangerous is a 
government that can never, ever go but in one direction: eating a 
bigger and bigger percentage of what we produce in this country. What 
is dangerous is an administration that will use this kind of debate to 
mask over the fact it is not willing to face up to timely problems. 
That is what is dangerous. I think the American people see that.
  I think the American people support this bill. I support this bill 
and urge its passage.
  The PRESIDING OFFICER. The time of the Senator has expired. Who 
yields time?
  Mr. BAUCUS. Mr. President, how much time is remaining?
  The PRESIDING OFFICER. The Senator has 16 minutes.
  Mr. BAUCUS. I yield all 16 minutes to the Senator from West Virginia, 
Senator Rockefeller.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. ROCKEFELLER. Mr. President, I am here in the hopes of convincing 
my colleagues to oppose the $792 billion tax cut, which is based on a 
premise of a projected surplus of $996 billion. We have just heard a 
speech which basically attacked everything President Clinton has done 
and stayed away from the tax cut debate itself, and that is shaping up 
as somewhat of a pattern.
  I am also here in the hopes of convincing my colleagues that the only 
prudent fiscal course, the only way you can strike a blow for our 
constituents and for our country and for our place in this world, is by 
taking advantage of this, what I consider to be almost certainly a 
once-in-a-lifetime chance to take the projected surplus and use 
whatever actually accrues from that to pay down the national debt.
  It is very odd to me that the Republican Party and Democratic Party 
almost seem to have switched. The Democratic Party appears to be the 
party of fiscal responsibility. The Republican Party wants to be the 
party of political expediency. That is a political statement on my 
part. I apologize for that, but I have to make note of my understanding 
of what has happened in the last several years.
  I think we should take this money to take down the debt. I think we 
should use it to save for Medicare and Social Security's future. I 
think we should position ourselves to be able, as Alan Greenspan has 
suggested, if we see the surplus coming in the future years in the way 
that we want, to then do a meaningful tax cut--once we have put our 
fiscal house in order. Remember all the talk about getting our fiscal 
house in order? That is all we talked about in 1990, 1991, 1992, 1993. 
That was the talk--most of it from the other side.
  We are almost there. Now we have come to the point where we can 
actually get over the hump, position America well for the future, and 
my colleagues, at least some of them, want to blow all of this 
investment of effort and discipline we have made with a huge tax cut 
spending spree which the American people are not asking for, nor is 
American business asking for.
  First and foremost, let's recognize the $996 billion surplus only 
exists--and I hope my colleagues will pay attention to this--only 
exists if you assume that Congress will cut $775 billion in real 
dollars over the next 10 years from programs that the American people 
want and need.
  Does that mean we are adding on new programs? No. That is programs 
that already exist, that are already under the budget caps and already 
below expenditure levels of where they ought to be. So that surplus 
exists only if we cut an additional $775 billion from programs, which I 
will discuss in a minute.
  That $775 billion in cuts is itself almost equal to the size of the 
Republican-proposed tax cut. That should tell you something about the 
tradeoff here, whether the tax cut numbers really add up. Deep, deep 
cuts would be required in seniors programs, education, transportation, 
veterans--just about every area of the Government--an average of over 
30 percent if we are to enact a $792

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billion tax cut the American people are not asking for.
  By deep cuts I mean the kinds of cuts in programs that provide health 
care to veterans. People talk about veterans and then run away from 
their obligations to them. Or child nutrition--we all talk about 
children. They will have to be cut by more than 40 percent in real 
terms if the Republican tax cut is enacted. This assumption is 
ludicrous. It is ludicrous. It is a sham that a massive tax cut of 
either $792 billion or, the so-called more moderate approach, the $500 
billion--they are both shams. They both have the same results. They 
both cause us to reverse course on fiscal discipline and 
responsibility, not just to the American people today but to future 
generations.
  We should all have the courage to admit that now, before the Senate 
makes a mistake of historic proportions, we are subsuming our 
responsibility to the social fabric of America as we cast our votes. 
That kind of debilitating discretionary cuts cannot happen in an 
integrated and united America. The American people will not stand for 
it. I believe the projected $996 billion will not materialize. That is 
my personal view. I do not believe it will happen. But the tax cuts 
will kick in and they will be there. I believe once again we will get 
into the situation of spiraling deficits that we have tried so hard--
going back to the structural impediment talks with Japan, and then the 
discipline the folks on this side of the aisle exercised in 1993--that 
all of us have tried to exercise.
  Fiscal responsibility--corporate America has done it. Now Government 
is in the process of doing it. We have eliminated the deficits. We have 
a chance to eliminate the debt, something that has never even been 
contemplated before. Now we are going to blow it on a Republican tax 
cut which the people do not ask for.
  Well-respected economists estimate that there would be probably 
cumulative deficits of maybe $821 billion in the non-Social Security 
budget over the next 10 years if the Senate Finance Committee's tax 
packets were enacted. It is a lot less than what is projected. That 
should be reason enough to rethink a vote for this tax cut package, or 
any tax cut package of such gigantic proportions.
  Let me take a minute or two to outline what I think would happen to 
our economy if a massive tax cut were enacted. Let us consider what 
would happen if we actually voted to reduce taxes by $792 billion. 
Forget the inequity of distribution. I can go into that, but I will not 
now. Forget the cruel, gross, greedy inequity of that distribution of 
taxes.
  No. 1, if you vote for a $500 billion or $792 billion tax cut, which 
would undoubtedly further stimulate spending, it is inconceivable to me 
or any rational person in this Chamber that the Federal Reserve would 
do anything other than raise interest rates. I listened to Alan 
Greenspan this morning as Republicans tried to pin him into corners, 
yet he kept coming back to the point that this is not the time to do 
it. Do not do it now. There will be consequences if you do it now. Do 
not make the tax cuts now. This is not the time.
  The Chairman of the Federal Reserve, Alan Greenspan, clearly says 
that. It is not the time for massive tax cuts. If you credit him, as I 
think most of us do, with being a part, along with the fundamental 
force of the private sector, of our booming economy, then you should 
consider what he has to say. One listens closely to every word he has 
to say because he has not missed one yet. Greenspan said just this 
week:

       The first priority in my judgment should be getting the 
     debt down, letting the surpluses run, and to, as has been 
     suggested here--[I am quoting Greenspan; this is all him]--
     put in contingency plans so that in the event that all of 
     this is happening, you could move forward later, at a later 
     date, with tax cuts.

  No. 2, let's examine what an increase of tax reductions would do, 
let's say, with a 1-percent increase in the interest rates by the 
Federal Reserve. In West Virginia it would mean the average home 
mortgage holder with an adjustable rate mortgage of $60,000 would pay 
$456 more every year for that mortgage.
  The average student loan payment, based upon $11,800 owed, which is 
typical, would cost the average student $70 more a year. Add those up, 
and an average person in West Virginia will have to pay $615 more per 
year in increased costs due to higher interest rates.
  I encourage any Member to do the math for the people they represent. 
That is the increase they will have to pay. Then you say: But there is 
a tax reduction out there in the land. In West Virginia, the Republican 
tax rate reduction proposal will give the average West Virginia family 
a tax cut of approximately $118 per year versus the $615 more they will 
have to pay just on college, car, and home.
  That is a tax cut? If they have to pay more money, that is not a tax 
cut. But you say: We have the proposed marriage penalty relief. Maybe 
that is 100 bucks. Maybe that is a little bit more than 100 bucks, but 
still that is an enormous tax increase on the burden of average 
families in West Virginia. I am taking the average family median income 
of $30,500.
  As far as I figure, it does not add up to the cost of what they will 
have to pay in higher interest rates that are sure to accompany a huge 
tax cut.
  Moreover, many of the people we represent benefit from the programs 
that will have to be cut. I go back to the 40-percent cut in programs 
that are now in effect and helping people; not new programs, not new 
spending, but programs in effect and already underfunded and staying 
that way through the year 2002. Families with children in Head Start 
programs will have significant cuts. We all benefit from a range of 
basic Government services. The air transportation system is grossly 
underfunded. We all benefit from that. Not all of us, but more and more 
of the American people are flying.
  We benefit from what goes on at NIH in biomedical research. Cures for 
cancer, Alzheimer's, Parkinson's, and many other things are on their 
way. Or the assistance that is provided directly to the States--all of 
these things will be cut under the Republican tax plan. Not just cut, 
they have already cut, but they will be cut much more.
  The NIH increase this year is minute. It will go down substantially. 
Do people really want to do this? Are my colleagues truly willing to 
sacrifice those benefits for the American people for a tax cut that 
disproportionately benefits those who are doing best in our country 
already?
  Three, the Treasury Department just provided us with an analysis of 
who benefits from the Republican tax cut when it is fully phased in. I 
point out on the marriage penalty tax cut, there will be no relief for 
any West Virginians or anybody from any of our States for the first 5 
years because it does not kick in. All we do in West Virginia is pay 
more taxes under a Republican tax cut because of what it inevitably 
does through the Federal Reserve System.
  If my colleagues vote for the Republican tax cut, if they are of such 
a mind to vote for the Republican tax cut, please understand that 
Americans in the highest income brackets will get 67 percent of the 
benefit of this bill. Can anyone call that a middle-income tax cut with 
a straight face? If one divides up the quintiles--America divided into 
five different income categories--it is gross, it is embarrassing to 
see what happens in the distributional tables of who benefits from the 
Republican tax cut.
  How much is there for those in the lower brackets doing the best they 
can? Very little. In fact, for those in the lowest quintile, which is, 
in fact, close to 23 million families, they get less than one-half of 1 
percent of this generous Republican tax cut bill.
  I suggest my colleagues should be able to answer these questions to 
themselves before they have to answer them to their constituents.
  Equally shocking is the fact that more than 45 million families in 
the lowest brackets get a tiny percentage from this bill. The 23 
million American families right in the middle get only 10 percent of 
the $792 billion Republican proposal. That means, again, that three-
fifths, or a little bit more, get only 15.5 percent of the total 
benefits

[[Page 18167]]

in this bill. This is wrong; this is dangerous tax policy. Frankly, it 
is dangerous social policy which will reverberate upon those who vote 
for it.
  Fourth, the Republican tax cut will increase mandatory interest 
payments on the debt by $141 billion over the next ten years. Mandatory 
interest payments on the debt are already at about $227 billion. 
Doesn't that tell you in fairly clear and simple terms why we need to, 
in fact, pay down the debt to get rid of that obligation, to free up 
for the capital market this money which is now crowding out private 
sector investments.
  Five, if we spend every dime and more of our available assets in the 
form of yet unknown surpluses before we preserve Medicare and Social 
Security for the future, there will be no additional resources left to 
strengthen those programs that we know the American people do want, do 
ask for, do insist on, and do look to us to provide.
  Medicare is desperately in need of modernization. It is desperately 
in need of universal outpatient prescription benefits. Social Security 
needs to meet the needs of the baby boom generation. People on the 
other side and some on our side talk about we in Washington trying to 
decide what is good for the people as opposed to the people know what 
is good for the people. The people out there know. Those whom I 
represent and my colleagues represent know they are not in it for 
themselves. They are in it for their children and their grandchildren. 
It is not just what they think might be best for them. They are 
thinking, yes, what might be good for them, but what is good for their 
children and grandchildren. That is the way Americans are. That is the 
way we have always been.
  Six, and finally, for your consideration: If my colleagues cast their 
vote for a $792 billion tax cut predicated on those deep spending cuts, 
how will my colleagues be viewed in their States?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. MOYNIHAN. Mr. President, I yield 5 minutes off the bill to the 
Senator from West Virginia.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. ROCKEFELLER. I thank my Democratic chairman of the Senate Finance 
Committee.
  If my colleagues vote for this bill, will they be viewed as a leader? 
Will they be seen as somebody who is thinking for the long-term good? 
That is what people want. That is what people yearn for, is leadership. 
Or will they be looked at as somebody who took the easy course of 
voting to ``return tax dollars,'' or some part of them? Or will they be 
viewed as somebody who signed up to an economic plan that will limit 
our ability to protect Medicare and Social Security? My people point 
that out. Even if they do not know it, even if they are not sure of it, 
in their own minds, wouldn't they question whether or not you are 
exercising leadership responsibilities or political imperatives?
  When will these devastating cuts in the important domestic programs 
affect your constituents? Imagine--how would my colleagues respond to 
that? What would my colleagues say to them? How would they view you 
when they discover that these things happened and they happened because 
of a $792 billion vote that you made? What would you hear from your 
constituents if you agreed to $775 billion in very important 
discretionary cuts on programs people care about? These are not new 
programs but programs already reduced, programs to be further 
diminished by $775 billion. How would they view you then? Would they 
view you as a leader or as a follower of public opinion that did not 
exist in that regard?
  Here is one example which is shocking to me, I say to the senior 
Senator from New York. The House is now considering reclaiming $6 
billion from the welfare reform money from the States--from the States, 
not even from us, but from the States--to make up their shortfall on 
the Labor-HHS budget. It is kind of ``reverse Robin Hood''--stealing 
from the poor to make sure we can provide tax breaks for the wealthiest 
of Americans.
  I conclude my remarks simply by urging my colleagues, in the most 
sincere and intense terms, in one of the most important debates--the 
most important debate I have been associated with in the 15 years I 
have been in the Senate--to weigh these considerations against the 
possibility that exists for this country and for our people if we 
actually pay down the national debt--to accomplish the impossible--to 
eliminate the budget deficit, to eliminate the national debt, and then 
to contemplate what kind of country this could be for all of our 
citizens.
  I thank the senior Senator from New York, and I thank our colleagues 
and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. I yield 19 minutes to the distinguished Senator from Texas.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, I thank the chairman of the committee for 
yielding me so much time and for letting me speak last on our side as 
we begin the amendment process.
  We have heard some awfully strong language here. Our colleague from 
West Virginia begs us not to give Americans back some of this money 
that we have taken from them in taxes.
  We are projecting a $3 trillion surplus over the next 10 years. 
Nobody disputes that. We have before us a bill that would give about 25 
cents out of every dollar of the projected surplus back to taxpayers. 
Our Democrat colleagues say: Please, don't do that. Our President is 
quoted in AP on July 25 as saying that our effort to give 25 cents out 
of every dollar of projected surplus over the next 10 years back to 
working people in tax cuts ``will imperil the future stability of the 
country.'' In fact, yesterday the President said it would hurt women's 
health care. Perhaps today it will be that it will bring back the 
bubonic plague.
  But it is clear that the President is against giving back 25 cents 
out of every dollar of surplus--out of every dollar we are taking in 
above what the Government needs. He thinks giving back 25 cents out of 
every dollar is too much.
  Our Vice President says that the tax cut before us is a ``huge, 
gigantic, risky tax scheme.''
  This is very extreme language we are hearing. Let me try to explain 
why it is so shrill. It is shrill for two reasons, really.
  No. 1, giving people back their money so they can spend it themselves 
rather than Government spending it for them hardly seems extreme to the 
American people. With the projected surplus of $3 trillion, giving 
about one-fourth of it back in tax cuts hardly seems extreme.
  But the other reason the President and his supporters are so shrill 
is, the President is not telling the truth. Let me explain why.
  I have a chart here that has the cover page and one page of text of 
the analysis of what is called the Mid-Session Review. This is an 
analysis by the nonpartisan Congressional Budget Office that was just 
completed of the President's budget; that is, what he proposes we do 
with the surplus, what the budget adopted by the Congress proposes we 
do with the surplus; and then it compares the two. The important point 
being, this is not me talking, this is not Bill Clinton talking, this 
is the nonpartisan Congressional Budget Office talking.
  To listen to the President and to listen to our Democrat colleagues, 
you get the idea that this is a debate between cutting taxes and paying 
down debt. The problem is, that is not what the debate is about. This 
White House has turned misinformation into an art form. Here is the 
living proof of it.
  In the analysis of the Mid-Session Review that was just published by 
the Congressional Budget Office, the Congressional Budget Office 
basically has two findings. One, while the President had initially 
proposed spending some of the Social Security surplus, we have so 
shamed the administration that they now have agreed with us that the 
roughly $2 trillion of surplus caused by Social Security should be set 
aside to either pay down debt or to fix Social Security.
  It is interesting that we have voted many times on a lockbox 
procedure to

[[Page 18168]]

require that that money not be spent, and we have been unable to get 
the support of the minority in making that the law of the land. But 
that is something that at least to this point we have agreed on.
  Where the disagreement is--and the Congressional Budget Office shows 
it very clearly--is, what do you do with the non-Social Security 
surplus? Basically, what the Congressional Budget Office finds, that 
the administration desperately does not want anybody to know, is that 
their answer is, spend it. They are not paying down any debt with the 
nondefense discretionary surplus. In fact, over a 10-year period they 
spend every penny of it. And they spend so much money in their budget 
that in 3 of the years they have to plunder the Social Security trust 
fund, basically, in contrast to what they have committed to do.
  In fact, the Congressional Budget Office concludes, in looking at 
their own budget--and, again, this is the nonpartisan CBO--that in 
total, the President, over the next 10 years, would spend $1.033 
trillion of the non-Social Security surplus, which is a little more 
than the entire surplus.
  So when our colleagues are saying, don't give money back to 
taxpayers, pay down the debt, they are not talking about their program. 
The problem is, and the frustration is, if the President stood up and 
told the truth and said, don't give this money back to families, let me 
spend it, don't give this money back to working couples because they 
can't do as good a job spending it as the Federal Government could, 
then we could have a meaningful debate. But it is hard to have a 
meaningful debate because the administration basically is engaged in a 
concerted effort to mislead people.
  But numbers and facts are persistent things. The Congressional Budget 
Office concludes two things about the Clinton budget that are 
devastating. No. 1, it would spend an additional $1.033 trillion more 
than the budget we have adopted and the spending caps to which the 
President is committed.
  Secondly, and equally devastating, despite all this talk about buying 
down debt, with Chairman Roth's tax cut, the budget adopted by 
Congress, which includes this tax cut, still pays down the Federal debt 
$219 billion more than the President's budget. Why? Because Senator 
Roth's tax cut gives $792 billion back to working families. The 
President's budget spends $1.033 trillion. As a result, even after the 
tax cut, the Republican budget reduces debt held by the public by $219 
billion more than the President's budget.
  So his rhetoric is great. His sound bites are flawless. But the point 
is, he is not telling the truth. The reality is, the President proposes 
to spend every penny of the discretionary surplus on Government 
programs and plunders Social Security for additional money in 3 out of 
the next 10 years.
  So the debate is not between reducing debt and cutting taxes. The 
debate is between letting Government spend the money or letting the 
taxpayer spend the taxpayer's own money.
  But in addition to that, the tax cut that is being called ``huge,'' 
``vulgar,'' ``dangerous,'' by President Clinton and his supporters is 
actually substantially smaller than the massive spending spree the 
President would take us on with 81 programs.
  I ask you, how can it be more dangerous to start to cut taxes by $792 
billion with a trillion-dollar surplus than it is to fund 81 programs 
and spend $1.033 trillion? Obviously, no one can argue that it is even 
equally dangerous. So what does the President do? He basically does not 
tell the truth.
  Point No. 2, let's talk about: Why a tax cut now?
  This chart really shows the highest 7 years in American history, in 
terms of the tax burden on working American families. The highest tax 
burden in American history by the Federal Government was in 1945 when 
Harry Truman was President. By the way, 38 cents out of every dollar 
earned in America is what we were spending on defense in 1945. That was 
the highest tax burden in American history.
  The second highest tax burden in American history is today. Under 
President Clinton, in the year 2000--which is the budget year we are 
considering--the Federal Government will take 20.6 cents out of every 
dollar earned by every American. That is the second highest Federal tax 
burden in American history.
  The third highest is under President Clinton in 1999.
  The fourth highest was under President Clinton in 1998.
  The fifth highest was under Franklin D. Roosevelt in 1944, when 
defense was 37 percent of the economy.
  The sixth highest was under Bill Clinton in 1997. Hence, why we have 
on this chart ``Cause of Record Taxes: War and Clinton.''
  The seventh highest tax burden in American history was the day Ronald 
Reagan became President. What did we promptly do? We cut taxes by 25 
percent. So we have never had, except under President Clinton, tax 
levels approaching the level we have today.
  Now, in terms of this ``dangerous'' tax cut, this is probably the 
most telling chart of all. The day Bill Clinton became President, the 
Federal Government was taking 17.8 cents out of every dollar earned by 
every American in Federal taxes. Today, we are near an all-time record 
of 20.6 cents out of every dollar earned by every American. Hence, 
since Bill Clinton has been President, with the 1993 tax increase as 
people have moved into higher tax brackets, the tax take on the 
American people has grown from 17.8 to 20.6 percent.
  Now, if we took every penny of the non-Social Security surplus, which 
is $1 trillion, under current services, actually, bigger if you take a 
spending freeze, but if we took every penny of that, and we are not 
proposing that here--we are talking about $792 billion, not over $1 
trillion--but if we took the entire trillion and gave it back in tax 
cuts, 10 years from now, when that tax cut is fully implemented, taxes 
would still be 18.8 percent of the economy, and taxes would still be 
substantially above where they were the day Bill Clinton became 
President.
  So when he is calling this tax cut ``dangerous and huge,'' it is a 
tax cut that would not get us back, in terms of tax burden, to where we 
were the day Bill Clinton became President. It would still mean the tax 
burden during the Clinton administration, even with this tax cut, would 
have grown by more than in any modern Presidency.
  Let me address the idea that this is a huge, dangerous tax cut. It is 
very interesting how people make up these things and nobody goes and 
looks it up. But let me give you some figures.
  We are projecting next year, the first year of this tax cut, that 
revenues are going to be $1.9 trillion. We are going to collect that 
much in taxes. This tax cut next year is a whopping $4 billion. So out 
of $1.905 trillion of taxes we are going to collect, this would give $4 
billion back. That is .21 percent. Now, that is the ``huge, dangerous'' 
tax cut about which we are talking. It is implemented over a 10-year 
period. But over that entire period, what is being called a 
``dangerous'' tax cut would reduce taxes on the American people by 3.48 
percent. So it is less than a 3.5-percent reduction in taxes, far less 
than President Clinton would increase government spending, I remind my 
colleagues, and somehow that is ``dangerous.''
  Well, it is dangerous if you are Bill Clinton, because if we give 
this money back to the American people, he can't spend it. There are 81 
programs he would like to have that he won't get. What the President 
should be asking, rather than misleading people, is: Here are my 81 
programs. This is what I am going to do for you. I love you and this is 
what we are going to do for you. And we ought to be forced to say: We 
are going to give you this tax cut, and we are going to let you decide 
how to spend it.
  The people could look at the President's 81 programs and look at our 
tax cut and they can say, ``I would rather President Clinton do it,'' 
or ``I would rather do it myself.'' That is the legitimate debate we 
ought to be having. But we are not having it because the White House 
continues to mislead the American public.
  Let me make a few other points. Our colleagues keep talking about tax 
cuts

[[Page 18169]]

for the rich. I have noticed there is a code here: Any tax cut is for 
the rich. Any tax increase is a tax on the rich.
  So when the Democrats pushed through the largest tax increase in 
American history when they last had a majority, in 1993, that was a tax 
on the rich. Remember? Well, it raised taxes on gasoline for everybody. 
Do only rich people drive cars and trucks? I don't think so. It defined 
as ``rich'' anybody who made $25,000 a year or more because that is the 
tax it put on Social Security. Now, I don't know about some of the 
States that people may represent, but where I am from, $25,000 a year 
is not rich. But to our Democrat colleagues, obviously, since the 
Clinton tax increase was a tax on the rich, $25,000 in income made you 
rich.
  According to them, our tax cut is for rich people. They get very 
excited about the fact that they have discovered when you cut taxes, 
people who don't pay income taxes don't get tax cuts. In fact, they 
will point out, I am sure a hundred times here, that 32 percent of 
American families pay no income taxes, which I personally think is an 
outrage. I think everybody ought to pay something. But 32 percent of 
American families pay no income taxes, and their obvious question is: 
Well, under your tax cut, 32 percent of families don't get a tax cut; 
how can that be fair?
  Let me explain why it is fair. These taxpayers don't get food stamps, 
the great majority of them. They don't get Medicaid. And unless they 
are elderly, they don't get Medicare. They don't qualify for those 
programs. Our point is that tax cuts are for taxpayers. When we are 
cutting taxes, if you don't pay income taxes, you should not expect to 
get a tax cut.
  Some of our colleagues would like you to believe the Roth package 
benefits the rich relative to the poor. Well, the plain truth is that 
the Roth package makes the tax system more progressive, not less 
progressive. Now, it is true that when you cut taxes, people who pay 
taxes get to keep more; people who don't pay taxes don't get a tax cut. 
But our colleagues have basically discovered that, over the years, we 
have made the tax code more and more and more progressive. In fact, 
today, the top 50 percent of income earners in America pay 99 percent 
of the income taxes. So is anybody surprised that, when the top 50 
percent pay 99 percent of the income taxes, that when you cut income 
taxes, the top 50 percent tend to get more tax cuts? In fact, our 
colleagues like to rant and rave about across-the-board tax cuts by 
saying, well, a 10-percent tax cut means that Senator Rockefeller, who 
pays at least 10 times as much in taxes as I do, would get 10 times as 
big a tax cut.
  I am not offended by that. If he pays 10 times as much, and we have 
an across-the-board cut, he would get 10 times as big a tax cut.
  Let me run over these figures real quickly so people understand.
  The top 1 percent of income earners in America earn 16 percent of all 
the income earned, but they pay 32.3 percent of all the taxes.
  The top 5 percent earn 30.4 percent of all the income earned, but 
they pay 50.8 percent of the taxes.
  The top 10 percent earn 41.6 percent of the income earned, but they 
pay 62.4 percent of the taxes.
  Should anybody be shocked when you cut taxes, when the upper 50 
percent of American income earners pay 99 percent of the taxes, and 
they are going to get most of the tax cut?
  Only our Democrat colleagues and the President would be outraged 
about that. Our view is that tax cuts are for taxpayers.
  Who is rich? I decided to look at this top 50 percent of income 
earners and basically ask: Who are these rich people who the Democrats 
think should not get a tax cut?
  Let me go down who they are.
  They are the 50 percent of people who pay roughly 99 percent of the 
income taxes.
  They are 62 percent of all homeowners in America. They are 66 percent 
of all people between the age of 45 and 64. They are 67 percent of all 
full-time workers in America. They are 68 percent of all workers who 
went to college. They are 69 percent of all married couples. And they 
are 80 percent of all two-earner households in America.
  These are the people who the Democrats tell us are unworthy and 
should get no tax cut--that these are rich people and they deserve no 
tax cut. They pay 99 percent of the income taxes, but they deserve no 
tax cut.
  Let me tell you what the code is. The Democrats are always for a tax 
increase, and the tax increase, no matter who it is imposed on, is 
always a tax on the rich. They are always against the tax cut, and the 
tax cut always goes to the rich, and that is basically the code.
  When you break through the code, the code is they are for tax 
increases. They are not for tax cuts because they believe the 
Government can do a better job of spending your money than you can.
  The final two points: We often hear from our colleagues that this is 
the worst tax cut since the Reagan tax cut of 1981. This is the worst 
tax since the Reagan tax cut. Do we want to do it again?
  Let me remind my colleagues the day Ronald Reagan became President, 
an average family in America making $50,000 a year was paying $12,626 
in Federal income taxes. They were paying 25 cents out of every dollar 
they earned. Thanks to Ronald Reagan, today they are paying $6,242, or 
12.5 percent.
  The Democrats think that was terrible. This is the worst tax cut 
since Ronald Reagan. They must have liked the tax burden under Jimmy 
Carter. They must have liked the 21-percent interest rates under Jimmy 
Carter. They must have liked the 13 percent inflation rate under Jimmy 
Carter. But we had sense enough to end that policy and let working 
people keep more of what they earn.
  Final point: Alan Greenspan's statements have become similar to the 
Bible--nobody reads them very closely, and everybody quotes them. They 
quote him on both sides of the argument.
  I would like to let him speak for himself. I would like to do it in 
the context of what the President has proposed.
  Alan Greenspan said:

       If you find that as a consequence of those surpluses they 
     tend to be spent, then I would be more in the camp of cutting 
     taxes, because the least desirable is using those surpluses 
     for expanding outlays.

  When the President is proposing increasing spending by $1 trillion 
over the next 10 years, don't we find ourselves in a position where the 
surplus is being spent?
  The answer is obviously, yes. It is being spent just as fast as it 
can be spent.
  Then Alan Greenspan is in favor of giving part of it back--in this 
case a very conservative amount, 25 cents out of every dollar we have 
in surplus.
  I think we should do it. I think it is the responsible thing to do. I 
believe we will do it.
  If this is taking us back to the terrible days of lowering the tax 
burden, I am ready to go back.
  Mrs. MURRAY. Mr. President, I rise today to express my concerns about 
the tax plan proposed by my Republican colleagues.
  When I first came to the Senate in 1993, there were projected 
deficits as far as the eye could see. The United States had not seen a 
budget surplus in a quarter century. The American people were demanding 
change after more than a decade of Republicans in the White House, and 
Republicans in control of this body from 1980 to 1986. We knew we had 
to make some unpopular decisions to put our fiscal house in order. And 
working with the Clinton administration, the 103rd Congress made those 
tough decisions.
  We reduced the tax burden for the middle class and we restored some 
degree of tax fairness to our system. We put the Federal Government on 
the road of less spending, while maintaining commitments to core 
priorities. Some of my colleagues were defeated in 1994 because they 
did the right thing for the future of America.
  In 1997, Congress and the administration reached a bipartisan 
agreement to balance the budget and provide responsible tax relief to 
the American people. At that time, we had no idea we would achieve an 
on-budget surplus so quickly. Wise fiscal and monetary policies

[[Page 18170]]

and a strong economy have provided a projected surplus that gives us 
hope we can solve some of the biggest challenges of our time. It is an 
exciting time to be in the Congress.
  But in our excitement about the projected surplus, I am afraid we are 
acting in haste. And in doing so, we could undermine the hard work we 
have done to get to this point.
  Let me be clear: I support responsible tax relief for the American 
people.
  I support further reform of our nation's estate tax laws so that the 
small timberland owner in Mason County, Washington, and the small 
business owner who sells farm equipment in Moses Lake, Washington, can 
pass their land and livelihoods on to the next generation.
  I support deductibility of health insurance costs so the self-
employed owner of a technology start-up company in Seattle can afford 
health care.
  I support reducing the so-called ``marriage penalty'' so that a young 
married couple in Spokane has more money to purchase their first home 
or begin saving for retirement.
  I support expanding the low income housing tax credit so that we 
increase the availability of affordable housing for low- and middle-
income families, especially in rural and urban areas.
  I support the creation of Farm and Ranch Risk Management Accounts so 
the apple grower in the Yakima Valley will have one more tool to manage 
the risk inherent in agriculture.
  I support the extension of the research and experimentation tax 
credit so Washington state high-tech and bio-tech companies have the 
incentive and the ability to invest in their long-term future and the 
future of our country.
  I support reforming the individual alternative minimum tax so that 
families all across Washington state can continue to enjoy the full 
benefits of the HOPE scholarship and the per child tax credit that we 
passed in 1997.
  In principle, I support all of these ideas, and many others that have 
been proposed. However, we cannot afford to make tax cuts without 
considering and carefully weighing the consequences. The American 
people deserve a responsible tax cut. They also deserve an honest 
debate from this Congress about how the Republican tax bill would 
affect their lives.
  The majority's tax plan is based on an assumption. An assumption 
about what future Presidents and Congresses will do. They assume we 
will have a projected $964 billion non-Social Security surplus through 
fiscal year 2009. My colleagues propose to use $792 billion of that 
projected surplus over the next ten years to reduce taxes. They also 
assume that three-quarters of the projected surplus will come from 
unspecified reductions in spending by future Congresses.
  To all the citizens watching around the country today, let me 
explain. The 1997 balanced budget agreement called for strict spending 
caps in discretionary, nondefense spending in fiscal years 2000, 2001, 
and 2002. In other words, the 17 percent of the Federal budget that 
funds all Government activities besides Social Security, Medicare, 
Medicaid, and interest on the $5.5 trillion national debt is subject to 
cuts. That 17 percent funds the federal role in improving education, 
giving greater access to Head Start, preventing crime, protecting the 
environment, providing health care to veterans, investing in urban and 
rural communities, maintaining national parks, creating affordable 
housing, reducing traffic congestion through highways and mass transit, 
and many other important functions.
  The projected surplus uses as its baseline spending targets 
established for fiscal year 2000. Right now, the Senate Appropriations 
Committee, of which I am a member, is struggling to move forward with 
bills. Even some of my Republican colleagues have indicated they cannot 
write appropriations bills within the current spending caps. For 
example, both the VA, HUD, and Independent Agencies spending bill and 
the Labor, Health and Human Services, and Education spending bill have 
not been reported by their respective subcommittee because of the 
funding difficulties involved.
  The American people need to understand that this tax cut will mean 
massive, unprecedented cuts in important and popular domestic 
priorities.
  If we assume that Congress will meet the discretionary spending caps 
outlined in the Republican plan, then nondefense discretionary programs 
would have to be cut by 23 percent by 2009.
  What does this mean for Washington state?
  It means 23 percent less for Hanford cleanup. It means 23 percent 
less for salmon recovery. It means 23 percent less for community police 
officers. It means 23 percent less for highway improvements and mass 
transit to meet our growing infrastructure demands. It means 23 percent 
less for Head Start, which serves more than 9,000 children in 
Washington state. It means 23 percent less for reducing class size. it 
means 23 percent less for our VA hospitals. It means 23 percent less 
for the management of Mt. Rainer National Park. But reductions in 
discretionary spending is far from the only concern with this tax bill.
  This bill jeopardizes our ability to reduce our national debt. All of 
my colleagues have worked hard to get our fiscal house in order. We 
have successfully balanced the budget, provided reasonable tax relief, 
and contributed to the strong economic environment we have today. One 
of our priorities must be continuing to reduce publicly held debt. By 
doing so we can decrease the interest payments on the debt that 
currently claim 15 percent of the federal budget. And reducing the debt 
will also help keep our economy moving forward. Federal Reserve 
Chairman Alan Greenspan has indicated again and again that reducing 
debt is preferable to a large tax cut.
  I have saved the most important issue for last: Social Security and 
Medicare. Throughout the past year, as it appeared we would have a 
large projected budget surplus over the next ten years, I have said 
repeatedly that we should not raid the surplus for tax cuts until we 
protect Social Security and Medicare for the long term.
  I have listened to many of my colleagues talk about the importance of 
returning money to taxpayers. Let me tell my colleagues there is no 
better return on the investment for taxpayers than saving Social 
Security and Medicare. This must be a top priority. If we fail to enact 
real reform, we will be judged harshly--and rightly so--by our children 
and grandchildren. Our Nation's future economic security rests in our 
hands.
  Saving Social Security and Medicare is important to all of our 
Nation's seniors, but let me explain why it is especially critical to 
women and their families. Women are twice as likely as men to live with 
a chronic health care condition. Women receive Social Security and 
Medicare longer than men, and for all women over age 65, 60 percent of 
their retirement income comes from Social Security. Often, Social 
Security and Medicare are their only hope for maintaining a reasonable 
standard of living and some degree of independence and dignity.
  If we fail to protect the solvency of both of these important safety 
net programs, my generation will become a burden on our children. Our 
grandchildren will not have the same economic opportunities that we had 
simply because their parents will be taking care of us. More and more 
older Americans would fail deep into poverty, further straining family 
and government resources, and most important the emotional and physical 
health of seniors.
  My Republican colleagues claim they have created a lock box for 
Social Security and Medicare. However, the Republican proposal simply 
continues to reserve the Social Security trust fund surplus for Social 
Security. But, they do not provide any additional resources for either 
Social Security or Medicare and they do nothing to improve their 
solvency. Their lockbox is an empty promise.
  We can argue about the economic threat posed by this package of tax 
cuts targeted to the more affluent and geared towards increased 
consumption, but I think we should be talking instead about maintaining 
the most successful economic stability programs

[[Page 18171]]

ever implemented by the federal government--Social Security and 
Medicare. Can you imagine the economic upheaval that the insolvency of 
Social Security or Medicare would cause? I can assure my colleagues 
that hard working Americans want economic security in their retirement 
years, not tax breaks they may never even see or benefit from.
  That's an important point, Mr. President. This tax bill, which would 
do nothing for Federal initiatives--from Social Security to Medicare, 
from transportation infrastructure to education, from Section 8 housing 
to clean air and water--that raise the quality of life of low and 
middle income Americans would then give three-fourths of the benefits 
in return to the top one-fifth of income earners. The average tax cut 
for the bottom 60 percent of taxpayers--with incomes of $38,200 and 
below--would be $139 per year. And in return for that tax cut, that 
same family will have to worry even more about taking care of elderly 
parents, about where they will find money to help their kids go to 
college since there are fewer Pell Grants, and about how they get to 
spend some time with their kids when they are on congested highways for 
hours each day. And to top it all off, when the family goes on vacation 
to see our nation's national parks, the gates will be closed.
  I will support the alternative drafted by my Democratic friends on 
the Finance Committee. The alternative would meet many of our 
priorities for any tax bill we send to the President.
  The Democratic alternative would provide broad-based relief to the 
more than 70 percent of taxpayers claiming the standard deduction. It 
would remove three million taxpayers from the tax rolls. It would also 
provide marriage penalty relief. These are real benefits targeted to 
precisely the lower and middle Americans that need it the most.
  The Democratic alternative would allow 100 percent deductibility of 
health insurance costs for self-employed individuals and include a 30 
percent tax credit for individuals without employer-sponsored plans. 
Since the Senate failed to pass a strong Patients' Bill of Rights, the 
least we can do is make health insurance more accessible to all 
Americans.
  The Democratic alternative would make public school modernization a 
high priority. It would provide $24 billion in modernization bonds. Mr. 
President, this would send a strong message to students, parents and 
administrators that this Congress cares about providing the education 
infrastructure we desperately need.
  The Democratic alternative would provide tax relief for our nation's 
struggling farmers and ranchers. It would establish Farm and Ranch Risk 
Management FARRM, accounts so that producers could better manage their 
income to reduce risk. Given that it is unlikely Congress will act to 
improve the long-term safety net for growers this year, FARRM accounts 
are the least we can do.
  I urge my colleagues to vote for the Democratic alternative. A vote 
for the Democratic alternative is a vote for responsible tax relief and 
responsible government. At a time when most Americans do not have much 
faith in Congress, let us not compound that sentiment with responsible 
tax politics. We have worked so hard to correct the misguided policies 
of the past. As we move forward into the next century, let's learn the 
lessons of the past and reject the Republican tax plan in front of us.


     RETIREMENT SECURITY PROVISIONS IN TAXPAYER REFUND ACT OF 1999

  Mr. GREGG. Mr. President, I rise to address several important 
provisions in the tax relief legislation that has been reported out of 
the Senate Finance Committee.
  In the last few years, I have taken an especial interest in reforming 
our federal entitlement programs and our tax policies so as to 
recognize and to prepare for the retirement of the Baby Boom generation 
that will begin in 2008. During the last Congress, I was appointed by 
Majority Leader Trent Lott to chair a Senate Republican Task Force on 
Retirement Security, on which Chairman Roth served, and provided the 
benefit of his experience and his enduring commitment to promoting 
retirement saving. Our task force produced a bill, numbered S. 883 in 
the last Congress, several provisions of which were included in the 
1997 reconciliation bill. I am pleased to see that several more have 
been included in this year's reconciliation bill.
  I would like to review several of these provisions and to discuss 
their significance.
  Chairman Roth has devoted several years of his career to promoting 
increased personal saving through individual retirement accounts. His 
IRA legislation, the Roth-Breaux bill, was included in its entirety as 
the first title of our comprehensive bill. The Chairman succeeded in 
passing some of the provisions of this legislation during 
reconciliation last time around, including the back-loaded IRA that has 
become known as the ``Roth IRA.'' This time, the Finance Committee mark 
moves the ball still further forward on expanding the saving in 
individual retirement accounts. It increases the contributions that can 
be made to these accounts, as well as expanding the number of 
individuals who can participate in them. Now more than ever, with the 
Baby boomers poised on the brink of retirement, ready to move from 
being earners and investors to being consumers, ``all saving is good 
saving.'' It is a very propitious time to propose that individual 
saving be promoted and encouraged.
  I stress that we score these provisions, for our own accounting 
purposes, as ``revenue losers,'' but this is misleading. This is not 
saving that is ``lost"--it is only ``lost'' to the federal government. 
This saving and investment will result in much-needed contributions to 
capital formation and to economic growth. This is a far superior use of 
this money than collecting it to fuel current government consumption.
  I was pleased to join in cosponsoring Senator Roth's legislation to 
expand IRAs, and am further pleased that this reconciliation bill 
incorporates a portion of that expansion.
  Senator Roth's IRA legislation was drafted before the task force 
began work on S. 883 in the last Congress. But there were several 
provisions that were original to the task force of which I remain very 
proud, and I am pleased to see that they have received positive 
attention from the Finance Committee this year.
  First of these is the ``SAFE'' plan for small businesses. This is a 
new type of defined benefit plan that we worked to devise in concert 
with others who also perceived the need to make such pension plans more 
attractive to small business owners. Right now, it is too often the 
case that it is not in the interest of a small employer to offer such a 
pension plan. The nondiscrimination rules are too complex, and the 
small employer may not feel that they can afford the fiscal commitment 
of such a size, uncertainty, and duration.
  The ``SAFE'' plan neatly balances the need of employers to have a 
simplified pension structure, with the desire to give employees fair 
treatment and a pension benefit that they can count on. The rules of 
the ``SAFE'' plan are very simple. Fair treatment is ensured by simply 
requiring that the employer fund a benefit that is the same percentage 
of pay for each eligible employee in the shop. If one year's 
contributions produce a pension benefit equal to 2 percent of pay for 
the boss, then it's also 2 percent of pay for the employee--extremely 
simple.
  ``SAFE'' is a fully portable, fully funded pension plan that will 
work. It's portable because the contributions are made specifically on 
behalf of each employee, so it is easy to track how much of a nest egg 
each has accrued. If that employee moves on, that balance can move on 
with them with a minimum of difficulty. It's also fully funded--simple 
rules dictate how much money the employer puts in for each employee in 
each year. It has to be enough to fund the promised defined benefit. 
Each year the accumulation in that account is tracked, and if it falls 
behind the amount that is assumed to be needed using some flexible and 
reasonable interest rate assumptions, then the employer will have to 
make additional

[[Page 18172]]

contributions to make the employee's pension fund ``whole'' again. The 
employer meets his obligations in a simple and easily understood way, 
and has no mounting financing problem at the end of the game.
  I also note that the ``SAFE'' plan also is an important benefit for 
long-time employees who have not been covered to date, because it does 
allow for ``catch-up'' contributions covering an employee's previous 10 
years of service. This is a helpful feature because of the assistance 
it will give to employees who have less time to prepare for retirement.
  The Finance Committee proposal also includes several provisions to 
increase the amount of contributions that can be made to SIMPLE plans 
or to other pension plans. I am pleased to note that it also includes 
several provisions championed by our task force that would benefit 
small businesses and the self-employed in particular. For one, it would 
equalize the treatment of self-employed and larger businesses with 
respect to loans taken from pension plans. Right now, the self-
employed, subchapter S owners, partners, sole proprietors, cannot take 
loans from their pension plan as can larger businesses, and this puts 
them at a competitive disadvantage. Our proposal to correct this 
inequity is included in the Finance Committee bill.
  We also included a proposal that would remove a disincentive for the 
self-employed to make matching contributions to their pension plans, 
and no longer counting such matching contributions towards the annual 
401(k) contribution limit. I am pleased that a version of this proposal 
is also included in the Finance Committee package.
  I am also pleased to see the number of provisions included in this 
legislation aimed at addressing the problem of inadequate retirement 
income for women, who make up the vast majority of our impoverished 
elderly population. Our task force considered our women's equity 
provisions to be so important that we introduced them separately in the 
last Congress as the WISE, Women's Investment and Savings Equity bill.
  Some of the provisions of WISE were included in last year's 
reconciliation package, including the liberalization of rules governing 
contributions by homemakers to IRAs.
  We also included another provision aimed at giving stay-at-home 
spouses a chance to ``catch-up'' on pension contributions if staying at 
home to care for a child interrupted their past contributions. We 
offered a provision allowing ``catch-up'' opportunities for individuals 
who had taken maternity or paternity leave. The Finance Committee bill 
also includes a ``catch-up'' provision. Though not specific to the case 
of families caring for children, the provision providing for larger IRA 
and pension contributions once the individual reaches the age of 50 is 
intended to serve the same purpose--to recognize that individuals often 
do not have as much money to put aside in saving until their children 
are out of the nest. Giving parents a chance to ``catch up'' for these 
lost opportunities is a family-friendly reform.
  I continue to believe that allowing ``catch-up'' contributions for 
individuals who missed out on pension contribution opportunities 
specifically because of child-rearing is an important idea, which I may 
still wish to pursue. But I am pleased to see the provision in this 
legislation and to recognize the chairman's effort to serve the same 
end.
  Finally, a number of other reforms that I and the rest of the task 
force have sponsored in the past also appear in this bill--including 
important portability provisions that would allow individuals in public 
sector employment plans to take their pension benefits with them when 
they join a private employer. The current situation is an artifact of 
the undue complexity of our pension law, and the incompatibility of 
public and private pension regulations that has interfered with such 
portability until now. Public employees are often afraid to leave 
public positions because they do not know whether their pension 
benefits will travel with them, especially once it has accumulated to a 
significant amount that is critical to their retirement plans. 
Everyone's interest will be served by allowing these accumulations to 
roll over into other types of plans.
  I simply close by again thanking the chairman for the level of 
attention that he has given to retirement saving in the Finance 
Committee mark. As the chair of the Republican Task Force on Retirement 
Security, I find it gratifying to see that the chairman placed such a 
high priority for these needs among the competing objectives that 
Senators brought to crafting this tax bill. I hope that indeed ``the 
time has come'' for many of these provisions on which we have worked so 
hard in the past, and I hope that they will be supported throughout 
this reconciliation process.
  I thank my colleagues, and I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. LOTT. Mr. President, I raise a point of order that section 1502 
of the bill violates the Budget Act.
  Mr. ROTH. Mr. President, pursuant to section 904 of the Congressional 
Budget Act of 1974, I move to waive section 313(b)(1)(e) of the Budget 
Act for the consideration of S. 1429, and any conference report 
thereon, amendments between the Houses, and any amendments reported in 
disagreement.
  I ask for the yeas and nays on the motion.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. ROTH. Mr. President, I yield myself such time as I may use.
  Mr. President, the point of order against section 1502 is made 
necessary by the antiquated provision of the Budget Act where 
provisions were drawn to function in an era of deficits.
  Even though the Senate instructed the Finance Committee to cut taxes, 
almost everyone understood those instructions to mean the tax cuts 
would be permanent.
  Nevertheless, we must contend with the language of section 
313(b)(1)(e) of the Budget Act which forbids any reconciliation bill 
from achieving a net reduction in revenue beyond the 10 years for which 
the committee was instructed.
  Of course, achieving a net reduction in revenues is our goal, as well 
as our instructions.
  Moreover, the Budget Act provision in question was not written with 
this situation in mind. It was not written to hinder refunds of a 
budget surplus. Rather, it was written to bar creative accounting 
provisions, such as those offered on this floor to delay the timing of 
expenditures, or to accelerate the timing of revenue.
  These were one-time only provisions designed to occur at the end of 
the window--not for any policy reason but only to achieve compliance 
for a moment in time with the relevant instructions.
  I remember a military pay installment was once moved from the last 
day of one fiscal year to the first day of the next year, which was 
outside the window, to achieve budgetary savings in the earlier years. 
But no provision of that sort is contained in this bill.
  Rather, the question here is whether any tax relief can be permanent 
except for a very small percent of tax provisions.
  It is a general rule that tax relief is permanent. This was true with 
the last tax bill, which provided an actual tax cut--the Tax Relief Act 
of 1997. But that bill was paired with a balanced budget act of the 
same year, the savings of which far exceeded the tax cut then provided.
  Today, we face a new question under the Budget Act because it is 
unnecessary to pair this tax cut with another bill to cut spending. It 
is unnecessary because we have already achieved the goal that such a 
spending bill would hope to achieve, a surplus to fund a tax cut.
  In my opinion, the Budget Act provision makes no sense if applied to 
the current circumstances.
  Everything I have said applies in equal measure to the Democratic 
alternative, and every other tax cut Members are anxious to propose on 
the floor this week.

[[Page 18173]]

  In sum, everyone thought we were instructed to achieve permanent tax 
relief. That was the commonsense understanding. That is the better tax 
policy. I urge support for the waiver to protect this legislation 
against an arcane budget rule never intended to apply to this 
situation.
  The PRESIDING OFFICER (Mr. Crapo). The Senator from New York.
  Mr. MOYNIHAN. As my good friend knows, at the end of my statement 
this morning I indicated I would raise this point of order against 
section 1502 of the bill, which restores the sunsetted provisions of 
the bill beyond the 10th year. That is clearly a violation of the Byrd 
rule which deals with increasing the deficit on a reconciliation bill.
  I am surprised to find my friend refer to that provision as 
``antiquated'' or ``arcane.'' We have spent 20 years trying to control 
this deficit. We quadrupled the national debt in 12 years, from 1980 to 
1992. We have now reversed that. We have made the point on this floor 
that we are providing tax reductions from a projected surplus that has 
not occurred and may not occur. It certainly does not exist.
  A few days ago, in a letter to the Democratic Members on our side, 
our dear friend, the chairman of the Committee on Foreign Relations, 
with respect to the Comprehensive Test Ban Treaty, used the word 
``floccinau
cinihilipilification,'' and it was reported in the press this morning. 
He got that word from the Senator from New York. Floccinau
cinihilipilification is now the second longest word in the Oxford 
Dictionary. It is from a debate in the House of Commons in the 18th 
century meaning the futility of budgets. They never come out straight.
  I had the opportunity to review an autobiography of John Kenneth 
Galbraith years back in the New Yorker magazine. I added ``ism'' to 
refer to the institutional nature of this, so it became 
floccinaucinihilipilificationism. It is no joke. One never gets it 
right. It is not because one cannot, one does not try.
  ``Exogenous'': Come in from the outside. Drought, hurricane, Asia 
goes to pieces. We don't know what will happen. We have this surplus 
that would match a $792 billion tax cut. However, does anybody believe 
we know enough about the decade beyond this one to continue these tax 
cuts, many of which take hold later in the first decade, such that the 
Treasury Department holds that in the second decade the revenue costs 
will be $1.9 trillion and the interest and consequence will be $1.1 
trillion. So the total costs would be $3 trillion, which is almost four 
times the cost of the first decade.
  Surely we cannot be so irresponsible. It speaks of hubris to suggest 
we know what is going to happen that far out. It speaks calamity, as 
well.
  I see my friend from North Dakota. I yield to the Senator 5 minutes.
  Mr. CONRAD. I thank the distinguished Senator from New York.
  I rise to urge my colleagues to resist the move to waive the budget 
procedures. I think it is important to remember the history. The budget 
reconciliation process was devised to expedite consideration of deficit 
reduction measures. That was the purpose.
  The bill before the Senate now perverts that process by using 
expedited procedures to secure enactment of a measure to increase the 
deficit. Fortunately, Senator Byrd crafted the Byrd rule to prevent 
abuse of reconciliation's expedited procedures. He did that to protect 
the fiscal integrity of the United States. This move to waive that rule 
is a move to undermine the fiscal integrity of the process. It ought to 
be resisted by every Member, especially those who profess to be 
conservative.
  Section 313(b)(e) of the Byrd rule provides that any provision in the 
reconciliation bill that would decrease revenue in years beyond the 
budget window violates the Byrd rule and would be automatically 
stricken from the bill upon a point of order being waived.
  It is clear this measure, this risky tax cut scheme, explodes in the 
second 10 years.
  This chart shows what happens with the tax scheme being proposed. It 
starts out modestly, but it grows geometrically. In the second 10 
years, it absolutely explodes. It goes from being an $800 billion tax 
cut over the first 10 years to being over a $2 trillion tax cut in the 
second 10 years.
  Mr. MOYNIHAN. Will the Senator yield?
  Mr. CONRAD. I am happy to yield to the Senator.
  Mr. MOYNIHAN. I believe the Treasury Department estimated the second 
10 years is a $1.9 trillion tax cut, but we have to add $1.1 trillion 
in interest payments, such that the total cost is $3 trillion.
  Mr. CONRAD. The Senator is exactly right. The tax cut alone in the 
second 10 years is nearly $2 trillion. Obviously, there are additional 
costs. Because of additional interest costs, if you spend the money or 
run it in tax cuts, you lose the interest earnings. So you add to the 
interest costs of the United States. That is why Senator Byrd put in 
place this very wise rule, so we would not undermine the fiscal 
integrity of the United States. Now there is a move to waive that rule. 
It ought to be resisted. It ought to be defeated.
  This morning a column in the Washington Post by Robert Samuelson 
addressed this issue in ``The Reagan Tax Myth.'' He pointed out the 
danger, the riskiness, the radical nature of the tax proposal before 
the Senate, and pointed out that it is all based on projections that 
very well may not come true.
  In fact, he pointed out:

       . . . there is no case for big tax cuts based merely on 
     paper projections of budget surpluses.

  He pointed out:

       The projections, for example, assume a steep drop in both 
     defense spending and domestic discretionary spending that may 
     be unwise, particularly for defense.

  He goes on to say:

       Suppose that spending exceeds projections by one percentage 
     point of national income and that tax revenues fall below 
     projections by the same amount. In today's dollars, these 
     errors--not out of line with past mistakes--would total about 
     $170 billion annually. Most of the future surpluses would 
     vanish.

  They would vanish.
  Mr. President, I think it is very important. We have heard repeatedly 
from our friends on the other side of the aisle that they are only 
providing 25 percent of the surplus in tax cuts. They are not telling 
the whole story. They are being very selective about what they tell the 
American people. They say we have $3 trillion of projected surpluses--
projected. Let's remember they are projected; they may not happen. And 
they say they are only providing $800 billion of tax relief.
  I ask for 1 additional minute.
  Mr. MOYNIHAN. Of course.
  Mr. CONRAD. If we check their math, we find the story is quite a bit 
different from the way they are telling it. Of the total surplus over 
the next 10 years, $2.9 trillion, nearly $2 trillion of it is Social 
Security surplus. Are they talking about spending some of this Social 
Security surplus? Are they talking about once again raiding the Social 
Security surplus? If they are not, then this should be taken right out 
of the calculation.
  Then we have to take out an additional amount, about $130 billion, 
because if you provide tax cuts, or you spend the money, interest cost 
goes up. So now you are down, instead of $3 trillion, to $870 billion. 
And they are talking about a $800 billion tax cut. They are not using a 
quarter of the money, unless they intend to use Social Security funds. 
Fairly described, they are talking about using 94 percent of the non-
Social Security surplus for a risky tax cut scheme based entirely on 
projections, projections that might not come true, and in the second 10 
years those tax cuts explode, endangering the fiscal integrity of this 
Government.
  My God, after the progress we have made to eliminate the deficit and 
create surpluses in the last 6 years, to turn our back on that and take 
the risk of putting this economic expansion in jeopardy? It is wild. It 
is risky. It should not happen. And the move to waive the budget rules 
that protect the fiscal integrity of this country ought to be defeated.
  The PRESIDING OFFICER. Who yields time?

[[Page 18174]]

  The Senator from New York.
  Mr. MOYNIHAN. I yield 5 minutes to the Senator from Minnesota who 
would like to speak on the motion to waive the Byrd rule.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I thank the Senator from New York. I 
actually was going to come down here and take a little bit of time to 
prepare for this, but I will just do this off the top of my head.
  I want to say to the Senator from New York, Senator Moynihan, I come 
to the floor to fully support his initiative, what he is trying to do. 
I think what the Senator from New York is saying is that we have a 
proposal on the floor, the Republican proposal, which after the first 
decade is essentially going to explode the debt, and that really this 
is the height of folly.
  I will not get at all demagogic right now, but I will say this. I do 
not mean that other times when I speak that I am demagogic. I don't 
mean that at all. I will say this. When I hear the discussion about how 
we need to give the surplus back to people, give it back to the 
taxpayers, I say to myself--and I think this is what Senator Moynihan 
is trying to say, not just to the Senate but to the country--I say to 
myself, this is actually not true.
  Whatever we have by way of surpluses, assuming that our economic 
performance will continue to be as good over the decades to come, that 
surplus belongs to our children and grandchildren. We built up this 
debt. We saddled this debt on them. We ought to make sure that whatever 
we do doesn't explode the debt after 2010, that we make sure Medicare 
and Social Security will be available for them, and we make sure our 
children and grandchildren will have the same opportunities we have 
had.
  What the Senator from New York is doing with this point of order, his 
challenge right now to the majority party's plan, is to essentially say 
this. The people of our country, the vast majority of people in 
Minnesota, New York, and all across the country, are very intelligent 
about this. The last thing they want to see us do is explode the debt 
again. They don't want to see us do it because they don't want to see 
us go into more debt as a nation. They don't want to see their children 
saddled with more debt.
  There is one other point, which is a political point and also an 
ideological point. If we pass this proposal, the Republican plan--and I 
believe the President must veto it--as we look to the second 10 years, 
we are going to have such an explosion of deficits and debt that will 
make it impossible for us to move forward on any of the initiatives 
that do in fact give more opportunities to children, to allow some of 
the investments we should make--not unwise investments, but investments 
in education, investments in child care, investments in economic 
development, investments in our urban communities, investments in our 
rural communities.
  This Republican initiative will explode the debt. It is fiscally 
irresponsible. It will put us in a straitjacket where we as a country 
will not be able to make any of the wise investments we should make in 
education for our children and our grandchildren. This is a critically 
important initiative, I say to the Senator from New York, and I fully 
support his action. This vote is probably as important a vote as we are 
going to have over the next couple of days.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I could not more agree with my friend 
from Minnesota, who has taught political science superbly well. Earlier 
today, in opening remarks, I commented on a theory that developed on 
the conservative side of politics in the 1970s which held that the way 
to control the size of the Federal Government was to starve it of 
revenue--``starve the beast'' was the rather graphic term. It was 
indeed. That was the effort in the early 1980s until they realized it 
was not working. Just yesterday, E.J. Dionne wrote:

       The long-time goal about which Republican leaders are 
     candid, is to put Government in a fiscal straitjacket for 
     years to come.

  This is an idea with which we are dealing, not a bunch of numbers, a 
grand strategy, and it will work if, in the second decade, we see a 
cost of this measure. The Treasury estimate is $3 trillion, an 
incalculable sum, which will paralyze, which will put the Government in 
a straitjacket. We have no right to do that to another generation of 
Americans. If they wish to do it, that is their right, but it is not 
surely our option.
  Mr. WELLSTONE. Mr. President, I say to my colleague from New York, 
the point he just made is profoundly important. We do not have a right 
to make this decision for our children. The next century belongs to 
them. We do not have a right to make this decision for other Democrats 
and Republicans who are in the Senate to serve and represent people. 
This is fiscally irresponsible. It explodes the debt, and it puts us in 
an absolute straitjacket whereby we will be incapable of making any of 
the investments we all say we are for to make this a better country.
  I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from 
Missouri.
  The PRESIDING OFFICER. The Senator from Missouri is recognized for 10 
minutes.
  Mr. ASHCROFT. I thank the Chair.
  Mr. President, I thank my colleague for this opportunity to address 
what I consider to be a very important issue. Of all the freedoms we 
enjoy, I think the freedom to use and to spend and to devote the 
product of our own hands, the work we do to benefit our own families, 
is perhaps one of the most cherished freedoms of a free society. In our 
debates about the theories of government and resources and whether we 
should have tax cuts or increased taxes, sometimes we forget that it is 
a fundamental freedom--a cherished opportunity for individuals--to 
accept the incentive, the opportunity, and the responsibility of 
providing for themselves.
  One of the things we want to provide for ourselves, obviously, is 
government, so that we have a framework in which to work, which 
protects our property, protects us, and protects our families. That is 
an important thing we do.
  We have to be careful that we do not think we are working for 
government rather than for ourselves, or that government should do for 
us those things we can do for ourselves.
  As we think about how we deal with the resources that are generated 
by the enterprise and the productivity of the American people, we ought 
to think about the American people and the fact that the fundamental 
freedom we cherish is being able to work, to produce something, and 
then to manage that which we produce for our own benefit. We as a 
people have been so successful at it that we even are able to be 
generous with that which we produce. But it is our own generosity. 
America is the most giving nation in the world. Philanthropy here 
dwarfs philanthropy in other settings, but it is, in part, because we 
are allowed to keep that which we produce. Giving is greater here than 
any place on the planet because we allow people to keep that which they 
produce, to manage it for their own benefits and for their families, 
and then to give it according to their desires.
  We stand on the threshold of a debate about what happens when a 
person works hard and creates something, creates resources, earns 
wages, creates wealth--that is what wages are. People earn that, they 
create it with work and decide how it will be devoted, what will happen 
to it.
  We have a situation now where our Government has taxed the American 
people to such an extent that if those taxes are just collected over 
the next 10 years, we will have collected in that 10-year period about 
$3.3 trillion that we will not need to spend in that 10-year period. 
That is why we call it the general surplus, the sort of global surplus, 
the entirety of the surplus.
  A number of us realized it would not be responsible to spend all of 
that, so we said: Wait a second, there is a part

[[Page 18175]]

of that surplus which we will not spend, and that is the part that is 
the surplus related to Social Security. We said there will be no 
expenditures of the Social Security surplus. It sounds simple and it 
sounds like something that should always have been the case, but the 
truth of the matter is, for the first time in recent history, in 
memorable history, for the first time we had a budget in this body that 
said we are not going to spend the Social Security surplus.
  Frankly, on this side of the aisle, I am very proud of the fact that 
we have been able to do that. It was not a budget that was voted for by 
the people on the other side of the aisle. They did not vote for that. 
That is not something they have ever done with one of their budgets or 
one of the things they have done with their leadership, but it is 
something they fought against. We have done it, and it is now an 
achievement of the Senate that we have a budget which is designed to 
protect every cent of Social Security, none of it to be spent to cover 
operating budget demands of this Government. That is a major 
achievement. That is something for which we can be grateful.
  Secondly, we have a plan in place, even with the proposed tax relief 
for the American people, that will cut the national debt, the publicly 
held debt of America, in half over the next 10 years. That is pretty 
responsible. They are talking about lots of things, saying we are not 
addressing the debt properly.
  Never have I seen any budget in a previous setting ever purport to 
move forward to cut the deficit in half in the next 10 years. Very few 
families will try to pay off a mortgage in that period of time--very 
few. We have an opportunity now, very responsibly, to set aside Social 
Security, which the American people want us to do, to take the budget 
deficit of publicly held debt in this country, and cut it in half, 
paying down the publicly held debt by half in the next 10 years. And 
then we will have some money, some resources that are left over in this 
vast infusion of Government resource that has come from the people. 
What are we going to do with the rest of it?
  The Republican plan simply says a good part of that, some significant 
part of it, ought to go back to the American people. They should be 
able to spend it on their families, to do for themselves what they do 
not need Government to do for them, because the best department of 
social services is the family, the best department of education is the 
family, the best department of health is the family.
  Let's let our families operate. Let's fund families, not just 
bureaucracies. Let's fund people in their homes, not just the 
bureaucracy in its Government. That is what the Republican plan is.
  There is a lot of debate now: If we can afford a tax cut for the next 
10 years, we have to make sure we do not promise the American people we 
can have tax cuts on a permanent basis.
  We are making this tax relief on very modest presumptions regarding 
the prosperity of this country. We are presuming a very modest growth, 
very limited. This is conservative.
  It is not appropriate for us to say we will provide tax relief now 
and not provide it later. If we repeal the marriage penalty tax now, we 
should not repenalize you ten years later. That does not make sense.
  We simply ought to put the tax rates where we believe they reflect 
the integrity of the American people and the productivity of the 
American people and the fact that the American people are now being 
asked to pay more than it costs to provide the service. And we ought to 
reduce them, and we ought to reduce them permanently, not on a 
piecemeal basis, not with an automatic reinstater of a tax which is the 
highest in history.
  Why is it we are asked to have a tax cut and those on the other side 
of the aisle want to make sure we cannot make it permanent relief for 
the people, that we have to promise somehow that the highest rates in 
history will be revisited after a 10-year lapse? I do not believe that 
is good government. I do not believe that is good judgment.
  I believe when we lower taxes, when we lower the burden on the 
American people, we are beginning to direct the assets of the culture 
to America's families instead of governmental bureaucracy. It seems to 
me we ought to do that on a permanent basis.
  I do not remember tax increases that have said they only last 10 
years. It seems to me that when taxes have been raised in this culture, 
they are just raised. I think we would be well served to say we are 
going to provide a tax structure that respects families. We are not 
going to say we will take the marriage penalty out of the code for 10 
years and then reimposed it.
  If we are going to provide tax equity for people so that the lowest-
rate taxpayers in America have an even lower rate, and more people are 
paying at that lower rate, we should not say this is a sale which goes 
off and later on your taxes will automatically be raised by some 
Congress in the future or at some certain date in the future.
  It is time for us to say that the American people have simply paid in 
more than it takes to provide the services. When you pay in more than 
it takes to provide what you are buying, you get change.
  I go to the grocery store. When I pay in more than it takes to buy 
the gallon of milk that I want to buy for my family, the grocer does 
not say to me: I tell you what I'm going to do for you. I'm going to 
give you a stalk of celery and a bag of broccoli and two boxes of 
cereal so you use up all the money you paid me. He says: You paid more 
than is necessary for the services, and you get change. You get a 
refund. You get relief. You get some of your resource back.
  I think that is where we are as a Senate. It is time for us to look 
at this country, where our cost of government is higher than it has 
ever been in the history of this Republic, and to say that it is time 
to give people relief. That relief is appropriate. And it should be 
permanent, not relief upon which we could not rely, but that it should 
be relief upon which we can rely, plan, and build for our future.
  Mr. President, I reserve the remainder of our time.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. May I observe in passing, the cost of government is not 
greater than it ever has been. The revenues are. That is why we have a 
surplus.
  To my good friend, the Senator from North Dakota, I yield 4 minutes 
to respond; and then the remaining 5 minutes I yield to the Senator 
from Montana.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 4 minutes.
  Mr. CONRAD. I thank the Chair and the ranking member, the Senator 
from New York.
  The Senator from Missouri misspoke. He said that those of us on this 
side have not supported saving every penny of the Social Security 
surplus for Social Security. He is simply wrong. The budget we offered 
on our side not only saves every penny of the Social Security surplus 
for Social Security; in addition, we proposed saving an additional $300 
billion over the next 10 years to strengthen and preserve Medicare.
  So not only did we propose saving every penny of the Social Security 
surplus for Social Security, we also proposed taking another $300 
billion and using it to preserve and protect Medicare.
  The thing that is really jolting about this discussion is what is in 
this column that I referred to earlier by Robert Samuelson in the 
Washington Post today. He says:

       The wonder is that the Republicans are so wedded to a 
     program that is dubious as [to] both policy and politics. As 
     Federal Reserve Chairman Alan Greenspan noted the other day, 
     tax cuts might someday be justified to revive the economy 
     from a recession or to improve the prospects of a sweeping 
     program of tax simplification. But there's no case for big 
     tax cuts based merely on paper projections of budget 
     surpluses.

  Members of the Senate, that is what is so radical about this 
proposal--radical, risky, dangerous. This proposal not only has massive 
tax cuts--94 percent of all the non-Social Security surplus over the 
next 10 years--but it absolutely explodes in the outyears. A

[[Page 18176]]

tax cut that is $800 billion in the first 10 years becomes $2 trillion 
and costs an additional $1 trillion of interest. That is exactly what 
the Byrd amendment was designed to prevent. The whole reason there are 
expedited procedures in budget reconciliation is to reduce deficits.
  Our friends on the other side are trying to use those expedited 
procedures on a measure that would increase deficits--blow a hole in 
the budget, potentially a hole of over $3 trillion. That is dangerous. 
That is not conservative. It is radical. It is risky. It is reckless.
  When they say they are only using 25 percent of what is available--
nonsense, absolute nonsense. Of the $3 trillion that is projected--and, 
remember, just as Mr. Samuelson points out--if these projections just 
change a little bit, as they have over and over and over in our 
history, these projections of surplus could change to projections of 
deficit, and we will rue the day when we have undermined the dramatic 
moves we have made toward fiscal responsibility in getting this country 
back on track.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. CONRAD. I just remind my colleagues, the Democratic plan has more 
debt reduction in it than the Republican plan. That is a fact. It is 
indisputable. I hope my colleagues will resist this move to overcome a 
budget rule to prevent undermining the fiscal integrity of the United 
States.
  Mr. MOYNIHAN. The Senator from Montana is yielded the remaining time 
we have.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, this debate is almost surreal. We are 
debating whether to be reckless or not. It comes down to that, whether 
to be responsible or not. I am astounded that the Senate is having this 
debate of whether to be responsible or whether to be reckless.
  The numbers are clear. They are compelling. The logic is steel-trap 
logic, with these numbers showing what this Republican majority budget 
tax proposal will cost--creating recklessness, irresponsibility. The 
numbers are just black and white clear.
  This side has come up with charts, numbers; we have quoted from 
objective observers, columnists. It all comes out the same. This is 
extremely irresponsible. Let me remind my colleagues again why.
  First of all, this is a column in a recent, very respected paper, the 
Wall Street Journal, from a day or two ago: ``GOP Uses Two Sets of 
Books. Double-Counting Surplus Keeps Alive the Notion of Being Within 
Budget.'' That is from the Wall Street Journal written by David Rogers. 
No one accuses him of being a biased Democrat. He is a reporter of one 
of the most respected financial papers in the world, the Wall Street 
Journal.
  This is his conclusion of what is going on: GOP uses two sets of 
books; double-counting.
  I call that reckless. I call that irresponsible. Again, it is 
surreal.
  Let me point this out, again, undisputed. Nobody disputes this. The 
Republican tax breaks explode, like the atom bomb, in the second 10 
years. Nobody disputes that. If you added interest to this, their tax 
cuts are roughly $1 trillion. There is nothing left over for anything 
else--Medicare, veterans. If you add in defense, which I am sure the 
Republican majority is going to do, that amounts to about a 40-percent 
cut, 40 percent in veterans' benefits, in education, et cetera. That is 
just the first 10 years.
  Then you add it out in the next 10 years and it is over $2 trillion.
  Mr. MOYNIHAN. Plus interest.
  Mr. BAUCUS. So $2 trillion, plus interest on the national debt, at a 
time when the baby boomers retire. Why is that so important?
  Just one more chart here. It shows when the baby boomers are going to 
retire, when current younger Americans are going to retire. It is 
clear. The chart goes way up, beginning here in 2010, and the cost is 
$250 billion by 2020, at a time when the trust fund, the Medicare trust 
fund, comes to zero.
  So add it all together and the Medicare trust fund comes down to zero 
in 2015. No dollars are left there. The baby boomer population is 
exploding and the tax cuts, which push us down into a deeper deficit, 
will be exploding in the second 10 years. No wonder the majority party 
wants us to pass this motion waiving all points of order, waiving 
fiscal responsibility. Again, why are we debating this? Why are we even 
debating whether to be responsible or irresponsible? It is clear.
  One final point. We remember that dreadful day when a conference 
report was brought back to this body with everything including the 
kitchen sink in it--everything--bills that were never debated in either 
the House or Senate, tax bills that were never debated, spending bills 
that were never debated. They all came back in one gigantic package. 
That is going to happen if this motion passes. That is very 
irresponsible. It is irresponsible to us and to the American people.
  I am just astounded, frankly, that we as a Democratic Party are in a 
position of saving the majority party from themselves and, more 
important, saving the American people. What happened in the 1980s? This 
is history all over again. In the 1980s, this body, the Republican 
President and Republican Congress, at the time succumbed to the siren 
song of huge tax breaks. What happened? Deficits exploded. Then what 
happened? The Republican Congress was forced to increase taxes. The 
Republican Congress and the President were forced to increase taxes 
twice--in 1982 and 1984.
  So I say if we, today, lock in these huge tax cuts for the future, 
they are going to have to come back again to re-enact it and put it 
back in place at a future time. I don't think they want to do that. I 
urge colleagues to do what is right and not support the majority on 
this motion.
  The PRESIDING OFFICER. The Senator from Delaware controls the 
remaining time.
  Mr. ROTH. Mr. President, I yield such time as the Senator from Texas 
needs.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. REID. Mr. President, I could not hear the manager. Is the time 
yielded on this amendment or on the bill?
  Mr. ROTH. On this amendment, on the waiver motion.
  Mr. GRAMM. Mr. President, I think there are a lot of ways you can 
argue this point. The Byrd rule, as the distinguished Senator from 
Montana argued, is to try to protect us from provisions that have not 
been debated, provisions that have not been considered in committee, 
but provisions that show up in a reconciliation bill where we have 
rules that are distinctly different from the Senate rules, principally, 
that you have limited debate for 20 hours and that, therefore, you 
can't filibuster it and, therefore, you don't have to have 60 votes to 
pass it.
  I am a supporter of the Byrd rule. I think it is a good rule, and I 
think it is a rule aimed at exactly the kind of offense that the 
Senator from Montana is talking about; that is, issues that have not 
been widely debated, issues that have not been considered in committee, 
and issues that have not had a full airing of public opinion. But can 
anybody argue that any one of those points applies to this tax bill? 
Does anybody here believe this tax bill has not had a full airing of 
public opinion?
  The President, daily, issues some new statement. Yesterday, it was 
going to be the end of health care for women in America if we cut 
taxes. For all I know, by this afternoon there could be a new coming of 
the bubonic plague if we cut taxes. Daily, the Vice President comments 
on it.
  We have had a running debate now for weeks on this issue. We held 
extensive hearings in the Finance Committee on the issue. We held a 
markup. We have had extensive debate. Nobody in America has any doubt 
as to what we are doing in this bill. So my point is that all the 
reasons we have the Byrd rule, all the reasons that were adequately 
explained by the Senator from Montana, are good reasons to strike 
provisions from a reconciliation bill. And that is, if the provisions 
have not been widely discussed, if the public is not generally aware of 
them, if there have not been committee hearings and a markup on them, 
you don't want to give them the special privilege of being

[[Page 18177]]

in a reconciliation bill. But surely I don't have to make a lengthy 
argument to convince people that none of those points apply here.
  It is true that our Democrat colleagues, using this technicality, can 
force us to sunset this tax cut in 10 years. They can do it. And in 
doing so, we have the tax cut for 10 years. Nobody believes the 
Congress or the American people will just allow them to fall off the 
end of the Earth in 10 years. It is not the complete undoing of our tax 
cut if this point of order should be sustained. I don't know that it 
would be of great practical importance. But I simply say that on an 
issue that is the No. 1 issue in the country, on an issue that has been 
extensively debated, on an issue where we held hearings and a markup, 
on an issue where every American knows the subject is being debated--it 
is referred to on a minute-by-minute basis on most of the major outlets 
for news in America--there is no logic to sustaining this point of 
order.
  I really see this as creating instability in the Tax Code. It wasn't 
our intention to raise a similar point of order against the Democrats' 
bill. Basically, it seems to me they have a right to propose a 
permanent tax cut. We could have raised a point of order against such a 
tax cut if it had been proposed. We would not have done it--basically 
believing they ought to have a chance to say to the Nation what their 
vision is. We know their vision. They want to spend this money and they 
don't want to give it back. It is perfectly legitimate; I just don't 
agree with it.
  I hope our Democrat colleagues will not take this technicality as an 
opportunity to create a Tax Code that is in effect for 10 years and, at 
the end of 10 years, it goes away. I think it is unstable. I think it 
is an irresponsible way of doing it. I don't object. The minority has 
the right to do this. If we can't get 60 votes, they have every right 
under the rule to do it. It doesn't undo our tax cut. It is not the end 
of the world. It certainly makes what we are doing still of great 
importance.
  I argue to those who have not hardened their hearts to a tax cut to 
allow us to have a permanent tax cut. If you are not for it, vote 
against it. We are willing to let you offer a permanent tax cut. So 
that is really the issue. The Byrd rule technically applies to this 
provision, but the logic of it does not apply. Therefore, I argue that 
we should waive the point of order, and that is going to take 60 votes. 
There are 55 Republicans, so if every Republican voted to waive it, we 
would have to get five Democrats. My argument is, if you are against 
the tax cut, great; it is perfectly legitimate to be against it. But 
don't use a technicality to try to undermine a legitimate proposal, 
which has been debated extensively, which is known to virtually 
everybody who hasn't been hiding under a rock for the last 6 months; 
don't use a provision of law that is really aimed at preventing 
extraneous material from getting into the bill to undermine basically, 
at least today and tomorrow, and I think for a long time, the No. 1 
issue in the country. I hope our Democrat colleagues who are not just 
hell-bent against a tax cut will vote to waive this point of order so 
we don't have the absurdity of adopting a tax cut and have it temporary 
and have it end in 10 years.
  Hopefully, we are going to have an opportunity to improve this during 
10 years. I am still for it if it is sunset in 10 years. But I don't 
think this is good policy, and I urge my colleagues to rise above the 
politics of the moment and vote for good policy.
  I reserve the remainder of our time.
  Mr. DASCHLE. Mr. President, I know our side is out of time, so I will 
use leader time to make a couple of remarks with regard to the vote we 
are to take.
  We all are able to use our rhetorical acrobatics from time to time, 
but I must say, no one is better at it than the distinguished Senator 
from Texas as we try to define this set of circumstances.
  This is a lot more than a technicality. The Byrd rule is there for a 
reason. I am glad he subscribes to the Byrd rule, but I must say, this 
goes way beyond the debate we had in committee and the understanding 
the American people and even Senators have with regard to what is in 
the bill. This will give the conference, the Congress, the Senate, 
everybody, carte blanche all the way through the legislative process 
until this bill goes to the President's desk. Is that what we want to 
do?
  It would be one thing to waive a point of order and do so on the bill 
alone. That would be understandable. I might add, in that regard, it 
wasn't the Democrats who made the point of order; it was the majority 
leader. The majority leader made his own point of order on this bill. 
It was the distinguished Chair, the senior Senator from Delaware, who 
made the motion to waive the point of order. So let's make sure we have 
our facts straight. No one here made the point of order. They did.
  But the point of order is not just on the bill. The point of order is 
on the conference report as well. I want somebody to come up and tell 
me what is going to be in that conference report. There is a huge 
difference between the Senate version and the House version, even on 
the Republican side. There are major differences that have to be ironed 
out and worked out.
  Is anyone here today prepared to waive the point of order on a 
conference agreement for which there has not been one word written, for 
which there has not been one meeting, for which really there is no 
understanding or comprehension today? How could we possibly waive a 
point of order on something we haven't done yet? That is what our 
Republican colleagues are prepared to do.
  I hope we would have better sense than that, that we would recognize 
how ill-founded it would be and what a terrible precedent it would be 
for us to waive a point of order on actions to be taken at a later date 
by a conference we haven't even named.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BREAUX. Will the distinguished chairman yield?
  Mr. ROTH. I am happy to yield.
  Mr. BREAUX. Following up on the Democratic leader's question, when we 
have passed a bill out of the Finance Committee, the Moynihan bill, the 
Democratic version, and the Roth version, both for permanent tax cuts, 
different amounts--ours was $295 billion, the chairman's was $792 
billion, but they were both permanent tax cuts--I think the point the 
Democratic leader makes is a good one. I think I could possibly be for 
waiving the point of order if it was against this bill that we all know 
about. But to extend that to a conference report when we do not know 
what is going to be in that bill I think is probably going further than 
certainly I would be comfortable going.
  If it was limited to the bill that is before the Senate where 
everybody does know what is in it, I could understand that argument. 
But to say that all points of order against anything that may come 
back--and who knows what may come back; I have my ideas about what it 
should be, and others have different opinions. I don't know that we can 
waive points of order against something we have not yet seen. I was 
wondering, why does the point of order waiver cover everything that has 
not yet even been written?
  Mr. ROTH. Mr. President, I say to my distinguished colleague, if we 
do not waive it with respect to the conference report, then we put the 
conference in a very difficult position. Should it write a bill for 10 
years, or should it write one for a permanent tax cut?
  Just let me point out that I don't know of a single tax cut taking 
place since we have had the Budget Act that was not permanent. I don't 
think there is a single person in the Finance Committee or on the floor 
who thought otherwise--that when you had tax cuts it was necessarily 
going to be permanent. That is just common sense.
  We all know that the point of the Byrd rule in this case was to avoid 
monkey business. We have all seen that happen, where you shift payment 
from one fiscal year to the next year by changing it but for 1 day and, 
by doing that, you assure that you are in compliance with the budget 
instructions in theory but not in substance.

[[Page 18178]]

  Now, we are all interested in seeing this economy continue to grow 
and prosper. One of the purposes of the tax cut is to ensure that it 
will happen. I am weary of those who are saying, well, this is going to 
cause inflation, and so forth. That is just plain rubbish. If you look 
at our tax cut, practically nothing happens the first year--a very 
small tax cut. For the first 5 years, it is something like $156 
billion. So the big tax cut is 5 years off.
  Let me make the point: Congress will be in session. People will be 
here. They will be able to take appropriate action. If it is thought 
that the tax cut is not desirable, there is nothing to prevent them 
from changing it. But let me just say, common sense--and that is what 
the American people want to see displayed here on the Senate floor--
common sense is that when you have a tax cut, it is permanent.
  Every substitute, every amendment to be offered here is permanent. 
Even the Democratic substitute is permanent. Every reconciliation 
before on spending or taxes, whether it was a Republican Congress or a 
Democratic Congress, has made permanent changes. Every reconciliation 
bill has depended on projections. There is nothing new about that. This 
bill is no different. It is not reckless; it is not radical; it is 
traditional and common sense.
  As I said earlier, everyone thought we were instructed to achieve 
permanent tax relief. That was the commonsense understanding. This is 
by far and away the better tax policy.
  I urge Members to support the waiver to protect this legislation 
against an arcane budget rule never intended to apply to this 
situation.
  I yield back the remainder of my time and ask for the yeas and nays.
  The PRESIDING OFFICER. The yeas and nays have been ordered.
  All time having expired, the question is on agreeing to the motion to 
waive section 313(b)(1)(e) of the Budget Act for the consideration of 
S. 1429. This vote requires a three-fifths majority. The yeas and nays 
have been ordered. The clerk will call the roll.
  The legislative assistant called the roll.
  Mr. NICKLES. I announce that the Senator from Ohio (Mr. Voinovich) is 
necessarily absent.
  The PRESIDING OFFICER (Mr. Sessions). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 51, nays 48, as follows:

                      [Rollcall Vote No. 225 Leg.]

                                YEAS--51

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--48

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Cleland
     Collins
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Voinovich
       
  The PRESIDING OFFICER. On this vote the yeas are 51, the nays are 48. 
Three-fifths of the Senators duly chosen and sworn not having voted in 
the affirmative, the motion is rejected.
  The point of order is sustained, and section 1502 is stricken.
  The Senator from New York.
  Mr. MOYNIHAN. Mr. President, might we have order?
  The PRESIDING OFFICER. The Senate will come to order. The Senator 
from New York.


                           Amendment No. 1384

              (Purpose: To provide a complete substitute).

  Mr. MOYNIHAN. Mr. President, I send to the desk the Democratic 
alternative to the measure before us. This is an amendment in the 
nature of a substitute. It is proposed by myself, Mr. Baucus, Mr. 
Rockefeller, Mr. Breaux, Mr. Conrad, Mr. Graham, Mr. Bryan, Mr. Kerrey, 
and Mr. Robb.
  The PRESIDING OFFICER. The clerk will report.
  The legislative assistant read as follows:

       The Senator from New York [Mr. Moynihan], for himself, Mr. 
     Baucus, Mr. Rockefeller, Mr. Breaux, Mr. Conrad, Mr. Graham, 
     Mr. Bryan, Mr. Kerrey, and Mr. Robb, proposes an amendment 
     numbered 1384.

  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  The PRESIDING OFFICER. There will be order in the Senate. The Senator 
from New York.
  Mr. MOYNIHAN. Mr. President, just in passing, I note page 440 of our 
substitute provides that all provisions of and amendments made by this 
act which are in effect on September 30, 2009, shall cease to apply as 
of the close of September 30, 2009.
  Before I discuss the amendment, I yield 20 minutes to my colleague.
  Mr. President, we must have order.
  The PRESIDING OFFICER. The Senator is correct. The Senate will please 
come to order.
  The Senator from New York.
  Mr. MOYNIHAN. Sir, I do not envy your position, but you seem to have 
had some success.
  I yield 20 minutes for a general statement by my associate on the 
Finance Committee, the distinguished Senator from Louisiana, the senior 
Senator from Louisiana.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I thank the distinguished Democratic 
leader of our Finance Committee. It is interesting; I think the action 
we have taken really means no matter what type of tax bill ultimately 
comes back to this body after the conference, we cannot make it a 
permanent tax cut. For those on our side who have argued for permanency 
in the Tax Code for research and development or tax incentives, that 
means we cannot do that. It means if we have an increase in the 
standard deduction and fix the marriage penalty, we can't do that. It 
means all those things many of us as Democrats have argued should be 
permanent tax policy, now we are no longer going to be able to make it 
permanent no matter how good it is. The argument is true for the other 
side as well. No matter what comes back in the conference report, it 
cannot be permanent.
  I think from a policy standpoint this is terrible policy. We 
literally are telling all the businesspeople in this country and 
employees in this country, people who save in this country, no matter 
what the law is today, it is going to fall off a cliff and go poof in 
10 years. What kind of roadmap for economic growth is it, when a 
country says our tax policy is only going to be good for 10 years no 
matter how good it is? No matter how good a Democratic policy it is or 
Republican policy, it is only going to last for 10 years. That in 
itself is very bad policy in this Senator's opinion.
  At the same time, I recognize we are operating with our hands tied 
behind our back with regard to bringing up a tax bill through budget 
reconciliation, with all these rather archaic rules. We ought to be 
able to debate fairly a tax bill, make it permanent. If you do not like 
what is in it, vote no; if you like what is in it, vote yes. But we 
should not be restricted from offering tax legislation that is the 
permanent policy of this land.
  We have had meeting after meeting in the Finance Committee, when 
people have come up and said: You have to make these provisions 
permanent. I am not sure whether I am going to expand and grow my 
company if you are only

[[Page 18179]]

going to allow it for 10 years, and who knows what is going to happen 
after 10 years.
  That is not good public policy; it is not good tax policy, and it 
points to the problem: the fact that we are bringing up tax legislation 
in this reconciliation scenario that requires us to operate as we are 
operating. I suggest to folks on both sides of the aisle, if we can't 
make tax laws in this country for more than 10 years, we have done 
something that is very terrible for this country. I think it is the 
wrong thing to do.
  Let me make a couple of comments on the legislation that is before 
the Senate. Most countries around the world would love to have the 
problem we have in this Senate and in this Congress right now. Other 
countries would look at it as a great opportunity to have the problem 
we are facing. We cannot seem to come to an agreement on it. That 
problem is the United States has about a $1 trillion surplus, and all 
of us are trying to figure out what to do with the surplus. I suggest 
if we as a Congress, Republicans and Democrats, cannot come to an 
agreement on what to do with a $1.1 trillion surplus, we, in effect, 
have said we are not very good at governing; that we cannot simply come 
together, make our points, seek legitimate compromise, and figure out 
what to do with a $1 trillion surplus.
  I know there are some who want the President to be in a position to 
have the Republican tax bill of $796 billion pass and send it down to 
him at the White House and have a great ceremony vetoing it.
  His argument will be that it is too large; it is too irresponsible; 
it is wasteful; it is going to cause the economy to go south; we are 
going to have an increase in interest rates. He is going to make a lot 
of good, solid political points when he has that veto ceremony.
  There are those on the Republican side who I think would love that to 
happen, in fact, because they will be able to say: No, the President, 
when he had the opportunity, chose not to give the American people a 
legitimate tax cut, and he turned his back on the American people; we 
are fine with that political argument, and we will take that argument 
into the election.
  The American people outside Washington, in my opinion, have come to 
the conclusion that they are getting very tired of those types of 
political positions being taken by Members on both sides of the aisle.
  Under the current circumstances, we are headed for a financial train 
wreck because we are taking positions on both sides of the aisle: It is 
my way or no way.
  I suggest that type of position leads to nothing happening. Sure, we 
will all at the end of the debate have an argument politically about 
whose fault it was that nothing was done. Some will say it is the 
Republicans because they were too greedy. Others will say, no, it was 
the Democrats' fault because they did not want to give a reasonable tax 
cut to the American people. We will have good political arguments, but 
we will have no public policy. We will have good political arguments, 
but we will be arguing about failure and whose fault it was and whose 
fault it was that nothing was done. We will not have good public 
policy, which we were all sent here to craft.
  It is clear that in a divided government under which we operate, no 
party can have their way all the time. If both parties take that 
position, we will end up getting absolutely nothing done.
  There are a number of us who have suggested that somewhere between 
the $295 billion Democratic proposal and the $796 billion Republican 
proposal which the President has said he will veto, there has to be 
some common ground. There has to be a way in which intelligent, hard-
working Members are able to come to an agreement somewhere in the 
middle and come up with a figure that is reasonable and gives a good 
tax credit to the American people and, at the same time, uses some of 
the surplus money, the $1 trillion, to address the very serious needs 
and shortages we have in discretionary programs, such as veterans, 
health and education, and has some money in it for paying down the 
national debt, has money in it for Medicare, which is obviously very 
important.
  There should be a way both sides can come together and say: We don't 
have everything we want but, yes, this is good public policy.
  I suggest the American people are crying out for us to move in that 
direction.
  I and others have joined in offering an amendment, which we hope to 
offer tomorrow, which tries to take the approach of: All right, let's 
take $500 billion of the $1 trillion and give the American people a 
good, solid tax cut for those who need it the most, increase the 
standard deduction for hard-working people, increase the amount that 
you can earn before you are kicked up into the higher 28-percent 
bracket so people can keep a little bit more of their dollars. Yes, 
let's fix the marriage penalty that encourages people, who are two 
single earners in the same family, not to marry only because of the Tax 
Code. Yes, let's do something for education and savings, but let's keep 
it at a reasonable figure of $500 billion, and then we can have the 
other $500 billion for things that are necessary or are needed.
  The President has put some 320-odd billion dollars into Medicare. I 
was privileged to chair the Medicare Commission for a year. I will tell 
you that no one can tell this Congress how much money we need to fix 
Medicare. No one can make that assessment today because we have not yet 
reformed Medicare. How can we say how much we need to spend on Medicare 
until we reform it, which everybody agrees we ought to do?
  Yes, ultimately the Roth tax bill will pass the Senate. A similar 
bill with the same size tax cut has passed in the House. I suggest to 
our leaders on both sides of the aisle, let's hold back trying to go to 
conference. Pass these two bills and hold them in abeyance and let all 
Members, Republicans and Democrats alike, those in the House and in the 
Senate, go back to their respective States and respective districts and 
listen to our constituents and ask them what their priorities are.
  Do not look at the polls that Republican pollsters take and 
Democratic pollsters take. I can give you the answer when I see the 
questions they ask. Listen to the people and have town meetings and 
talk about trying to work together to finish this problem and solve 
what I think is a real opportunity on what to do with $1 trillion.
  I suggest that after we spend that time in August, we then come back 
to our respective bodies, the House and the Senate, and move quickly, 
as Senator Roth has said he will do, on reforming Medicare, real 
Medicare reform, coming up with good suggestions about what we need to 
do with a system that was first established in 1965 which no longer 
works as it should.
  When we do Medicare reform, we will then know how much more money we 
need in order to make that program work. When we find out what that 
number is, we can then combine it with a reasonable tax cut and have 
enough money for hard-working Americans and yet have enough money for 
Medicare reform with a good, solid prescription drug package to go 
along with it, and then come together, join hands for a very rare 
moment in bipartisan cooperation to do something which I think is in 
the national interest, so that at the end of this year we will have 
more than a political issue about whose fault it was that nothing was 
done. We will be able to go back to our constituents and say that when 
we had the opportunity to decide what to do with $1 trillion, we took 
that opportunity and came up with good public policy.
  I hope many of our colleagues can say: I think the Democratic bill is 
a little too low in the tax cut, but I also think the Republican bill 
is a little too much of a good thing; therefore, I want to find a 
legitimate compromise.
  I suggest the word ``compromise'' is not a dirty word. It is 
something we should be seeking as Members of an elected body which is 
called upon to make Government work for everyone.
  I hope when we do offer in a bipartisan fashion the $500 billion tax 
cut

[[Page 18180]]

and reserve the other $500 billion for other needs of discretionary 
spending, to fix Medicare and reform it with prescription drugs, that 
we will be able to get a strong degree of bipartisan support so we can 
all work together and hopefully, sometime in September, we can reach an 
agreement that makes sense and is good public policy. Good public 
policy is also good politics. I suggest that is the approach we should 
be taking.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN. Mr. President, I yield the Senator from North Dakota 
such time as he requires to express himself fully on the matter of the 
committee substitute.
  Mr. CONRAD. May I withhold for the moment?
  Mr. MOYNIHAN. By all means. I will take the opportunity to make a 
brief description of the committee substitute.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, it is our view that the roughly $900 
billion in projected surpluses for the coming decade can prudently be 
allocated in thirds: the first to be reserved for Medicare. We are 
going to have to get to Medicare. If we do not do it in this session, 
we may do it in the next or the next Congress, but that time is coming. 
It will require money. It will require general revenues, there is no 
mistaking that any longer. We think that keeping a third of a billion 
dollars for that purpose is prudent. In the meantime, it will retire 
some debt and there will be some interest savings and we will have that 
money generally understood to be available.
  We think another third has to be used to restore what we have come to 
call discretionary spending. I wish I knew for sure from where that 
word came. I think Senator Roth would not have produced so devious a 
term. Is the Marine Corps discretionary? Is the Coast Guard? Do we 
regard the Bureau of the Census as something we can do without? We did 
for a while, letting the States do it, but since 1860 we have had one. 
This is our general Government, and it is not discretionary, save on 
the margins. Most of these functions have been with us a long time, and 
we need them.
  The present arrangement is for drastic reductions in real dollars for 
these programs over the next decade. It cannot go on. We have just seen 
the painful scene of the House of Representatives providing an 
emergency appropriations for the year 2000 census, as if the census 
came up like a hurricane or a flood. We have had one every 10 years 
since 1790. It is not an emergency. It is just that it cannot be met 
under these caps. So we think a third should be preserved for that 
purpose.
  Finally, a third for tax relief, targeted to generally accepted 
principles that are widely based. We would have $189 billion in broad-
based tax relief. That would, most importantly, increase the standard 
deduction by 60 percent. This would remove more than 3 million 
taxpayers from the tax rolls and would provide an estimated 9 million 
more to simply take the standard deduction. It is good tax policy. We 
believe it certainly is simplification.
  We would like to have $27 billion for health care initiatives, 
including a $1,000 long-term care credit and a 50-percent deduction for 
long-term health insurance to make health insurance affordable.
  We look forward to $17 billion in education initiatives. That would 
include a large bond program for public school modernization and 
permanently extending employer-provided tuition assistance for higher 
education.
  If the Senate would indulge me, this latter provision is so 
important. I have now 23 years in the Finance Committee, and it seems 
every other year we recommend extending it instead of making it 
permanent.
  But if ever there was a palpable, demonstrably useful program, it is 
when employers send employees to receive education at various levels, 
commonly graduate levels, because they want to acquire new skills for 
which they will be put to work at higher wages, and for which they will 
pay more taxes, and that virtuous cycle I was talking about this 
morning will continue. It is unreal we continue to keep it on a short 
lifespan. But this gives it a much longer period.
  Finally, $31 billion in technological and economic development 
incentives, including an extension of the research credit. These seem, 
to us, to be widely based. They are equitable, and I hope they will 
amend themselves to the Senate.
  I see my friend from North Dakota is on the floor, is ready, and I 
yield him 15 minutes.
  Mr. CONRAD addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I thank the Chair and thank the Senator from New York.
  I thought it might be helpful to review the record on how we got to 
where we are today as we put in context the choices that Senators have 
to make.
  I think it is helpful to go back to 1981, the Reagan administration, 
and look at what happened to deficits and debt during that period, and 
compare it to the Bush administration and the Clinton administration, 
so that we understand how we got to where we are today and what the 
implications are for the proposals before us.
  If we go back to the Reagan administration, I think we all recall the 
economic history. We had, then, a major tax cut. The results were 
clear. The deficits exploded. The debt exploded.
  Then, in the Bush administration, we saw a further explosion of 
deficits, until in the last year of the Bush administration we reached 
a budget deficit of $290 billion. The national debt had tripled under 
the Reagan administration.
  In 1993, we passed a plan, on the Democratic side, without a single 
vote from the Republican side, a 5-year plan to reduce the deficits and 
restore our economic health.
  That plan worked and worked beautifully. We saw reductions in the 
deficit in every year of this plan. We saw in the first year the 
deficit go down to $255 billion, and then we saw declines in the 
deficit until we reach surplus.
  That is the record of these three administrations.
  In 1993, when we passed a 5-year plan that put us on the path to 
deficit reduction, we had increased taxes on the wealthiest 1 percent 
of taxpayers on income taxes and cut spending. That is how we achieved 
balance.
  If we look at it from another vantage point, debt held by the public, 
we can see during the 1880s the debt held by the public grew 
dramatically. It was only after we passed the 1993 5-year plan that 
debt held by the public started coming down.
  In fact, here we are today; we have seen significant progress made on 
debt held by the public being reduced. If we have the wisdom to stay on 
this course, we will see further declines in the publicly held debt. In 
fact, we can be on a course to eliminate the publicly held debt in 15 
years.
  What have been the results of this economic policy? The results have 
been a resurgence in our national economic lives--the lowest inflation 
rate in 33 years, the lowest unemployment rate in 41 years, and we have 
seen the best economic performance since the Johnson administration 
back in the 1960s.
  We can see the rates of growth of various administrations. In the 
Clinton administration we see an economic growth rate of nearly 4 
percent. We compare that to the Bush administration, 1.3 percent; 3 
percent under Reagan; the Carter administration, and so on. So we have 
seen a period of sustained economic growth--in fact, the longest 
economic expansion in our history.
  In addition to the other positive benefits, we have seen a dramatic 
reduction in the welfare caseload. This is largely a result of the 
economy. It is also a result of the welfare reform proposal that we 
passed a number of years ago. The percentage on welfare is the lowest 
in 29 years.
  All of this is jeopardized. All of this is jeopardized by the risky, 
radical, reckless proposal that is before us from our friends on the 
other side of the aisle. Interestingly enough, the very people who are 
advocating this proposal said, about the 1993 plan that has

[[Page 18181]]

formed the basis of the deficit reduction and the economic resurgence 
of this country, that that plan would not work.
  The distinguished chairman of the Finance Committee said about the 
1993 plan:

       It will flatten the economy.

  Senator Gramm of Texas, a member of the Finance Committee, said:

       We are buying a one-way ticket to recession.

  The truth: The economy has reached a new milestone--the longest 
peacetime expansion on record.
  We had a former President who said: Facts are stubborn things. 
Indeed, they are. The fact is the 1993 5-year plan, that passed without 
a single vote on the Republican side, reduced the deficit and formed 
the basis for an economic resurgence in this country.
  Our friends on the other side of the aisle, the very ones who are 
here with a radical, risky plan, were the ones who were wrong about the 
1993 plan. In fact, Senator Gramm, who was just speaking, said at the 
time about the 1993 plan:

       I want to predict here tonight that if we adopt this bill 
     the American economy is going to get weaker and not stronger, 
     the deficit four years from [now] will be higher than it is 
     today and not lower . . . when all is said and done, people 
     will pay more taxes, the economy will create fewer jobs, 
     Government will spend more money, and the American people 
     will be worse off.

  Senator Gramm was wrong on virtually every count.
  The fact is, the 1993 plan reduced the deficit and kicked off this 
extraordinary economic expansion: the lowest unemployment rate in 41 
years, the lowest inflation rate in 33 years. The fact is, the very 
folks who are now advocating this radical, risky plan were wrong in 
1993, and not just a little bit wrong; they were dead wrong.
  Now, let's check their math. It is fascinating what I have heard on 
the floor today. Over and over the message is that we have a $3 
trillion surplus and we are only using one-quarter of it for tax 
relief. Let's check that.
  The truth is, the total surplus that is projected over the next 10 
years is $2.9 trillion, according to the Congressional Budget Office. 
But what they haven't been saying on the floor is that $1.9 trillion of 
that, nearly two-thirds, is Social Security surplus. So you have to 
subtract that. That leaves a surplus of $1 trillion. When you take out 
the additional interest cost that will accrue, if you are going to give 
a tax cut of $130 billion, you are left with $870 billion that is 
available of non-Social Security surplus.
  What do our friends on the other side of the aisle want to do with 
this $870 billion? They say, let's take $800 billion, or nearly that, 
and give it in a tax cut, a risky tax cut that has the potential to 
blow a hole in the fiscal discipline we have established--$800 billion 
of tax cut out of $870 billion that is available. That is not 25 
percent, that is 94 percent, 94 percent of the non-Social Security 
surplus being used for a tax cut--not 25 percent, 94 percent.
  It is very interesting, the choices that leaves us with. We have 
nothing for Medicare under the Republican plan, nothing to strengthen 
Medicare, nothing for domestic needs over the next 10 years, and they 
have got unallocated $63 billion.
  Compare that to the Democratic plan that saves every penny of the 
Social Security surplus for Social Security and then, in equal thirds, 
one-third for tax relief, $290 billion--$500 billion less than our 
friends on the other side--$290 billion to strengthen and protect 
Medicare, and $290 billion for high-priority domestic needs.
  I think it is critically important that people understand when we 
talk about domestic needs, what are we talking about for the next 10 
years? This chart shows what happens if we just have constant buying 
power over the 10 years, which is represented by this blue line. That 
is constant buying power.
  Our friends on the other side say the Democrats just want to spend 
money. Let's look at the Democratic plan.
  I have just indicated we want $290 billion for domestic needs. That 
represents this red line. That is a cut in buying power for the Federal 
Government from what we now have. If you just take last year's spending 
and add inflation, that is the blue line, constant buying power.
  The Democrats are proposing cutting the buying power of the Federal 
Government. They are proposing cutting spending.
  Here is what our Republican friends are talking about in terms of 
spending cuts, this green line. This green line means dramatic, radical 
cuts in education, in defense, in parks, in law enforcement. That is 
what they are talking about. Does anybody believe this is going to 
happen? Does anybody believe it? It is not even happening this year.
  The Wall Street Journal reported yesterday that they are cooking the 
books on the Republican side because they want to spend more money and 
want to act as if they are not breaking the caps. At some point we have 
to face reality and face facts. Facts are stubborn things.
  This blue line is constant buying power. The Democratic plan proposes 
cutting Federal spending in real terms. The Republican plan proposes 
dramatic, draconian cuts, cuts that cannot be sustained, will not be 
sustained. In fact, they won't support them for defense, and they 
shouldn't. They are living with a fiction, and it is a fiction that is 
being revealed every day as the committees of Congress do their work.
  Not only should we check their math but we should check the whole 
basis for the projections that are being made to sustain a tax cut. 
Let's remember, the money is not in the bank. The money is projected to 
come in.
  I used to be in charge of projecting the revenue for my State of 
North Dakota. I can tell my colleagues, there is no 10-year projection 
that anybody can have great confidence in.
  Robert Samuelson, in today's Washington Post, said:

       The wonder is that the Republicans are so wedded to a 
     program that is dubious as to both policy and politics. As 
     Federal Reserve Chairman Alan Greenspan noted the other day, 
     tax cuts might some day be justified, but there is no case 
     for big tax cuts based merely on paper projections of budget 
     surpluses.

  In fact, he went on to indicate, if there was just a 1-percent change 
in revenue and expenditure from what is projected, these surpluses 
would vanish. That is very much in line with what mistakes have been in 
the past.
  This tax cut scheme is not conservative; it is radical. It is risky. 
It is reckless. It poses the threat of undermining all of the work we 
have done to restore the fiscal integrity of this country that has 
played such a large role in restoring our fiscal health. This is not 
conservative. It is radical. It is risky. It is reckless. It ought to 
be stopped.
  Now, our friends on the other side of the aisle say tax revenue is 
the highest it has been in a long time, but they are not telling the 
whole story. Here is what the revenue and expenditure line of the 
Federal Government looks like going back to 1980 and carrying through 
to today.
  The blue line is the outlays of the Federal Government, the spending. 
The red line is the revenues. What we can see is, it has been pretty 
constant over time. The reason we had a deficit was that the spending 
line was above the revenue line--pretty basic stuff.
  In 1993, when Democrats, without a single Republican vote, passed a 
plan to balance the budget, we reduced the spending line and we raised 
the revenue line. That is how we balanced the budget. We cut spending 
and, yes, we raised income taxes on the wealthiest 1 percent in this 
country. That is how we balanced the budget. That is how we got the 
deficit under control. That is how we got the lowest unemployment in 41 
years. That is how we got the lowest inflation in 33 years. That is how 
we got 18 million jobs created. That is how we restored this country to 
economic health--by cutting spending and raising the revenue to balance 
the budget.
  There is one thing they don't tell us much about because I don't 
think they want to deal with these facts. They are saying the taxes are 
the highest they have ever been. The tax revenue is the highest it has 
been in a considerable period. That is what helped us balance the 
budget, along with cutting spending. But what they have not talked

[[Page 18182]]

about is what has happened to individual taxes. Most individual taxes 
in this country have gone down. It might surprise you to hear that 
after all the rhetoric on the other side.
  These are not Kent Conrad's calculations; these are the calculations 
of the respected accounting firm, Deloitte and Touche. These are the 
combined tax rates of income tax and Social Security taxes. It is very 
interesting. This is for a working mother, the tax burden, with a 
family income of just under $20,000 a year. In 1979, their tax rate----
  The PRESIDING OFFICER. The Senator's 15 minutes have expired.
  Mr. MOYNIHAN. Would the Senator like another 5 minutes?
  Mr. CONRAD. I would. I thank the Senator from New York.
  It is very interesting; if we study what has happened to the 
individual tax rates and tax burden of people in this country over 20 
years, they have gone down. The Republican rhetoric suggests 
everybody's taxes are at record highs. It is not true. It is not true. 
This is the accounting firm of Deloitte & Touche. They point out that 
for a working mother with an income of just under $20,000, in 1979, her 
combined tax rate was 8.6 percent. That has dropped to 5 percent today. 
Why? Because when the Democrats passed that budget balancing plan in 
1993--it is true we raised taxes on the wealthiest 1 percent, but we 
cut taxes on the vast majority of Americans by expanding the earned-
income tax credit.
  Look at what happened to a middle-income family earning $35,000 a 
year. Their taxes have not gone up. They have gone down. Again, this is 
according to the respected accounting firm of Deloitte & Touche. In 
1979, their combined tax rate--income tax and Social Security taxes--
was 11.2 percent. That dropped to 10.5 percent in 1999, again, because 
when the Democrats passed the plan to balance the budget in 1993, we 
expanded the earned-income tax credit.
  Look at a tax burden of a family of four earning $85,000, and look at 
the last 20 years. Again, their tax burden has been reduced. In 1979, 
it was 17 percent; it is 16.3 percent today.
  Don't get me wrong. I am not suggesting that people don't deserve 
further tax relief. I believe they do. The Democratic proposal provides 
it. It provides it in a fair and balanced way, in a fiscally 
responsible way.
  That is not the case of the risky, radical scheme of our friends on 
the other side. Their tax break explodes in the second 10-year period. 
We have just stopped that, at least momentarily. But this program that 
they have outlined of $800 billion in tax cuts explodes to $2 trillion, 
with the additional interest costs that would add another trillion to 
$3 trillion in the second 10-year period. That is risky. At the very 
time the baby boomers start to retire, they are going to undermine the 
fiscal stability of the country.
  Those aren't the only issues that need to be addressed. We have 
already seen how their tax cut explodes in the outyears, just as the 
baby boomers retire. But we should also ask ourselves how fair is the 
tax cut scheme of our friends on the other side.
  This shows the House bill that has already passed. Their idea of 
fairness is to give the top 1 percent of the people in this country 32 
percent of the benefit. The top 1 percent get 32 percent of the 
benefits of the tax cut proposal of the Republicans in the House of 
Representatives, which has already passed. So for people earning under 
$38,000 a year, they would get, on average, $99. If you are earning 
over $300,000 a year, you get $20,000. That is not fair. That should 
not be the policy of the United States--a tax cut plan that is skewed 
to the richest and wealthiest among us, that gives 32 percent of the 
benefit to the richest 1 percent. That is not fair. It is not wise. It 
is radical; it is risky; it is reckless.
  There is a better way. The Democratic alternative says save Social 
Security first--every penny of Social Security surplus for Social 
Security. And then for the non-Social Security surplus, to split it in 
equal thirds: one-third to protect Medicare, to extend its solvency, 
and to provide prescription drug coverage; one-third, tax reductions 
for working families, targeted squarely at the middle-income people in 
this country, the very ones who need tax relief; and one-third for 
high-priority domestic needs such as education, agriculture, defense, 
and law enforcement.
  Again, that $290 billion doesn't even keep pace with inflation. We 
are cutting Federal spending, in real terms, in the Democratic 
proposal.
  I might add that we have more debt reduction than the Republican 
plan. Let me make that as a final point. The Democratic plan has over 
$2 trillion of debt reduction. The Republican plan has just under $2 
trillion.
  I suggest to my colleagues that the Democratic plan is superior in 
every way--greater debt reduction, preserving the Social Security 
surplus for Social Security, preserving and protecting Medicare, 
providing for our high-priority domestic needs, and, yes, tax relief 
targeted at those who deserve it the most--not the wealthiest among us, 
but middle- and lower-income people who richly deserve some tax relief.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN. Mr. President, as chairman of the Finance Committee, I 
stood on this floor for 10 long hours 6 years ago and I thank the 
Senator from North Dakota for recreating what we did that day and what 
the consequences have been.
  It had been our idea that the Senator from Montana would go next, but 
we can alternate.
  Mr. ROTH. Mr. President, I yield 15 minutes to the Senator from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa is recognized for 15 
minutes.
  Mr. GRASSLEY. Mr. President, we have a Democrat alternative tax cut 
that is the weakest, least adventuresome effort to reduce taxes that 
you could ever expect which will do little good for anybody.
  I call upon my colleagues on the other side of the aisle to be bold 
in trusting the American people with their money, to be bold in letting 
people keep money in their own pockets to spend. I ask the other side 
of the aisle to be as bold in tax policy, and to be as bold in reducing 
taxes as they are bold in wanting to spend the taxpayers' money. I 
would like to have them be as bold in reducing taxes as they are bold 
in their budget of this year to increase practically every program that 
has ever been thought of, and even establishing a lot of new programs 
to have Washington bureaucrats spend the additional money coming into 
the Federal Treasury.
  They are not very bold when it comes to giving the taxpayers back 
their money, but they are very bold in saying how Washington can spend 
that money better than the taxpayers. They are very bold in increasing 
new programs and very bold, without using the words, but saying, in 
effect, that we in Washington know better how to spend the taxpayers' 
money than the taxpayers do.
  How they like to quote Chairman Greenspan because of his respect, but 
also they only like to tell half of what Chairman Greenspan says. We 
have had an opportunity, as Senators, to hear Chairman Greenspan in so 
many different forums this year, just since the first of the year, talk 
about a surplus and what should be done with it. They would like to 
have you believe the only thing that Chairman Greenspan says is that he 
is against any tax cuts.
  But what he does is give Congress several alternatives. Admittedly, 
he says that his first choice is to retire debt held by the public;
  Next, to give tax reductions, because tax reductions are better than 
spending the money as the third alternative.
  And particularly, Chairman Greenspan says, top priority ought to be 
given to cutting marginal tax rates.
  Appearing just last week before the House Budget Committee, Chairman 
Greenspan reiterated his position by making clear, and I will give you 
this quote:

       Only if Congress believes that the surplus will be spent 
     rather than saved is a tax cut wise.

  I think given the President's, and his party's, past and present 
propensity to

[[Page 18183]]

want to spend all of the surplus--the President's budget not only 
spends all the surplus, the President's budget would take $30 billion 
from Social Security, and they have a $100 billion tax increase as 
well--with their propensity to spend all of it, and more than the 
surplus, it should be obvious that the congressional budget plan that 
is before us by the people on this side of the aisle is aligned very 
much with Chairman Greenspan's position.
  I wish our friends on the other side of the aisle would speak in the 
same way when they say that this money is not in the bank, that it is 
only projected income--when they use that as an excuse that you can't 
give people a tax cut--they ought to not project the expenditure of 
that money as well.
  Yet they are willing to be radical. They are willing to be risky when 
projecting expenditure of this money. But somehow it is wrong to give 
this money back to the people to spend because if the people keep this 
money in the first place, they don't send it to Washington, and it is 
going to create more jobs. It is going to turn many times over in the 
economy than would otherwise be turned over in the economy if it were 
spent by Washington bureaucrats--creating jobs and creating wealth, if 
the taxpayers spend it, and just being poured down the black, 
bottomless pit if it is spent in Washington, DC.
  We had a chart from the other side of the aisle that said what a 
great deal has happened since 1993 on reducing the deficit. But what is 
left out of that equation and that presentation is one of the greatest 
political revolutions that has come from the grassroots of America in 
an off-year election in the last 60 years. And that was that the people 
of this country for the first time in 40 years turned both Houses of 
Congress over to a Republican majority.
  It was only after that Republican majority was elected that there 
were dramatic changes in budgeting with the caps, and even with a 
reduction of taxes in 1997 that brought the changes and the discipline 
to the Hill--even to the White House as well--that brought us to the 
place where we are today of talking about surpluses, because in the 
first 2 years of this administration their own budgets were projecting 
in the outyear deficits for a long, long time. But all of that was 
turned around when Republicans took over Congress, and started down the 
road of bringing surpluses and balancing the budget.
  We are here to say that the Democrat tax decrease of $300 billion 
compared to our $792 billion is too puny to do the economic good that 
ought to be done. It is too puny to return political and economic 
freedom to the taxpayers of this country because the taxpayers will 
spend that money more wisely than if it is sent to Washington.
  But we are also here to declare victory in the debate over whether we 
should give tax relief to the American people because they want us to 
believe with their amendment that they are for a tax cut. They are for 
a tax cut--a very small, puny tax cut. The President says now he is for 
a tax cut.
  We have won somewhat of a victory in this year's debate. The question 
now is not whether there should be tax relief, but what kind and how 
much?
  As a Member of the majority party, I can't think of a better problem 
with which to be confronted. With a tax cut plan before us, we are 
proposing to finally start sending hard-earned dollars out of 
Washington and back to the taxpayers.
  Most of the provisions of this bill are what the people from the 
grassroots of America have been telling their Congressmen and Senators 
they want done--and really want done--because we include those things 
in our bill: addressing the marriage penalty; providing health care tax 
relief; more help for education, pensions and savings; long-term care; 
child care; estate tax relief; and, most importantly, general relief 
for middle-income taxpayers.
  Nearly all of the provisions that I and Senator Feinstein introduced 
in S. 1160 are included in some form in the bill before us. I commend 
the chairman for taking the initiative and pushing major tax relief 
that people really want. And, by the way, even some Democrats supported 
it out of the Finance Committee. The President has only offered modest 
tax cuts.
  This amendment is an example of it. Of course, in the process, as I 
indicated, he wants to raise taxes $100 billion in other ways in the 
process of giving a tax cut, because the President of the United States 
wants it both ways. He wants to be able to take credit for a tax cut on 
the one hand while he is raising taxes on the other hand.
  Of course, he is sending out all of these frantic, hysterical veto 
threats. He attacked the House bill, playing the class warfare card 
that he plays so well, saying that it benefited the rich. Of course, he 
can't do that with a Senate bill. We saw that was not challenged on 
this point by people on the other side of the aisle, since 60 percent 
of the bill before the Senate helps families who are middle class and 
earning $75,000 or less.
  Now the President and his minions are saying $792 billion in tax 
relief to the American people is too much. He is saying that either 
they don't need it--meaning they don't need the tax decrease--or he 
might even be saying they don't deserve it. He says this while asking 
for billions of dollars in new taxes to pay for even more spending 
while raiding the Social Security trust fund of $30 billion.
  That is right. This President and his budget team raids Social 
Security to pay for more spending. He does this when taxes as a 
percentage of the Gross Domestic Product are at an all-time high of 
around 21 percent. Historically, taxes have been around 18 to 19 
percent of the Gross Domestic Product over the last 30- to 40-year-
period of time. We restore that historical level.
  The public at the grassroots has pretty much consented to pay--not 
every American would agree with that--but over 30 to 40 years, it has 
been about 18 to 19 percent. But now it is up to 21 percent. We propose 
that it be more like that historical rate of taxation, as it has been 
for a long time.
  By contrast, the administration, in addition to providing puny tax 
relief, would have a debt of $200 billion more than what we will have 
if our budget is adopted.
  We also protect Social Security and Medicare.
  The congressional budget plan before the Senate provides a blueprint 
for savings. We are projecting a cumulative surplus of $3.4 trillion. 
This includes the surplus in the Social Security trust fund as well as 
the on-budget general fund surplus. Of the estimated $3.4 trillion 
surplus, Republicans are advocating in this budget saving $1.9 trillion 
to save Social Security. These are the funds which are estimated to 
come into the Social Security trust fund from the payroll tax.
  Of course, the President of the United States in attacking our budget 
is dead wrong in saying we put tax cuts before Social Security, because 
we plan for Social Security very thoroughly. We have been trying to set 
up a lockbox so no one will be able to get at that money and spend it. 
However, we have not met with much cooperation from the other side of 
the aisle on saving Social Security. I have lost track of the number of 
times since the first of the year we have had cloture votes on our 
Republican lockbox proposal. This is truly unfortunate. If we don't 
create a Social Security lockbox, we are going to end up spending the 
money for everything else but Social Security. Even the President has 
said he is in favor of a lockbox, but his actions fall far short of his 
rhetoric.
  The tax cut we are talking about today is $792 billion. This is less 
than 25 percent of the total cumulative surplus of $3.4 trillion. A lot 
of our taxpayers say even $792 is not a bold enough tax cut. It is even 
less than the $1 trillion that will accumulate on the on-budget 
surplus. There is money left over, $505 billion to be exact, to take 
care of problems with the Medicare system and provide additional funds 
for discretionary spending.
  In our budget resolution, we provide $180 billion for increased 
discretionary spending after the budget caps expire in the year 2002. 
That still leaves $325 billion to help solve Medicare problems and 
spending for domestic priorities.
  Over the next 10 years the Federal Government will take in nearly $23

[[Page 18184]]

trillion in all taxes. That is a lot of money. This bill gives $792 
billion back to the American taxpayers. That still leaves $22 trillion 
in revenue that the Government will spend. The tax cut we are talking 
about is only 3.5 percent, 3.5 pennies out of every $1 coming into the 
Federal Treasury over the next 10 years. I am a little embarrassed to 
tell the taxpayers we are only giving a tax cut of 3.5 percent from all 
the money the Federal Government will take in over the next 10 years. 
That is three times what the other side of the aisle would return to 
the taxpayers.
  The congressional budget plan will save 75 percent of the surplus 
projected by the CBO over the next 10 years. In contrast, the President 
saves only 67 percent. The President is proposing a $95 billion tax 
increase.
  We continually ask the American taxpayers to trust us as legislators. 
There isn't a day that goes by without us asking for that support from 
our constituents. Now it seems to me it is time to return trust to the 
American taxpayers. It is time to trust the American taxpayers with a 
little bit of their own money--3.5 percent of all the money coming in 
over the next 10 years.
  The latest challenge from the other side of the aisle is reflected in 
the Democrat substitute before the Senate. I suppose it could be called 
a tax ``scratch'' instead of calling it a tax cut because it is that 
puny. Even a number of Democrats are scoffing at such a weak effort. It 
is less than $300 billion over 10 years. It does not even have a rate 
cut for middle-income taxpayers. It does not even get rid of the unfair 
marriage penalty that affects millions of taxpayers. Compared to our 
tax bill, it delays the 100-percent deductibility for self-employed 
health insurance and in the process hurts small business and farmers.
  The Democrat plan only provides half of the assistance the Republican 
plan provides for people who need to purchase their own health 
insurance. The Clinton-Gore team and their lockstep followers in 
Congress do not think that the tax rate the average American pays is 
too much. We all know what their record has been. We all know the 
Clinton-Gore tax increase of 1993 was the largest ever in the history 
of the United States. I have heard some Members, in defense of their 
support of this massive tax increase, try to argue that this is what 
brought about the current surpluses.
  This is a revisionist history that has risen to some sort of art form 
on the floor of the Senate today. First, the Clinton-Gore tax increase 
was supposed to raise $240 billion. Of course, this is less than the 
$290 billion they now say they want to give back in this substitute 
amendment.
  However, the Clinton-Gore tax increase never raised the money it was 
supposed to raise. The revenue increase that did come in is due to the 
private sector economic engine and did so despite all of the shackles 
this administration has placed on business through both tax increases 
and unprecedented regulation.
  In addition, $40 billion of this new revenue can be attributed to the 
capital gains tax reduction that the Republican Congress passed in 
1997. The administration argued this tax reduction would cost revenue, 
but the Wall Street Journal has said this has brought in $40 billion 
more. So most of the arguments on the other side of the aisle are just 
plain wrong.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Abraham). The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield myself 10 minutes.
  I begin by asking Members and the public to review the remarks of the 
Senator from North Dakota, Mr. Conrad, given 15 or 20 minutes ago. It 
was one of the best summations of the facts and choices we now face 
that I have ever heard.
  Senator Conrad is a former tax commissioner of the State of North 
Dakota and is intimately familiar with tax matters. He also is a very 
senior member on the Budget Committee. He is very deeply involved in 
all of the tax and spending matters that face our Federal budget. I 
urge Senators to review the comments made by the Senator from North 
Dakota, Mr. Conrad. They were very much on target. As I said, it was 
probably the best factual summary of the choices facing Members that I 
have heard in the entire debate.
  Essentially, we have choices that are quite significant. How are we 
going to manage this additional surplus? I don't want to say awesome, 
but it is very unusual for this country to have a budget surplus and be 
faced with these choices. Not too coincidentally, it is the end of the 
1990s that we have the choice, as we face the next century, the 
millennium. I think the American people sent legislators to the Senate 
and the Congress to do what is right, to do what is right when we have 
a big surplus.
  It has been stated many times, and I will repeat it: The projections 
over the next 10 years are for a $3 trillion surplus, $2 trillion out 
of payroll tax additional revenues because more people are working, the 
economy is doing so well, the payroll tax revenues increase. We have 
agreed that that $2 trillion generated from the payroll tax increases 
will go into the Social Security trust fund. We want to make sure the 
Social Security trust fund is as secure as we can possibly make it. It 
seems reasonable those revenues go to the Social Security trust fund. 
That is agreed to here. That is not a problem.
  The question is: With the remaining $1 trillion of the $3 trillion 
that comes out of general revenue--from income taxes, including 
corporate and individual income taxes--what do we do with that? Very 
simply, it comes down to making choices. Under the choices we make, 
some people are going to be helped and some people are going to be 
hurt. That is the nature of choices. Or some people are helped more and 
some people are helped not quite as much because we have to make 
choices.
  So essentially what do we have in front of us? I would like to show a 
chart that has been presented many times, but it is important to drive 
this point home. It is a fact. The fact is, our friends on the other 
side of the aisle do propose a tax cut of about $792 billion over the 
next 10 years. Because of that tax cut, it means the debt will not be 
reduced as fast as otherwise might be, which means interest on the debt 
will be a little more. That additional interest on the debt is about 
$141 billion. If we add the two together, in effect the tax cut offered 
by the other side really takes $933 billion out of the roughly $1 
trillion surplus. That is a fact. Nobody can deny that. That is a fact.
  Then the next question is, does that make sense? Who is helped by 
that? Who is hurt by that? Given the composition of the tax reduction, 
those helped tend to be the most wealthy Americans at a period in our 
American history when our economy is doing very well. Who is hurt? The 
people hurt by this tend to be people who are necessarily going to face 
very severe reductions in veterans' benefits. It might be in education 
provisions, it might be the FBI salaries, Head Start, kids not admitted 
to the program, and so forth.
  Why do I say that? I say that because the budget tax proposal before 
us, presented by the other side, necessarily assumes we are going to 
stick with the budget caps on discretionary spending.
  My friends around the country watching this ask what in the world are 
discretionary spending caps? Let me explain to the American public what 
they are. Essentially, Congress passed a budget, by the other side, 
entirely by the other side--and by the other side I mean the Republican 
party--which set very tight budget caps. If those budget caps are 
projected in the next 10 years, that necessarily means about a $595 
billion cut in discretionary spending, which is spending on such things 
as education, veterans' benefits, Head Start programs, education 
programs, and so forth. But to make it even worse, that does not take 
into consideration the probable scheduled increase in defense spending 
of about $127 billion, which means if you add the two together, this 
budget means about $775 billion in real discretionary spending cuts. 
That is necessarily, arithmetically, mathematically, the consequence of 
this proposal --cuts that deep. That means, if defense is increased 
$127 billion, all the

[[Page 18185]]

other discretionary spending will be cut about 43 percent by the year 
2009.
  That means a 43-percent cut in veterans' benefits. Let me tell you a 
little more about that. What does that mean? That means about 1.5 
million veterans will be turned away--turned away because of those 
cuts. It means about 375,000 kids will be out of the Head Start 
Program, gone--375,000 kids. That is necessary because of a 43-percent 
cut in all these programs because this budget assumes no increase in 
discretionary spending caps and probably, if we are realistic with 
ourselves, it means the other side is going to add back in defense. 
That nets out at a 43-percent cut.
  I am not saying we should increase these programs above the baseline, 
although perhaps in some areas we could. But at the very least, we 
should not cut them 43 percent across the board. Let's say we are not 
going to cut them 43 percent across the board. Let's say we are going 
to keep Head Start funding. That necessarily means you have to cut 
something else by more than 43 percent. That is where we are. Nobody 
can dispute those facts--nobody. Those are the facts.
  Let me show another chart. To state it differently, take a dollar 
bill. This is the line--it is hard to see on this chart --of the tax 
breaks as a consequence of the bill before us. This is the additional 
interest payment, which is about $63 billion for everything else, and I 
have already outlined what the consequences of that are.
  The proposal before us is the Democratic alternative. What is it? 
Basically, we think it is a wiser set of choices. Again, with roughly a 
$1 trillion surplus that we are debating, the question is what choices 
are we going to make? What should we do about it? The choice made by 
the other side is essentially all of it in tax cuts--all of it. Because 
if you add interest lost, it basically comes to it all going to tax 
cuts. That is basically what it is.
  We say no. First, because that is a projection and we do not know if 
it will be real; it is so back loaded. You have heard all the 
arguments. Rather, let's do a little bit here and a little bit there 
that protects the future. We say let's have about a $300 billion tax 
cut. Sure, we are for tax cuts. Let's take $300 billion and reduce it.
  Mr. President, I yield myself an additional 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. So another third, we say, goes to Medicare. Let's give 
some to Medicare. I heard a Senator a few minutes ago say it is 
reckless or it is irresponsible to spend money on programs. I ask the 
Senator, is it reckless, is it radical to save a little bit for 
Medicare? The Medicare trust fund is in dire straits, even more so than 
the Social Security trust fund. Right now it is projected that the 
surplus in the Medicare trust fund is due to reach zero about 2015. 
What happens if the economy is not doing as well in the next several 
years? What does that mean? That means the Medicare trust fund is due 
to reach zero earlier than 2015.
  You wonder why the projections for the Medicare trust fund expiration 
kind of bounce around? It is basically because the economy itself 
changes. Some years we are doing very well, some years not so well. 
Right now we are doing well, so that means a 2015 expiration date.
  So we are saying in the proposal crafted by our leader, the Senator 
from New York, let's save about a third of this surplus, this $1 
trillion surplus, for Medicare. One-third for tax cuts, one-third for 
Medicare, and we are also saying come on, men and women around here, 
let's be realistic.
  I mentioned earlier about the discretionary spending caps and how the 
budget on the other side assumes we are not going to raise the caps, 
which means in effect if we add some for defense, about a $775 billion 
cut in spending. We are saying that is unrealistic. We are not going to 
cut veterans' benefits nearly that amount. We are not going to take 
young kids out of the Head Start Program. So we are saying take a third 
of that $1 trillion, roughly, and let's dedicate that to the 
discretionary spending programs so the reductions are not as great as 
we note they otherwise might be. The result is the interest cost that 
will necessarily result from this proposal.
  So, again, it comes down to choices. Who is helped? Who is hurt? We 
say the people who should be helped are seniors on Medicare. We should 
help shore up the Medicare trust fund, the program. Some of these 
Medicare dollars could be set aside for drug benefits. We know how many 
seniors desperately need help with prescription drug benefits. We are 
saying some could help veterans.
  What are we really saying? Many say, give back the tax cut, give it 
back to the people, give it back now to the people.
  It is a very sympathetic argument. We are saying let's be responsible 
but let's give it back to our children. Let's give it back to our 
children in greater deficit reduction. Let's give it back to our 
children to help their parents with Medicare. Let's give it back to the 
future. Let's be responsible.
  I do think we have a moral obligation as representatives of the 
people to do what we can to leave this country in at least as good a 
shape, if not better shape, than we found it. That means reducing the 
debt, it means helping shore up Medicare, it means just meeting 
people's needs in a very solid, responsible way.
  The majority plan hurts people on Medicare, hurts veterans, hurts 
kids in Head Start, hurts the country. We say let's not hurt the 
country, let's help the country. Let's help the country with a 
balanced, responsible alternative, one I think the American people 
really would prefer if they were fully involved in this debate rather 
than a reckless, irresponsible--I hate to categorize it that way, but I 
do think it is, quite honestly--a program that takes all of the 
surplus, $1 trillion, and sends it all back for tax cuts at a time when 
Mr. Greenspan, the Chairman of the Federal Reserve, says is not the 
right time for a tax cut. He says it is not the right time because the 
economy is already heated up and we are dangerously close to the point 
where, with more stimulus, a bubble could burst and we could be causing 
a lot more problems than we can even think of at this point.
  I thank the Chair and yield back my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I yield 12 minutes to the Senator from 
Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. Mr. President, as we consider the $792 billion of overpaid 
taxes we seek to refund in the Taxpayer Refund Act, millions of 
Americans are deeply concerned about President Clinton's veto threat. 
We just heard the statement about we cannot have a ``reckless'' tax 
cut, but they want to give back this money to our children and 
grandchildren and to the American people.
  The truth is, our bill is the bill that wants to return this surplus 
to the taxpayers of the country; the President's bill wants to spend 
it. It is very different. Somehow, if we give it back in tax relief, it 
is reckless because the American people somehow do not know how to 
spend it, but let us keep it in Washington and let Washington spend it 
and it is fine. I do not understand that logic.
  The President has also threatened to veto a proposal from his own 
party to provide just $500 billion in tax relief--again, more evidence 
that they want to spend the money, not give it back, not save it for 
our children, but spend it on new Washington programs.
  The President is hinting at supporting tax relief somewhere in the 
$250 billion range, but his own budget included only one tax cut, and 
that could only be used for savings, not to let families decide how to 
spend their own money, but for Washington, the President, to tell you 
what you are going to do if he decides to give any of your surplus 
back.
  I take this opportunity to make a few points about why the taxpayers 
have every right to expect this Congress and the President to return at 
least $792 billion of overpaid taxes.

[[Page 18186]]

  First, let me emphasize that this bill is a 10-year $792 billion tax 
cut plan that benefits all Americans, with a focus on providing major 
tax relief for middle-class families. It is not a tax cut for the rich. 
It is not an unrealistic level of relief. It significantly reduces 
taxes for millions of American families and individuals, and it is the 
biggest tax relief we have ever had since President Ronald Reagan cut 
taxes dramatically in the early 1980s. I again commend Chairman Roth 
for his leadership and his commitment to providing major tax relief.
  We promised to return to American families the non-Social Security 
tax overcharges they paid to the Government, and we have fulfilled that 
solemn promise. The proposed tax relief will immediately ease working 
Americans' tax burden and allow them to keep a little more of their own 
money and use it on their family priorities--not Washington's, not 
President Clinton's, but their families' priorities.
  This taxpayer relief refund legislation gives middle-class working 
families at least $450 a year in relief from the tax squeeze. It 
corrects the injustice of the marriage penalty tax by allowing married 
couples to file joint returns as if they were single payers of taxes, 
so 22 million Americans will no longer be penalized simply for the fact 
they are married.
  This legislation also eliminates the alternative minimum tax to 
permit millions of American families, including farmers, to enjoy the 
full benefit of tax exemptions and credits such as the $500-per-child 
tax credit which I championed and the Senate passed back in 1997.
  The proposed tax relief includes a reduction in the death tax which 
will help farmers and small businesses across the country pass on their 
hard-earned legacies to their children, not to pass it on to the 
Government but to pass it on to their children and their heirs.
  The bill makes health care more affordable for millions of self-
employed and uninsured by making their health care costs 100-percent 
deductible, and it includes my legislation to permit workers without 
coverage to deduct their health insurance costs and also allows those 
purchasing long-term care policies to deduct them as well. These 
measures will allow more people to obtain health care coverage or 
improve the coverage they already have.
  The bill before us also encourages working Americans to save more for 
their future by expanding IRAs and providing education tax benefits for 
parents, for students, and for workers.
  There is other tax relief for hard-working Americans as well. While 
there is still room to improve the legislation, such as to expand the 
broad-based tax relief and to provide immediate relief of the marriage 
penalty, this $800 billion package is a clear victory for working 
Americans.
  One of the most important points I have made repeatedly in this 
Chamber is that the non-Social Security surplus is the working people's 
money, not Washington's, and the people deserve the refund.
  America's strong economy has turned the ink in Washington's 
accounting book black for the first time in 40 years. The budget 
surplus above and beyond Social Security will top $1 trillion to $1.4 
trillion over the next 10 years. The CBO finds the increased revenue is 
propelled by personal income tax increases, and the CBO cites four 
sources for this unexpected revenue:
  First, the rapid growth of taxable income, which has raised the tax 
base for personal income tax receipts.
  Second, the CBO says adjusted gross income, which has grown even more 
rapidly than taxable personal income, mainly through the realization of 
capital gains. The capital gains tax increased by 150 percent between 
1993 and 1997, which is a third of the growth of tax liability relative 
to GDP.
  Third, rising taxes paid on pension and IRA retirement income.
  Fourth, and I think the most important, is the increase in the 
effective tax rate. As Americans are working harder, as they earn more 
money, as inflation is there, it pushes more and more of them into the 
higher tax brackets. The tax rate increase accounts for 40 percent of 
the tax growth in excess of GDP growth. That is an unfair tax. It has 
pushed people from one tax bracket into another.
  By the way, the CBO also points out the revenue windfall did not 
result from legislative policy changes. In other words, according to 
the CBO, the legislative initiatives taken by the President and by 
Congress did not generate this surplus.
  Clearly, all four reasons we have a surplus are the result of the 
productivity of working men and women of this country, and it has 
little or nothing to do with Washington. So why should the President, 
why should Congress, be at the front of the line to spend this surplus, 
and why are we hearing claims that the $792 billion of tax relief 
will--and these are the scare tactics, we hear them time after time and 
they are ridiculous, but they say that tax relief will somehow harm 
Social Security, it will harm Medicare, and similarly impact Federal 
spending.
  Again, my point is, these are overpaid taxes from American workers 
and they have every right to get it all back. To say we cannot provide 
this level of relief without hurting Americans is totally inaccurate.
  We must recall that Americans have long been overtaxed and millions 
of middle-class families cannot even make ends meet due to the growing 
tax burden. Our savings rate in this country this year is a negative 
because families do not have any money left, especially after paying 
taxes, to put away. They are desperately in need of this largest 
possible tax relief.
  Americans today, for example, are paying in my State of Minnesota 42 
percent of their hard-earned money on taxes to support Government.
  It is hard enough to raise one family without having to raise your 
Uncle Sam at the same time. According to the Government's own data, the 
average household today pays about $10,000 in Federal income taxes 
alone. That is twice as much as they paid in Federal taxes in 1985. The 
total Federal tax will consume 21 percent of the national income. 
Americans have not paid this much in taxes since World War II.
  They say: Oh, Americans aren't overtaxed. But since President Clinton 
was elected in 1993, the amount that Federal tax consumes of the gross 
domestic product has gone from 18 percent to 21 percent. So the 
Government is taking more of what this country produces, and it comes 
out of the pockets of average working Americans.
  In the past few years, Washington's income, in fact, has grown faster 
than our economy and twice as fast as the income of working Americans. 
Washington is growing twice as fast as what you are getting in your 
paychecks. With more middle-income workers being thrown into higher tax 
brackets, the ``middle class tax squeeze'' has been devastating.
  Millions of middle-income Americans, who have worked hard to get 
ahead, have been pushed from the 15-percent tax bracket up into the 28-
percent tax bracket. Hundreds of thousands of others have been pushed 
from the 28-percent tax bracket into the 31-percent bracket, and so on. 
More people working explains the surge of the Social Security surplus 
because payroll taxes are levied against everyone. So part-time, low-
income, minimum-wage earners cannot escape the cruel tax bites.
  According to the census report, the income of the average American 
family has grown--get this--the average income of the American family 
has grown only 6.3 percent, in constant dollars, between 1969 to 1996--
6.3 percent, while Federal tax revenues have increased by nearly 800 
percent during the same time. Yet I hear my colleagues on the other 
side of the aisle say Americans aren't overtaxed; somehow, they are 
doing fine.
  As a result, Americans today are working harder and they are working 
longer, but they are taking home less money because the Federal 
Government is taking home more. A larger share of the earned income of 
working Americans is siphoned off here to Washington, and it isn't 
available for families to spend on their priorities.

[[Page 18187]]

  A recent Census Bureau report finds that 49 million hard-working 
Americans, including 8 million middle-class Americans, live in a 
household that has trouble paying for just their basic needs.
  President Clinton himself at one time--this was down in Texas during 
a campaign swing in 1995--admitted to a group of contributors, by the 
way, that Americans were taxed too much. He said: I might have raised 
taxes too much in 1993. He said: You might think I did. Well, I think I 
raised them too much, too.
  But today he still refuses to refund overpaid taxes to Americans, 
because he does not think working Americans are ``going to spend it 
right.'' President Clinton believes individuals are not capable of 
making decisions for themselves and bigger Government is the only 
solution. Instead, he spends the surplus for Government programs, and 
he calls meaningful tax relief ``fiscally irresponsible.'' His priority 
is not to give tax relief at all. It is ``irresponsible'' to ease 
Americans' tax burdens a little so they can afford basic necessities.
  That is the question. Is it irresponsible to even have a family night 
out once in a while? The family has been, and will continue to be, the 
bedrock of American society. Strong families make strong communities; 
strong communities make a very strong America. But 22 million working 
American couples have been forced to pay $1,400 a year more, on 
average, in taxes every year simply for choosing to be married. Is it 
irresponsible to get rid of an unfair tax policy that discourages 
marriage?
  The PRESIDING OFFICER. The Senator has used his 12 minutes.
  Mr. GRAMS. I ask unanimous consent for 5 more minutes. Or are we 
short on time?
  The PRESIDING OFFICER. The Senator from Delaware has 28 more minutes.
  Mr. ROTH. I yield the Senator 5 more minutes.
  Mr. GRAMS. I thank the Senator very much.
  So the question I was asking is, Is it irresponsible to get rid of an 
unfair tax policy that discourages marriage? The President at one time 
a couple years ago said, yes, this is an unfair tax, but, basically, 
Washington needs it more than the couple does in order to raise a 
family.
  I have heard many who oppose $792 billion in tax relief support the 
individual relief included in this package. Just which specific section 
of the Roth bill would they throw out? What part of tax relief do they 
object to most? I would like to know which part they would like to get 
rid of to get down to what they are proposing in tax relief.
  Let me further address the issue of so-called ``fiscally 
irresponsible'' tax cuts that we hear of so often. ``Fiscally 
irresponsible,'' that means, do not give it back to the people who own 
it, earn it, and should have it, but give it to Washington. That is 
``responsible,'' I guess.
  But in a recent analysis of President Clinton's midsession proposal, 
the bipartisan Congressional Budget Office found that our budget plan 
saves all of the $2 trillion Social Security surplus while the 
President's revised plan still spends $30 billion of the Social 
Security surplus. He cannot get by with just spending surplus; he is 
going to raise taxes by $98 billion, and he is also going to dip into 
the Social Security trust fund again.
  His original plan spent over $150 billion of the Social Security 
surplus. Yet we still hear claims that our tax relief is at the expense 
of seniors. It is the President who is spending the money, raising 
taxes, and dipping into the Social Security trust fund. Yet we are 
irresponsible because we want to return to the American people the 
overcharge in taxes?
  The CBO estimates that our plan reduces more debt held by the public 
than the President's plan. That is another thing. We do reduce the debt 
even more than the President's plan. Ours also produces an additional 
non-Social Security surplus of nearly $300 billion over the next decade 
while the President's plan, again, spends almost all of the on-budget 
surplus. Do you spend it or do you give it back in tax relief? That is 
the question. Whose money is it?
  The CBO also says the President's midsession proposal has no net tax 
cut but, instead, increases taxes by $95 billion. Again, the surplus 
isn't enough. He wants to raise taxes another $95 billion. The 
President commits over $1 trillion in new and additional spending over 
the next decade by expanding Government programs or creating new 
programs.
  Just quickly, I will show this chart. This is what we are talking 
about as to what the President plans to do.
  We all agree on saving Social Security, putting every dime from the 
Social Security surplus into the trust fund, into our lockbox, and not 
spending that. This is our projected $3,371 billion expected surplus. 
But the President wants to spend all that is remaining and raise taxes 
by $95 billion more in order to do that.
  So contrary to Mr. Clinton's plan, our budget provides $792 billion 
in tax relief to working Americans. Meanwhile, we save every penny of 
the Social Security surplus exclusively for Americans' retirement. In 
addition, we set aside over $505 billion for Medicare and to address 
spending needs.
  Out of this whole projected surplus, we plan on saving for Social 
Security, for Medicare, for education, other needs, 75 cents on every 
dollar of this expected surplus. Only 25 cents on the dollar, one-
quarter, would go to tax relief. Somehow, they want to spend the whole 
dollar.
  Our tax relief takes only a small portion of the total budget 
surplus. In fact, only 23 cents of every dollar of the budget surplus 
goes for tax relief.
  There is enough to provide this 23 cent of every surplus dollar for 
tax relief, to protect Social Security and to reform Medicare, 
including prescription drug coverage from needy seniors. But what I 
want to stress today is how we spend this $505 billion is not the 
question before today. It will come at the end of the year when we look 
at Medicare reform and the final appropriations bills. Today the issue 
is, can we provide $792 billion in tax relief, and I think we have 
proved we can with these charts, and the expert advice us received 
through the budget process.
  In fact, you don't have to be a rocket scientist to figure out who is 
fiscally responsible and who's fiscally irresponsbile.
  Contrary to Mr. Clinton's rhetoric that tax relief will cause 
recession, cutting taxes will keep our economy strong, will create 
jobs, increase savings and productivity, forestall a recession and 
produce more tax revenues.
  History has proved that tax cuts work:
  In the 1960s, President Kennedy proposed and later President Johnson 
enacted an individual income tax reduction of an average of 20 percent 
and reduced the top income tax rate from 91 percent to 70 percent. This 
tax relief preceded one of the longest economic expansions in U.S. 
history.
  In the 1980s, Ronald Reagan inherited an economy that was deep in 
recession. Unemployment and inflation sank to double digits and 
interest rates hit over 20 percent. Reagan implemented an economic plan 
that dramatically cut taxes, reduced regulations, and got the economy 
moving again.
  What resulted was nothing short of an economic miracle. Our nation 
experienced the longest peacetime economic expansion in American 
history. Over 8 years, 20 million new jobs were created, unemployment 
sank to record lows, all Americans did better, and in spite of lower 
rates, tax revenues increased.
  In the 1990s, many States cut taxes and turned their budget deficits 
into budget surpluses.
  Oklahoma Governor Frank Keating enacted the largest broad-based tax 
cut in the state's history; Michigan Governor John Engler enacted 24 
tax cuts, reducing state personal income taxes to the lowest level in a 
generation; New Jersey Governor Whittman cut taxes 17 times, reducing 
state income taxes by 30 percent. In my own state of Minnesota, 
Governor Carlson cut taxes and generated a record budget surplus. And 
Governor Ventura returned the

[[Page 18188]]

surplus to Minnesotans in the form of sales tax rebate and across-the-
board income tax cuts.
  None of these states broke their budgets; instead they produced a 
robust economy and generated big budget surpluses which allowed them to 
provide even more tax cuts.
  Our neighbor north of the border, in the Province of Ontario, chose 
to follow New Jersey and cut their income tax by 30 percent in 1995 
instead of increasing spending. It generates a very successful economy. 
This year, Ontario Premier Mike Harris will cut the income tax by 
another 20 percent. Here is what he says; ``the debate is over; tax 
cuts create jobs.''
  Finally, I would like to take a moment to talk again about Social 
Security, Medicare, and debt reduction.
  Republicans are pleased that President Clinton agrees with us that 
shoring up Social Security and Medicare should be our nation's top 
priority. But the difference is President Clinton talks about it; and 
Republicans act on it.
  We are determined to achieve these goals. We have locked in every 
penny of the $1.9 trillion Social Security surplus over the next 10 
years, not for government programs, not for tax cuts, but exclusively 
to protect all Americans' retirement.
  We have been working hard to reform Medicare to ensure it will be 
there for seniors. Prescriptions drug coverage for the needy will be 
part of our commitment to seniors to protect their Medicare benefits. 
Had the White House and Democrats cooperated with us, we could have 
fixed Medicare by now.
  In any event, we will continue our effort to preserve Medicare as 
Chairman Roth reveals his Medicare bill in the near future.
  We have reduced the national debt and will continue to dramatically 
reduce it. Debt held by the public will decrease to $0.9 trillion by 
2009. The interest payment to service the debt will drop from $229 
billion in 1999 to $71 billion in 2009. We will eliminate the entire 
debt held by the public by 2012.
  As I indicated before, we have not ignored spending needs to focus on 
tax cuts as has been charged. We not only have funded all the functions 
of the government, but also significantly increased funding for our 
budget priorities, such as defense, education, Medicare, agriculture 
and others.
  In fact, as I mentioned earlier, we set aside over $505 billion in 
non-Social Security surplus to meet these needs and the debate on how 
these funds is not before us today. But is there to highlight how 
Republicans can provide $792 billion in tax relief while not ignoring 
other important priorities.
  This major tax relief does not come at the expense of seniors, 
farmers, women, children or any other deserving group. On the contrary, 
it benefits all Americans and keeps our economy strong. And most 
importantly, this tax relief will give every working American more 
freedom to decide what's best for themselves and their families.
  Let me include my remarks by citing President Reagan who once said: 
``Every major tax cut in this century has strengthened the economy, 
generated renewed productivity, and ended up yielding new revenues for 
the government by creating new investment, new jobs and more commerce 
among our people.''
  President Reagan was right.
  I remember vividly that when I first proposed the $500 per child tax 
cut in 1993, the naysayers called it bad policy, even ``dangerous.'' 
Democrats accused us of cutting taxes for the rich. Sound familiar? 
Some in Congress contended it was too costly, and others argued that we 
should balance the budget first. I argued repeatedly that we could and 
should do both. And so we did. As a result, now we have a balanced 
budget, and the largest surplus in U.S. history. Cutting taxes, 
reducing the national debt, and reforming and protecting Social 
Security and Medicare at the same time are all possible. We can do it 
again. We must do it again.
  I urge my colleagues to defeat this amendment and support the $792 
billion in tax relief in the Taxpayer Refund Act.
  I thank the Chair. I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I yield 10 minutes to my colleague from 
Nevada who is on the Finance Committee.
  The PRESIDING OFFICER. The Senator from Nevada is recognized for 10 
minutes.
  Mr. BRYAN. I thank the Senator from New York and the Chair.
  Mr. President, I came to the Senate as a new Member in January 1989, 
at the end of the decade of the 1980s. The fiscal policies the Federal 
Government pursued during the 1980s resulted in a Federal budget that 
was awash in red ink.
  At the beginning of the 1980s, the entire national debt--from the 
time of the ratification of the Constitution up until 1980--was less 
than $1 trillion. That included the assumption of the Revolutionary War 
debt, financing a costly and devastating Civil War, two world wars, 
Korea, Vietnam, and the programs of the Great Depression.
  In less than a decade, the national debt tripled to $3 trillion. That 
is an indictment of the fiscal policies of the 1980s that we ought not 
to repeat.
  Mr. President, we have an opportunity here.
  One can debate as to who should take credit for the circumstances 
which none of us could have foreseen a decade ago. A decade ago it was 
my fondest hope that somehow we would be able to control the spiraling 
annual deficits which were hundreds of billions of dollars each year. 
When asked by my fellow Nevadans, how about the national debt, how are 
you going to pay that back, my response was: I did not see any 
realistic likelihood that that would occur in my lifetime, certainly 
not my lifetime as a Member of the Senate.
  So today we are in a fortuitous circumstance. As I said, who gets 
credit for that, that is an issue we can debate at some length. But we 
have an opportunity to do the responsible thing, and we have the 
opportunity to do the irresponsible thing.
  I think the responsible course of action is to save Social Security, 
ensure the solvency of Medicare, pay down the national debt, and then 
provide for a modest and realistic tax cut. That is the responsible 
thing to do.
  In my judgment, the irresponsible alternative is the Republican tax 
cut before us.
  There have been numbers bandied around, $3 trillion is the projected 
surplus. With respect to the Social Security surplus, that means the 
Social Security taxes that exceed the amount of the Social Security 
payments, it is projected over the next decade that that surplus will 
amount to $1.9 trillion. With respect to that surplus, there is no 
disagreement. That should be set aside to protect Social Security.
  The debate is about the $1 trillion projected surplus that is 
referred to as on-budget or non-Social Security surplus.
  Earlier this morning, as a member of the Senate Banking Committee, we 
were privileged to have Alan Greenspan, the distinguished and able 
Chairman of the Federal Reserve Board. There are many, Democrats and 
Republicans alike across the land, who give Alan Greenspan a 
substantial measure of credit for the reversals in our fortunes at the 
Federal level in terms of the situation we find ourselves in today, 
where we are talking about projected surpluses and not projected 
deficits. I was privileged to have an opportunity to ask him a 
question.
  I said: Mr. Chairman--directed to Mr. Greenspan--given our current 
economic circumstances, if we had three choices, what choice would you 
make: Choice No. 1, a substantial tax cut; Choice No. 2, additional 
spending; Choice No. 3, reducing the debt?
  His answer, unequivocal: Reduce the debt. That, he said, would be the 
most important thing this Congress could do in fiscal policy to 
continue the extension of the longest economic expansion in our 
Nation's history. That comes from Chairman Greenspan.
  Now, under the Republican proposal before us, $964 billion is the on-
budget surplus. Their proposal would be to reduce taxes by $792 
billion.

[[Page 18189]]

  I understand the instant gratification and I understand that if in a 
roomful of good and hard-working Americans you asked, would you like to 
pay less tax, all of us would say yes. Perhaps it is because my wife 
and I are entering a new period in our lives--we are blessed with three 
adult children, two of whom have blessed us with grandchildren and a 
third to bless us with a grandchild to be in a couple of weeks--that my 
thoughts are not with respect to instant gratification, not the kind of 
political rhetoric ``we want to return your money to you.'' What is the 
responsible thing to do for the country? What about my grandchildren 
and your grandchildren? Ought we not to think about them? Our 
generation doesn't have a particularly impressive track record running 
up a national debt that tripled in less than a decade.
  The Republican plan would reduce taxes by $792 billion, would cost 
$141 billion of additional interest, and would result in a surplus 
remaining over the 10-year period of $32 billion. This surplus that is 
projected over 10 years is on a very shaky foundation.
  I also was able to ask Mr. Greenspan to talk about projections. I 
said to him: Is it not true, Mr. Chairman, that not even the most able 
economists--distinguished graduates of the Wharton School of Finance, 
the Harvard Business School, the Stanford Business School, the most 
erudite institutions in America--isn't it true that no one can tell us 
what the economy is going to be like next year, much less what it is 
going to be like a decade from now? He opined that that was in fact the 
case.
  So this policy is built upon a house of cards. We are not sure these 
surpluses will, in fact, materialize. Yet we build in to our 
legislative actions a $792 billion tax cut.
  We have been there before, and we have done that before, in the 
1980s. We were told in the 1980s that we could have substantial tax 
cuts and, at the end of the day, we would still be able to reduce the 
national debt. That did not occur. The national debt more than tripled.
  I know that our friends on the other side of the aisle would say that 
had nothing to do with tax cuts. That is because you all in Congress 
spent recklessly, foolishly, and irresponsibly.
  I was not a part of the Congress at that time. I will not defend all 
of the expenditures. But I will tell Senators this: If you add what 
President Reagan requested the Congress to spend in the 8 years he was 
President and you add up the appropriations that the Congress approved 
during those 8 years, some of those with a Republican majority in the 
Senate, the Congress approved $13 billion less, $13 billion less than 
President Reagan requested. So whether you went to school, as I did, 
with the old math or the new math, those kinds of tax cuts left us with 
deficits in the trillions of dollars.
  Mr. President, I ask the distinguished leader if he would extend me 
another 5 minutes; is that possible?
  Mr. MOYNIHAN. Another 5 minutes for my friend from Nevada.
  The PRESIDING OFFICER (Mr. Hagel). The Senator from Nevada is 
recognized for 5 minutes.
  Mr. BRYAN. Mr. President, there are several assumptions that our 
Republican colleagues make in reaching the conclusion of a $792 billion 
tax cut, $141 billion in interest, leaving a $32 billion surplus to 
take care of Medicare, other priorities, including reducing the debt. 
It is a very shaky assumption. Mr. Greenspan also told us this morning 
that history teaches us to be cautious. This surplus may never 
materialize. No one can predict with certainty whether it will occur or 
not.
  Implicit in this are some other assumptions that are totally 
unrealistic. One of those assumptions is we will be able to reduce 
discretionary spending by $700 billion over the next 10 years. Now, 
there are more people in America who believe there will be a sighting 
of Elvis than believe that we are going to reduce discretionary 
spending by $700 billion. We are talking about such programs as 
veterans' health, education, what we need to do for agriculture, and 
any kind of emergencies that might occur as a result of natural 
calamities or disasters. So the assumption that we can reduce spending 
by $700 billion in the discretionary accounts, also including national 
defense, is not realistic.
  Indeed, that is premised also upon the spending caps that are in 
place--next year and the year after it will be even tighter--that we 
will be able to adhere to them. The chairman of the Banking Committee, 
as part of his questioning to Mr. Greenspan, indicated that in the 
House already this year they are talking about emergency spending, 
which is a vehicle to avoid the spending caps and, in point of fact, is 
not emergency spending at all--$3.5 billion or $4.5 billion for the 
census, $3 billion for veterans' health, $30 billion this year alone. 
That wipes this out.
  The point I am trying to make is this is a highly reckless and 
irresponsible approach. What we ought to do is protect Social Security 
with the $1.9 trillion surplus, and there is agreement on that. Next, 
we need to shore up Social Security solvency, pay down that debt, 
reduce the amount of money we are paying on interest on the national 
debt, so that we can do some other things with the additional tax cuts 
or selective spending in terms of veterans' health, or education, or 
national defense, whatever we determine the priorities may be, and then 
a more modest tax cut.
  The Democratic alternative, I think, comes pretty close to hitting 
the mark: Tax cuts of $290 billion, Medicare cuts of $290 billion, 
domestic needs of $290 billion--that reduces spending in real terms 
over the next 10 years by about $300 billion--and interest, $126 
billion. That is a more responsible approach.
  I hope we do not revisit the mistakes of the past. Chairman 
Greenspan, it seems to me, had a lot of wisdom to offer. History 
teaches us to be cautious. These surpluses may, indeed, never occur 
and, indeed, if we can pay down the national debt, would we not be 
doing something for our children and our grandchildren that is the 
responsible course of action, something we can all be proud of, and 
provide a reduction in the interest payments we make each year, which 
is about $230 billion?
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senate majority leader.
  Mr. LOTT. Mr. President, I ask unanimous consent that Senator Abraham 
be recognized to offer the next amendment regarding the Social Security 
lockbox, and immediately following the reporting by the clerk, the 
amendment be temporarily laid aside and Senators Baucus or Conrad be 
recognized to offer a lockbox amendment.
  I further ask unanimous consent that the amendments be debated 
concurrently for a total of 2 hours to be equally divided between 
Senators Abraham and Baucus, or their designees, and following the 
conclusion or yielding back of time, the amendments be laid aside.
  I further ask unanimous consent that following the debates just 
described, Senator Daschle, or his designee, be recognized to offer an 
amendment, and following that debate the Senate proceed to a period of 
morning business.
  I further ask unanimous consent that no other amendments be in order 
prior to the stacked votes and the votes begin in the stacked sequence 
at 9:30 a.m. on Thursday in the order in which they are offered, with 2 
minutes of debate prior to each vote.
  Finally, I ask unanimous consent that following those votes, there be 
10 hours remaining for the consideration of the bill and Senator Gramm 
be immediately recognized to offer his amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. LOTT. I ask also unanimous consent that the next Democratic 
first-degree amendments be in the following order:
  Senator Kennedy, Senator Bingaman, Senator Kerry of Massachusetts, 
and Senator Lautenberg.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Therefore, the next vote in regard to the Democratic 
alternative is scheduled to occur at approximately 6:30 or 6:35 this 
evening. It will be the last vote of the evening. The

[[Page 18190]]

lockbox issue and the Baucus amendment will be debated this evening, 
with those three votes occurring in the stacked sequence at 9:30 on 
Thursday morning.
  As a reminder to Members, a late session is expected Thursday, and 
votes are expected to occur on Friday, since it appears it may not be 
possible to finish Thursday night.
  I reiterate my commitment that if we find a way to finish the votes 
on this issue Thursday night, we will not have a session on Friday. If 
that is not possible, we will go into session Friday and continue 
voting as is necessary in order to complete this reconciliation tax 
relief bill.
  I yield the floor.
  Mr. ROTH. Mr. President, I yield 14 minutes to the Senator from 
Florida.
  The PRESIDING OFFICER. The Senator from Florida is recognized for 14 
minutes.
  Mr. MACK. Mr. President, although I agree with many of the specific 
provisions in the Democrat alternative tax package--including a few 
bills that I have introduced--I must rise in opposition to this 
amendment. The plain fact is that the tax cut offered is just too 
small. We have budget instructions to cut taxes by $792 billion over 
the next 10 years, and we should cut taxes by $792 billion.
  I am glad I have this opportunity to talk about tax cuts, one of my 
favorite subjects.
  We are in the midst of what should be a very easy task: reducing the 
tax burden on our citizens by $792 billion over the next ten years. 
After all, over the next decade, the federal government is on track to 
collect over $3 trillion dollars more than we have budgeted for 
spending.
  In other words, we will be overcharging the taxpayers by $3 trillion. 
You would think that the suggestion to return to the taxpayers a mere 
25 percent of these overpayments would not be controversial. But we 
have heard, over the past few months, the defenders of the status quo, 
the advocates of big government, raise their voices in criticism of our 
tax cut goal.
  These critics say that tax cuts are not needed, that taxpayers do not 
deserve to keep more of their hard earned money. It has even been 
suggested that the tax burden on our families has been falling. Well, 
the facts could not be any clearer: the federal government will tax 
away 20.6 percent of our nation's gross domestic product this year. 
That is an all-time, peacetime record, a level that was only exceeded 
when we mobilized to win World War II.
  But even though the tax burden is a record high, even though we will 
be overcharging the taxpayers by $3 trillion over the next decade, 
every excuse under the sun is being raised against tax cuts. Some of 
these arguments are contradictory, and all are wrong.
  Some argue, from a Keynesian demand-side perspective, that tax cuts 
will overstimulate the economy. But even after a $792 billion tax cut, 
the federal government will run up over $2 trillion in surpluses over 
the next ten years--from a Keynesian viewpoint, $2 trillion in 
surpluses is not considered a stimulus. And with all of the lags, the 
delays, and the phase-ins, the bulk of the tax cuts will not arrive 
until years 2007, 2008, and 2009.
  Can anyone seriously suggest that, in a $9 trillion economy, a $4 
billion net tax cut for fiscal year 2000 will overstimulate consumer 
demand? Or even a $25 billion tax cut in 2001? Would a $39 billion tax 
cut in 2002 overheat the economy, when this is only .004 percent of 
projected GDP?
  Clearly, the facts do not support the argument that our tax cuts will 
overheat the economy. In any event, from the demand-side perspective, 
the tax cut would be irrelevant. If we do not cut taxes by $792 
billion, it is safe to say that spending will increase by $792 billion 
over the next decade--spending by the government, that is. That is what 
President Clinton means when he says we cannot afford a tax cut--his 
bureaucrats are working overtime to dream up new ways to spend the 
money, as if the government has first claims to the fruits of our 
citizens' labor.
  What kind of spending initiatives can we expect? A few years back, as 
many of us recall, President Clinton's so-called stimulus package 
included spending on such urgent needs as building parking garages at 
the beach, resurfacing tennis courts, researching the sicklefin chub 
fish, renovating swimming pools, building golf courses, soccer fields, 
and softball diamonds, and constructing an ice skating warming hut.
  Now, the President is not the only source of such wasteful spending 
ideas--we in Congress are very susceptible to pressures to spend, 
spend, spend. But no one here doubts for a minute that if the $792 
billion in taxes are instead brought to Washington, the money will all 
be spent. That is one very good reason why we must keep the money out 
of Washington in the first place.
  The argument is also raised that a $792 billion tax cut leaves no 
money to meet some other important government goals such as debt 
reduction. But we still have $1.9 trillion in social security surpluses 
that will be in a ``lock-box'' to retire debt and shore up our 
citizens' retirement security, and another $505 billion in non-social 
security surpluses that can be used for Medicare, National Defense, and 
our other priorities. It is my hope that these surpluses will be used 
for real priorities, not the ice skating warming huts and beach parking 
garages. It should be clear that this half-trillion dollars is more 
than enough to cover our priorities.
  The rest of the arguments against our tax relief goal are similarly 
mistaken. Some people argue that the money is needed to retire 
publicly-held debt--although, after the tax cut, the remaining 75% of 
the surplus is available for debt reduction. Even with our tax cut, 
publicly-held national debt will be reduced from 40% of GDP to just 12% 
of GDP by 2009.
  Other people argue that the Federal Reserve Board would react to the 
tax cut by tightening the money supply. I have already noted that the 
very small size of the tax cuts over the next two years--just .0015% of 
GDP--does not add up to a dramatic increase in consumer demand and, in 
fact, will not increase demand since government spending would have 
increased by that same amount were we to collect the taxes. And I will 
point out that, on many occasion, including today, Fed Chairman Alan 
Greenspan has stated that he believes that government spending is the 
worst possible use of the surpluses, and that he would support tax cuts 
if spending is the alternative. Furthermore, a tax cut that removes 
government barriers to savings and investment is not an ``artificial 
stimulus'' that should worry the Fed one bit. Inflation, after all, is 
caused by too many dollars chasing too few goods, not by too many 
investors creating wealth and opportunity. An even stronger economy, 
fueled by the freedom and enthusiasm of our entrepreneurs, is not 
something to fear.
  It is even argued that a sizable tax cut passed now makes a future 
economic downturn more hazardous, as if the tax cuts needed for an 
economic rebound will have already been wasted by our efforts this 
year. Of course, that argument makes the case for tax cuts, as any tax 
cuts that would succeed in getting us out of a recession should keep us 
out of one in the first place. That is why former Fed Governor Lawrence 
Lindsey considers a tax cut a good insurance policy against an economic 
downturn.
  When you consider all of the arguments, there really is no case 
against cutting taxes by at least $792 billion. Chairman Roth is to be 
commended for sticking to his guns and reporting out of Committee a 
bill that cuts taxes by that full amount, despite all of the pressure 
exerted by all of the advocates of big government, who would rather 
spend the money.
  One final point I want to make is that these abstract discussions 
tend to obscure the real reason we are here. Tax cuts are not about 
numbers, they aren't about aggregate statistics, they aren't about 
increasing demand by 4 thousandths of a percentage point--tax cuts are 
about people. We are cutting taxes because of the 67-year-old owner

[[Page 18191]]

of a family business in Florida's panhandle, who is discouraged from 
reinvesting his hard-earned profits because the specter of the federal 
death tax is hovering, waiting to swoop down and scoop up 55% of the 
increased value of his business. We are cutting taxes because of the 
two-earner family, struggling to make ends meet, that has to pay over 
$1,000 extra in taxes just because they are married.
  We are cutting taxes so that waitresses, truck drivers, teachers and 
carpenters can put an extra $1,000 in their IRAs each year, to build a 
better nest egg for retirement. We are cutting taxes to enable a 
biomedical company to budget that one additional research project that 
just might lead to a breakthrough in the treatment of glaucoma or a 
cure for cancer. And we are cutting taxes to reduce government barriers 
to saving and investment, so the capital is available for the American 
entrepreneurs of the 21st Century to develop markets in technologies we 
cannot even imagine today. We need to cut taxes to get government out 
of the way and give people the freedom to pursue their own dream--not 
Washington's.
  I thank the Chair.
  I yield whatever time I did not use.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. MOYNIHAN. Mr. President, we yield any time remaining on our side.
  Mr. ROTH. Mr. President, I yield the remainder of our time.
  Mr. MOYNIHAN. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
of the Senator from New York. On this question, the yeas and nays have 
been ordered, and the clerk will call the roll.
  The legislative assistant called the roll.
  Mr. NICKLES. I announce that the Senator from Ohio (Mr. Voinovich) is 
necessarily absent.
  The result was announced--yeas 39, nays 60, as follows:

                      [Rollcall Vote No. 226 Leg.]

                                YEAS--39

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Cleland
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Wyden

                                NAYS--60

     Abraham
     Allard
     Ashcroft
     Bayh
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Chafee
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Edwards
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wellstone

                             NOT VOTING--1

       
     Voinovich
  The amendment (No. 1384) was rejected.
  Mr. ROTH. Mr. President, I move to reconsider the vote and I move to 
lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. ROTH. Mr. President, I ask unanimous consent that a copy of a 
letter from Dan Crippen, Director of the Congressional Budget Office, 
dated July 26, 1999, be printed in the Record. The letter analyzes the 
legislation before us, the Taxpayer Refund Act of 1999.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 26, 1999.
     Hon. William V. Roth, Jr.,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for the Taxpayer Refund 
     Act of 1999.
       If you wish for further details on this estimate, we will 
     be pleased to provide them. The CBO staff contact is Hester 
     Grippando.
           Sincerely,
                                                 Barry B. Anderson
                                   (For Dan L. Crippen, Director).
       Enclosure.


               congressional budget office cost estimate

     Taxpayer Refund Act of 1999
       Summary: The Taxpayer Refund Act of 1999 would provide for 
     a variety of phased-in tax reduction proposals, including a 
     reduction of the 15 percent income tax rate to 14 percent and 
     an expansion of the proposed 14 percent bracket, a provision 
     for married couples to file single returns, modifications of 
     the individual alternative minimum tax, an increase of the 
     annual contribution limit for individual retirement accounts, 
     a reduction of estate and gift taxes, and a new tax deduction 
     for health insurance expenses. The Congressional Budget 
     Office and the Joint Committee on Taxation (JCT) estimate 
     that the bill would decrease governmental receipts by about 
     $4 billion in fiscal year 2000, by about $155 billion over 
     the 2000-2004 period, and by nearly $792 billion over the 
     2000-2009 period. In addition, the legislation would increase 
     direct spending by $40 million over the 2000-2004 period, but 
     would decrease direct spending by $83 million over the 2000-
     2009 period. Because the bill would affect receipts and 
     direct spending, pay-as-you-go procedures would apply.
       The bill contains a new intergovernmental mandate, the cost 
     of which would not exceed the threshold for intergovernmental 
     mandates ($50 million in fiscal year 1996, adjusted annually 
     for inflation) established in the Unfunded Mandates Reform 
     Act (UMRA). The bill also contains 16 new private-sector 
     mandates. The costs of those mandates would exceed the 
     threshold established by UMRA for private-sector mandates 
     ($100 million in fiscal year 1996, adjusted annually for 
     inflation) in fiscal years 2000 through 2004.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of the bill is shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                      By fiscal years, in millions of dollars--
                                   -----------------------------------------------------------------------------
                                        1999         2000         2001         2002         2003         2004
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES
 
Estimated Revenues:
    On-Budget.....................           22       -4,042      -24,391      -39,124      -41,685      -45,043
    Off-Budget....................            0          -97         -224         -274         -292         -312
                                   -----------------------------------------------------------------------------
      Total Change in Revenues....           22       -4,139      -24,615      -39,398      -41,977      -45,355
 
                                           CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority........            0            2            4            6            6           10
Estimated Outlays.................            0            2            4            9            9           13
 
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimatd Outlays..................            0        (\1\)        (\1\)        (\1\)        (\1\)        (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Amounts under $500,000.
 
Sources: Congressional Budget Office and Joint Committee on Taxation.

       Basis of estimate: All estimates, with the exception of the 
     following provisions, were prepared by JCT.
     Revenues
       Accelerate the Repeal of the FUTA Surtax. The Federal 
     Unemployment Tax Act (FUTA) imposes on employers an effective 
     tax of 0.8 percent on the first $7,000 in wages paid annually 
     to each employee. This 0.8 percent includes a 0.2 percent 
     surtax scheduled to expire on December 31, 2007. The bill 
     would accelerate the expiration date to December 31, 2004.
       Revenues from the FUTA tax are deposited into federal 
     unemployment trust funds,

[[Page 18192]]

     which are statutorily capped. Under current law, CBO projects 
     that the amounts in the federal trust funds will exceed the 
     caps beginning in 2003. Amounts above the caps are 
     transferred to state unemployment compensation trust funds. 
     Since the state funds are included in the unified federal 
     budget, this transfer will have no net budgetary effect. 
     However, CBO expects that states would respond to this 
     transfer by lowering their unemployment taxes so that their 
     trust fund balances would remain constant.
       The bill would lower the amount of revenues deposited into 
     the federal trust funds and thus would reduce the amounts 
     flowing to the state funds. CBO assumes that in the year 
     following each lowered transfer, states would respond by not 
     lowering their unemployment taxes as much as they would have, 
     thus increasing revenues relative to current law. CBO 
     estimates that the measure would reduce governmental receipts 
     by $1,029 million in fiscal year 2005 and by lesser amounts 
     in 2006 and 2007. We estimate increases in receipts in fiscal 
     years 2008 and 2009. Over the 2005-2009 period, CBO estimates 
     that the measure would have no net impact on governmental 
     receipts.
       IRS User Fees. The bill would adjust and extend the 
     authority of the Internal Revenue Service (IRS) to charge 
     taxpayers fees for certain rulings by the Office of the Chief 
     Counsel and by the Office for Employee Plans and Exempt 
     Organizations. The bill would eliminate the fee the IRS 
     currently charges on determination letter requests regarding 
     new small business pension plans beginning on December 31, 
     2000. The bill also would extend for six years beyond its 
     current expiration date of September 30, 2003, the authority 
     of the IRS to charge taxpayers fees for certain rulings. CBO 
     estimates that the adjustment and extension of IRS fees would 
     increase governmental receipts by $42 million over fiscal 
     years 2001 through 2004 and by $323 million during the 2001-
     2009 period, net of income and payroll tax offsets. CBO based 
     its estimate on recent collections data and on information 
     from the IRS.
     Federal spending
       IRS User Fees. The bill would adjust and extend the 
     authority of the IRS to charge taxpayers fees for certain 
     rulings by the Office of the Chief Counsel and by the Office 
     for Employee Plans and Exempt Organizations. The IRS has the 
     authority to retain and spend a small portion of these fees 
     without further appropriation. CBO estimates that the 
     adjustment and extension of fees would increase direct 
     spending by $3 million over the 2001-2004 period and by $18 
     million over the 2001-2009 period.
       National Vaccine Injury Compensation Fund and Medicaid. The 
     bill would add conjugate vaccines against streptococcus 
     pneumoniae to the list of taxable vaccines and thus would 
     allow for compensation for injuries related to those vaccines 
     from the National Vaccine Injury Compensation Trust Fund. CBO 
     estimates that this provision would increase outlays by $4 
     million over the 2000-2004 period. This provision would also 
     increase federal Medicaid outlays by $21 million over the 
     2000-2004 period because Medicaid would be required to pay 
     the excise tax on purchases of vaccines against streptococcus 
     pneumoniae. The federal government purchases about one-half 
     of all vaccines through its Vaccines for Children program.
       In addition, the bill would reduce the tax rate applicable 
     to all taxable vaccines from 75 cents per dose to 25 cents 
     per dose for sales of vaccines after December 31, 2004. This 
     provision would reduce the amount of tax that the Medicaid 
     program would be required to pay for vaccines purchased 
     through its Vaccines for Children program and would decrease 
     federal outlays after the effective date by about $35 million 
     annually.
       Also, by adding conjugate vaccines against streptococcus 
     pneumoniae to the list of taxable vaccines, the bill would 
     increase the cost of vaccines purchased under section 317 of 
     the Public Health Service Act. Section 317 authorize grants 
     to states for the purchase of vaccines under federal 
     contracts with vaccine manufacturers. The bill would also 
     reduce the cost of vaccines purchased under this program 
     after December 31, 2004, by reducing the excise tax rate. Any 
     changes in spending under this section would be subject to 
     the annual appropriation process. CBO estimates that there 
     would be additional, but insignificant costs from the 
     addition of the streptococcus pneumoniae vaccines and savings 
     of about $9 million annually from the reduction in he excise 
     tax after December 31, 2004.
       Reduced PBGC Premiums for New Plans. Under current law, 
     single-employer defined benefit pension plans pay two types 
     of annual premiums to the Pension Benefit Guaranty 
     Corporation (PBGC). All covered plans are subject to a flat-
     rate premium of $19 per participant. In addition, underfunded 
     plans must also pay a variable premium that depends on the 
     amount by which the plan's liabilities exceed its assets.
       The bill would reduce the flat-rate premium from $19 to $5 
     per participant for plans established by employers with 100 
     or fewer participants during the first five years of the 
     plan's operation. According to information obtained from the 
     PBGC, approximately 3,000 plans would qualify for this 
     reduction. Those plans contain an average of about 10 
     participants each. CBO estimates that the premium change 
     would reduce PBGC's premium income, which is classified as an 
     offsetting collection, by about $0.4 million annually 
     beginning in 2002 or by about $1.3 million over the 2000-2004 
     period.
       Reduction of Additional PBGC Premiums for New and Small 
     Plans. The bill would make two changes affecting the 
     variable-rate premium paid by underfunded plans. First, for 
     all new plans that are underfunded, the bill would phase in 
     the variable-rate premium the plans must pay. In the first 
     year, they would pay nothing. In the succeeding four years, 
     they would pay 20 percent, 40 percent, 60 percent, and 80 
     percent, respectively, of the full amount. In the sixth and 
     later years, they would pay the full variable-rate premium 
     determined by their funding status. On the basis of 
     information on premium payments to the PBGC in 1996-1997, CBO 
     estimates that this change would affect the premiums of 
     approximately 400 plans each year. It would reduce PBGC's 
     total premium receipts by about $4.2 million over the 2000-
     2004 period.
       The bill would also reduce the variable-rate premium paid 
     by all underfunded plans (not just new plans) established by 
     employers with 25 or fewer employees. Under the bill, the 
     variable-rate premium per participant paid by those plans 
     would not exceed $5 multiplied by the number of participants 
     in the plan. CBO estimates that approximately 8,300 plans 
     would have their premium payments to PBGC reduced by this 
     provision beginning in 2002. Premium receipts by the PBGC 
     would decline by $1.5 million in 2002 and by about $4.6 
     million over the 2002-2004 period.
       Missing Plan Participants. The legislation would expand the 
     missing participant program. The Retirement Protection Act of 
     1994 established a missing participant program at PBGC for 
     terminating defined benefit plans. The bill would expand the 
     program to include terminating multiemployer plans, defined 
     benefit plans not covered by PBGC, and defined contribution 
     plans.
       The budgetary impact of this provision would be less than 
     $0.5 million annually. PBGC does not expect a high volume of 
     missing participants as a result of this proposal, and the 
     administrative costs of expanding the program would not be 
     high. The net budgetary effect of increased benefit payments 
     would also be small. Amounts paid by a pension plan to PBGC 
     for missing participants are held in PBGC's trust fund, which 
     is off-budget. Amounts paid out by PBGC to participants at 
     the time they are located are funded in the same manner as 
     benefit payments to participants in plans for which PBGC is 
     the trustee--partially by the trust fund and partially by on-
     budget revolving funds.
       Rules for Substantial Owner Benefits in Terminated Plans. 
     The legislation would simplify the guarantee and asset 
     allocation rules as they relate to terminated plans involving 
     a substantial owner (ownership interest of at least 10 
     percent). All owners other than majority owners (those with 
     an ownership interest of 50 percent of more) would be treated 
     the same as other participants, thus receiving a more 
     generous guarantee than under current law. Majority owners 
     would be subject to simplified special rules. The guarantee 
     for majority owners would be phased in at the rate of \1/10\ 
     for each year that the plan has been in effect, which is 
     faster than the current-law phase-in, but the nonguaranteed 
     benefits of majority owners would be given a lower priority 
     in the allocation of assets. Only about one-third of the 
     plans taken over by PBGC involve substantial owners, and the 
     change in benefits paid out by PBGC to owner-employees under 
     this provision would be less than $0.5 million in each year.
       Pay-as-you-go considerations: The Balanced Budget and 
     Emergency Deficit Control Act sets up pay-as-you-go 
     procedures for legislation affecting direct spending or 
     receipts. The net changes in governmental receipts and 
     outlays that are subject to pay-as-you-go procedures are 
     shown in the following table. Only changes affecting on-
     budget outlays and receipts affect the pay-as-you-go 
     scorecard. For the purposes of enforcing pay-as-you-go 
     procedures, only the effects in the current year, the budget 
     year, and the succeeding four years are counted.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              By fiscal years, in millions of dollars--
                                                                    ----------------------------------------------------------------------------------------------------------------------------
                                                                        1999       2000       2001       2002       2003       2004       2005       2006        2007        2008        2009
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in Receipts................................................         22     -4,042    -24,391    -39,124    -41,685    -45,043    -89,541    -114,318    -129,025    -145,337    -156,219
Changes in Outlays.................................................          0          2          4          9          9         13        -16         -26         -26         -26         -27
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 18193]]

       Estimated impact on State, local, and tribal governments: 
     JCT has determined that the provision that would add 
     streptococcus pneumoniae to the list of taxable vaccines in 
     an intergovernmental mandate. JCT estimates that the cost of 
     the mandate would not exceed the threshold specified in UMRA 
     ($50 million in fiscal year 1996, adjusted for inflation). 
     Sections of the bill reviewed by CBO regarding pension plans 
     and IRS user fees contain no intergovernmental mandates as 
     defined in UMRA. The section that would move the expiration 
     date of the federal unemployment surtax back three years 
     would have implications for state unemployment compensation 
     programs as noted above.
       Estimated impact on the private sector: JCT has determined 
     that 16 provisions in the bill contain private sector 
     mandates. The private-sector mandates in the bill would:
       Add certain vaccines against streptococcus pneumoniae to 
     the list of taxable vaccines;
       Impose a 10 percent vote or value test for real estate 
     investment trusts (REITs);
       Change the treatment of income and services provided by 
     taxable subsidiaries of REITs;
       Modify foreign tax credit carryover rules;
       Require reporting of information regarding cancellation of 
     indebtedness by nonbank financial institutions;
       Limit the use of the nonaccrual experience method of 
     accounting to the amounts to be received for the performance 
     of qualified professional services;
       Impose a limitation on prefunding of certain employee 
     benefits;
       Repeal the installment method for most taxpayers using the 
     accrual basis;
       Prevent the conversion of ordinary income or short-term 
     capital gains into income eligible for long-term capital gain 
     rates;
       Deny the deduction and impose an excise tax with respect to 
     charitable split-dollar life insurance programs;
       Modify the estimated tax rules of closely held REITs;
       Change the tax treatment of prohibited allocation of stock 
     in an Employee Stock Ownership Plan of a subchapter S 
     corporation;
       Modify anti-abuse rules related to the assumption of 
     liabilities;
       Require consistent treatment and provide basis allocation 
     rules for transfers of intangibles in certain nonrecognition 
     transactions;
       Modify the treatment of certain closely held REITs; and
       Provide for a basis reduction to assets of a corporation, 
     if stock in that corporation is distributed by a partnership 
     to a corporate partner.
       JCT estimates that the cost of the private-sector mandates 
     would exceed the threshold established in UMRA ($100 million 
     in fiscal year 1996, adjusted annually for inflation) in each 
     of the fiscal years 2000-2004.

                                    ESTIMATED COST OF PRIVATE-SECTOR MANDATES
----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal years, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   1999    2000    2001    2002    2003    2004
----------------------------------------------------------------------------------------------------------------
Cost of the Private Sector......................................      22     830   1,611   1,370   1,083     814
----------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.

       Estimate prepared by: Federal Revenues: Hester Grippando 
     (for IRS fees) and Noah Meyerson (for FUTA). Federal 
     Spending: Tami Ohler (for pensions), Jeanne De Sa (for 
     National Vaccine Injury Compensation Fund and Medicaid), and 
     John Righter (for IRS fees).
       Estimated approved by: Robert A. Sunshine, Deputy Assistant 
     Director for Budget Analysis, G. Thomas Woodward, Assistant 
     Director for Tax Analysis.

  Mr. ROTH. Mr. President, I yield 5 minutes on the bill to Senator 
McCain.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1397

   (Purpose: To provide educational opportunities for disadvantaged 
                   children, and for other purposes)

  Mr. McCAIN. Mr. President, I have an amendment at the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. Without objection, the clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain] proposes an amendment 
     numbered 1397.

  Mr. McCAIN. 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 text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. McCAIN. Mr. President, as per the agreement with the Senator from 
Delaware, I will ask unanimous consent that the amendment be laid aside 
as soon as I use my 5 minutes.
  Mr. BAUCUS. Withdrawn.
  Mr. McCAIN. Not withdrawn, set aside.
  Mr. BAUCUS. Mr. President, reserving the right to object, this is not 
what I understood the procedure was going to be. 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. McCAIN. 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 from Arizona.
  Mr. McCAIN. Mr. President, it was made clear by the Senator from 
Montana and the Senator from Delaware that I will withdraw the 
amendment after speaking for 5 minutes on it, with the full 
understanding that there will be a vote on this at the proper time, as 
amendments are voted on probably tomorrow night.
  Mr. BAUCUS. Reserving the right to object, do I understand from the 
Senator from Arizona that he will offer his amendment then at a later 
time?
  Mr. McCAIN. I have 5 minutes. I want to use the 5 minutes to talk 
about it. The Senator from Delaware told me the time tomorrow will be 
taken up, so I asked to be given 5 minutes to talk tonight. In previous 
years, I have ended up in the position where at 2 a.m. I can speak for 
1 minute and the other person can speak for 1 minute. At least now I 
have 5 minutes.
  Mr. BAUCUS. Will the Senator inform us as to the nature of the 
amendment?
  Mr. McCAIN. That is why I asked for 5 minutes, so I can tell the 
Senator the nature of the amendment.
  Mr. BAUCUS. No objection.
   Mr. McCAIN. Mr. President, today I am proposing an amendment to 
authorize a three-year nationwide school choice demonstration program 
targeted at children from economically disadvantaged families. The 
program would expand educational opportunities for low-income children 
by providing parents and students the freedom to choose the best school 
for their unique academic needs, while encouraging schools to be 
creative and responsive to the needs of all students.
  The amendment authorizes $1.8 billion annually for fiscal years 2001 
through 2003 to be used to provide school choice vouchers to 
economically disadvantaged children through the Nation. The funds would 
be divided among the States based upon the number of children they have 
enrolled in public schools. Then, each State would conduct a lottery 
among low-income children who attend the public schools with the lowest 
academic performance in their State. Each child selected in the lottery 
would receive $2,000 per year for three years to be used to pay tuition 
at any school of their choice in the State, including private or 
religious schools. The money could also be used to pay for 
transportation to the school or supplementary educational services to 
meet the unique needs of the individual student.
  In total, the amendment authorizes $5.4 billion for the three-year 
school choice demonstration program, as well as a GAO evaluation of the 
program upon its completion. The cost of this important test of school 
vouchers is fully offset by eliminating more than $5.4 billion in 
unnecessary and inequitable corporate tax loopholes which benefit the 
ethanol, sugar, gas, and oil industries.
  First, the amendment eliminates tax credits for ethanol producers, 
eliminating a $1.5 billion subsidy. Ethanol is an inefficient, 
expensive fuel that has not lived up to claims that it would reduce 
reliance on foreign oil or reduce impacts on the environment. It takes 
more energy to produce a gallon of ethanol than the amount of energy 
that gallon of ethanol contains. Ethanol tax credits are simply a 
subsidy for corn producers, and the amendment ends the taxpayers' 
support for this outdated program.

[[Page 18194]]

  Second, the amendment eliminates three subsidies enjoyed by the oil 
and gas industry, totaling $3.9 billion. It phases out oil and gas 
industry's special right to fully deduct capital costs for drilling, 
exploration and development; eliminates the 15% tax credit for 
recovering oil using particular methods and ends special right of oil 
and gas property owners to claim unlimited passive losses under income 
and alternative minimum tax provisions. Subsidizing the cost of 
domestic production has not been shown to have reduced reliance on 
foreign oil or directly contributed to more efficient resource use or 
domestic productivity. The amendment ends these special tax treatments.
  Finally, the amendment eliminates the special loan program for sugar 
producers and processors, worth $390 million. The Federal Government is 
burdened with an unnecessary and unprofitable loan program for big 
sugar producers and enforcing mandated import quotas on foreign sugar. 
Sugar price supports also force consumers to pay $1.4 billion every 
year in artificially inflated sugar prices. The amendment simply 
eliminates the taxpayer-funded loan program in 2003 and immediately 
requires repayment of existing loans in cash, rather than sugar.
  These tax benefits and subsidies were originally intended to serve a 
limited purpose during times of economic recession and hardship in the 
1970s. Our economy has long since recovered and I believe that these 
subsidies have outlived their purpose. The sunset of these programs 
will end these corporate welfare programs and return any remaining 
benefit back to our nation's children.
  Mr. President, we all know that one of the most important issues 
facing our nation is the education of our children. Providing a solid, 
quality education for each and every child in our Nation is a critical 
component in their quest for personal success and fulfillment, as well 
as the success of our nation: economically, intellectually, civically 
and morally.
  We must strive to develop and implement initiatives which strengthen 
and improve our education system thereby ensuring that our children are 
provided with the essential academic tools for succeeding 
professionally, economically and personally. I am sure we all agree 
that increasing the academic performance and skills of all our Nation's 
students must be the paramount goal of any education reform we 
implement.
  School vouchers are a viable method of allowing all American children 
access to high-quality schools, including private and religious 
schools. Every parent should be able to obtain the highest quality 
education for their children, not just the wealthy. Tuition vouchers 
would provide low-income children trapped in mediocre, or worse, 
schools the same educational choices as children of economic privilege.
  Some of my colleagues may argue that vouchers would divert money away 
from our nation's public schools and instead of instilling competition 
into our school systems we should be pouring more and more money into 
poor performing public schools. I respectfully disagree. While I 
support strengthening financial support for education in our Nation, 
the solution to what ails our system is not simply pouring more and 
more money into it. Currently our nation spends significantly more 
money than most countries and yet our students scored lower than their 
peers from almost all of the forty countries which participated in the 
last Third International Mathematics and Science Study TIMMS test. 
Students in countries which are struggling economically, socially and 
politically, such as Russia, outscored U.S. children in math and scored 
far above them in advanced math and physics. Clearly, we must make 
significant changes beyond simply pouring more money into the current 
structure in order to improve our children's academic performance in 
order to remain a viable force in the world economy.
  It is shameful that we are failing to provide many of our children 
with adequate training and quality academic preparation for the real 
world. The number of college freshmen who require remedial courses in 
reading, writing and mathematics when they begin their higher education 
is unacceptably high. In fact, presently, more than 30 percent of 
entering freshmen need to enroll in one or more remedial course when 
they start college. It does not bode well for our future economy if the 
majority of workers are not prepared with the basic skills to engage in 
a competitive global marketplace.
  I concede that school vouchers are not the magic bullet for 
eradicating all that is wrong with our current educational system, but 
they are an important opportunity for providing improved academic 
opportunities for all children, not just the wealthy. Examination of 
the limited voucher programs scattered around our country reveals high 
levels of parent and student satisfaction, an increase in parental 
involvement, and a definite improvement in attendance and discipline at 
the participating schools. Vouchers encourage public and private 
schools, communities and parents to all work together to raise the 
level of education for all students. Today, we have the opportunity to 
replicate these important attributes throughout all our Nation's 
communities.
  Thomas Jefferson said, ``The purpose of education is to create young 
citizens with knowing heads and loving hearts.'' If we fail to give our 
children the education they need to nurture their heads and hearts, 
then we threaten their futures and the future of our nation. Each of us 
is responsible for ensuring that our children have both the love in 
their hearts and the knowledge in their heads to not only dream, but to 
make their dreams a reality.
  The time has come for us to finally conduct a national demonstration 
of school choice to determine the benefits or perhaps disadvantages of 
providing educational choices to all students, not just those who are 
fortunate enough to be born into a wealthy family. I urge my colleagues 
to support this amendment and put the needs of America's school 
children ahead of the financial gluttony of big business.
  I hope my colleagues will consider this. It is time we got rid of 
wasteful and unnecessary subsidies. It is time we had a national test 
voucher program to find out if vouchers, indeed, will live up to the 
promise that many of us believe is there as a result of giving parents 
a choice, the same that wealthy parents have in this country.


                     Amendment No. 1397, Withdrawn

  Mr. President, I thank the Senator from Delaware and the Senator from 
Montana, and I ask unanimous consent that the amendment be withdrawn.
  The PRESIDING OFFICER (Mr. Brownback). Without objection, it is so 
ordered.
  Mr. McCAIN. I yield the remainder of my time.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.


                           Amendment No. 1398

(Purpose: To preserve and protect the surpluses of the social security 
 trust funds by reaffirming the exclusion of receipts and disbursement 
from the budget, by setting a limit on the debt held by the public, and 
 by amending the Congressional Budget Act of 1974 to provide a process 
          to reduce the limit on the debt held by the public)

  Mr. ABRAHAM. Mr. President, under the unanimous consent agreement 
which was agreed to earlier, I now send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Michigan [Mr. Abraham] for himself, Mr. 
     Domenici, Mr. Ashcroft, Mr. Crapo, Mr. Enzi, Mr. Santorum, 
     Mr. Grams, Mr. Allard, Mr. Frist, and Mr. Coverdell, proposes 
     an amendment numbered 1398.

  Mr. ABRAHAM. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. ABRAHAM. I believe under the previous order we will now set that 
amendment aside so that the Senator from Montana may be recognized to 
offer an amendment.
  The PRESIDING OFFICER. The amendment is set aside.

[[Page 18195]]

  The Senator from Montana is recognized.


                  Motion To Recommit With Instructions

  Mr. BAUCUS. Mr. President, I send an amendment to the desk and ask 
unanimous consent that Senators Conrad and Harkin be added as 
cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus] moves to recommit S. 
     1429 to the Committee on Finance, with instructions to report 
     back within 3 days, with an amendment to reduce the tax 
     breaks in the bill by an amount sufficient to allow one 
     hundred percent of the Social Security surplus in each year 
     to be locked away for Social Security, and one-third of the 
     non-Social Security surplus in each year to be locked away 
     for Medicare with an amendment.

  Mr. BAUCUS. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
  TITLE __--SOCIAL SECURITY AND MEDICARE SAFE DEPOSIT BOX ACT OF 1999

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Social Security and 
     Medicare Safe Deposit Box Act of 1999''.
                      Subtitle A--Social Security

      SEC. __11. PROTECTION OF SOCIAL SECURITY SURPLUSES.

       (a) Points of Order to Protect Social Security Surpluses.--
     Section 312 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following new subsection:
       ``(g) Points of Order to Protect Social Security 
     Surpluses.--
       ``(1) Concurrent resolutions on the budget.--It shall not 
     be in order in the House of Representatives or the Senate to 
     consider any concurrent resolution on the budget, or 
     conference report thereon or amendment thereto, that would 
     set forth an on-budget deficit for any fiscal year.
       ``(2) Subsequent legislation.--It shall not be in order in 
     the House of Representatives or the Senate to consider any 
     bill, joint resolution, amendment, motion, or conference 
     report if--
       ``(A) the enactment of that bill or resolution as reported;
       ``(B) the adoption and enactment of that amendment; or
       ``(C) the enactment of that bill or resolution in the form 
     recommended in that conference report,
     together with associated interest costs would cause or 
     increase an on-budget deficit for any fiscal year.
       ``(3) Definition.--In this subsection:
       ``(A) On-budget deficit.--The term `would cause or increase 
     an on-budget deficit', when applied to an on-budget deficit 
     for a fiscal year, means causes or increases an on-budget 
     deficit relative to the baseline budget projection.
       ``(B) Baseline budget projection.--The term `baseline 
     budget projection' means the projection described in section 
     257 of the Balanced Budget and Emergency Deficit Control Act 
     of 1985 of current year levels of outlays, receipts, and the 
     surplus or deficit into the budget year and future years, 
     except that--
       ``(i) if outlays for programs subject to discretionary 
     appropriations are subject to discretionary statutory 
     spending limits, such outlays shall be projected at the level 
     of any applicable current adjusted statutory discretionary 
     spending limits; and
       ``(ii) if outlays for programs subject to discretionary 
     appropriations are not subject to discretionary spending 
     limits, such outlays shall be projected as required by 
     section 257 beginning in the first fiscal year following the 
     last fiscal year in which such limits applied.''.
       ``(C) Budget resolution baseline.--A budget resolution 
     would set forth an on-budget deficit for a fiscal year if the 
     resolution sets forth an on-budget deficit and the most 
     recent Congressional Budget Office baseline estimate of the 
     surplus or deficit for such fiscal year projects an on-budget 
     surplus, on-budget balance, or an on-budget deficit that is 
     less than the deficit set forth in the resolution.''.
       (b) Content of Concurrent Resolution on the Budget.--
     Section 301(a) of the Congressional Budget Act of 1974 is 
     amended by redesignating paragraphs (6) and (7) as paragraphs 
     (7) and (8), respectively, and by inserting after paragraph 
     (5) the following new paragraph:
       ``(6) the receipts, outlays, and surplus or deficit in the 
     Federal Old-Age and Survivors Insurance Trust Fund and the 
     Federal Disability Insurance Trust Fund, combined, 
     established by title II of the Social Security Act;''.
                          Subtitle B--Medicare

      SEC. __21. DEFINITIONS.

       Section 3 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(11) The term `Medicare surplus reserve' means the 
     surplus amounts reserved to strengthen and preserve the 
     Medicare program as calculated in accordance with section 
     316.''.

      SEC. __22. MEDICARE SURPLUS RESERVE POINT OF ORDER.

       Section 301 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(j) Medicare Surplus Reserve Point of Order.--It shall 
     not be in order in the Senate to consider any concurrent 
     resolution on the budget (or amendment, motion, or conference 
     report on the resolution) that would decrease the surplus in 
     any of the fiscal years covered by the concurrent resolution 
     below the levels of the Medicare surplus reserve for those 
     fiscal years calculated in accordance with section 316.''.

      SEC. __23. ENFORCEMENT OF MEDICARE SURPLUS RESERVE.

       Section 311(a) of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:
       ``(4) Enforcement of the medicare surplus reserve.--
       ``(A) In general.--After a concurrent resolution on the 
     budget has been agreed to, it shall not be in order in the 
     House of Representatives or the Senate to consider any bill, 
     joint resolution, amendment, motion, or conference report 
     that together with associated interest costs would decrease 
     the surplus or the medicare surplus reserve in any fiscal 
     year below the level of the medicare surplus reserve for that 
     fiscal year calculated in accordance with section 316.
       ``(B) Inapplicability.--This paragraph shall not apply to 
     legislation that --
       ``(i) appropriates a portion of the medicare reserve for 
     new subsidies for prescription drug benefits under the 
     medicare program as part of or subsequent to legislation 
     significantly extending the solvency of the Medicare Hospital 
     Insurance Trust Fund; or
       ``(ii) appropriates new subsidies from the general fund to 
     the Medicare Hospital Insurance Trust Fund.
       ``(C) Scorekeeping directive.--In scoring legislation for 
     purposes of enforcing the point of order established by this 
     paragraph, only the costs of the new prescription drug 
     benefits and any associated interest costs shall be exempted 
     from triggering the point of order.''.

      SEC. __24. MEDICARE SURPLUS RESERVE.

       Title III of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following:

     ``SEC. 316. MEDICARE SURPLUS RESERVE.

       ``The amounts reserved for the Medicare surplus reserve in 
     each year are--
       ``(1) for fiscal year 2000, 33 percent of any on-budget 
     surplus for fiscal year 2000, as estimated pursuant to 
     section 211 of H. Con. Res. 68 (106th Congress); and
       ``(2) for each of the fiscal years 2001 through 2014, 33 
     percent of any on-budget surplus, as estimated by the 
     Congressional Budget Office for that fiscal year in its 
     initial report for that fiscal year pursuant to section 
     202(e).''.

      SEC. __25. PAY-AS-YOU-GO EXTENSION.

       Section 252(a) and section 252(b)(1) of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 are amended by 
     striking ``before October 1, 2002,''.

      SEC. __26. SUPERMAJORITY.

       (a) Point of Order.--Subsections (c)(1) and (d)(2) of 
     section 904 of the Congressional Budget Act of 1974 are 
     amended by inserting after ``310(d)(2),'' the following: 
     ``312(g).''
       (b) Waiver.--Subsections (c)(2) and (d)(3) of section 904 
     of the Congressional Budget Act of 1974 are amended by 
     inserting after ``301(i),'' the following: ``301(j), 
     311(a)(4),''.

      SEC. __27. ADJUSTMENT OF BUDGET LEVELS AND REPEAL.

       Upon the enactment of this subtitle, the Chairmen of the 
     Committees on the Budget shall file with their Houses 
     appropriately revised budget aggregates, allocations, and 
     levels (including reconciliation levels) under the 
     Congressional Budget Act of 1974 to carry out this subtitle.

      SEC. __28. EFFECTIVE DATE.

       This Act shall take effect upon the date of its enactment, 
     and the amendments made by this Act shall apply only to 
     fiscal year 2000 and subsequent fiscal years.

  Mr. BAUCUS. Mr. President, this is a motion to recommit the bill and 
send it back to the Finance Committee with instructions. The 
instructions would be to change the tax bill to ensure that 100 percent 
of the off-budget surplus--that is, the Social Security surplus--be set 
in a lockbox that is in reserve, and it also provides that one-third of 
the on-budget, or non-Social Security surplus, be set aside for 
Medicare.
  You might remember that although both sides generally agree that of 
the roughly $3 trillion projected surplus over 10 years, $2 trillion 
would be reserved for Social Security--that is the Social Security 
lockbox part of this amendment--we have not reached agreement on the $1 
trillion projected on-budget surplus, and this amendment reserves one-
third of that for Medicare.
  Why is this amendment so important? Plainly, simply, we believe that 
a

[[Page 18196]]

portion of the budget surplus should be reserved for Medicare. 
Americans very much believe in Medicare. Americans want Medicare. 
Americans want the Medicare program to be in good shape. They want to 
have the security of knowing that seniors will have a better chance to 
have a portion of their health care bills provided for, and that means 
we need Medicare.
  There are several problems facing us with Medicare right now. One of 
them is solvency.
  I would like everybody to look at this chart behind me. Very simply, 
it shows that the Medicare trust fund will become insolvent, under 
current projections, by the year 2015. That assumes the economy stays 
as strong in the next 15 years as it is today. That is the assumption.
  If for some reason economic growth in America declines slightly, 
inflation rises slightly, if for some reason there is a reduction in 
the stock market boom, a reduction in markets, if for some reason 
interest rates go up, then the insolvency of the trust fund moves back 
to the left; that is, before 2015.
  The Medicare trust fund is in much worse shape than Social Security. 
Projections are with this lockbox amendment that the Social Security 
trust fund will be in good shape way off in the future. That is not 
true for the Medicare trust fund, not true at all.
  In fact, this chart shows that, optimally, the trust fund is going to 
reach a deficit situation--the surplus will be zero--and Medicare 
payments will therefore have to be decreased under the hospital trust 
fund, at the very latest by the year 2015, probably earlier.
  Why is that doubly important? We are reserving a portion for 
Medicare, one-third of the on-budget surplus for Medicare, not only 
because the solvency of the trust fund is in a difficult position, but 
also because the baby boomers are due to reach retirement age at about 
2011 and on through to about 2020.
  The baby boomers are going to reach retirement, and that is going to 
cause much more pressure on the trust fund. We believe it is prudent 
today to reserve a portion of the on-budget surplus --a third of it--to 
meet that problem, to meet that demographic condition that is going to 
occur; namely, more baby boomers. We think it is only prudent to 
preserve Medicare for that reason.
  There is another reason to save for Medicare, and that is very simply 
to help make it easier for us in the Congress to provide prescription 
drug coverage for seniors. If we have heard anything lately with 
respect to Medicare, it is that seniors want and deserve some kind of 
Medicare prescription drug coverage. Why is that? One reason is that 
today, essentially, Medicare does not provide for drug coverage out of 
hospital.
  There are some exceptions for that, but as a basic rule Medicare does 
not provide for prescription drug coverage for seniors except when they 
are in the hospital. That is a problem. Roughly 30 percent of Americans 
over age 65 depend entirely on Social Security for their income.
  There are a lot of seniors who are not very wealthy. A lot of seniors 
who desperately look for that Social Security paycheck and who 
desperately are trying to figure out how to balance their individual or 
family budget to pay for prescription drugs, to pay for heating bills, 
to pay for food. This is not some cataclysmic scare tactic. It is not 
some wild story.
  All of us in this Chamber who go to drugstores to get prescription 
drugs run across an elderly lady or an elderly man talking to the 
druggist, trying to balance things out, trying to fill a prescription 
and trying to find enough money to pay for it all, and asking the 
druggist, ``Well, maybe just half,'' because they don't have enough 
money. I have seen it. I will bet that most Members of this body have 
seen either that or something similar to it.
  When I first ran for office, I knocked on virtually every door in 
Missoula County, MT, a lot of doors. One thing that struck me--and I 
know it gets everybody who does the same thing--there are a lot of 
people who are really poor, who are really hurting, and most of them 
are seniors. There are seniors who are having a hard time making ends 
meet. They are lonely. And we know, too, that drug benefits, drug 
coverage is more and more important to seniors. Seniors rely much more 
on drugs today than they did 20, 30 years ago. In part, that is because 
pharmaceuticals have come out with lots of different drugs that affect 
people's medical condition, help people's health, especially for 
seniors, whose health needs more attention in later years. That is 
clear. We all know that.
  When I talk with folks when I am home--it is with some frequency--I 
see it everywhere. You are reminded just how many people in our country 
are really in tough shape and they need help. Most of them are seniors. 
A lot of seniors need a lot of help. Our proposal is simple--a third of 
the on-budget surplus should be saved for Medicare.
  Now the alternative from the other side has no coverage for 
Medicare--zero, nothing, not a red cent for Medicare, nothing.
  Mr. SANTORUM. Will the Senator yield?
  Mr. BAUCUS. I will yield at the appropriate point.
  We have two amendments before us. One is the Republican alternative, 
which is the lockbox only for Social Security, that is all and, I might 
say, in a way which is very dangerous. It will cause train wrecks. It 
is going to cause the precipitation of confrontations in government. It 
is very reckless--very reckless. That is one alternative--only Social 
Security in a reckless way.
  The other alternative before us, of the two amendments, is a lockbox 
that protects Medicare also, but in a nonreckless way.
  Those are the two choices. It is very simple. We say that in these 
times of tremendous projected surpluses, at least a third of the on-
budget surplus should be protected for Medicare--at least a third.
  My colleagues on the other side of the aisle says zero--they want to 
put aside nothing for Medicare. We say a third, and we lock it in. We 
lock it in to the same degree as both sides want to in some way lock in 
Social Security protection. We lock it in, and we provide for it. The 
other side has not one red cent for Medicare, not one red cent, not a 
penny, not a dime, not a quarter, nothing. If they come back and say, 
we have some money for Medicare, that is a wish. They don't lock it in. 
They just say maybe. Because of the big tax cut, it is not going to be 
there. It is just a hope and a wish and a prayer. We say we lock it in. 
That is the difference.
  I strongly urge my colleagues to take advantage of this situation by 
locking in a third of the on-budget surplus for Medicare.
  Another reason for doing this is, all of us have heard in the last 
year, roughly, about how we went too far in 1997 with the Balanced 
Budget Act provisions which cut providers' benefits. We have all heard 
that, that we have cut hospitals, too, that we cut home health care too 
much, and so forth.
  Let me show my colleagues this chart. If they can see this chart, 
basically it shows the projected cuts under Medicare were about $100 
billion over 5 years. Now it has turned out that the actual cuts are 
almost twice that, almost $200 billion over 5 years. We have all heard 
that.
  To be a little more specific, look how big the differential is 
between anticipated cuts under the BBA 1997 and the actual cuts. In the 
anticipated cuts, the differential is greatest for home health care--
big difference. It turns out that the actual cuts for home health care 
are more than twice what we anticipated. And the actual cut under 
skilled nursing homes is about 60 percent more than we anticipated.
  So I will summarize and say that the choice between us is very 
simple. We have two amendments we are considering. One is a lockbox 
with only Social Security, in a very dangerous way because it is tied 
to projections by the CBO. CBO determines what the debt limit is under 
their amendment.
  The other choice is ours, which is not only to protect Social 
Security but also to protect to the same degree Medicare, at a time 
when the American Government faces a surplus, a surplus

[[Page 18197]]

of about $1 trillion over 10 years. It is very simple: Save a third of 
the surplus for Medicare, for seniors. Help them pay those health care 
bills. Help them get those prescription drug benefits. Help us relieve 
the undue pressure we have caused on home health care agencies, on 
nursing homes, on hospitals, particularly rural hospitals.
  This is a no-brainer, Mr. President. This is pretty simple stuff. It 
is a matter of choices. Do we want to help people on Medicare or do we 
not? We say yes, we do want to help people on Medicare. We want to help 
those seniors. This amendment we are offering enables people who are 
senior citizens to get the health care protection and the health care 
benefits that we think are so important.
  I reserve the remainder of my time.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, because we had a little bit of confusion 
in the order of speaking, I propose at this point a unanimous consent 
agreement which would allow first the Senator from Pennsylvania to 
speak on our amendment for up to 10 minutes, to be followed by the 
Senator from Georgia to speak for 5 minutes on the amendment, and then 
we would go back at that point to the other side. We had thought we 
would start since we offered the first amendment on this side of the 
aisle.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ABRAHAM. I yield up to 10 minutes to the Senator from 
Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized 
for 10 minutes.
  Mr. SANTORUM. Mr. President, I congratulate the Senator from Michigan 
and Senator Domenici for their great work on the Social Security 
lockbox issue.
  Before I get into our amendment, I will address the Senator from 
Montana. First he says there is no money, not a penny, not a nickel, 
available for Medicare under the Republican bill. As the chairman of 
the Budget Committee will show in his big charts--I don't have one of 
those big charts with me, but I have a smaller one--this yellow area is 
$505 billion for domestic spending programs.
  If we want to--and that is the second point I want to make--use the 
on-budget surplus to fund Medicare, which is not an on-budget program, 
it is a separate program like Social Security, by the way--it is a 
separate program--one of the things I hear from seniors most: Keep 
Medicare and Social Security separate. That is what the lockbox is 
trying to do with Social Security. There is money there if we want to 
take money from the general fund and use it for Medicare.
  So the idea that we don't lock it up is ridiculous. The money is 
there. Then we can decide where we want to spend that money. It is a 
matter of priorities.
  I will make this argument: I don't know if the Senator from Montana 
has ever voted to spend general fund money on Medicare. I don't think 
there has been a vote I am aware of in the Finance Committee to 
actually--there have been resolutions, a sense of the Senate, we should 
save Medicare--fund a Medicare program out of general fund revenues, 
Medicare Part A Program.
  That, to me, is a dangerous precedent. We have a separate dedicated 
tax for Medicare--a separate tax. What is now being talked about is 
that we have to grow Medicare by using the on-budget surplus.
  Let me say this: If Medicare was a program that was financially 
sound, that was doing a very solid job in the sense of providing 
efficient services, was the kind of coverage that seniors are really 
looking for, then you might make the argument that it is a well-run 
program and is doing everything it should be doing, and instead of 
raising taxes on people to fund Medicare, we should take that money out 
of the surplus. The problem is, we have a fairly strong bipartisan 
agreement that there are a lot of problems with Medicare. The Senator 
from Montana will agree there are serious problems. No. 1, it doesn't 
cover even half of health care costs of seniors. Here is the major 
health care program for seniors, and it doesn't even cover half of 
their costs for health care.
  What we are saying is--and we said on a bipartisan basis--let's fix 
Medicare, make it more efficient, let it meet the needs of seniors, 
including prescription drug coverage. Why? Because when Medicare was 
put together 35 years ago, drug therapies weren't that common or well 
used; they were a very different game. Well, today is different. So we 
need drug therapy as part of a basic benefit because it is the way we 
treat people more often. So this idea that, somehow or another, our 
lockbox is not sufficient because we don't lock up Medicare is 
ridiculous. We have money to do it, A; and, B, we have to question 
first whether we should throw more money at Medicare before we fix what 
is fundamentally flawed with Medicare, in making it a better program. 
Those are the things I would like to address on Medicare.
  With respect to our lockbox, I always find it unbelievable that when 
we have an issue here with broad consensus--in this case, or in most 
cases, the issues pushed by our side of the aisle--all of a sudden we 
have agreement. We have agreement in the House, 416-12. The President 
says he wants a Social Security lockbox. We come to the Senate and we 
have agreement. Probably if I talk to seniors around the country, the 
first thing they will tell me is: If you quit raiding that money out of 
the Social Security trust fund, Social Security would be OK. We have an 
agreement.
  So we come to the floor with an agreement to fix the Social Security 
problem. Let's lock that money up so only Social Security money can be 
used for Social Security. Well, sometimes, as the song in Oklahoma 
says, a girl can't say no. These are the girls who can't say yes on the 
other side of the aisle. These Democrats just can't say yes.
  We have an agreement, we have something that we all agree on. America 
is overwhelmingly agreeing with it, but they can't come around to 
saying let's get this done. No, they are going to change the subject. 
Well, that Social Security thing, we agree with you; but you don't do 
enough and therefore we can't let you do this. We can't let you do your 
Social Security. They throw up this phony red herring with Medicare. I 
am trying to say the public is tired of this. They want us to be able 
to find things we have consensus on and do them, instead of playing 
political games.
  What is going on in the Senate on this issue, for six cloture votes, 
over a several-month period, is political gamesmanship. We have 
agreement that Social Security moneys should only be used for Social 
Security, and we can't get one single Democrat vote to pass that 
measure. We have 80-plus percent of the American public who want it 
done. We have their President who said: Send me only a Social Security 
lockbox--only. We have 416 Members of the House who say ``Social 
Security lockbox,'' and we have 45 obstructionists--45--who would 
rather play politics because they think they can win the election on 
making the Republicans bad guys on Medicare. So they throw the Medicare 
herring out. We don't have the Social Security herring this time. These 
are the two red herrings that are chronically thrown at Republicans at 
election time. We have lost the Social Security card, so let's play the 
other card to muck things up so we don't get things done.
  People are sick of that. I can tell you, as a Republican Member who 
is working hard to preserve Social Security, I am sick of it. We can 
get this done tomorrow. We can pass a lockbox that says to every Social 
Security recipient in America: Your money is not going to be spent on 
other Government programs. We can make that assurance. The President 
said he would sign it, and 45 people on the Democratic side of the 
aisle are saying, no, we are not for getting anybody any political wins 
because we only think of politics. We don't want to give you this 
political win. We want you to be the do-nothing Congress, so we are 
going to throw this red herring out. Medicare. Oh, the bogeyman on the 
Republican side; they don't have a nickel or a penny or a quarter for 
Medicare.

[[Page 18198]]

  Garbage. The issue is not Medicare. This is a Social Security 
lockbox, which the Democrat President--their President and our 
President--wants. We are ready to give it to him. What is the response 
from the other side? The response could be, should be: OK, let's do 
Social Security. We all agree on it. We have broad bipartisan 
consensus. We have public approval. Let's do Social Security.
  But, no. Let me tell colleagues on the other side of the aisle, the 
Medicare issue is going to be here a little while longer. I don't know 
of anybody who thinks Medicare is going to go away, or the problems in 
Medicare are only temporary. That issue will be here, and it is an 
important issue, one that should be fully debated. But it should not be 
used to obstruct something that is desperately needed to protect the 
Social Security trust fund, and that is the political game that is 
going on. We should call it what it is; it is an absolute red herring.
  Social Security can be--should be--must be--protected from raids by 
the general government and by the very same people, I might add--we saw 
the Democratic leader come forward this week and say we need $10 
billion more for agriculture. May I ask the Senator from Montana where 
that money is coming from?
  Let me answer that question. The Social Security surplus. So is it 
really that they want to do the Social Security lockbox as they say? Is 
it really that they want to put all that money aside to make sure 
Social Security is solvent for the next generation? Or is it really 
because they just can't help themselves; they want to spend it?
  They don't want a lockbox because a lockbox keeps their fingers out 
of the Social Security trust fund, which they love to raid. They just 
can't help themselves. They just love to stick their fingers in there 
and get that money out that is just sitting there. It is just sitting 
there. It is similar to a sailor on leave, sitting there with a shot on 
the bar and he is staring at it and he can't leave it alone.
  All I am saying is: Leave Social Security alone. Pass the lockbox.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Georgia is recognized for up to 5 minutes.
  Mr. COVERDELL. Mr. President, I think it might be useful for anybody 
listening to the debate to put this in some sequence. When the Nation 
discovered there would be projected surpluses of amounts that had not 
been anticipated, they changed all the dynamics of our discussions 
about budgets and Social Security. When the President gave us his 
budget, he spent about 40 percent of the Social Security receipts.
  If there is one complaint you hear as you travel across the country, 
it is that people are unhappy when the Congress dips into the Social 
Security taxes that have been sent, purportedly, to prepare for the 
retirement of all those who participate. So when this Congress began, 
we got a budget from the President that spent 40 percent of those 
Social Security receipts.
  Our side of the aisle said no. We are going to take the President at 
his admonishment over the years. We are not going to spend any of the 
Social Security receipts, and we are not going to use it for tax 
relief. It is going to be set aside and protected. Over the next 10 
years, that is almost $2 trillion.
  I might add, that does not solve all the issues that deal with Social 
Security. But it makes a pretty good downpayment on the problem. 
Everybody in America agrees that ought to be done.
  After this debate was floated around the town for a while, I think 
the President realized it was not going to fly to propose to spend the 
Social Security receipts. So he said on June 28. That is just several 
weeks ago after being pummeled for 5 weeks that he should not be 
spending those receipts. He said, ``Social Security taxes should be 
saved for Social Security, period.'' He didn't say, ``and something 
else,'' or, ``Maybe we ought to talk about Medicare.'' We will talk 
about that in a minute. He said, ``Social Security taxes should be 
saved for Social Security, period.'' That was a big change.
  We had our side of the aisle saying no Social Security receipts for 
anything but Social Security, and we had the President.
  They brought it up in the House of Representatives. It was virtually 
unanimous with 415 votes. We are going to protect all the Social 
Security receipts. All that has to happen is for that to clear the 
Senate, and we say to America: We have made a monumental breakthrough.
  What happened when it got to the Senate? Filibuster.
  We have endeavored to go to the measure to debate it and to amend it 
five different times. I might add it would be subject to amendments to 
improve it and to have the ideas heard from the other side of the 
aisle.
  But what was the response? Don't let the Senate get to the bill. 
Block it.
  The latest ruse, which is this amendment, is to cloud it because they 
do not want to be responsible for blocking a sound measure to protect 
Social Security. They don't want to be responsible for that. They do 
not want headlines such as the New York Times that says ``Republicans 
Seize the Banner on Social Security.'' This has been their purview for 
years. Suddenly, they are in the position of having to cloud the issue 
because they do not want to be seen as being responsible for leaving 
all of those receipts out there that could be spent or used for some 
other issue.
  We are prepared to pass a lockbox for Social Security--that none of 
those receipts would be spent on anything but Social Security, or the 
pay-down, and that they would not be used for tax relief. It would be a 
monumental breakthrough.
  You can only conclude that, A, they don't want a lockbox because they 
want those funds to be available; and, B, that the reason they are 
coming forth with blocking going to the bill or an amendment--that gets 
into another subject--is to cloud the issue, which is they are blocking 
the ability of the Senate to concur with the President of the United 
States and the House of Representatives and give America a lockbox that 
protects Social Security. It is not very complicated.
  I will say one last thing. When you go to a town hall meeting and you 
talk to the American people, they do not want these two subjects mixed. 
They don't want them jumbled up. They want Social Security protected, 
and then they will consider what we are talking about on Medicare. They 
do not want the Government in their medicine cabinet. They don't want 
these two issues mudded.
  Mr. President, I yield in accordance with the unanimous consent.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from Michigan is recognized.
  Mr. ABRAHAM. Mr. President, at this point, on behalf of myself and 
the managers of the bill, I yield up to 15 minutes to the Senator from 
Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized for 
up to 15 minutes.
  Mr. THOMPSON. Mr. President, I thank my friend from Michigan. I thank 
the Presiding Officer.
  Stepping back from what we have been talking about for the last few 
minutes, I will go back and address the issue at hand concerning the 
lockbox.
  I think it is important to keep in mind what we are about here and 
what the essential question is. The essential question remains whether 
or not when we are faced with projected substantial surpluses, 25 
percent of that amount should be returned to the people who created 
those surpluses. That is the American taxpayer. I think that question 
should answer itself.
  Another way to put it is whether or not, in view of these surpluses, 
we need a tax cut or a tax increase. You would think that question 
would answer itself. You would think that certainly in a surplus 
situation you would have to seriously consider tax cuts under those 
circumstances.
  We have a tremendous tax burden right now. Taxes are taking a greater 
and greater share of our economic productivity. Income taxes alone have 
reached the level of 10 percent of gross domestic product, the highest 
they have ever been in this country.

[[Page 18199]]

  A two-earner family nowadays pays 38 percent of their income in 
taxes. You would think that surely we could reach agreement that now is 
the time for a decent tax cut for the American people. If not now, 
when?
  Our Democratic colleague, Senator Kerrey from Nebraska, put it well 
earlier today. He said: I don't even think it is a close call--that 
under these circumstances we should have a tax cut.
  But what we are dealing with now, with regard to the Democratic 
amendment, is another reason why they say we should not have a tax cut.
  We have seen time and time again over the last few days almost utter 
hysteria in this town primarily from the White House, the President, 
the Vice President, and their spokespeople wringing their hands giving 
one reason after another after another why we cannot possibly have a 
tax cut under these circumstances. It is going to destroy the economy; 
old folks are going to be put out on the street; we are going to 
pollute the environment; women's health issues are coming into play.
  It is substantial overkill, and it is based upon the fact that they 
are not telling the truth about the elements of what they are trying to 
do; that is, essentially give us a tax increase instead of a tax cut 
and spend an additional $1 trillion-plus.
  Now what we have as part of the reason why we can't have a tax cut is 
we want to protect Medicare and Social Security, and, in this 
particular amendment we are addressing, the question of a Medicare 
lockbox.
  I think one of the essential questions before this Congress is, What 
is the responsible way to protect Medicare? We all know we have a 
substantial problem. We all know we are going to have to address it.
  What happened in response to that was a bipartisan effort by the 
Medicare Commission, chaired by Senator Breaux from Louisiana. They 
came up with real reform because everybody knows you can't keep pouring 
money on top of a system that is broken, that is flawed, that is out of 
date, that is uneconomical, and that everybody says has to be changed. 
We can disagree on how to do it, but everybody says and recognizes that 
we have to have fundamental reform.
  The difficulty with that is a political difficulty. It is not one of 
not knowing what to do; it is having the political nerve and 
wherewithal to sit down and get the job done.
  This commission addressed it. This commission did it, Democrats and 
Republicans together. But the President pulled the rug out from under 
that effort. That was a real chance to do some Medicare reform. That 
would be the only thing that was going to save Medicare. It is 
fundamental reform. The President pulled the rug out from that effort.
  He says now, since we have this Medicare problem and essentially 
since they have pulled the rug out from the reform effort that would do 
something to solve the problem, that we have to look to general 
revenues. We can't have a tax cut now so we have to take this surplus 
and dedicate a huge chunk of it for so-called fixing Medicare.
  The fact of the matter is that will not fix Medicare. It will not 
even help Medicare. It will be counterproductive. There will be some 
transition costs as we move from a failing system--it still does a lot 
of good, but it is a failing system--to one of real reform. There will 
be some transition costs. The Republican proposal has over $500 billion 
of revenues in our proposal that can be used for Medicare or any other 
reason.
  Pouring more money in, setting it aside, and calling it a lockbox--
and by the way, nobody goes to jail if they get inside the lockbox--I 
don't think fools anybody. We are making a commitment to set the money 
aside and not mess with it. I take that commitment seriously. There is 
nothing keeping Congress from coming in the next day and doing 
something about it.
  The fact of the matter is we are not helping the system by saying we 
are going to set aside some money for Medicare without addressing 
fundamental reform. A lot of people want prescription drugs as an 
additional entitlement. At a time when we have a real fiscal problem 
with the system itself, laying another entitlement on will provide 
additional challenges we will have to meet. However, there is even a 
way to do that if it is accompanied with fundamental reform.
  Instead of doing that, what we have in a proposal similar to the 
President's proposal, just another variation, is saying another reason 
we cannot have a tax cut is because we need to set aside the general 
revenues, the surplus, to save Medicare. It will not save Medicare. 
That approach will actually wind up hurting Medicare.
  I was looking at testimony of the Comptroller General on this issue. 
He was talking about the President's proposal. It has to do with the 
idea of setting aside general fund revenues, general surpluses, and 
claims we will use that to solve the Medicare problem.
  It is fallacious; it is phony. The Comptroller General says even if 
all future surpluses were saved, we would be saddled with the budget 
over the longer term and at current tax rates could fund little else 
but entitlement funds for the elderly population. Reforms reducing the 
future funds of Medicare and Social Security and Medicaid are vital to 
restoring fiscal flexibility for future generations of taxpayers.
  The Comptroller General says if we took all the money and poured it 
into the programs, we are really not doing very much other than perhaps 
buying a little bit of additional time to allow us to pour more money 
into a leaky bucket, when the hole in the bucket at the bottom is 
getting bigger and bigger, and we are pouring more general revenues, 
under the assumption, I suppose, that we can do that forever without 
ever having to make real reform.
  He says:

       I feel that the greatest risk lies in extending the HI [the 
     hospital] trust fund solvency, while doing nothing to improve 
     the program's long-term sustainable. Or worse, in adopting 
     changes that may aggravate the long-term financial outlook 
     for the program and the budgets.

  The Comptroller is saying we are aggravating the problem. You are 
actually doing harm if you think by putting a little more money on top 
of this program you can forestall real reform and you can fool the 
American people into thinking they don't have to make some tough 
choices and have real reform such as the Medicare Commission came up 
with. It is making you stand off from the problem and not address the 
problem.
  We are facing a demographic time bomb. In the year 2030 we will have 
twice as many people over the age of 65. We will have about half as 
many worker-per-retiree ratio. It will be twice as bad by the year 
2030. We know we have to do something.
  I am afraid I must conclude that although saving Medicare and Social 
Security has worked very well for some people who have used it as a way 
of having to face up to the fundamental problems those two programs 
present, the real answer to the question that is presented tonight with 
regard to the Medicare lockbox amendment is that, once again, it is 
being used as yet another excuse, along with ``it will ruin the 
economy, it will pollute the atmosphere, it will destroy the 
military.'' It is being used simply as another excuse as to why we 
cannot have a tax cut.
  For folks who believe the money ought to come to Washington, there is 
never a good time for a tax cut. There is never a good time for it. It 
is about power. It is fundamentally about who makes decisions in our 
society. Anyone believing Washington should have control of this, 
thinks even in a surplus situation that 25 percent of it can't be 
returned to the American people.
  I say if not now, when in the world could we ever do it? Certainly, 
we are not doing Medicare any good. We are not doing Medicare any good 
by standing here and trying to convince the American people that by 
setting aside a few more general revenue dollars for this system, when 
we have failed to reach fundamental reform, that we can do that and we 
will be doing something good for Medicare or the country.
  If we can't have a tax cut with a $3 trillion surplus, I don't know 
when we will ever have one. The President, in three different years, 
has recommended tax increases in a deficit situation.

[[Page 18200]]

Now we have a surplus situation. One would think the answer to that 
would be a tax cut. Now he comes back and suggests another tax 
increase. It doesn't make sense.
  I suggest the Medicare lockbox proposal be defeated.
  Mr. ABRAHAM. Mr. President, I yield up to 15 minutes to the Senator 
from New Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
up to 15 minutes.
  Mr. DOMENICI. I ask the Presiding Officer to tell me when I have used 
10 minutes.
  I heard the distinguished Senator from Montana, Mr. Baucus, say there 
is not one nickel for Medicare in this Republican budget. That is 
absolutely wrong. Perhaps the Senator forgot to include the fact that 
there is $3.1 trillion in this budget for Medicare, fully funded.
  What the Senator should have said was: Shame on the President. He is 
accusing Republicans, and he underfunded Medicare $31.5 billion on 
purpose. He did such things in his budget as freezing hospital costs 
for rural America. Senators, including the distinguished Senator from 
Montana, are worried about that. The President's proposal is that it be 
frozen for another year. That is where he picked up $31.5 billion. 
Guess what he did with it. He spent it on other domestic programs. That 
is the stark reality, unequivocal truth.
  Having said that, let me start with a quote from the CBO on July 23 
of 1999. It has some real application to the so-called Medicare lockbox 
that is being proposed today to confuse the issue. The issue is putting 
a lockbox around Social Security. The other side doesn't want to vote 
for that for some reason, so they say: Let's do another lockbox, let's 
do Medicare, and we will get credit for reducing the debt.
  Here is what they say about it.
  The chief criticism that the President--that is, OMB--has of CBO is 
that,

       . . . we did not give them credit for $328 billion in 
     transfers from the general fund to the Medicare trust fund.

  Then they say,

       That's right, we didn't, and that's because transfers from 
     one part of government to another do not reduce the public 
     debt.

  The whole argument the President is taking to the American people is 
that he reduces the debt more than we do. But one of his big-ticket 
items is this one right here. The Congressional Budget Office says that 
$328 billion that he wanted to move out of the general fund, so it 
could not be used for tax cuts, he puts in the Medicare trust fund and 
wants credit for reducing the debt.
  What does the Congressional Budget Office say? Fundamentally the most 
simple of all propositions: We did not give them credit for that 
because transfers from one part of Government to another do not reduce 
public debt. That is an interesting one.
  Then, in addition, we had a very good Senator who does not agree with 
the Democrats on everything and say--this is Bob Kerrey:

       The President also has a great deal of pain in his plan--a 
     hidden pain in the form of income tax increases that will be 
     borne by future generations of Americans.

  He is alluding to the $328 billion which are IOUs, and he says:

       I strongly disapprove of a plan that provides a false sense 
     of complacency that Social Security has been saved by this 
     nebulous and vague idea of ``saving the surplus''--

  The very same thing applies to Medicare--

     while failing to disclose the real pain that will be imposed 
     on future generations.

  When they will have to pay for it, is what he is saying. Their income 
taxes are going to go up by the amount of $328 billion or whatever 
amount the Democrats allegedly want to secure for Medicare by putting 
it in some kind of lockbox in an on-budget trust fund.
  I also ask an interesting question: Is there anybody who can stand on 
the floor of the Senate and suggest that by taking this money away from 
the taxpayers and shuffling it over into a trust fund extends the date 
by which we run out of money to pay the Medicare people what they are 
entitled to? Does it increase any? Not at all. You have to change the 
payment plan to do that. That is what Medicare reform is all about.
  Having said that, I could even quote the President's own OMB budget 
about it.
  Suffice it to say, anybody who wants to read this can. But even they 
say, ``only in a bookkeeping sense'' does this carry out any real 
purpose--in a bookkeeping sense, nothing else. We don't need 
bookkeeping; we need to decide what we are going to do with this 
surplus.
  I believe I understand the nature of this surplus. I am working very 
hard to convince people that we all ought to agree on one set of facts 
and then see where we are.
  So I would like to suggest to the Senate, if they find fault with 
this, they can do their own. But I submit that we have, if you start 
with a freeze on domestic spending for the next 10 years--Do not jump 
up and say we cannot do that. I know we cannot do that. But if we start 
with that, we have an accumulated surplus of $3.3 trillion. We ought to 
then talk about how the Republicans plan to use that. Very simply, we 
take every penny that belongs to Social Security and we say put it in a 
lockbox. That is the debate tonight. But put it in a real lockbox, 
don't put it in a lockbox such as the one that is offered here on the 
floor tonight. It is unbelievable that the other side would even claim 
to have a lockbox.
  They create another budget point of order on top of at least four 
that already exist, against a budget resolution that has an on-budget 
deficit. That is exactly the issue. You can call it Social Security or 
whatever. There are already four points of order on that. You do not 
need this new lockbox on Social Security.
  But let me suggest, let's continue on. If this is the way you look at 
a surplus, then set all the Social Security money aside. Then go and 
say, What do we do with the rest of it? We submitted the proposal that 
was put in this budget resolution when we designed it and voted on it 
for a tax cut over a 10-year period.
  People are acting as if we are cutting $792 billion worth of taxes 
next year. Do you know how much we are cutting taxes next year? Four 
billion dollars. They are worried about whether we have a tax plan that 
will overstimulate the American economy. That is so small that it is in 
the range of rounding errors in terms of the tax take of America.
  In the next year it is maybe twice that--$8 or $10 or $12 billion. It 
does not do anything to inflate this economy because we are planning it 
right. We are planning it to come in piecemeal, as a booming American 
economy can absorb it. That is $792 billion. If you want to know the 
number, that is 23.4 percent of this total surplus.
  I have been using a dollar bill. It caught on. The Democrats have 
used dollar bills, and they got us all confused. They have two 
different dollar bills, one cut in thirds, one cut some other way. Ours 
is simple. We have not cut it any way. We say one-quarter of it, 23.4 
percent, should go back to the American people. It is tough for 
Democrats to believe this, but plain old arithmetic says there is $505 
billion left over. The other side says there is not a nickel in this 
for Medicare.
  Before they came to the floor, before this idea that we were not 
doing anything for Medicare became a political issue, the budget 
resolution had $90 billion in it for Medicare--the one you voted on, 
Republicans. It had $90 billion in. Now, look here, there is $505 
billion worth of domestic priorities. We submit it is up to the 
Congress and the President to decide how to use it. But would anybody 
believe we are not going to use part of it for prescription drugs? Of 
course we are. And, incidentally, is that enough money?
  Do you know how much the President said we need for prescription 
drugs? And he would have sold this to the American people, except it is 
impossible. He said $48 billion of that is what you need to fix, 
reform, and pay for prescription drugs. It turns out he totally 
underestimated it. It is more like $111 billion--$118 billion. But the 
truth of the matter is, take $90 billion out of it, take $100 billion 
out of it;

[[Page 18201]]

that leaves $405 billion to add to discretionary. Just in rough 
numbers, you could add about $50 billion a year. If you do $100 billion 
worth of Medicare, you can add $40 billion a year. Is that enough?
  Tomorrow I will put up a chart showing how much discretionary 
spending has gone up in the last decade. I would be surprised if it 
went up $40 billion, net increase, in very many of the years.
  So essentially we have only one issue here: Do we lock up, in an 
irretrievable manner, as suggested in the Abraham-Ashcroft-Domenici 
lockbox, which is really a lockbox--such a lockbox that the Secretary 
of Treasury was even worried that it did not give Government enough 
flexibility, so we changed it to give them some flexibility. We 
provide, in the case of a war, in the case of great emergencies, you 
are not bound by it. We provide some other flexibility.
  But the truth of the matter is that this is a prudent way, if you 
decide you do not want to use the surplus to grow big, big, big, big 
Government. If you want to grow it, then do it the way the President 
recommends: Do not have this tax cut in; have a little piece of one.
  The PRESIDING OFFICER. The Senator has used 10 minutes and has 5 
minutes remaining.
  Mr. DOMENICI. In fact, I am prepared to make a guess, if they want us 
to settle for $300 billion--and $792 billion, rounded to $800 billion, 
is almost 25 percent--they would like to give the American taxpayers 
back less than a dime, it looks to me. So if they have a chart up that 
explains their position and want to use an American dollar, put it up 
and clip it off at 10 percent and say: That is what we would like to 
give you back because we need all the rest of it because we want to 
increase spending.
  I do not think this applies to the distinguished Senator who is 
making the argument in behalf of the Democrats. I do not think he would 
want to spend all that money. But I do believe the President has 
snookered us all. He has us believing we are really going to harm the 
American people by not paying for every new program he has in mind and 
more. And, frankly, that is just not true.
  In fact, tomorrow, if I can, I will put up about five of the 
President's new programs, I say to Senator Abraham. I will get them on 
a chart here, and I will ask the American people: Which do you prefer? 
These five new programs? Or would you prefer to make it easier to pay 
off student loans? Would you prefer to make it easier to take care of 
an elderly parent? Would you prefer to stop penalizing marriage? Or 
would you prefer a new program? It does not matter what new program. 
New programs are new programs, if they are added to the expenditure of 
the Federal Government and are making it grow.
  We believe it is a pretty good size right now. We believe there is a 
need for some growth. We believe there is a need in some instances to 
increase dramatically what we have been spending, and we voted for that 
in our budget resolution. We said education is one of them, if you will 
reform the way we give it to the States. Let's put more money in, not 
less. We said that. We argued it here on the floor. We propose to stick 
with that.
  But the truth of the matter is that our lockbox will make our tax cut 
reasonable and plausible and will make sure the Social Security people 
are safe.
  I close tonight by suggesting to everybody who is listening to this 
debate the President continues to raise the issue and Democrats are 
following him almost in rote marching, and that is, they get cranked up 
and they say: We want to save Social Security; we want to save 
Medicare, which simply means you should not have tax cuts.
  Here is $1.9 trillion waiting for you to tell us how to fix Social 
Security. Is it so complicated? No, it is not complicated. He prefers 
the issue to a solution. That is why we are on the floor. He does not 
want to submit a Social Security reform program. He wants to continue 
to hoodwink us into thinking if you give the people a tax cut, you 
cannot fix Social Security.
  I will bet the President would not submit a Social Security program 
that would cost so much that it would not leave money for a tax cut out 
of this surplus. That is absolutely incredible that he would do that. I 
do not believe he would submit a Medicare reform program that would be 
so big and so costly that there would not be money for a tax cut. As a 
matter of fact, he kind of shocked me. He submitted a reform Medicare 
plan that only costs $48 billion, if he was right in his numbers. It 
turns out he is not right, but had he been right, he would have been 
submitting one that cost $48 billion. I submit there is plenty of money 
left over to do that.
  My last argument, and it will take a minute, is there are some 
suggesting we should not do this now. If we do not do this now, we will 
never do it because, as a matter of fact, as we proceed through, we 
will obligate all this money one way or another for some American 
program, and then we will say there is not any money left for tax cuts.
  For those who are so frightened about us having a negative impact on 
the American economy, let me suggest, for the next 3 years, our impact 
is insignificant, almost negative. It begins to grow a little bit in 
the outyears, but even the great doctor--as Phil Gramm said today--he 
is like the Bible, everybody quotes him but nobody reads him. That is 
what Phil Gramm said today on the floor. Even he said if you are going 
to spend it, have a tax cut. He also said the Republican plan is not 
significant enough in size over a 10-year period or annually to have a 
negative impact in terms of the American economy.
  I think we are on the right track. Will the Senator yield me 1 
additional minute?
  Mr. ABRAHAM. I yield 1 minute.
  Mr. DOMENICI. We are on the right track, and I think the Democrats 
have missed the boat. They are mixing apples and oranges when they try 
to confuse us on another lockbox for Medicare. I think tonight we have 
just about disposed of that as being a ridiculous approach which I call 
anything but a tax cut approach. Frankly, with that size surplus 
accumulated over this period of time, I say if you cannot give back a 
little bit of it to the American people, then what do they elect us 
for? I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Montana.
  Mr. BAUCUS. Mr. President, I have heard a lot of words.
  Mr. DOMENICI. Good words.
  Mr. BAUCUS. My question is, Where's the beef? There is nothing on the 
other side about what they want to do to help Medicare--nothing. The 
Senator from Pennsylvania started out by saying: Gee, there's money for 
Medicare. Then he shifted his argument to say we should not use general 
revenue. Then he shifted his argument to say that the amendment we are 
offering is a charade, a smokescreen. But if you listen to the words, 
there is not one word of what he wants to do to help Medicare and help 
Medicare beneficiaries, to provide money for drug benefits, to help 
address the balanced budget agreement overcut, and to help the solvency 
of the trust fund.
  I ask again: Where's the beef? Not one word on that side about what 
they want to do to help Medicare. As a matter of fact, what I hear in 
the words is, first, we need some kind of structural reform. Let's get 
structural reform, but let's not use general revenue.
  There has been reference to the Breaux commission. Senator Breaux 
admits we need resources in addition to structural reform to help solve 
the Medicare problem. He said that. He is the chairman of the 
commission. He said we need it. I think he is right. The problems 
facing Medicare will require both structural reform as well as some 
additional resources to help solve the problem. At least that is his 
view, and he is chairman of the Breaux commission. He ought to have 
some idea of what is necessary.
  I also remind my colleagues that structure reform is not easy. I will 
never forget catastrophic attempts several years ago. That was about $4 
on

[[Page 18202]]

seniors to pay for catastrophic and people went berserk. That thing was 
repealed faster than a New York minute because of the politics and the 
difficulty of addressing Medicare reform.
  The Breaux commission did not come up with any super-majority 
recommendation. They could not. It is so difficult, which is not to say 
we should shirk from structure reform. Of course, we should work on 
structural reform, but we also need general funds to help with 
Medicare.
  I was very perplexed when I saw the chart put up by the chairman of 
the Budget Committee. I want to ask him where he got his numbers. I 
know where he got his numbers. They are his own numbers, not CBO 
numbers. For example, the CBO baseline projection over the next 10 
years is a surplus of about--it is on the chart--of about $2.896 
billion. That is CBO.
  If you look closely at the chairman's chart, down below in the corner 
it says: Source. What is the source? It is CBO and the Senate Budget 
Committee, not just CBO.
  We have the Senate Budget Committee--I am trying to avoid the phrase 
``cooked the books.'' I will tell you what it did to come up with the 
chart the chairman was showing. Here is what it did:
  The Congressional Budget Office said, OK, we are going to freeze the 
caps as required under the budget through the year 2002. Then CBO said: 
We are going to assume a baseline at the rate of inflation for the 
remainder of the term up to about 2009. That is how they got this 
number, $2.896 billion.
  What did the chairman of the Budget Committee do? He said: I know 
what I am going to do because the Democrats are really right. What I am 
going to do is come up with a different number to show there are more 
savings.
  How did he do it? He said: OK, I am going to freeze the baseline 
after the year 2002 for discretionary spending, and that is going to 
mean that I get to come up with additional--that is the yellow, 
domestic priorities.
  The fact is, that is very unrealistic and it's not what CBO projects. 
I think we ought to use the same numbers. A lot of us on our side think 
CBO is a little tainted; it has become a little political over the 
years. But I suggest we all start with the same numbers, and the best 
place to start is CBO. If the Senate Budget Committee majority can come 
up with its numbers, I suppose the Budget Committee minority can come 
up with its own numbers. It is no different. That is where we are.
  It is important for Senators to know those are not CBO numbers, those 
are Senate Budget Committee numbers. Those are the majority's numbers, 
not CBO's numbers.
  Mr. DOMENICI. Will the Senator yield?
  Mr. BAUCUS. Just say the yellow is an illusion, it is not there, 
because most of us, if we are realistic, are going to assume we are 
going to at least keep up with inflation over those years. If we do not 
keep up with inflation over those years, then we are going to 
dramatically cut programs.
  How much are we going to cut? The figure is about a 54-percent cut in 
domestic spending.
  By saying there is no inflation rate considered past the year 2002, 
for the rest of the term, these numbers represent, in effect, a 54-
percent cut in discretionary spending. That is what it comes out to. 
That is pretty big. So that is why I say that yellow is an illusion. It 
is not going to happen.
  If I could address another point. My colleagues on the other side of 
the aisle made two basic charges. First, they say that this is a 
smokescreen. That we really do not want a lockbox. My good friend, the 
Senator from New Mexico, said: Well, we have the points of order. It is 
true, we create an additional point of order, but it is a supermajority 
point of order--60 votes. It is pretty hard to get more than 60 votes 
around here.
  Witness the waiver on the Byrd rule did not get 60 votes. Oh, that 
side really wanted to waive the Byrd rule. They could not do it. They 
could not get 60 votes. Sixty votes is a pretty big hurdle.
  Make no mistake, we are very serious about protecting medicare. You 
can also tell that we are serious because we are proposing a lockbox 
that is very similar to the House lockbox which passed by an 
overwhelming margin.
  Why is the Senate lockbox not a good idea? I will tell you why. 
Because it says the debt limit has to go down on a step basis, 
depending upon what CBO's projections really are for the debt. That is 
what it says. That is going to force all kinds of votes here to raise 
the debt limit if it does not work out that way.
  We know all the charades around here, all the politics, all the 
nonsense that goes on around here, because of votes on raising the debt 
limit, whether or not to pay bills we know we have to pay anyway. It 
just doesn't make sense. It just does not make sense to tie the debt 
limit to what CBO says the projections are going to be on the debt. We 
already have a lockbox which works--at least the House thinks it works. 
The House approved it. I think only a handful of House Members voted 
against it.
  So we are saying the House lockbox basically works. House Republicans 
voted for it; House Democrats voted for it. But we want to go one step 
further. We are also saying, let's reserve some money, a third of the 
surplus each year, reserve that for Medicare. If it is not used, if 
structural reform takes care of it and we do not have to use it, it can 
be used for tax cuts, it can be used for defense spending, it can be 
used for whatever this body thinks makes the most sense. But only with 
a supermajority vote.
  My good colleagues on the other side of the aisle also made an 
argument about shifting $328 billion. That is a red herring. That 
argument has nothing to do with this issue. It is irrelevant.
  The only point I am making is that of the $1 trillion on-budget 
surplus, we ought to at least set aside a third in a reserve fund for 
medicare.
  Congress can decide what it wants to do in helping protect Social 
Security and Medicare. We can decide to provide for prescription drug 
benefits. We can address the problems caused by the balanced budget 
amendment cut backs. We can extend the solvency of the trust fund. That 
is what this amendment is all about. It is about reserving the funds 
necessary to help America's seniors. It is actually very simple.
  Again, I go back to my basic question, Where is the beef? How do our 
colleagues on the other side of the aisle assure that are going to 
provide for Medicare, provide for seniors, provide for drug benefits 
for our elderly men and women? That is the problem.
  I urge Senators, cut through all the rhetoric. Listen carefully to 
the underlying words. Sometimes, what people don't say is just as 
telling as what they do say. In this case, our good colleagues make no 
pretense of guaranteeing funds for medicare. Whereas we say, very 
simply, let's save a third of the surplus each year in a reserve fund. 
If we need it, fine. If we do not need it, fine--we can reduce the debt 
and leave our options open.
  We have this opportunity because we have the large projected on-
budget surplus in the future. We do not have these opportunities very 
often. How many Senators can remember times in the past having a $1 
trillion on-budget projected surplus? I can't. I do not think anyone 
else can either.
  What is the likelihood that is going to continue? What is the 
likelihood we are going to have this opportunity 5 years from now? What 
is the likelihood we will have it 8, 10 years from now? Pretty slim; 
not very likely, in my judgment.
  So we have an opportunity. We have an opportunity to put aside the 
funds necessary to extend the solvency of Medicare. We have the 
opportunity to put aside the funds necessary for structural reforms. We 
have the opportunity to put aside the funds for a prescription drug 
benefit. I am saying, let's preserve this surplus--let's keep our 
options open.
  Do you know what else our lockbox does? Deficit reduction. People 
want deficit and debt reduction. They are tired of being saddled with 
this debt. They don't want their children similarly constrained. That's 
why this lockbox is such a good proposal. If we don't need the funds 
for the next, say,

[[Page 18203]]

10 years--because the Medicare trust fund will be solvent at least 
until 2015--that is a $300 billion reduction in the national debt. That 
is what it comes down to.
  So, again, I do not hear anything from the other side aisle about any 
guarantees to help Medicare except for words--maybe something in the 
future about structural reform, but certainly not in the budget tax 
debate--I repeat again, not one red cent for Medicare.
  Helping to provide for Medicare is not a smokescreen because we do 
have a Social Security lockbox that works. Our lockbox is very similar 
to the one that the House passed. They passed it. If they passed it by 
such a large margin, providing a supermajority point of order, it makes 
sense to me that we should do it. But let's go farther and protect 
Medicare. Let's have both. Let's protect Social Security. Let's also 
protect Medicare. It is very simple. They are two parts of the same 
package, if you will, to help the elderly.
  We have a lot of very poor elderly. About a third of the American 
elderly rely solely on Social Security for income--about a third. There 
are a lot of people who just do not have any money. Virtually one-third 
are dependent upon it. There are about 44 million people on Social 
Security including folks with disabilities. The average payment is 
about $750 a month. That is all. If a third are relying on only $750 a 
month, that means, clearly, they really need the help.
  So, again: A lockbox for Social Security that works and a lockbox for 
Medicare that also works.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BAUCUS. Mr. President, how much time is remaining on both sides?
  The PRESIDING OFFICER. The Senator has 33\1/2\ minutes; the other 
side has 17 minutes 20 seconds.
  Mr. BAUCUS. Mr. President, I yield 20 minutes to my good friend, the 
Senator from New Jersey.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Jersey.
  Mr. LAUTENBERG. I thank the Senator from Montana. Perhaps I will use 
less time than that.
  Mr. President, I have listened carefully to the debate. I heard 
comments that I would describe as scornful, derisive, challenging 
everybody else's honesty.
  I know one thing. When we are challenging someone else's honesty, it 
is a good idea to do it in front of a mirror. That way, one gets to see 
what perhaps one might be saying, and understanding where one is going, 
so that when one reviews the argument being made for or against a 
particular point of view, if they want to talk in terms of dishonesty 
and in terms of scorn and in terms of derision about what is being 
said, it invites the same kind of commentary--which gets us nowhere.
  It doesn't improve the debate. It doesn't make it clearer to the 
American people. It doesn't establish a framework for really thinking 
the problem through.
  Mr. President, I am the senior Democrat on the Budget Committee. And 
I want to suggest that my colleagues take a look at an article in the 
Wall Street Journal, entitled ``GOP Uses Two Sets of Books.'' The 
article explains that the GOP is using two sets of books--one from the 
Office of Management and Budget, the other from the Congressional 
Budget Office. And, by taking the best of each, it's trying to hide the 
fact that, and I quote, ``lawmakers are poised again to raid the very 
same Social Security funds they have promised to lock away.''
  Mr. President, I don't accuse our friends on the other side of the 
aisle of deliberate untruthfulness. But I hope the American people will 
be able to understand what is really going on.
  Mr. President, when it comes to this tax bill, there is no doubt 
where I stand. I stand for the majority of the American public. The 
people who are concerned with making a living and providing for their 
children. The people who are working hard to help their parents and 
grandparents. The people in families where two people are working, and 
who are having a hard time meeting their obligations. When mom has to 
work and dad has to work and they are either on different shifts or the 
same shifts, it means one of the parents is not home to be with the 
children at times when that might provide the kind of encouragement and 
sustenance for development. There is a price to pay for it.
  There is physical fatigue. My mother was a widow at age 36. She 
worked hard. I was old enough to be in the Army. My sister was only 12 
when my father died. But there was exhaustion. It was hard to take care 
of all of the responsibilities.
  When I look at tax cuts, I ask, which Americans need them? The guy 
making $800,000 a year? I don't think he needs a $23,000 tax cut. But 
that's what he'd get under this bill. And that's money that we could be 
using to pay off our national debt.
  Mr. President, most Americans, if given the opportunity, would love 
to pay off their loans and their debts. Their mortgages. Their car 
loans. Well, that's what we want our nation to do.
  But the Republicans, instead, want to use the money to provide 
massive tax breaks for wealthy individuals and special interests. Oil 
interests, mineral interests, many others. Instead of paying off our 
debts and leaving our children free from that obligation, the 
Republican bill would give that money to these special interests.
  As you can tell, Mr. President, I object strongly to the Republican 
tax bill. This legislation raids surpluses that are needed for Social 
Security, that sacred covenant we have with people who have my color 
hair that says we want to care of them. It is a commitment we made, a 
promise we made, as we took the money from their paycheck.
  I want to protect Social Security. My conscience calls for it. I have 
to make sure those who are paying Social Security are going to get the 
benefits they expected when it comes to retirement time.
  Medicare? There are few programs in this country that have the value 
to people like Medicare, which says that when you reach that age when 
sickness, when physical problems are not a surprise, you will get the 
medical care you need. Those are essential, basic things--Social 
Security solvency, Medicare. These are for people when they are most 
vulnerable, in their older age. We have made a commitment that we are 
going to take care of them. Our friends on the Republican side say no, 
tax breaks; that is more important.
  By the way, all of this is more show business than plain business. It 
is designed to let the American public think they want to be generous 
and they want to return the money, and we are sinners because we say we 
are going to help pay off the debt that your kids, Mr. and Mrs. 
America, won't have to worry about.
  They say: Who knows better how to spend the money? Is it those bad 
guys in Washington--bad guys and women; that is the way we are today--
those bad people in Washington who want to just take your money? I 
heard someone say ``take it and spend it,'' take it and spend it, like 
that is the principal motive for responsible people serving here. I 
wouldn't accuse them of that, and I don't think they ought to accuse us 
of that silly nonsense. Take your money and spend it? That is not what 
anybody wants to do.
  We want to do the right thing. They want to do the right thing. They 
just haven't learned how yet.
  Mr. President, the cost of the tax breaks under their bill would 
increase dramatically just when the baby boomers begin to retire. The 
bill would force drastic cuts in education, environmental protection, 
other priorities. It could lead to a return of higher interest rates. 
And it is fundamentally unfair.
  Mr. President, Democrats strongly support tax cuts for middle-class 
Americans, ordinary people who are working hard to keep things 
together. We have proposed almost $300 billion worth of tax cuts. Our 
cuts were targeted to the middle class, the people who needed them 
most. But we couldn't get the cooperation of our friends on the other 
side. We won't take funds needed for

[[Page 18204]]

Social Security and Medicare like the Republican bill does. They are 
willing to take it out of this Social Security trust fund, which I will 
demonstrate later.
  Neither Social Security nor Medicare has enough financing to support 
the baby boomers in their retirement. We need to extend the solvency of 
both programs. We need to pay off our debt, which now forces taxpayers 
to pay $225 billion a year in wasted interest payments. I guess they 
don't want to stop that. They don't want to stop that. They would 
rather try to dole it out principally to people at the top of the 
income ladder. They don't want to reduce that debt.
  President Clinton has proposed to reserve all Social Security 
surpluses for debt reduction as well as another $325 billion for 
Medicare. The Republicans openly oppose reserving non-Social Security 
surpluses for Medicare, but they claim their bill reserves all Social 
Security surpluses for Social Security. The claim is untrue.
  The bill before us would raid Social Security surpluses in 5 of the 
next 10 years. This chart shows the numbers.
  Here we are, 2005; that is practically around the corner. What does 
it say? Red. Everybody knows what red ink means. Minus $12 billion. 
That is out of the Social Security trust fund. We have no place to get 
it. So instead of protecting Social Security, we are raiding Social 
Security because of the tax cut they want to give to the fat cats.
  Consider what will happen in 2005. The non-Social Security surplus 
that year will be $88.6 billion. But this bill would cost $89.9 
billion. The bill therefore would directly create Social Security 
surpluses of $1.3 billion in that year. However, the real raid on 
Social Security would be much deeper. This legislation would increase 
debt and lead to higher interest costs. In 2005 alone, these additional 
interest costs would eat up another $10.9 billion of Social Security 
surpluses. So the total raid on Social Security would be over $12 
billion in 2005.
  If you consider both the direct revenue losses and the additional 
interest costs, this bill would raid the Social Security surplus in 
each of the second 5 years after enactment.
  Mr. President, I think I know what the Republicans would say about 
this. They will promise that even if this bill does spend Social 
Security surpluses, many years from now, Congress will somehow make 
huge cuts in programs, such as education and the environment, to offset 
these costs. Unfortunately, it is an empty promise that is completely 
unenforceable. No credibility.
  Consider the depth of the cuts that would be required. If you assume 
the Republican Congress funds defense programs at the levels presently 
proposed by President Clinton, by the end of the 10 year period, 
domestic needs, everything from education and environmental protection, 
to the FBI, would have to be cut roughly 40 percent. Is that credible? 
A 40-percent cut in student aid? A 40-percent cut in health research? A 
40-percent cut in veterans' programs?
  That is not going to happen. But that is the pretense under which we 
are operating.
  The Republicans are saying we have to reduce and cut programs. But 
the American people need to understand what that would mean. Head 
Start--375,000 preschool children would be denied services that help 
them come to school ready to learn. The FBI--that is a favorite of all 
of ours because they do very important work--would have to cut 6,300 
agents in order to accommodate this. VA medical care--a promise that 
was made to veterans, and to me when I enlisted in the Army--they would 
treat 1.4 million fewer patients. Superfund--the wonderful program that 
helps clean up toxic waste sites in our society--no funding would be 
provided for any new cleanups, due to begin in 2009. Are summer jobs 
important? I think so. But 270,000 young people would lose jobs and 
training opportunities. The list goes on.
  Look how the tax breaks in this bill explode in cost. In the first 
year, they cost $4.2 billion. By the last year, they cost almost $200 
billion. In the following 10 years, these costs explode even more. All 
of this will be happening when the baby boomers start retiring.
  In other words, the Republican plan doesn't just raid the Social 
Security trust fund; it also would undermine the Government's revenue 
base and dramatically increase the chances that Social Security 
benefits will be cut.
  Similarly, this bill proposes a very real threat to Medicare. The 
Medicare trust fund is now scheduled to go bankrupt by 2015. President 
Clinton has proposed a comprehensive reform plan that would extend 
solvency through 2027, for a dozen years or more. He wants to provide a 
new prescription drug benefit for older Americans. That is going to 
come from the surpluses that we enjoy, as long as we don't give them 
away.
  What does this legislation do for Medicare? Zero. There is not a 
penny to extend the program's solvency, and not one penny for 
prescription drugs.
  Another problem with the bill is that it is fundamentally unfair. It 
is loaded up with various special interest provisions. Meanwhile, 
ordinary Americans are left with a few crumbs.
  If we look at this chart, the top 1 percent of the income earners, 
earning $837,000, get a $23,344 cut. If you are in the bottom 60 
percent, earning below $38,000, you get $141. That is less than 50 
cents a day. I hope those people making $38,000 don't go out and blow 
that 50 cents a day.
  Another problem with this bill, according to an analysis by Citizens 
for Tax Justice, the top 1 percent of the taxpayers, those with incomes 
over $300,000--and the average, as we saw, is $837,000--will get those 
juicy tax breaks that we see here, while the bottom 60 percent will get 
that $141.
  That is not fair. Beyond the threat to Social Security, Medicare, 
education, and other priorities, and beyond its fundamental unfairness, 
this bill also poses a significant risk to our economy.
  It would be one thing to call for huge tax cuts if our Nation were in 
the middle of a recession. Sometimes you need a boost, a stimulus, but 
today our economy is very strong. In this kind of an environment, a 
large fiscal stimulus is dangerous.
  The Federal Reserve just tightened monetary policy, forcing up 
interest rates to preempt inflation. Chairman Greenspan suggested last 
week the Fed may raise interest rates again to preserve price 
stability. A huge tax cut in these conditions would be a serious 
mistake. It could force up interest rates, which could drag down the 
investment that is driving our economy. As Chairman Greenspan 
testified, ``The timing is not right.''
  Mr. President, we are doing no favors for middle-class families if we 
give them a tax break worth less than 50 cents a day and then force 
them to pay higher interest rates on their mortgages and their car 
payments.
  Mr. President, before I close, I want to take a minute to respond to 
an analysis released last week by the Congressional Budget Office. That 
analysis supposedly shows that the GOP budget plan reduces debt more 
than the President's. But the analysis is highly misleading, largely 
because it is based on questionable assumptions.
  For example, the analysis assumes the Congress will abide by this 
year's spending cap, even though the chairman of the Appropriations 
Committee, a distinguished Senator, Senator Stevens from Alaska, says 
there is no way he can pass the bills without more money. It then 
assumes that Congress will abide by the caps in 2001 and 2002, which 
are both lower than this year's.
  Then, to top it off, CBO assumes Congress will cut even further in 
real terms in each of the following 7 years. Mr. and Mrs. Public, don't 
you believe that. Congress is not going to make cuts like that in 
veterans' medical care. We are not going to permit Head Start to be 
decimated. We are not going to cut out programs that people depend on 
for their very lives.
  Mr. President, people really need many of these programs. Most don't 
like to depend on government if they can avoid it. My father at the 
height of the depression was most ashamed of the fact that he had to go 
to work for

[[Page 18205]]

WPA, the public works program. He demanded dignity. He demanded it 
almost more than his pride would permit. He worked for a government 
program, and he was ashamed to tell anybody. People like him do not 
want government programs. I had my GI bill for my education. I took it 
because I thought that in the final analysis not only would it help me, 
but it would help me to be a better citizen, to make a contribution to 
my country.
  The Congressional Budget Office is assuming we will not abide by the 
spending caps. They are assuming we are actually going to cut almost 
$200 billion below it. That is not credible.
  CBO's analysis also contains a variety of questionable statements. 
For example, it ignores the extra $14 billion in tax breaks that were 
added to the $778 billion originally assumed in the budget resolution. 
It also ignores the Budget Committee's directive to CBO that it use 
different scorekeeping estimates when it scores appropriations bills.
  Those mandates for special, ``directed scoring'' will allow the 
Appropriations Committee to spend more, and will reduce the surplus by 
at least $18 billion. Yet CBO doesn't even mention this in its 
analysis.
  Mr. President, there are other inaccuracies and distortions in the 
CBO analysis. But together they undermine the credibility of last 
week's analysis. And, unfortunately, they've raised many questions on 
this side of the aisle about CBO's fairness and objectivity.
  Mr. President, CBO is supposed to be objective and fair to both 
sides. They are just supposed to look at the numbers. That is all.
  Mr. President, let me close by just recapping the main problems with 
the Republican tax bill.
  It raids Social Security surpluses in several years.
  It leaves nothing for Medicare.
  Its costs explode in the future, just when the baby boomers will be 
retiring.
  It would force extreme cuts in education, health care, crime 
fighting, and other priorities.
  Its tax breaks are unfair, and give huge benefits to special 
interests and the wealthiest Americans.
  And it's fiscally irresponsible, risking higher interest rates and a 
return to the days of red ink and large deficits.
  In sum, Mr. President, this is extreme legislation. It may appeal to 
the far right wing of the Republican Party. But by posing such a direct 
threat to Social Security and Medicare, it's inconsistent with the 
values of mainstream American families.
  That is why this President is determined to veto it the minute it 
reaches his desk, and he should.
  I urge my colleagues to oppose the bill and to support the amendment 
offered by the distinguished Senator from Montana.
  I yield the floor.
  Mr. KENNEDY. Mr. President, the principle of the Baucus amendment 
goes to the heart of this debate. We should not enact tax cuts which 
will use up virtually the entire surplus before we solve the 
significant financial problems facing Social Security and Medicare.
  Placing Social Security and Medicare on a firm financial footing 
should be our highest budget priorities. The surplus gives us a unique 
opportunity to extend the long-term solvency of these two vital 
programs, without hurting the senior citizens who depend upon them. We 
should seize that opportunity.
  Two-thirds of senior citizens depend on Social Security retirement 
benefits for more than fifty percent of their annual income. Without 
it, half of the nation's elderly would fall below the poverty line. 
These same retirees rely on Medicare for their only access to needed 
health care. For all of them, the Republican proposal does absolutely 
nothing. It does not provide one new dollar to support Social Security 
or Medicare. It squanders the unique opportunity which the surplus has 
given us.
  Social Security and Medicare represent America at its best. They 
reflect a commitment to every worker that disability and retirement 
will not mean poverty and untreated illness. They are a compact between 
the Federal government and its citizens that says: work hard and 
contribute to the system when you are young, and we will guarantee your 
financial security and your health security when you are old.
  It has been said that the measure of a society is how well it takes 
care of its most vulnerable citizens--the very young and the very old. 
By that standard, Social Security and Medicare are among the finest 
achievements in all of our history. Because of Social Security and 
Medicare, millions of senior citizens are able to spend their 
retirement years in security and dignity. A Republican tax cut of the 
magnitude proposed here today will put their retirement security in 
serious jeopardy.
  In the first ten years, the Republican tax cut of $792 billion--plus 
the increased interest on the national debt required by it--will 
consume all but $25 billion of the $996 billion surplus. The cost of 
the tax cut alone will mushroom to two trillion dollars between 2010 
and 2019, plus hundreds of billions more in additional debt service. 
There will be no surplus left to strengthen Social Security and 
Medicare for future generations of retirees. The needs of the millions 
of Americans who depend on these basic programs for their well-being 
are ignored.
  Democrats propose a very different set of priorities for the surplus. 
We commit one-third of the surplus--$290 billion over the next decade 
and more thereafter--to Medicare. And beginning in 2011, we would 
dedicate all of the savings which will result from debt reduction to 
Social Security.
  Today, interest on the debt consumes nearly 13% of the federal 
budget. Under the President's plan, by 2015, that annual debt interest 
expense will be completely eliminated. As a result, between 2011 and 
2019, more than a trillion additional dollars will be available to pay 
future Social Security benefits. We will be meeting our responsibility 
to future generations of retirees.
  In addition, the GOP tax cut is fundamentally unfair in additional 
ways. It distributes the overwhelming majority of its tax breaks to 
those with the highest incomes. The authors of the Republican plan 
highlight the reduction of the 15% tax bracket to 14%. They point to 
this reduction as middle class tax relief. But that relief is only a 
small part of the overall tax breaks in their plan. It accounts for 
only $216 billion of the $792 billion in GOP tax cuts. Most of the 
remaining provisions are heavily tilted toward the highest income 
taxpayers.
  If the Republican plan is enacted and implemented, nearly 50% of the 
tax benefits would go to the richest 5% of taxpayers--and more than 75% 
of the benefits would go to the wealthiest 20%. Those with annual 
incomes exceeding $300,000 would receive tax breaks of $23,000 a year. 
By contrast, the lowest 60% of wage-earners would share less than 11% 
of the total tax cuts--they would receive an average tax cut of only 
$139 a year.
  The choice could not be more stark--it is between using the entire 
surplus for an enormous GOP tax cut which overwhelmingly benefits the 
wealthiest Americans, or using the surplus for modest tax cuts that 
leave room to preserve Social Security and Medicare for future 
generations of retirees.


                            social security

  On Social Security itself, the Republican proposal is misleading. The 
rhetoric surrounding it conveys the false impression that it is a major 
step toward protecting Social Security. In truth, it does nothing to 
strengthen Social Security.
  The Republican plan would not provide even one additional dollar to 
pay benefits to future retirees. It would not extend the life of the 
Trust Fund by one more day. It merely pledges to give to Social 
Security the dollars which already belong to Social Security under 
current law.
  By contrast, by drawing on the surplus, President Clinton's proposed 
budget would contribute more than a trillion new dollars to Social 
Security over the next twenty years. Beginning in 2011, the 
Administration's plan would devote all of the savings which will result 
from debt reduction to the

[[Page 18206]]

Social Security Trust Fund. That step would extend the life of the 
Trust Fund by more than a generation, to beyond 2050.
  In fact, the Republican plan does not even effectively guarantee that 
existing payroll tax revenues will be used to pay Social Security 
benefits. There are trap doors in the Republican ``lockbox.'' A genuine 
``lockbox'' would guarantee that those dollars would be in the Trust 
Fund when they are needed to pay benefits to future recipients. But 
that is not what the Republican plan does.
  Our Republican friends claim that the enormous tax cuts they have 
proposed will have no impact on Social Security, because they are not 
using payroll tax revenues. On the contrary, the fact that the 
Republican budget commits every last dollar of the on-budget surplus to 
tax cuts does imperil Social Security.
  First, revenue estimates projected ten years into the future are 
notoriously unreliable. As the Director of the Congressional Budget 
Office candidly acknowledged:

       Ten year budget projections are highly uncertain. In the 
     space of only six months, CBO's estimate of the cumulative 
     surplus has increased by nearly $300 billion. Further changes 
     of that or a greater magnitude are likely--in either 
     direction--as a result of economic fluctuations, 
     administrative and judicial actions, and other developments.

  Despite this warning, the Republican tax cut leaves no margin for 
error. If we commit the entire surplus to tax cuts and the full surplus 
does not materialize, Social Security revenues will be required to 
cover the shortfall in tax cuts.
  Second, even if the projected surplus does materialize, the cost of 
the Republican budget exceeds the surplus in five of the next ten 
years--2005, 2006, 2007, 2008 and 2009. Unless the Republican proposal 
is restructured, Social Security revenues will be required to cover the 
shortfall in each of those years.
  Third, the Republican tax cut leaves no funds to pay for emergency 
spending, which has averaged $9 billion a year in recent years. Over 
the next decade, we are likely to need approximately $90 billion to 
cover emergency needs. That money has to come from somewhere. With the 
entire surplus spent on tax cuts, the Social Security Trust Fund will 
have to fund these emergency costs as well.
  These three threats to Social Security that I have described are very 
real. They expose the fundamental flaws that prevent the Republican 
``lockbox'' from being a genuine lockbox for Social Security.
  In addition, there is an even greater threat to Social Security in 
the out-years. Under the President's plan, the Social Security Trust 
Fund would receive 543 billion new dollars from the surplus between 
2011 and 2014, and it would receive an additional $189 billion each 
year after that. The Republican tax cut will make the President's plan 
impossible to carry out. The cost of their tax cut proposal mushrooms 
to over $2 trillion between 2010 and 2019. It will consume all of the 
surplus dollars which were intended for Social Security. There will be 
nothing left for Social Security. As a result, no new dollars will flow 
into the Trust Fund, and the future of Social Security will remain in 
serious doubt.


                                medicare

  The failures of the Republican plan to preserve and strengthen 
Medicare is just as serious. Today, Medicare is a lifeline for the 40 
million elderly and disabled citizens who depend on it for health care. 
It is an essential part of our health care system. It allows families 
to save to send a child to college, instead of saving to send a parent 
to the hospital. It fulfills its founding promise, in which everyone 
pays in to Medicare during their working years, and everyone benefits 
from good health care during retirement.
  The Republican budget threatens to destroy Medicare by putting it on 
a starvation diet. Instead of protecting Medicare in anticipation of 
the largest demographic challenge in its history, the Republican budget 
sacrifices Medicare on the altar of tax breaks for the rich. There is 
not one additional dime for Medicare in the Republican budget, although 
that budget contains nearly $800 billion in tax breaks that 
disproportionately benefit the wealthy.
  Make no mistake. This budget will determine whether we keep the 
medical care in Medicare. This budget will determine whether Medicare 
will continue strong and continue to guarantee the protections that are 
so essential for senior citizens in the years ahead.
  Unfortunately, the pending bill falls unacceptably short of reaching 
these important goals. It is, in fact, a thinly-veiled assault on 
Medicare and an affront to every senior citizen who has earned the 
right to affordable health care by a lifetime of hard work. It is a 
bill that says $800 billion of new tax breaks for the rich are more 
important than preserving Medicare for our senior citizens.
  The top priority for the American people is to protect both Social 
Security and Medicare. But this budget puts tax breaks for the rich 
first, and Medicare and Social Security last.
  Our proposal says: save Social Security and Medicare by devoting all 
of the Social Security surplus to Social Security, and by reserving 
one-third of the on-budget surplus for Medicare. It says: extend the 
solvency of the Medicare Trust Fund, not by raiding Social Security but 
by assuring that some of the benefits of our booming economy are used 
to preserve, protect, and strengthen Medicare. It says that we should 
modernize Medicare to ensure that all senior citizens have access to 
affordable medications.
  Some of the other side contend that we should not provide additional 
funds for Medicare. They say we should look for additional ways to 
reduce Medicare spending. But Medicare spending growth is at an all-
time low. In fact, evidence is mounting that Congress has already cut 
too much from Medicare in the drive to balance the budget in 1997.
  While Democrats and Republicans have different opinions about how 
best to reform Medicare, one fact remains clear: Starting in 2010, the 
retirement of the baby boom generation will begin in earnest. Without a 
significant investment now to prepare Medicare for the financial 
demands of that era, the only options will be to dramatically cut 
benefits or raise taxes.
  According to the most recent projections of the Medicare Trustees, if 
we do nothing, keeping Medicare solvent for the next 25 years will 
require benefit cuts of almost 11%--massive cuts of hundreds of 
billions of dollars--or double-digit payroll tax increases. Keeping 
Medicare solvent for the next 50 years will require cuts of 25%--or 
even larger payroll tax increases.
  Under the guise of reform, some argue that we should reduce our 
obligation to support guaranteed benefits. They favor proposals to 
privatize Medicare, or turn it into little more than a voucher 
program--leaving senior citizens to the tender mercy of profiteering 
private insurance companies. Nothing could be more devastating for 
America's elderly--today and in the future.
  We have a clear opportunity to protect Medicare. All we have to do is 
reserve a fair share of the surplus for Medicare. But instead of 
protecting Medicare, the pending bill uses $800 billion of the surplus 
to pay for new tax breaks. You don't need a degree in higher 
mathematics to understand what is going on here. This Republican plan 
is Medicare malpractice.
  Every senior citizen knows--and their children and grandchildren 
know, too--that the elderly cannot afford cuts in Medicare. They are 
already stretched to the limit--and often beyond the limit--to purchase 
the health care they need.
  Because of gaps in Medicare and rising health cost, Medicare now 
covers only about 50% of the health bills of senior citizens. On 
average, senior citizens spend 19% of their limited incomes to purchase 
the health care they need--almost as large a proportion as they had to 
pay before Medicare was enacted a generation ago. Many low-income 
senior citizens have to pay even more as a proportion of their income.
  By 2025, if we do nothing, the proportion of out-of-pocket spending 
devoted to health care expenses will rise to 29%. Too often, even with 
today's Medicare benefits, senior citizens have to choose between 
putting food on the table, paying the rent, or purchasing the health 
care they need.

[[Page 18207]]

  The typical Medicare beneficiary is a widow, seventy-six years old, 
with an annual income of $10,000. She has one or more chronic 
illnesses. She is a mother and a grandmother. Yet this budget would cut 
her Medicare benefits in order to pay for new tax breaks for the 
wealthy. These are women who will be unable to see their doctor, who 
will go without needed prescription drugs, or without meals or heat, so 
that wealthy Americans earning hundreds of thousands of dollars a year 
can have tens of thousands of dollars more a year in additional tax 
breaks.
  This is the wrong priority for spending our hard-earned surplus--and 
the wrong priority for America. And the American people know it.
  As we debate these issues this week, the response of our opponents is 
predictable. They deny that they have any plans to cut Medicare. But 
the American people will not be fooled. They know that our plan and the 
President's plan will put Medicare on a sound financial basis for the 
next generation--without benefit cuts, without tax increases, without 
raising the retirement age, and without privatizing Medicare.
  In this debate, we intend to offer Senators a chance to vote on 
whether they are sincere about protecting both Medicare and Social 
Security.
  Our opponents are already trying to confuse the issue. They say that 
it is wrong to put the surplus into Medicare.
  The workers of this country are the ones who have earned this 
surplus--and they want to use it to preserve and protect Social 
Security and Medicare, not use it for new tax breaks for the wealthiest 
Americans.
  Our opponents say that our proposal just puts new I.O.U.s into the 
Trust Fund. Let's be very clear. There are two ways to restore 
Medicare's financial stability. One way is to cut benefits. The other 
way is to provide new resources. Our proposal puts new resources in the 
Medicare Trust Fund. It takes funds that would otherwise be used for a 
tax cut for the wealthy, and uses them instead to maintain the health 
protection the elderly need and deserve--and have earned. In terms of 
its effect on Medicare, it is no different from depositing payroll tax 
receipts in the Trust Fund, as we do today.
  Those on the other side of the aisle have tried to conceal their 
neglect of Medicare. They say that their plan does not cut Medicare. 
That may be true in a narrow, legalistic sense--but it is fundamentally 
false in every way that counts.
  Between now and 2025, Medicare has a shortfall of almost $1 trillion. 
If we do nothing to address that shortfall, we are imposing almost $1 
trillion in Medicare cuts, just as surely as if we said so directly in 
the text of the legislation. No amount of rhetoric can conceal this 
fundamental fact. The authors of the pending bill had a choice between 
supporting Medicare or slashing Medicare--and they chose to slash 
Medicare.
  A vote for our alternative is a clear statement that Congress should 
preserve and protect Medicare for today's elderly and their children 
and grandchildren. Rejection of our alternative is an equally clear 
statement--in favor of new tax cuts for the rich, paid for by harsh and 
unacceptable cuts in Medicare.
  In 1935, when President Franklin Delano Roosevelt signed the Social 
Security Act, he said it was ``a cornerstone in a structure which is 
being built but is by no means complete.''
  The creation of Medicare 30 years later added significantly to that 
structure. On the threshold of a new century, the time has come to add 
again to that structure.
  We can modernize Medicare and prepare for the 21st century--the 
century of life sciences. We can prepare for the massive influx of 
retirees from the baby boom generation, if we devote the resources 
needed to do so. The surplus was generated in part by Medicare savings, 
and it is only right that a responsible portion be invested in 
modernizing and strengthening the Medicare.
  We know how the American people want us to vote. Congress should 
listen to their voice. The opponents of Medicare were wrong in 1965, 
and they are wrong in 1999.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Michigan.
  Mr. ABRAHAM. Mr. President, I yield 10 minutes to the Senator from 
Missouri.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Missouri.
  Mr. ASHCROFT. Mr. President, thank you very much. I thank the Senator 
from Michigan.
  Mr. President, it would be amusing, if it weren't tragic, to hear the 
representations made by those on the other side of the aisle that the 
Republicans are indifferent to our senior citizens and to Medicare, or 
indifferent to Social Security.
  Let us not forget the Social Security lockbox is a Republican 
concept.
  They come to us saying how aggressively they are supporting what 
happened in the House. It is about time they started to support a 
lockbox of some sort. They filibustered that at least six times 
previously to keep it from being here. It is time we have a lockbox.
  We enacted a credible lockbox to protect Social Security so our 
seniors won't be jeopardized by a reckless sort of effort to spend.
  There is real distress on the part of our colleagues on the Democrat 
side of this Chamber who are afraid we are not going to leave enough 
money to spend. Their spending habit is hard to break.
  But I think we ought to understand the American people are paying in 
over the next 10 years $3.3 trillion of surplus, and they don't want to 
buy that much more government. They want some change to go to the 
store.
  You by a gallon of milk, and you give them 10 bucks. You don't expect 
them to start adding other items to your order to fill up what you 
could have bought with your 10 bucks. You expect to get your money back 
when you pay in a surplus, and the American people should do that.
  They suggested we don't have any money to deal with a Medicare 
problem. It is pretty clear we have $505 billion available to deal with 
Medicare, if we choose to, over the next 10 years.
  Just for example, the President said he could fix it for $48 billion. 
And $505 billion is 10 times that much. But I don't recommend that we 
allocate a specific amount to fix Medicare before we have decided how 
to reform Medicare.
  The Senator from Tennessee eloquently stated the position of the 
Comptroller General of the United States, our sort of auditor, the 
person who looks at things and asks: How are you doing? Is this 
reasonable? Does it make sense?
  He indicates that just pouring more money into a system that is 
broken--well, you know, if you just step on the gas in a car that is 
going in the wrong direction, it doesn't get you to your destination 
any more quickly. The key is to reform Medicare and have a resource 
available when you reform it. That is the Republican plan.
  Are we being irresponsible by taking 23.8 cents out of every surplus 
dollar and saying to the American people who earned it that we are 
going to return it?
  There is an old slogan in Washington. ``You send it; we spend it.''
  People are a little tired of that.
  We have the highest tax rate in the history of the country. Even 
State and local rates are higher in many cases caused by our mandates 
on State and local government.
  We have a $3.3 trillion surplus, and someone says we should save tax 
cuts for when it is the right time for tax cuts as if the timing is 
contingent on the Government.
  I tell you. It is the American people's money. Their timing ought to 
be considered.
  I think the American families need resources to do for themselves 
now, that they should have the money to do it for themselves, and not 
have to rely on government. We should make that choice.
  I rise to say that this business about us not having a regard for 
Medicare should be dismissed.
  We want to reform Medicare. We don't want to pour more resources into 
a bucket, the bottom of which is like a sieve.

[[Page 18208]]

  Sure. We will do what we can to sustain the system. It is 
sustainable, according to the most recent data, until the year 2014. It 
is good. But we shouldn't decide to just pour money into that system. 
We should reform it.
  There was a bipartisan commission led by Senator Breaux that would 
have reformed it. The proposed reform led by Senator Breaux wasn't to 
take a lot of money. As a matter of fact, it was to save money.
  We are willing to make resources available. But the idea that somehow 
we have to lock up $300 billion in order to make possible a reform of 
the system when the $300 billion will keep people from wanting to 
reform it, and just wanting to spend what is there is not the way to 
handle the problem.
  The chairman of the bipartisan commission, Senator Breaux, I don't 
believe supported that provision when it was before the Finance 
Committee. I don't think we should support it now.
  But it is time for us to say to the American people what we said in 
our budget process, what the Senate voted, I believe, 99-0 to do; and 
that is to lock up the Social Security surplus.
  It is a program which we promised to the American people. It is a 
program that can go forward. We ought to have that resource available 
to them. We agreed on that. The House agreed on that.
  Talk about the House agreement on the other side of the aisle, yes. 
This is what the House agreed to--lock up Social Security. I think that 
is what we ought to do.
  We expect to have $2 trillion in Social Security surpluses over the 
next 10 years. We ought to make sure we don't spend it on anything 
else. That is the Republican plan. It ought to be the Republican plan. 
It is the Democrat plan, and the President's plan. The President agreed 
to it. He said we needed a durable lockbox, ``period.'' He didn't say a 
lockbox for Social Security and add Medicare. The President didn't say 
that. He said we need a Social Security lockbox, period. The ``period'' 
was his language, not mine. It is not some Republican plot. The 
President said it. The House of Representatives said it. The Republican 
Senate has been asking for it, filibustered on the other side of the 
aisle time after time after time after time after time after time, and 
now trying to keep us from doing it again.
  I think we need to make sure we honor and respect the retirement 
security of individuals who expect us to protect Social Security.
  Having done that, and we find out there is roughly half of the next 
10 years' surplus that is not earmarked for Social Security and it is 
not paid in for Social Security, that money could be divided between 
tax relief and resources for contingencies that come up in this body, 
or to the United States Congress. That is why we planned $792 billion 
in tax relief.
  Some say: Is that too much? Is it too little? It is 23-plus percent 
of the total surplus.
  The lion's share of the total surplus should go right into this 
lockbox. This proposal that Senator Domenici, Senator Abraham, I, and 
other Senators have been talking about, taking Social Security money 
and earmarking it for Social Security benefits alone, and then 
reserving the $505 billion that is available in addition to that for 
future contingencies and needs including, if necessary, transitional 
costs for reform in Medicare. The Senator from Tennessee eloquently 
related comments by the Comptroller General of the United States.
  This is a resource we now have that we do not have a right to keep, 
in my judgment. The American people have overpaid their taxes. Like a 
shopkeeper, who has a responsibility to give back change when they are 
paid too much for an ordered item, rather than trying to foist off an 
extra gallon of milk, another ham or another box of cereal, another box 
of nails or hammer if you are at the hardware store, when a person has 
paid more for the item than requested, they get their money returned.
  Return the money to the American people. The American people earned 
this money. This is not money that came from Government. This is not 
from the magic of the Congress. This is not from the creativity of the 
President. This isn't the product of the bureaucracy. This is the 
product of the hard work of American families. In many families, both 
parents work. In some families, both parents are working two jobs or 
extra work. They have sacrificed and sweat. It is their money.
  We have to make a decision. Are we going to fund families in this 
country or are we going to fund bureaucracy? Are we going to let 
families have an opportunity to spend the resources which they have 
created? We must. In order for them to be confident about the fact we 
are not giving away the future, make clear that the President has said 
we need what the House of Representatives voted 416-12 in favor of, and 
that is a lockbox to protect Social Security.
  With that in mind, I say we have a responsibility to the American 
people to put the Social Security proceeds in the lockbox, to have a 
prudent approach to the rest of the expenses. Say to the American 
people with that $800 billion over the next 10 years: You earned it; we 
returned it. Let's end this idea of: You send it; we spend it. Our 
desire and appetite should not be unlimited.
  I thank the Chair for this opportunity to support the concept of a 
lockbox.
  I reserve the remainder of my time.
  Mr. ENZI. Mr. President, I rise in support of Senator Abraham's 
Social Security lockbox amendment to the Taxpayer Refund Act. This is 
the third time the Senate has considered this language and I believe it 
is appropriate that we take up this matter during the debate on the 
returning the non-Social Security surplus for tax cuts. This amendment 
should put an end once and for all to the rhetoric about raiding the 
Social Security trust fund to provide tax cuts. By passing this 
amendment, the Social Security surplus will be protected.
  Congress has the responsibility to create a firewall between the 
Social Security surplus and the discretionary surplus to ensure that we 
can meet the future needs of retirees. The Social Security surplus is 
spoken for and Congress must take steps to ensure that the money is 
protected and ready for the future.
  The source of the surplus is a rising inflow of Social Security 
payroll taxes. This is money that comes out of the paycheck of every 
working American who has been paying into the system and we deserve to 
give them some assurance that the money will be there when they retire. 
Under the current budget rules, this revenue is treated like revenue 
from another source--it is put into the general fund and then spent. 
The lockbox would capture the difference between the inflows to the 
Social Security trust fund and the payment of benefits to current 
retirees--reserving it for the Social Security program and helping to 
guarantee benefits for future retirees.
  The amendment that we are debating tonight also prohibits transfers 
between the general fund and Social Security. That is an important 
provision, it prevents the president and Congress from playing hide the 
ball and shifting money from the Social Security trust fund to the 
general fund and replacing that money with IOUs. An IOU in the Social 
Security Trust Fund is an obligation of the United States Government, 
it is a debt that we must pay back. Where is that money going to come 
from? We cannot repay an IOU with an IOU. We must hold on the Social 
Security surplus in a budgetary lockbox and protect it.
  The Social Security lockbox will also protect the Social Security 
surplus from wasteful spending and ensure that the money will be there 
to fulfill future obligations. Just as corporations are prohibited from 
spending their pension funds on regular business expenses, Congress 
should have the same restrictions on the Social Security surplus. If 
company executives handled pension funds like the current use of Social 
Security the executives would be in jail. The temptation to go back to 
the old tax and spending ways is too great if Congress has access to a 
growing pot of money. Congress must not go back to

[[Page 18209]]

the old spending rules. Just because we have a surplus does not mean 
hat the battle has been won. It means that we must continue to be 
watchful and ensure that the surplus is used wisely.
  One of the attacks we have heard from the White House and the 
Democrats is that the we should not refund American's hard-earned money 
to them because we still have an enormous federal debt. I find this 
argument astonishing given the spending appetites of many on the other 
side of the aisle. There is nothing quite like a good tax cut to turn a 
tax-and-spender into a deficit hawk. While I fear this interest in 
retiring the national debt may be short-lived metamorphosis, I welcome 
the interest of my colleagues from the other side of the aisle in 
fiscal responsibility. In fact, I would invite them to join me as a 
cosponsor of Senator Allard's bill to retire the entire national debt 
over a 30-year period. I believe that debt reduction is consistent with 
a tax cut. We need to pay off our debt obligations and trim the 
allowance of the federal government by returning some of the taxpayers 
overpayment to them.
  The lock-box amendment furthers this goal of debt reduction. This 
amendment includes higher debt reduction provisions than previous lock-
box proposals. As the surplus has continued to grow Senator Abraham has 
moved the bar higher. The amendment requires more debt reduction as the 
surplus grows and I believe the American people expect that. Debt 
reduction creates a ripple effect throughout the economy in the form of 
lower interest rates for home mortgages or car loans or student loans.
  The time has come for the White House and my colleagues on the other 
side of the aisle to finally provide protection for the Social Security 
program. Congress must not continue to pay lip service to the concept 
of preserving the Social Security surplus. We must take the bold steps 
necessary to ensure that the program is around for the long term. We 
must not use long term funds to satisfy short term wishes. I urge may 
colleagues to join me in supporting this important in the Taxpayer 
Refund Act of 1999.
  I thank the Chair and yield the floor.
  Mr. BAUCUS. Mr. President, I yield myself 5 minutes.
  Mr. President, a couple of points. I heard my good friend, the 
Senator from Missouri say, as has often been stated, they are using 
only 23 percent of the surplus for tax reduction.
  I think it is important to get the facts out so the American public 
can decide what the truth is. The fact is, about $3 trillion is 
projected over the next 10 years. Mr. President, $2 trillion off-
budget, Social Security surplus; $1 trillion on-budget surplus. No one 
disputes that.
  We also agree that the roughly $2 trillion generated by the payroll 
tax, the off-budget surplus, should be reserved for Social Security. We 
all agree to that. What is in dispute is the $1 trillion remaining on-
budget surplus.
  The Republican tax cut essentially uses it all, roughly $800 billion, 
plus the interest expense added on because the tax cut will increase 
interest, which amounts to a 97-percent tax cut of the on-budget 
surplus.
  So that we have our facts straight, it is roughly 25 percent of the 
total, if we include the $2 trillion for Social Security that we all 
agree to protect. What is in dispute is how much of the $1 trillion on 
budget is used for a tax cut. The answer to that is about 97 percent, 
including the interest. If interest is not included, maybe about 60 or 
70 percent of the surplus is used for a tax cut.
  Decide which numbers to use. Those are the facts. I will not stand 
here and say it is necessarily 97 percent or it is necessarily 23 
percent. I think people should recognize what the truth is.
  I have a couple of points. This is about choices. Either we choose to 
set aside one-third of the on-budget surplus for Medicare for seniors, 
or we don't. That is the choice. That is the choice we have between the 
two lockbox amendments. One says lockbox Social Security only; the 
other says lockbox Social Security and Medicare. We believe the proper 
choice is to protect Medicare.
  There is a deeper choice I want to talk about for a moment. It is a 
choice that many senior citizens in our country make each day. Do they 
choose to use their income to pay for drugs or do they choose their 
income for food, to pay the rent, or to pay for the bus? That is the 
choice that many senior citizens make each day.
  About 16 million Americans are faced with that choice a day. That is, 
16 million Americans rely solely on Social Security for their income. 
About 30 percent of American senior citizens rely solely on Social 
Security for their income, which comes out to about $750 a month. 
Seniors with a total income of about $750 a month have to make choices. 
Choose for drugs, choose to pay the rent, choose to pay the food bill, 
the bus, taxi service--those are the choices. They have to decide which 
among the choices to make.
  We are saying let's help the seniors with that choice. Let's help 
seniors pay the drug bill. Let's help seniors pay a little more of the 
doctor bill. If there is anything that obsesses senior citizens, it is 
their health.
  I will never forget when I was walking across Montana campaigning for 
Congress 24 years ago, I was walking toward Butte, MT, near Elk Park. I 
was walking down the highway, and I could see perpendicular to me an 
older fellow hunched up way off in the distance walking toward his 
mailbox. I could tell we were going to meet at the mailbox. I had my 
brochure in my pocket in my campaign for Congress. Sure enough, we met 
at the mailbox. I pulled out my brochure and said: Sir, I am Max 
Baucus. I am running for Congress. Is there anything on your mind you 
want to talk about? Anything that is really bothering you that you want 
to talk about?
  He said: Oh, nothing except the perplexities of health.
  It is certainly true for seniors, and he very much was a senior 
citizen.
  In summation, this is about choices. I think the choice is for 
Medicare, not against Medicare. The choice is also to help those senior 
citizens pay for their medical benefits. I hope Senators choose for 
seniors.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Michigan.
  Mr. ABRAHAM. How much time remains?
  The PRESIDING OFFICER. Seven minutes twenty-three seconds.
  Mr. ABRAHAM. I will not use all that time.
  First, I thank the manager of the bill, Senator Roth, for his 
patience and the support tonight in this debate. I thank all the 
Senators who have spoken on our side, to argue, once again, for the 
Social Security lockbox. We have been doing this now for almost 3 
months. I assure our colleagues will continue to do this as long as we 
have to.
  I suspect again tomorrow procedural impediments will be placed in the 
way of our efforts to try to protect the Social Security surplus, even 
as everyone in this place makes at least verbal assertions that they 
want to protect that surplus.
  But we will keep trying. Whether or not we have 60 votes tomorrow, we 
are going to continue this battle until it is won. Every single Member 
of the Senate, I think, hears from their constituents what this Senator 
hears when I am back in Michigan; an ongoing and ever increasing level 
of frustration that our seniors, as well as almost anybody who pays 
money into the Social Security fund, has with the notion that we spend 
those dollars on anything other than Social Security.
  We have tried to make this a simple issue from the very beginning. We 
have tried various forms of this lockbox. We have offered different 
types of amendments to try to address concerns that have been raised. 
Each time, procedural roadblocks have been placed in our way. My 
understanding and expectation is that they will be placed in our way 
again tomorrow. But the bottom line is that--and I agree with the 
Senator from Montana--that Republicans do want to cut taxes more than 
Democrats. There is not much disagreement about that around here. That, 
I believe, reflects a clear distinction between us.

[[Page 18210]]

And we Republicans want to protect Social Security with a tough 
lockbox, the very lockbox that has frequently been criticized tonight 
because it is so tough.
  The question is, where is the beef? The answer is in our lockbox. It 
is so tough that in fact we have been criticized for making it too 
tough. That is where it is. It is in the teeth we have put in the 
lockbox.
  We are going to try again tomorrow. We are going to try tomorrow to 
pass this lockbox proposal in a form that will absolutely guarantee 
that Social Security money sent to Washington by people who pay payroll 
taxes is protected from any spending of any kind.
  The budget that has been offered by the President is a budget that 
actually spends over one trillion new dollars of that surplus over the 
next 10 years. We say those choices, as to how that surplus ought to be 
spent, should reside in the hands of the people who earned the money 
and paid the taxes and sent them to Washington. We say take all the 
Social Security money, protect it in a tough lockbox, and then let's 
return 25 cents out of every surplus dollar to the men and women in our 
country who earned those dollars in the first place.
  As I have tried to indicate tonight, we have endeavored, on six 
previous occasions, to try to pass this lockbox. In each case 
procedural impediments have been placed in our way to prevent it from 
happening. We would just like to have a chance to have an up-or-down 
vote. If we have 50-plus votes, then we will have a Social Security 
lockbox. Hopefully we will get that chance.
  Mr. BAUCUS. May I ask the Senator a very gentlemanly, civil question?
  Mr. ABRAHAM. The Senator from Michigan, the lead sponsor of this, has 
very little time left.
  The PRESIDING OFFICER (Mrs. Hutchison). Does the Senator from 
Michigan yield?
  Mr. BAUCUS. I ask the Senator whether he would agree to the lockbox 
the House passed?
  Mr. ABRAHAM. Let me say this. We have offered that to the Senate to 
be considered. One of the cloture votes which was offered was on the 
House lockbox when they passed it. And once again, on party lines, we 
came to the well of the Senate and our effort to pass that bill was 
prevented.
  All I am saying is we would like to have a final up-or-down vote on 
this. That is what we are asking for.
  Mr. BAUCUS. Madam President, one more brief question?
  Mr. ABRAHAM. I am going take back my time actually, Madam President. 
I am the only person who has been on the floor tonight who has not 
spoken. The Senator from Montana had two opportunities to speak. I 
refrained because we had so many speakers on our side. I would like to 
summarize. I have a feeling the debate is not over on this topic and we 
will have other opportunities.
  I just want to say we brought up the House lockbox on the floor. It 
was prevented from moving forward. We brought up the tougher version, 
the Senate version we are offering tonight. We have not had a chance, 
because of procedural impediments, to vote on it. One proposal I hope 
might be followed up on is a simple one. Tomorrow maybe neither side 
should impose procedural impediments, and if one or the other version 
of this gets a majority of votes in the Senate, then let's move it 
forward. I suspect that will not happen. I am not going to ask anybody 
to answer that tonight. But tomorrow I may make a pitch and an appeal 
to our colleagues to let each side have their vote. If one or the other 
of these lockboxes gets 51 votes, let's move it forward. Let's give the 
American people what they want. That is a lockbox to protect Social 
Security.
  Madam President, to me that makes sense. To me it certainly is 
consistent with what voters in our States want, what people who pay 
payroll taxes want. It is overdue.
  This Senator will come back, if he has to, time after time, well into 
the night if we have to, to make this case. But it is a simple one--are 
we or are we not going to really protect the Social Security dollars, 
that are sent to Washington, from being spent on anything other than 
Social Security? I say we should. I think we should use a tough lockbox 
to make sure that happens. We have a chance tomorrow to vote on these 
two lockbox proposals. I say, if one of them gets 50 votes, that ought 
to be good enough, if it is true we all want a lockbox. If it is not 
true, then we will be back again as we have been over the last 3 
months, endeavoring to find a way to finally get the American people 
that which they want.
  But, in closing, as we examine this issue, as we consider the next 10 
years, if we are really going to have, as current projections indicate, 
almost $2 trillion in Social Security surpluses, and if we do not do 
something soon to protect this with a lockbox, those dollars are going 
to start to be spent. There will be great arguments made for cutting 
into portions of it this year and the same will happen next year, as 
has been happening for so many years already. This Senator is doing 
everything he can to try to make sure those efforts to take money out 
of the Social Security trust funds for other programs do not happen any 
longer.
  All this debate which has gone on for 3 months has done nothing more 
than delay and keep open the possibility that Social Security money 
would be spent on other things. I do not believe we should let that 
happen. I think we should pass a lockbox tomorrow. If somebody gets 50 
votes for their proposal, then my recommendation is we should not use 
any procedural impediments to prevent that proposal from happening. The 
President says he wants it. Even the House has passed a version, not 
the one we are offering, but they passed one nonetheless. So let's go 
forward. If somebody gets 50 percent let's move this issue out of the 
Senate and on towards final completion.
  I gather my time is up, and I appreciate the debate that has happened 
this evening.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Madam President, I suggest the absence of a quorum, and 
in so doing state to my colleagues the next amendment will be offered 
by the Senator from Florida. He will be here momentarily.
  The PRESIDING OFFICER. The clerk will call the roll.
  The Legislative assistant proceeded to call the roll.
  Mr. GRAHAM. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Enzi). Without objection, it is so 
ordered.


                         Privilege Of The Floor

  Mr. GRAHAM. Mr. President, I ask unanimous consent that Alison Egan 
and Patricia Daugherty of the Finance Committee be granted the 
privilege of the floor during pendency of S. 1429, a bill to provide 
for reconciliation pursuant to section 104 of the Concurrent Resolution 
on the Budget for the Fiscal Year 2000.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Chair recognizes the Senator from Virginia.
  Mr. ROBB. I thank the Chair.


                           Amendment No. 1401

   (Purpose: To delay the effective dates of the provisions of, and 
  amendments made by, the Act until the long-term solvency of Social 
               Security and Medicare programs is ensured)

  Mr. ROBB. Mr. President, I send an amendment to the desk and ask that 
we consider it for debate at this time and that the vote occur on this 
amendment at the time previously designated under the unanimous consent 
agreement.
  The PRESIDING OFFICER. Without objection, the clerk will report.
  The legislative clerk read as follows:

       The Senator from Virginia [Mr. Robb], for himself, Mr. 
     Graham, Mr. Rockefeller, Ms. Mikulski, Mrs. Murray, and Mr. 
     Bryan, proposes an amendment numbered 1401.

  Mr. ROBB. 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:

       At the end add the following:

[[Page 18211]]



                   TITLE XVI--DELAY IN EFFECTIVE DATE

       Notwithstanding any other provision of, or amendment made 
     by, this Act, no such provision or amendment shall take 
     effect until legislation has been enacted that extends the 
     solvency of the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund under 
     section 201 of the Social Security Act through 2075 and the 
     Federal Hospital Insurance Trust Fund under part A of title 
     XVIII of such Act through 2027.

  Mr. ROBB. Mr. President, I am pleased to offer this particular 
amendment with my long-time friend and colleague from Florida, Senator 
Graham, and others who join us. Both Senator Graham and I served as 
Governors before coming to this body, and our views on fiscal matters 
are frequently very much in sync as they are on the amendment we offer 
this evening. Having served as executive officers of our States, we 
share a somewhat unique perspective, and it is from that particular 
unique perspective that we offer this amendment.
  The amendment simply states that if it is the will of a majority of 
the Members of this body to enact the tax cut before us, let's at least 
accept responsibility for strengthening Social Security and Medicare 
first. In short, let's get our priorities straight.
  We all understand the allure of tax cuts. I do not know many 
Americans who would not like to have a few extra dollars to spend on 
something, and I do not know many Americans who truly enjoy writing a 
check to the IRS. Most of us work hard to minimize legally what we have 
to pay to Uncle Sam to run our Government, and most of us can find 
areas where we would like to see Government spending cut or eliminated 
altogether. Sure, we like and, indeed, expect many of the services and 
protections Government offers, but we do not like to have to pay for 
them.
  To enact a tax cut of this magnitude at this time when the economy is 
not in need of an economic stimulus, when we have not fixed Social 
Security, when we have not fixed Medicare, when we backload all of the 
tough decisions future Congresses will have to make to pay for the 
cuts, when we frontload only the politically popular promise of more 
than we are actually delivering, when we know that discretionary 
spending assumptions are unrealistic and unattainable, when we are 
already breaking the spending caps we have pledged to adhere to in the 
Balanced Budget Act we passed just 2 years ago, when we know defense 
spending is going to have to increase well beyond the current baseline, 
when we know that correcting a course of action will be far more 
difficult than anything we are bent on doing with this bill, Mr. 
President, I submit that to pass this bill at this time without this 
amendment would be ludicrous. It would be fiscally irresponsible in the 
extreme. It would be as fiscally irresponsible as anything Congress has 
contemplated during the 11 years I have served in this body, and we are 
doing it all in the face of a certain Presidential veto. Is it any 
wonder people lose faith in their Government?
  Enacting massive tax cuts today before addressing the obligations we 
know we have tomorrow is reckless. Those who propose this approach are, 
in effect, buying political benefits by using our children's credit 
cards. We curry favor today and leave the bill for others to pay. A 
surplus is what is left over after we have met our obligations, and we 
will not know what our obligations are until we reform Social Security 
and Medicare.
  I am pleased to offer this amendment with my distinguished colleague 
from Florida and many others who are acting as cosponsors. I say in the 
spirit of the amendment that we all have enormous respect for the 
chairman of the committee and the bipartisan effort that has preceded 
this particular point in the debate. But we are simply--I am simply 
unwilling--we are simply unwilling to accept the fact that we should 
move forward with the tax cuts before the surplus upon which those tax 
cuts are premised has actually materialized.
  Mr. President, I yield the floor to my distinguished colleague from 
Florida.
  Mr. GRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Florida.
  Mr. GRAHAM. Mr. President, the issue before us with this amendment is 
what is the proper order of consideration of the issues challenging our 
Nation? In the Bible it talks about the fact that there is a season for 
all things. There is a season to plant; there is a season to harvest. 
The question is, What is the season of America here in late July of 
1999?
  The position Senator Robb and I and our cosponsors take is that the 
season is not for a massive tax cut until we have planted and harvested 
the seeds of a strengthened Social Security program and a strengthened 
Medicare program.
  The bill that was reported by the Senate Finance Committee and its 
companion, which has already passed the House of Representatives, would 
cut taxes by approximately $800 billion over the next 10 years.
  Some have claimed--and claimed on this floor earlier today --that a 
tax cut of $800 billion is the ideal way to usher in a new era of 
budget surpluses and to maintain the economic growth and prosperity 
through which we are currently living. I could not disagree more.
  With all due respect to my colleagues, the tax cut jeopardizes the 
long-term solvency of two of the critical programs for millions of 
Americans--Social Security and Medicare--programs for which there is a 
solemn contract, a contract between the American Government and its 
people, a contract which is now in question.
  There are a series of rather straightforward questions that lie at 
the heart of this debate: Do we live for today? Do we consume for 
today's satisfaction? Or do we plan, do we save, do we prepare for 
tomorrow? Do we support fiscal gluttony or fiscal discipline? The 
question our children might ask is, do we eat our dessert before or 
after spinach?
  The amendment Senator Robb offers delays the effective date of any 
tax cut until after legislation strengthening Social Security and 
Medicare has been enacted. This proposal, I suggest, is not dissimilar 
to the approach which has been proposed by the leadership in the House 
of Representatives. They have agreed that debt reduction, at least as 
measured by interest expense, should take priority over tax cuts. Under 
the House proposal, tax cuts are not made if interest payments do not 
decline.
  Similarly, our amendment places the preservation of Social Security 
and Medicare as higher priorities than tax cuts. The amendment states 
that before any tax cut proposal can be implemented, Congress must 
pass, and the President must sign, legislation extending the solvency 
of Social Security three generations, or to the year 2075. The Congress 
must also pass, and the President must also sign, legislation that 
modernizes the Medicare program and extends the solvency of the 
hospitalization program within Medicare through the year 2027.
  Unfortunately, the tax cut proposal on the Senate floor does not just 
delay our efforts to preserve these important programs for future 
generations; it brings these efforts to a screeching halt. The $800 
billion tax cut in the plan before us represents over 80 percent of the 
projected non-Social Security surplus over the next 10 years.
  I point to this chart, which indicates that through the combination 
of the tax breaks of $792 billion, and then the interest which we will 
have to pay--rather than as our budget has been calculated, those $792 
billion would have been used to reduce the Federal debt--since that use 
will now be diverted to tax cuts, that means we will be required to pay 
out an additional $100 billion in interest during the next 10 years. 
With the combination of the lost interest savings associated with these 
tax cuts and the lost revenue from the tax cuts themselves, the surplus 
disappears completely, leaving no resources to strengthen Social 
Security or modernize Medicare for our Nation's older citizens.
  Although we cannot accurately predict how the economy will perform 
over the next 10 years, we do know that demographic changes taking 
place in America will place a tremendous strain on Social Security and 
Medicare.

[[Page 18212]]

  Our elderly population is growing quickly. Those seniors are living 
longer than ever before. As a result, Social Security is projected to 
run its first ever deficit in the year 2014.
  It has been stated that all we have to do to save Social Security is 
to lock up the $1.9 trillion that will be derived by the Social 
Security surpluses in a lockbox, that we can wipe our hands of any 
further responsibility for the solvency of Social Security. As you well 
know, the fact is that that will only extend the Social Security 
solvency to approximately the year 2034. Yet our commitment is to 
preserve Social Security for three generations, not only to those who 
are the current beneficiaries, not only to those who will soon become 
beneficiaries but to their children and their grandchildren. A three-
generational solvency for Social Security cannot be achieved through 
the singular step of investing all of the Social Security surplus into 
strengthening the Social Security trust fund.
  Even worse than the challenge faced by Social Security is the 
challenge faced by Medicare. The twin pillars of security for older 
Americans--financial security through Social Security, health security 
through Medicare.
  The trustees of the Medicare fund have reported that Part A, the 
hospital payments, already exceed the program's revenue and will do so 
in each of the next 15 years.
  In addition, not only does the program have a serious financial 
problem, Medicare is an increasingly out-of-date program and one that 
fails to take advantage of the benefits of modern medical science. We 
have a program which is from the model year 1965 when we desperately 
need one worthy of the 21st century.
  For example, we should increase the number of important preventive 
benefits available to Medicare. We should provide for programs such as 
hypertension, programs like glaucoma, for smoking cessation, for the 
management of hormones--all of which would extend the quality and the 
length of life, all of which are within the current extents of modern 
medicine. Yet the Medicare program does not provide those or many other 
of the important, proven preventative measures.
  We need to support that preventive effort by extending Medicare to 
include a prescription drug benefit, which is not only an important 
part of treating chronic diseases but a critical part of maintaining 
the health of our older citizens.
  Private health care plans long ago recognized that prescription drugs 
are a vital tool in efforts to save lives, improve health quality, and 
prevent and treat sickness and disease.
  Medicare will not be relevant in the 21st century if it does not 
cover the treatments physicians use and patients require.
  Yet the tax plan before us says nothing about preserving Social 
Security to the year 2075 or protecting and strengthening Medicare to 
the year 2027. Instead, it blindly devotes virtually all of the non-
Social Security surplus to tax cuts without considering the larger 
budget issues, issues which hang over us like the sword of Damocles.
  Despite a record economy, the best fiscal situation since the late 
1960s, this tax bill passes on the hard choices, passes on the choices 
that are going to be important to our children and our grandchildren.
  The deficit may be gone, but we are still operating under the same 
pass-the-buck-to-the-next-generation mentality that created it. Talk of 
an $800 billion tax cut versus a $500 billion tax cut versus a $250 
billion tax cut, all of those miss the fundamental point. The 
fundamental point is, Congress should not pass any tax cut until we 
have strengthened Social Security by making it solvent for three 
generations. We should not pass any tax cut until we modernize Medicare 
by increasing the number of preventive benefits, incorporating a 
prescription drug benefit, and securing the program's fiscal health. 
Those should be our priorities.
  When this amendment was introduced during last week's Finance 
Committee markup, it was defeated on a strict party-line vote. It is my 
hope that bipartisanship, common sense, respect for future generations 
of Americans will prevent a similar outcome on the Senate floor this 
week. But if it does not, I am very confident and, frankly, very proud 
that President Clinton has stated he will veto any tax cut proposal 
that does not put Social Security and Medicare first. He is in the 
fiscally responsible position, one that values wise preparation over 
instant gratification.
  Now is the time to extend the life of Medicare and Social Security. 
Later, if our fiscal situation permits, it might be time to enact tax 
cuts. But my first priority, shared by Senator Robb, is to my nine 
grandchildren and the other children of their generation. I hope my 
colleagues will join me in making this the priority of Congress as 
well.
  I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. Mr. President, I yield to the Senator from Tennessee such 
time as he may require.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Tennessee.
  Mr. THOMPSON. I thank the Chair, and I thank Senator Roth.
  It must seem strange to those watching this debate that people on 
both sides who have the same interest come to such different 
conclusions about how to get where we both say we are trying to go.
  There is no controversy with regard to the need to do something about 
Medicare and Social Security. We all know that. There is no controversy 
about the need to do something not just for ourselves but the next 
generation and the next generation after that. I think that is why many 
of us came to the Congress and to the Senate. We wanted to give back a 
little bit. We wanted to look forward. We wanted to do some of those 
tough things that maybe we thought anybody couldn't do and we could 
maybe come in for a little while and do that.
  Yet here we are, with such diametrically different views as to what 
will accomplish that. That is what makes good debates, and we have 
heard a fine presentation with regard to this amendment. But I think it 
is totally shortsighted and misguided.
  In the first place, let's not forget what we are about. We are about 
the question of whether or not we should have a tax cut with a 
projected $3 trillion surplus. Some people are suspicious of these 
projections. I am suspicious of most projections. We know it will not 
be exactly right. We just don't know which direction or how much. But 
this Congress gets together quite often and passes tax cuts. If a 
little farther down the road we have been proven to be incorrect with 
regard to our projection, it won't take us very long to come in here 
and raise additional revenues if they are needed. It happens all the 
time, in my opinion, whether they are needed or not.
  On the other hand, if we spend an additional trillion dollars, as the 
President suggests, that is gone. If we add on additional entitlements 
without the ability to pay for it when our entitlements are eating us 
alive in terms of squeezing out spending for everything else, we will 
never reverse that process.
  I fail to see the danger, the treacherous nature of a tax cut, 
because we can raise taxes anytime we want to. But right now on the 
table we have a $3 trillion projected surplus. It is really very 
simple. What do we do with that?
  We say that actually less than 25 percent of it, a little over 23 
cents on the dollar, should go back to the taxpayers. The rest of it 
goes to debt reduction, Social Security, whatever we choose to spend 
with regard to Medicare or any other items of preference on which we 
believe we need to spend money. And we can't tell that year to year.
  Some people say we are cutting money from education and the 
environment and all that. It is not true. It is absolutely not true. We 
got together as a Congress with the President a couple of years ago and 
agreed to abide by some caps. That was the deal. We are trying to stay 
with that deal. After that deal runs out in 2002, we, as a Congress, 
can spend the money however we want to.

[[Page 18213]]

  My personal opinion is, we need to put some more money into some 
things and we need to take some money out of things on which we are 
spending money. That is what Congress is all about. So this business 
that we are going to be cutting this program and cutting that program 
would lead someone watching us to believe that in our proposal we are 
slashing this and slashing that. That is what the President is going 
around and saying, and he is misleading people when he is doing that.
  When we increase, we have certain constraints. There is no question 
about that. I make no apologies for it. I think it is a good thing. It 
is what we agreed to do. Even past that, we should have certain 
constraints. But within that framework, we have the ability to spend 
more money on some things and less money on others. That is as far as 
discretionary spending is concerned.
  Now, with regard to Medicare and Social Security, the proposal before 
us basically takes our natural sentiment to be very concerned about 
Medicare and Social Security, because they are in trouble, and says 
let's hold everything off until we solve that problem. That sounds like 
a good idea, if this proposal that is before us right now would solve 
that problem. It would not. It would exacerbate the very problem we say 
we are trying to solve.
  This amendment would say we can't have any tax cuts until we pass 
legislation that will make Medicare solvent to the year 2027 and make 
Social Security solvent to the year 2075. What is magic about those 
dates? What about the year after 2027? We have been talking about what 
is going to happen in the year 2030. We are going to have twice as many 
people over the age of 65 at 2030. Why would we want to make it solvent 
to the year 2027 when we are going to be right in the middle of crunch 
time?
  There is no magic to these dates. Where these dates come from is the 
President of the United States. These are President Clinton's dates. 
These are the dates to which he says what he is doing will extend 
Medicare and Social Security. And they won't.
  I think that most economists, most objective observers, the 
Comptroller General, the CBO, and everyone else who has taken a look at 
it basically acknowledged that. But it is suggested that we wait before 
we have any tax cuts until we agree on legislation that will solve 
these problems by those dates. Can you imagine that process? Can you 
imagine our agreeing on what legislation in effect accomplishes that?
  I can tell my colleagues--and I think most observers I have read who 
have a job in looking at these things would conclude--that the 
President's proposal does not do that. What the President basically 
proposes--and he is able to say this with a straight face because it is 
so complicated; it is difficult to understand--is saying, okay, we have 
trouble with Medicare and Social Security. For the most part we have 
dedicated sources, FICA taxes, to take care of most of all that. But we 
have trouble with that now. So instead of disciplining ourselves, let's 
go to the general revenue, because we have some extra now, and instead 
of reforming Medicare and Social Security and doing those things that 
the Medicare Commission tried to do, instead of doing those things that 
some bipartisan Senators--the Senator from Virginia is on one bill that 
I am on--instead of doing those fundamental things to really solve 
Medicare and Social Security, let's just transfer some general revenues 
over into those items to serve as a temporary fix--in Medicare's case, 
until 2027.
  I don't know what the idea is that we are supposed to do. I guess the 
idea is none of us will be around here to have to answer for it by 
2028. But let's look at it individually. Since this amendment is 
predicated upon the President's proposal, I can only assume that it 
takes the position that the President's plan works and the President's 
plan will actually get us solvency by these dates.
  But with regard to Social Security, I think both the majority leader 
and the Speaker of the House have reserved bill No. 1 on both sides for 
the President's Social Security bill, where he can submit his 
legislation that he says will effectuate his plan in order to save 
Social Security. It hasn't come yet because I think most people realize 
it is not a serious plan. It is a transfer of trillions of dollars of 
IOUs in the Social Security trust fund, the creation of a new debt that 
will constitute a burden on future taxpayers.
  You talk about looking out for the future. This is not looking out 
for the future; this is not looking out for our children and our 
grandchildren, by transferring trillions of dollars in IOUs that will 
have to be redeemed some day. Then the President, of course, doesn't 
make these transfers until starting 2011 because that is outside the 
purview that we are looking at, and CBO and all these other 
commentators. So nobody is really able to evaluate it very effectively. 
And then it takes the money he says will come from all of this and he 
has the Government invest it. He has the U.S. Government invest it.
  Chairman Greenspan says that is a terrible idea. When you get right 
down to it, after all is said and done, there are only three ways to 
solve this problem, in terms of Social Security: You have to increase 
taxes, you have to cut benefits, or you have to come up with a way that 
will produce more off the investments than are being made.
  Now we have bipartisan legislation over here--the Senator from 
Virginia and I--on a bill that we think will do that. That is the only 
kind of thing that will do that. Transferring more general revenue 
funds--as I put it earlier, putting more water into a leaky bucket, 
when the hole in the bottom of the bucket is getting bigger every day--
will only carry us so far, they think until 2027 on Medicare and 2075 
on Social Security. It might. It might get us that far if we put enough 
general revenue funds in while we have a surplus. I assume it very well 
might get us to 2027.
  So what. Don't we have an obligation past that? Don't we have an 
obligation to do something more fundamental? It doesn't take a genius 
to say you have some extra money, let's just pour it on top of a broken 
system, or, as one of our Members likes to say, putting more gasoline 
into an old run down, beat up, decrepit automobile doesn't change the 
nature of that automobile.
  So the President's plan with regard to so-called saving Social 
Security is not a serious proposal. The President's own budget--the 
document that he submits, the ``Analytical Perspectives of the Budget 
of the United States Government, Fiscal Year 2000''--says that:

       Under the proposals in the President's budget, the trust 
     funds balances are estimated to increase by approximately 70 
     percent by the year 2004, raising to $2.8 trillion.

  That is the part of the plan the President says will take Social 
Security out and keep it solvent until the year 2075. But the 
President's own folks continue:

       These balances are available to finance future benefit 
     payments and other trust fund expenditures--but only in a 
     bookkeeping sense. These funds are not set up to be pension 
     funds, as are the funds of private pension plans. They do not 
     consist of real economic assets that can be drawn down in the 
     future to fund benefits. Instead, they are claims on the 
     Treasury that, when redeemed, will have to be financed by 
     raising taxes, borrowing from the public, or reducing 
     benefits or other expenditures. The existence of large trust 
     fund balances, therefore, does not, by itself, have any 
     impact on the Government's ability to pay benefits.

  It is a shell game. His own folks, in this thick document, basically 
tell it like it is. When you hear him talk about it, of course, it is a 
little bit different. It makes you believe it is real money and you are 
setting something aside, and so forth. It is not. The only way we can 
reform this problem, and the only way we are going to get our arms 
around it, is to increase FICA taxes. We don't want to do that. The 
working man is overburdened as it is today. Cut benefits. We don't want 
to do that, or come up with a system that is going to produce more 
revenue than the investment that our Social Security system has today, 
which is virtually nil. We can put a little part of it in the stock 
market, and even if the market crashed, unless we had unprecedented 
decades of low market, it would produce much more than what the Social 
Security system is producing today. Those are the only

[[Page 18214]]

things we can do. I do not believe these other things are serious in 
the effect they would have.
  Of course, again--and I mentioned it several times today--we are 
dependent upon the President's support, I guess, to pass a bill that 
will do these things when, on the other hand, he is doing everything he 
can to prevent reform. We had a bipartisan Medicare commission. We have 
these bipartisan bills. As far as the commission is concerned, the 
President did everything he could to defeat the recommendations there. 
Democrats and Republicans--and Senator Breaux chaired that commission, 
a Democrat--worked together and came up with solutions. The President 
would not support it. He would rather have a temporary political issue 
than a long-term solution to this problem. That is very disappointing. 
Many of us who were critical of the President some time ago thought 
that in his last couple of years in office he might want to step 
forward and do this and leave that kind of legacy. He could have done 
that. It is a wasted opportunity, and I regret that.
  So that is the Social Security plan, one that doesn't consist of real 
economic assets and will have to be financed by raising taxes borrowed 
from the public or reducing benefits.
  What about Medicare? As I understand it, the President's proposal 
there basically transfers $327 billion from the general revenue. CBO 
takes a look at it and says it will make Medicare more solvent for 
several more years. It doesn't have a number on it. But this is what 
the professionals who look at this say about that. This is what CBO 
says about the President's Medicare financing. Again, is this the 
solution to the Medicare problems we have? Is this the reason why we 
can't have tax cuts because this is what we need to do? I don't think 
so. Listen:

       The President is proposing to augment Medicare's financing 
     by making transfers from the general fund of the U.S. 
     Treasury to the program's trust funds.

  That sounds familiar--Social Security and Medicare.

       Consistent with the policy outlined in the President's 
     budget for fiscal year 2000, CBO estimates that $288 billion 
     would be transferred from the general fund to the Hospital 
     Insurance trust funds over the next decade. That transfer 
     would delay by several years the projected date on which the 
     HI [Hospital Insurance] trust fund will become insolvent by 
     committing future general revenues to the program. It would 
     do nothing to address the underlying rapid growth in spending 
     for Medicare that will eventually outrun the revenues 
     dedicated to the program.

  Just on borrowed time, headed toward a cliff.
  This plan does nothing to fundamentally alter that.
  The Comptroller General, talking about the President's proposal--
again, this amendment is based upon the numbers, as I understand it--if 
I am wrong about that, I can be corrected. But they are the same 
numbers that the President has been using throughout his plan. The 
Comptroller General says:

       I feel that the greatest risk lies in extending the HI 
     trust fund solvency while doing nothing to improve the 
     program's long-term sustainability, or worse, in opting for 
     changes that may aggravate the long-term financial outlook 
     for the program.

  What he is talking about is something that might not only not do any 
good in terms of a fundamental sense but will aggravate the problem. If 
we deceive ourselves into believing that by using general revenue 
moneys we are really doing something to solve the Social Security/
Medicare problem, it will put off real reform and wind up hurting 
Social Security and Medicare. It encourages us to wait. We can't afford 
to wait for fundamental reform.
  We have in excess of $500 billion in our proposal that can be spent 
for transition costs, Medicare, any other discretionary spending 
proposals that we as a Congress decide to spend it on. That is general 
revenue money, too. There is no question about that.
  But, fundamentally, both sides have to come together on an agreement 
that this is not the sort of thing that is going to solve that problem. 
It has nothing to do with tax cuts. If we don't fundamentally solve the 
Social Security problem, a tax cut is going to be irrelevant. If we 
don't fund it, they are going to be irrelevant to that. It has nothing 
to do with that basic problem. By keeping the economy strong, cutting 
taxes for working people, letting them keep a little bit more of their 
own money, it doesn't directly benefit these programs but it helps the 
people whom these programs ultimately are designed to benefit.
  In conclusion, basically we have no legislation before us and no 
proposal that would effectuate this amendment in terms of what kind of 
legislation are we talking about to reach these magic dates.
  Second, the President's position, which I think these dates are based 
upon, is a flawed one for the reason that we have set out.
  Lastly, not only is this not reform, but it goes against reform. So, 
indeed, we come full circle.
  I agree with my colleagues that my heart is in the same place as 
theirs. I want to figure out a way for us to come together and really 
do something about Medicare and Social Security. I want to find a way 
to do something about not just ourselves up to 2027, or however long 
some of us might still be around here--not myself, but the next 
generation and the generation after that.
  Let's look seriously and see whether or not this is the sort of thing 
that is going to get us there, or whether buckling down and doing the 
hard work, the hard, politically risky work--because if you use the 
words, you are running some kind of political risk--and not be diverted 
with false reasons as to why we shouldn't have a tax cut.
  We have had more reasons in one day than you can shake a stick at as 
to why the world would come to an end if we had a tax cut. There is no 
good time for a tax cut for some people because a tax cut has more to 
do with than just dollars and cents; it has to do with the exercise of 
who is going to make decisions in this society. Money is power. Where 
the money lies is where the power lies. Is it going to be in the 
pockets of the American people, or is it going to be in our pockets?
  Some say we have been a little bit too reticent ourselves because we 
say of the surplus dollar that only 25 percent or less should go into 
the American people's pockets. But to call that dangerous, to call that 
gluttonous, to call that selfish greatly exceeds the mark.
  I urge the defeat of the amendment.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. Mr. President, I thank you, and I thank the distinguished 
Senator from Tennessee for his comments. I think he is absolutely 
correct in that there is much that we agree upon. I would like to 
commend him for his effort to reach the bipartisan consensus that is 
going to be required if we are going to solve either challenge that we 
are discussing this evening.
  Social Security will not be saved without a bipartisan effort, and it 
is going to require the hard, politically risky work that the Senator 
from Tennessee just alluded to. The same thing is true with saving 
Medicare. Those are not easy decisions. That is one of the principal 
reasons that we are suggesting we ought to address those tough 
questions first.
  Let me suggest I understand in terms of the remarks made by the 
distinguished Senator from Tennessee that taking on something that is 
not on the table is effective. But we are not really defending all of 
the President's plan in this particular instance. We are using a couple 
of numbers that happen to coincide with the President's. But ours is 
much simpler and much more specific. We are talking about simply 
postponing this tax cut.
  The Senator from Tennessee made the point that it might be difficult 
to actually achieve whatever is necessary for some actuary to come to 
the conclusion that we had in effect saved Social Security or that we 
had saved Medicare. I would not contest that assertion by the Senator 
from Tennessee.
  But we are not saying you can never have a tax cut. We are saying 
only that we will not have this tax cut, this tax cut that we believe 
at this time is excessive. It may be that a time will

[[Page 18215]]

come when tax cuts, particularly targeted tax cuts, are appropriate. I 
suggest to my friend from Tennessee that while the time may be 
difficult to envision in terms of major tax cuts, it seems to me a time 
that does not cry out for tax cuts is a time when the economy is not in 
need of the economic stimulus that would come with a tax cut.
  The one thing that the Fed seems to suggest to us is that a tax cut 
could overheat the economy and would have consequences that we are 
trying to avoid at this particular time. But the bottom line is this: 
We are not suggesting anything but, hold up. We are saying in effect, 
What is the hurry? There is no compelling urgency to cut taxes, 
particularly when we are talking about a tax cut of this magnitude that 
can be addressed next year, or the year after, or whenever we find that 
we can afford to make that kind of a tax cut after meeting our 
obligations, such as protecting Social Security and Medicare.
  That is all we are saying. We are only suggesting that, because of 
the magnitude of this particular bill, we ought to suspend this 
particular tax cut until we have achieved those objectives. I suggest 
that is a relatively modest restraint on our activities, but it is a 
fiscally responsible approach to take.
  I have to tell the distinguished Senator from Tennessee that there 
are many on this side of the aisle at least who are not all that 
enamored with some of the suggestions that our brethren have made with 
respect to tax cuts at this time, and indeed we voted for the 
Democratic alternative only because it would substitute for the bill 
that is on the floor today.
  But we are not against tax cuts altogether for all time. Indeed, 
there are some areas where we should provide cuts--the extending, for 
instance, of the R&D tax credits and others that we know we are going 
to do anyhow--it is something that would provide a sense of realism and 
would allow some certainty in terms of planning for those companies 
that are doing the cutting edge work, that make our economy strong, and 
that make us a leader in the global economy.
  But we are just saying this tax cut is so big and so difficult to 
justify that we ought to at least hold up until we have, again to quote 
the distinguished Senator, ``done the hard, politically risky work'' to 
protect Social Security and Medicare.
  Again, I commend the Senator because he is willing to engage. He is 
willing to roll up his sleeves and engage on a bipartisan basis in 
trying to make those tough decisions. I wish we could find more on both 
sides of the aisle who were willing to roll up their sleeves and work 
on these decisions.
  The distinguished Senator from Florida and I are saying, let's simply 
not make this tax cut effective until we have solved those problems 
facing both Medicare and Social Security. I agree with the Senator from 
Tennessee, we are not solving these problems just by saving some of the 
surplus generated by Social Security. That does not bring about the 
systematic change we are going to need to have if we are going to solve 
the long-term solvency question with respect to Social Security. We are 
not doing that at this point with respect to Medicare. To that extent, 
I agree with the Senator.
  We have the tougher decisions to make. We are saying let's not take 
advantage of a projected future surplus since that would, indeed, make 
all of the other decisions more difficult.
  Another point where I differ with the Senator from Tennessee, he says 
it is always easy to come back and, in effect, reverse the decisions; 
if we cut taxes too deeply, we can turn around and raise taxes. With 
all due deference and respect, raising taxes is not easy to do. There 
are very few in this body on either side of the aisle who like to be 
tagged with either authoring or voting for a tax increase. That is the 
problem with tax cuts of this magnitude, particularly when they would 
be so difficult to reverse, and we splurge without making the tough 
decisions first. In the meantime the current surplus can be used for 
constructive, long-term debt reduction.
  Lastly, I have been concerned about the focus on publicly held debt 
as opposed to the total debt. We used to be very much concerned about 
the total debt. I have told my friends from the White House and others 
who have focused on this, I think what we are doing to reduce the 
public debt is a good thing. However, the plan promises too much. We 
are really not reducing the total obligation we have simply by making 
the IOU a statutory obligation instead of having it part of the 
publicly held dealt. Reducing the publicly held debt does good things. 
It makes our financial future better. It means we don't have to go out 
and borrow on the markets. However, the same obligations we have with 
respect to Social Security now, with respect to Medicare now, are still 
there. We are simply transferring them to a different form so our 
financial picture looks a little better.
  I suggest again this is a limited amendment. It is simply saying, 
what is the hurry with respect to huge tax cuts that may or may not 
materialize? Let's do the responsible thing. Let's do that hard, 
politically risky work of extending Social Security and Medicare 
solvency first. Then we can address the question of whether or not we 
provide additional tax cuts and what form and what magnitude they might 
take.
  I yield the floor.
  Mr. GRAHAM. Mr. President, in 1983 Alan Greenspan chaired a 
commission to study the state of Social Security. He began the 
deliberations of that commission with this admonition: Every member of 
the commission is entitled to their opinion. No member of the 
commission is entitled to their facts. We are going to work off a 
common base of facts and then from that common base arrive at an 
informed set of judgments.
  What are some of the facts that drive this amendment? One, there is a 
tidal wave of Americans who will reach 65 and become beneficiaries 
under the Medicare program and the Social Security program beginning in 
the year 2010. That generation, the generation born immediately after 
World War II, will more than double the number of current beneficiaries 
in Social Security and Medicare. That is a fact.
  Second, it is a fact that under the current financing in the year 
2014, 4 years after that tidal wave begins to hit, Social Security will 
go negative. That is, it will begin to pay out more benefits than it 
will take in annually in revenues.
  Third, it is a fact that even if we do as is suggested, put all of 
the Social Security surplus into strengthening the Social Security 
system primarily by paying down the national debt, even that step will 
only extend the solvency of Social Security to the year 2034. That 
happens to be a significant date for me because my youngest daughter 
will become 65 in the year 2034. I hope she might not necessarily be 
listening to my remarks, she would not be happy for me to remind her of 
that.
  Fourth, it is a fact that Medicare is a program of the 1960s based on 
1960s knowledge of medical science, 1960s concepts of how to provide 
insurance for health care. With a few exceptions, it is still a 1965 
program. It is a program in which the trust funded portions--that is, 
those that relate to hospital services--is already in a negative 
position. It is a program which will crack under the weight of the 
beneficiaries who will begin drawing its services in the year 2010.
  Finally, it is a fact that the longer we delay dealing with Social 
Security and Medicare, the more difficult the problem becomes. We may 
think we have eased our burden by delaying these hard decisions. We may 
have eased our burden because we may not be here. But the sooner we act 
for the benefit of all Americans, particularly those Americans who 
properly are anticipating the contract they have with their Government 
for the financial security of Social Security and the health security 
represented by Medicare, their problems, their challenges, grow daily 
more severe as we delay dealing with these fundamental issues.
  I want to join my colleague, Senator Robb, in saying much of what the 
Senator from Tennessee said was compelling. However, he asked a 
question:

[[Page 18216]]

Why is there a relationship between Social Security solvency, Medicare 
and its strengthening and solvency, and the tax cut? These are 
unrelated, disparate policy issues.
  I beg to say I could not disagree more. There are two ways in which 
these issues are inextricably intertwined. One is fiscal. This chart 
indicates with the tax cut of $792 billion and the foregone interest 
savings of $141, the total cost to the treasury over the next 10 years 
of the plan before the Senate is $933 billion. If someone wishes to 
challenge those numbers, I stand silent and yield for them to do so.
  I assume, thus, that we agree those are the right numbers.
  With a total surplus from non-Social Security purposes--and we have 
already agreed we will put all the Social Security surplus into saving 
Social Security--that is $964 billion over 10 years, meaning the total 
amount that is left will be $32 billion over 10 years, or a little over 
$3 billion a year in order to do everything else that we may find needs 
to be done.
  The fact is, once we have committed ourselves to this plan, there are 
no fiscal resources to either further strengthen Social Security to 
move beyond the year 2034, or to strengthen Medicare. So there is a 
fiscal relationship.
  But beyond the fiscal Siamese twins of these issues, Social Security 
and Medicare, and this tax cut, is a political reality. There is 
nothing easier in politics, there is nothing that is less likely to get 
you a chapter in ``Profiles In Courage,'' than cutting taxes. Everybody 
likes to cut taxes. That is the classic case of eating your political 
desert. The question is, Do you eat your desert before you have had to 
first eat your vegetables? That is what we are being asked to do by 
passing this tax cut before we have dealt with the vegetables of Social 
Security and Medicare.
  One of the most responsible groups is a group which is now led by two 
of our colleagues, former Republican Senator from New Hampshire, Warren 
Rudman, and Democratic Senator from Georgia, Sam Nunn, the Concord 
Coalition. The Concord Coalition was one of the driving forces that has 
given us the opportunity to have this debate tonight about surpluses 
because they helped focus national attention on the rot we were 
suffering year after year because of the deficits and the mounting 
national debt.
  What does the Concord Coalition advise us about the issue we face 
tonight? Mr. President, I ask unanimous consent to have printed in the 
Record immediately after my remarks, a statement released today, July 
28, 1999, by the Concord Coalition.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. GRAHAM. This is the statement of the Concord Coalition. In 
conclusion it provides:

       The bottom line is that, at the moment, political leaders 
     have no idea how to meet the long-term spending promises that 
     have been made for Social Security and Medicare, and no idea 
     how to meet the tough discretionary spending caps on which 
     the baseline surplus is premised. Major tax cuts should await 
     the resolution of these issues. If the politically hard 
     choices are not made before the easy ones, there is a very 
     real danger that we'll end up spending a surplus we don't 
     really have.

  Let me repeat:

       If the politically hard choices are not made before the 
     easy ones, there is a very real danger that we'll end up 
     spending a surplus we don't really have.

  So those are why the issues of sequencing--what do we do first, where 
do we put our primary priorities--are central for the fiscal future of 
this country and the debate we have this week. I will briefly say why I 
think the proper order is Social Security and Medicare first.
  First, the Social Security taxpayers and the Medicare taxpayers, 
through their payroll taxes, have created the totality of the surplus 
we have today. There is no other surplus than the Social Security 
surplus today, and there will only be a meager surplus beyond Social 
Security for the foreseeable future. So should not the people who 
created the surplus have some moral standing to be at the front of the 
line, not the back of the line, when we decide how to spend the 
surplus?
  Second, a substantial amount of the non-Social Security surplus is 
going to be the result of the Social Security surplus being invested in 
paying down the debt held by the public and therefore relieving the 
National Government of enormous interest payments--that $2 trillion of 
Social Security surplus when it is fully committed to reducing the debt 
held by the public. Let us say the average interest on the debt of the 
Federal Government today is 6 percent. Mr. President, as a certified 
public accountant, what kind of interest savings do you get at 6 
percent on $2 trillion? A very substantial amount of money. And that is 
a significant part of the non-Social Security surplus. Don't the people 
who are creating those interest savings deserve to be at the front of 
the line, not at the back of the line?
  Third, we do have a solemn contract between the American Government 
and its people on these programs. If we think we should not have that 
contract, then I think someone should stand up and be candid and honest 
and say: Let's repeal the 1935 Social Security Act, let's repeal the 
1965 Medicare Act, so there will not be any false expectations. We are 
going to abrogate these contracts.
  I do not believe there is any Member of this Senate or the House of 
Representatives who would do so. Therefore, I believe we, as the 
trustees for the American people in these important programs, have an 
obligation to see that they can fulfill their expectations.
  Finally, we are not suggesting, with the amendment that Senator Robb 
and I have offered, what the resolution of this issue should be. There 
are probably a dozen or more good ideas in this Chamber as to how we 
should strengthen Social Security, how we should strengthen Medicare. 
What we are saying is there should be a performance standard. The 
performance standard, I say to the Senator from Tennessee, my good 
friend, is not one we stole from somebody else. We have been saying for 
many years that Social Security should be solvent for three 
generations.
  When you apply that three-generational test to 1999, it happens to 
come out to the year 2075. If somebody has a different standard they 
believe Social Security solvency should be judged by, let them come 
forward and make the case. But I believe we should guarantee this 
program for current beneficiaries, their children--like my child who, 
in the year 2034, will start drawing her Social Security benefits and 
become eligible for Medicare. I am pleased to say that same daughter is 
now about to make us grandparents, Adele and myself. This will be our 
10th grandchild. In November she will have a baby. So we are concerned 
about the new baby who will soon come into our family. I believe that 
is a concern all of us share who are or hope soon to be grandparents. 
So I believe in the three-generational standard, which has been the 
standard against which Medicare solvency has been historically judged, 
is a sound one and represents the intergenerational contract.
  We are not suggesting how that contract should be fulfilled because 
there are many ways. But we are saying that is the standard against 
which all proposals should be judged. Similarly, with Medicare--that is 
a more difficult proposition because Medicare, unlike Social Security, 
is not totally funded out of a trust fund but rather a mixture of a 
trust fund for hospitalization and general revenue, plus premiums by 
the beneficiaries for the physicians' portion of Medicare. We are 
saying that, for the hospitalization plan, we should set as a standard 
the year 2027 for solvency of that trust fund.
  Again, if someone wishes to argue for a different standard, that is 
certainly their prerogative. But we need to have a measurement. We need 
to have something like an external audit, some standard to which we can 
submit our proposals and have them evaluated as to whether they meet 
the test of the American people.

[[Page 18217]]

  So what we are saying is let's maintain our options. Let us not place 
ourselves in a position where we are unable to achieve those standards 
of solvency for Social Security and Medicare. Once we have done that, 
we can declare hallelujah, and then we can proceed, if there are funds 
left after we have accomplished those purposes, to tax cuts or whatever 
else the Congress and the American people believe to be their 
priorities. But these are the first two priorities. There is both a 
moral and a legal obligation, and maybe most important, an obligation 
to our future, as seen in the faces of our children and grandchildren. 
It is to them that this amendment is directed.
  I urge my colleagues to adopt the simple principle: Let's do first 
things first, and Social Security and Medicare solvency are the first 
two responsibilities of this Congress. I thank the Chair.

                               Exhibit 1

              [From the Concord Coalition, July 28, 1999]

             Tax Cuts Should Await Hard Choices on Spending

       Washington.--With the House and Senate headed toward 
     passage of a $792 billion, 10-year tax cut, The Concord 
     Coalition today challenged Congress and the President to make 
     the hard choices on discretionary and entitlement spending 
     before enacting a major tax cut.
       ``Cutting taxes in anticipation of spending cuts that have 
     not been made, and may never be made, is a recipe for the 
     return of chronic annual budget deficits,'' said Policy 
     Director Robert Bixby. The Concord Coalition pointed out that 
     Congress and the President have yet to agree on several key 
     spending issues, including:
       Discretionary caps--The Congressional Budget Office (CBO) 
     baseline assumes that the discretionary spending caps will be 
     complied with through 2002. It is increasingly clear, 
     however, that this goal will not be met. Spending will exceed 
     the caps either explicitly or by stealth through the 
     emergency loophole. The projected baseline surplus varies by 
     hundreds of billions of dollars depending upon the path of 
     discretionary spending. Tax cuts should therefore await a 
     more realistic assessment of the non-Social Security surplus, 
     which will be available only after the dust settles on the 
     appropriations bills.
       Medicare prescription drug benefit--Congressional leaders 
     and the President seem to agree that a prescription drug 
     benefit should be added to Medicare. According to CBO, the 
     President's plan would cost $111 billion over ten years. 
     Republican leaders have suggested a less expensive approach, 
     but the question remains--how much will the new benefit cost?
       Social Security reform--The CBO baseline assumes that the 
     entire surplus will be used for debt reduction. But what 
     about Social Security reform? Many responsible reform plans 
     would use at least the Social Security portion of the surplus 
     as the down payment on a funded system of individually owned 
     Social Security accounts. If combined with appropriate long-
     term cost savings in the rest of the program, such a reform 
     plan would do more to improve the outlook for future 
     generations than a strategy of debt reduction alone. Enacting 
     a major tax cut now, however, could drain away resources that 
     may well be needed for the costs of transitioning to a more 
     sustainable, generationally equitable Social Security system.
       ``The bottom line is that, at the moment, political leaders 
     have no idea how to meet the long-term spending promises that 
     have been made for Social Security and Medicare, and no idea 
     how to meet the tough discretionary spending caps on which 
     the baseline surplus is premised. Major tax cuts should await 
     the resolution of these issues. If the politically hard 
     choices are not made before the easy ones, there is a very 
     real danger that we'll end up spending a surplus we don't 
     really have,'' Bixby said.

  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Delaware.
  Mr. ROTH. I yield myself 10 minutes.
  Mr. President, my good friend and colleague, the Senator from 
Virginia, raised the question as to why a tax cut now, what is the 
hurry; the economy is doing well. Let me tell you why I think it is 
critically important we have a tax cut now. That is because the 
American family needs it.
  In going home and talking to my constituents, talking to many 
families, whether they are farmers or small businessmen, or whomever, 
they are finding it hard to face the challenges of today. The cost of 
sending a child to college is increasing very rapidly and is taxing the 
typical American family. We provide relief in this package for the 
American family who is trying to send their children to college. They 
are trying to send their children to college today, not 5 or 10 years 
hence. That is the reason it is important.
  I point out there is something like 42 million families without 
health insurance. There is no hurry to try to address that, as we do in 
this legislation? We provide that someone who is self-employed or an 
employee who works for a company that has no health insurance can take 
a tax deduction for their insurance. That is helping to provide access 
today. None of us know whether we will be sick today, tomorrow, or in a 
week. There is a need for that today, not 5, 10 years from now.
  What about savings? We all agree as to the critical importance of the 
two domestic programs--Social Security and Medicare. But to retire 
today, it is important people have savings, and that is the reason we 
have stressed so much the importance of pensions, the importance of 
IRAs, because if people are going to retire with dignity, they must 
have the opportunity to save not tomorrow, not 5 years from now, but 
today.
  Marriage penalty: How many of my colleagues have gone home and talked 
to people about that? There is concern that taxwise it pays not to 
marry but to live in so-called sin. We take care of the marriage 
penalty. It is long overdue. Why wait? I think there is good reason, if 
we are going to help the American family, let's help the American 
family today, not sometime in the distant future.
  It intrigues me. People say delay the tax cut, it is not important. 
But what about spending? My good friend from Wyoming raised that point, 
and it is a solid one. If we are going to delay tax cuts, why shouldn't 
we say there can be no increased spending until we solve these two 
domestic programs? If it is fair for one, why isn't it fair for the 
other?
  Then the point was made this tax cut is inflationary. That is hard to 
understand. In the year 2000, we are talking about a $4 billion tax 
cut. That is not very large when you stop and think that our GDP is $9 
trillion. It is not very likely our tax cut in the next year or two is 
going to have a very significant effect on the economy. The larger cuts 
come down the road in the last 5 years. Sure, we may not like to vote 
for tax increases, but we have all done it in the past, and we will do 
it again if it is necessary, but this tax cut is very slow in 
developing into a major reduction for the American people.
  I oppose the legislation for those reasons. I am a strong believer 
that we can have the tax cut, address the problems of Medicare, as well 
as Social Security. As I said, the new CBO estimate of the on-budget 
surplus over the next 10 years is $996 billion, while my bill returns 
most of this overpayment of taxes back to those who sent it to 
Washington, while at the same time it leaves enough money on the table 
for Social Security reform, $1.9 trillion, and Medicare reform, $505 
billion.
  As I said in the Finance Committee, I am committed to moving a 
Medicare bill through the committee after we return in September. It is 
my hope that comprehensive Medicare reform can be achieved, including 
providing for a prescription drug benefit, but it must be on a 
bipartisan basis and it must be done with White House cooperation.
  The chairman's mark complies with the budget resolution to this 
committee by reducing on-budget revenues by $792 billion over 10 years. 
This amount will allow up to $505 billion of the on-budget surplus to 
be dedicated to Medicare reform. The President's plan costs $118 
billion over 10 years. Clearly, the $505 billion left on the table is 
more than sufficient to reform Medicare with a prescription drug 
benefit.
  The Committee on Finance has held numerous hearings on Social 
Security over the past few years. Many of the members of the committee 
have offered comprehensive Social Security reform plans that, I have to 
say, are quite compelling. I do intend to return to Social Security 
after this recess and the Senate works its way through Medicare reform.
  I oppose this amendment, and I firmly believe we can address all 
three--a tax cut, Medicare reform, and strengthen Social Security. I 
yield the floor.

[[Page 18218]]

  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Virginia.
  Mr. ROBB. I thank the Chair. Mr. President, I want to respond 
briefly, if I can, to our distinguished chairman and friend from 
Delaware with respect to the question of timing.
  The distinguished Senator from Delaware mentioned the fact that the 
tax cut this year is only $4 billion out of some $792 billion that is 
proposed in the bill. That is about one-half of 1 percent of the total 
promise that would be incorporated in statutory law if, for any reason, 
we are wrong. That is what we would have to find a way to change, 
against all of the forces that are normally arrayed against any tax 
increase.
  Why squander the opportunity to pay down or to begin to pay down the 
national debt--not just the publicly held debt, the national debt, the 
national unified debt? This is the first time in well over a generation 
there has been any opportunity to pay down the debt.
  We are not proposing additional spending. I have not checked with my 
distinguished colleague from Florida for certain, but if the 
distinguished chairman of the committee were willing to accept an 
amendment that would suggest some similar restraint on spending which 
would correspond to the restraint we are attempting to place on cutting 
taxes, I will suggest to the chairman of the committee, I think we 
could find a place to make a deal.
  We are not suggesting profligate spending. We are suggesting that we 
put that money in the bank, that we pay down the national debt.
  Again, in terms of urgency, one-half of 1 percent is what we would do 
right now. But the other 99.5 percent would be locked into the law that 
we would be obligated, by law, to change at the appropriate time. That 
is the reason we are suggesting that we do not want to rush to judgment 
with respect to what many of us believe would simply not be a 
responsible tax cut of this magnitude at this time.
  With that, Mr. President, I thank the Chair and yield the floor.
  Mr. THOMPSON addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Tennessee.
  Mr. THOMPSON. If the chairman will cede me a couple other minutes, 
just a couple of points.
  I have enjoyed this discussion very much. It is a serious discussion 
about a serious problem. My only real disappointment is to learn that 
the Senator from Florida has twice as many grandchildren as I have. But 
all we ask is for an opportunity to catch up.
  But I think there are a lot of things we do agree on. We agree that 
there is a crisis. We agree that we need fundamental reform in Medicare 
and Social Security. We agree that the longer we delay in doing that, 
the worse the problem is going to be.
  So the question is, Are we doing the right thing by temporarily 
papering over the problem to extend it a few years, knowing that is not 
going to fundamentally solve the problem, giving us an excuse not to 
really address the fundamental problem or should we push and pressure 
ourselves to go ahead and address the fundamental problem? That is 
really the issue here today. I think that is where we have a 
disagreement.
  When I said that there is no relationship between this Medicare/
Social Security problem on the one hand and tax cuts on the other, I 
did not mean to say if you keep more of the tax money and pour more of 
it into Medicare and Social Security, you could not delay it a little 
longer. That is certainly true, but fundamentally there is no 
relationship.
  The reason I said that was because of what the Comptroller of the 
United States said. In his testimony in July before the Finance 
Committee, he said:

       Even if all future surpluses were saved--

  Taking every penny of the surplus, not one dime of tax cuts--

     we would nonetheless be saddled with a budget over the longer 
     term that the current tax rates could fund little else but 
     entitlement programs for the elderly population. Reforms 
     reducing the future growth of Medicare, as well as Social 
     Security and Medicaid, are vital under any fiscal and 
     economic scenario to restoring fiscal flexibility for future 
     generations of taxpayers.

  That is the reason I say that even if we put all this aside --we are 
throwing a lot of numbers around here--take all of it, pour it into 
Medicare and Social Security, so we can tell people we saved it for a 
few more years, it really would not address the fundamental problems.
  Is it incumbent on us to have a temporary solution or to force 
ourselves to have a longer-term solution? I think it is the latter. 
That is kind of what it boils down to.
  My friends talk about the size of this tax cut. The economy is 
projected to be $9 trillion next year. The net tax cuts next year alone 
are $4 billion, so the tax cuts are less than one-twentieth of 1 
percent of the economy next year--less than one-twentieth of 1 percent.
  I am told that the tax cuts over the 10-year period would be 3.4 
percent of total Federal revenues, and it would be under 1 percent of 
the gross domestic product. So that is not a huge tax cut if you look 
at it under those terms, in terms of the share of the economy, 
especially in light of the fact that taxes, especially Federal taxes--
especially Federal income taxes--are mushrooming as a share of our 
total economy. It is eating up more and more and more as a share of our 
total economy.
  We may have good times now, but that is not guaranteed. We are in a 
world standing as an island, as it were, at the present time while 
those all around us have problems. Our friends in Asia, our friends in 
Japan, some of our friends in Europe, some in South America, all have 
economic problems. So we have to be mindful of that as we go along.
  Quite frankly, there are some who say, when we have a deficit, 
certainly we can't afford to cut taxes; we have a deficit. And 
listening to the debate today, apparently some of our same friends, 
when we have a surplus, say we can't cut taxes because we really don't 
know whether or not we will have the surplus. So that does not leave us 
much room for a tax cut.
  I have enjoyed the debate. I yield the floor and thank the chairman 
and my good friends from Florida and Virginia for such an interesting 
discussion.
  Mr. ROBB addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Virginia.
  Mr. ROBB. I will just respond to one point made by my distinguished 
friend from Tennessee. He was suggesting, correctly, that if we were to 
reserve, save, all of the surplus, we would not save Social Security 
and we would not save Medicare. We do not disagree. We concede.
  Indeed, I suggest that that makes the case for why we believe we 
ought to save this surplus and, at the very least, not squander it, 
because it might increase the incentive to make those tough political 
choices we have not made to protect these two programs.
  So saving all of the surplus is not going to save Social Security. It 
is not going to make Social Security solvent in the context that the 
Senator from Florida and I are discussing, nor is it going to do that 
for Medicare. We understand that. But it might focus the mind a little 
bit. As Samuel Johnson said: when a man knows he is to be hanged it 
concentrates his mind wonderfully. That is not an exact quote, but that 
is fairly close to it. Delaying the effective date of the tax cuts 
might give us some incentive, some focus, to conduct that hard, 
politically risky work that the Senator from Tennessee so accurately 
described it is going to take if we are to solve the problem with 
either Social Security or Medicare.
  All we are saying is, let's not squander this money. It isn't just a 
matter of correcting it next year, it exacerbates the problem, because 
it is going to increase the amount of money we are going to have to 
carry in terms of the debt. So we are saying: Hang on; $4 billion, one-
half of 1 percent; it is not worth locking in the kind of a tax cut 
some are suggesting until we've done first things first.
  It has been a good debate. I am particularly grateful, first of all, 
to my friend and colleague from Florida for

[[Page 18219]]

his leadership and cosponsorship, and to the distinguished chairman, 
who is also good natured--notwithstanding differences we may have which 
may be fairly significant, but I have never heard a cross word uttered 
by him--and to the distinguished Senator from Tennessee for engaging in 
this dialogue which I think does at least illustrate the choice we are 
going to have to make and the choice that, in fact, we are asking our 
colleagues to make.
  We are simply saying do not squander the surplus by making this kind 
of humongous tax cut this year when we can wait until next year or the 
year after and find out exactly where we are going and, hopefully, 
increase the pressure to actually save Social Security and Medicare. 
With that, I thank the Chair, and I thank my colleagues.
  The Senator from Florida and I happily yield back the remaining time 
on our side.
  Mr. ROTH. Mr. President, I yield back the remainder of my time.
  I ask unanimous consent that the pending Baucus motion be considered 
in order under the provisions of the consent agreement and all other 
provisions of the consent agreement remain in status quo.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________