[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Senate]
[Pages 1014-1017]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         THE PRESIDENT'S BUDGET

  Mr. HARKIN. Madam President, I have had a chance now to look over the 
President's budget. What with being out of our offices and stuck over 
in the Capitol and not being able to see some of the people we were 
supposed to see and conduct business as usual, I have had the chance to 
look at the budget. Of course, I had heard it was kind of bad. I read 
some of the preliminary reports, but it was not until I really started 
digging into it and looking at some of the fine print and getting out a 
calculator and adding it all up that I realized how stupefyingly bad 
this budget is. It almost defies logic.
  After going through it, I can sum up his election year budget in four 
words: More of the same. More tax cuts for the wealthy, more massive 
spending increases on things such as Star Wars and, of course, that 
nice trip to Mars we are going to take, more giveaways to special 
interests, and more massive budget deficits.
  This is Mr. Bush's fourth budget submission, so now I think we can 
take stock. We can size up the full 4-year fiscal record of this 
administration. Quite frankly, the irresponsible actions of this 
administration over 4 years boggle the mind.
  In just 4 years, Mr. Bush has put in place trillions of dollars in 
tax cuts, overwhelmingly for the very wealthy. In spite of the huge 
deficits, the President now is demanding that those tax cuts be made 
permanent. At the same time, he is proposing tens of billions of 
dollars on new spending programs, and this includes untold billions for 
trips to the Moon and Mars. There is billions more for Star Wars, which 
Mr. Bush intends to build now and test later.
  President Bush has taken the projected 10-year surplus of some $5 
trillion that he inherited from President Clinton and turned that into 
a projected 10-year deficit of nearly $5 trillion. Think about that. In 
4 short years, this President and this administration have taken a $5 
trillion surplus and turned it into a $5 trillion deficit, a $10 
trillion swing. As I said, it just boggles the mind.
  By any measure, this is an astonishing record of economic 
mismanagement and economic malpractice. In fact, I challenge my 
colleagues to cite any President in the 215-year history of our 
Republic who has compiled such a record of sheer recklessness.
  The White House now says the deficit in the current fiscal year will 
be $521 billion. That is bad enough, but that is not the worst of it. 
Far more dangerous are the long-term, permanent, structural deficits 
that will result. Mr. Bush dares to claim he has charted a course to 
cut the deficit in half in 5 years. This has about as much credibility 
as his claim that Iraq possessed massive stockpiles of weapons of mass 
destruction. The fact is that, after 4 years, Mr. Bush has zero 
credibility on the budget.
  Let's look at his past projections and promises. In 2001, Mr. Bush 
promised: ``We can proceed with tax relief without fear of budget 
deficits.'' That turned out to be untrue.
  In 2002, Mr. Bush reassured us: ``Our budget will run a deficit that 
will be small and short term.'' That turned out, also, to be untrue.
  In 2003, Mr. Bush again assured us: ``Our current deficit is not 
large by historical standards and is manageable.'' That also is turning 
out to be untrue.
  This year, President Bush claims that the massive deficits he has 
created will be magically cut in half in 5 years' time. Is there any 
Senator in either party who believes that promise? I don't think so. 
Mr. Bush has not just created a structural budget deficit, he has 
created a structural credibility deficit. Few credible economists 
believe him anymore.

[[Page 1015]]

  The Washington Post sized up this budget in an editorial yesterday 
morning. The editorial was titled ``Bogus Budgeting.'' The editorial 
stated that:

       The Bush administration 2005 budget is a masterpiece of 
     disingenuous blame-shifting, dishonest budgeting and 
     irresponsible governing.

  The reality is that the deficits will persist at high levels even if 
the economy stays healthy. Year after year they will stay at high 
levels, until the baby boomers start to retire, and then the deficits 
will explode.
  If we look at the operating budget--that is not counting the surplus 
that comes from the Social Security taxes--the picture becomes crystal 
clear. Under the operating budget--again, excluding Social Security 
surpluses--Bush has a huge $675 billion deficit for this year. That is 
equal to 5.9 percent of our GDP, our gross domestic product, the second 
highest operating deficit since 1946.
  But President Bush claims this operating deficit will drop to $470 
billion in just 2 years. Then, according to his own budget documents, 
the operating deficit begins to rise, reaching $500 billion in 2009--
deficits as far as the eye can see.
  There are three huge problems here. No. 1, we are continuing to add 
debt at a very rapid rate. No. 2, the glidepath is not downward to 
lower deficits but upwards to bigger deficits, and it rises more 
rapidly as we begin paying Social Security benefits to the baby boomers 
and, as the Social Security surplus shrinks, the true direction of the 
budget disaster under Bush's plan becomes clear. No. 3, the Bush budget 
does not include costs that we all know we are going to have.
  For example, get this. The Bush budget does not include any 
additional funds for Iraq after September 30 of this year. In other 
words, for 2005, beginning October 1 of this year, fiscal year 2005, 
there are zero dollars for Iraq. We will have no troops there? We will 
have no support going to Iraq? After September 30 it is just going to 
all end? Does anyone believe that? Yet this budget has zero dollars in 
it for Iraq after September 30 of this year. That alone ought to tell 
you this budget is bogus.
  The 2001 tax bill left a timebomb called the AMT, the alternative 
minimum tax. In 2001, fewer than 2 million, mostly wealthy, taxpayers 
paid it. By 2010, if it is not changed, over 30 million taxpayers will 
be paying it, mostly middle-class families. Nobody around here believes 
that is going to be allowed to happen. Everyone understands it will be 
fixed, probably at a cost of over $400 billion. So, what does the Bush 
budget do? It just fixes it for 1 year. Again, bogus.
  What do these huge deficits mean, coming ahead? They mean we are 
increasingly dependent on the Chinese, Japanese, Korean, and other 
foreign governments and investors who buy our Treasury bonds.
  I said to someone the other day, after looking over this budget and 
looking over who is loaning us money to buy our bonds, we are actually 
borrowing money from the South Koreans to finance our deficit.
  Mr. REID. Will the Senator yield for a question?
  Mr. HARKIN. I am pleased to yield.
  Mr. REID. I was struck by the statement made by the Senator from 
Iowa, that this budget includes not a penny for our troops and the 
other programs we have going on in Iraq. The question I ask the Senator 
is, Does this kind of remind you of what took place last year? Does the 
Senator remember that the President came and asked for a supplemental 
of $69 billion early in the year, and then later came and asked for $87 
billion, in 1 year?
  Mr. HARKIN. That is right.
  Mr. REID. Does the Senator from Iowa think for 1 minute we are going 
to spend no money in Iraq, after last year having had two supplementals 
in the amount of more than $150 billion?
  Mr. HARKIN. I tell you, the Senator from Nevada has put his finger on 
it. Look, everyone knows, we had the $69 billion last year. We knew it 
wasn't enough, so he had to come back and ask for $87 billion. He got 
that. We also know that is not enough. Yet the President has the 
audacity, as the Senator has pointed out, to have a budget that on 
September 30 of this year has no money for Iraq.
  I say to my friend, no one believes that. Yet the President puts it 
in his budget as though it is factual.
  Mr. REID. Will the Senator yield for another question?
  Mr. HARKIN. Yes, I am delighted to yield.
  Mr. REID. Does the Senator believe that in the Pentagon and in the 
bowels of the White House they have already prepared the documents for 
a supplemental appropriations bill to take care of the funding in Iraq 
and poor little Afghanistan, about which we seem to have just 
forgotten?
  Mr. HARKIN. The Senator from Nevada is very perceptive. He has been 
here a long time. My good friend from Nevada knows how these things 
work, and he is absolutely right. The Senator is right. We all know 
that. The Pentagon already has figures put together. In the bowels of 
the White House they have figures put together. They already know it is 
going to cost money for next year.
  Again, I guess I respond to my friend by asking him, why wouldn't 
they be honest with us? Why wouldn't they be honest and put this in the 
budget? because everyone knows the facts--that it is going to cost some 
money after September 30.
  I ask my friend what possible reason would they have for saying it 
costs nothing and they are zeroing it out?
  Mr. REID. Because they believe, in my opinion, we will do whatever is 
necessary to fund the key things that are important. I am sure down 
there they have taken into consideration the programs they say they are 
going to cut. I believe this is just a prelude to having these people 
accomplish indirectly what they can't do directly; that is, decimate 
and in effect void the Social Security laws that have been in effect 
for this country for more than 70 years. Those people do not believe in 
Social Security. They don't believe in Social Security.
  I carry this with me, because I want people to know I don't make this 
up. It is my wallet. It is kind of worn. I am not going to read all of 
it. But let me just read a couple of statements from Senator Robert 
Dole, our friend, who is a nice man and does a good job now on 
television being a commentator. This is a direct quote. He said:

       I was there fighting the fight, one of 12 voting against 
     Medicare because we knew it wouldn't work in 1965.

  He is one of the patriarchs of the Republican Party who gives advice 
and counsel to the President of the United States today. He doesn't 
like Medicare, and most other people at the White House do not like 
Medicare.
  Listen to this one:

       Medicare has no place in a free world.

  I am not making this up.
  Mr. HARKIN. Who said that?
  Mr. REID. The recently departed majority leader of the House of 
Representatives, Dick Armey.
  That is only part of what he said.

       Medicare has no place in a free world.

  I am not making this up. That is what he said.

       Social Security is a rotten trick. I think we are going to 
     have to bite the bullet on Social Security and phase it out 
     over time.

  These people are doing indirectly what they cannot do directly. They 
are going to rob this Government of all the moneys they have until they 
have no choice but to say what we have to do is basically do away with 
the Social Security program; do away with Medicare. Let the private 
sector take care of it. If you want some retirement benefits, get it at 
your job; and if the job doesn't, save it.
  Social Security is a rotten trick. That is what they think. But my 
mother and father who drew Social Security--actually, my dad didn't. He 
died too early. But my mother did. I don't think it was a rotten trick. 
I can remember my grandmother. I was a little boy. Every month she got 
what we called and she called her ``old age pension.'' That was Social 
Security. That was what gave my grandmother independence from her eight 
children. She got her check. She didn't have to depend on her children. 
She was a widow. She got her Social Security check.
  I thank my friend very much for talking about this budget, which is 
as phony as a six-dollar bill.

[[Page 1016]]


  Mr. DURBIN. Madam President, will the Senator from Iowa yield for a 
question?
  Mr. HARKIN. Yes.
  I thank the Senator from Nevada for his questions and for answering 
one of my questions, too. The Senator is right. There is a part in this 
budget where essentially the administration points out that with the 
huge deficits, the Social Security system will be unsustainable in its 
present form. Talk about code words. There is a code word for 
privatization. Charge Social Security, turn it over to the private 
marketplace, and let people take a chance on whatever. I think the 
Senator from Nevada is absolutely right. I will not say every 
Republican, because I can't cast the net that far. But I would say 
there are forces in the Republican Party--the Senator mentioned Senator 
Dole and Dick Armey. Newt Gingrich said he wanted Medicare to wither on 
the vine and also led the charge to try to privatize Social Security.
  There are forces at work and they are in control of the Republican 
Party now that do not like Medicare. They do not like Social Security, 
and they will do whatever they can to get rid of it. I believe this 
budget is a step in that direction.
  I yield to my friend from Illinois for a question.
  Mr. DURBIN. I want to ask the Senator a question through the Chair. I 
thank the Senator from Nevada for his comments.
  But I have before me the budget. It is now in four different books. I 
have the lead book. By the time you get to page 14 of the President's 
budget, right in the front end of it, in the introduction, ``Winning 
the War On Terror,'' is a long section on removing the threat of Saddam 
Hussein. It talks about Operation Iraqi Freedom, the removal of Saddam 
Hussein, and the responsibility of the United States in Iraq.
  If I understand the Senator from Iowa correctly, despite the fact 
this is in the opening introduction of the budget, you can pour through 
this entire budget and not find a single penny--not one cent--that is 
going to be spent by the United States of America in waging the war in 
Iraq after September 30 of this year.
  Is that my understanding of what the Senator from Iowa said?
  Mr. HARKIN. The Senator from Illinois is absolutely right. I didn't 
believe it myself when I was first told of this. I started digging in 
the budget along with my staff. I said surely someplace in this budget 
they must have some money in there to fund our operation in Iraq.
  You will look until your dying day and you will not find one penny in 
that budget for our operations in Iraq after September 30, you will 
just find a note about possible funding.
  Mr. DURBIN. I ask the Senator from Iowa through the Chair this 
question: Has he heard any member of this administration suggest we 
will be withdrawing all of our troops from Iraq before September 30 of 
this year?
  Mr. HARKIN. I think the Senator asked a very good question. I don't 
know. I have not heard them say that. But that is what the budget 
implies.
  Mr. DURBIN. I am sure the Senator has visited with his National Guard 
in Iowa as I have visited them in Illinois. They have been told just 
the opposite. The Guard and Reserve have been activated and told they 
will be gone for a year or 18 months in service to our country. It is 
clear that once there we are going to support them. We will give them 
what they need to come home safely with their mission accomplished. But 
we can't do it for nothing.
  My question to the Senator from Iowa is, Why would the President of 
the United States refuse to include in his budget one penny to wage 
this war in Iraq and this war in Afghanistan? What is the purpose 
behind shortchanging this budget and making it look cheaper than it 
actually is? I ask the Senator from Iowa if he has any opinion.
  Mr. HARKIN. I will just say to my friend all you have to do is go 
back and look at 2002, 2003, and 2004. Look at the last 3 years of the 
Bush budget and you can see what happened. They have dug themselves and 
our country into a huge fiscal hole. Now what they want to do, rather 
than trying to get out of it, is going to dig us even further into that 
hole and try to make it look not so bad. They are trying to cut here 
and cut there, and doctor things up a little bit so it doesn't look 
quite so bad. They put zero money in there for Iraq.
  Mr. DURBIN. If I might ask another question----
  Mr. HARKIN. It is a shell game. That is all it is.
  Mr. DURBIN. The Senator realizes that only 4 years ago we had a $236 
billion surplus that we were strengthening Social Security with, paying 
down America's debt, and reducing the mortgage our children will have 
to carry. And now, if I am not mistaken, we are going to be faced with 
this budget which is the largest deficit in the history of the United 
States of America.
  My question to the Senator from Iowa is this: In basic terms for 
those following this discussion, how do we pay for the debt? I am told 
every minute the Bush administration spends $991,000 more than we take 
in in taxes. This results in a $520 billion deficit this year. I ask 
the Senator from Iowa, How do we balance the books? Where do we turn 
with a deficit like this to help balance the books?
  Mr. HARKIN. We are not going to balance it. But I tell you what they 
are doing. Effectively, they are going hat in hand to the Chinese, and 
they are saying, Please loan us some money. The Chinese will buy our 
bonds. Japan is buying our bonds. I think Japan now is the single 
largest owner of bonds. I think China is No. 2, if I am not mistaken.
  Mr. DURBIN. Japan is $526 billion, and China--I can give you the 
exact number. I think the figure is $144 billion.
  Mr. HARKIN. From China?
  Mr. DURBIN. China.
  Mr. HARKIN. And they will keep buying more and more and as the huge 
deficits pile up America's debt. This is going hat in hand to China and 
Japan and South Korea and many other countries. To do what? To finance 
huge tax breaks for the wealthy.
  Mr. DURBIN. I ask the Senator from Iowa to complete the thought; the 
obvious question which I ask which we ought to consider, where does 
China get the dollars to buy the debt of the United States? Where does 
China have a surplus of dollars coming in? What is it about China that 
they end up with all of these dollars?
  Mr. HARKIN. I ask my friend from Illinois, what is the trade deficit 
we have with China?
  Mr. DURBIN. That is exactly the answer. It is a trade deficit.
  Mr. HARKIN. So we have a huge trade deficit with China. We are buying 
everything from China. They get the dollars, and we go hat in hand, a 
debtor nation, and effectively say, please, buy our bonds.
  Mr. DURBIN. And I ask the Senator from Iowa, in your home State of 
Iowa and my State of Illinois, we have lost 20 percent of our 
manufacturing jobs in the last few years; America has lost 3 million 
jobs under this President, more than any President since the Great 
Depression. So as we have lost these jobs and lost these businesses, 
and our economy is sinking--a jobless recovery is no recovery where I 
live--we see other countries who now take over our manufacturing jobs, 
like China, and because they are selling more to the United States, 
they have dollars and turn around and own our debt.
  So our workers do not have the jobs, their children have the debt, 
and China is holding the mortgage. Is that the fact?
  Mr. HARKIN. The Senator is on to something. First of all, they are 
getting our dollars for the products they make and send to this country 
with cheap labor, with no Social Security protections for the workers. 
They get all those dollars. They then buy our debt, they buy our bonds. 
The Senator is right. They buy the bonds and then there is interest on 
the bonds, a lot of interest. So who gets the interest payments? The 
Chinese get the interest payments.
  So our workers lose their jobs, the jobs go to China, we buy their 
goods, they get the dollars, they buy our bonds, and the Senator is 
absolutely

[[Page 1017]]

right. It is the workers' families, the kids who now have to pony up to 
pay the interest charges.
  Now, I ask the Senator, looking ahead, if, in fact, we have these 
huge budget deficits which are going to roll on year after year, that 
means someone has to finance this debt. So we will still be going back 
to the Chinese and the Japanese, the Europeans and others, to buy our 
debt.
  I ask the Senator, if you are in the position of having a lot of 
money and you are buying debt, do you want high interest rates or low 
interest rates?
  Mr. DURBIN. I say to the Senator from Iowa, clearly what we have here 
is a scarce commodity--dollars. And the people who can come up with the 
dollars want to get paid more for coming up with them in terms of 
interest. As the interest goes up that is being paid for those holding 
our debt overseas, it runs up the interest rates in America in terms of 
how we can expand our businesses.
  So we have lost the jobs. We have lost the manufacturing. And with 
interest rate pressure going up from all of the debt, we are making it 
more difficult for businesses to rebound, build in America, and create 
American jobs.
  Is the Senator from Iowa aware of the figures given by Senator Kent 
Conrad on the Budget Committee that by 2009, every American will have 
as their personal share of our American mortgage, our American debt, 
$35,283, so that the debt tax from the Bush administration on every 
individual American will be over $35,000.
  I ask my friend from Iowa if he believes the people in his State, let 
alone any other State, have a notion that President Bush's failed 
economic policy is building up the mortgage on every single American 
and American family for years to come.
  Mr. HARKIN. The Senator is right. I ask the Senator to repeat this 
figure.
  Mr. DURBIN. By 2009, each American's share of the debt will total 
$35,283.
  Mr. HARKIN. That is bad enough in itself. I say to the Senator, also 
by 2009, the interest payments on this debt that we are piling up under 
this budget that we have will lead to $980 for the credit card of every 
man, woman, and child in America. In other words, a family of four will 
pay nearly $4,000 just in interest on the debt in just that year. They 
are not buying it down but just paying the interest charges. And, with 
the policies of this administration, they will just grow and grow. We 
know what happens to families as they have a growing difficulty just 
paying the interest on their credit cards.
  Where is a big chunk of that interest rate payment going?
  Mr. DURBIN. Certainly it goes overseas.
  And I ask the Senator from Iowa, the President said in the State of 
the Union, the key to the future of the American economy is to make the 
tax cuts for the wealthiest people in America, permanent law.
  I ask the Senator from Iowa, as he has traveled his State and I have 
traveled mine, as well, has the Senator found with the working 
families, a hue and cry, demands to keep President Bush's tax cuts in 
place, tax cuts that have basically given us the biggest deficit in the 
history of the United States and have failed to create jobs? Has the 
Senator heard this in the State of Iowa?
  Mr. HARKIN. Not only have I not heard from the people in the State of 
Iowa, even friends of mine who have a lot of money, who make a lot of 
money, have basically told me: You guys are crazy what you are doing 
back there. You have to get this economy straight.
  Even the people who made out under this tax break, if they are 
honest--and many are--are saying: Wait a minute, this is not right for 
America, not right for our economy.
  Mr. DURBIN. I ask through the Chair, I know the Senator from Iowa has 
had a leadership position when it comes to education and health issues 
in his appropriations subcommittee. I ask the Senator from Iowa, is the 
Senator hearing the same thing I am hearing as you visit school 
districts in Iowa and sit down with school board members and principals 
and teachers, regarding No Child Left Behind, which is imposing a 
requirement for testing kids to find out the progress they are making--
and there is nothing wrong with that--but then when they find the kids 
are falling behind, does the Senator hear in Iowa the same as I do in 
Illinois, hear that these educators are asking, Why did the Federal 
Government fail to fund this mandate? Why are you sending us the No 
Child Left Behind mandate and failing to send the money to help educate 
the children?
  Again, we find this President's budget is not funding his education 
program. It is underfunding his mandate. Does the Senator find the same 
thing as he travels through Iowa?
  The PRESIDING OFFICER (Mr. Alexander). The Senator from New 
Hampshire.
  The time of the Senator is expired.
  Mr. HARKIN. How much time was I allowed?
  The PRESIDING OFFICER. There is a 30-minute time limit.
  Mr. HARKIN. Under what rule was I allowed 30 minutes?
  The PRESIDING OFFICER. We had an order for a 30-minute time limit for 
morning business.
  Mr. SUNUNU. It is my understanding the Senate is in a period of 
morning business with a time limit not to exceed 30 minutes. I will not 
take that much time. I wish to speak very briefly and ask a rhetorical 
question, since I am not allowed to ask a question of a Senator who 
does not have the floor. But then I would be pleased, if permissible 
under the rules, to yield the remainder of my time to the Senator from 
Iowa.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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