[Congressional Record (Bound Edition), Volume 149 (2003), Part 7]
[Senate]
[Pages 9519-9569]
[From the U.S. Government Publishing Office, www.gpo.gov]




               FISCAL YEAR 2004 BUDGET--CONFERENCE REPORT

  Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of the conference report to accompany 
H. Con. Res 95, the concurrent budget resolution for fiscal year 2004.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The clerk will report the budget resolution conference report.
  The assistant legislative clerk read as follows:
       The Committee of Conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the concurrent 
     resolution (H. Con. Res 95), establishing the Congressional 
     budget for the United States Government for fiscal year 2004, 
     and setting forth appropriate budgetary levels for fiscal 
     years 2003 and 2005 through 2013, having met, have agreed 
     that the House recede from its disagreement to the amendment 
     of the Senate, and agree to the same with an amendment, 
     signed by a majority of the conferees on the part of both 
     Houses.

  Mr. REID. Mr. President, I ask the Budget Committee chairman if he 
will yield for a question.
  Mr. NICKLES. Certainly.
  Mr. REID. As I said a few minutes ago, on our side there is real 
angst as to when we might finish this budget conference report. We have 
5 hours on our side. At this stage, we have the intention of using most 
all of that time. I am wondering, from your perspective, how much of 
your time are you going to use? It is important for people who are 
bouncing around the country.
  Mr. NICKLES. Did the Senator say they have the intention of yielding 
most of their time?
  Mr. REID. Using the time.
  Mr. NICKLES. I am happy to work with my colleagues to find a mutually 
agreed upon time for debate and for final passage. We have up to 10 
hours, as my colleague knows. That would have us voting at 8 o'clock 
tonight. I hope we can reduce that. I will work with colleagues on both 
sides to make it mutually agreeable.
  Mr. REID. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, for the information of our colleagues, I 
urge our colleagues to stay in town today on this particular Friday 
before an April Easter recess. We have a vote on the Senate budget 
conference report, which we are now debating. We have a vote on the 
urgent DOD request, the war supplemental. That will be voted on today. 
I expect we will also have a vote on debt limit extension. Maybe that 
can be done by voice, maybe not. I urge colleagues to be here today.
  Those are the three very important issues to be resolved today. We 
will try to work with all of our colleagues to expedite consideration 
of all three measures, and I will be happy to accommodate and yield 
time and work with people. We need to pass all three bills. I look 
forward to working with all involved Senators to come to the conclusion 
of all three bills.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, if I may direct a question to the chairman, 
we are willing to work in any way possible to get the budget passed and 
the supplemental passed.
  I think the Senator should be forewarned that I doubt very seriously 
if there will be a debt extension passed today. We spoke at some length 
a week ago with the majority leader. We will be happy to work with the 
leader on a freestanding bill. We need a day on that, but that doesn't 
mean 30 minutes or an hour. We have a number of people who have 
indicated to us that they want to offer amendments on the budget 
extension.
  The majority leader is quoted in the press as saying he thinks we can 
do the supplemental and the budget resolution, but he doesn't think we 
can do the debt limit. I want the chairman to know we agree with the 
majority leader.
  Mr. NICKLES. Mr. President, I appreciate the comments of my colleague 
and friend from Nevada. I will bump that up to a higher level between 
the majority leader, minority leader, and my friends. It was my 
understanding it needs to be done this week before we left. I have not 
consulted with Treasury--the Secretary of the Treasury in the last week 
or so. It was my understanding it really needed to pass before the 
April break. Maybe that is not the case. It may be my friend from 
Nevada and others have done their tax returns and paid such enormous 
taxes that we are in great shape. There is usually an April bump in 
revenues. That is my main concern. We don't like being in the situation 
where we are borrowing funds from civil service retirements and so on, 
which has happened in the past, and may be happening now. I will be 
happy to bump that up to the majority and minority leaders. It was my 
understanding it needed to be done prior to our leaving for this break.
  Mr. REID. Mr. President, very briefly, if I may, I think every time a 
debt limit extension has come before the Congress, I have voted for it. 
I believe we have debts and we should pay them. I will likely vote for 
this one. But there are some people who don't think as I do and they 
want some time to talk on this.
  The majority leader has the commitment of Senator Daschle and myself 
and Senator Conrad that we will work with them to get the debt limit 
extension passed. We need a little bit of time to do that.
  Just on a personal note, I have been checking my banking on line 
every morning to see if my return is back. I am expecting that money to 
come back soon. It has been 4 weeks now and it is not here. I am a 
little disappointed.
  Mr. NICKLES. I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, as we begin the debate on the budget for 
fiscal year 2004, I will make a couple of comments. One, I compliment 
my colleague, Chairman Nussle, in the House. It has been a pleasure to 
work with him.
  Passing a budget is never easy. I have been critical in the past, 
such as when last year we did not get a budget passed, but I have a 
better appreciation for how difficult it is. Particularly when we have 
a great big number of 51 on our side, it is not an easy job. So I 
compliment Chairman Nussle and thank him for his work and cooperation.
  We had many hours working together trying to formulate a budget that 
would pass both the House and the Senate. It is a great deal easier 
said than done. We have come forward with a budget this year that 
accomplishes a lot of major objectives. We balance the budget. We 
balance the budget in 9 years, not 10. When we brought it before the 
Senate, it was balanced in 10 years, in 2013. Now we balance it by the 
year 2012.
  It is a budget that allows and encourages growing the economy. The 
economy has not been growing. Frankly, we will never balance the budget 
if the economy is not growing. This budget allows and provides for a 
growth package.
  This is a budget that will help us win the war on terrorism. We fully 
fund the President's request for national defense and homeland defense.
  It includes the war supplemental that Congress is going to pass 
tonight. The Senate passed it a week ago, and we will end up passing it 
as well today. It fully funds homeland security and the President's 
request.
  It also is a budget that allows us to modernize Medicare. We did not 
get

[[Page 9520]]

that done last Congress. We should have, but we did not. Almost 
everybody says they are in favor of it, but because we did not have a 
budget, we did not have protection on the floor. We did not even have 
markup in the committee. We did spend some time on it on the floor, but 
we were not successful. This is a bill that says we will spend up to 
$400 billion not just to provide a drug benefit but also to strengthen 
and improve Medicare, not just for the current beneficiaries but for 
future generations as well.
  It is a budget that maintains spending discipline. It grows domestic 
nondefense discretionary, but barely--about 2.3 percent over 2003 
levels before the supplemental. We limit spending with enforceable caps 
for the next 2 years.
  Budgets are not easy. They are not pretty. The process is difficult. 
It is long. It is tedious. It is tough. It is not the easiest committee 
of which to be a member. I thank all members of the Budget Committee 
who helped us build this budget.
  When we convened early this year, we had seven Budget Committee 
hearings. The President submitted his budget on February 3. We passed a 
large appropriations bill, the 2003 appropriations bill, on February 
13. These were appropriations from the previous year. We did not get a 
budget last year, and we did not get appropriations last year.
  Why did we not get the appropriations bills done? Because the House 
and the Senate were arguing what the appropriate level would be. There 
was never a budget, so this was not an agreement on how much we should 
spend. And because we did not have the agreement, we could not manage. 
It just did not work. And the Congress did not work. Last year was a 
very frustrating year, largely because we did not have a budget. In 
February of this year, we ended up passing last year's appropriations 
bill. Eleven of the thirteen bills passed in February. On March 7, CBO 
submitted the reestimate of the President's budget, and then on March 
12 and 13, the Senate Budget Committee marked up the President's 
budget. We had 2 days of markup. We had 32 amendments considered, 23 
rollcall votes, and we passed it out of the committee on March 13.
  Then we had the longest consideration of the budget maybe in Senate 
history. I will have to look back, but we had 7 days of debate on the 
floor. The Budget Act provides for 50 hours, but we had 50 hours plus 
many more hours because we had a very extended number of rollcall 
votes. We had 81 amendments considered on the floor. Fifty-one were 
decided by rollcall votes, and 31 by voice votes which adds up to 82, 
including final passage.
  We have had a challenging conference. We had a very challenging 
conference, after both the House and Senate passed a bill, because we 
had differing expectations of what could pass, particularly as it 
related to the growth package. The House wanted, and they passed, a 
growth package of $726 billion. The Senate passed a package of $350 
billion. The Senate could not pass more than $350 billion, it looks 
like, and the House would not accept $350 billion. It is kind of hard 
to have reconciliation in a conference agreement if there are 
irreconcilable differences.
  What did we do? Well, we were a little innovative and we came up with 
giving different instructions to the House and the Senate, certainly 
legitimate in parliamentary procedure. It has not been done before, so 
we gave an instruction to the House. The House has an instruction of 
$550 billion on the growth package. The Senate has an instruction of 
$350 billion on the growth package. The difference is to be decided by 
the conference. I think I know where the votes are. I will tell my 
friends and colleagues, I know Chairman Grassley very well. I expect 
that I will be a conferee, and we do not expect to bring a bill out of 
conference unless it will pass the House and the Senate. We want it to 
become law. We do not want to make political statements. We want to 
help the economy grow. That is our objective.
  So hopefully we will have a budget and a growth package. I think it 
is more important to have a budget than even having a growth package. I 
think we have to have fiscal discipline. The budget amounts to $2.2 
trillion. The growth package is somewhere between $350 billion and $550 
billion over 10 years. Over 10 years, we are going to spend about $30 
trillion. I think we have to have some management of that $30 trillion 
in the next 10 years.
  If we did not pass a budget last year and we do not pass a budget 
this year, then we have really no budget. The former Director of the 
Congressional Budget Office said the budget process is dead. I called 
him and told him: I beg to differ with you, but if we were not 
successful in passing a budget this year, it would be dead. If we had 2 
consecutive years and Congress did not pass a budget, then certainly it 
would be dead, for all practical purposes. There would be no budget 
enforcement. There would be no pay-go. There would be no rules against 
spending on extraneous measures. This budget has enforcement.
  I will mention a couple of other things. We have inherited a very 
difficult thing. A lot of people are going to come to the floor today 
and they are going to decry how large these deficits are and say: Woe 
is me, how come we have all of these deficits? It is because of the tax 
cuts.
  That is not actually factual. The fact is we have large deficits 
because revenues have declined dramatically--not because of tax cuts 
but because of the economy. Revenues fell 2 years ago, 1.7 percent. 
Last year, they fell 7 percent. Combined, that is about a 9-percent 
reduction in revenues in the last 2 years. Simultaneously, spending 
went up 12 percent; revenues went down 9 percent. Spending went up 12.2 
percent, and we went from a surplus of $129 billion to a deficit of 
$159 billion in 1 year.
  What caused that? A soft economy, a stock market collapsing. People 
will later say that is because of President Bush's policies. That is 
not correct. The NASDAQ fell 50 percent between March of 2000 and 
December of 2000, so the market started collapsing under President 
Clinton. I want to make sure people know where this collapse came from. 
Revenues started falling like a rock because the stock market started 
collapsing. Maybe the stock market had irrational exuberance going up, 
but it fell dramatically and that cut off revenues. A lot less capital 
gains, less personal income tax, and revenues declined to the Federal 
Government.
  Also, we had something called a terrorist attack on the United States 
on September 11 in the year 2001. That has cost this economy and it has 
brought a lot of outlays to the Federal Government--outlays to respond 
to terrorism, outlays to protect us against terrorism, outlays to 
rebuild both New York and Washington, DC. As a result, outlays have 
gone up and expenses to the economy have been dramatic. It is hard to 
calculate how significant it has been.
  So we have the confluence of several things. We already had a stock 
market declining dramatically, we had a soft economy, then we had 
September 11 on top of that, which has made revenues go down and 
expenditures go up.
  What can we do? We have to show fiscal discipline. We have done that 
in this budget. Despite attempts by many to increase spending by over 
$1 trillion, we held the line on nondefense spending. It will only grow 
by a couple of percentage points. That is compared to spending that has 
been growing at dramatic increases in past years. The year before last, 
it was 12 percent alone in discretionary spending. When I talk about 
spending, sometimes we talk about discretionary and sometimes we talk 
about entitlements, but discretionary spending, the amount of money we 
control, had been increasing at enormous levels. We contained that 
growth. In nondefense, as I mentioned, spending growth has been limited 
to a couple of percentage points.
  We do a couple other things. We reinstill discipline. We have caps on 
discretionary spending. We have enactment of changes. If you want to 
call something emergency, you have to have 60 votes. We prohibit 
advance funding which was done more often than it should have been, 
advance funding where you not only appropriate for

[[Page 9521]]

the next fiscal year but maybe for the next couple of years. We 
prohibit that.
  Let me mention a few more. Spending growth in 2004 will be 4 percent. 
Defense spending in 2004 is 2.4 percent in budget authority. The last 5 
years it has been 7.6 percent; nondefense spending growth in 2004, 2.9 
percent. The average was 7.9 percent. In defense, I mentioned we fully 
fund the President's request to fight the war on Iraq. We have included 
the war supplemental. We fully fund homeland security. That is an 
increase of 18.4 percent in 2004. We have a $3 billion increase over 
the President's request in 2000 for the Department of Education. Those 
are programs such as IDA, title I, No Child Left Behind. Veterans 
health care is the largest increase ever, 14.7 percent. I have 
mentioned Medicare and our efforts there. We also have a pay-go point 
of order, to limit mandatory increases or revenue decreases in excess 
of those provided in the budget.
  We did something else, and I want to make sure my colleague from 
North Dakota listens to this because we can work together on this. The 
House--to their credit, I would say--proposed hundreds of billions of 
dollars in savings in entitlements. The President did not propose 
those; we did not propose those. I had to think maybe we need to be 
looking at entitlements. We did not get that done in this budget when 
we had the opportunity. We did not do it. And I did not call for it to 
be done because I didn't think Congress was ready. I want Congress to 
get ready. I want the authorizing committees to start doing oversight.
  We require in this resolution the House and the Senate authorizing 
committees to submit findings to the Budget Committee identifying 
instances of waste and fraud and abuse in programs within their 
jurisdictions. There are a lot. We have not had extensive oversight on 
a lot of programs in years, for whatever reason. Blame me, blame all of 
us; we need to do more. We are requesting and actually directing each 
of the committees to give us identified areas where they think we can 
make savings. Those need to be submitted by the authorizing committees 
by September 2 of 2003, and we will use those in the Budget Committee 
to develop future budget resolutions. We do not want to dictate to the 
authorizing committees, but we want to work with the authorizing 
committees to get real results, real savings, real oversight.
  It bothers me a lot when we find out we have actually hundreds of 
billions of dollars estimated to be lost in errors or waste--in some 
programs it is 20 or 30 percent.
  Regarding the earned-income tax credit program, I believe CBO did a 
study, and it was something like an error rate of close to 30 percent. 
That is not acceptable. We need to make sure Government is more 
efficient and more effective.
  I look forward to the debate on this resolution. I hope our 
colleagues consider it vitally important to pass a budget. We will be 
grossly irresponsible if we do not. It is easy to throw stones and 
sticks and say I don't like this so we will just vote no. But, 
conversely, we have to govern. We considered alternatives, and they did 
not pass. I urge our colleagues to consider this budget. I urge Members 
to vote for final passage some time later this afternoon.
  Mr. President, I ask unanimous consent that quorum calls be charged 
equally from now on during the course of the debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, this is, I believe, the worst budget this 
Chamber has considered perhaps in its history. It is radical, reckless, 
dangerous, and extreme. At a time of record budget deficits, it 
proposes to cut revenues by over $1.3 trillion and increase spending by 
over $1.1 trillion, driving us deeper into deficits and debt.
  It explodes deficits when we are at war, the cost of which is 
unknown, and right on the eve of the retirement of the baby boom 
generation which will dramatically increase the cost of Social Security 
and Medicare.
  Make no mistake, the cost of the massive tax cuts in this budget 
explode at the very time the cost to the Government of the baby boom 
generation's retirement explodes. There can only be one result, and 
that is to drive this country off the cliff into deficits and debt on a 
scale and magnitude never seen in this country's history. That is not 
just irresponsible, it is wildly irresponsible.
  This budget is not a document that represents a conservative approach 
to governance. It is radical and it is extreme. It says deficits do not 
matter, that taking virtually every penny of the Social Security trust 
fund surpluses to fund tax cuts for the wealthiest among us, is the 
priority for this Nation.
  This budget flunks every test of fiscal responsibility and basic 
fairness. This budget proposes taking trillions of dollars raised from 
the payroll taxes of middle-class Americans, generated to support 
Social Security, and uses them to fund an income tax cut overwhelmingly 
for the benefit of the most wealthy among us.
  The President's proposal, which this budget resolution seeks to 
support, would give a $90,000 tax reduction to those earning over $1 
million a year and funds it by taking the payroll tax money of middle-
class Americans to pay for it. To the extent it is not paid for by that 
mechanism, it borrows the money and charges the cost to future 
generations. That is class warfare of an extreme nature. It takes from 
the many to give to the few.
  The proponents of this budget claim it contains a growth package. It 
does not. It contains a radical expansion of deficits and debt that can 
only undermine our long-term economic strength and security. Oh, yes, 
it will give a momentary and modest lift to the economy. But like the 
drug addict who gets a momentary high, it will be inexorably followed 
by the lows brought on by the deadweight of deficits and debt.
  The best economists in America tell us that this budget proposal 
hurts long-term economic growth and threatens our economic security 
because it is all financed by borrowed money. It is a borrow-and-spend 
philosophy that doubles our gross national debt over the next decade, 
right before the baby boom generation retires. This is the time we 
should be paying down debt or prepaying the liability we all know is to 
come. Instead, this budget says: Forget about what we know is happening 
and what is about to happen; let's live for the moment and not worry 
about the future.
  As bad as this budget is--and it is bad--the process that brought it 
here is even worse. I believe it represents an attack on the 
Constitution itself. Our Founding Fathers intended the Senate to be the 
place where a determined minority could slow down and perhaps even stop 
measures that the minority believed could damage our country. So the 
Senate adopted the right to unlimited debate and the ability to offer 
unfettered amendments. The budget process used in this conference 
report has never been done before and fundamentally denies Senators 
those basic rights. The process, called reconciliation, which restricts 
Senators' rights to debate and amend, has been twisted like a pretzel 
into something unrecognizable from what was intended.
  Reconciliation was meant to provide a fast-track process to reduce 
deficits, and now it is being used to explode them. Understand that 
this budget says both bodies, under the reconciliation provisions, are 
instructed to cut taxes by $550 billion. If anybody believes this is a 
measure to cut taxes by $350 billion under reconciliation, that person 
is profoundly misled. The instruction says clearly: Cut taxes by $550 
billion under these fast-track procedures that mean Senators are denied 
the basic protection of unlimited debate and amendment.
  In the next breath, the Senate is told to forget that instruction 
because there will be a supermajority point of order in the Senate if 
it is followed. But in the conference committee, the higher tax cut can 
be adopted and come back to the Senate and be passed on a simple 
majority vote under special time limits and with restrictions on 
amendments that deny every Senator their most basic rights.
  All this was made possible by a procedure never considered or debated 
in

[[Page 9522]]

either body. This scheme was concocted in the conference committee 
without a single member of the minority present--not one. We were 
locked out. So four members of the Senate majority, with two members of 
the House majority, have constructed a procedure, never contemplated in 
either Chamber, which allows the special restrictions and limitations 
of reconciliation to apply to a tax cut that never passed this Chamber.
  This stands the plain meaning of reconciliation on its head. No true 
reconciliation between the House and the Senate has ever occurred. 
There was no true meeting of the minds. So they conjured up a new point 
of order in the conference committee as a figleaf to hide their 
failure.
  Colleagues should understand the extreme nature of what is being 
done. If a conference committee can add new provisions never debated or 
contemplated in either Chamber, and do so without the minority, where 
does it end? Could an abusive minority of the majority, in a conference 
committee, decide that a supermajority point of order would apply to an 
individual Senator's right to offer an amendment? Could just a handful 
of Senators and House Members in a conference committee create a 
supermajority point of order against amendments on a particular 
subject? What is to prevent a minority of the majority in a conference 
committee from fundamentally altering the rights of individual 
Senators?
  This way lies chaos and a descent into unconstitutional government. 
Mark my words, the Senate will live to regret this day. Unintended 
consequences, we have seen in the past, flow from very little things.
  In 1975, a tax cut of $6 million was used as precedent for using the 
reconciliation process that was designed for deficit reduction. It was 
used as a pretext to allow tax cuts of over $1 trillion, tax cuts that 
have pushed us now into deep deficit and growing debt.
  This is what has been agreed to in the conference committee. The 
reporting has been almost uniformly wrong.
  They say the tax cut permitted is $550 billion. That is not true. The 
tax cut in this budget resolution is $1.3 trillion, and that does not 
count the associated interest costs. It is only one part of the tax cut 
which is $550 billion. That is the so-called reconciled amount. Those 
are the amounts that will move under special protection, that will 
restrict Senators' right to amend, restrict Senators' right to 
unlimited debate, fundamentally restrict the determined minority's 
ability to stop what they believe will damage this country in a 
fundamental way.
  I hope anybody voting on this understands. If you vote for this 
budget resolution, you are voting for $1.3 trillion of tax cuts, of 
which $550 billion is reconciled, moving under special protection that 
fundamentally restricts the Senators' basic rights to amend and debate.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. If you count in the additional interest costs which 
would have to be incurred to do this tax cut because of the borrowing 
that would be necessary to fill the deficit gap created by the loss of 
revenues from the tax cut, what would the cost of this tax cut be?
  It seems to me eminently reasonable that one also ought to factor in 
the interest costs associated because you have to borrow money in order 
to do the tax cut. Am I correct that we would have to borrow money in 
order to do the tax cut?
  Mr. CONRAD. The Senator is on to something very important. Really, 
this understates the cost of the tax cut. The tax cut that is in this 
resolution, $1.3 trillion, has an additional cost, the associated 
interest cost, because this is all borrowed money. That would be 
another about $300 billion.
  So the total cost goes to $1.6 trillion--truly stunning when we are 
already at record budget deficits, when we are at war, the cost of 
which no one knows, and when we are on the eve of the retirement of the 
baby boom generation. So there can only be one result; that is, to 
dramatically explode deficits and debt.
  Mr. SARBANES. May I ask the Senator one more question about his chart 
before he puts it down?
  Mr. CONRAD. Yes. I would be pleased to yield.
  Mr. SARBANES. There is all this focus about this $550 billion figure 
being the amount of the tax cut. But as I understand it, the $550 
billion figure is only part of the tax cut that is in the budget 
resolution. This is the part that would proceed under the special 
procedures, the so-called reconciliation, which prevents extended 
debate in order to address the issue. The budget resolution provides 
$550 billion there, but it also provides an additional $725 billion in 
additional tax cuts. Now, they would have to go through the regular 
procedure, but, nevertheless, that is $1.3 trillion. And then you add 
the interest, and you are talking about $1.6 trillion tax cuts, at a 
time when we are in budget deficit.
  Mr. CONRAD. Record budget deficit.
  Mr. SARBANES. I understand. In fact, I understand that the budget 
deficit for this year is now projected to be twice as much as it has 
ever been before--an absolute record budget deficit.
  Mr. CONRAD. Yes. We now estimate the budget deficit, under this 
budget resolution, will be between $500 and $600 billion for this year 
alone on a $2.2 trillion budget. Some have said these deficits are 
small. There is nothing small about them. They are massive. They are 
record. They are the biggest we have ever had in dollar amount.
  If we look back to 2 years ago when we were told that we could 
expect--instead of deficits--nearly $6 trillion of surpluses, we now 
know, if we adopt what is before us, instead of $5.6 trillion of 
surpluses--if we adopt the budget resolution before us--we will have 
over $2 trillion of deficits over that same period.
  Mr. SARBANES. Will the Senator yield for a question on that chart?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. In January of 2001, when this administration first came 
in, we were projecting out, over the 10-year time period, a surplus of 
$5.6 trillion. At the time, President Bush, and his Republican 
supporters, said: Well, we are going to run this huge surplus. We 
should do a tax cut because we don't want to be taking taxes just to 
build up a surplus.
  Well, a lot of people said: Don't be so sure about that. Let's not 
rush into it. Why don't we pay down the debt some more? We are finally 
doing that.
  No, no, they wanted to do this big tax cut because we had a projected 
surplus. Well, they did their tax cut. They rammed that through here.
  Now we are projecting big deficits, and they want to do another big 
tax cut, even though they are projecting big deficits.
  Whatever the fiscal situation is--big surpluses or big deficits--it 
makes no difference; they are bound and determined to do tax cuts for 
very wealthy people.
  As I understand it, analysis of the President's tax proposal shows 
that almost 50 percent of the benefits of that tax cut go to the top 1 
percent of the population. Almost 75 percent of it goes to the top 5 
percent of the population.
  So there is this absolutely zealous drive for big tax cuts for very 
wealthy people regardless of the Nation's fiscal situation and 
regardless of the fact that this proposal is going to drive us deeper 
into deficit and deeper into debt. Isn't that the situation?
  Mr. CONRAD. It is the situation. And what is most stunning about it 
is that it is all done at the worst possible time: at a time we are at 
war, the cost of which none of us can know; and also on the eve of the 
retirement of the baby boom generation, a cost we do know because the 
number of people eligible for Social Security and Medicare are going to 
double.
  And I believe this proposal is very clear. If this is adopted, this 
will head us in the direction of massive cuts in Medicare, in Social 
Security, and most of the rest of Government as we know it.
  I think it is absolutely foreordained, if this is adopted, you will 
see proposals that will be cloaked in the soft

[[Page 9523]]

language of reform which will hide deep cuts in Social Security, in 
Medicare, and all other parts of Government. You can really have no 
other outcome because you have record budget deficits now; and what 
this proposal is, is to cut taxes by $1.3 trillion, not counting the 
interest cost, to increase spending by $1.1 trillion over the so-called 
baseline, including the interest cost. What you are left with, then, is 
even deeper deficits, right on the brink of the retirement of the baby 
boom generation which starts in 2008, which we all know what it will 
lead to. And I will show, as we go through this presentation, where 
that leads.
  Mr. SARBANES. Will the Senator yield for a further point?
  The Senator made reference to the context in which we find ourselves. 
I am frank to tell you, I think this is a reckless budget resolution. I 
think the President's budget proposal was reckless. I think this 
resolution is reckless. As the very able Senator from North Dakota has 
pointed out, we are in a war, and we have not only the war costs but 
the reconstruction costs. We are about to do a supplemental of about 
$80 billion, most of it devoted to that purpose. And there is no one 
who contends that is anything other than the initial downpayment on the 
cost.
  But, furthermore, we still have the worldwide battle against al-Qaida 
and international terrorism. We have to confront the challenge of 
providing for homeland security. We have other threats around the 
world, to mention but one, North Korea.
  No prudent person would give away their fiscal ability to deal with 
those situations the way this budget resolution does. It is 
extraordinary what this budget resolution is doing.
  I ask my friend from North Dakota, isn't this an abject failure to 
reserve fiscal strength to deal with these pressing problems which we 
know are right there in front of us?
  Mr. NICKLES. Mr. President, just a parliamentary inquiry: I would 
like to remind my colleagues the rules of the Senate are to address the 
Chair, ask questions through the Chair, not to have colloquies between 
two Senators.
  Mr. CONRAD. I would be happy to answer my colleague by saying this: 
This process and this budget, to me, is totally disconnected from 
reality. In fact, I have never seen a greater disconnect with reality 
than is represented by this budget. Here we are, with record budget 
deficits, approaching $500 to $600 billion this year, and what we do is 
increase spending under this resolution, cut the revenue, plunging the 
country deeper into deficits, when we are at war, the cost of which we 
do not know, and when we are on the eve of the retirement of the baby 
boom generation.
  Let me just say, this fiscal turnaround that we have seen--when 
people ask us, well, where did the money go? Here is where it went. 
Over the period in question, 36 percent went to the tax cuts--both 
those already passed and those proposed.
  The second biggest reason for the disappearance of the surplus is the 
additional spending caused by the attack on the country and the war; 
that is, the increased defense spending and the increased homeland 
security spending.
  The third biggest reason is that revenue is coming in below 
expectation, apart from the tax cut; that is, the tax cut is the 
biggest single reason. The third biggest reason--close to the second--
is that revenue is coming in below what was anticipated.
  And the smallest reason, over the 10-year period, is the economic 
downturn at 9 percent.
  The result of all this is that the budget before us--after many of 
the Members of this body pledged not to take Social Security for other 
purposes--this is the total amount of Social Security surplus over this 
period: $2.7 trillion.
  This budget takes $2,698,000,000,000 from the Social Security trust 
fund surpluses and uses it for other purposes, uses it to fund the tax 
cut, uses it to pay for other things. This budget has deficits. Some 
have said they are small and short term. Here is what they are. They 
are not small, and they are not short term. This year we now anticipate 
a deficit on an operating basis of $558 billion, by far the biggest we 
have ever had. You see throughout the rest of the decade, we never get 
below $300 billion in deficits. Again, that is not counting Social 
Security, not taking Social Security and using it to pay for other 
things.
  Mr. SARBANES. Will the Senator from North Dakota yield for a question 
about one of his charts?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. I would like to go back to the previous chart. As I 
understand it, because of the tax cut and also because we are 
constrained to do these programs for the war and for homeland security, 
over this 10-year period we are going to be using $2.7 trillion from 
the Social Security trust fund to cover those costs; is that correct?
  Mr. CONRAD. That is correct.
  Mr. SARBANES. As I understand it, if we didn't do that, that $2.7 
trillion would be in the Social Security trust fund to help us take 
care of the extra stress on the system that will come from the 
retirement of the baby boomers, this upsurge in people taking 
retirement, so that one needs to understand if you didn't do the tax 
cut or if you constrained some of these other programs, you wouldn't 
then be drawing down the Social Security trust fund and, therefore, it 
would be in a better position to address the extra stress that will 
come when the baby boom generation retires. Is that the connection one 
should be making here?
  Mr. CONRAD. Let me just say, the Senator has put his finger on what 
to me is so stunningly irresponsible about this budget. If this money 
was not being taken and used for other purposes, the surplus money, it 
could then be used in one of two ways. It could be used to pay down 
debt that would better prepare us for what is to come, or it could be 
used, some portion of it, to prepay the liability of what we know is to 
come. That is what other countries are doing. Other countries, 
recognizing the same demographic time bomb, are taking the surpluses 
being generated now in their trust funds and are investing them or they 
are prepaying the liability.
  Instead of paying down debt or prepaying liability, we are using the 
money for tax cuts and for other expenditures of government that leave 
us less capable to deal with what is to come.
  That is a profound mistake, and we will live to regret it. And we 
will then face a circumstance in which we will be asked to make even 
more draconian reductions in the benefits of those programs, or drastic 
tax increases.
  Let me say, the President told us 2 years ago his budget would pay 
down a record amount of national debt. He said:

       We will pay off $2 trillion of debt over the next decade. 
     That will be the largest debt reduction of any country, ever.

  He said then:

       Future generations shouldn't be forced to pay back money 
     that we have borrowed. We owe this kind of responsibility to 
     our children and grandchildren.

  I believe the President was absolutely right in saying that. But look 
at what is happening. There is no record paydown of debt. There is no 
paydown of debt. Instead the gross debt of the United States is 
exploding. From $6.7 trillion in 2003, instead of being virtually paid 
off, which he said would occur by 2008, we are nearly doubling the 
national debt just in this 10-year period. So the national debt would 
be $12 trillion at the end of 2013 if this budget is adopted, the plan 
that it contains.
  The President this year told us:

       This country has many challenges. We will not deny, we will 
     not ignore, we will not pass along our problems to other 
     Congresses, to other presidents and other generations.

  In this very budget, what we see contained is a call for the biggest 
increase in the debt limit in the history of the country. They are 
asking for a $984 billion increase in the debt limit as part of this 
proposal. That is the biggest increase in the national debt in the 
history of America.
  Mr. SARBANES. Will the Senator yield?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. This budget conference report is seeking an increase in

[[Page 9524]]

the debt limit of just under $1 trillion; is that correct?
  Mr. CONRAD. Yes, $984 billion. The previous record increase was under 
the previous President Bush, November of 1990, when they got a $915 
billion increase in the debt limit. As you know, the House has 
different rules than the Senate. We will not conclude action on the 
debt limit here probably until sometime later. But that is what this 
budget resolution contemplates, an increase in the debt limit now of 
$984 billion, nearly a $1 trillion increase in the debt.
  Mr. SARBANES. If the Senator will yield further, until when is this 
additional $1 trillion increase in the debt limit supposed to last? 
Will they not come back at any point, or are they going to come back 
again and again seeking increases?
  Mr. CONRAD. Under this budget proposal, they will probably have to 
come back as early as next year----
  Mr. SARBANES. Oh, my.
  Mr. CONRAD. Late next year and ask for even more expansion of debt 
because this budget resolution is one constructed on deficits and debt. 
It is a testimony to deficits and debt. It can only get worse.
  It is interesting, the effect on the rest of the budget. For example, 
the interest costs, we were told 2 years ago the interest costs to the 
Federal Government over this next decade would be $622 billion. 
Instead, because of the failed fiscal plan, the interest costs alone 
will be $2.3 trillion. That is an increase in interest costs of $1.7 
trillion. Obviously, we have to pay it because we have borrowed it, and 
we owe it. But those are dollars that can't buy a single tank. They 
can't buy a single weapons system. They can't buy a single airplane. 
They can't educate a child. They can't house the homeless. They can't 
do any of the other things the Federal Government has responsibility 
for. They can't pay down debt. Those are dollars that are just used to 
service the debt we are running up.
  Mr. SARBANES. Would the Senator yield on that point?
  Mr. CONRAD. I am happy to.
  Mr. NICKLES. I remind my colleagues, they need to ask questions 
through the Chair, and they need to ask questions and answer questions.
  Mr. SARBANES. Mr. President, I would like to put a question to the 
Senator from North Dakota.
  Mr. CONRAD. I am happy to yield.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from North Dakota.
  Mr. SARBANES. Mr. President, when this administration came into 
office, it was my recollection that the Federal budget was running a 
surplus. Therefore, there was not only no increase in Federal interest 
costs, but we were, in fact, year to year, reducing Federal interest 
costs and had done so for 2 or 3 years prior to President Bush coming 
into office; is that correct?
  Mr. CONRAD. The Senator is correct. We had actually been in the happy 
circumstance of not only running a balanced budget, but running a 
surplus. In fact, we had stopped the practice of taking Social Security 
trust fund surpluses to fund other functions of Government. It was 
critically important that we do that because we are getting close to 
the retirement of the baby boom generation.
  Some of our colleagues say to us that, you know, deficits don't 
really matter anymore. What a profoundly wrong notion that is. 
Obviously, deficits matter. When the Federal Government is compelled to 
borrow money, that puts us into competition with others who want to 
borrow money, that drives up the cost of interest rates, and that slows 
the economy. That is why when I reviewed this budget, it is not an 
economic growth budget, it is a budget that will hurt long-term 
economic growth because of the deadweight of these deficits and debt. 
That is not just my opinion.
  I will get to the point in the presentation where we talk about 
others who are economists who have been hired by the White House, by 
the CBO, to tell us the implications of what is being done; and what 
they have concluded is that this will hurt economic growth because it 
is all being financed by borrowed money.
  What does that mean? When the Federal Government borrows money, we 
are in competition with the private sector, and that reduces the pool 
of societal savings. That is a dissavings. When you reduce the pool of 
societal savings, that reduces the amount of money available for 
investment and that hurts long-term economic growth.
  It is not just this Senator who says that. Interestingly enough, the 
CBO is headed by a man chosen by our colleagues on the other side, who 
came directly from the White House. He has done seven long-term models 
looking at the effect of this budget. In four of the seven, he said 
deficits would be even worse as a result of this budget proposal. In 
three he found it would be better, but only on the assumption that 
Americans, over the next decade, would work harder in preparation for 
the massive tax increases that will inevitably flow from the adoption 
of this kind of a budget.
  I hope people understand where this is all headed because it is as 
clear as it can be. Nobody can vote today and say they didn't know. 
Nobody can vote today and not have their record reviewed and have 
people look back and say these people led us down a path of deficits 
and debt that fundamentally weakened the country.
  This is a chart from the President's own budget document. This comes 
from his analytical perspectives, page 43. This is his long-term 
outlook. We never escape from deficit under the President's plan--
never--according to his own estimates. In fact, we are in the sweet 
spot now. You can see that the deficits here are the smallest they are 
going to be. Yet these are record deficits. It may look like a small 
amount of red, but it is the most red we have ever experienced, and it 
is going to get worse. Under the President's own analysis of his plan, 
it gets worse because the cost of the tax cuts explode at the very time 
the cost of the Government explodes because of the retirement of the 
baby boom generation.
  Mr. SARBANES. Will the Senator yield for a question on that chart?
  Mr. CONRAD. Yes.
  Mr. SARBANES. As I understand it, this chart shows the deficit as a 
percentage of the gross domestic product and it is almost 14 percent at 
this point out here; is that correct?
  Mr. CONRAD. That is correct. If this were in dollar terms, I could 
not put it on a chart. The sea of red ink that would follow would not 
fit on any chart that I am allowed to use on the Senate floor.
  Mr. SARBANES. The European Union, when they made the economic 
agreement with respect to all the European Union countries, set as a 
requirement that the deficit that a country was running could not be 
greater than 3 percent of GDP; and countries had to go through a 
rigorous effort to get below the 3 percent of GDP figure as a deficit.
  Yet what the President has given us, and what is reflected in this 
budget resolution as a first significant step in that direction, is a 
policy that is going to put the deficit as a percentage of GDP in the 
double figures. It will well exceed 10 percent.
  Mr. CONRAD. What is interesting is that, right now, we would not be 
eligible to join the European Union because our deficit is in excess of 
what is required for a member state to join the European Union. We 
would be disqualified. We are headed for a circumstance in which we 
would not be qualified for decades to come.
  The fundamental reason is contained on this chart, I say to my 
colleague. This, to me, is the single most important thing to 
understand. This chart shows the Social Security surplus, Social 
Security trust fund, the green bar. The blue bar is the Medicare trust 
fund. The red bar is the cost of the proposed and already-enacted tax 
cuts. What one can see is that right now we are running big surpluses 
in the Medicare and Social Security trust funds. In fact, the tax cuts 
right now, in this part of the time period, are less than the trust 
fund surpluses.
  Look what happens when the baby boomers start to retire and those 
trust funds go cash negative. It is at the very time that the cost of 
the President's

[[Page 9525]]

tax cuts explode. What does that do? That leads us into deep deficits 
and debt.
  I don't want anybody to conclude from this that this Senator doesn't 
favor some tax cuts because I do. I think they are necessary right now 
to stimulate the economy, give lift to the economy. But we have to 
balance the need for short-term additional stimulus both by way of 
spending and tax cuts, with the long-term need to return to fiscal 
balance and to prepare for retirement of the baby boom generation.
  What is being done here does neither because only 5 percent of the 
cost of the President's proposed tax cuts in the stimulus package are 
effective this year, when we need the stimulus, when the economy is 
weak. Ninety-five percent of the cost is in future years, when it is 
only going to explode deficits and debt. It will lead to a weakened 
economic position and will fundamentally alter this country's ability 
to meet its obligations.
  Mr. SARBANES. I am struck in looking at that chart by the extent to 
which the cost of these tax cuts explodes, as the Senator says, in 
future years.
  For instance, take the year 2023, this is all deficit. But all of 
this part of that deficit is from the explosion of the tax cut. The 
balance is from what happens in the trust funds for Medicare and Social 
Security. But this chart so clearly demonstrates that these tax cuts 
that are being talked about have built into them a tremendous expanded 
cost in future years.
  It is extraordinarily dramatic because all of that is exploding tax 
cuts. We are being set on a path that is dooming us to large deficits 
and large debt.
  Mr. CONRAD. Mr. President, I say to my colleague, what this means is 
not just numbers on a page, not just deficits, whether people care 
about deficits or not, they matter a lot to the functioning of the 
economy. They matter a lot to the ability of the United States to keep 
its obligations.
  The implication of all this is much more direct. This is going to 
compel at a future time, according to the former Congressional Budget 
Office Director, massive cuts in benefits of Social Security and 
Medicare, massive tax increases, and massive debt. That can be the only 
outcome because none of this adds up in any serious way.
  For those who say deficits do not matter, Chairman Greenspan of the 
Federal Reserve believes deficits matter. This is what he said in 
testimony before the Banking Committee, where my colleague is the 
ranking member:

       There is no question that as deficits go up, contrary to 
     what some have said, it does affect long-term interest rates. 
     It does have a negative impact on the economy, unless 
     attended.

  It is not just the view of the Chairman of the Federal Reserve, but 
the Committee for Economic Development, which is made up of some of the 
most prominent business leaders in the country, has looked at these 
budget proposals, and this is what their conclusion is:
  No. 1, current budget projections seriously understate the problem;
  No. 2, while slower economic growth has caused much of the immediate 
deterioration in the deficit, the deficits in later years reflect our 
tax-and-spending choices;
  No. 3, deficits do matter;
  And No. 4, the aging of our population compounds the problem.
  The other day in the New York Times, some of our most able former 
colleagues and former members of administrations, both Republican and 
Democrat, put out this op-ed. This is former Senator Kerrey, former 
Senator Nunn, both Democrats, former Senator Rudman, a prominent 
Republican, Pete Peterson who was in the Cabinet of a Republican 
administration, Robert Rubin, former Secretary of the Treasury, and 
Paul Volcker, the distinguished former head of the Federal Reserve.
  They asked the question:

       Will Congress stand up for fiscal responsibility?

  They said in this article:

       Tax cuts are the primary focus of this year's budget 
     debate. To speed enactment, Congress is planning to use a 
     special fast-track procedure called reconciliation. While 
     determining the size of the tax cut to be given fast-track 
     protection in the budget is sometimes dismissed as a 
     procedural matter, it is not. Whatever its size, a tax cut 
     that receives this protection is almost certain to be enacted 
     in later tax legislation. Given the rapidly deteriorating 
     long-term fiscal outlook, neither proposal--

  Neither the House nor the Senate proposal--

     is fiscally responsible. It is illogical to begin turning 
     back toward balanced budgets by enacting a tax cut that will 
     only make the long-term outlook worse.
       Furthermore, the proposed tax cuts are not useful for 
     short-term fiscal stimulus, since only a small portion would 
     take effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits will 
     eventually slow the economy.
  When our friends say this is a growth package, it is not a growth 
package. This is a package that undermines long-term growth. We have 
six of our most distinguished colleagues, former Senators and former 
members of the Cabinet, on a bipartisan basis telling us that is the 
case.
  We do not have to just look to the Chairman of the Federal Reserve or 
former Cabinet members or former Senators; we can look at the people 
who have been hired by the White House to tell them the effect of their 
policies. This is what they said.
  They showed that the policy being proposed will give a short-term 
bump, but after 2004, we will get less economic growth than if we did 
nothing. We would be better off to do nothing than to adopt this policy 
because it explodes deficits and debt. The deadweight of those deficits 
and debt will hurt long-term economic growth.
  We have another distinguished economist, the head of Economy.com, who 
did this analysis of two competing proposals, what the Democrats 
proposed and what the President proposed. This is their conclusion.
  The Democratic plan will give almost twice as much economic growth in 
2003 and 2004 and not do the long-term harm of the President's proposal 
because we do not explode the deficits and debt in the way the 
President's plan and the budget plan before us does.
  If we just want to look at reality, since we pursued this course, 
since we have gone to this notion of borrow and spend, here is what has 
happened. We have lost 2.6 million jobs.
  Mr. SARBANES. Mr. President, will the Senator yield on that point?
  Mr. CONRAD. I will be happy to yield.
  Mr. SARBANES. My understanding is that the unemployment rate in the 
course of this administration has gone from 4 percent to almost 6 
percent, and that the number of long-term unemployed, people out of 
work for more than 26 weeks, is now at almost 2 million people. 
Consumer confidence in the latest survey is at a 10-year low. So we are 
facing serious economic challenges.
  Of course, the Senator suggested, as did the quote from our former 
colleagues, that you could do some effort to boost the economy this 
year and next year to try to bring us out of this situation, but the 
President's proposal does very little of that.
  What the President's proposal does is put into place these exploding 
tax cuts out into future years that will significantly boost the 
deficit and the debt problem, rather than addressing the immediate 
challenge we have of trying to give a boost to the economy now. So not 
only does this budget proposal commit the Nation to a serious long-term 
fiscal problem, but it fails to do what needs to be done in the short 
term, in terms of trying to restore jobs and economic growth. I ask my 
colleague, is that not correct?
  Mr. CONRAD. I believe that is correct. I say to the Presiding Officer 
in response to my colleague, I really do not know what could be more 
clear. We do not need to just look at economists' projections. We can 
look at our own history.
  We had this attempt in the 1980s to pursue the economic policy that 
is now being attempted. It did not end happily. It exploded the 
deficits and debt of the country. It quadrupled the national debt.
  Then in the nineties, we took a different approach, the approach of 
balancing budgets, of investment in technology, of bringing down 
Federal

[[Page 9526]]

spending, of raising revenue to balance budgets. What it kicked off was 
the longest economic expansion in our Nation's history. We turned 
deficits into surpluses, and we had the lowest unemployment rate in 30 
years, the lowest inflation rate in 30 years, and the strongest period 
of business investment in our Nation's history.
  That is a real-world example of two competing views of how to 
strengthen the economy. Now we are going back to the failed policy of 
the eighties and doing it at the worst possible time.
  Then there was time, before the baby boomers started to retire. Now 
there is no time. The mistakes that are made now will be paid for by 
increased debt, by reduced benefits, by increased taxes. That is where 
we are headed.
  And I would quote again our most distinguished colleagues warning us:

       Congress cannot simply conclude that deficits do not 
     matter. Over the long-term, deficits matter a great deal. 
     They lower future economic growth by reducing the level of 
     national savings that can be devoted to productive 
     investments.

  That is the argument I have been making this morning.

       They raise interest rates higher than they would be 
     otherwise. They raise interest payments on the national debt. 
     They reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an unsupportable tax burden for the next 
     generation.

  I guess we are in this mode now where we live for the moment. I guess 
we do not worry or care about what we do now, how it affects the 
future. But we ought to. The lessons are clear. The warning signs are 
there.
  Every Senator is going to be responsible for their vote. Every 
Senator can be held accountable in the future for what they did to 
either strengthen this country or to weaken it. Every Senator is going 
to have a very clear choice in a few hours: Do they support a budget 
that plunges us deeper into deficits and debt, or do they say it is 
time to pull back?
  This is the economic record on job creation of administrations going 
back to President Eisenhower. Every one of them created jobs. This is 
the first one to lose private sector jobs in 50 years. If we look to 
public opinion, the American people are saying:

       On the home front, Americans strongly agreed with the past 
     week's Senate action to slash the President's proposed tax 
     cut. Two in three respondents--Republicans, Democrats and 
     independents alike--favored the Senate plan to reduce Bush's 
     $726 billion tax cut by more than half to help pay for the 
     war, shore up Social Security and reduce the deficit.

  That is two-thirds of the American people sending us a message. I do 
not think we should do budgets based on polling, but I do think we 
ought to do it based on common sense, and common sense ought to tell us 
that exploding deficits and debt when we are at war, exploding deficits 
and debt when the baby boom generation is about to retire, exploding 
deficits and debt when we know it will harm long-term economic growth, 
is truly a fool's errand, and we will live to rue the day we made 
shortsighted decisions.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. I yield whatever time he may consume to the Senator from 
Maryland.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I thank the very able Senator from North 
Dakota, the former chairman of the Senate Budget Committee and now 
ranking member, for an extraordinarily perceptive opening statement 
with respect to this budget resolution.
  The Senator from North Dakota has taken a long-term view of where the 
American economy is going and the challenges we face. He has assumed 
that role repeatedly, and I think it is extremely important that we not 
simply live for the moment and that someone point out the direction in 
which we are going and what the consequences will be.
  The vote we are about to cast has consequences. It has consequences 
for today, tomorrow, and many years into the future. Members of the 
Senate need to fully appreciate the import of this decision.
  I will speak a few minutes about equities in this budget resolution. 
What needs to be understood is that the whole driving thrust of this 
budget resolution is to put in place a large tax cut which, under the 
President's proposal, will go overwhelmingly to people at the very top 
of our income and wealth scale in this country.
  The drive to do that is carried so far that my colleagues on the 
other side of the aisle are prepared to twist the procedures of this 
institution like a pretzel in order to push through their large tax 
cuts because they are encountering considerable resistance to them by 
people who are stopping and looking at them and saying this is not the 
responsible thing to do. Indeed, it is a reckless thing to do.
  One of my colleagues looking at what they are trying to do said: It 
never occurred to me, I never thought I would see the day when they 
would be using these kinds of gimmicks in order to push their agenda.
  This is no proper process. This is simply a twisting of process in 
order to try to get to this tax cut result.
  Let's look at what the tax cut does and its implications. The budget, 
of course, sets all our national priorities. We make fundamental 
decisions within the budget: How much support we will provide for 
particular programs, what we will do on the tax side. Of course, the 
aggregate amount of the budget can have a profound effect upon our 
overall economy, not only this year but extending well into the future. 
The Senator from North Dakota very carefully and lucidly spelled out 
those large budget consequences, as is, of course, the responsibility 
of the leader on the Budget Committee to do.
  We know the fiscal situation has deteriorated drastically since this 
administration took office. In January of 2001, when President Bush 
took office, the Congressional Budget Office was projecting a budget 
surplus over 10 years of $5.6 trillion. The President pointed to that 
surplus as a rationale for doing the 2001 tax cuts. Now, over that same 
period, the Congressional Budget Office is projecting a $2.1 trillion 
deficit, assuming that the President's tax proposals are adopted. This 
is a swing of $7.7 trillion in our fiscal position, a swing from a 
projected surplus of $5.6 trillion to a projected deficit of $2.1 
trillion.
  Yet facing this, the whole focus of this budget resolution has been 
whether to create room within it for another very large tax cut which 
the President is seeking. This is not going to be a growth package. In 
fact, there is hardly any stimulus in the President's proposal for this 
year or next year. Instead, this budget is going to drive us deeper 
into the deficit and debt hole. It is going to leave us with deficits 
projected out into the indefinite future. We are really mortgaging away 
our economic future. This is very bad macroeconomic policy.
  In addition, within this budget our urgent national priorities are 
not being adequately addressed. There is not enough for homeland 
defense. We have a pressing health care problem in this country with 
regard to both the uninsured and prescription drug benefits for our 
senior citizens. We have an affordable housing crisis in which millions 
of working families cannot afford even a modest apartment in many high-
cost cities. The mayors across the country are saying they are getting 
inadequate support to meet their responsibilities. Our first responders 
also have very large demands placed upon them. And instead of providing 
fully for education to give meaning to the Leave No Child Behind 
educational policy, we are focused on a tax cut proposal seeking to 
make sure no millionaire is left behind.
  It must be understood that if you do these large tax cuts that 
benefit primarily wealthy people, you will not be able to support a 
number of programs which people all across the country are crying out 
for, and you will be boosting the deficit in a completely unreasonable 
fashion. There is no magic formula; it is all a question of balance. My 
own view is that a more sensible balance would be not to do these large 
tax cuts, and instead to strengthen some of these programs, and then to 
use the balance--most of the money--

[[Page 9527]]

to hold down the deficit and not boost the debt and not commit the 
Nation down that path.
  Let me talk about one other issue of fairness and equity. I want to 
note that in almost every previous instance when the Nation went to 
war, not only did we not cut taxes, we raised taxes in order to help 
pay for the war and meet its costs. There is a conference committee 
meeting at this very moment on the supplemental appropriations bill. We 
expect it to be somewhere in the vicinity of $80 billion, most of that 
directed to the Department of Defense for the costs of the war and some 
for reconstruction. It is obvious to everyone this is but a 
downpayment. No one is asserting this is anywhere near meeting what the 
full costs will be. So we know there is more to come.
  That raises the question of whether this is the appropriate time to 
commit away significant resources for a tax cut to benefit wealthy 
Americans. As I said, analysis indicates that almost half of the 
benefits of the President's proposal would go to the top 1 percent, 
almost three-quarters to the top 5 percent. Is this the fair and 
equitable thing to do at the very time when the Nation is being 
rallied, as it should be, to support our men and women in the Armed 
Forces?
  This is the time when we are talking about sacrifice, and it is 
appropriate we should be talking about sacrifice at a time like this 
because one cannot follow the events taking place now in Iraq without a 
deep appreciation of the sacrifice our fighting men and women are 
making and the risks they are taking every minute.
  Let me ask this question: What sacrifice are those who are most 
favored in our society in terms of their economic position making at 
this critical juncture in our Nation's history? Not only are they not 
making a sacrifice, but indeed they are getting a very large tax cut 
which will place our economy in a more difficult position as we move 
into the future. What a sad commentary that these excessive tax cuts, 
which will contribute to deficits, which will build up the debt and the 
burden of paying the interest on that debt and, indeed, paying down 
that debt, will fall upon the fighting men and women when they return 
home and undertake their economic activities moving out into the 
future.
  They are now being called upon to make a double sacrifice, the 
sacrifice of serving in the Middle East and the sacrifice when they 
return home of helping to pay off this debt that has arisen in large 
part because of these enormous tax cuts that are being given to those 
at the very top of our income scale. Where is the fairness and the 
equity in this approach?
  The Nation faces serious challenges. We have our men and women at 
this very moment in danger abroad. It is a time for all to sacrifice. 
What sacrifice here at home will the beneficiaries of the tax cut be 
making? This is such a sharp contrast with previous occasions when the 
Nation has gone into war. In most instances, not only did we not give a 
tax cut, recognizing we had to pay for the war, we, in fact, increased 
taxes in order to meet that burden.
  At the beginning of World War II when Winston Churchill became Prime 
Minister, he told his nation, ``I have nothing to offer but blood, 
toil, tears and sweat.'' Our young men and women positioned in the 
Middle East are called upon to sacrifice even as we debate this budget 
resolution. There will be sweat, there will be tears, there will be 
toil, and there will be blood on their part. What sacrifice will be 
made by those who are the most well off in our society under this 
budget resolution? None whatsoever. In fact, not only are they making 
no sacrifice, but they are programmed to reap benefits, extensive 
benefits, at a time when the Nation is facing critical challenges. 
Should not those most advantaged be making their own sacrifice instead 
of seeking to reap a large economic benefit?
  I urge the defeat of this budget resolution. I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I would like to go back to the editorial, 
the opinion piece that was in the New York Times written by three of 
our former colleagues: Senator Kerrey, Senator Nunn, Senator Rudman--
Senator Rudman, a Republican who was on the Budget Committee. Senator 
Nunn and Senator Kerrey took great interest in budget affairs here in 
the Senate. Also, Pete Peterson, the former Secretary of Commerce, 
Republican; former Secretary of the Treasury Robert Rubin; and the 
former head of the Federal Reserve, Mr. Volcker; warning us that what 
we are about to do here is not fiscally responsible.
  They said in this article--and I want to read an extended version of 
this for my colleagues because I think it is critically important it be 
in the Record before we vote. They said:

       The fiscal outlook is much worse than official projections 
     indicate. These projections assume that the tax cuts enacted 
     in 2001 will expire at the end of 2010. They also assume that 
     discretionary spending, the part of the budget that pays for 
     national defense, domestic security, education and 
     transportation, will shrink continuously as a share of the 
     economy. Neither of these assumptions is realistic.
       Moreover, the official projections do not include the costs 
     of war and reconstruction in Iraq. And they ignore the 
     inevitable need to reform the alternative minimum tax, which 
     is not indexed for inflation and will apply to some 40 
     million households within 10 years--up from two million 
     today.

  Let me just say with respect to the alternative minimum tax, boy, 
have a lot of people got a surprise coming. They think they are going 
to get a tax cut under this plan. But there is this little thing nobody 
talks about called the alternative minimum tax that only applies to 2 
million taxpayers today. By the end of this period of the budget, it is 
going to apply to 40 million taxpayers. It costs $600 billion to fix. 
Not a dime of it is in this budget.

       Under more realistic assumptions--

  They go on to say in their opinion piece--

     the deficit projections are cause for alarm. A recent study 
     by Goldman Sachs includes this forecast: if the president's 
     proposed new tax cuts are enacted, a Medicare prescription 
     drug benefit is approved, [which he has also proposed], the 
     A.M.T. is adjusted and appropriations grow modestly, the 
     deficits over the next 10 years will total $4.2 trillion--

  That is double the amount I have been talking about in my assessment 
of this budget this morning--twice as much as what I have been warning 
my colleagues about--

     even if the Social Security surplus is included.

  It will be $4.2 trillion of deficits. In other words, if the Social 
Security trust funds are used to pay for other things, the deficit will 
be $4.2 trillion.

       If [the Social Security trust fund] is not included, the 
     deficit would be $6.7 trillion.

  That is just over the next decade.

       Under these circumstances the ratio of publicly held debt 
     to gross domestic product climbs within 10 years to near 50 
     percent, from 33 percent just two years ago.
       And all of this happens before the fiscal going gets tough. 
     Looming at the end of the decade is a demographic 
     transformation that threatens to swamp the budget and the 
     economy with unfunded benefit promises, like Social Security 
     and Medicare, of roughly $25 trillion in present value. Our 
     children and grandchildren already face unthinkable payroll 
     tax burdens that could go as high as 33 percent to pay for 
     these promised benefits.

  They conclude:

       It is neither fiscally nor morally responsible to give 
     ourselves tax cuts and leave future generations with an even 
     higher tax burden.
       And yet tax cuts are the primary focus of this year's 
     budget debate.

  Mr. President, in just a few hours we will vote on this budget. This 
will be a time of choice. This won't be a decision just for this year. 
This will put in place revenue hemorrhages and increased spending that 
will put us on a never ending escalator, going in just one direction--
straight down into deeper deficits, in deeper debt, right on the brink 
of the retirement of the baby boom generation. It will only escalate 
those trends, leaving us in a totally unsustainable position.
  The tax cut that we are voting on is not what has been advertised, 
$350 billion in the Senate--oh, no. The tax cut in this plan, in this 
budget resolution that is before us, is $1.3 trillion; $550 billion 
reconciled to the Finance Committee, $725 billion provided elsewhere in 
the resolution--a tax cut of $1.3 trillion, with an additional interest 
cost of

[[Page 9528]]

some $300 billion, for a total reduction in revenue of $1.6 trillion 
just over the next decade, when we are already in record budget 
deficits.
  This is a proposal that borders on the preposterous. It borders on 
the absurd. I sometimes come to work thinking the Senate of the United 
States has become like Disneyland: It is all illusion here. It is 
totally detached from reality. It has all become the politics of sound 
bite. Substance has absolutely fallen by the wayside, and there is no 
serious concern where all this leads. But it is inevitable. This leads 
to massive deficits and debt that can only undermine the strength and 
security of this economy, that can only endanger the economic lives of 
the American people.
  This is profoundly wrong, and I urge my colleagues to think--to 
think, to pause. I know there is a rush to judgment here. We are on a 
Friday afternoon right before a 2-week break. Members want to leave.
  But what is going to be decided here has profound consequences for 
the future of our Nation; a $1.3 trillion tax cut--not paid for, not 
offset by spending reductions, but paid for by borrowed money and by 
looting the trust funds of Social Security and Medicare. That is what 
is about to happen here.
  Virtually every economist has told us, when you take tax cuts like 
this and, instead of paying for them with spending reductions, you 
borrow the money, you weaken the economic vitality of this Nation. You 
take money out of the societal savings, the pool of societal savings, 
thereby reducing the money that is available for investment, thereby 
weakening the economic strength of our Nation.
  That is exactly what our former distinguished colleagues are telling 
us. I repeat their concluding paragraph:

       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be otherwise. 
     They raise interest payments on the national debt. They 
     reduce the fiscal flexibility to deal with unexpected 
     developments [such as the terrorist threat on this country].

  ``Terrorist threat on this country''--that is not part of their op-
ed. I add that because we all now know the devastation that something 
unanticipated can cause to this country.

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

  Now, I know, in politics, we often live for the next election and 
there is not too great a concern for the future. But, colleagues, I 
urge you to think carefully about the decision that is about to be made 
because it will have profound consequences for this Nation. I believe 
it will weaken our country, not strengthen it. I believe it will damage 
long-term economic growth, not improve it.
  Does that mean that on this side we are against any tax reduction? 
No. I would actually support more tax reduction in this year than the 
President proposes in order to give lift to the economy at a time of 
serious weakness. But, over the 10-year period, we simply cannot afford 
$1.3 trillion out of the revenue stream, when we are already in record 
deficit, and when we face the retirement of the baby boom generation, 
and we are at war, the cost of which is unknown.
  I know the other side must believe it has the votes to pass this 
budget. We have had no role in it. We were locked out of the conference 
committee. Oh, we were invited to the first meeting, and never invited 
back. So this is a budget that was constructed in a conference 
committee that excluded the minority.
  That is not the way the business of Congress is supposed to be done. 
There was not one member of the minority present when this scheme was 
hatched to come out here with a budget reconciliation number that 
suggests there is a different number in the Senate than in the House. 
In fact, both committees have been given an instruction of $550 billion 
for the reconciliation provision. But then, in a sleight of hand, the 
Finance Committee is told, there will be a supermajority point of order 
if you carry out the instruction you have been given.
  Never been done before. Never been done before.
  And when the package comes back from the conference committee, even 
though there never was a reconciliation, never was a working out or a 
meeting of the minds between the House and the Senate, the higher House 
number will still enjoy privileged protection on this floor.
  That is a total perversion of the reconciliation process. And, my 
colleagues, it may benefit you today, it may hurt you tomorrow, because 
what goes around comes around. And the real victim is fiscal 
responsibility. The real victims are going to be those who are asked to 
pick up the tab for what we are going to be spending; the real victims 
are going to be those who have to shoulder the burdens that we all know 
are coming. And we are telling them: We are taking our money while the 
getting is good, and we are sticking you with the tab.
  I guess that is the message that is going to come from this Senate 
today. I find it profoundly disappointing that is the way, apparently, 
the votes will fall, that it is OK to run up the tab, forget about the 
future, stick it to the kids. That is what this vote will be about.
  Mr. SARBANES. Mr. President, will the Senator yield on that point?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. I just note, the kids they are sticking it to are the 
ones who are fighting now in the Middle East. They are out there making 
a sacrifice now, and they are going to come home and be called upon to 
make a further sacrifice in order to carry this deficit and this 
increased debt.
  And why are we having the deficit and the increased debt? In order to 
give a large, excessive tax break to very wealthy people. Where is the 
equity in that or the fairness in that? None whatever. None whatever.
  But when you connect it all together, that is exactly what is 
happening. In order to give these large, excessive tax cuts, we are 
going to run these deficits and debt. And the burden on these young men 
and women who are there fighting, will be greatly increased, and they 
will have to pay it off over the rest of their lifetimes when they come 
home, having made that sacrifice.
  Where is the sacrifice, in this budget resolution, on the part of 
those most advantaged in our society? Where is their sacrifice at this 
critical juncture in our Nation's history?
  Not only is there no sacrifice, but they are reaping excessive 
benefits. This budget resolution ought to be defeated.
  I thank the Senator for yielding.
  Mr. CONRAD. I say, Mr. President, in response to my colleague, I 
believe this budget really is a triumph of ideology. And it is a sad--a 
sad--commentary on this body that we pass something that is this 
disconnected from reality.
  At some point we are going to have to join together to try to dig out 
of this mess because this is going to damage the country in a profound 
way. I just hope that at some point reason returns.
  This is not a conservative document. There is nothing conservative 
about this. This is radical and reckless and dangerous, and it should 
be defeated. We should go back, and we should restrain spending, and we 
ought to restrain our appetite for tax cuts. We ought to have the 
courage to stand up and tell the American people what we all know is 
true: That when this Nation is already facing record budget deficits, 
and we are at war--the cost of which we cannot know--and on the brink 
of the retirement of the baby boom generation, we simply cannot do 
everything they would like us to do.
  We cannot have every spending program that they would like. We cannot 
have every tax cut that they would like and be responsible to the 
future. The result will be a weakened America, not a growth package. 
There may be a little bit more growth in the short term--not as much as 
if we had a more robust stimulus package--but, over time, the 
deadweight of those deficits and debt, because all of this is being 
borrowed--is all borrowed money--the deadweight of those deficits and 
debt

[[Page 9529]]

suppresses economic growth, weakens our economy, reduces investment.
  If you do not have investment, you cannot grow. You cannot have 
investment unless there are savings that are available to invest. When 
the Federal Government runs deficits, that reduces the pool of societal 
savings that are available to invest.
  This is an economic package that simply cannot stand scrutiny.
  I am happy to yield.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, as this presentation draws to a close, I 
ask unanimous consent to print in the Record a column by David Broder 
from March 23 entitled ``Cutbacks To Our Children.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Mar. 23, 2003]

                        Cutbacks to Our Children

                          (By David S. Broder)

       Under the shadow of war with Iraq, the House and the Senate 
     last week fought a series of skirmishes over the federal 
     budget for next year. One big, overriding question was at 
     stake: Would President Bush and the Republican majorities in 
     Congress step up to the costs of battle, of homeland defense 
     and of national obligations at home, or would they pass the 
     costs on to future generations?
       The answer, sadly, is that youngsters yet to be born will 
     see their choices limited and their prospects blighted by the 
     decision of today's politicians to press ahead with an 
     unaffordable tax cut even while the costs of war and 
     reconstruction make earlier spending estimates wildly 
     unrealistic.
       The possible doubling of the national debt in the next 
     decade will drive up interest costs that must be paid every 
     year--billions of dollars that will not be available for 
     Social Security, Medicare or any of the myriad 
     responsibilities of the government here and abroad.
       But the squeeze is not all prospective. Some dangerous 
     economies are being forced this year--cutbacks that will have 
     long-term damaging consequences for American society.
       This was brought home to me from an unexpected source in a 
     group interview last week with six state attorneys general--
     four Democrats and two Republicans--who were in Washington 
     for a professional conference. Their theme was one I had 
     heard before, not just from social workers, academics and 
     supposed bleeding-heart liberals but from police chiefs, 
     prosecutors and other hard-nosed denizens of the criminal 
     justice system.
       It is the irrefutable evidence that the most effective 
     anti-crime strategies--and the least expensive--are early 
     childhood education, after-school programs and serious 
     mentoring of youngsters who otherwise are almost certainly 
     fated to be dropouts, delinquents and, yes, prison inmates.
       Larry Long, the South Dakota attorney general and a 30-year 
     career prosecutor, put it this way: ``I can tell you that by 
     the time kids of 12 or 14 are brought into the juvenile 
     justice system, they are lost. All I can do is warehouse 
     them--at huge expense. The sooner and faster we reach kids, 
     the better the chance of their being saved.''
       Long and his counterparts from Colorado, Delaware, Maine, 
     Montana and New Mexico described what they are doing to reach 
     vulnerable youngsters--especially those being raised by 
     single mothers still in their teens--and to help those 
     parents stabilize lives often blighted by drugs or other 
     addictions. But they also confirmed that many of their 
     initiatives are on the chopping block, as states struggle 
     with declining revenue and runaway health care costs for the 
     elderly.
       ``These are proven programs that work,'' said Montana 
     Attorney General Mike McGrath, ``but our budget crisis is so 
     severe we may not be able to meet the federal matching 
     requirement''--the dollars a state must put up to qualify for 
     a grant from Washington.
       That is why they express such dismay at what they are 
     hearing out of the Washington budget proceedings. The 
     briefing paper that all the state law enforcement officials 
     were given by the advocacy group Fight Crime: Invest in Kids 
     spelled out some of the cuts included in the Bush budget.
       Funds for the 21st Century Community Learning Centers 
     after-school program would be cut from $1 billion to $600 
     million. The memo to the attorneys general says that cutback 
     would take a half-million children each year out of those-
     centers, even though unsupervised youngsters make the hours 
     from 3 p.m. to 6 p.m. the peak time for serious and violent 
     juvenile crime.
       The Bush budget increases Head Start funding by $148 
     million, just about enough to keep pace with inflation, but 
     the program now serves only six out of 10 preschoolers who 
     are eligible. Several other early childhood block grants and 
     programs are ticketed for reduction or elimination.
       The picture is similar for other Justice Department an 
     Education Department programs aimed at preventing juvenile 
     delinquency.
       ``This is so shortsighted,'' said Maine Attorney General 
     Steven Rowe. ``For $300 billion, one-fifth the [10-year] cost 
     of the new tax cut, we could fully fund all of these 
     programs'' for the next decade.
       That kind of investment would not only save lives, the 
     attorneys general said. It would save money. ``We are 
     spending $75,000 a year every time we incarcerate someone 
     under 18,'' said Delaware Attorney General Jane Brady. ``We 
     have to jail them, educate them, counsel them and try to 
     rehabilitate them. It would be so much better to help them 
     while they are young.''
       It's another example of the long-term costs will incur 
     today's budget decisions.

  Mr. SARBANES. I want to quote a couple of paragraphs from the column:

       Under the shadow of war with Iraq, the House and the Senate 
     last week fought a series of skirmishes over the federal 
     budget for next year. One big, overriding question was at 
     stake: Would President Bush and the Republican majorities in 
     Congress step up to the costs of battle, of homeland defense 
     and of national obligations at home, or would they pass the 
     costs on to future generations?
       The answer, sadly, is that youngsters yet to be born will 
     see their choices limited and their prospects blighted by the 
     decision of today's politicians to press ahead with an 
     unaffordable tax cut even while the costs of war and 
     reconstruction make earlier spending estimates wildly 
     unrealistic.
       The possible doubling of the national debt in the next 
     decade will drive up interest costs that must be paid every 
     year--billions of dollars that will not be available for 
     Social Security, Medicare or any of the myriad 
     responsibilities of the government here and abroad.
       But the squeeze is not all prospective. Some dangerous 
     economies are being forced this year--cutbacks that will have 
     long-term damaging consequences for American society.

  He then cites conversations he had with a number of attorneys general 
of the States, pointing out that cutting back on programs for young 
people will have disastrous consequences.
  Once again, that is the connection that has to be made to giving 
these large tax cuts. I listened to my colleague from North Dakota as 
he talked about the procedure. I put a question to him. It strikes me 
as all a charade, is it not? As I understand it, we are going to pass a 
budget resolution that is going to have a tax cut figure in it. The 
Finance Committee in the Senate will be told they cannot reach that tax 
figure. They have to have the lower tax figure, as I understand it. But 
then when they go to conference to reconcile their tax figure with the 
higher House tax figure, let's say they settle at the higher tax 
figure, the House tax figure, the full amount, then they can bring it 
back to the Senate and that is protected under the special 
reconciliation procedures. Is that how it will work?
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. I would say to the Presiding Officer, in response to my 
colleague, it is truly a perverted result we have here. Aside from the 
substance of this budget, which I find appalling, the procedure is even 
worse. The procedure that was designed to provide a fast-track 
procedure to reduce deficits has now been seized upon to expand 
deficits. If that isn't standing history on its head, I don't know what 
is.
  What they have done here is, they couldn't get a vote out of this 
Chamber to have a tax cut bigger than $350 billion. So what they did 
is, they went into a secret meeting in a room with the minority locked 
out, and they conjured up a scheme that says both committees are given 
an instruction, the tax committees, to cut taxes under these special 
fast-track procedures by $550 billion and another $725 billion on top 
of that outside of the fast-track procedures.
  And with respect to those that are given the special protection, the 
$550 billion, the Senate Finance Committee is told, oh, wait a minute, 
there will be a supermajority point of order if you report anything 
more than $350 billion. But don't worry about that because when it goes 
to a conference committee between the House and the Senate, you can 
come back with the bigger number and still enjoy the protections, the 
special provisions of reconciliation that take away a Senator's 
fundamental right to debate and amend. That is what is happening here.
  I say to my colleagues, we will rue the day this procedure is 
adopted. It

[[Page 9530]]

has never been done before--never. What is going to happen here is 
going to fundamentally alter the Senate. The Senate was designed by the 
Founding Fathers to be different than the House of Representatives. It 
was designed to let a determined minority slow things down, to 
reconsider. But when it comes to reconciliation, forget it, because we 
have become just an extension of the House of Representatives. It will 
render the Finance Committee of the Senate irrelevant. All the Members 
of the Finance Committee should be aware of that. They are going to be 
irrelevant to this discussion because what is going to matter is what 
comes out of a conference with three or four people from both Chambers. 
They will come back here with whatever they decide. It will be an up-
or-down vote, and a simple majority will pass it. And the fundamental 
role of the Senate is altered and diminished, and the strength of our 
Founding Fathers, the constitutional structure they created to protect 
this Nation, weakened. This is big stuff that is about to happen here. 
This is history-making stuff that is about to happen here. It is a dark 
day for this Chamber and for this country, in this Senator's view.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. While the Senator is waiting, I would like to show my 
colleagues what we have faced, what we were told would be the surpluses 
over the next decade. The Congressional Budget Office made their 
estimates 2 years ago, when they gave us a range of outcomes they said 
we could expect over the next decade. This is what they told us 2 years 
ago. They said this gray area were the possible outcomes, from least 
favorable to most favorable. They adopted as a prediction the midline. 
That is what they told us we were going to have $5.6 trillion of 
surpluses over the next decade.
  I showed this chart repeatedly back in 2001, when we were considering 
the tax cuts, and warned my colleagues that we should not count on any 
10-year projection. Some of my colleagues said: You are being way too 
conservative. We won't have the midpoint of this range of possible 
outcomes; we will have much more than that because the tax cuts will 
produce more revenue.
  That is the same song we are hearing now. They said: No, we won't 
have $5.6 trillion in surpluses; it will be much more than that because 
the tax cuts will kick off additional economic activity and that will 
bring us even more revenue.
  Well, let's go back to a reality check and see what happened. This 
red line is what has happened. It is below the bottom of the 
projections that were made just 2 years ago. That is where we really 
are. We are not at the midpoint. We are not at the low point of the 
range of projections. We are below the bottom. All those who said if 
you just cut taxes, you get more money, that is dream world stuff. It 
didn't work. It didn't come close to working. They were wrong. They 
weren't just a little bit wrong, they were totally wrong. The result is 
deep deficits and debt that will burden this society for decades to 
come. That is the fact.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I want to give a little different vantage 
point on some of these issues, and then maybe other colleagues will 
wish to speak.
  I have heard kind of a continual part of the debate offered by our 
colleagues in opposition to this resolution that this is a terrible 
budget resolution. They say it is bad, worse, evil, preposterous, and 
absurd.
  Wait a minute. At least we have a budget. Frankly, budgets are not 
easy. How much money are we going to spend, and how much are we going 
to tax? You always have a lot of people who want to spend more, maybe 
tax less, maybe tax more. I have heard a lot of comments that maybe we 
should be taxing a lot more. In the budget resolution, we assume the 
tax cuts we passed in 2001 would be continued in years 2011, 2012, and 
2013. They would sunset at the end of 2010. I guess my colleague on the 
other side would like to have those tax cuts made tax increases in the 
years 2011, 2012, and 2013. That is about half of the tax cut that is 
in this bill. We need to do that. We need to address those tax cuts 
sometime between now and 2010. I doubt it is going to happen this year. 
If it does--I guess a bill could be offered and, if it is, it is 
debatable. I doubt that will be part of the tax bill that will be 
proposed under the reconciliation procedure.
  In the President's proposed reconciliation growth package, he would 
like to have that happen quickly so we can get the economy moving. The 
economy is not moving very quickly. Some people presupposed that they 
knew exactly what was going to be in the tax bill. We tell the Finance 
Committee to cut up to $350 billion in the Senate. The House is $550 
billion. We go to conference.
  Most people count votes. I count votes around here. I think I know 
where the votes are going to be. I know Chairman Grassley pretty well. 
I doubt we will come back from conference with something we cannot pass 
in the Senate. We will make that decision probably 5 weeks from now, 
not today. I hope we do things to grow the economy. The economy is 
going down. It needs help. I will mention to our colleagues that our 
colleagues had a stimulus or growth package. Theirs was almost all 
spending; 75 percent was spending, with very little tax relief. I guess 
their idea of a growth package is to grow government.
  Our idea is, wait a minute, let's contain the growth of Government 
and have some incentive to grow the economy. Historically, in the tax 
arena--I happened to be elected in 1980, so I go back to that point. In 
1980, the Federal Government took in $517 billion, and the maximum 
personal tax rate per individual was 70 percent. Ronald Reagan was 
elected President, and 8 years later the maximum tax rate was 28 
percent. If you listen to the dialog we just had, you would think 
revenues would have fallen. We reduced tax rates from 70 percent to 28 
percent. That happened over the first several years of the Reagan 
administration.
  In 1990, total revenues to the Federal Government almost doubled, 
from $517 billion to over a trillion dollars. So we cut tax rates 
dramatically. But guess what. Revenues went up. Then I looked back a 
little closer. Well, President Bush increased the rate from 28 percent 
to 31 percent in 1990. When President Clinton was elected in 1992, he 
raised the rate from 31 percent to 39.6 percent. I have heard 
discussion about all these ``massive'' tax cuts for the wealthy and 
benefits to the wealthy. So far, the wealthy, the higher income tax 
brackets, are reduced a great big 1 percentage point, from 39.6 to 
38.6. That is all that happened. Evidently, they say that is the reason 
we have this enormous deficit, which is absurd.
  What do we do on the lower income? We took lower income rates that 
were 15 percent and made those 10 percent and made that retroactive. 
Then we passed a $500 per child tax credit. That is law. Now it is 
$600. So we have done a lot of things for lower income, to make them 
basically not pay Federal income tax, some of which was retroactive, or 
pay a lot lower rate.
  I keep hearing all this class warfare and that these deficits are 
caused by the tax cut, and some people don't like tax cuts and they 
want to have tax increases, I guess, in the outyears. But I don't think 
that will help the economy. Some of us want to help the economy.
  I looked back and, historically, we have done some things in this 
body, with bipartisan support, that helped the economy. We reduced 
capital gains rates in 1997 over the objection of the Clinton 
administration. They eventually signed the bill. We reduced the rate 
from 28 to 27 percent and it helped create and foment a lot of growth.
  If you look at total growth in revenues in the last several years, in 
1998, 1999, and 2000, revenues exploded to the

[[Page 9531]]

Federal Government--I think in part because we cut capital gains rates. 
So we can cut rates on occasion and it will help the economy. I am 
absolutely convinced that it had a great deal of economic stimulus when 
we cut the rates in 1997 and revenues exploded to the Federal 
Government. Unfortunately, in the last couple of years, revenues have 
declined a lot, mostly because the stock market has declined a lot.
  So people talk about, wait a minute, we expected $5.6 trillion 
surpluses over the next 10 years. That was estimated by CBO. They were 
way wrong because the stock market had already started crashing. 
NASDAQ, which was exploding in the late nineties, declined by 50 
percent between March of 2000 and December of 2000. CBO missed it. They 
didn't know what that would mean as far as projections. CBO did not 
forecast the terrorist attack on 9/11 and the disastrous impact that 
had on the economy and what that has caused in outlays.
  I wanted to make a couple of those points. We need to grow the 
economy and we have a stimulus package that I believe will pass the 
Senate--and probably a comparable figure will pass the conference. It 
is a little bit more than our colleagues on the Democrat side wanted, 
except it is mostly on the tax side, not the spending side.
  The other criticism is, wait a minute, this budget is so terrible. 
Well, at least it is a budget. It is critically important that we pass 
it. Last year, we didn't even have a budget on the floor of the Senate. 
One passed through the Budget Committee; my compliments to the chairman 
for that, but we didn't have a chance to even vote on the floor of the 
Senate. I think people can be pretty critical, but I think we need to 
be a little more reserved. It is important that we pass a budget.
  I urge our colleagues to be mindful, if we do not pass a budget, one 
example would be: One could come up on a bill next week, and the bill 
might be a small authorization bill. Someone can offer an amendment to 
it and say: Let's spend $1 trillion on a new program, maybe it is 
prescription drugs or some other type of program that sounds really 
good. Let's spend hundreds of millions of dollars on education. Sounds 
good. Let's spend hundreds of millions of dollars--we could do all 
those things, and if we do not pass this budget today, there would be 
no 60-vote point of order. Spending would be running rampant. We would 
be totally out of control. We would have no caps on appropriated caps 
and no limit on the $2.2 trillion we are spending today, and there is 
no limit on the demand for Federal spending. It could get out of hand 
very easily. The only limitation we would have would be the potential 
threat of a Presidential veto.
  We need to govern better than that, and we need to show some 
discipline. If we remember those 51 votes when we passed the budget 
resolution, there were countless amendments, almost all of which on the 
Democrat side were: Let's grow spending; let's increase spending. 
Deficits are not caused just on the revenue side, they are caused by 
spending more than we take in.
  I wanted to make those points in response to our friends and 
colleagues on the other side.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, we can debate economic theory for a long 
time. What is not open to debate is what has factually occurred. Let's 
go back. Two years ago, we were told this was the range of outcomes 
looking forward in terms of the budget surplus. The Congressional 
Budget Office and the President's Office of Management and Budget said 
they adopted the midpoint of this range. We are going to have $5.6 
trillion of surpluses. Our friends on the other side said: Oh, no, it 
is going to be better than that because we are going to cut taxes; it 
is going to lead to bigger surpluses; it is not going to be the 
midpoint of the range of possible outcomes, it is going to be even 
better than that.
  That was fantasy world stuff. We tried their approach. It failed. It 
did not even come close, not even hailing distance of what happened. 
Here is what happened. We wound up below the bottom of the range of 
projected outcomes with deficits and debt as far as the eye can see.
  What is the answer of the other side? Let's do it again. Let's try it 
again. Let's dig the hole deeper. Let's run up more deficits, add more 
debt, and that will strengthen the country. Does anybody honestly 
believe that more deficits and more debt are going to strengthen the 
country when we are on the eve of the retirement of the baby boom 
generation that is going to explode the cost to the Federal Government, 
and these folks come forward with tax cuts that explode at the very 
same time when we are already in record deficit? I tell you, is there 
no common sense left?
  Here is what our Congressional Budget Office, headed by their 
appointee, straight from the Council of Economic Advisers of the 
President of the United States, tells us if we adopt this proposal. He 
has done seven different models. He used their dynamic scoring, the 
idea that we are going to get more money if we cut the taxes. What did 
he find? In four of the cases, the deficits are even bigger. In three 
of the seven, the deficits are somewhat smaller, although all of them 
massive.
  What does he say:

       CBO estimates show lower deficits relative to so-called 
     static scoring only by assuming large tax increases beginning 
     in 2014.

  Hello, is anybody listening? He is saying, all those who said the 
problem is they are not using dynamic scoring, they are not showing the 
positive effects of the tax cuts, if we just do that, we will see the 
deficits are not going to be so bad. So we turned it over to their guy, 
straight from the President's Council of Economic Advisers, and he 
comes back and says to us: Oh, no, the deficits are not going to be 
smaller, they are going to be bigger because of the deadweight of 
deficits and debt. You cannot take on all this borrowing and strengthen 
the country. You weaken the country.
  Then he looked at three other possibilities. He ran three other 
models. Do you know what he said: Yes, the deficits could be somewhat 
smaller than would otherwise be the case, but that is on the theory 
that people are going to work harder over the next decade in 
preparation for the massive tax increases to come.
  Let me repeat that: The only way the deficits are smaller than so-
called static scoring is if you assume the American people are going to 
work harder in anticipation of the massive tax increases to come to 
deal with these deficits that are exploding out of control.
  If anybody can seriously come out here and justify this proposal and 
these budgets, come on out, let's debate it. I do not see them. Where 
are they? Come on out here; let's debate. Let's debate what the effect 
of this budget is, $1.3 trillion of tax cuts on top of an initial $1.1 
trillion of spending when we are already in record deficit on the eve 
of the retirement of the baby boomers, we are at war, a cost of which 
we do not know.
  There is only one possible outcome: More deficits, more debt in a way 
that is totally unsustainable, and that will lead to massive cuts in 
Social Security and Medicare and all the rest of Government. That is 
what is coming next.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I have sought recognition to comment 
about the pending budget resolution. I was very much impressed with the 
comment by the distinguished Senator from North Dakota who really 
questioned if anybody is listening. I think the answer to that question 
is generally no. The positions in this Chamber are really frozen. We 
are looking at a 50-50 vote to be broken by the Vice President, and, 
realistically, we are going through the motions of a debate.
  Then the Senator from North Dakota says: Let's have a debate. We have 
been having a debate today. We have debates lots of days, but most of 
the time we talk right by each other. The proliferation of charts adds 
more confusion than clarity. I do not know that there are very many 
viewers on C-SPAN2 who even flick on their sets with the monotony of 
the kind of debates which we have in the Senate, which I would say is a 
blame attached universally on all sides and to all Members.

[[Page 9532]]

  The one factor I think is most important is that we get a budget just 
to get a budget. We have a lot of argument about tax increase, no tax 
increase, what is the amount of the tax increase. An arrangement has 
been worked out really to sort of save face with all parties involved 
here so we could come to some terms and move on.
  Last year, we did not have a budget. When the Democrats were in 
control of this Chamber, there was no budget resolution offered on the 
floor of the Senate, and I do not say that in a partisan way. I think 
too often there is debate and there are arguments which are partisan 
Democrats versus Republicans bickering, much to the dissatisfaction of 
the American people. But not having a budget resolution was very 
detrimental to the whole appropriations process where we could not 
curtail spending and have a discipline. For those who may be listening 
on C-SPAN2 or for a few people in the galleries, there are no Senators 
on the floor to listen, 60 votes are required to increase spending 
beyond the budget allocation if there is a budget.
  Sixty votes are hard to come by, but if only 51 votes, or a majority 
of those present, are required, then spending goes up.
  I visited Israel earlier this year, and the Palestinian Authority has 
a new finance minister. I was delighted to learn that the Palestinian 
Authority has a budget. I exchanged views with him that the Palestinian 
Authority had something the Senate did not have. The Senate did not 
have a budget. It was not reported out last year by the Budget 
Committee. It is vital we have a budget.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I would like to correct the record with respect to one 
thing the Senator from Pennsylvania said, I think inadvertently. The 
Budget Committee did report a budget last year. It did not come to the 
floor, but the Budget Committee did report a budget. The determination 
was made not to bring it to the floor. That determination was made 
because the Senate had a 10-year budget, the House had a 5-year budget. 
The Senate had used the more conservative OMB estimates. The House had 
used the more liberal OMB estimates.
  It was very clear there would not be a reconciliation between the 
two.
  I will be happy to yield in a moment.
  The Senator, the ranking member of the Budget Committee, and I 
determined that we would bring a 2-year budget to the Senate. We did 
that. That required 60 votes to pass because it was not a product of 
the committee. We got 59 votes for that 2-year budget in the Senate; it 
required 60 votes.
  The further facts are that we had all Democrats voting for it, we had 
8 Republicans voting for it, including the ranking member of the Budget 
Committee, the ranking member of the Appropriations Committee, and 
others, but because we did not have 60 votes, it did not prevail.
  It should also be known that the Appropriations Committee, on a 
unanimous vote, adopted the spending recommendation contained in the 
budget resolution passed in the committee. They adopted it on a 
unanimous vote.
  Because of differences in the House, there was no final conclusion on 
most of the appropriations bills. They were held over to this year. And 
interestingly enough, the conclusion was a total that was within $2 
billion of what we had proposed from the Budget Committee. So there was 
almost no difference--on over $700 billion of spending--almost no 
difference between what we proposed and what was ultimately passed in 
the early part of this year.
  I am happy to yield.
  Mr. SPECTER. Mr. President, when the Senator from North Dakota says 
there was ``almost no difference,'' $2 billion, I respectfully disagree 
with him that that means ``almost no difference.'' Regrettably, around 
the Senate Chamber, and the House Chamber, we think $2 billion does not 
amount to very much.
  The question I have for the Senator from North Dakota is in a context 
where the 2-year budget was turned down and there had been a 1-year 
budget prepared by the committee, as articulated by the Senator from 
North Dakota who was the chairman last year and who specifies 
differences between the House and the Senate where there were different 
assumptions made and many differences; that is what a conference is 
about. If the Senate had passed a budget, having failed on a 2-year 
budget, and had gone back and brought to the floor a 1-year budget with 
differences, that is what a conference is about.
  Why didn't the distinguished Senator from North Dakota, then-chairman 
of the Budget Committee, proceed to get a budget, take it to the House, 
and have a conference so we could have a budget?
  Mr. CONRAD. I didn't make that determination. That was made in a 
higher pay grade than mine.
  The budget we had done in the committee was a 10-year budget, and the 
budget in the House was a 5-year budget. We had used the more 
conservative CBO assumptions, and they used the Office of Management 
and Budget assumptions. We went to a 2-year budget because we thought 
that had the best prospects of securing the votes necessary to actually 
have a budget blueprint in the Chamber. We did get 59 votes. We did get 
a unanimous consent agreement from the appropriators to stick to that 
number.
  For other reasons there was disagreement with House appropriators 
outside of the budget with respect to priorities.
  I say to my colleague, no question, we would be better off to have a 
budget. That is a fundamental responsibility. It did not happen last 
year for lots of reasons. I have tried to enumerate some of those.
  I personally am committed to the budget process. I think it is 
critically important. I agree with the Senator with respect to that 
observation.
  Mr. SPECTER. Mr. President, my followup question is, Would the 
Senator from North Dakota identify who made the decision? The 
distinguished Senator from South Dakota is on the floor now. Was the 
decision made by Senator Daschle, the majority leader?
  Mr. CONRAD. The decision, it is fair to say, was a collective 
decision and probably was the wisest course given the circumstances we 
faced at the time.
  We could ask the 41 who voted against the 2-year budget: Why did they 
fail to vote for what was a bipartisan budget proposal right here on 
the floor of the Senate that would have provided the budget blueprint? 
They had the chance; 59 Members voted for it, for a budget outline; 41 
did not. The question ought to be directed to the 41 who voted no.
  Mr. SPECTER. If I may proceed to question one step further. I think 
the Senator from North Dakota talked about apples and oranges. This 
body does not have to go to a 2-year budget, if it does not choose to, 
to produce the 60 votes when the customary practice is a 1-year budget.
  I don't recollect with precision, but my instinct is that I supported 
the 2-year budget. I have supported votes to try to get this to 
conference to be resolved.
  When the Senator from North Dakota says probably it was a wise 
decision, there is a lot of disagreement about that. I believe it is 
the duty of the majority party to bring a budget to the floor. I admire 
an effort to bring the 2-year budget. I think we ought to have a 2-year 
budget so we can spend more time on oversight, a subject sorely 
neglected. If that does not succeed, it does not take 59 votes to bring 
a 1-year budget to the floor. That is the duty of the party that 
controls the Senate.
  When you talk about a majority of the appropriators agreeing to stick 
to the budget, or unanimous among the appropriators, that does not mean 
a whole lot because that does not bind the Senate to the figure.
  I note the presence of the distinguished Senator from South Dakota on 
the floor. Might I inquire if the Senator from South Dakota would care 
to respond as to why we did not have a budget?
  The PRESIDING OFFICER (Mr. Allard). The Senator from North Dakota has 
the floor.

[[Page 9533]]


  Mr. CONRAD. The Senator from North Dakota reclaims my time, and I say 
to the Senator from Pennsylvania, the Senator from Pennsylvania voted 
no. We had a 2-year budget. The Senator said he supported a 2-year 
budget; he voted no. The Senator had a chance last year to vote for a 
2-year budget. He voted no; 59 Senators voted for it. We had an 
opportunity.
  Mr. CRAPO. Will the Senator yield?
  Mr. CONRAD. I will not yield until I finish. The Senator had an 
opportunity. Every Senator had an opportunity. And it is not the 
typical order to have a 1-year budget in the Senate. We deal with 5-
year or 10-year budgets, not 1-year budgets.
  Last year, in an attempt to achieve a budget on a bipartisan basis, 
we brought a 2-year budget to the floor. It was rejected; 59 Senators 
voted aye. It was a bipartisan vote; 41 voted no. They had their chance 
to have a budget, and they decided not to.
  The PRESIDING OFFICER. The Democratic leader has sought recognition 
and is recognized.
  Mr. DASCHLE. Mr. President, I appreciate this colloquy.
  The distinguished Senator from North Dakota did everything within his 
power to reach the bipartisan consensus required to achieve a budget 
last year. I give him great credit for the efforts he made, in so many 
ways, to reach across the aisle, to find that bipartisan consensus 
throughout the year.
  Unfortunately, we had very little response or help.
  When we came to the conclusion, finally, that perhaps the best thing 
to do would be to move a 2-year budget resolution, as he correctly 
noted, we did get a bipartisan consensus on that but not enough to 
reach the 60 votes. Unfortunately, had the Senator from Pennsylvania 
chosen to support that resolution, we would have had the necessary 60 
votes and hopefully worked out the remaining differences with our House 
colleagues in spite of the chasm that existed between their proposal 
and ours.
  I appreciate very much the clarification made by the Senator from 
North Dakota. I again thank him for his efforts and the contribution he 
has made to this debate.
  I also thank him for his earlier presentation to the Senate. My only 
regret is that more people could not have had the opportunity to see 
it. I think it is very instructive. I am inclined, almost, to go 
through the charts once again just because they are so good and they 
have such a compelling message, but I will leave that to our 
distinguished manager on budget matters. I appreciate very much the 
presentation he has made.
  Mr. President, I come to the floor with sadness and with great regret 
at the position the Senate finds itself in today. I don't know that we 
have a clear indication whether the votes are there for this 
resolution. I hope we do not. But I assume our Republican friends would 
not come to the floor if they didn't have the votes.
  I am troubled by this resolution for a number of reasons. First, I am 
troubled by the obsession with tax cuts that appears to be so much a 
part of the motivation behind the construction of this resolution, an 
obsession with tax cuts that led the majority leader of the House a 
couple of days ago--I guess it was last week--to say:

       In the face of war, nothing is more important than cutting 
     taxes.

  I have thought about that quote on so many occasions:

       In the face of war, nothing is more important than cutting 
     taxes.

  I assume by that he meant nothing in terms of the commitment we make 
to our military, nothing in terms of the commitment we make to homeland 
security, nothing in terms of the commitment we make to education, to 
the needs of people at every level.
  So it is troubling to me, first, that this obsession with tax cuts 
articulated so succinctly by the House majority leader could be so much 
a part of this resolution. This obsession with tax cuts, as noted by 
the distinguished Senator from North Dakota, will cause us to 
experience deficits and accumulated debt unprecedented in this country. 
We are told, as a result of this resolution, we will see unified 
deficits exceeding $300 billion. We anticipate under this resolution 
there will be a $1.95 trillion increase in the accumulated debt for the 
period 2002 through 2011.
  We began, 2 years ago in the 107th Congress, with a projected surplus 
of $5.6 trillion. We will now experience accumulated deficits of $1.95 
trillion, leading us to a $7.6 trillion swing in our fiscal 
circumstances in just 24 months. That, too, is unprecedented.
  As the distinguished Senator from North Dakota noted, the ranking 
member of the Budget Committee, close to 40 percent of that swing is 
attributed to the tax cuts previously enacted or incorporated within 
this resolution. I don't know the degree to which we can calculate a 
direct connection between higher interest rates and the demise in our 
economy as a result of the fiscal problems we are likely to face if we 
adopt this resolution. But the deficits and the debt anticipated and 
actually outlined in this resolution present unprecedented and 
extraordinarily complex--in some ways, unimaginable--fiscal challenges 
as we look to the future over the next decade or so.
  I suppose some would argue that the tax cuts of this magnitude could 
generate an economic recovery that could bring about an improvement in 
both the deficit and debt projections and the economy. We will hear 
that argument, I am sure, throughout the day.
  But in a letter that addressed the President's economic stimulus 
package, 450 economists have said this package will not generate 
economic activity and will probably cause a loss of jobs. The CBO has 
actually reported that it is possible we could see a net decline in 
economic growth of just under 1 percent if the President's economic 
proposal, as it has been presented, goes into law.
  There is no economic stimulus involved here. The CBO says it. Most of 
the major mainstream economists say it. Therefore, we can't be 
motivated by any expectation that economic stimulus somehow drives the 
need for these tax cuts.
  On Wednesday, in the New York Times, there was an article coauthored 
by five public servants who, between them, helped pull our country out 
of four severe recessions in the last 30 years: former Secretary Robert 
Rubin, former Commerce Secretary Peter Peterson, former Senators Warren 
Rudman and Bob Kerrey, and former Chairman of the Federal Reserve Paul 
Volcker. This is what they had to say about the economic stimulus and 
the tax cuts incorporated in this particular resolution:

       Given the rapidly deteriorating long-term fiscal outlook, 
     neither proposal is fiscally responsible. It is illogical to 
     begin the journey back towards balanced budgets by enacting a 
     tax cut that will only make the long-term outlook worse. 
     Furthermore, the proposed tax cuts are not useful for short 
     term fiscal stimulus, since only a small portion would take 
     effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits will 
     eventually slow the economy. . . .
       They lower future economic growth by reducing the level of 
     national savings that can be devoted to productive 
     investments. They raise interest rates higher than they would 
     be otherwise. They raise interest payments on the national 
     debt. They reduce the fiscal flexibility to deal with 
     unexpected developments. If we forget these economic 
     consequences, we risk creating an insupportable tax burden 
     for the next generation.

  You can't be any more unequivocal, any more clear than that. Our 
best, most experienced minds in the country urge us, advise us, plead 
with us: Do not make this choice. Five percent of the tax cuts 
incorporated in the reconciliation package that we anticipate will be 
before us in a few weeks--5 percent of the total tax cuts assumed in 
this resolution will be realized this year: $61 billion, less than 1 
half of 1 percent of our GDP.
  Yet what do the economists tell us? The economists tell us: First, if 
you are going to have an economic stimulus package, do it now. Make it 
immediate. Make it broad based. Make sure it is fiscally responsible.
  On those three counts, the tax cut legislation anticipated within 
this resolution all fail. So that leaves me with a third concern. The 
third concern is what it does to our national investment.

[[Page 9534]]

  This resolution assumes a $168 billion cut in domestic investments 
over the course of the next 10 years. That means there will be cuts in 
homeland security, cuts in education, cuts in law enforcement, cuts in 
health care for veterans, cuts in infrastructure--cuts in all of those 
specific needs that make this country stronger.
  I am troubled by that. I am troubled by the realization that, in 
part, I believe supporters of this resolution wish to reduce the flow 
of Federal funds to these investments for ideological rather than 
economic or fiscal purposes.
  So, Mr. President, this is a very difficult day for our country, a 
day when we will commit to deficits unlike we have ever seen before, a 
day when, as a result of those deficits, we are likely to see economic 
circumstances get worse, not better, a day when, by the admission of 
those who support this resolution, we can anticipate dramatic cuts in 
the investments in those areas for which there is great need.
  We have talked at length on the floor over the course of the last 
several months about homeland security and how badly our first 
responders need help and the importance of addressing the needs of the 
States as they confront their own immense fiscal challenges.
  We have talked about the need for providing additional funding for 
the No Child Left Behind Act, how critical it is that we find a way to 
bridge the shortfall between the expectations and the unfunded mandates 
incorporated within that bill, and the reality that funding for these 
programs does not just materialize unless we appropriate it.
  Serious problems with regard to law enforcement: As crime goes up, 
our investments in law enforcement, under this resolution, go down.
  Problems in Medicaid for the States: The shortfall has never been 
greater. And the health concerns that nursing homes and hospitals are 
experiencing, all through rural America in particular, are commensurate 
with the shortfall that we find in this resolution.
  So we can do better. While there are those who continue to talk about 
the budgets of last year, I think our focus now must be on the budget 
before us. And I think the first test legislation must pass before we 
support it ought to be: Do no harm. There is a lot of harm done in this 
resolution, and that is regrettable.
  I hope our colleagues will think very carefully prior to the time 
they cast their vote. I will be casting a vote in opposition to the 
resolution. I urge my colleagues to join me.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, there has now been an opportunity to 
obtain the vote referenced by the Senator from North Dakota, and it was 
not a resolution for a 2-year budget at all. It was an amendment made 
by Senator Feingold which would set caps for 2 years. But that is not a 
2-year budget resolution.
  The idea of a 2-year budget resolution has been discussed widely in 
this body for many years and has been advocated by the distinguished 
Senator from New Mexico, Mr. Domenici, who chaired the Budget Committee 
for many years. It is a proposal that I have long supported.
  I, frankly, did not remember any resolution for a 2-year budget 
coming to the floor when it was mentioned by the Senator from North 
Dakota. But if it had come to the floor, if there had been a resolution 
for 2 years, I would have supported it because of my longstanding sense 
that the Congress does an inadequate job of oversight, finding out what 
is happening in the executive branch, because we spend so much time on 
the budget and then on the appropriations process.
  As chairman of the Subcommittee on Labor, Health and Human Services, 
and Education, it occupies months of time. So if it can be done in 2 
years, then it would be a big savings.
  But I recall very well when the Feingold amendment was offered. And 
there was a major effort by appropriators, significantly, to adopt it, 
which would set a cap. I refused to back that because I thought it was 
inappropriate to have a way out for the Budget Committee, which had not 
established a budget.
  The budget law was passed in 1974, and for 27 years, this body has 
had a budget--until last year. And if the Budget Committee could avoid 
or evade its responsibility in coming up with a budget, and then have a 
simple cure by having an amendment offered which would set a cap, what 
motivation would there be for a budget?
  To set a cap is not to have a budget resolution. A cap simply means 
what the total expenditure will be. It does not mean what the budget 
will allocate for various categories of expenditures.
  We spend a protracted period of time in establishing a budget, and we 
have many votes. In the last, during what we called a vote-a-rama, we 
voted dozens of times on specific amendments. So you do not have a 
budget resolution when you establish a cap.
  I ask unanimous consent that the Record Vote Analysis be printed in 
the Record--this is compiled by the staff of the Republican Policy 
Committee--and that a similar document be printed in the Record, 
provided to me by the Senator from North Dakota, which repeats that the 
Feingold amendment establishes discretionary spending caps for fiscal 
year 2003 and fiscal year 2004, which is the same 2-year period.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          [From the 107th Congress, 2d Session, June 20, 2002]

               Senate Record Vote Analysis--Vote No. 159


       Defense Authorization/Budget Enforcement, Higher Spending

       Subject: National Defense Authorization Act for Fiscal Year 
     2003 . . . S. 2514. Feingold motion to waive the Budget Act 
     for the consideration of the Feingold amendment No. 3915, as 
     amendment.
       Action: Motion Rejected, 59-40.
       Synopsis: As reported, S. 2514, the National Defense 
     Authorization Act for fiscal year (FY) 2003, will authorize a 
     total of $393.278 billion in new budget authority for 
     national defense programs (last year's bill provided $343.284 
     billion). The Administration requested $396,396 billion, 
     including $3.5 billion pay for a shift to accrual accounting 
     for civilian employee health and retirement benefits; this 
     bill will not make that shift. The bill was reported on 
     largely party lines due to a cut in the Administration's 
     request for funding for missile defense programs. Democrats 
     favored the cuts and Republicans opposed them.
       The Feingold amendment, as amended, would modify and extend 
     various budget enforcement mechanisms. It would extend the 
     statutory discretionary spending cap points of order through 
     2007, but would set caps for only the next 2 years. It would 
     cap discretionary spending budget authority for FY 2003 at 
     $768.1 billion and for FY 2005 at $784.4 billion (the cap for 
     FY 2002 was $710 billion); for FY 2003, separate spending 
     caps (a firewall) would apply to defense and non-defense 
     spending. The ``pay-go'' point of order on revenues and 
     mandatory spending would be extended through 2007 (the pay-go 
     point of order requires any decrease in revenue or increase 
     in mandatory spending to be offset with either a 
     corresponding increase in revenue or decrease in mandatory 
     spending; it takes a three-fifths majority (60) vote to waive 
     this point of order). The pay-go point of order would expire 
     at the end of the year following a year in which an on-budget 
     surplus was reported. $25.4 billion in advance appropriations 
     would be permitted in FY 2003. The current bar on delayed 
     obligations would not be extended.
       Senator Gramm raised a point of order that the Feingold 
     amendment violated section 306 of the Budget Act. Senator 
     Feingold then moved to waive the Budget Act for the 
     consideration of the amendment. Generally, those favoring the 
     motion to waive favored the amendment; those opposing the 
     motion to waive opposed the amendment.
       Note. A three-fifths majority (60) vote is required to 
     waive the Budget Act. After the failure of the motion to 
     waive, the point of order was upheld and the amendment thus 
     fell.
       Those favoring the motion to waive contended:

                               Argument 1

       This amendment would extend expiring budgetary restraints. 
     Those restraints, which apply to both mandatory and 
     discretionary spending, are urgently needed. Most of the 
     provisions of this amendment are non-controversial. However, 
     some Senators have objected to a few of its provisions. The 
     main objection they have raised is that the amendment would 
     supposedly allow too much discretionary spending. They have 
     suggested that if we had adopted a budget resolution as a 
     free-standing measure we could

[[Page 9535]]

     have avoided this supposed problem. In response, we concede 
     that a budget resolution has not been adopted by the full 
     Senate this year, but the Budget Committee did pass such a 
     resolution. It set spending at a level that was just $9 
     billion higher than the President requested. Both the Budget 
     Committee's resolution and the President's proposed budget 
     increased discretionary spending significantly over last 
     year's level of $710 billion in order to increase defense 
     spending by $45 billion and homeland defense by $4.5 billion. 
     When one takes those numbers out, one finds that the spending 
     cap proposed in the Budget Committee will increase non-
     defense spending by less than 1 percent this year. Further, 
     we think that in many respects it is just a more honest 
     version of the President's budget, because the largest 
     differences are that it will not assume spending cuts in 
     particular areas requested by the President because everyone 
     knows Congress is going to fund those areas. Overall, non-
     defense discretionary spending will rise less than 1 percent 
     under the Committee's budget. This amendment would take the 
     discretionary limits in the Committee's budget for 2 years. 
     We believe that those limits are very frugal. Our colleagues' 
     only other substantive objections to this amendment are that 
     it would allow an increase in advance funding and would not 
     retain current restrictions on delayed obligations. Neither 
     of those objections give sufficient reason to vote against 
     this amendment. The proposed increase for advance 
     appropriations is marginal, and the delayed obligation 
     restrictions would not be renewed by this amendment solely 
     because they are so complex they are never applied. The final 
     argument against this amendment is that it should not be 
     offered to the defense authorization bill. We disagree. This 
     bill sets a limit on the amount that can be appropriated for 
     defense; the defense appropriations bill is the largest 
     spending bill considered each year. Considering an amendment 
     regarding total Federal spending on this authorization bill 
     therefore makes sense. The point of order that has been 
     raised is that this amendment is not germane. This point of 
     order should be waived.

                               Argument 2

       Congress has been spending discretionary funds like drunken 
     sailors the last few years, but the fact remains that the 
     biggest threat to our Nation's long-term solvency is 
     entitlement, not discretionary, spending. Yes, this amendment 
     would allow $9 billion more in discretionary funds to be 
     spent than the President requested, but we are more than 
     willing to accept that increase in our $2 trillion budget if 
     it means we are able to retain the pay-go point of order. If 
     we do not retain that point of order, we will soon be faced 
     with massive increases in entitlement spending, primarily on 
     health care, that will need only simple majority votes to 
     pass. Further, we note that once we put back in place that 
     binding point of order, the President would still have his 
     veto power to strike down any bill that he thought spent too 
     much. We urge colleagues to be realistic. If we do not 
     reinstate the pay-go rule, we will net end up $9 billion 
     deeper in debt, but hundreds of billions of dollars deeper in 
     debt. The trade-off is very acceptable.
       Those opposing the motion to waive contended:
       The Democrats, who are in the majority, have utterly failed 
     in their responsibility to bring up and pass a budget 
     resolution this year. Because of that failure, budget 
     enforcement mechanisms that are expiring will not be renewed. 
     When we consider spending bills in the coming weeks, we will 
     be doing so without any budget blueprint to restrain spending 
     and without rules to keep spending in check. Given this 
     dismal situation, many Members may be tempted to vote for the 
     Feingold amendment under the principle that some restraints 
     will be better than nothing. However, it would be a mistake 
     if they were to do so. This amendment would reinstate 
     spending restraints only after substantially increasing the 
     amount of money that could be spent. First, for next year, it 
     would increase spending by $9 billion more than the President 
     requested. Second, it would increase to $25 billion--a new 
     record level--the amount of ``advance appropriations'' that 
     could be passed. A third problem is that it would not renew a 
     ban on a particular type of budget gimmick--deferred 
     obligations--that was passed in the 106th Congress.
       All of these matters could have been resolved if they had 
     been dealt with appropriately on a budget resolution. We 
     could have offered amendments and had debate on a wide 
     variety of ideas instead of debating little bits and pieces 
     on unrelated bills. Our Democratic colleagues have created a 
     terrible mess, but they are still trying to push through 
     budget enforcement procedures that would allow them to spend 
     more money. We are not going to go along with these efforts. 
     We encourage them to bring a budget to the floor; it is not 
     too late. All Senators would have their rights to debate and 
     offer amendments protected, and the resolution would be 
     considered under the normal procedures that would ensure it 
     would pass (or be rejected) by a time certain. If they were 
     to follow that course, a bipartisan result would be likely. 
     If they continue with this path, though, they are not going 
     to get anywhere. The President has made clear that, unlike 
     last year, he is not going to accept any increases in 
     spending over his request. Spending has been going through 
     the roof; it is time to draw a line against further 
     increases. Therefore, we oppose the motion to waive the 
     Budget Act for the consideration of this amendment.

                                YEAS (59)
 
       Democrats       (51 or 100%)
                                                  Republicans (8 or 17%)
 
 
I01  Akaka               Inouye                   Chafee, L.
Baucus                   Jeffords\1\              Collins
Bayh                     Johnson                  Domenici
Biden                    Kennedy                  Gregg
Bingaman                 Kerry                    McCain
Boxer                    Kohl                     Shelby
Breaux                   Landrieu                 Snowe
Byrd                     Leahy                    Stevens
Cantwell                 Levin
Carnahan                 Lieberman
Carper                   Lincoln
Cleland                  Mikulski
Clinton                  Miller
Conrad                   Murray
Corzine                  Nelson (FL)
Daschle                  Nelson (NE)
Dayton                   Reed
Dodd                     Reid
Dorgan                   Rockefeller
Durbin                   Sarbanes
Edwards                  Schumer
Feingold                 Stabenow
Feinstein                Torricelli
Graham                   Wellstone
Harkin                   Wyden
Hollings
 


                                NAYS (40)
 
                                          Republicans (40 or 83%)
     Democrats (0 or 0%)
 
 
 
                                   Allard              Hutchinson
                                   Allen               Hutchison
                                   Bennett             Inhofe
                                   Bond                Kyl
                                   Brownback           Lott
                                   Bunning             Lugar
                                   Burns               McConnell
                                   Campbell            Murkowski
                                   Cochran             Nickles
                                   Craig               Roberts
                                   Crapo               Santorum
                                   DeWine              Sessions
                                   Ensign              Smith (NH)
                                   Enzi                Smith (OR)
                                   Fitzgerald          Specter
                                   Frist               Thomas
                                   Gramm               Thompson
                                   Grassley            Thurmond
                                   Hagel               Voinovich
                                   Hatch               Warner
 

         

                             NOT VOTING (1)
 
          Democrats (0)              Republicans (1)
 
                                   Helms\2\
 
 
\1\Official Business.
\2\Necessarily Absent.

  Mr. SPECTER. And I conclude, Mr. President, by asking the Senator 
from North Dakota if establishing caps for 2 years amounts to a budget 
resolution for 2 years.

  The PRESIDING OFFICER. Who seeks recognition?

  The Senator from North Dakota.

  Mr. CONRAD. Mr. President, I suppose reasonable people could differ 
on what constitutes a budget for 2 years. The amendment that was 
offered last year was an attempt to adopt the budget that had been 
formed in the Budget Committee.

  And what that amendment provided--and I have it before me now and the 
Senator is correct--was caps on spending.

  It provided, for fiscal 2003, an overall amount for discretionary 
spending of $764,722,000,000. For the highway category, it provided 
$28.9 billion in outlays. For the mass transit category, it provided 
$1.445 billion. For the conservation spending category, it provided 
$1.922 billion.

  It provided the framework--perhaps that is the best way to say it--of 
the budget that we had constructed in the committee. It was an attempt 
to give the appropriators the budget framework to go forward so they 
could do their work.

[[Page 9536]]

  That is what the attempt was. I think it is fair to say it was not a 
full budget resolution. I would say that to my colleague. A full budget 
resolution is not a 2-year document. What the Budget Committee does 
with the full budget resolution is either a 5-year or a 10-year 
allocation of resources, both for taxing and spending. But it became 
evident we did not have the votes for that.

  So what we tried to do was put in place this framework of a budget 
for 2 years, with caps set for 2 years, with the categories specified 
for the 2 years; but, more than that, to also provide an extension of 
pay-as-you-go provisions to include the budget enforcement mechanisms 
that were otherwise going to lapse and to provide the other elements 
that were important for the consideration of the individual decisions 
that the appropriators have to make.

  I note my colleague from Massachusetts is here. He has asked for 
time. I yield 15 minutes to the Senator from Massachusetts.

  The PRESIDING OFFICER. The Senator from Pennsylvania.

  Mr. SPECTER. Very briefly, Mr. President, I frankly expected more 
from the Senator from North Dakota. When he says, and I read his words, 
adopt a budget formulated in the Budget Committee, there was nothing in 
the Feingold amendment about a budget formulated in the Budget 
Committee. When the Senator from North Dakota recites a long list of 
categories and then says they provide a framework, there were no 
categories in the Feingold amendment. There was no framework there. 
When the Senator from North Dakota says it was not a full budget 
resolution, he really ought to say there was no budget resolution at 
all because that is the fact.

  The PRESIDING OFFICER. The Senator from North Dakota.

  Mr. CONRAD. Mr. President, I tried to be as frank and forthcoming as 
I could be. When the Senator says there were no categorizations, there 
were. I would be happy to enter it into the Record. It is not true to 
say there were not. There were.

  You had the discretionary spending amount and the other elements that 
I described for the highway category, for the discretionary category. I 
don't know what the Senator is looking at.

  Mr. SPECTER. Will the Senator yield for a question?

  Mr. CONRAD. Let me finish the thought and then I will be happy to 
yield.

  Maybe we are looking at different things, but I offered an amendment 
to the Feingold amendment providing for these categories, providing for 
the discretionary amount, providing for these other categories. That 
appears in the Record as an amendment numbered 3916 to amendment No. 
3915.

  That is what I am discussing here.

  I do yield 15 minutes to the Senator from Massachusetts. I am sorry. 
Would the Senator from Massachusetts withhold. The Senator from 
Pennsylvania wanted to ask a question. I am happy to yield to him.

  Mr. SPECTER. I discussed this informally with the Senator from North 
Dakota, and he handed me a vote, which I read from, which was the 
Feingold amendment which established caps for 2 years. The Conrad 
amendment had nothing to do with what the Senator from North Dakota 
handed me. But these will be in the Record, and people who read the 
Record can come to a conclusion themselves. I think there is absolutely 
no doubt not only that this is not a full budget resolution but that it 
is no budget resolution at all.

  I yield the floor.

  Mr. CONRAD. Mr. President, perhaps it does no good to prolong this. 
But this was the chance we had to put in place the spending limits for 
last year and this. It was our chance to establish what a budget 
resolution does. A budget resolution outlines what are the resources 
available, and it was our best chance to put in place that structure, 
to have the Appropriations Committee know what was available to them. 
That vote was held.

  I am happy to yield to the Senator from Massachusetts.

  The PRESIDING OFFICER. The acting minority leader has the floor.

  Mr. CONRAD. I have yielded to the Senator from Massachusetts for 15 
minutes.

  The PRESIDING OFFICER. Has the Senator from Pennsylvania sought 
recognition?

  Mr. SPECTER. Mr. President, when the Senator from North Dakota said 
the amendment put in limits, he is correct. The Feingold amendment did 
seem to put in limits. When he says that is what a budget resolution 
does, he is correct also. A budget resolution does put in limits. But a 
budget resolution does much, much more. A budget resolution specifies 
categories. It is an elaborate document that specifies categories of 
expenditures, and that was not in the Feingold amendment.

  Mr. CONRAD. Mr. President, the Senator is correct on that. I have no 
interest in saying it is something it was not. The Senator is correct 
on that. But I would say to the Senator, this was our best chance to 
put in place a budget framework to give the Appropriations Committee an 
indication of what was available to them to spend and not to spend more 
than that and to put in place the pay-as-you-go restrictions and to put 
in place the other budget enforcement mechanisms so that the 
functioning of the Congress could go forward.

  I understand the Senator, for whatever reason, decided to oppose 
that. I just say to him, that was our best chance of putting in place 
the framework for a budget. It didn't happen. All of us can take 
responsibility. I will take my share of responsibility. I regret very 
much that the budget that I took out of the committee didn't come to 
the floor and we didn't have a chance to conclude action on it. I was 
pleased that we were able to get bipartisan agreement, at least with 
respect to that budget framework. I wish it would have passed. I think 
that would have been a good thing. But it did not.

  I yield 15 minutes to the Senator from Massachusetts.

  The PRESIDING OFFICER. The Senator from Massachusetts.

  Mr. KENNEDY. Mr. President, the budget that passed the Senate 2 weeks 
ago was not a good one. The budget which returned from conference today 
is much, much worse. It provides for far larger tax cuts--totaling more 
than a trillion dollars. It provides less resources to meet our urgent 
domestic needs in education, in health care, and in homeland security. 
It relies on an unprecedented parliamentary gimmick in a desperate 
attempt to force a bigger tax cut through a reluctant Senate. The 
Republican leaders who controlled this conference had a single goal--
more and deeper tax cuts primarily benefitting the wealthiest 
taxpayers. This budget clearly shows that they are willing to sacrifice 
the well being of the American people and make a mockery of the budget 
process to achieve their goal. We should have the courage to reject it, 
and enact a responsible budget in its stead.

  The conference report nullifies nearly all of the improvements which 
were made to the budget on the Senate floor. A majority of Senators 
reduced the size of the overall tax cut. The Republicans in conference 
raised it back up by $400 billion, from $857 billion to $1.23 trillion. 
A majority of Senators reduced the amount of tax cuts which could be 
fast-tracked under the reconciliation process to $350 billion. The 
Republicans in Congress are attempting to substantially increase that 
number through a parliamentary gimmick. On the floor, a majority of 
Senators voted repeatedly to provide additional resources for our top 
domestic priorities. The Republicans in conference eliminated most of 
those gains, reducing domestic spending this year by $7 billion. Less 
for education. Less for health care. Less for homeland security. A 
majority of Senators should now defeat this irresponsible conference 
report.

  The manner in which the conference report deals with the size of the 
tax cut is particularly disturbing. It has been designed to maximize 
the amount of new tax breaks which can be fast-tracked through the 
Senate. The $350 billion limit on the amount the Finance Committee can 
report out under

[[Page 9537]]

reconciliation is a sham. Under this budget resolution, when the tax 
bill returns from conference, it can provide for up to $550 billion in 
new tax breaks and still be protected by reconciliation. That is 
outrageous. Only 2 weeks ago, a bipartisan majority of Senators said 
$350 billion would be the limit. It was all the Nation could afford. In 
just 2 weeks, the number has grown by $200 billion. Why? Because the 
Republican leadership is desperately trying to save the President's 
ill-advised elimination of the tax on dividend income. That is not a 
tax cut to help working families and stimulate the economy. That is a 
tax boondoggle for the wealthy few. Half of all the tax benefits from 
the elimination or reduction of the dividend tax would go to the 
richest 1 percent of taxpayers, and 80 percent of the benefits would go 
to the wealthiest 10 percent of taxpayers. It is unaffordable. It is 
grossly unfair. No one can claim with a straight face that this is a 
moderate budget.

  The impact on education is devastating. The Republican conferees cut 
$20 billion in education and training resources over the decade from 
the Senate passed budget. They stripped the Murray amendment which 
would have increased funding to make real the promise of No Child Left 
Behind. They stripped the Kennedy-Dodd-Collins amendment which would 
have increased the Pell grants of 4.8 million students struggling to 
pay higher tuition costs. To my constituents in Massachusetts this will 
mean a loss of $24 million in Pell aid. The Republican leaders who 
dictated this conference report ignored the education concerns of a 
bipartisan majority of Senators. And that same bipartisan majority 
should now reject this shameful budget.

  The budget resolution before us actually reduces funding for the No 
Child Left Behind Act school reform and cuts over half a million 
children from after school programs. How can President Bush abandon his 
unequivocal promise of full funding for the school reforms required by 
the No Child Left Behind Act? That legislation was signed into law with 
great fanfare by the President just a year ago. But when the klieg 
lights go out and the bunting comes down and the cameras leave, the 
money isn't there. The Republican budget provides $8.9 billion less 
than we promised America's children. Six million children are being 
left behind.

  On the floor of the Senate, we added an additional $40 billion to 
help the uninsured obtain health coverage. This was an expenditure 
which even the White House supported. But not the Republican conferees. 
They deleted it so there would be $40 billion more to finance their 
reckless tax cut scheme. Helping families get health care is obviously 
not a priority for them.

  This budget has far less funding than is necessary to provide a 
meaningful prescription drug benefit for all seniors. It follows the 
administration's grossly unfair plan requiring the elderly to give up 
their family doctors and go into HMOs in order to obtain any real 
assistance with the cost of their drugs. Yet Republicans defeated 
amendments to increase the amount of money available for the 
prescription benefit and to make the benefit available to all seniors, 
not just those in HMOs. As a result, many seniors will continue to go 
without the medication they need every day to stay well.

  The budget also contains the administration's plan to convert much of 
Medicaid into a block grant, reducing the long-term funding which is 
available to provide health care for the needy. The Republican block 
grant program would leave many innocent victims in its wake--sick and 
needy children and their parents, the disabled, and low-income workers 
and elderly. States are, in fact, being given a financial incentive to 
cut back coverage for those in need.

  The administration plan would even abolish the highly successful CHIP 
program, which is providing five million children with a healthy start 
in life. CHIP would be rolled into the block grant, with no guarantee 
that all of these children would continue to receive health care 
coverage.

  Budgets are the way a nation sets its priorities, and the priorities 
in this Republican budget are profoundly wrong for America. It fails to 
address the real problems of real families. It appears to have been 
drafted in a sound-proofed room so that the voices of working men and 
women, students and senior citizens could not be heard.

  In the 2 years since President Bush took office, the well-being of 
American families has declined at an alarming rate. Ask most Americans 
how their lives have changed since President Bush took office, and they 
will tell you: declining job security; disappearing retirement savings; 
plummeting school budgets; rising college tuition; skyrocketing health 
care and prescription drug costs; Federal budget deficits threatening 
the future of Social Security and Medicare.

  With the economy stagnating and continuing threats from terrorists, 
these are not normal times. Our responsibility in Congress is to pass a 
budget that meets the challenges of our time. Instead of more tax 
breaks for the wealthy, we should be concentrating on our national 
security and our economic security.
  Surely, when our troops come home from Iraq, we want them to come 
home to a strong economy, with jobs that let them care for their 
families and save for a secure retirement. We want them to come home to 
better schools for their children, not schools facing drastic budget 
cuts, fewer teachers, and crowded classrooms. We want them to be able 
to afford health insurance, and know that their families will receive 
the quality health care they need.
  This budget fails all these tests. It rejects the steps needed to 
restore the economy, and instead embraces ideologically rigid policies 
that have not worked and will not work. In 2001, President Bush pushed 
a $1.3 trillion tax cut through Congress that disproportionately 
benefits the wealthiest taxpayers. Now, at his urging, this Republican 
budget calls for an additional $1.3 trillion in tax cuts, even more 
heavily slanted toward the rich. That is not the solution to the 
problems facing America's families. That is a strategy that will only 
add to their problems.
  Huge numbers of working men and women have lost their job security. 
As layoffs mount, they live in fear of being the next to be let go. 
There are 2\1/2\ million fewer private sector jobs in America today 
than there were just 2 years ago. Those looking for a job are finding 
it increasingly difficult to obtain one. The number of long-term 
unemployed workers has increased by nearly 200 percent since President 
Bush took office.
  Health insurance is becoming less and less affordable for millions of 
workers and their families. Over two million more Americans are without 
health insurance today than there were 2 years ago. One in ten small 
businesses which offered their employees health insurance in 2000 no 
longer do. The average cost of health insurance is rising at double 
digit rates--up by 11 percent in 2001 and another 12.7 percent in 
2002--nearly four times the rate of inflation. The health care squeeze 
on working families is getting tighter and tighter.
  The cost of higher education is rising beyond the reach of more and 
more families. The gap between the cost of college tuition and the 
tuition assistance provided by the Federal Government has grown by 
$1,900 in the first 2 years of the Bush administration. As a result, 
the number of worthy students being denied the chance to go to college 
is growing each year.
  For millions of families, their retirement savings have seriously 
eroded in the last 2 years. The value of savings in 401(k) plans and 
other defined contribution plans has declined by $473 billion in the 
last 2 years. Many middle-aged workers who thought their retirements 
were secure are suddenly being forced to consider staying in the 
workforce longer and reducing their standard of living in retirement.
  These are the realities American families face today. It is no 
surprise that consumer confidence has dropped more than fifty percent 
since President Bush took office.
  To all these problems, the Bush administration has one answer--more 
and more tax cuts predominately benefitting the wealthiest taxpayers.

[[Page 9538]]

  In this current situation, the most irresponsible action Congress 
could take would be to accept the proposal of the Bush administration 
to enact major new permanent tax cuts. Yet, that is what this budget 
resolution does. The combined cost of the President's plan to exempt 
dividend income from taxation, accelerate the tax cuts for the upper 
income brackets, and make the 2001 tax cuts permanent would be over 
$1.3 trillion in the next 10 years. The conference report provides full 
funding for this plan. It will lead to an immense increase in the 
deficit which would trigger an additional $300 billion in interest 
costs on the larger national debt. We cannot afford the loss of an 
additional $1.6 trillion from the Treasury. Temporary tax cuts to 
stimulate the economy are affordable, but the President's large, 
permanent tax breaks are not. If the Republican plan is adopted, the 
Federal Government will not have the resources to meet urgent domestic 
needs in education, in health care, and in homeland security. The 
Republican plan will raid the Social Security Trust Fund for $2.6 
trillion over the decade, threatening the benefits of future retirees.
  If Congress accepts the Republican budget resolution, the on-budget 
deficit will be nearly $4 trillion by 2013. More than three-quarters of 
that amount is directly attributable to the Bush tax cuts enacted in 
2001 and the additional cuts proposed in 2003.
  The impact these new tax cut proposals will have is clear from this 
budget. When the President says ``no'' to obviously-needed spending on 
urgent domestic priorities such as education and health care, he says 
the war on terrorism requires us all to tighten our belts. The burden 
of these sacrifices falls mainly on low and middle income individuals 
and families. Yet the President refuses to ask the wealthiest taxpayers 
to share the burden. In the midst of his repeated calls on others to 
sacrifice, he is advocating over $1.3 trillion in new tax breaks 
primarily for those with the highest incomes. Such a policy is wrong 
and unfair.
  Under the President's ``economic growth'' package, households with 
annual income over $1 million would receive an average tax cut of 
nearly $90,000 each year. In contrast, households in the middle of the 
income spectrum would receive an average of less than $300 a year in 
tax benefits. Exempting dividend income from taxation will take $400 
billion out of the Treasury over the next 10 years. Half of that 
enormous amount--$200 billion--will go directly into the pockets of the 
richest 1 percent of taxpayers. The White House apparently sees no need 
for the wealthiest taxpayers to share in the national sacrifice. It 
cannot be wartime for middle America but still peacetime for the rich.
  Despite the enormous amount spent on tax cuts, this budget resolution 
still does not provide the kind of stimulus that is needed to get the 
economy moving, nor does it provide help to those who are hurting the 
most. Under the Republican plan, less than $40 billion of the $1.3 
trillion in new tax cuts will go into the economy this year when a 
stimulus is needed--less than $40 billion. There is no extension of 
unemployment compensation benefits to help the long-term unemployed.
  There is no aid to States and local communities which are struggling 
with an increased demand for the health care and human services they 
provide, at the same time their revenues have sharply declined. This 
budget will not help to bring an early end to economic stagnation.
  A recent analysis of the President's proposal to eliminate the income 
tax on corporate dividends determined that it is one of the least 
effective forms of stimulus, generating less than a dime of stimulus 
for every dollar of Federal revenue lost. This is further proof that 
the Republican tax cut plan is not about stimulating a stagnant 
economy, it is about further enriching the already wealthy.
  The Nation cannot afford the tax breaks in this Republican budget. 
The President's tax cut proposals must be scaled back substantially to 
a far more affordable level.
  Which of these choices will make the American community stronger and 
better able to face the challenges of the future? The decision to pass 
more and more tax cuts for the richest among us is a decision to ignore 
America's greatest needs. Now is the time for Congress to bring our 
policies back into line with our national values. Rejecting this 
conference report would be a good start.
  Unfortunately, most Congressional Republicans have made their choice. 
For them, bigger tax cuts have a higher priority than educating kids, 
providing a secure retirement for seniors, and making health care 
available and affordable to more Americans.
  The priorities clearly revealed in this Republican budget are not the 
priorities of the American people. Their voices have been shut out of 
the room where the real decisions are being made. If Congress does not 
change this budget, the American people will change Congress next year.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, I ask unanimous consent that the vote on 
the adoption of the pending budget conference report occur at 4 p.m. 
today, with the time until then divided equally for debate.
  The PRESIDING OFFICER. Is there objection? The Senator from North 
Dakota.
  Mr. CONRAD. Mr. President, I am constrained to object. We hope to 
have agreement in the very near future, but apparently somebody needs 
to be contacted who has not yet been contacted. I say to my colleagues, 
I apologize. I thought we had agreement, but I am just informed we need 
to wait another few minutes before we can reach agreement.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Idaho.
  Mr. CRAPO. Mr. President, I wish to speak on the conference report. I 
think it is important we put into perspective the debate we are having 
today. You heard a lot of talk, if you listened to this debate, about 
the potential danger of tax relief at a time like this in our economy. 
You heard a lot of talk about skyrocketing deficits and what is the 
responsibility or the cause of those deficits, and the circumstances 
around which this budget has been brought to the floor.
  I wish to step back a bit and look at my personal experience in 
Congress as an example of what it is we are really looking at, what the 
perspective is with regard to this debate.
  I ran for Congress in 1993. At that time, we had massive deficits, in 
the neighborhood of $200 billion, $300 billion, $400 billion, $500 
billion, and had been having those deficits for years. I ran on a 
balanced budget platform. I argued for a lot of other issues, but one 
of the main issues I talked about was the need to balance our Federal 
budget. I got elected, got here to Washington, and have been involved 
in a debate over a budget each year since I served in Congress. Now I 
am in my 11th year.
  In each year, what happens is, whoever is the leadership in Congress 
proposes a budget. The budget can be a 5-year budget, which is what we 
used to have, or a 10-year budget, such as the one before us. The 
important point to note about all these budgets is the year that 
counts, particularly with regard to spending, is the first year of the 
budget.
  Yes, we are here talking about a 10-year budget, but next year we 
will be back in front of the Congress with a new budget, and the first 
year of that new budget will not necessarily be the same year, the same 
as the second year of this year's budget. In other words, we do not 
just adopt this 10-year budget and then go on from there and live with 
the budget constraints contained in each of those 10 years. We do a new 
budget every year. So what really counts is the first year of the 
budget. It is important for people listening to this debate to 
understand that dynamic in order to understand what is really being 
said by those who are arguing about what should be the policy of this 
budget.
  It is true that with regard to tax relief, once tax relief is 
adopted, it is permanent until a Congress changes it, and it plays out 
for a period of years. But it is the spending side of the budget that 
gets changed, especially the

[[Page 9539]]

discretionary spending side of the budget that gets changed and redone 
by Congress every year. You have to look very carefully at the spending 
proposal. What happens, frankly, is that those who want to see more 
Federal spending, those who want to see our economy basically 
nationalized, with the Federal Government controlling ever-increasing 
aspects of the economy and spending ever-increasing dollars, frontload 
the spending into that first year of the budget. Then they have very 
prudent spending patterns in the second through the tenth year of the 
budget or the second through the fifth year of the budget, knowing they 
can come back next year with a new first year and change the whole 
spending dynamic.
  The debate we are in right now is just another aspect of the 
traditional debate we have been having in Washington for the last 
couple of decades between those who do not want to see tax relief and 
those who want to see tax relief, and between those who want to see the 
Federal spending increase versus those who want to hold spending down.
  We have heard a lot of talk, as I have said, about budgets and 
deficits. There has been a lot of accusation made about who caused the 
deficit that we face. President Bush, as you know, when he first became 
President proposed major tax relief which this Congress adopted. It was 
adopted for a 10-year timespan and will expire at the end of 10 years 
from the day it was adopted in 2001, if it is not continued.
  That tax relief has provided needed relief to the American people. 
That tax relief is today being attacked on this floor as a cause of the 
budget deficits when, in reality, I think most Americans are very well 
aware we have had dramatic increases in spending required by the attack 
on 9/11 by terrorists against our Nation and the significant increases 
in spending on homeland security, by the war in Iraq, and the increased 
spending for our national security that has been driven by the need to 
make sure we have the strongest military we can to protect and preserve 
our Nation against terrorists and rogue nations overseas.
  We have seen spending increases in other categories that have been 
far beyond the growth of the economy. In the categories discussed by 
Senators on this floor today--education, health care, the environment--
spending has gone through the roof for very good reasons: the defense 
of the war on terrorism, the defense of our homelands, the defense of 
our Nation. Nevertheless, spending has skyrocketed at the same time the 
economy has collapsed. So we see revenue going down at a time when 
spending is going up. That is what is causing these deficits. It was 
not President Bush's tax relief.
  We can argue about whether giving tax relief is going to actually in 
a dynamic economy strengthen revenues or reduce revenues, and I would 
like to talk about that a little bit in a minute. The fact is, wherever 
one comes down on that debate, the true core of the causes of the 
deficits we are dealing with right now was not the tax relief; it was 
the increases in spending and the collapse of the economy we have seen 
not only in the United States but across this globe.
  There has been a lot of talk about the fact we really have an 
obsession with tax cuts. There is definitely a strong commitment on the 
part of many of us to obtain tax relief because we believe strongly 
that it is through proper management of the tax collection side of our 
budget that we will provide the economic stimulus to our Nation that is 
needed. But if there is an obsession on the one side for tax relief, 
then it must also be said there is an obsession on the other side with 
spending.
  Those very Senators who stand on the floor and talk about the fact we 
cannot support increased tax relief, we cannot have more tax relief, 
are the very same ones who when we debated this budget in the Senate 
they proposed over 80 amendments. There were over 80 amendments that we 
dealt with. If we tally up the increased spending that was proposed in 
the bevy of amendments when we considered this budget, it was almost an 
additional trillion dollars of spending that was proposed.
  This budget is a lean budget, but it is one that meets the needs of 
this Nation in the critical areas that we must address. Again, we are 
having that age-old battle between whether we should keep taxes low 
and, in fact, even reduce them further or whether we should keep taxes 
high and stop tax cuts from being made and allow previous tax relief to 
expire and thereby let taxes go up so we can sustain higher levels of 
Federal spending in the budget. That is what this debate is about.
  If we do nothing, if we let the current law stay as it is and have no 
tax relief and have no additional spending, we will still see deficits 
in the neighborhood of $200 billion in the budget year 2004 we are 
working on. So, again, I think it is important to set the parameters.
  If we look at the proposals of the one side who are now objecting to 
the President's tax relief, they also have a stimulus package. Their 
stimulus package, however, does not contain so much tax relief. It 
contains mostly spending, on the theory, apparently, that we can spend 
ourselves into prosperity by having the Federal Government put a 
massive focus on spending to strengthen our economy.
  We simply disagree with that. Notably, the spending in this stimulus 
package is frontloaded. Recall what I talked about with regard to how 
these budgets work. It is the first year of the budget that we really 
have to focus on on the spending side, and the frontloaded spending in 
the alternative stimulus package that is proposed results in a deficit, 
if it were to be adopted, that is even higher than the deficit that is 
contained with the President's tax relief proposal in this budget. 
According to the analysis, the deficit would be $382 billion, but it 
would not be because of tax relief. It would be because of spending. 
That is the key difference, again, in the debate we are having today.
  There has been some discussion about the fact that we did not get a 
budget last year, and why we did not get a budget. The Senator from 
North Dakota asked some of us who voted against what he calls a 2-year 
budget that was proposed last year, why we voted against it. Well, I 
will tell my colleagues, it was the same old debate. That proposal, 
though it was not actually a full-blown budget, was one which extended 
the caps and it extended the point of order for the budget points of 
order that we need as protection in this budget and had some increased 
spending in some categories. The spending proposals were, once again, 
too high. They were far beyond what the President had proposed in his 
budget that was focused on building a path back toward balance.
  The reason we voted against it was because we did not believe in the 
spending levels they had proposed. With regard to those important 
budget protections, the extended caps on the budget and the budget 
points of order and the like, we did later on adopt those and extend 
them into April of this year. It is those spending caps and budget 
points of order that this budget now proposes to put back into place.
  There has also been some talk about whether the manner in which this 
budget is being brought forth with the reconciliation instructions, 
being different between the House and the Senate, is proper. Frankly, I 
have looked at it. As I see it, it is very straightforward. The 
reconciliation instructions provide for $550 billion of tax relief over 
the next 10 years. With regard to that proposed tax relief, it is very 
clear that with the current support in opposition to that proposal, the 
Senate cannot pass that kind of tax relief. So it is proposed in this 
budget reconciliation that the Senate committee cannot exceed $350 
billion, as the Senate committee puts together the tax package 
contemplated by this budget, and the House committee cannot exceed the 
$550 billion. The reconciliation between those two numbers will occur 
when the tax committee in the House and the tax committee in the Senate 
write the actual detailed tax language and they seek, if those bills 
are passed, to conference those bills.

[[Page 9540]]

  It is a very normal and standard approach, in my opinion, of bringing 
together the differences between the House and the Senate, letting that 
debate be resolved at a time when the House and the Senate have put the 
details to the tax packages.
  As has been said many times, what we are adopting today is a budget. 
It creates a number for tax relief. It does not say what kind of tax 
relief will occur. There are proposals and I am going to talk about 
those proposals, but the budget that we are talking about allows the 
House and the Senate tax committees to write their own proposals. We do 
not know what they are likely to adopt--well, let me say we think we 
know what they are likely to focus on, but we do not know the details 
of how they will adopt it.
  I will talk about the tax relief argument for a minute. It has been 
said again today, multiple times, that we are talking about tax relief 
for the wealthy. As I said, I have served in Congress now for over 10 
years, and during each of those 10 years--the 6 years I served in the 
House and going on 5 years I have now served in the Senate--we have had 
debates over tax relief. We have had tax relief proposals of all 
different kinds, everything from proposals to reduce the income tax 
rates to proposals to eliminate the marriage tax penalty, to proposals 
for child tax credits, and so forth. Every single time that a proposal 
for tax relief has been made, since I have served in this Congress, it 
has been attacked as tax relief for the wealthy. Even the proposal to 
eliminate the marriage tax penalty was attacked as tax cuts for the 
wealthy.
  Why? Because that is something that seems to work when people do not 
look at the details behind what kinds of tax relief are being proposed.
  Well, what kind of tax relief is being proposed by the President? 
First, he is proposing that we accelerate the tax cuts that were put 
into place in 2001. That includes expansion of the 10-percent bracket, 
hardly a tax cut on the wealthy; acceleration of the 2006 rate 
schedule; acceleration of the 15-percent bracket; and an increase in 
the standard deduction for married filing jointly, hardly tax cuts for 
the wealthy; acceleration of the child credit increase, hardly tax 
relief for the wealthy; an increase in the AMT exemption amount. There 
is one where people from all different categories could get caught up 
in it but particularly I hear about this one from small business 
owners. I certainly hope all small business owners in America and 
others are not considered to be wealthy simply because they own their 
own business.
  It also includes an increase in the expensing options for small 
businesses and other businesses, all businesses.
  Mr. President, I have just been notified I can now make a unanimous 
consent request, and I will do so.
  Mr. REID. Mr. President, if I could direct a question through the 
Chair to my friend, who is acting majority leader.
  The PRESIDING OFFICER (Mr. SUNUNU). The Senator from Nevada.
  Mr. REID. Could I have some indication how much longer the Senator 
from Idaho is going to talk? We may not be able to make the 4 time.
  Mr. CRAPO. Maybe 5 minutes.
  Mr. REID. We have four speakers, and if the time is equally divided 
between now and 4, I am not sure we have enough time for all of our 
speakers.
  Mr. CRAPO. I do not expect to go more than another 5 minutes.
  Mr. REID. I am wondering if the majority is going to use all of their 
time, if we decide to vote at 4, which will be beyond 15 minutes. Does 
the Senator think he would have authority to allow us to have another 
hour of that time and the majority have what remains?
  Mr. CRAPO. I am not authorized to make that agreement at this point. 
Should I forego making the unanimous consent request?
  Mr. REID. Yes.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. The point I was making is that the first thing the 
President was talking about doing was accelerating the tax relief that 
was implemented in 2001, tax relief which was attacked then for being a 
tax cut on the wealthy but certainly was not so.
  The other thing the President has proposed is to make all of that tax 
relief permanent. That would be making the elimination of the marriage 
tax penalty permanent, making the elimination of the estate tax 
permanent, making the increase in the expansion of the 10-percent 
bracket and the other tax relief provided for all taxpayers in America 
permanent. These proposals benefit every taxpayer in America. On a 
percentage basis, they favor those in the lower income brackets far 
more than those in the upper income brackets.
  The bottom line is, whether you use percentages or numbers, people 
can play with the numbers and say this is a tax cut for wealthy or 
middle income or whatever, but on a percentage basis these tax relief 
proposals benefit those in the lower income tax brackets more than any 
other bracket.
  In order to facilitate our effort to conclude this debate at the 4 
p.m. time, I will forego the remainder of my comments.
  I conclude by pointing out this is another angle on the traditional 
debate we have virtually every year between those who want to see 
spending maintained and increased and those who want to see the Federal 
budget controlled and implement tax relief. The American people can see 
through these arguments. The American people understand the value and 
stimulus tax relief can provide to the economy of this Nation at a time 
when our economy dramatically needs the right kind of fiscal policy to 
be adopted by this Congress.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I yield 10 minutes to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, the budget before the Senate, like the 
President's budget which it reflects, represents the wrong priorities: 
Too many ill-advised cuts in too many critical area to help pay for a 
tax cut which is too large, too inequitable, and which will worsen our 
fiscal situation without providing our economy the jump-start it needs.
  The budget resolution that passed the Senate, while irresponsible, 
was a small improvement over the one reported from the committee. The 
Senate managed to make an irresponsible budget resolution slightly less 
irresponsible. The huge tax cuts the President proposed, a majority of 
which would go to upper income folks and which most economists agree 
would provide our economy with almost no jump-start that it so 
desperately needs, were scaled back some. But the conference report 
before the Senate today pushes us right back to where we started.
  Notwithstanding our current record deficits, a war in Iraq and its 
expected aftermath, the full cost of which is not yet known, and a baby 
boom generation that will soon retire in record numbers, the conference 
report contains tax cuts that total about $1.3 trillion over the next 
10 years and, with the expected interest costs added in, $1.6 trillion.
  As recently as January of 2001, the Office of Management and Budget 
projected a 10-year surplus of $5.6 trillion. Now we are back into a 
huge deficit hole and will be there for the foreseeable future. In 
fact, this conference report projects total deficits of $1.4 trillion 
over the next 10 years, including record deficits of over $300 billion 
this year and next.
  The right type of small tax cuts could stimulate the economy by being 
effective in the short term and going to working families and small 
businesses who will spend the money now, instead of mainly going to the 
wealthiest among us who do not need tax cuts. Tax cuts that drastically 
worsen our long-term fiscal situation, that will not help out in the 
short term, and that would require cuts to many other priorities are 
not what our economy needs and not what our people are asking us to 
adopt.
  How much money is going to whom in 2003? The President's tax cut 
proposal gives about half of the tax cuts to

[[Page 9541]]

the wealthiest 5 percent of American taxpayers. People can try to put a 
different gloss on numbers, but there are two bottom lines: One bottom 
line is this proposal puts us deeper into a deficit ditch and pays for 
tax cuts mainly going to upper income folks by borrowing; the other 
bottom line is that the 2003 tax cut proposal of the President gives 
the wealthiest 5 percent about 50 percent of the money involved in 
these tax cuts.
  Simple equity, as well as an economic stimulus, suggests if we are 
going to have tax cuts, they should be broad based, providing, for 
instance, every working family of four with an immediate tax cut of 
$1,200. That would be an economic stimulus. That would be equitable. 
That is not what is before the Senate.
  There are a number of other things we ought to do in talking about 
equity and economic stimulus. We ought to extend unemployment benefits 
for those whose benefits have expired and were not previously extended. 
We ought to provide short-term incentives for businesses to invest 
immediately. We ought to provide some assistance to our struggling 
states for education, homeland security, Medicaid, and highway and 
other infrastructure improvements. Those measures would be better for 
our economy today, our fiscal situation in future years, and the many 
other challenges that lie ahead. They would also address today's 
problems today without passing the costs on to future generations. One 
symbol of those future generations are the men and women who now are 
putting their lives on the line for us in the war in Iraq. It seems to 
me unthinkable that when we welcome them home--hopefully with the 
parades and the welcome and the hugs they deserve--we would also tell 
them: By the way, the war you are fighting is going to be paid for by 
you and your kids, not by us; we are going to borrow money, not to pay 
for this war; we are going to borrow this money to pay for a tax cut 
that mainly goes to the wealthiest among us.
  This approach in this budget is wrong on three counts. Number one, we 
should not be cutting taxes. We ought to be paying for the war now. 
Number two, if we are going to borrow money, if we have to borrow money 
for the war, we obviously should borrow it for the war, not for a tax 
cut. Finally, if there are going to be tax cuts, the tax cuts ought to 
go not only to those who need the tax cuts the most but those who will 
spend the money now, giving our economy the jump-start it needs.
  We need a lift in this economy, not one that will kick in years down 
the road or will further explode the deficit, but a fiscally 
responsible lift that will kick in now. The job loss numbers released a 
week ago by the Labor Department reinforce the need for a stimulus plan 
that will create jobs now, in 2003, when we need it.
  The proposed tax cuts are not only sharply slanted toward the 
wealthiest among us, they would do virtually nothing to assist our 
financially strapped States. As a matter of fact, the tax cuts as 
proposed may harm them. Just the proposed dividend tax provision alone 
would actually strip my home State of Michigan of over $100 million in 
revenue in 2004. And economists, including multiple Nobel Prize 
winners, agree the tax cut will not provide the boost that this economy 
needs.
  I was also very disappointed to see the conference report excluded an 
amendment that I offered and that was adopted by the Senate in the 
budget resolution which we adopted.
  Mr. REID. Mr. President, I ask my friend to yield. I am rising for a 
unanimous consent request so Members have an idea when this will be 
concluded.
  Mr. President, I have been in discussion with the majority, and I ask 
unanimous consent the vote on adoption of the pending budget conference 
report occur 2 hours from this time, and that Senator Levin be allowed 
to complete his statement on our side, and Senator Durbin would have 15 
minutes, Senator Graham of Florida 15 minutes, Senator Feinstein 10 
minutes, Senator Biden 10 minutes, and Senator Byrd 30 minutes.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I also need some time to wrap up, I say to my colleague, 
in maybe 10 minutes. Maybe we can work these all down in a way that 
fits within the time constraints.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. I think it is totally appropriate.
  The PRESIDING OFFICER. Is there objection to an additional 10 minutes 
being allocated to the Senator from North Dakota?
  Mr. REID. We need to make sure we have enough time for the majority. 
If we do 2 hours, they would be limited, instead of 30 minutes, to 20 
minutes. The only reason I say that is Senator Nickles, when he started 
today, said they would not need a lot of time. I know 110 minutes 
compared to 20 minutes is not very much.
  Mr. CRAPO. I am authorized to agree to 90 minutes for the Democrats 
and 30 minutes for the Republicans. But I am not authorized to reduce 
that 30 minutes at this point, so I would have to object.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. If I could modify my request, I will try to pare down the 
time here. Let's make it 95 minutes here and 35 minutes on the other 
side.
  The PRESIDING OFFICER. Is there objection?
  Mr. DORGAN. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Reserving the right to object, I just had a chance to 
visit for a moment with the Senator from Nevada. I would like to be 
able to speak for 20 minutes between now and the time the vote occurs.
  Mr. REID. I withdraw my request.
  The PRESIDING OFFICER. The request is withdrawn.
  The Senator from Michigan has 3 minutes remaining.
  Mr. LEVIN. The amendment to which I referred, which was adopted by 
the Senate, was aimed at closing down certain abusive tax haven 
loopholes. We would have taken the money which we would receive by 
closing down these abuses and applied half of it to the deficit, the 
other half going to education in areas where we are cutting education.
  It is unconscionable to me that corporations, too many of them, have 
renounced their United States citizenship and opened phony offices in 
Bermuda from which they can then pretend that their businesses operate, 
keep doing their business here in the United States, using our police 
departments, our fire departments, our schools, and all of our other 
services--inverting, as it is called--getting the benefits of 
citizenship here but avoiding paying taxes.
  People ask, how come revenues are going down? There are a lot of 
reasons why revenues are going down. One of them is the tax cuts which 
were adopted here which were proposed by President Bush. Obviously, a 
slowing economy has had an effect, too. But one of the other reasons we 
lost revenues is that we have too many corporations that are avoiding 
paying their fair share of taxes through a very large number of tax 
avoidance schemes.
  We have seen some of these tax shelters. We have seen some of these 
special-purpose entities used by Enron and others. We have seen a whole 
host of ways folks can avoid paying their fair share of taxes. It seems 
to me, in the middle of a war, the most unconscionable one of all is 
those corporations that renounce their citizenship and open up a fake 
office somewhere else in order to avoid paying taxes which they should 
be paying, and at the same time using our roads, our schools, our 
banks, our patent laws, our law enforcement, our fair trade laws, our 
workforce, and not contributing their fair share to pay for those 
benefits. It was really unfortunate that the conferees decided to strip 
this budget resolution of language that was aimed at closing down that 
particular loophole.
  This budget emphasizes the wrong priorities. It burrows us deeper 
into the deficit ditch. It continues our reliance on the Social 
Security surplus. And it fails to provide the stimulus which is needed 
to improve our sputtering economy. It rises to a new level of 
irresponsibility and it should be defeated.

[[Page 9542]]

  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I want to respond to something my 
colleague from Idaho indicated during his remarks when he stated that 
marriage penalty relief has been attacked as a tax cut for the wealthy. 
I know of no example of that. I do know that on our side, Democrats 
moved to accelerate that relief in 2001, but virtually every Republican 
voted against it.
  I would be happy to have that vote printed in the Record at this 
time, so people can check the record and determine whether or not that 
allegation has merit or not. I ask unanimous consent that be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    [Record Vote 112, May 17, 2001]

              Reconciliation (Tax Cut), (Marriage Penalty)

       H.R. 1836--Amendment No. 654: ``Economic Growth and Tax 
     Relief Reconciliation Act of 2001''.
       Conrad-Kennedy-Johnson amendment which accelerates the 
     elimination of the marriage penalty in the standard deduction 
     and the 15 percent tax bracket to fully eliminate the penalty 
     in 2002; offsets by delaying the reduction of the top two tax 
     brackets from 2009 to 2010; and provides a trigger mechanism 
     to protect the Medicare HI trust fund, requiring the Treasury 
     Secretary to adjust the marginal tax rate reductions in any 
     fiscal year in which the rate cuts would result in an on-
     budget surplus smaller than the Medicare HI trust fund 
     surplus.
       Amendment Rejected.


                               YEAS (44)

       Democrats (42 or 84%): Akaka, Bayh, Biden, Bingaman, Boxer, 
     Byrd, Cantwell, Carnahan, Clinton, Conrad, Corzine, Daschle, 
     Dayton, Dodd, Dorgan, Durbin, Edwards, Feingold, Feinstein, 
     Graham, Harkin, Hollings, Inouye, Johnson, Kennedy, Kerry, 
     Kohl, Landrieu, Leahy, Levin, Lieberman, Mikulski, Murray, 
     Nelson (FL), Reed, Reid, Rockefeller, Sarbanes, Schumer, 
     Stabenow, Wellstone, Wyden.
       Republicans (2 or 4%): Chafee, L., McCain.


                               nays (56)

       Democrats, (8 or 16%): Baucus, Breaux, Carper, Cleland, 
     Lincoln, Miller, Nelson (NE), Torricelli.
       Republicans (48 or 95%): Allard, Allen, Bennett, Bond, 
     Brownback, Bunning, Burns, Campbell, Cochran, Collins, Craig, 
     Crapo, DeWine, Domenici, Ensign, Enzi, Fitzgerald, Frist, 
     Gramm, Grassley, Gregg, Hagel, Hatch, Helms, Hutchinson, 
     Hutchison, Inhofe, Jeffords, Kyl, Lott, Lugar, McConnell, 
     Murkowski, Nickles, Roberts, Santorum, Sessions, Shelby, 
     Smith (NH), Smith (OR), Snowe, Specter, Stevens, Thomas, 
     Thompson, Thurmond, Voinovich, Warner.


                             NOT VOTING (0)

       Democrats (0).
       Republicans (0).

  Mr. CRAPO. Will the Senator from North Dakota yield?
  Mr. CONRAD. I am happy to yield.
  Mr. CRAPO. I believe what I said was that, as I had been here over 10 
years, we debated that proposal several times and every time it has 
been debated it has been attacked as a tax cut for the wealthy. I can 
tell you from my own personal experience, that is the case. In fact, 
today it is part of the proposal being talked about and it is being 
attacked as a tax cut for the wealthy.
  Mr. CONRAD. I say to my colleague, as I indicated, we on this side 
moved to accelerate that relief in 2001. In fact, I offered the 
amendment.
  Mr. CRAPO. We will take a look at that and see why the vote was 
different.
  Mr. CONRAD. All but two on your side voted against it.
  Is the Senator seeking time?
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. I yield 10 minutes to the Senator from Illinois.
  The PRESIDING OFFICER. The Senator from Illinois is recognized for 10 
minutes.
  Mr. DURBIN. Mr. President, I reduced the time I requested because I 
know I have colleagues on the floor seeking recognition and we want to 
wrap this up in a timely way.
  Let me say to those following this debate, one, the greatest 
Illinoisan of all times once said:

       A speech the world will little note nor long remember.

  I think the same can be said of this debate. The United States will 
little note nor long remember this debate on the Senate floor. But it 
will remember what happened today when we see the outcome. The outcome 
is going to be devastating for the economy of the United States for 
years to come.
  The reason is, of course, America is preoccupied, as it should be, 
with the war in Iraq. We are so proud of the achievements of the men 
and women in uniform. We have watched every single day the wonderful 
unfolding of the change in Iraq, offering a new opportunity. I think 
the reason we are focused and so positive about the military 
accomplishment is we know the men and women involved in that decision 
showed both courage and vision.
  Sadly, when it comes to the economy of the United States, the other 
party and the administration in the White House show political 
calculation and myopia. Instead of dealing with the real economic 
challenges of America in a sensible, fair, and evenhanded way, we have 
a Republican budget resolution which will be devastating. It will be 
devastating in creating the largest deficits in the history of the 
United States of America.
  What happened to this Grand Old Party, this party of fiscal 
conservatism? Today, we find it is the party of record deficits and 
record debt. A party which once said, we don't want to leave a legacy 
to our children of debt, is in fact creating that debt with this budget 
resolution.
  There are some things you can argue are beyond the control of the 
White House or anyone in Congress. One of those things is the cost of 
this war and the war on terrorism. I will gladly concede that those are 
things which could not be calculated 2 or 3 years ago and cannot be 
calculated today in terms of their cost. But the real problem with this 
budget resolution is this President's fixation with creating massive 
tax cuts for the wealthiest people in America. It is the age-old 
Republican answer to every single problem: When in doubt, cut taxes for 
wealthy people.
  This is done in the belief that if the wealthiest people in America 
just had a little more money to spend, things would get so much better. 
We tried this. A little over 2 years ago, the President came in with 
the first round of his tax cuts for the wealthy, and he said: Just 
watch what happens.
  We watched. The economy continues to plummet. We continue to lose 
jobs. In fact, if you look at the Bush record since the President took 
office: 2.5 million fewer private sector jobs under this President; 
long-term unemployment up 184 percent; over 2 million more Americans 
without health insurance; 1 in 10 small businesses has dropped health 
insurance for their workers; the average cost of health insurance rises 
by double digits; the gap between tuition and Federal student aid has 
grown $1,900 more under President Bush, retirement savings have been 
decimated, consumer confidence dropped by 51 percent, and the Bush 
budgets have turned a projected $5.6 trillion Federal surplus into a $2 
trillion deficit.
  How can one President in 2 years and 3 months have dealt such body 
blows to the American economy? He did it with the wrong policies, a 
policy of tax cuts for the wealthy that failed in the first round and 
will fail again. This budget resolution enshrines those tax cuts and 
says to our children and future generations: Get prepared to pay off 
this debt because we have to give tax breaks to wealthy people today.
  My friend from Idaho says: Oh, that's just class warfare. I am 
reminded we were recently visited by Warren Buffett, one of the most 
wealthy men in America. He said: If this is class warfare, I have 
something to report: My class is winning.
  It certainly is, because if you look at the President's overall tax 
cuts, and the amount of money that average taxpayers can expect, look 
at these numbers: $265 for the typical taxpayer in tax relief; and yet 
for people with over $1 million, $88,873 on an annual basis.
  Think about that for a moment. We are saying to the average taxpayer: 
We are going to give you a modest bicycle and some roller skates. We 
are saying, for the millionaires: You need a luxury car.
  That is the idea of fairness and justice when it comes to the 
Republican side of the aisle.

[[Page 9543]]

  Well, it has been absolutely devastating. When you take a look at it 
in terms of the Bush tax plan, nearly 50 percent of American taxpayers 
will receive less than $100. They just get the roller skates. The 
people who are millionaires end up with the luxury limos.
  Is that what America is all about, particularly in time of war, when 
we have children from average, middle-income working families risking 
their lives for this Nation? Is this the best we can do? To offer a tax 
cut to the wealthiest people in this country? To say at this time of 
uncertainty about the cost of the war, and what we will need as a 
nation, that the best we can come up with is a plan from the White 
House to give tax breaks to the wealthiest people?
  Take a look at this budget conference report and I will tell you what 
you will find. The Republican approach shortcuts education 
dramatically. The President passed No Child Left Behind. He said: We 
are going to help our schools move forward.
  We need $9 billion, Mr. President, next year. Your budget provides 
$400 million--not nearly enough. While school districts face 
bankruptcy, States are deep in deficit, this administration cannot find 
the money for education. But it can find the money for tax cuts for 
wealthy people.
  I will tell you, the No. 1 issue I find among families and businesses 
in Illinois--the No. 1 issue--is not this whole question of tax cuts; 
it is the cost of health insurance. This administration, in this 
budget, has done absolutely nothing to deal with the most serious 
problem that businesses and families face today--nothing. It is better, 
they believe, to give a tax cut to wealthy people than to deal with 
real issues that families and businesses face every single day.
  You want to deal with tax cuts? Let me tell you one that I find 
overwhelmingly popular in my town meetings. The Senator from New York 
has suggested it, Mr. Schumer: a $12,000 deduction each year for 
college education expenses. Think about working families whose kids get 
into good schools and face tuition that they never would have dreamed 
of and debt that they couldn't imagine. Imagine if we could give them 
tax assistance, give them tax help: $12,000 deductibility.
  But, no, the Republicans say that isn't the way to invigorate 
America. That isn't the vision of the future. Their vision is to make 
sure the wealthiest among us have more money to spend.
  I don't get it. It is classic Republicanism, but it is a classic 
failure--a failure which over 2 years and 3 months has driven the 
American economy into the rut.
  In my State, we have lost tens of thousands of manufacturing jobs, 
faced record unemployment rates, and this administration believes the 
way out of it is to provide tax cuts for the wealthiest people.
  I salute the Senator from North Dakota. His leadership on this has 
been extraordinary. He and the Congressman from South Carolina, John 
Spratt, have spoken out in honest terms about what we face as a nation. 
Some of the things the Senator said during the course of the debate are 
not necessarily politically popular, but they are courageous and they 
show vision. That is what our military forces are doing in Iraq. That 
is what we should do here, nothing less. Instead, we are dealing with 
political calculation and kind of shortsightedness that we will pay for 
for many generations.
  I will vote a resounding no on this budget resolution.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the Senator from Illinois.
  Does the Senator from Florida seek time?
  Mr. GRAHAM of Florida. Yes.
  Mr. CONRAD. Mr. President, I yield 12 minutes to the Senator from 
Florida.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM of Florida. I thank the Senator.

  Mr. President, the real priorities of the President and those who 
wrote this budget can be seen by comparing two numbers: The tax cuts 
authorized in this resolution total $1.3 trillion over the next 10 
years. Over the same 10 years, the Federal budget will run deficits 
totaling $1.4 trillion.
  The priority of those supporting this resolution is crystal clear: 
tax cuts today, in exchange for an even higher mountain of debt that 
will be paid by our children and grandchildren.
  So strong is the lust for tax cuts, the conference committee on the 
budget has gone so far as to develop an unprecedented gimmick by which 
the Senate and the House of Representatives will consider a portion of 
these tax cuts later in the year.
  Under normal procedures, a conference report is to be a consolidated 
single resolution of all of its issues. We are presented with what is 
called a conference report, which has a dramatic difference between tax 
cut allowances in the House--$550 billion, over 10 years--and tax cuts 
allowed in the Senate--$350 billion.
  The goal of the majority is to give the appearance of limiting tax 
cuts to the Senate-passed limit of $350 billion, while paving the way 
for fast-track tax cuts of $550 billion.
  During the debate on the Senate's budget resolution a couple of weeks 
ago, I voted against any tax cut in the budget. Why? Because, in my 
judgment, they do not reflect our Nation's priorities.
  This budget should seek to reduce the national debt. It should seek 
to strengthen and reform Social Security. It should seek sufficient 
funds to modernize the Medicare Program and add a meaningful 
prescription drug benefit. It should provide funds for programs the 
Federal Government has committed itself to which are so critical in the 
lives of our children.
  This budget includes no adequate money for these priorities. It is 
laser like in its focus on tax cuts. The tax cuts allowed by this 
budget are not only irresponsible, they are misdirected. Although their 
advocates claim their purpose is to create jobs and stimulate economic 
growth, these tax cuts will not do the job. That is especially true of 
the proposed tax cut on stock dividends.
  To truly stimulate the economy, any tax cuts should be targeted so 
they boost demand for consumer goods and services. Most economists 
agree that this is best achieved by directing the tax cuts to low- and 
middle-income families and small businesses.
  I personally would prefer a short-term reduction in the payroll tax, 
paid for by general revenue, holding the Social Security and Medicare 
trust funds whole.
  The tax cuts contemplated by this resolution are directed at upper 
income families who are the least likely to boost their purchases of 
goods and services.
  We had a debate a few moments ago as to whether this was class 
warfare. That is in the eyes of the beholder. But one thing that it 
clearly is: It is intergenerational warfare.
  It is warfare against children, with cuts in education, the failure 
to fund the No Child Left Behind Act, which we passed 2 years ago, cuts 
in childcare, cuts in women's, infant's, and children's health care.
  The irony of this intergenerational warfare against children is that 
they will end up paying, during their adulthood, the cost of the 
deficits which we are adding today.
  It is also intergenerational warfare against older Americans. Some 
would argue that this budget includes $400 billion for a Medicare 
prescription drug benefit. They know full well that $400 billion is 
inadequate to provide an affordable, comprehensive, universal 
prescription drug benefit for America's seniors.
  Why do we know this? Last year, 52 Senators voted for a plan, which I 
had offered, to provide to Medicare beneficiaries real drug benefits, 
with no gimmicks, no gaps, no hidden ``gotchas.''
  With inflation and the change in demographics of the older 
population, such a benefit would now cost $619 billion over 10 years.
  Limiting a prescription drug benefit to $400 billion means that 89 
percent--

[[Page 9544]]

89 percent--of Medicare beneficiaries, those who have elected to stay 
in the fee-for-service Medicare Program, will go without prescription 
drug coverage, unless they either have very low incomes or very high 
drug costs.
  The only way to provide a drug benefit within this budget's framework 
is to limit the benefit to a relatively small number of Medicare 
beneficiaries.
  If they should happen to live in an area that offers health 
maintenance organization coverage--and millions of our seniors do not--
Medicare beneficiaries will have no choice but to move into managed 
care plans because there is no other way that they will be able to 
access the lifesaving prescription drugs they need. It is wrong to 
force seniors to make this choice. It is irresponsible to approve a 
budget that ignores vital priorities such as modernizing the Medicare 
Program, securing Social Security's future, reducing the national debt, 
while promoting massive tax cuts for the wealthiest of Americans.
  I urge my colleagues to take responsibility for our actions, to pay 
for our obligations now--not to pass a budget that promotes 
unaffordable tax cuts, tax cuts with consequences that will be felt 
now, particularly by children and older Americans, tax cuts with costs 
that will be passed on to future generations to pay.
  Therefore, I shall vote no on this budget resolution and hope that we 
might have an opportunity later in the year to reconsider this 
misguided proposal.
  I ask unanimous consent that an item which appeared in the New York 
Times of April 9, titled, ``No New Tax Cuts,'' which was authored by 
former Senators Bob Kerrey, Sam Nunn, and Warren Rudman, as well as 
Peter Peterson and Robert E. Rubin, and Paul A. Volcker be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Apr. 9, 2003]

                            No New Tax Cuts

(By Bob Kerrey, Sam Nunn, Peter G. Peterson, Robert E. Rubin, Warren B. 
                      Rudman and Paul A. Volcker)

       With a war in Iraq and looming post-war costs, growing 
     pressures for a prescription drug benefit, increased expenses 
     for domestic security and a ballooning budget deficit, 
     Congress must exercise restraint on both revenues and 
     spending to prevent fiscal policy from spiraling out of 
     control. The consensus in favor of long-term budget balance 
     must be re-established. This issue is now directly before 
     Congress as it debates the federal budget.
       The fiscal outlook is much worse than official projections 
     indicate. These projections assume that the tax cuts enacted 
     in 2001 will expire at the end of 2010. They also assume that 
     discretionary spending, the part of the budget that pays for 
     national defense, domestic security, education and 
     transportation, will shrink continuously as a share of the 
     economy. Neither of these assumptions is realistic.
       Moreover, the official projections do not include the costs 
     of war and reconstruction in Iraq. And they ignore the 
     inevitable need to reform the alternative minimum tax, which 
     is not indexed for inflation and will apply to some 40 
     million households within 10 years--up from two million 
     today.
       Under more realistic assumptions, the deficit projections 
     are cause for alarm. A recent study by Goldman Sachs includes 
     this forecast: if the president's proposed new tax cuts are 
     enacted, a Medicare prescription drug benefit is approved, 
     the A.M.T. is adjusted and appropriations grow modestly, the 
     deficits over the next 10 years will total $4.2 trillion--
     even if the Social Security surplus is included. If it is not 
     included, the deficit would be $6.7 trillion. Under these 
     circumstances, the ratio of publicly held debt to gross 
     domestic product climbs within 10 years to nearly 50 percent, 
     from 33 percent just two years ago.
       And all of this happens before the fiscal going gets tough. 
     Looming at the end of the decade is a demographic 
     transformation that threatens to swamp the budget and the 
     economy with unfunded benefit promises, like Social Security 
     and Medicare, of roughly $25 trillion in present value. Our 
     children and grandchildren already face unthinkable payroll 
     tax burdens that could go as high as 33 percent to pay for 
     these promised benefits. It is neither fiscally nor morally 
     responsible to give ourselves tax cuts and leave future 
     generations with an even higher tax burden.
       And yet tax cuts are the primary focus of this year's 
     budget debate. To speed enactment of tax cuts, Congress is 
     planning to use a special fast-tract procedure called 
     ``reconciliation'' in the budget resolution. While 
     determining the size of the tax cut to be given fast-track 
     protection in the budget is sometimes dismissed as a 
     procedural matter, it is not: whatever its size, a tax cut 
     that receives this protection is almost certain to be enacted 
     in the later tax legislation. Members of Congress should not 
     therefore approach the budget decision with the idea that a 
     tax cut given such status now can be easily scaled back 
     later.
       The president has proposed a cut of $726 billion, which the 
     House has already approved. The Senate has reduced the cut to 
     $350 billion.
       Given the rapidly deteriorating long-term fiscal outlook, 
     neither proposal is fiscally responsible. It is illogical to 
     begin the journey back toward balanced budgets by enacting a 
     tax cut that will only make the long-term outlook worse. 
     Furthermore, the proposed tax cuts are not useful for short-
     term fiscal stimulus, since only a small portion would take 
     effect this year. Nor would they spur long-term economic 
     growth. In fact, tax cuts financed by perpetual deficits will 
     eventually slow the economy.
       The tax cuts now before Congress do not pay for themselves. 
     No plausible array of matching spending cuts or offsetting 
     revenue increases has been, or will be, proposed to close the 
     gap resulting from a large new tax cut.
       We believe that there should be no new tax cuts beyond 
     those that are likely to provide immediate fiscal stimulus, 
     and that avoid growing revenue loss over time. If, however, 
     Congress decides it must approve a tax cut, it should pass 
     the Senate's. While a $350 billion tax cut does not fit our 
     definition of fiscal responsibility, it comes closer than a 
     tax cut of $726 billion. Moreover, Congress should 
     reestablish the pay-as-you-go rule in which tax cuts and 
     entitlement expansions must be offset. The discipline of this 
     rule greatly contributed to the elimination of budget 
     deficits in the 1990's and is clearly needed again.
       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be other 
     otherwise. They raise interest payments on the national debt. 
     They reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an insupportable tax burden for the next 
     generation.

  The PRESIDING OFFICER. Who yields time? The Senator from Florida.
  Mr. GRAHAM of Florida. Mr. President, how much time would the Senator 
from Florida like?
  Mr. NELSON of Florida. The good ranking member of our committee was 
going to allocate 10 minutes to me.
  Mr. GRAHAM of Florida. Taking the position of the ranking member of 
the Budget Committee, I shall allocate 10 minutes to my colleague.
  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
  Mr. NELSON of Florida. For that to come from the senior colleague of 
my State, who not only can I call friend but also my senior Senator, my 
mentor, I am very grateful. I find that as in most of the cases, his 
and my ideas are very similar, as he has just expressed so about this 
budget.
  I want to start my remarks by telling a story. In 1978, I came to the 
House of Representatives and became a freshman member of the Budget 
Committee. Twenty-two years later, I come to the Senate, and I am a 
freshman Senator put on the Budget Committee.
  In the second term I had in the House, we had a newly elected 
President, President Reagan. I felt that the President, having won a 
significant victory, was owed a certain deference with regard to his 
tax policy. On a very close vote, I was one of the handful of votes 
that allowed President Reagan to pass his budget in 1981, and his tax 
cut.
  In a couple of months, I realized that I had made a mistake. I took 
to the floor of the House of Representatives and stated that I had made 
a mistake because what we had done was to cut the tax revenues so much 
so that the revenues were plummeting at the same time we were 
increasing expenditures of Government. Prior to the Reagan 
administration we were still running deficits, but it was about a $20 
billion deficit, annual deficit--that is, $20 billion more that the 
Government was spending than it had coming in tax revenue--but if you 
look on a chart, what happened after that was the expenditures were 
going up and the revenues were coming down. And the annual amount of 
borrowing that the Government had to do was all the greater, swelling 
the national debt, causing a

[[Page 9545]]

huge expenditure for the Federal Government of annual interest on the 
additional amounts that we were borrowing each year. It was taking us 
into the economic ditch. We were in fiscal chaos. I will never forget 
one of my dear friends in the House, who shall remain nameless but who 
was one of the preeminent economic spokespeople of the time for the 
trickle-down, supply-side economics theory, stated--and I found it 
revealing--We do not worship at the altar of the balanced budget 
anymore.
  Well, that was certainly true because in the decade of the 1980s, the 
annual deficit swelled to around $250 billion a year. The national debt 
doubled and tripled, and that big tax cut I said was a mistake in 1981 
had to be undone--not once, not twice, but three times over the course 
of the decade of the 1980s--ultimately, into the 1990s. Then sounder 
fiscal minds prevailed. The budget was ultimately balanced to the point 
at which almost nirvana was achieved in the late 1990s and the year 
2000. And lo and behold, here we were in a surplus.
  Had we been fiscally conservative--let me repeat that statement--had 
we been fiscally conservative, we could have been good stewards of 
those surpluses, and we could have provided for the additional spending 
that clearly we were going to have to do, particularly in the defense 
of the country, even though we didn't know at the time that September 
11 would happen. And we had the very real probability that we could pay 
off the national debt over the course of 10 or 12 years.
  I tell that story because that is a personal story I have lived. It 
is a story of personal experience that I come to this Senate Chamber 
today to tell as to why I voted against this budget resolution when it 
came through the House and why I am going to vote against it today. 
Because it is not sound fiscal policy; it is not conservative fiscal 
philosophy. It is exactly the opposite. It is reckless fiscal policy 
when you drive revenues down, increasing expenditures, particularly in 
time of war and the kinds of occupational expenses that we are going to 
have to be expending, that we are already expending in Afghanistan, 
that we have been expending in Bosnia for 7 years, and how many years 
are we going to have to expend it in Iraq, which I support.
  It brings us back to this mindless fiscal policy driving us into the 
economic ditch.
  I say to the ranking member of the committee, I am just getting wound 
up. I know you have lots of others to talk.
  I am just getting into my message, but you get the drift of my 
message. I know you want to allocate time to other folks. I will sum 
up.
  I have always tried to conduct myself in public office looking to 
what is the workable solution, what is the commonsense solution. Most 
folks want Government to work, and they want their elected 
representatives to perform so that Government will perform and function 
well.
  When you adopt fiscal policy such as this, driving the annual deficit 
higher and higher, when there is no prospect in the future anytime soon 
of bringing it into fiscal balance and getting close to a balanced 
budget. That just doesn't comport to common sense. You can do all of 
the legislative sleight of hand and fiscal ``now-you-see-it-now-you-
don't,'' as has been done by this budget resolution, but that doesn't 
get away from the hard economic fiscal reality that we are going in the 
opposite direction.
  Do I support tax cuts? Of course I do. In the first year, I voted for 
a version that went as high as $1.2 trillion over a 10-year period. 
What we passed was supposedly $1.35 trillion. But the reason I didn't 
vote for that was that we knew that wasn't accurate; that it was going 
to be closer to $2 trillion in tax cuts over 10 years.
  Would I like to have those tax cuts? Of course, but every decision we 
make here has to be balanced as to how is it going to perform in the 
functioning of the economy. What you want is an economy that hums. You 
want an economy that functions, that is a robust economy.
  We are going in the opposite direction, where we fall off revenues so 
much at the time of expenses going so high that it causes the markets 
to get shaky because people do not have confidence in the markets.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. CONRAD. Mr. President, I yield an additional few minutes to the 
Senator.
  Mr. NELSON of Florida. Mr. President, I will not take the time 
because so many others have such beautiful ways of expressing 
themselves and they want to speak and I want to hear. I will conclude 
by saying I love this Senate, and I love these Senators. I love the 
Senators on this side of the aisle, and I love the Senators on that 
side of the aisle.
  The only disappointment I have had is when this place gets too 
partisan so it cannot work out a solution, and when this place gets too 
ideologically rigid so that you cannot find a consensus in the 
commonsense middle ground, and that is what is happening to us in this 
budget debate.
  Someday we will learn because we will have to make Government 
function in the way that the people all across America want it to 
function.
  I would venture that every single Member of Congress, on both sides 
of the aisle and both sides of the Capitol, can agree on one thing: We 
need to get the economy moving again.
  Every priority that we speak about up here--whether it is health 
care, retirement security, national defense, battling terrorism or even 
cutting taxes--every one of our priorities is easier to achieve when 
the economy is booming.
  The fundamental disagreement is on how we get the economy going 
again.
  When talking about the economy, I tend to trust economists. But these 
tax cuts that are the centerpiece of the administration's economic 
growth package, don't have a lot of fans among the Nation's economists. 
In fact, 450 economists, including 10 Nobel laureates, oppose his tax 
cuts because they won't create jobs or stimulate the economy. Meantime, 
the President was able to find just 13 who support his ``stimulus'' 
plan.
  And still, here we are, ignoring not only the better judgment of 
experts, but ignoring a majority of Senators who were able to agree on 
a smaller tax cut package. Only 2 weeks ago, this body agreed to reduce 
the reconciled tax cut package from $726 billion to $350 billion. Yet, 
in 2 short weeks, the administration and the majority party have found 
a way to game the system of reconciliation to ram through a higher tax 
cut number against the collective will of the Senate and the budget 
process.
  Over the years the budget process has endured many changes, but 
always with the intention of creating procedures that allowed Congress 
to be fiscally responsible as we plan for 10 years of spending 
priorities. The games that were played with the system this year have 
completely undermined the purpose of our budget process. As a result, 
we are in grave danger of plunging the country off a cliff into massive 
deficits and debt--threatening the education of our children, the 
financial security of our seniors, and the strength of the Nation.
  Given all the uncertainty we face, this tax cut we're forcing through 
is irresponsible. If the economy doesn't improve, or if peacekeeping in 
Iraq takes longer than expected, or if we face another conflict or 
terrorist act, we're going to have to find a way to pay for it. Fiscal 
responsibility cannot be predicated on a hope that all goes right, it 
requires planning to ensure financial stability should anything go 
wrong.
  This is no way to budget. We are not planning for the rainy days 
ahead. We're hoping that the economy gets going again. We're hoping 
that America doesn't have to defend itself again. We're hoping that 
homeland security costs don't mount or that more terrorists don't 
strike.
  Meantime, unemployment is growing, there are more uninsured 
Americans, we're about to have more veterans, our schools are not 
receiving the funds they need, the baby boomers are retiring, and we're 
cutting taxes?

[[Page 9546]]

  Sooner or later, we are going to have to pay for all of this or, more 
likely, our children will.
  If any of these worst-case scenarios occur, we will have to raise 
taxes or we will have to cut programs such as Medicare and Social 
Security or we will have to keep up deficit spending.
  No matter what, future generations are going to be forced to pay for 
the sacrifices we have refused to make.
  Our budget process and sound fiscal policy have become the latest 
casualties of political expedience. This is not the time for a tax cut, 
and certainly not one this large.
  Mr. CONRAD. Mr. President, I thank the Senator from Florida, Mr. 
Nelson. He is a very valuable member of the Budget Committee. He has 
been steadfast and resolute on fiscal responsibility. As he has made 
clear, he does not believe this budget represents that. The truth is, 
it does not. This is a budget that is going to explode the deficits and 
debt of the United States at a time of already record deficits. It 
takes $1.3 trillion away in revenue and increases expenditures by $1.1 
trillion. There can only be one result, and that is more red ink, more 
deficits, more debt, and a threatening of the economic security of the 
Nation.
  How much time does my colleague from North Dakota need?
  Mr. DORGAN. About 15 minutes.
  Mr. CONRAD. I yield 15 minutes to the Senator from North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 15 minutes.
  Mr. DORGAN. Mr. President, I recall an article by David Broder some 
while ago. He is one of the thoughtful columnists in the Washington 
Post. I think perhaps he is considered the dean of thinkers in 
Washington, DC, who write regular columns. He said in the first 
sentence:

       I am going to commit class warfare--not because I want to, 
     but because that is the only way I can describe what is 
     happening.

  Let me not act as a volunteer to commit class warfare, but I will say 
some things that others who are in a habit of doing so will describe as 
class warfare. We have proposals to cut taxes before us. We have plans 
offered by those who support this budget that will say to those who 
make $1 million in income in this country that we want to give you an 
$80,000-a-year tax cut. That is what they are proposing if you are 
lucky enough to receive $1 million in annual income. And if you are, 
God bless you. I am sure you work hard for it. But if you are lucky 
enough to be in that category, the majority party plan says we think 
you should have an $80,000-a-year tax cut. If we say that, is that 
class warfare? Is that what it is called?
  It seems to me it is logical for us to ask a question. When you are 
deep in debt, should you be talking about giving the most affluent in 
this country another tax cut? They got a very large tax cut 2 years 
ago. Should you talk about another one that will go largely to the most 
affluent in the country? I don't think so.
  Let me go to the specifics. Everybody speaks in generalities. We use 
a lot of charts and we talk about the numbers on the charts. But we 
seldom go right to the resolution itself. We have a budget resolution 
before the Senate. It comes from a conference between the House and the 
Senate, which our side was not part of because the conference was not 
bipartisan. It was a conference of the Republicans in the House and in 
the Senate, deciding together what kind of a budget they wanted to 
bring to the House and Senate from that conference.
  Let me describe what they brought to the floor of the Senate. Here is 
what they propose. Ask yourself: Is this Republican economics, is this 
conservative values, or a conservative doctrine? It is not a part of a 
conservative doctrine with which I am familiar.
  On page 5, they say: (4) Deficits (on budget).--For purposes of the 
enforcement of this resolution, the amounts of the deficits (on-budget) 
are as follows:

       Fiscal year 2003: $512 billion.
       Fiscal year 2004: $558 billion.
       Fiscal year 2005, $487 billion.

  If I keep going to fiscal year 2013, there are very large budget 
deficits year after year after year.
  Does anybody care about that around here? Is there anyone who calls 
themselves a conservative who is willing to stand up and say this 
matters? No. The only thing you hear is the chanting from the other 
side that says you know what this is, this is a growth plan.
  Let me be the first to admit this is the financial fertilizer that 
promotes growth. The problem is it promotes growth in deficits and debt 
and nothing else. Even the nonpartisan Congressional Budget Office 
reviewed this nonsense and said this is not a growth plan. This isn't 
going to promote growth in the economy. Don't take it from me because I 
belong to a political party. Take it from the nonpartisan Congressional 
Budget Office. They say it is not a growth plan. Take it from 10 Nobel 
laureate economists. They say this is not a growth plan.
  My colleague from Florida just described a bipartisan op-ed piece in 
the New York Times. Former Senators Kerrey and Nunn; former Senator 
Rudman; former Treasury Secretary Rubin; former Chairman of the Federal 
Reserve, Paul Volcker; former Commerce Secretary, Peter Peterson--
Republicans and Democrats alike--say this is not a growth plan. This is 
a serious problem for this country. We have people on the conservative 
side telling America let's spend money we do not have, often on things 
we don't need, and let's have the kids fighting the war come back and 
be saddled with the debt. This is fundamentally irresponsible.
  It is not a surprise then I am not going to vote for the conference 
report. This does not make sense.
  On page 5, for fiscal year 2003, they propose with this budget a $512 
billion debt. Do you know what they will say? ``How on earth can you 
say that? We are not proposing $512 billion in debt.'' What they do is 
take the Social Security trust funds for that year and reduce this and 
say: Our debt is only in the $300 billion range. You can do that if you 
want to loot the Social Security trust fund and use those revenues for 
a purpose for which it is not intended. I guess you can do that, but 
how many people are you fooling in this country? What does the word 
``trust'' mean? Is ``trust'' a forgotten word in this town, in this 
Chamber?
  They are the ones who say in the budget on which we will be voting 
that they want $512 billion in debt for fiscal year 2003 and $558 
billion in 2004, and on and on. In fact, what they are also saying on 
page 6 is very interesting. I would just love for one of them to stand 
up and say: Sign me up for this, count me in, I am a big cheerleader; 
in fact, bring some pom-poms to the floor. We believe we ought to 
double the national debt from $6 trillion to $12 trillion. Sign us up. 
In fact, put on some sweaters. Put the letters on the sweaters: We are 
for higher debt; we are for doubling the debt; we are for giving tax 
cuts mostly going to upper-income people to increase Federal 
indebtedness.
  I would just like somebody to stand up and be honest about that. Just 
tell us that is what you are for. Instead, we get this nonsense: We are 
for a growth plan. Growth of what? The only thing you are growing is 
debt. Deny that. Then take a look at your resolution. Stand up with 
pages 5 and 6 and deny it. Do I hear anybody denying it? I guess not. I 
guess they understand page 5 and 6 is what they wrote because this was 
not a bipartisan conference. Democrats were not involved in writing 
this. It is what they wrote, page 5 and 6, let's double the Federal 
debt and decide it does not matter. I just do not understand this 
thinking.
  This is a remarkable country. In the McCullough book about John 
Adams, he writes about how John Adams used to write back to Abigail 
when he was posted in Europe as they were forming this new country of 
ours. He would plaintively ask Abigail in his letters: Where is the 
leadership going to come from? Where will the leadership be to help 
create this new country of ours? Who will be the leaders?
  Then he would say: There is really only us. There is just me, George 
Washington, Thomas Jefferson, Ben Franklin, Madison, Mason--just us, he 
would say. It turns out, with two centuries of hindsight, it was some 
of the greatest

[[Page 9547]]

human talent ever assembled, and they created a remarkably strong 
democracy.
  It is important from time to time to ask the same question John Adams 
asked: Where is the leadership? Where is the leadership going to come 
from? Who will stand up and say: Let me lead; let me make tough 
choices? Regrettably, we do not see many leaders say that. My 
colleague, Senator Conrad, is one of those leaders. There are precious 
few others.
  Some of my colleagues who have stood up and fought valiantly to say 
this budget resolution will hurt this country, it will move this 
country deep in to debt, are willing to assume some leadership in 
saying that, but there are not enough in the Senate who want to say: 
Let me assume some leadership. There is not enough here. I regret that.
  This country is not going to move ahead by leaving some behind. In 
this plan, they say, we must increase defense spending, we must 
increase homeland defense spending, we must cut taxes deeply, and we 
will shrink all other domestic discretionary spending to pay for it. 
That is not a plan.
  What we are seeing in Iraq today is something quite remarkable, 
something that makes all of us enormously proud, first of all, of what 
our soldiers have done to liberate the Iraqi people. But then it 
bothers us a lot to see this looting all over the country of Iraq. That 
is what happens when you do not have civil order in a country, when 
there is no civil authority and no government.
  Government means essential functions. It means law enforcement. It 
means building schools and educating children. It means roads, 
providing for the common defense--that is what government is. So when 
people talk about let's just give very large tax cuts and we will just 
decide to shut everything else down, I say, yes, let's cut some 
spending, let's tighten our belts in the right way. But let's not 
decide in this country to provide a budget resolution to America that 
on page 5 and page 6 says at this moment in America when we are at 
war--the war in Iraq and the war against terrorism--when we have an 
economy that is sluggish, when we have so many difficulties, let's 
embark on an irresponsible fiscal policy that doubles the Federal debt 
and has budget deficits every year as far as the eye can see.
  As John Adams would ask: Where is the leadership? Where is the 
leadership to move this country responsibly toward the future of 
economic opportunity and growth and hope?
  When this war is over and the young men and women, sons and daughters 
of America, come home to their loved ones--and we hope and pray that is 
soon--we have to get about the business of taking care of business at 
home. We have an economy that is a mess. Those who make investments in 
our country, those who work for a living, those who build businesses--
all of them want to be American people who are confident about the 
future because our economy is all about confidence. If they are 
confident, then they do the activities that manifest that confidence. 
They take a trip, buy a car, buy a home, make a purchase, and the 
economy expands and new jobs are created. If they are not confident, 
they do exactly the opposite.
  This budget document takes us toward deep Federal debt, and deeper 
Federal deficits year by year. This is not a document that is 
responsible. This is not a document that is a growth document. This is 
a document that takes America backward, not forward. None of us here 
would come to the Chamber of the Senate and say, Let's have higher 
income taxes. But at the very least we ought to decide we should not 
have very large tax cuts at a time when we are doubling the Federal 
debt, at a time when we are at war in Iraq and at war against 
terrorism.
  The easiest lifting in American politics is by those who shuffle 
around saying: I am for tax cuts; it does not matter what the 
consequences are, I am for tax cuts. The consequences are, of course, 
to say let's do now what we want to do and have our kids pay for it. 
Let's have America's children bear the burden of the responsibility of 
this mistake. I think that is a horrible mistake. I wish very much I 
could come to the floor to support this budget. My colleague, Senator 
Conrad, made a persuasive argument earlier today. He used a great deal 
of charts.
  Let me use two of them. I mentioned what is on page 5 and 6. Here is 
the chart on debt. That is where it is headed, from $6 trillion to $12 
trillion. That is not my number, that is on page 6 of the budget 
resolution. That is not my number, that is what the Republicans are 
proposing. I do not mean that just because they are proposing this, I 
am saying this is irresponsible. It would not matter to me who proposed 
it. If my side was proposing it, I would say it is irresponsible. It is 
a fiscal policy that does not add up, and everybody in this room knows 
it.
  There is debt every single year, unless you loot the Social Security 
trust fund. We can make a chart that is a little better than this if 
one takes the Social Security money and misuses it. But we keep the 
Social Security trust fund in a trust fund, where the word ``trust'' 
means something to everybody.
  This is what we have for 10 years. One can paint a barn with this red 
ink. Red ink is all we see. It is not a growth plan. The only thing 
that grows in this plan is debt and deficits, and that is why I am 
going to vote no.
  I appreciate the time my colleague has offered me to describe my 
strong feelings about what this budget will do to this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. I yield 12 minutes to the Senator from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I rise to address an aspect of the 
budget resolution that we are debating today. I am going to focus on 
one of the Finance Committee's tasks that is included in the 
resolution. I am referring to growth package and reconciliation 
instruction to the Finance Committee. I would first like to put all of 
this into context. After that, I will describe an agreement with 
Senators Snowe and Voinovich.
  When I was thinking about the budget, Former Senator Barry 
Goldwater's words came to mind. Among legislators, you will find 
purveyors of perfection and those who practice the art of compromise. 
Reflecting on Senator Goldwater's words, I came up with a new version 
of Senator Goldwater's famous statement. With a little bit of poetic 
license, here is the version that I think sums up where we are:

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

  Our economy has not recovered as we had hoped. Too many factories are 
shut or running below capacity. Too many workers are looking for work 
and need jobs to provide for their families. Stock prices have remained 
well below the ``bubble'' prices of the late 1990's. Americans wonder 
when their 401(k) accounts will bounce back.
  To me, there is a clearly demonstrated need for bold fiscal policy to 
give our economy a ``kick start.'' President Bush took the initiative 
and the responsibility. The President put forward a bold plan that 
focused on consumer demand and lagging investment. Let me be clear. I 
am with the President and supported his proposals in committee and on 
the floor.
  Keep in mind, press reports indicated administration officials 
pursued ever larger resources for the growth package. Last fall, the 
figure seemed to be $150 billion. In early winter, the Wall Street 
Journal reported one day the figure had gone up to $300 billion. 
Finally, when the President announced his plan the figure had grown to 
almost $700 billion. In fact, Joint Tax scored the plan at $726 
billion.
  I supported the President's number at each step and support it today. 
Unfortunately, there is not now a majority of Senators in support of 
the President's figure. Based on countless conversations I have had 
that majority is

[[Page 9548]]

not going to materialize over the next few weeks. As much as I wish it 
were no so, that is the political reality.
  The reality is that the Republican caucus is split. Most of the 
Senate Republican caucus supports the President's number. My moderate 
friends, such as Senators Snowe and Voinovich, think the President's 
number is too large. Our Democratic colleagues who want to be 
constructive legislators, such as Senators Baucus, Breaux, Ben Nelson 
and others, share our Republican moderates' view. Unfortunately, there 
are many on the other side who appear to view this exercise solely from 
the political objective of destroying part of the President's agenda. 
They seem less concerned about addressing the needs of the people.
  My moderate friends base their views on concerns about future 
deficits. Those are sincere concerns. Likewise, I do not like the 
prospect of deficits. My difference is that fiscal discipline needs to 
come from the spending side as well. I do want to differentiate these 
moderates who are deficit hawks from those that claim the title of 
deficit hawk and seem to be advancing political objectives.
  I would ask a question of those hard line opponents of the 
President's growth package who claim to be deficit hawks. How often 
have they offered to restrain spending? Did they offer any fiscally 
responsible spending restraints during the budget debate? I think we 
know the answer on that one.
  We all need to focus on getting spending under control. 
Unfortunately, the reality is that a majority of the Senate wants to 
focus only on the tax relief side. That is where we find ourselves. We 
only see restraint on the revenue side of the ledger.
  There is a more fundamental issue at stake. Republicans have a 
responsibility to govern. Aside from 135 days in 2001, Republicans have 
not had control over both the Congress and the administration for 
almost half a century. The American people gave us the authority to 
govern in the last election and we owe it to them to produce. Senators 
Snowe and Voinovich understand this.
  Senators Frist and Nickles also understand this responsibility. I 
want Iowans to know I understand it as well. The people are tired of 
the partisan games and want us to govern. That is one of the reasons 
why I have said, as the growth package emerged, I want a bipartisan 
product. Senators Baucus and Breaux have told me they want to help me 
get a bipartisan growth package. They, along with other Democrats, made 
a down payment on this pledge with their support of the Senate budget 
resolution. I will work with them and like-minded Democrats in the 
bipartisan tradition of the finance Committee.
  In this context, the governing comes down to a couple of pieces of 
the peoples' business. One, producing a budget and, two, advancing an 
economic growth package. We cannot go through the chaos of last year 
when, under Democratic control, we did not have a budget. Chairman 
Nickles has made it his priority to restore the order that comes with 
the fiscal blueprint of a budget resolution.
  A few moments ago, I discussed the importance of the second item, the 
growth package. That is my job, hopefully with my friend and colleague, 
Senator Baucus, to get a bipartisan economic growth package out of the 
Finance Committee, out of the Senate, out of conference, and on its way 
to the President.
  So, the reality is these two items, the budget and the growth 
package, will not happen unless a majority of the Senate support the 
effort. Last night, a majority of the Senate did not support the budget 
resolution that passed the House early this morning. In order to get 
the necessary support, we made an agreement with Senators Snowe and 
Voinovich. Let me be clear, without this agreement, the budget 
resolution conference report would not pass the Senate today. There 
would be no budget and no growth package without our agreement. That is 
why the leadership supports my efforts.
  The agreement is simple. It relates to the revenue number for the 
growth package. I agreed that I would not return from the conference on 
the growth package with a number greater than $350 billion in revenue 
reductions. This means that, at the end of the day, the tax cut side of 
the growth package will not exceed $350 billion over the period of the 
reconciliation instruction.
  Now, some on the other side will characterize this agreement as a 
``defeat for the President.'' Those who say it is a defeat for the 
President may reveal their objective. It appears that they view this 
important responsibility solely from a political angle. I would say the 
same thing about my Republican friends who use that same 
characterization.
  This is not about the President. It is not about the House. It is not 
about the Senate. It is about doing our job. It is about doing the 
people's business. As a matter of fact, if you review where the growth 
package started, at about $150 billion, you could say the ball has been 
moved substantially. Why is that? Common sense will tell folks on both 
sides of the aisle are a lot more concerned about the economy now than 
they were when we started. The reality is that we have the resources to 
do a very good growth package.
  We have the tools to cut taxes that burden workers. We have the tools 
to cut taxes that burden small business. We have the tools to make 
investment decisions more attractive. That is where my focus will be--
on workers, small business, and investors. I hope that my colleagues 
will join me and focus on doing the people's business. They can start 
by supporting the budget resolution conference report.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, first, I compliment my friend and 
colleague, the chairman of the Finance Committee, for his leadership, 
for his courage, for his service on both the Finance Committee and on 
the Budget Committee. He full well realizes we need both a budget and a 
growth package, and he has helped us and enabled us to do that. I also 
thank my colleagues from Ohio and Maine as well.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, while I welcome what I have just heard the 
Senator from Iowa say, no one should be under any illusion that there 
will only be $350 billion in tax cuts provided for in the budget 
resolution. This budget resolution provides for $1.3 trillion of tax 
cuts. Focusing on the reconciled tax cuts is only half of the story. It 
is a very important part of the story because those are the provisions 
that have special protection. There is a whole other part of the tax 
cut package part of this budget resolution that gets little reported. 
We are still left with well over $1 trillion of tax cuts.
  People keep asserting it is a growth package. This is the work of the 
people who determine the effect of various packages, the very people 
who are under contract to the White House, the people who are under 
contract at the Congressional Budget Office who have looked at the 
President's plan. This is what they say:

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

  Not a growth package, it is a package that hurts economic growth. 
That is the hard reality.
  The fundamental reason for it is revealed in the President's own 
budget that shows his long-term outlook with respect to budget deficits 
if his budget plans are adopted. This is from his budget document. It 
shows we never get out of deficit. It shows the deficits explode 
because the baby boom generation retires and the cost of his tax cut 
package explodes.
  The result is a heavy load of deficit and debt that burdens this 
economy and prevents the kind of economic growth for which we had all 
hoped.
  The Senator from Montana is seeking time. I yield 15 minutes to the 
Senator from Montana.

[[Page 9549]]

  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, so often Members of Congress, the 
President of the United States, and members of the press refer to an 
event as ``historic.'' The vote we are about to take on the budget 
resolution is one of those events. If this resolution passes, then 
April 11, 2003 will be included in the history books as the day the 
Senate relinquished part of its Constitutional purpose and power.
  On March 31, a little over a week ago, I attended the funeral service 
of the late Senator Daniel Patrick Moynihan. I had the privilege of 
serving in the Senate with Senator Moynihan. He was a visionary, a 
leader, a teacher, and a statesman.
  Senator Moynihan reminded us to pay attention to our history. And he 
protected the historical purpose of the institutions of our nation's 
government--the executive branch, the judicial branch, and especially 
the legislative branch.
  Article 1, Section 3 of the Constitution designates the Senate as our 
Nation's deliberative body. As such, Senators are the only elected 
officials in our Federal Government with the power to impeach, approve 
treaties, and have 6 year terms.
  In Federalist paper No. 63, the Founders explained that 6 year terms 
were important because the Senate would serve ``as the cool and 
deliberate sense of the community.'' The Framers believed this was 
important to prevent the Federal Government from making hasty decisions 
about matters that are central to the future of our country.
  Let me quote directly from Federalist 63:

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

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

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

  I believe we are at such a critical juncture.
  Several Senate rules facilitate the Founders intent. First, Senators 
generally are allowed to offer amendments to any bill brought before 
the Senate. This is not generally the case in the House of 
Representatives.
  In order to limit debate and reduce amendments, either all 100 
Senators must agree to the limitations or the promoters of the 
legislation must file a motion to close debate and get 60 votes for 
that motion. That means that a simple majority is simply not good 
enough. The magnitude of our decisions requires a larger number of the 
Members of this body--60--to agree that it is the right thing to do for 
our country.
  These Constitutional protections are fundamental to ensuring that the 
Senate maintains the role envisioned by our Founding Fathers. We must 
be very cautious when diminishing these protections in any way.
  The enactment of the Budget Act of 1974 is one of the very few 
instances when the Senate has cut back on these protections. This was 
done with another important goal in mind--reducing deficits.
  Let me take a minute to touch on the budget and budget reconciliation 
protection process.
  When Congress passed the Congressional Budget and Impoundment Control 
Act of 1974, the purpose of the legislation was to help Congress 
control its budget.
  Among other things, the Budget Act allows Congress to enact a budget 
blueprint each year. That blueprint, contained in what we call a budget 
resolution, is considered under special rules and must be passed by 
April 15th of each year.
  One of these rules is that, instead of requiring 60 votes for 
approval, the resolution requires only 51. After a limited amount of 
time for debate, the Senate moves to a final vote.
  The Budget Act set up a streamlined process--reconciliation--to make 
it easier for the Senate to pass legislation pursuant to the directives 
of the budget resolution.
  Those provisions such as cutting spending or increasing taxes, are 
critical to reducing deficits.
  Thus we agreed to significantly diminish the right of Senators to 
debate and amend measures brought to the Senate floor when done as part 
of the budget resolution and reconciliation. We agreed to give up these 
rights for a very important goal--that of deficit reduction.
  Things changed, though, in 1996. In 1996, the Senate parliamentarian 
ruled that the budget resolution's streamlined reconciliation 
protection could also be used to pass tax cuts, that is, provisions 
that increase deficits.
  The budget resolution can now include instructions to the Finance 
Committee to report tax cuts that can be passed in subsequent 
legislation with only 51 votes in the Senate. That ruling turned the 
Budget Act on its head. Unfortunately, today's parliamentary maneuver 
goes even further; it turns Senate procedure on its head.
  The instructions in this budget resolution regarding the tax cut 
establish new precedents that will expand the power of the House and 
the leadership of the Senate at the expense of Senators. The precedents 
will diminish the power of any individual Senator, the Senate's 
committees, and whichever party happens to be in the minority at any 
given time. This new budget resolution scheme runs counter to intention 
and rules governing Congress since Congress first convened in 1789.
  The tax cut instructions direct the Finance Committee to pass a bill 
with a maximum of $550 billion in tax cuts.
  However, if the Finance Committee passes a bill greater than $350 
billion, then the bill will not be permitted to pass the Senate unless 
it garners 60 votes of support instead of 51. This is accomplished 
through a new point of order that will apply during Senate 
consideration of the Finance Committee bill.
  So, for example, if the Finance Committee passes a tax cut bill 
costing $450 billion, any Senator could raise a point of order on the 
Senate floor. The point would be sustained by the chair, unless 60 
Senators voted to waive the point of order.
  The point of order, however, is not applicable in conference under 
this resolution. Accordingly, a conference report that comes back above 
$350 but no more than $550 would need only 51 votes. No known points of 
order would lie against it--a dramatic change from current Senate 
practice.
  At this point, I might say the architect of all these provisions 
which were designed to maintain Senate procedure and to maintain 
control of the deficit in a meaningful way is now seated on the floor, 
Senator Robert Byrd from West Virginia. I pay great respect to the 
Senator from West Virginia, who I am sure right now is lamenting a lot 
of new procedures that this body is about to adopt.
  Under the Byrd Rule, the Senate could not exceed the instructions to 
the Finance Committee unless there were 60 votes to waive the 
objection.
  But there is a significant difference. The Byrd Rule applies to both 
Senate consideration of the tax bill and Senate consideration of the 
conference report. But there is a big twist. The new point of order 
will apply only to Senate floor consideration of the Finance Committee 
tax cut legislation. It won't touch the conference report.
  Now, you may ask, why doesn't the Byrd Rule still apply to the 
conference report? I believe that the Chair would rule that it does 
apply. This was confirmed in a letter sent from the Parliamentarian to 
Senator Daschle on April 9, 2003, which stated in part:

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

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

[[Page 9550]]

                                                      U.S. Senate,


                                      Office of the Secretary,

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

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

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

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

  Taken together, the instruction to the Senate Finance Committee 
regarding reconciliation is $350 billion. I believe if you were to ask 
100 Senators what the size of the tax cut is going to be in the Finance 
Committee-reported bill, they will tell you, it will be $350 billion--
not more. Everyone in this Senate, this body, knows that is what is 
going to be reported.
  The budget resolution says it is not in order to consider a tax bill 
greater than $350 billion. If the Chair rules that the instruction to 
the Finance Committee is for $550 billion, then I believe that approval 
of this resolution would eviscerate a significant part of the Byrd 
rule.
  The Senate will have created a mechanism to, at a minimum, eliminate 
the effect of the Byrd rule provision in consideration of conference 
reports.
  Under this ruling, there would be no basis for stopping further 
erosion of the Byrd rule. The drafters could eliminate the use of the 
Byrd rule provision by setting a very high instruction number to the 
committee, and setting points of order at lower amounts at whatever 
steps along the way were necessary to command the votes sufficient to 
pass a bill.
  For example, the budget resolution could instruct the Finance 
Committee to report a bill costing $1 trillion. The resolution could 
then set a point of order applicable to the Finance Committee bill at 
$200 billion, set a point of order applicable to Senate floor 
consideration at $300 billion, and set a point of order applicable to 
the conference report at $400 billion. The Byrd rule would then be 
inapplicable provided the cost of the tax cut bill was not more than $1 
trillion, an artifice. That is exactly what is going on here in this 
budget resolution.
  That result is absurd, and I believe this interpretation renders 
portions of the Budget Act moot or ineffective. If these actions go 
forward, this ruling will come back to haunt the Senate. It may enhance 
the Senate's ability to pass bigger tax cuts. It may enhance the 
Senate's ability to pass larger spending increases. It may do both. But 
it will not help the Senate reduce the deficit, which was the purpose 
of the reconciliation provisions.
  I urge every Member of this body to fully examine the effects this 
ruling will have on the Senate and on our Nation. It is irresponsible 
to go forward with this plan, and I cannot support the procedural 
scheme cooked up in this budget. I urge my colleagues to look at the 
long run, not the immediate short run, and vote against this 
resolution.
  In addition to my earlier comments expressing my disappointment and 
serious concern regarding the procedures adopted with respect to this 
budget, I would like to also speak against certain funding provisions 
included in this budget conference report. I'm especially concerned by 
the insufficient level of highway funding and by Title III.
  Highway funding is one of the most effective ways to create jobs and 
send needed assistance to the States--in my State of Montana and across 
the nation. It is unacceptable to cut transportation funding at this 
time when states are facing record deficits and unbalanced budgets. In 
addition to highway funding levels being set too low in the budget 
resolution, the reserve fund provisions won't allow us to increase the 
highway program unless we raise taxes.
  In order to build on the success of TEA 21 and pass a TEA 21 
reauthorization bill, we must ensure that our budget resolution can 
accommodate higher levels of spending for highways and transit. These 
higher levels of spending will enable the successor to TEA 21 to become 
law.
  Increasing funds into the Highway Trust Fund is the sole 
responsibility of the Senate Finance Committee. Senator Grassley and I 
have been working very hard to find ways to grow the highway and 
transits programs, without raising taxes.
  I can't emphasize enough how the single principal feature of any new 
highway reauthorization bill has to be its increased funding for the 
program, something that will help Montana and help our country. The 
blueprint that the budget resolution sets for our fiscal year 2004 
budget fails when it comes to transportation funding.
  I am also troubled by provisions that were included in Title III of 
the budget resolution. Similar to the deceptive procedures that are 
being used to rush this budget to a final vote, Title III includes 
misleading findings in order to justify possible future cuts to 
programs that are essential for working Americans. Title III includes 
findings on waste, fraud, and abuse in Federal programs and 
instructions for the tax-writing committees to examine these programs 
for savings.
  Many of the programs included in Title III involve aid to low income 
Americans. Included in this group are millions of veterans and members 
of our current armed forces. Title III includes findings addressing the 
earned income tax credit (EITC). EITC works to reduce the tax burden on 
low income Americans, while giving a powerful incentive to work. I am 
concerned by a section of Title III that would crack down on erroneous 
payments of the earned income tax credit, stating that the OMB has 
found that $8 billion a year is paid erroneously for EITC claimants.
  I have no tolerance for people who commit fraud and steal benefits 
paid for with the tax dollars of hard working Americans. However, I 
believe the OMB findings are largely due to errors, not fraud. And I 
believe that the complexity of the tax credit and complex living 
situations are responsible for the high error rate. Publication 596, 
the instructions and forms for the EITC, are 54 pages long. The number 
of pages explaining the EITC is longer than those describing the 
alternative minimum tax. Many of the claims paid ``erroneously''--
according to the study on 1999 tax returns--are not paid fraudulently. 
Often a payment made in

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``error'' is simply made to a mother living in the same house as her 
grandmother--who should have claimed the credit--and is consequently 
marked as paid in ``error.''
  Senator Nickles argued earlier today that we have never addressed 
these issues before. With all due respect for my good friend from 
Oklahoma, we have worked in a very bipartisan way over the last several 
years to address the issue of EITC noncompliance. In 1997, we passed a 
provision allowing the IRS to access the Federal Case Registry to 
determine if a child is qualifying. This registry is still a work in 
progress. We also established kid-link, which as of today, only affects 
children aged four and up.
  In 2001, Senator Grassley and I worked together to include 
significant provisions in the bipartisan tax cut that were aimed at 
reducing error. These changes include the AGI tiebreaker provision and 
giving the IRS math error authority to prevent deadbeat dads from 
claiming the EITC.
  It should be noted that almost none of these changes were in place 
when the study Senator Nickles refers to was done on 1999 returns.
  President Reagan hailed the expansion of the EITC in 1986 as ``the 
best anti-poverty, the best pro-family, the best job creation measure 
to come out of Congress.'' It has been estimated that nearly 4.8 
million people, including 2.6 million children, are lifted out of 
poverty every year because of the earned income tax credit.
  In 1999, then Presidential candidate, Governor Bush, told reporters 
``I don't think they ought to balance their budget on the backs of the 
poor.'' Mr. President, I hope we take these words to heart when we 
consider this budget.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I salute the Senator from Montana, the 
ranking member of the Finance Committee, the former chairman of the 
Finance Committee, for, with great specificity, pointing out the 
extraordinary danger of what is being proposed here.
  In order to accomplish a short-term goal, we are endangering the 
ability of this body to responsibly manage the budget of this Nation. I 
believe this is a dark day for the Senate. I believe we will live to 
regret the day this was adopted.
  It is a sham. It will create enormous problems in the future. Whoever 
is in the minority--whoever is in the minority--is going to face a 
dramatic diminution of the power and the ability to influence outcomes.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I take issue with our colleagues. I 
regret the decision they made. But that is not the way this resolution 
reads. It may have been the way we were looking at having it a couple 
days ago, but because of some changes that were made, this resolution 
reconciles both committees to $550 billion, both Houses to $550 
billion.
  It also has additional language that says the Senate will be limited 
to $350 billion, both out of committee and on the floor. The chairman 
of the Finance Committee said he would not report, he would not sign a 
conference report that was greater than $350 billion. You can take the 
word of the chairman of the Finance Committee. If he says it is not 
going to be more than $350 billion, it is not going to be more than 
$350 billion.
  But to say we are starting something different, if the resolution was 
drafted correctly and it said $550 billion for both Houses, it did have 
limitations on the Senate. We have the right to put limitations. We put 
instructions to various bodies, either the House and/or the Senate, and 
various committees. That is what a Senate resolution does.
  I just want to make sure people understand both the commitment our 
colleague from Iowa made and also that the resolution--and it was not 
done haphazardly. It was not done with malice or trying to distort the 
budget process. We were trying to pass a budget in both the House and 
the Senate. That is what we are going to do. We are going to have a 
budget.
  We did not have a budget last year. We are going to have a budget 
this year. We are going to have a budget that will have caps on 
discretionary spending and points of order against entitlements. It 
will be able to keep people from offering entitlements on any little 
bill that comes down that costs billions of dollars and acting as if it 
did not cost anything. We are going to have budget enforcement. We are 
going to have fiscal discipline. We are going to have a reconciliation 
package that will be reported out of the Senate Finance Committee on 
the floor of the Senate, and I believe out of the conference report, at 
$350 billion.
  I will also say, I heard my colleagues say: Well, there is really 
$1.2 trillion. Mr. President, $600 billion and some of that is for the 
last 3 years of the reconciliation period--the years 2011, 2012, and 
2013. That will be to extend present law. If we do not extend present 
law, you are going to have people who are paying 10 percent, who will 
be paying 15 percent. You are going to have people who are paying 25 
percent who will have to go back up to 28 percent. You will have an 
increase or reinstatement of the marriage penalty. You will have people 
who were receiving a $1,000 tax credit per child who will only get a 
$500 tax credit per child.
  I just mention these. Everybody keeps talking about these fabulous 
tax cuts for the wealthy. The highest income tax bracket has been 
reduced a great big 1 percent. It has gone from 39.6 percent to 38.6 
percent. Hopefully, eventually it will be at 35 percent. How high is 35 
percent? I might remind my colleagues, in 1990, the maximum rate was 31 
percent. So even after all of these enormous personal income tax cuts 
proposed by President Bush, the rate is going to be 35 percent, which 
is still about 13 percent--or maybe higher than that--well, the old 
rate was 31 percent. So you are still about 15 percent higher than it 
was under President Clinton.
  I just mention, with all these rate reductions--I have been in the 
Senate not nearly as long as Senator Byrd, but when I came to the 
Senate, the maximum personal income tax rate was 70 percent. In my 
first 8 years in the Senate, it was reduced to 28 percent--a pretty 
significant reduction.
  Incidentally, Federal revenues in that 10-year period of time, 
between 1980 and 1990, doubled. So even though we reduced personal 
income tax rates dramatically, total revenues to the Federal Government 
rose dramatically--doubled--in that timeframe. So it can happen.
  We reduced capital gains rates in 1997 from 28 percent to 20 percent, 
and revenues rose, and rose dramatically, because we cut tax rates.
  President Bush is now proposing additional tax cuts to stimulate the 
economy. The chairman of the Finance Committee said the reconciliation 
package would be $350 billion. Colleagues on the other side offered tax 
bills and spending bills--mostly spending--that was $140 billion. I 
guess that was OK but this is not OK.
  We are looking at an economy that is $11 trillion per year. We are 
looking at total revenues to the Federal Government over this same 
period of time of $28 trillion. We are trying to move the economy by 
having a slight reduction of $350 billion. The House would say $550 
billion. That is hard to do. Some of us think it should be more, but we 
also know we have to count votes. We also know we have to pass a 
budget. That is our objective, to pass a budget and to get the biggest 
growth package we can. That has been my objective for a long time. I 
think it would be very foolhardy to say: Well, we can only get half a 
growth package; therefore, we will not have a budget. I think that 
would be a mistake.
  We need to have a budget. We need to have a growth package.
  I just tell my colleagues as well that there are still opportunities 
to do additional tax cuts outside of reconciliation. I encourage that. 
I was very close to recommending we not have reconciliation and just do 
a tax cut, period, the old-fashioned way, without the expedited 
procedure, Senator Byrd, because I believe we can pass one. I think we 
should pass one. It would be amendable and debatable. We could do it, 
and we would help the economy. I hope we will, in addition to what we 
do

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on reconciliation. I don't think you can stimulate the economy as big 
as this economy is. I don't think you can do enough with $350 billion. 
I agree with our President. It may well be we will have to do some 
inside of reconciliation, and we will have to do some outside of 
reconciliation. Fine. I would imagine the House can pass a tax bill, 
and I hope and look forward to taking it up in the Senate. Yes, there 
will be unlimited debate and unlimited amendments. Fine. Let's take it 
up. Let's vote. Let's find out, do we really want to grow the economy.
  I hope our colleague, the ranking member of the Finance Committee, 
will work with the chairman to make that happen.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I say to my colleague, he may get a budget 
resolution, but there is no fiscal discipline here. Let's not mislead 
anybody. This is a prescription for record budget deficits, for red ink 
as far as the eye can see, for the explosion of deficits and debt. This 
may be a budget resolution, but it is not a prescription for fiscal 
discipline.
  People can make all the deals they want. We are going to vote on a 
budget resolution. This budget resolution authorizes $1.3 trillion in 
tax cuts. That is what is provided for here. And they can do this 
fandango dance that they instruct on one hand the Finance Committee to 
do $550 billion of tax cuts, then turn around and make a supermajority 
point of order against any actual product of that committee over $350 
billion, and the chairman of the committee can come out and commit not 
to bring back from conference committee anything more than 350. I have 
respect for the chairman of the committee. When he gives his word, I 
believe it. I commend him for it. But let's not be under any illusion 
that that restricts what is happening to $350 billion of tax cuts. It 
does not.
  What is in this budget we are going to vote on is $1.3 trillion of 
tax cuts when we already have record budget deficits, and it also 
increases spending by $1.1 trillion. Guess what? You are going to have 
deficits as far as the eye can see. And they are not small deficits; 
they are huge deficits. And they are going to mushroom when the baby 
boom generation retires.
  Is the Senator from West Virginia seeking time?
  Mr. BYRD. Yes.
  Mr. CONRAD. How much time would the Senator like?
  Mr. BYRD. Twenty minutes.
  Mr. CONRAD. I am happy to yield 20 minutes to the Senator from West 
Virginia, ranking member of the Appropriations Committee, and also an 
extraordinarily valuable member of the Budget Committee.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, I thank the distinguished Senator from North 
Dakota, the former chairman of the Budget Committee in the Senate on 
which I serve. I thank him for the time. I may not use the 20 minutes. 
I will yield back to him whatever I do not use.
  I also thank the distinguished Democratic whip for his courtesies and 
his characteristic accommodating mood.
  With the final passage of the fiscal year 2004 budget resolution, I 
expect that many in Congress will congratulate themselves for a job 
well done. I expect a whole flurry of press releases to emanate from 
Washington about who is or is not a friend of the taxpayer, and who is 
or is not a friend of the President.
  Those characterizations underscore just how ridiculous this budget 
debate has become.
  The economy is floundering. Economists are warning that it could 
begin to contract in the months ahead, raising the risk of a disastrous 
double-dip recession. The airline, manufacturing, and tourism sectors 
are already in outright recession.
  More than 2 million jobs have been lost nationwide since January 
2001, and 3.5 million workers are drawing unemployment benefits.
  During that same time frame, the Dow Jones Industrial Average--a 
symbol of the retirement holdings of millions of Americans--has 
declined by a disastrous 23 percent.
  Budget deficit projections are soaring, with some private-sector 
projections for the current fiscal year topping $400 billion. Yes, $400 
billion. That is $400 for every minute since Jesus Christ was born.
  The trade deficit remains disturbingly high, with the economy losing 
tens of billions of dollars every month in growth to other nations. We 
often hear the other distinguished Senator from North Dakota speaking 
on this subject, Mr. Dorgan, about the trade deficit. His pleas fall on 
deaf ears.
  The dreaded twin deficits plaguing the U.S. economy have raised 
alarms around the globe, with the world's economic leaders pleading 
with this Administration to reverse its policies and trim its deficits.
  Now the Senate is on the verge of passing a budget to authorize over 
$1 trillion in new tax cuts while we are in a war. It would be funny if 
it were not so serious; over $1 trillion in new tax cuts. How long 
would it take you to count to a trillion dollars at the rate of $1 per 
second--1, 2, 3, 4, 5, at the rate of $1 per second--how long would it 
take you to count to $1 trillion? Anybody want to guess? Thirty-two 
thousand years. So here we are on the verge of passing this budget to 
authorize over $1 trillion in new tax cuts before the American people 
can even begin to come to grips with just how badly our fiscal position 
has deteriorated. This budget deliberately obscures from the American 
public the mounting levels of deficits and debt we are accumulating. 
Have we no shame? This budget resolution is a sham. The spending and 
deficit numbers it contains are phony. I doubt there is a Member of 
this body who believes the assumptions that are included in this 
budget.
  We haven't even figured out yet how we are going to pay for the war. 
Ask Secretary Rumsfeld what the cost of the war is going to be? He will 
say that is not knowable; these things are not knowable. Well, we 
haven't even figured out yet how we are going to pay for the war, a war 
that began 3 weeks ago that this administration has been eyeing since 
it took office 2 years ago.
  The budget is in deficit. Under this so-called balanced plan, the 
national debt will almost double in just 10 years, reaching $12 
trillion by 2013. That is trillion dollars, trillion with a capital 
``T.'' We are borrowing hundreds of billions of dollars and exhausting 
the Social Security surpluses just to finance the current operations of 
Government.
  I pity those three little great-granddaughters I have, and other 
Senators should weep alike. If you don't have granddaughters or great-
granddaughters now, if the Lord blesses you, you will have them.
  The Congress will soon pass a roughly $80 billion supplemental, but 
those funds are just a downpayment on the war--just a downpayment, a 
small one at that--on the war, and post-war reconstruction there is 
likely to cost hundreds of billions of dollars.
  This budget resolution includes only $75 billion for the war in Iraq 
and pretends that not budgeting for this effort will not have long-term 
consequences for our troops and humanitarian relief efforts.
  The economy is faltering, the budget is deteriorating, and all this 
administration says is tax cuts will save us. Well, I have been in 
Congress for over 50 years. I have been in politics almost 60 years. 
The easiest votes that I ever had to cast were votes to cut taxes. The 
administration says tax cuts will save us. They append their hopes to 
ideological rhetoric. Meanwhile, the poor, beleaguered, hard-pressed, 
downtrodden American taxpayer gets stuck with bigger and bigger debt 
and more and more interest costs.
  The Congress has struggled for weeks about whether to endorse the 
President's tax cut proposal. For a while, there appeared to be a 
glimmer of hope on the horizon. A number of Senators, despite immense 
pressures from the White House, despite immense pressures from their 
party leadership, voted their conscience. Tax cuts were trimmed so 
funds could be set aside to

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pay for the war, pay for the deficit reduction, and pay for the other 
priority needs of the Nation.
  What's more, the Senate sought to create parity between emergency 
designations for homeland security and defense spending. That was my 
amendment.
  This budget resolution effectively erases those decisions--wipes them 
out--and replaces them with a lot of nonsense that has already been 
rejected by this Senate.
  We haven't the funds to pay for a war, and the administration knows 
that. They didn't even budget one thin dime in the budget for the war. 
We haven't the funds to pay for a war, let alone a massive new tax cut. 
Our only option is to go deeper and deeper into debt. How deep we are 
going to go is anybody's guess, but one thing is sure: Mr. President, 
your children, my children, my grandchildren, my great grandchildren, 
your grandchildren, your great grandchildren, and theirs--those people 
looking at the Senate Chamber today through those electronic eyes--your 
grandchildren, their children, and their children's children will still 
be paying the tab many years hence.
  We hear the cry for stimulus through tax cuts. I say bunk. Economic 
stimulus is a code word for covering your political backside--if you 
know what the code word ``backside'' is for. Economic stimulus is the 
code word for covering your political backside. The economy of this 
Nation has been mismanaged by those who put protecting their political 
base ahead of enacting sound economic policy. If all we had to do was 
to pass massive tax cuts every time the economy began to stumble, if it 
were just that simple, we would have done away with recessions in the 
last century.
  President Ronald Reagan had the common sense to recognize the 
consequences of long-term deficits and the courage to repeal portions 
of his own 1981 tax cut. President George Herbert Walker Bush likewise 
recognized the dangers of long-term deficits and signed legislation to 
increase taxes in 1990. But this administration refuses to recognize 
how badly its economic policies are failing. This administration can 
only stubbornly argue for more of the same--more tax cuts.
  It was unwise, unfair tax cuts that helped to push the budget into 
deficit in the first place. The much touted stimulus to the economy did 
not happen. The only thing these tax cuts will stimulate is campaign 
contributions from fat cats.
  The budget process is supposed to provide this Congress with a 
roadmap that will guide us toward reasonable spending and tax policy. 
But under this budget resolution, the war and postwar reconstruction 
will not be paid for, deficits and debts will continue to pile up, and 
the American taxpayer won't even know that the Nation has veered off 
the cliff, off the road, until the economy is on its back--spinning its 
wheels deep inside the deficit ditch.
  In the New York Times on Wednesday, Sam Nunn, Warren Rudman, Bob 
Kerrey, Peter Peterson, Robert Rubin, Paul Volcker--Republicans and 
Democrats, moderates and conservatives, former Federal Reserve and 
Treasury officials, and former Members of the Senate--all joined 
together to warn us not to do exactly what we are about to do. They 
urged us not to rely on unrealistic budget assumptions, not to ignore 
the deteriorating long-term fiscal outlook, and not to enact these 
fiscally irresponsible proposals.
  This budget makes promises to the American people that we know we 
cannot keep. This budget piles years of interest and debt payments on 
the public and then tries to obscure them with the promise of economic 
stimulus. I oppose that kind of manipulation. I oppose not being 
forthright with the American people. I oppose this budget resolution.
  I yield back to the distinguished manager of the bill on this side of 
the aisle whatever time I did not use.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the very distinguished senior 
Senator from West Virginia. As I indicated, he is a very valuable 
member of the Budget Committee and the ranking member of the 
Appropriations Committee. He has said very clearly what this budget 
before us represents: a plunge off the cliff into unending deficits and 
debt--at the worst possible time.
  Here we are at war, the cost of which we cannot know, right on the 
brink of the retirement of the baby boom generation. We are already in 
record budget deficits. The Senator said the budget deficit, as some 
private forecasters indicate, will be over $400 billion this year. That 
doesn't count the $160 billion they are going to take out of the Social 
Security trust fund.
  On a true operating basis, we are going to have a deficit this year 
of more than $600 billion. Is anybody listening? And it doesn't end 
this year. We don't see the deficit on an operating basis, if this 
budget is adopted, ever getting below $300 billion to $400 billion a 
year. This is the sweet spot--the time the trust funds are throwing off 
big cash surpluses. When the baby boomers retire, we will go into cash 
deficits. Then the cost of the President's tax cuts truly explode, 
driving us off the cliff into deficits, and deficits that are totally 
unsustainable.
  I note the Senator from New Jersey is seeking time. He is also an 
extraordinarily valuable member of the Senate Budget Committee. He is 
somebody whose expertise in financial matters has been demonstrated in 
the private sector and public sector. Very few have been as successful 
as he has been in the private sector, and he was successful in 
understanding how the economy works. How much time does the Senator 
seek?
  Mr. CORZINE. I would like 10 minutes. I might go a few minutes beyond 
that.
  Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from 
New Jersey.
  Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. Fifty-two minutes.
  Mr. CONRAD. I will be happy to yield 10 minutes to the Senator from 
New Jersey and any additional time he requires.
  Mr. CORZINE. I appreciate it very much.
  Mr. BYRD. Mr. President, before the distinguished Senator yields to 
the very distinguished Senator from New Jersey, will he allow me to 
thank him, the Senator from North Dakota, for the leadership he 
continues to provide to the Senate in these budget matters. I thank him 
for his kind words. Future generations will not rise up to call us 
blessed.
  Mr. CONRAD. I thank the Senator. I yield now to the Senator from New 
Jersey.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. CORZINE. Mr. President, I appreciate the time from the Senator 
from North Dakota. I say to both my colleagues, they are laying out for 
the American people the nature of a budget resolution that really does 
undermine our future. Before the Senator from West Virginia leaves, I 
heard one of the most direct analogies about what we are doing dollar 
for dollar and that it would take 32,000 years to count the deficit if 
we went to a $1 trillion deficit. We are actually creating a $1.6 
trillion deficit, which I think is 50,000 years. It is very hard for 
any of us to understand the dimensions of the fiscal irresponsibility 
we are taking on here.
  I compliment the Senator in trying to put this debate in terms which 
people can picture in reality.
  Mr. BYRD. Mr. President, I thank the able Senator.
  Mr. CORZINE. Mr. President, I add my strong opposition to this 
conference report on the budget resolution before us today from a whole 
host of perspectives. I am certainly no expert on procedural rules, but 
I have heard a description of an approach to the debates we have had 
about the budget. It is hard to accept if this is the process by which 
we want to bring discipline to our budgetary process.
  The area I do understand clearly is fiscal matters, and this budget 
resolution, in my view, is fiscally irresponsible to the extreme. Maybe 
more important than the accounting issue is it risks enormous harm to 
our economy

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in the short term and in the long term. It poses a clear danger to the 
future of Social Security and Medicare, and it threatens our ability to 
provide for critical priorities, such as homeland defense and education 
for our children.
  This budget calls for a tax cut of $1.3 trillion over the next 10 
years. When we add in the extra interest costs--that is using the 
assumptions we use now of low interest rates--which are required to pay 
for that cut, the real cut is $1.6 trillion. It raises the obvious 
question: Where is the money coming from? It is a question one has to 
ask when doing budgets: Do we have $1.6 trillion to fund these cuts 
without raiding the Social Security trust fund or undercutting 
consensus-driven priorities for the American people?
  A few years ago, we had the resources and the ability to evaluate 
whether we wanted to have tax cuts. We had a $5.6 trillion projected 
surplus. That surplus was built on sound fiscal policies, ones that 
accompanied an extremely strong economy for many years. It is hard to 
understand why we needed to change policies since the economy was doing 
very well and it had probably the greatest run in the 20th century. But 
we felt there was a need to tinker with this $5.6 trillion surplus.
  Guess what. It has disappeared, and we have added $1.6 trillion--that 
50,000 years the Senator from West Virginia talked about if you count 
$1 a minute. We do not have the extra dimes, nickles, and dollars--a 
blank checkbook--to fund these tax cuts or increase any of the spending 
we might want for homeland security, national defense, making sure we 
invest in our future so that when our men and women come home from the 
war, they will have an economy that works for their children and their 
future.
  By the way, we are looking at those deficits before these tax cuts, 
and this proposal in the budget resolution undermines that baseline. So 
the huge tax cuts proposed in this resolution are going to be relying 
on payroll taxes that are supposed to be dedicated to Social Security 
and Medicare. Then they will be financed by putting the remainder on 
our national credit card.
  Who is going to get those credit card charges? It is hundreds of 
billions of dollars that come with the additional interest we will be 
paying in the years ahead. As we have heard, it is not this generation, 
it is the next generation--our children and our children's children. We 
are laying the burden right out on their shoulders.
  I find it completely irresponsible. You certainly would not do that 
in your own life. That would border on immorality at a family level. 
This generation, or at least the most fortunate members of this 
generation, in my view, have no right to transfer the benefits of 
America for which we all worked so hard and so many have fought for and 
given their lives for at the expense of future generations.
  I do not get it. Just this morning I was at a funeral for a heroic 
young man in the State of New Jersey who lost his life in Iraq. He made 
the ultimate sacrifice so we would have a positive future and to 
protect America. We are doing just the opposite in economic security 
with respect to this budget.
  Beyond the raw, in my view, inappropriateness of this 
intergenerational transfer of wealth, it is also terrible economic 
policy. That is why we have had--one of the few times in history--10 
Nobel Prize economists--hardly 10 economists can agree on anything--and 
500 others signing up to say this does not provide short-term stimulus 
and really does undermine our long-term credibility, our long-term 
fiscal health.
  It is very simple what it is going to do. It actually creates 
antigrowth policies in the sense we are going to create deficits, and 
as the economy takes off, interest rates will rise and there will be 
this crowding out--which has gone on off and on when we have run these 
big budget deficits over time--and undermining of private sector 
initiatives, and that will depress future economic growth. There are 
many models that verify this and many people making those arguments. We 
heard that in the group the Senator from West Virginia talked about in 
the article on Wednesday--a Republican, a Democrat, conservative, 
liberal. This is not a policy that is in the mainstream of economic 
thought, of business thought about how we are going to grow the economy 
over time.
  Unfortunately, these negative effects of heavy fiscal deficits are 
going to last for decades. We have this baby boomer situation where we 
are going from 40 million 65 and older to 80 million, give or take a 
couple million on both sides of those numbers, and they are going to 
raise the cost of Social Security and Medicare in future years.
  If we are going to maintain those programs, we have an incredible car 
crash coming with regard to our fiscal conditions, even before these 
tax cuts.
  It is not as if we do not have a need to do something about the 
economy now. I could go through the employment situation. We have lost 
460-some-odd thousand jobs in the last 2 months. I check these weekly 
unemployment numbers, and they are startling. We have people out of 
work, working part time, dropping out of the labor force. It is not a 
pretty picture. We need stimulus now. We are having serious shortfalls 
in the ability for the economy to produce those jobs, and I do not see 
anyone saying that in the near term this package of proposed tax cuts 
is going to have much, if any, impact on creating jobs.
  It might be talked about in some kind of long-term context. At least 
there is a legitimate debate about whether that works. I actually think 
the mainstream comes out and says that does not even work in the long 
run, but there can be an argument about it. In the short run, it is 
almost universal it has little, if any, impact.
  We have lost 460,000 jobs in this economy in the last 2 months. 
President Bush could very well end up being the first President in 50 
years to preside over a decline in the total number of private sector 
jobs in the economy. I do not see this in the self-interest of the 
President and the administration with regard to good economic stimulus 
programs.
  There are plenty of problems we can talk about. Business investment 
has declined in all but one quarter in the period of time we have been 
here. The stock market has obviously plummeted. We are now using only 
about 75 percent of our Nation's productive capacity. We can go on and 
on. There are just a series of problems.
  So we have a continuing sense of lack of direction about dealing with 
the economic circumstance we have, and just at a time when what we are 
doing is pushing more of the same policies that we have been following 
for the last 2 \1/2\ years. At least in the world I come from, when 
something is not working, you admit it, you change it, you move on; you 
do something else.
  All we are doing is changing the level of the red ink we have already 
put on the paper, and we are going to have greater red ink. It is going 
to hurt this country's economic well-being in the years ahead.
  Like my colleagues, I hope we will stand back, evaluate this budget 
resolution, think about that $1.3 trillion that is going to put us 
deeper in debt--$1.6 billion if we count the interest--and say no to 
this budget resolution because it undermines the health of the American 
economy, it does not improve it.
  I think we are going to be looked at in the history books as a 
Congress that has really put us into the tipping point of fiscal red 
ink for as far as the eye can see, for generations to come, and I think 
it is just wrong that we are funding it out of Social Security, funding 
it out of payroll taxes. It is an intergenerational transfer, to future 
generations, of the obligations. I think historians will say we are not 
doing what it is our responsibility to do, which is to bring fiscal 
sanity and responsibility to the American budget.
  This is a system that depends on the rising tide lifting all boats. 
This budget, and particularly the tax cuts that are implied in it, do 
anything but lift all boats. They are targeted at a very narrow group. 
I hope my colleagues will stand up and say no to this budget and do the 
right thing. I really do hope we can reconsider this and move forward.
  I yield the floor.

[[Page 9555]]

  The PRESIDING OFFICER. Who yields time?
  Mr. NICKLES. I yield such time as he may consume to the Senator from 
Colorado.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. Mr. President, I thank the chairman of the Budget 
Committee for yielding me some time. I also want to thank him and let 
him know how much I appreciate the yeoman work he is doing in regard to 
this budget.
  I am a member of the Budget Committee. I had an opportunity to serve 
with him during the deliberations in the committee, and at the very 
start the chairman of the Budget Committee, Senator Nickles, said: We 
are going to work in a bipartisan way. We are going to work with the 
President, we are going to work with the House of Representatives, we 
are going to work with the Members of the Senate. But his most 
important priority is to get a budget passed.
  I think he had it right because the most important thing we can do in 
this Senate is to pass a budget. Now, it may not be a perfect budget 
that I would envision or the chairman would envision or somebody in the 
House or the President would envision, but we need to have a blueprint 
that will lay out the plan for this Senate and how we are going to 
handle those valuable tax dollars that get sent to Washington, DC.
  People refer to the sham in this budget. The sham is when we do not 
pass the budget. The big failure in the last Congress was that we did 
not pass a budget. There was an attempt to try to pass appropriations 
bills and spending bills through the process, but they did not have a 
blueprint to follow. We did not have a budget. Well, we are working 
hard to get a budget passed now so we will have a blueprint.
  I was struck by the comments that Senator Grassley, the chairman of 
the Finance Committee, made when he said, I do not recall an amendment 
that was ever put forward by those who oppose the President's tax cut 
plan that suggested we ought to cut spending.
  There were some Republican amendments, particularly the traditional 
one offered by Senator McCain, where he goes after porkbarrel spending 
that was actually working to cut spending, but I do not recall any 
others.
  Then I got to thinking about when we started this process this year, 
we came back in, we got sworn in, and the first two weeks we are 
working on an appropriations bill in an omnibus bill. There were 11 
appropriations bills we did not get passed in the last session because 
we did not have a budget, we did not have a blueprint.
  While that omnibus bill was going through, there were some $50 
billion in amendments that were offered by that group of individuals 
who are opposing the President's plan. So we move on further and then 
we bring up the budget resolution itself, and if we look at the number 
of amendments from those who oppose the budget and oppose the 
President's plan, there was $1.6 trillion at the desk to be acted on. 
It ended up being about $950 billion, all spending increases, all 
increasing the deficit, all increasing the total debt. I am speaking of 
the 40 amendments we ended up acting on, on the last day when we had 
our voting marathon.
  Then we had the supplemental bill that came up and now is in the 
conference committee this week that we have been working on, and here 
we have $12.3 billion in new spending that was put in the supplemental 
that was supposed to take care of just emergency spending. Many who are 
opposing this budget today, who oppose the President's plan, the 
amendments they offered increased spending. They did not cut spending, 
but they added to the deficit, and they did not have to comply with the 
budget rules because it was an emergency supplemental.
  When we have an emergency supplemental, that means that the budget 
rules do not apply. So we have Members of this body who cannot wait to 
have an opportunity to have an emergency supplemental bill come through 
because amendments or legislation that fall under the budget guidelines 
that we should pass with every Congress every year, that gives them a 
chance to get out from under those rules because they increase 
spending.
  The only time we hear from many of the individuals who are opposing 
this budget, opposing the President's plan, and who speak about how 
important it is to eliminate deficit spending is when we are talking 
about tax cuts.
  I think we need to have tax cuts. I think we need to have something 
to stimulate the economy. How are we going to stimulate the economy? I 
do not think we do it by increased spending. We started our spending 
binge as early as 2002.
  If we look back at what has been happening to the gross domestic 
product, it has been growing, probably peaked out somewhere around 
2001, 2002--our spending binge started about 2000 actually, and all the 
agencies that want to increase spending always wanted to talk about how 
much they were spending as a percentage of gross domestic product 
because gross domestic product measured all the goods and services that 
happen in our economy. There has been phenomenal growth. So it made 
their budgets look relatively small in relation to the total economy of 
this country.
  The taxpayers in this country are paying a burden that is among the 
highest it has ever been in the history of the country as a percentage 
of gross domestic product, especially since World War II. That tells me 
we have to do something to stimulate the economy. The only solution is 
to cut taxes. Increased spending will not do it. Doing nothing is not 
acceptable. We need to cut taxes.
  I strongly support any effort we have to cut taxes. I don't think our 
tax cut package is big enough, considering how big our gross domestic 
product is. It really needs to be more to stimulate the economy.
  Finally, we need to get this bill passed. The longer we delay getting 
it passed, the more it tends to delay our efforts. We need to get our 
money to take care of the needs of our men and women in the military.
  I was as disappointed as anyone about the increased spending driven 
because of September 11, and increased spending as a result of trying 
to maintain peace in the world in the Iraq crisis. It is a need we had 
to face. As a businessman, I realize sometimes you have to incur debt 
to take care of immediate problems in the business. You always had a 
plan to pay off the debt. There is a plan in this budget to pay off 
this debt. That is not easy to come up with.
  The chairman of the Budget Committee worked hard to have a plan laid 
out to meet what the President was wanting to see as far as tax cuts to 
meet the increased needs, and then to have a plan out there to 
eliminate deficit spending within 10 years. I compliment the chairman. 
He is doing a great job. I support the budget.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I take issue with my colleague on this 
question of spending. This chart demonstrates the long-term 
relationship between spending and outlays going back to 1981. This is 
the outlay line, the spending of the Federal Government. It was over 23 
percent of gross domestic product in 1982 and has been brought down 
steadily. When Democrats were in control in 1993, we put in place a 5-
year plan. Look what it did to spending.
  I hear the allegation that Democrats are the spenders. Let's look at 
the historical record. When Democrats had control in 1993, this is the 
trajectory we put spending on--down as a percentage of our gross 
domestic product, which economists say is the right way to measure 
spending over time because you are taking out the effects of inflation. 
We did increase revenues because we faced massive deficits. These 
deficits during this period were huge as a percentage of gross domestic 
product.
  So we cut spending; we raised revenue; we balanced budgets; we turned 
deficits into surpluses; we stopped raiding Social Security trust 
funds. We kicked off the longest period of economic growth in our 
Nation's history. We had the lowest unemployment in 30

[[Page 9556]]

years, the lowest inflation in 30 years, the strongest business 
investment in history. That is our record. We are proud of it.
  When the talk is about spending, let's look at the comparison. This 
chart looks at, from 1981 going forward, the difference in the 
Democratic alternative and the Republican budget before the Senate. 
Here is the difference. They are at 19 percent of gross domestic 
product, and we are at 19.3. We are both dramatically down from the 
peak of 23.5 percent in 1982. We have demonstrated spending restraint. 
This increase in spending that occurred was totally bipartisan. The 
increase in spending that occurred was for defense and homeland 
security almost exclusively. We participated in that spending increase 
together. We all agreed we ought to increase defense and we ought to 
increase homeland security.
  I hope my colleagues, when we talk about the record around here, will 
reflect on the whole record, and Democrats, despite what we hear all 
the time, were disciplined in spending, reduced spending when we were 
in a position to control it, reduced it for 5 years in a row as a 
percentage of gross domestic product, and balanced the budget.
  I give them high marks for getting a budget resolution. But what is 
in this budget resolution deserves low marks. It is red ink as far as 
the eye can see, with absolutely no concern for balancing budgets, 
ever.
  Our friend on the other side said this has a plan to pay off the 
debt. There is no plan to pay off the debt. If this budget is adopted, 
it doubles the debt. He is talking about a plan to pay off the debt; 
there is no plan to pay off the debt. This exploded the debt. If they 
want to get partisan about fiscal accomplishments here they are: The 
deficits of the Reagan administration, the Bush administration, the 
Clinton administration, and now this Bush administration. The only time 
we have been out of deficit, the only time was when the Democrats were 
in charge and we actually not only got out of deficit, we stopped the 
raid on the Social Security trust fund. That is a fact.
  And the deficits this President proposes are deep and long lasting 
and could not be timed in a worst way. Here we are on the eve of the 
retirement of the baby boom generation that will absolutely explode the 
deficits, and the President's tax cuts will explode in costs at the 
same time, putting us into a sea of red ink.
  How much time does the Senator from Delaware seek?
  Mr. BIDEN. Up to 15 minutes.
  Mr. CONRAD. I yield 15 minutes to the Senator from Delaware.
  The PRESIDING OFFICER (Mr. Cornyn). The Senator from Delaware.
  Mr. BIDEN. Mr. President, the country is truly well served by having 
the Senator from North Dakota as ranking member. I don't know anyone 
who knows more about facts relating to our budget this year, last year, 
or in the last decade than the Senator from North Dakota. I am not 
being solicitous.
  A good friend of ours from the State that was much closer to North 
Dakota than Delaware--from Wyoming, Senator Simpson--used to say in the 
Senate repeatedly, in his colloquial way: You know, everyone is 
entitled to their own opinion but not entitled to their own facts.
  It seems as though some in the Senate think they are entitled to 
their own facts.
  I will repeat some things that have been said here. They are so 
consequential I don't know how they cannot be repeated because they 
have not seemed to have broken through the ether, not here necessarily, 
but even in the country. To state the obvious, these are very serious 
times, just as they were at the dawn of the atomic age when Einstein 
observed ``that everything had changed except our way of thinking.'' We 
face mortal threats to our Nation from terrorists from rogue nations, 
expanding international commitments, a looming and gigantic democratic 
transition--a fancy word for saying there is going to be a bulge in the 
retirement-age people, myself included, and part of this baby boom 
generation--and our thinking must now change, not just about how we 
secure our safety in this dangerous new world but how we maintain our 
economic security, as well.
  And we are here today with yet another budget resolution that calls 
for more than $1 trillion in new taxes.
  One definition of insanity is trying the same thing over and over 
again and expecting a different result. This budget meets that 
definition.
  Thanks to the people of Delaware, I have been here now for three 
decades and I have shared this floor with many of my colleagues--well, 
not that many, actually--who are still here today. How many of my 
colleagues came to this Chamber back in the 1980s and talked about the 
need to balance the Federal budget? It was a fervor at the time.
  The President of the United States of America, and many on this 
floor, the most ardent supporters of this outrageous budget deficit, 
were insisting on--and I remind everybody--a constitutional amendment 
to balance the budget. Does everybody remember that? A constitutional 
amendment to balance the budget.
  When some of us voted for an exception to that amendment for war, our 
Republican friends, by and large, overwhelmingly our conservative 
Republican friends, voted it down and said that is a loophole we cannot 
sustain.
  The President, this President of the United States, indicated that. 
When we said that when there are exceptional economic circumstances 
requiring us to deficit-spend as an exception to the constitutional 
amendment, our Republican friends said no, no, we want to enshrine it 
in the Constitution of the United States of America. I think the leader 
of the Budget Committee was probably for a constitutional amendment--
without exceptions, we tried to put in.
  Now what are we doing? Here we are. Back in the 1980s we were told 
that Government needs to run more like a business and like a family; 
that business and families are under the danger of extending beyond 
their means and they should stop.
  I know it is kind of trite to say it, but I guess we are modeling 
this after Enron businesses, instead of what we used to know as 
businesses back in the 1980s.
  It took some time, but we eventually took that sound advice and we 
did balance the budget. As the old political saw goes, ``I have the 
scars on my back to prove it.'' It took discipline. It took some hard 
choices that made my constituents angry and my most ardent supporters 
angry--because we cut their programs.
  Here we are again. But this time the Nation is at war--in case 
someone on this floor hasn't noticed. We are at war. We face ballooning 
deficits, far larger than anyone could have imagined, especially, I 
might add, in the wake of our jubilation just 2 years ago about a 
projected $5.6 trillion surplus over 10 years.
  This year alone, counting the costs of the war, our deficit, if we 
pass this budget, will reach, in the unified budget, which means 
counting the surplus in Social Security, a $350 billion deficit. If you 
take out Social Security like we all promised you we would do, and 
don't count the surplus in Social Security, it is a $587 billion 
deficit this year.
  In the face of this $587 billion deficit, or what everybody likes to 
talk about now, the unified budget, which takes the Social Security 
surplus and spends it, the $350 billion deficit that this budget 
resolution calls for in the face of this more than a third of a 
trillion dollar deficit, for 1 year we are adding another $1.3 trillion 
tax cut.
  In my 30 years in the Senate I can honestly say, from my perspective, 
I cannot recall a more reckless or irresponsible proposal to come 
before this Senate.
  Where are the deficit hawks now? Where are those who were demanding 
for decades that we balance the budget; those who said we couldn't 
sustain our economy in the face of massive deficits? Where are those 
who were telling me we cannot let our children and grandchildren foot 
the bill for our excesses? Where are they now? Where have all--not the 
flowers--where have all the balanced budgeters gone? What

[[Page 9557]]

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

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

  Boy, am I hearing a rhyme here today. It does rhyme. It rhymes with 
all the nonsense of the supply-siders of the 1980s. It rhymes. It 
rhymes: massive tax cuts and deficits as far as the eye can see. They 
rhyme.
  Mr. President, at its core, a nation's budget reflects its basic 
values. More than any speech, more than any campaign promise, our 
budget reveals who we are, what we believe in, what we think is 
important, what we think is not. It reveals our real values, our real 
priorities.
  I do not say this as a criticism, but my value system and that of the 
Senator from Oklahoma are fundamentally different. My value system and 
the value system of my friends who are supporting this massive deficit 
are very different. And that is legitimate. I am in no way casting an 
aspersion but stating the obvious.
  Budgets reflect our values. In these historic times, in my view, our 
budget policy should reflect two of our most fundamental American 
values. The first is facing up to our responsibility.
  I love all my friends, Democrats and Republicans, who talk about that 
we have to have more individual responsibility in this Nation. I just 
ask the average person listening to this debate: Tell me how 
responsible you think we are being individually. It means putting 
together a responsible budget that makes hard but necessary choices, 
just like they are making in their families right now, as I speak. It 
means doing what is right. And by that I am not saying my Republican 
friends are doing what is wrong. They mean well, but I think it is 
wrong.
  The PRESIDING OFFICER. The Senator has used 15 minutes.
  Mr. BIDEN. Mr. President, I ask unanimous consent that I be allowed 
to proceed for 5 more minutes.
  Mr. CONRAD. Mr. President, I say to my colleague, I do not have that 
additional amount of time. I will give him an additional 2 minutes.
  Mr. BIDEN. I will take the additional few minutes.
  It means doing what is right, and not handing the bill for our 
actions to our children and grandchildren.
  By returning us to the failed policies of massive deficits this 
budget does exactly that. It hands it to the generation of young men 
and women who are fighting in Iraq.
  The second value is fairness--a sense that we are all in this 
together.
  In a democratic society like ours, under threats like those we face 
today, that means having a shared sense that paying our fair share of 
the bill is not just a partisan buzz phrase, it is not just window 
dressing, it is who we are, it is what we are about. It is what this 
budget should be about, fairness and responsibility.
  No one's definition of fairness is a tax cut that gives a taxpayer in 
the middle income bracket about $250, while those with incomes over $1 
million get a cut of over $90,000.
  No one's definition of fairness is a tax cut that gives almost half 
of all taxpayers a cut of less than $100, while the top one percent of 
taxpayers get a cut of over $24,000.
  Take a look at the income bracket of the men and women who are 
fighting now in Iraq--the young people who will be handed the bill for 
the future deficits in this budget. They will be getting less than $100 
in tax cuts.
  Is there anyone here who will argue that is fair, Mr. President?
  In my view, as far as reflecting our values, this budget fails.
  It is written as if we faced no new threats to our physical and 
economic security and it ignores the--small ``d''--democratic standard 
of fairness that we are fighting for.
  I remember when the President was running for office, when he was 
still facing a primary challenge from Steve Forbes and his flat tax, 
then Governor Bush proposed cutting taxes. The problem back then, as he 
saw it, was that

[[Page 9558]]

we were piling up budget surpluses and we were paying off--yes, paying 
off--the national debt.
  So what did he say? He said it would be better to cut taxes, above 
every other possible use of those resources.
  He did not say we should use those resources to fix Social Security, 
for example, or to restore the integrity of Medicare, or beef up and 
reorganize the military, or build up homeland defense to meet the new 
threats we face, or paying for his own priorities such as a missile 
defense system.
  At that time, at the end of the second Clinton administration, the 
Federal budget was in surplus. We had actually paid down over $150 
billion of the national debt, and we were on schedule to eliminate the 
national debt altogether by 2010.
  Think about that. In 7 years, we were going to completely eliminate 
the national debt.
  If there was any question about what the government could do if it 
balanced the budget and ran a surplus--if there was any question why 
surpluses are better than deficits--it was answered on the morning of 
September 11.
  That morning we learned the nature of the new threats we might face. 
We realized what it would cost to defend the Nation against them. It 
wasn't long before we saw the price tag for rebuilding Afghanistan.
  And now we are winding down a war in Iraq that the budget doesn't 
fully account for, not to mention the price tag for nationbuilding 
which--from the looks of news reports of massive looting this morning--
will be substantial.
  In his first year in office the President promised that he could cut 
taxes, pay off the national debt, add new funds for education, launch a 
missile defense system, and--he insisted--take care of any emergency 
that might come along.
  A lot of us were skeptical. We thought the tax cuts were too big, 
that the surpluses were overestimated, that the future was too 
uncertain. But unfortunately it was a vote we lost. He got what he 
asked for: a tax cut totaling $1.7 trillion, counting interest, over 
the next decade.
  We have seen the results of that mistake--the results are right there 
in the hundreds of billions of dollars of red ink we are spilling every 
year.
  Simple common sense tells us we must not make the same mistake again.
  In ordinary times, these proposals would be bad tax policy, and bad 
budget policy. In these times, they are irresponsible, a failure to 
confront the challenges we face.
  In the face of threats to our security, we are offered weaker Federal 
finances, with deficits as far as the eye can see.
  In the face of a weak economy, we are offered a tax cut program that 
is a windfall for a few instead of jobs for the many who need them. In 
the face of a demographic wave that will overwhelm our Social Security 
system, we are told to borrow the system's reserves.
  Let me conclude by suggesting that at a time when our Nation is 
challenged as never before, we are offered a budget policy that was 
devised to win a party primary 3 years ago.
  Finally, we must be concerned--in these times above all others--about 
the question of fairness. When we are putting the lives of our men and 
women in uniform on the line, when we face security threats here at 
home, in the Middle East, and in Korea, when deficits are once again 
imbedded in our budget, we have to pull our Nation together.
  It does make a difference how we pay for these goals. It is important 
that America believes we are in this war all together. We cannot send 
the bill for this to our children and our grandchildren--returning from 
this war--by returning to another era of deficits. And they are young 
men and women in their teens and early twenties.
  We cannot--in these times above all other times--cut taxes for a 
small fraction of Americans while we face the unknown costs of 
reconstructing Iraq and maintaining our security.
  Right now, I think the best thing we can do is forego any tax cuts 
that are not paid for and that are not part of a short-term stimulus 
package, and forego spending increases, as well, unless they are for 
homeland security and national defense because anything else--anything 
else we do, in my view--is just wrongheaded.
  In terms of the fairness of this, I will conclude by saying, if one's 
definition of fairness in a tax cut is to give taxpayers in middle 
income about $250 this year--with this tax cut--while those with 
incomes over $1 million get $90,000, and those in the top 1 percent--
meaning people making over $317,000 a year--get $24,000 a year, and the 
kid coming home--with the average pay being paid for a kid who is 
fighting over there in Iraq now--their tax cut will be $100 on average, 
give me a break about how this is fair--beyond being wrongheaded and 
counterproductive economic policy.
  I thank my colleague for the time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, just for the information of our 
colleagues--I appreciate the comments that have been made by many of 
our colleagues--I think we are close to wrapping this up. I inform 
people it is our expectation we will be voting probably no later than 
5:30. So if colleagues are off Capitol Hill, at least they can have 
that in mind. The rollcall vote will probably be starting maybe at 
5:20, 5:25, 5:30. So I just want to make that notification.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the chairman and want to echo that 
for Members on our side. We are very close now to being able to go to 
the final vote.
  How much time remains on our side, Mr. President?
  The PRESIDING OFFICER. Fifteen and a half minutes remains.
  Mr. CONRAD. Fifteen and a half minutes.
  Could I yield 10 minutes to the Senator from New Jersey?
  Mr. LAUTENBERG. I would appreciate that. And I will make sure that I 
do not run longer than that.
  Mr. CONRAD. I appreciate very much the Senator from New Jersey, who 
is the former ranking member of the Budget Committee, and, of course, 
has a history of extraordinary success in the private sector as well as 
tremendous contributions in the public sector.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I thank my good friend and colleague 
from North Dakota. I think perhaps my tenure as ranking member was the 
last time we had a balanced budget. But that is intended to be a joke, 
and I hope the Parliamentarian so notes it.
  Mr. President, the conference report to the fiscal year 2004 budget 
resolution is a curiosity at best. This piece of legislation, if it is 
adopted, will likely become as notorious, perhaps, as the Smoot-Hawley 
Tariff Act of 1930.
  When President Bush assumed office in January of 2001, he inherited a 
10-year surplus forecast, according to the nonpartisan Congressional 
Budget Office, of $5.6 trillion.
  Now, if this budget resolution is adopted, instead of a surplus, we 
are going to wind up with close to a $2.0 trillion deficit, according 
to CBO.
  A Republican President and a Republican Congress are presiding over a 
10-year $7.6 trillion reversal of economic fortune. And they are going 
to blame it on the recession that began in March of 2001, and they are 
going to blame it on 9/11, and they are going to blame it on the war 
against terrorism, the war in Afghanistan, and the war in Iraq.
  No, no, no. The single biggest contributor--and everybody should 
listen carefully and look at the numbers to confirm this--the single 
biggest contributor to that deficit is the 2001 tax cut, which the 
President wants to make even bigger, even longer.
  The administration and its allies in Congress will say that tax cuts 
are necessary to ``grow'' the economy. The only things growing in our 
economy are the number of people without jobs, the budget deficits, 
publicly held debt, and interest payments on that debt.
  There is an old saying: When you're in a hole, quit digging. And that 
is what we ought to do.

[[Page 9559]]

  One would think that much would be obvious to the administration and 
its Republican friends in Congress. Hundreds of prominent economists--
literally hundreds--including 11 Nobel prize winners, have come out 
against these tax cuts.
  It sounds like plain, old common sense to me. But the administration 
and those who control Congress seem immune to that kind of common 
sense--the kind of common sense that ordinary working families and 
business leaders from the smallest to the biggest companies use every 
day: spend less than what you take in.
  I will tell you why the administration and the Republicans in 
Congress seem to be immune to common sense: It is the triumph of a 
political ideology over good fiscal management. Our Government, 
paradoxically, is now in the control of people who hate Government.
  The tax cuts are not really meant to stimulate the economy; they are 
deliberately intended to reward well-heeled friends and create a budget 
crisis that forces us to cut important programs and permits them to 
turn the jobs of hard-working, loyal Government employees over to 
private sector contractors who claim they can do things at a cheaper 
price.
  There's a problem with this scheme. People who depend on the programs 
will get hurt and on the job front, we just converted a huge baggage 
screening operation at airports across the country, with 28,000 
employees, to the Federal Government because the private sector was 
handling it so poorly.
  Republicans have a name for this ``deliberate deficit'' strategy. 
They call it ``Starving the beast.'' Don't take my word for it. Listen 
to the words of two influential Republicans, economist Milton Friedman 
and activist Grover Norquist.
  On January 15, the Wall Street Journal ran an op-ed piece written by 
Milton Friedman, entitled, ``What Every American Wants.'' Part of what 
he wrote reads as follows:

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

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

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

  He concluded by saying:

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

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

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

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

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

  So, according to Messrs. Friedman and Norquist, elected officials are 
nothing more than spendthrift children and government--Social Security 
and Medicare, environmental protection and Pell Grants, national parks 
and the Coast Guard, veterans' benefits and disaster relief, the SEC 
and the FBI and all other hard-working, loyal Federal employees--are 
all things that should be drowned in the bathtub.
  If this budget resolution is adopted, unified deficits will reach 
record levels in 2003 and 2004 of $347 billion and $350 billion, 
respectively, and will total more than $1.7 trillion through 2013.
  Excluding Social Security, deficits will reach $558 billion in 2004--
that is the coming year--and will exceed $400 billion in every year 
through 2008, and will total more than $4.5 trillion by 2013.
  When the government runs deficits long enough, then Congress has to 
raise the debt ceiling. That is what happens. If we spend too much or, 
in this instance, cut revenues too deeply, the government has to go 
ahead and borrow money to meet its needs.
  The majority doesn't have the courage and probably doesn't have the 
votes to bring up free-standing legislation to increase the debt limit. 
So they resorted to a ploy: Under House Rule XXVII, adoption of the 
conference report before us will result in the House being ``deemed'' 
to have passed a joint resolution increasing the statutory limit on the 
public debt.
  This conference report states that the conferees anticipate that the 
debt ceiling will be raised from $6.4 trillion to nearly $7 trillion, 
an increase of $984 billion. That is the single biggest increase in the 
debt limit in history, surpassing the $915 billion increase the first 
Bush administration needed in 1990.
  The debt ceiling was under $6 trillion when this administration took 
over, and we were actually moving away from it because we were running 
budget surpluses. If we adopt the administration's budget blueprint 
today, the debt ceiling will have to be doubled to $12 trillion by 
2013. That is an extra $6 trillion in debt.
  The amounts are staggering. It is hard to put them into a format that 
everybody can understand, but I'll try: this extra $6 trillion amounts 
to $21,429 worth of debt for every man, woman, and child in America.
  This is what is happening while we are at war and with the baby boom 
generation on the verge of retirement. It would be impossible to mangle 
things so badly by accident. It can only be done by design.
  The triumph of ideology may bring joy to those currently in power; 
the ideologues in control may think that their ``starve the beast'' 
strategy will make our country stronger. But the problem with 
ideologues is that they shape reality to fit their ideology. It should 
be the other way around.
  To paraphrase Ronald Reagan, ``the trouble with our conservative 
friends isn't that they are ignorant, it's just that they know so much 
that isn't so.''
  Destroying the Government will not stimulate the economy. It will 
cripple it. Starving the beast will not strengthen our Nation. It will 
weaken it, immeasurably and perhaps permanently.
  I urge my colleagues to vote against this budget resolution 
conference report that is as cynical as it is reckless.
  I yield the floor.


                    Mental Health Parity Assumption

  Mr. DOMENICI. Mr. President, I compliment my friend from Oklahoma and 
the Chairman of the Senate Budget Committee on a job well done. He has 
skillfully navigated a difficult course to produce the budget 
conference report before us today. Congratulations.
  I would like to raise the issue of mental health parity as the Senate 
debates the FY 2004 Budget Resolution Conference Report.
  It is my understanding the conference report before us assumes the 
revenue impact of enacting a mental health parity law by using the 
Congressional Budget Office score for S. 543 from the 107th Congress of 
$5.4 billion over 10 years. However, I want to make sure that this is 
indeed the case because the assumption I just mentioned is not 
specifically referenced in the conference report. Rather, the overall 
revenue number is such that it assumes Congress will pass mental health 
parity legislation.
  Mr. NICKLES. I understand the concern of the distinguished senior 
Senator from New Mexico about mental health parity, and I would concur 
with my colleague's assessment. The conference report does assume the 
revenue impact of enacting mental health parity legislation.
  Mr. DOMENICI. I thank the distinguished Chairman for his 
consideration

[[Page 9560]]

and explanation of this important matter.
  Mrs. MURRAY. Mr. President, I rise today to express serious concerns 
about the budget resolution conference report. This is a 10 year 
blueprint for disaster that ignores the real priorities of working 
families. It eliminates all of the gains we made in the Senate that 
addresses the real fiscal challenges we face, while setting the Nation 
on a course of fiscal irresponsibility. This budget's contents and 
consequences will hurt the health of our nation.
  The budget agreement before us, which I want to point out was filed 
late last night, takes us back to the failed economic policies of the 
1980s that resulted in a tripling of the national debt. It also builds 
on the failed economic record of this administration.
  Since the President took office in 2001, we have lost 2.6 million 
private sector jobs. Many of these jobs were in the high tech and 
manufacturing industries so important to Washington State, which is one 
of the reasons our State has one of the highest unemployment rates in 
the Nation. The number of people unemployed for 6 months or longer has 
tripled. Real business investment has fallen. And finally, the $5.6 
trillion 10 year surplus that this administration inherited has been 
converted to a $2 trillion deficit in a little over 2 years.
  America's finances are deep in a hole, but rather than reaching for a 
ladder, this budget proposes a bigger shovel. Rather than trying to 
reverse the downward spiral, this budget drags us deeper and deeper 
into debt.
  The agreement is also deceptive and uses parliamentary tricks to 
achieve a $550 million tax cut for the few. It also calls for hundreds 
of billions more in tax cuts to make permanent the failed 2001 tax cut. 
After 2 years, we are still waiting for the ``economic stimulus'' that 
was promised from that tax cut.
  Despite the claims of my Republican colleagues, these new tax cuts 
will provide little relief to working families and will have little, if 
any, economic stimulus. We need a real economic stimulus plan now. We 
need to invest in the American workers and businesses now, not 5 years 
from now. The only way to get this economy going is to invest in 
economic development and growth, not in ineffective tax cuts targeted 
to the most affluent.
  This budget agreement not only fails our families, it will leave 
millions of children behind. When the President signed the No Child 
Left Behind Act, he made two promises: First, schools would be held 
accountable for their progress. And, second, schools would be given the 
resources to meet these new requirements.
  These two always went together--otherwise schools can't make real 
progress. But the Republican leadership in Congress and the President 
have broken their promise to our children by not providing the 
necessary resources.
  I was proud that the Senate accepted my budget amendment to increase 
funding for No Child Left Behind by $2 billion. But the House conferees 
have stripped out even that modest increase in education.
  Congress still has an obligation to fund the new requirements that we 
imposed on local schools. This commitment means we must provide $9 
billion to fully fund the No Child Left Behind Act. Unfortunately, this 
budget agreement will reduce funding for education over the 10 years. 
It holds domestic spending on education to roughly half the rate of 
inflation over 10 years. That means that each year our commitment to 
education will be less than the rate of inflation. This is the wrong 
direction. In order to strengthen our economy, we need to invest in 
tomorrow's workforce by investing in education.
  This budget agreement also falls short in supporting our 
transportation infrastructure. We know that transportation problems 
plague our biggest cities and isolate our rural communities. In my home 
State of Washington, our inadequate transportation network is hindering 
our economy, our productivity and our quality of life.
  When we make sound investments in our transportation infrastructure, 
we create good jobs today, and we build the foundation for our future 
economic growth. Making our transportation systems more efficient, more 
productive and safer, we will pay real dividends for our economy and 
our communities.
  This agreement provides little hope to seniors for a comprehensive, 
affordable Medicare prescription drug benefit. This agreement will 
allow for the block granting of Medicaid and the elimination of the 
entitlement. It offers no long term increase in the Federal match for 
Medicaid. In my home State of Washington, Medicaid could be faced with 
a $2 billion shortfall. This will mean cuts in programs for the 
uninsured and massive reductions in nursing home reimbursement. I fear 
this could lead to hospitals and nursing homes being closed, and that 
more doctors could refuse to see new Medicare and Medicaid patients.
  There are many of us in the Senate who have worked hard to strengthen 
public health and increase our investment in biomedical research. This 
is a commitment in prevention and long term savings in health care. We 
have seen the results of doubling NIH and the impact this is having on 
conquering diseases such as cancer, MS, Parkinson's and diabetes. Yet 
this agreement leaves little hope that we can maintain this investment.
  I would have to echo the comments of Senator Conrad. This budget is 
reckless, extreme and backwards. Perhaps the saddest conclusion is that 
this budget fails to invest in our families and our communities.
  I urge my colleagues to oppose this dangerous course and work today 
to strengthen our economy and invest in real economic development.
  Mr. DODD. Mr. President, I rise today in strong opposition to the 
budget resolution which my colleagues and I will be voting on this 
afternoon.
  First of all, I take serious exception to what has gone on here with 
respect to this year's budget resolution process. In all my years in 
Congress I have never seen anything quite like it.
  The budget resolution we are voting on today is different than the 
resolution passed by the House early this morning. This resolution 
creates an unprecedented ``point of order'' which ties the hands of the 
Senate by creating competing procedural paths between the House and the 
Senate for approving the size and nature of these proposed tax cuts.
  This is like a business keeping two sets of books. That is shady 
practice for a business and it is awful policy for this Nation's 
economy.
  But, more importantly, I believe that no matter how you look at this 
budget resolution it is extraordinarily fiscally irresponsible and will 
lock our Nation into years of record deficits and a skyrocketing 
national debt.
  I believe this resolution is profoundly unfair--providing hundreds of 
billions in tax cuts for the most affluent Americans who need them 
least, while slashing critical services from the American families who 
need them most.
  I believe that this resolution will be fundamentally ineffective in 
addressing the major challenges our Nation currently faces.
  I was in this Chamber in the early 1980s, when we debated the utility 
of enormous tax breaks benefitting mostly the wealthiest Americans and 
richest corporations. I was in this Chamber the last time we heard 
arguments about how passing large tax breaks and accepting huge 
deficits now will lead us to economic prosperity down the line.
  And I was here to witness what those breaks and deficits wrought on 
the American people: greater unemployment, lower growth, more 
homelessness, more poverty.
  For many of us, this budget resolution is--to quote Yogi Berra--
``deja vu all over again.''
  President Reagan was a remarkable man, who filled America with a 
sense of pride and optimism, at a time in our history when such 
feelings were sorely lacking. But that doesn't mean his fiscal policies 
were good for America. They were reckless policies that led us down the 
wrong path.
  I was one of a handful of Senators who voted against the Reagan tax 
cuts in 1981 and 1982. And history shows that the budget policies of 
the early 1980s

[[Page 9561]]

were enormously destructive to the fiscal health of our Nation--the 
shameful legacy of which lasts to this very day.
  Our Nation's Federal budget deficit rose from $74 billion in 1980, to 
$221 billion in 1986, and peaked at nearly $300 billion in 1992.
  In 1980, our national debt stood at $712 billion. By 1990 it had 
reached $2.4 trillion.
  Well, ``here we go again.''
  Here we are, once again, voting on an extraordinarily reckless 
budget, based on disproven and discredited economic theories.
  The philosopher George Santayana once said, ``Those who fail to 
remember the past are condemned to repeat it.''
  Our collective failure to remember the past, will be, in my view, far 
worse this time around than the first time we made these mistakes in 
the 1980s.
  This budget resolution locks in the largest deficits in our Nation's 
history. This year alone, the budget deficit could reach as high as 
$600 billion. That's more than twice as high as the highest annual 
deficit ever recorded in American history.
  According to the Republicans' own analyses, if these tax cuts are 
enacted, the deficits over the next 10 years will total as much as $6.7 
trillion.
  If these tax cuts are enacted, our national debt, which currently 
stands at a whopping $6.4 trillion--thanks, again, to the budget 
policies of the 1980s--will rise as high as $12 trillion.
  Frankly, I am shocked that we are about to pass a bill that is almost 
universally recognized as an enormous fiscal mistake.
  Even many of the Republican's own hand-picked economic officials 
concede that the Bush economic package will likely do little to spur 
growth, and could well stifle it.
  This is profoundly unfair--tax cuts for the wealthiest Americans 
while all others are making enormous sacrifices--including some in Iraq 
who are right now prepared to make the ultimate sacrifice.
  During past Congresses and past administrations, the American people 
have always been called upon to share the burden that is brought about 
from conflict.
  They have done so by buying government bonds and by even paying 
higher taxes if necessary to support our troops in times of war. 
Americans made these sacrifices with a sense of pride because they 
recognized it as their responsibility.
  What past administrations and Congresses did not do was consider tax 
cuts for the wealthiest Americans while their troops were in battle, 
which is what this administration and the majority in Congress are 
doing.
  I believe we missed an enormous opportunity here. I believe that we 
had an historic obligation and an historic opportunity to set our 
fiscal house in order this year.
  We had an opportunity to take enormous steps toward fiscal 
responsibility, a balanced budget, and economic prosperity. Instead, 
the agreement that we are voting on today will bring about record-high 
deficits and will significantly shortchange families across America.
  As I said, this resolution is irresponsible, unfair, and ineffective.
  It is highly irresponsible in the middle of a war, and in the midst 
of a severe economic downturn, to have a budget reconciliation bill 
with more than $1.2 trillion in tax cuts as its centerpiece.
  The other centerpiece of this budget resolution is, of course, 
cutting crucial funding for our national priorities--including homeland 
security, education, and health care.
  And for what? To pay for a tax cut for the wealthy.
  While offering tax breaks of up to $90,000 for the most affluent 
among us, this resolution cuts more than $7 billion over 10 years in 
services for America's veterans.
  As tens of thousands of our young men and women return from the 
Persian Gulf, we will reward them with cuts to their health care 
benefits, their education grants, and their opportunities to get ahead.
  While assuring the richest of the rich will receive an unprecedented 
financial windfall this year and over the next 10 years, we are 
severely shortchanging our children's education--underfunding Title 1 
by $5.8 billion, falling short of funding for the ``No Child Left 
Behind Act'' by roughly $8 billion, and slashing $400 million from 
after-school programs, which will force nearly 600,000 children out on 
the street after school.
  While making certain the bank accounts of the wealthiest Americans 
are secure, this budget fails to provide the funding necessary to make 
certain our homeland is secure.
  Money has been slashed for the FIRE grants program--which helps fire 
departments nationwide obtain the equipment and training they will need 
to effectively respond to new threats.
  And cuts have also been made to the COPS program and other programs 
critical to our defense against terrorism.
  We must attack head-on the argument that says that this tax cut is 
essential to our economic recovery. Just saying it is, does not make it 
so. Contrary to the belief of some on the other side of the aisle, 
deficits do matter. They lower future economic growth by reducing the 
level of national savings that can be devoted to productive 
investments--because more and more of the budget will be used to pay 
past debts, not to put into productive investments.
  They exert upward pressure on interest rates, which will mean higher 
rates for mortgages, new cars, business loans, and education loans--
which serve as a de-facto tax on our hardest-working families. They 
raise interest payments on the national debt. And they reduce our 
fiscal flexibility to deal with the unexpected.
  If we do not take action now to bring these growing deficits under 
control, those who endorse this document, in so doing, help to create 
the first generation of Americans less well off than their 
predecessors.
  The prosperity we had in the 1990s did not just come about from one 
day to the next. It came about through wise and tough decisions from 
the private and public sector. It took decisions to put an end to smoke 
and mirror accounting and budget gimmicks. It took tough decisions 
geared toward fiscal discipline and long term prosperity.
  Just 2 years ago, when President Bush first came into office, the 
Congressional Budget Office projected a surplus of $5.6 trillion over 
10 years. And now we are projecting record deficits of up to $6.7 
trillion over 10 years. That's a $12.3 billion decline in our Nation's 
budgetary health and economic prospects.
  This administration and the majority of this Congress are digging an 
enormous hole for our national economy. Their solution is more shovels 
and more digging. This does not strike me to be the wisest or most 
responsible course of action to take.
  I strongly oppose this budget resolution and urge my colleagues to 
vote against it.
  Mr. HARKIN. Mr. President, our nation is at an economic crossroads. 
This budget resolution conference report is an important document, 
setting out a course of policy for the coming decade. I oppose this 
resolution. I believe it takes us dangerously in the wrong direction as 
a country.
  We face a demographic shift as the baby boomers retire. We need to 
provide for the costs of Social Security and Medicare in the coming 
decades. I believe the elderly deserve a decent prescription drug 
benefit. We must provide a quality education for our children in an 
ever more competitive world where a large part of our advantage is the 
skills of our workforce.
  Prior to the 2001 tax bill, we were on a path to eliminate publicly 
held debt and to meet those needs. Now, the President is again 
proposing tax cuts of a similar size despite the fact that the 
surpluses predicted in 2001 have totally disappeared. Those projected 
surpluses have been replaced by record deficits. We may have historic 
deficits near $400 billion this year and next.
  The ranking member of the Budget Committee explained earlier today on 
the floor that the largest single factor in turning surpluses to 
deficits has been that 2001 tax cut. That tax cut, which I opposed, is 
more responsible for deficits in the long term than the

[[Page 9562]]

downturn of the economy, and more responsible than the new spending on 
defense and homeland security that was made necessary by the attacks of 
9-11.
  The President's new proposed tax cuts are largely provided for in 
this budget resolution--over $1 trillion worth. If made permanent, 
their cost to the Treasury will be larger than the entire projected 
shortfall in both Social Security and Medicare over the coming 75 
years.
  The proposal before the Senate is radical. So-called supply-side 
economics, manifested in the 1981 tax cut, brought us huge deficits in 
the 1980s. Unemployment skyrocketed from 7.4 percent to 10.8 percent in 
just 15 months. Supply-siders tried again in 2001, and we have lost 2 
million jobs. Now we are being asked to bet the farm for the third try. 
The economists who are so sure that this third bet will work are the 
same ones who predicted economic destruction when we passed measures to 
balance the budget in 1993, which led to strong economic growth.
  The budget resolution will produce $1.7 trillion in new Federal 
Government debt. That debt will compete with the private sector for 
funds, driving up interest rates. And it puts a break on economic 
growth, especially harming the housing, auto and agriculture sectors.
  The Congressional Budget Office has concluded that the President's 
plan--which is very similar to this resolution--would actually reduce 
economic growth by almost 1 percent. The CBO, now under a just-departed 
member of the President's Council of Economic Advisors, did an analysis 
of the budget proposal under so called dynamic scoring. The 
supplysiders say that economic analysis will show how much good the 
budget will do. What did it show? More debt.
  I believe that a short term economic growth package could be very 
helpful. We could make temporary tax relief available to working 
families immediately and provide financial assistance to states facing 
fiscal crisis. That would be stimulative. But the budget resolution 
proposes that only 5 percent of the tax cuts will be available this 
year. The proposal assumes that a huge share of the tax cuts will go to 
the very wealthy, those making $300,000, $500,000, and far more than a 
million dollars a year. There is nothing stimulative about such a 
proposal.
  We need a budget that is balanced, that takes the approach that we 
need to reduce the debt to take care of the baby boomers and provide 
for a decent drug benefit for the elderly. Clearly, the $400 billion 
proposed for prescription drugs and other medical reforms is far too 
low for that purpose. The total drug cost of the elderly in the coming 
10 years is estimated to be $1.8 trillion. While we should not cover 
all of that cost, far less than a quarter is not enough.
  We need a budget that provides for more for the education of our 
children. This budget calls for education spending that is $4 billion 
less than the Senate measure for the coming year and $20 billion below 
that level over the coming 10 years. No Child Left Behind is not 
adequately funded. IDEA, a program Congress promised to provide 40 
percent of the funds for decades ago is still grossly underfunded, 
meaning higher property taxes in almost every school district in the 
country.
  Mrs. FEINSTEIN. Mr. President, I rise to state my opposition to the 
fiscal year 2004 budget conference report.
  At a time when the United States is engaged in a war and will shortly 
begin a massive reconstruction effort whose costs are still unknown, at 
a time of growing deficits and rising debt, and at a time of increasing 
entitlement spending and increasing interest payments to service that 
debt, it is highly irresponsible for Congress to engage in such 
unprecedented maneuvering and gamesmanship to try to force through an 
overlarge, unstimulative, and unnecessary tax cut.
  The parliamentary maneuvering is unprecedented. A conference report 
is supposed to reconcile differences between the two bodies, but this 
conference report sets up a mechanism by which two different figures 
for a tax cut can be considered. It is a clear effort to make an end 
run around the Senate rules and procedures by advocates of large and 
irresponsible tax cuts to avoid a vote they know that they simply can't 
win. It makes no sense, and I urge my colleagues to vote against this 
conference report.
  When President Bush assumed office in January 2001, the Congressional 
Budget Office projected a budget surplus of $5.6 trillion for fiscal 
years 2002 through 2011. But under this budget resolution, there will 
be a deficit of $1.95 trillion. That is a $7.6 trillion turnaround in 2 
years.
  For fiscal years 2003 and 2004 alone, deficits will reach $347 
billion and $385 billion respectively if this budget resolution is 
adopted, and this does not include the cost of the war or the 
reconstruction of Iraq.
  This conference report provides for tax cuts of $1.3 trillion over 
the period 2003-2013. With interest the full cost of this tax cut is 
$1.6 trillion. And in an unprecedented move, the amounts of the tax cut 
that are reconciled are different in the House and Senate. The 
reconciliation instructions to both the Senate Finance and House Ways 
and Means Committee say that tax cuts up to $550 billion over 11 years 
can be reported.
  A special rule prohibits consideration in the Senate of the 
reconciliation bill that costs more than $350 billion, but it allows 
the Senate to consider a reconciliation conference report that costs up 
to $550 billion. This would establish a precedent that could be used in 
the future to play all kinds of games with the budget resolution. It is 
a bad solution to an impasse and should be rejected.
  There is also an urgent need to fund many priorities which are not 
dealt with in this budget, and those needs are not likely to disappear 
over the next decade. Those priorities include, among others: The war 
in Iraq and the subsequent reconstruction of Iraq, including a 90 
billion supplemental appropriations conference report coming to this 
body shortly; the President's No Child Left Behind education 
initiative; homeland security; a full prescription drug benefit in 
Medicare.
  Many priorities that are important to Californians are either cut or 
eliminated altogether, most notably funding for the State Criminal 
Alien Assistance Program. If that program is eliminated, the burden of 
processing and incarcerating criminal aliens will fall entirely on 
thinly-stretched State law enforcement budgets.
  When faced with the choice between supporting a bad budget and no 
budget at all, I must choose the latter.
  I support a budget which faces our fiscal needs head-on, even when an 
economic downturn forces us to make tough choices, and which resists 
the temptation to further increase the debt burden on future 
generations of taxpayers. This is not that budget. I urge my colleagues 
to vote against the budget conference report.
  Mrs. BOXER. Mr. President, the budget that passed the Senate was bad. 
This budget is worse. Though the budget is supposed to set priorities, 
this budget does not reflect America's priorities.
  Overall, for domestic needs, this budget cuts $6.9 billion from what 
was passed by the Senate. That means less for education, less for 
health care, less for homeland security. It means $4 billion less next 
year for education than what passed the Senate--and $20 billion less 
over the next 10 years.
  This budget begins by failing our kids. It provides $8.9 billion less 
than what was promised in the No Child Left Behind Act, which was 
signed into law with great fanfare just 1 year ago. That would leave 
millions of kids behind, and in the program to help States educate 
disadvantaged children, it would leave more than 600,000 California 
kids behind. This budget also cuts afterschool programs by 40 percent--
kicking 570,000 kids nationally and over 81,000 kids in California out 
of their afterschool programs.
  This budget fails our young people struggling with rising college 
tuition. Conferrees stripped out the Senate provision to increase Pell 
grants for 4.8 million students nationwide and for almost 600,000 
students in California. That means a loss of $165 million in Pell grant 
aid for California students.

[[Page 9563]]

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

       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be otherwise. 
     They raise interest payments on the national debt. They 
     reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an insupportable tax burden for the next 
     generation.

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

[[Page 9564]]

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

[[Page 9565]]

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

[[Page 9566]]

that between 2010 and 2030, the costs of these programs will increase 
rapidly, with annual costs exceeding dedicated tax revenues beginning a 
dozen years before this `baby boom' wave is over. And the trustees 
estimate Medicare will become insolvent 4 years earlier than predicted 
just last year. Importantly, these estimates do not include the 
addition of a necessary prescription drug benefit.
  The bottom line is, we cannot diminish our ability to strengthen 
Social Security and Medicare. We were looking to the window of 
opportunity presented by a return to surpluses to prepare for these 
future challenges. But as we have seen over the past 18 months, 
projections of surpluses or deficits can change dramatically, and that 
opportunity has evaporated. Given the uncertainties we are facing 
today, given the challenges we face tomorrow--we must exercise caution 
now so that we do not exacerbate long-term deficits in the years to 
come, and threaten our ability to address America's long-term 
priorities in the future.
  Once again, the President was right to offer a growth plan. But, we 
cannot ignore the impact of all of the challenges we face--the cost of 
war, higher defense spending, the retirement of baby boomers, higher 
health care spending, and homeland security.
  This agreement gives us the chance to unite behind a consensus 
figure. A figure that is ``right-sized'', a figure that strikes the 
right balance and one that will allow us to stimulate the economy in 
the short-term. It represents the most effective and responsible way to 
stimulate the economy, while advancing a growth package that can 
achieve the strongest bipartisan support.
  If we are to restore balance to the Federal budget, we must exercise 
fiscal discipline. This budget provides an important step in that 
direction and I urge my colleagues on both sides of the aisle to join 
me in supporting this conference agreement.
  I ask unanimous consent that the letters that I referred to be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                                  U.S. Senate,

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



                                                  U.S. Senate,

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

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

[[Page 9567]]

strength of the Nation's economy and literally hundreds of thousands of 
jobs are at stake.
  I foresee great difficulty in enacting a transportation 
reauthorization bill with the numbers proposed in this budget 
resolution.
  Our environmental programs get short shrift in this budget.
  I am most disappointed that conferees refused to agree to the 
additional $3 billion in funding for the Nation's water infrastructure 
approved by the Senate. As I said during debate on the Senate floor, 
the estimates of the current funding gap in the areas of water and 
wastewater infrastructure are enormous. Accounting for inflation, 
overall funding for environmental programs will be $770 million below 
fiscal year 2003 levels. Real cuts in programs that keep our water, 
land, and air clean will have to be made.
  Finally, education gets short shrift in this budget.
  Earlier this year, the President emphasized that education and 
homeland security are integral to having a secure nation with a well-
educated and training workforce that would grow and strengthen our 
economy.
  At a time in our history when we are all focused on homeland 
security, it must be noted that education should be considered the 
centerpiece of our homeland security efforts. The best security for a 
nation is to ensure that every individual has the opportunity to 
receive a high-quality education, from prekindergarten to elementary 
and secondary education, to special education, to technical and higher 
education, and beyond.
  The budget resolution before us severely underfunds key education 
programs. The Title One program, which is the heart of the Federal 
effort in elementary and secondary education, is $6 billion below the 
level authorized under the No Child Left Behind Act. The resolution 
also fails to provide for any increase in the Pell grant maximum award.
  By authorizing large tax cuts in the budget conference report, we are 
severely damaging our education delivery system. This Nation has 
overwhelming needs in education, healthcare, and infrastructure. The 
tax cuts in this resolution should have gone to meet these needs.
  Mr. President, a budget is a statement of priorities. As is clear 
from my statements, I will vote against this budget because I believe 
this budget's priorities are dangerously misguided.
  Mr. FRIST. Mr. President, let me first congratulate Senator Nickles. 
This is the chairman's first budget resolution, and I particularly 
thank him and his staff for all their hard work these last nearly 7 
weeks to bring us to this point today.
  It has not been easy, but the committee has met its schedule and 
completed the budget resolution ahead of the statutory deadline of 
April 15.
  I understand this is the second fastest budget resolution conference 
agreement ever considered. Senators might be reminded that the last 
time we adopted a budget resolution in the Senate was almost 2 years 
ago on May 8, 2001, under the chairmanship of Senator Pete Domenici, at 
a time when the Senate was 50-50.
  The Senate, for the first time in the 27 years of the Budget Act, did 
not adopt a budget resolution last year, did not even consider one here 
on the Senate floor. And I truly believe that our failure to complete 
11 appropriations bills for fiscal year 2003 until just 8 weeks ago, 
was a direct result of not adopting a budget last year.
  So having a budget resolution that we can vote on today, is not only 
important for how it will allow the legislative calendar to move 
forward in a more orderly manner, it is also important to the 
institution. The congressional budget process now is back in operation 
and that is important not only for today but for the future of how 
business is conducted particularly in this chamber.
  Without a budget, chaos would rein in the legislative calendar.
  Without a budget, there would be no fiscal discipline on our return 
from the upcoming recess.
  Without a budget, we would have no enforcement provisions to control 
mandatory or discretionary spending. It would be open season on 
spending increases.
  Without a budget, interestingly to my colleagues who are opposed to 
even the modest tax cuts assumed in this resolution, there would be no 
restrictions on any tax cuts, just as there would be no limit on any 
spending increases without a budget in place.
  But more importantly, the fiscal blueprint before today, is the 
correct blueprint to provide for economic growth and job creation.
  It is going to be absolutely critical that once we return from the 
upcoming recess that we focus quickly on adopting a tax reconciliation 
bill that will stimulate investment, increase demand, and begin to 
create needed jobs.
  Equally as important this budget will provide for increased spending 
where it is needed to provide for homeland security and national 
defense.
  And nondomestic spending will not decline but actually increase over 
3.6 percent next year. A rate of growth consistent with the average 
American family's pay check growth. Government spending should grow no 
faster than families' income growth.
  Mr. President, this is not, as the minority leader suggested, a 
difficult day. This is a good day to adopt a budget, the first one in 
over 2 years.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. How much time remains on our side?
  The PRESIDING OFFICER. Six minutes five seconds.
  Mr. CONRAD. Mr. President, we anticipate now that the vote will start 
at 5:20. We want to alert our colleagues to that. Let me just wrap up, 
if I may. And then would the chairman like to conclude this debate?
  Mr. NICKLES. Thank you.
  Mr. CONRAD. All right. Mr. President, let's all understand what we 
are voting on. This is not a tax cut of $350 billion. There is a tax 
cut contained in this budget resolution for $1.3 trillion. There may be 
some side deals that have been arranged to reduce the reconciled amount 
of that tax cut, but the budget resolution before us provides $1.3 
trillion in tax cuts. This is at a time of record budget deficits. We 
have the biggest budget deficits we have ever had.
  The budget deficit for this year will be between $500 and $600 
billion, not counting Social Security. If we treat Social Security the 
way it was intended and we don't take it and use it for other things, 
the operating deficit is between $500 and $600 billion this year.
  This is advertised as a growth package, something that will grow the 
economy. In our analysis, nothing could be further from the truth. The 
deadweight of these deficits and debt will burden the economy for 
years. It threatens the economic security of our country.
  This is the analysis of the people who were hired by the White House 
and the Congressional Budget Office to do the economic analysis. This 
is what they say:

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

  In other words, this plan hurts the economy. It doesn't help it. It 
hurts it. That is the analysis of the people who are paid to do it by 
the White House themselves.
  The White House's own budget document reveals the long-term 
circumstance we face: Exploding deficits as a result of exploding costs 
to the Federal Government from the retirement of the baby boom 
generation, coupled with exploding costs of the tax cut that is 
proposed and contained in this budget. The result: we never get out of 
deficit, ever, at least until the year 2050, according to the 
President's analysis. The deficits just get deeper and deeper and 
deeper, threatening the economic security of the country.
  I close with this piece that appeared in the New York Times op-ed 
page on

[[Page 9568]]

Wednesday. This is a piece done by six of our most distinguished 
colleagues: three former Senators--two Democrats, one Republican--two 
members of President's Cabinet in the past--one Republican, one 
Democrat--and Paul Volcker, former head of the Federal Reserve. I don't 
know his political affiliation.
  They are warning us of the direction we are going. They conclude by 
saying this:

       Congress cannot simply conclude that deficits don't matter. 
     Over the long term, deficits matter a great deal. They lower 
     future economic growth by reducing the level of national 
     savings that can be devoted to productive investments. They 
     raise interest rates higher than they would be otherwise. 
     They raise interest payments on the national debt. They 
     reduce the fiscal flexibility to deal with unexpected 
     developments. If we forget these economic consequences, we 
     risk creating an insupportable tax burden for the next 
     generation.

  That is what is at stake here.
  Are we really going to pass a budget that contains authorization for 
another $1.3 trillion in tax cuts, when we are already in record budget 
deficits, when we are in a war, the cost of which we do not know, and 
we are on the brink of retirement of the baby boom generation, which is 
going to explode the cost to the Federal Government?
  Mr. President, anybody who votes for this budget is voting to 
increase the deficits by $2.4 trillion. It is precisely the wrong thing 
at this time. It is precisely the wrong thing. I urge my colleagues to 
vote no.
  The ACTING PRESIDENT pro tempore. The Senator from Oklahoma is 
recognized.
  Mr. NICKLES. Mr. President, for the information of our colleagues, we 
are going to be voting momentarily. I have a lot of colleagues who say 
they want to catch planes, and a lot of the debate has cycled around 
once or twice. It has been a pleasure to work with Senator Conrad. I am 
not totally surprised that he will not vote for the budget resolution--
maybe a little disappointed.
  I hope we return to the days of having bipartisan budget resolutions. 
There will be some Democrats who will vote for this. I hope there are 
several. When we passed this budget 3 or 4 weeks ago in the Senate, 
there were several Democrats who voted for it. I hope we will get 
several to vote for it today.
  I have heard a lot of complaint about it, most of which is excessive 
tax cuts. I beg to differ. We have tax revenues over the next 10 years 
of about $28 trillion, and the reconciled portion of this tax cut, at 
maximum, would be $550 billion, but probably more like $350 billion. 
That is a small percentage. Some colleagues say: Wait a minute, there 
are more; in the outyears, there is $600 billion, and that is basically 
continuing present law. If you don't do that, you are going to have 
massive tax increases in 2011, 2012, and 2013. A lot of those tax 
increases will be on low-income people, raising their rate from 10 
percent to 15 percent, reinstating the marriage penalty, or it would be 
eliminating the $1,000 tax credit per child. I don't want to do that. I 
don't know that we are going to do it this year. We don't have to do it 
this year. We should do something to stimulate the economy. We have a 
small stimulus package--$350 billion for the Senate.
  So I hope our colleagues will support this package.
  I will make one comment about deficits. Are deficits too high? You 
bet. Some people say--and I have heard this a lot--they were caused by 
excessive tax cuts in 2001. But I disagree with that. There are two 
equations: how much revenue you are taking in, and also how much money 
you are spending. We have been spending a lot of money because of 
national defense needs, because of homeland security and, frankly, 
Congress got in the habit of spending a lot of money during the later 
years in the Clinton administration when we had a lot of growth 
revenue. We had spending compounding at double-digit levels--12, 13, 14 
percent. We cannot continue doing that.
  This budget has fiscal discipline. It does say that the discretionary 
amounts, compared to last year prior to the supplemental, will grow at 
about 2.5 percent. We have caps on entitlements, points of order 
against growing entitlements, and we say that entitlement changes in 
Medicare should be limited to $400 billion after a bill is reported out 
of the Finance Committee. We didn't put that in reconciliation. We want 
Medicare, and we want a prescription drug bill, and we think we can get 
it as a result of this bill.
  Last year, we had no budget. When we had no budget, we didn't get 
appropriation bills done. We didn't pass 11 of 13 appropriations bills 
last year because the House and Senate didn't have numbers with which 
they concurred. We didn't get a prescription drug bill. We didn't 
function or manage.
  I urge my colleagues, let's not be totally focused just on the size 
of the growth package--and a lot of people have different opinions, 
such as it is not large enough, it is too big; some want zero, some 
want $350 billion, some want more, and some may want more than that. 
Let's also keep in mind that that is a tax figure over 10 years, and it 
is a very small percentage compared to what we are spending per year, 
which is $2.2 trillion.
  This budget is the only game in town if you want to have any control 
over the growth of that total expenditure. We didn't pass the budget 
last year. If we don't pass one this year, the whole budget process is 
dead. I urge my colleagues, let's be fiscally responsible. This is the 
only game in town. For people to say, wait a minute, this is too high--
the only thing they are talking about being too high is on the tax 
side. That doesn't count the trillions of dollars they were trying to 
add on spending.
  I urge my colleagues to be responsible. Let's work together and pass 
a budget that can pass. This can pass. Let's reinstate some discipline 
that we didn't have last year. I urge my colleagues to support this 
budget.
  I yield back the remainder of my time and I ask for the yeas and nays 
on the conference report.
  The ACTING PRESIDENT pro tempore. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the conference report.
  The clerk will call the roll.
  The legislative clerk called the roll.
  The VICE PRESIDENT. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 50, nays 50, as follows:

                      [Rollcall Vote No. 134 Leg.]

                                YEAS--50

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

                                NAYS--50

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham (FL)
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wyden
  The VICE PRESIDENT. On this question, the yeas are 50, the nays are 
50. The Senate being equally divided, the Vice President votes yes, and 
the conference report is agreed to.
  Mr. NICKLES. I move to reconsider the vote.
  Mr. SANTORUM. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. NICKLES. Mr. President, I thank all of our colleagues. This has 
been a challenging process. I especially thank Senator Conrad. We have 
had a good debate, a challenging process, needless to say, but we now 
have a budget. I

[[Page 9569]]

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

                          ____________________