[Congressional Record (Bound Edition), Volume 151 (2005), Part 18]
[Senate]
[Pages 24305-24325]
[From the U.S. Government Publishing Office, www.gpo.gov]




          DEFICIT REDUCTION OMNIBUS RECONCILIATION ACT OF 2005

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
resume consideration of S. 1932, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 1932) to provide for reconciliation pursuant to 
     section 202(a) of the concurrent resolution on the budget for 
     fiscal year 2006 (H. Con. Res. 95).

  The PRESIDENT pro tempore. Under the previous order, the time until 8 
p.m. shall be divided between the Senator from New Hampshire, Mr. 
Gregg, for 4\1/2\ hours and the Senator from North Dakota, Mr. Conrad, 
for 5\1/2\ hours.


                   Recognition of the Majority Leader

  The majority leader is recognized.


                                Schedule

  Mr. FRIST. Mr. President, this morning we will immediately resume 
debate on the deficit reduction package after a brief statement I have 
to make.
  Chairman Gregg opened debate on the bill yesterday and will be here 
managing the bill this morning. Last week we entered an agreement which 
divided the statutory time limit between 3 days, with all time expiring 
on Wednesday at 6 p.m.
  During today's session, Senators will be able to offer amendments. 
However, votes on those amendments will be stacked to occur at a later 
time. I will be working with the Democratic leader to determine the 
best time for those votes to occur. I had hoped that we could dispose 
of some of the proposed amendments with votes during today's session. 
However, at this point, we have several scheduling conflicts, and we 
may have to delay those votes until tomorrow. On Wednesday, we have 
several Members attending the funeral of Rosa Parks, and we will need 
to schedule votes to accommodate that service as well.
  Having said that, this will be a very busy week. Senators will be 
able to offer amendments after the expiration of time and that leads to 
the so called vote-arama. I encourage Senators to offer their 
amendments during the debate period so that we can limit the amendments 
considered after time expires.
  I do not believe the vote-arama is the most constructive use of the 
Senate's time, and I believe most Members are frustrated with that 
process--at least halfway through the vote-arama, as they express that 
frustration directly to me and leadership. During those consecutive 
votes, the Senate votes on amendment after amendment with very little 
time and little explanation of the amendments.
  So I hope we can do it in an orderly process over the next several 
days. I do want Members to come to the floor early so we can show some 
restraint when the 20 hours of debate time is complete.
  Finally, I want to remind everyone that we will be considering the 
appropriations conference reports as they arrive from the House. Once 
the House has completed action and those conference reports become 
available, we will address them. We have the Agriculture appropriations 
conference report already, and we will be scheduling that for a vote 
sometime this week.


                               Avian Flu

  Mr. President, on another issue, I want to make a few comments. 
Shortly, the President will begin to unveil his plan to prepare the 
Nation against the threat of bird flu or avian flu, a potential for 
initially an epidemic and then pandemic nobody was thinking very much 
about a year ago.
  I do thank the President for his bold and decisive leadership. He 
recognizes the urgency for our Nation to take immediate action to 
prepare for and to prevent the spread of such a pandemic and the impact 
it would have on this Nation and, indeed, nations throughout the world.
  Last night, the Secretary of Health and Human Services began briefing 
people on the plan that will be laid out by the President today. He has 
been discussing in meetings over the last several weeks the importance 
of comprehensive organization at all levels of Government. It is not 
just a Federal issue or a State issue or a local issue, it is all 
three. The vertical integration of communication and response and 
preparedness is complex, but it is something that we absolutely must 
address. We would have to mobilize from the very top vertically at the 
Federal, State, and local level in ways that we never had to in the 
past.
  The Secretary explained at the National Press Club last week all of 
this using the analogy of a dry forest, that it takes only one little 
spark to set a fire in a forest, and if we are close to where the spark 
ignites, usually you can just stamp it out. But if it is allowed to 
spread and it really goes beyond any size that can be contained, that 
whole forest is left in smoldering ruins. I would simply add to that 
analogy that in a forest you could have many different little sparks 
which aggravate and increase the challenges to the system itself. If 
you can isolate those sparks or that spark very quickly, you can stamp 
out that potential for a pandemic, and ultimately you can save millions 
of lives. That is why it is absolutely critical we think of the 
response, of preparedness in this country. Indeed, this is a global 
challenge, and we have to work with our partners throughout the world.
  In fact, if you had to look at the likelihood of a pandemic and how 
it starts, it would probably be in Asia or Southeast Asia, and 
therefore we have a real obligation to address concerns in this country 
as well as around the world.
  In the Senate, we are working hard to develop a comprehensive 
prevention and preparedness plan. We have now passed two separate 
measures to increase the national stockpile of vaccines and the 
antiviral drugs, drugs like Tamiflu. This month the HELP Committee, the 
Health, Education, Labor, and Pensions Committee, passed a measure to 
protect vaccine makers from the frivolous lawsuits that we absolutely 
know discourage vaccine production and which, in part, has explained 
why we have gone from several

[[Page 24306]]

dozen vaccine manufacturers in this country down to fewer than a 
handful. The bill that the HELP Committee has addressed and passed out 
of committee also establishes a Biomedical Advanced Research 
Development Agency, called BARDA, which would support this bug or 
identifying what the etiology is, the bug that starts it, all the way 
to creating a drug.
  This agency, BARDA, would focus on the gaps that exist in the system 
today. The agency would help researchers move from egg-based vaccine 
manufacture--and right now for the avian flu you depend on millions and 
millions and millions and millions and millions of eggs to grow this 
vaccine, and today it does not make sense because you can with the 
appropriate research target and focus, develop a cell manufacture that 
doesn't require any eggs, that you could ramp up very quickly, in a 
short period of time, and you don't have to worry about, yes, we are 
going to have to have an egg-based vaccine, so where are all 20, 30, 40 
million eggs, chicken eggs, that you need to cultivate this vaccine for 
weeks and weeks and weeks?
  It is the sort of effort that BARDA would focus on to incentivize, to 
fill this gap in our system today.
  In the 20th century, we have seen three outbreaks of avian flu, avian 
bird flu. The worst of those occurred in 1918. A lot of people have 
gone back to read about that Spanish flu. It is called Spanish flu, 
though it probably started in this country in Kansas. Half a million 
Americans died, somewhere between 40 and 50 million people worldwide. 
And the people say why this bug, why this drug, why does it have to be, 
why do you have to narrow that window and speed things up? If you look 
back on the Spanish flu, in 24 weeks' time, more people were killed in 
the world than have been killed by HIV/AIDS in 24 years. In 24 weeks, 
more people died of the avian flu than in 24 years of HIV/AIDS. Speed, 
efficiency, appropriate research and development, appropriate vaccine 
production needs to be done rapidly, quickly.
  Secretary Levitt warns that if the past is a prologue, we are long 
overdue for a pandemic. If you look throughout history at pandemics, 
you cannot only look at it on a regular basis but a periodic basis. 
Worse yet, the current virus looks and acts more like the virus of 1918 
than any of its other cousins that we have seen to date--if you come 
back and analyze H5N1 and you compare it to the virus of 1918.
  So what do you do? Americans look for leadership, look for bold 
leadership, and we are seeing it from the President of the United 
States. I pulled off my desk, as I was coming over, last month's 
National Geographic, which asks the question: ``The next killer flu:'' 
And over in little letters here it says, ``Can we stop it?'' ``The Next 
Killer Flu: Can we stop it?'' And the answer to that is, yes, we can, 
using technology for research, bold leadership, Government resources, 
private sector resources.
  We know that H5N1 is spreading. Romania reported two bird cases 
yesterday. Last week, Indonesia and Thai authorities reported new cases 
of bird-human transmission. To date, avian flu has infected more people 
and more poultry than any previous strain. In fact, over 160 million 
birds have either died or been killed because of this avian flu in the 
last year.
  Since 2003, there have been 121 people confirmed to have avian flu 
and half of them have died, 61 have died. That is a 50-percent 
mortality. The Spanish flu in 1918 had a mortality of about 2.5 
percent--2.5 percent--and in this country, less than that. We are 
talking about a virus right now that has a mortality rate of 50 
percent.
  Last week, I met with Dr. Robert Webster, again, from St. Jude's 
Children's Research Hospital, which is in Memphis, TN. He is one of the 
leading authorities on H5N1. As he explains, there are 16 families of 
avian influenza. That virus mutates billions of times a day. It is 
constantly changing, which is why it is such a challenging opponent for 
us. And with each of these changes in this mixing bowl of the virus 
itself, the human-to-human transmission becomes more likely. If and 
when it becomes a pandemic, we have no natural immunity. That is the 
bad thing. It is not similar to the regular flu. If you have the flu 
one year and you get it next year, you already have some antibodies 
built up, but nobody in this room, nobody listening to me right now, 
nobody has any natural immunity to this. So when you get hit, you get 
sick very quickly, and of the people hit so far, one out of every two 
died. Again, panic and paralysis, even talking about it, people get so 
anxious.
  The good news is there are things we can do in terms of prevention, 
preparedness, stockpiling, educating our first responders and that, 
indeed, is what the President will spell out. I look forward to hearing 
more specifically about the President's plan. I urge my colleagues to 
spend time studying the issue.
  There is absolutely no reason to panic, but we do need to be 
prepared, and today we are underprepared. Indeed, we have no higher 
duty than to protect the health, the well-being, and the security of 
the American people.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Allen). The Senator from North Dakota.
  Mr. CONRAD. Mr. President, the subject under discussion is the matter 
before us entitled the ``Deficit Reduction Omnibus Reconciliation Act 
of 2005.'' Big words that are meant to communicate, but it reminds me a 
little of the old saying: You can't tell a book by its cover. If there 
was ever a case of that, this is it. You need to know that this is a 
book of many chapters. We need to read all of the chapters to know the 
conclusion. I can assure you the conclusion is not deficit reduction. 
No, this budget has nothing to do with deficit reduction. This budget 
is all about increasing the debt and increasing the deficits.
  Describing this package as deficit reduction is a little like the 
blindfolded man describing an elephant by only touching its tail. The 
blindfolded man might describe the elephant by just holding its tail as 
small, long, and slick. Well, that is not the whole story. That is an 
accurate description as far as it goes, but it misses the larger truth. 
That is the case with describing this budget action as deficit 
reduction. It is only the first chapter. You have to read all of the 
chapters to get the full meaning. The truth is, this budget increases 
the deficit and explodes the debt. That is the larger truth.
  The budget that was enacted earlier this year actually increases the 
deficit by $168 billion over the 5 years of its life. It does not 
reduce the deficit. It increases the deficit. We would have less of a 
deficit if we put the whole budget on cruise control, but that was not 
the choice the majority made. They made a choice, consciously, to write 
a budget that, even in the face of record deficits and massive 
increases in debt, increases the deficits even further. I know it is 
hard to believe, but that is the fact of the matter. The budgets that 
have been written by our colleagues on the other side of the aisle 
increase the deficits.
  Budget reconciliation is a part of the overall budget process. Budget 
reconciliation is special provisions, fast-track provisions that enjoy 
special protection under the rules of the Senate. But remember, what we 
are dealing with this week is the first chapter. The first chapter 
contains spending cuts of $39 billion. But that is only part of the 
package. The next chapter will have tax cuts of $70 billion. If you put 
those two chapters together, you don't have a reduction of the deficit, 
you have an increase in the deficit of over $30 billion.
  Chapter 3 is the chapter our colleagues on the other side of the 
aisle hope you will not read. Chapter 3 increases the debt of the 
country by $781 billion. That is what this book is all about: 
increasing the debt of the country when we have already taken on record 
amounts of debt.
  Back to chapter 1 and chapter 2. Chapter 1 cuts spending by $39 
billion, but it is quickly followed by chapter 2 that cuts taxes $70 
billion. The combined effect of chapters 1 and 2 is very clear. It is 
not deficit reduction, not what is on the cover of the book; it is a 
deficit increase, an increase in debt.

[[Page 24307]]

  If we go back to what the President told us when he started us down 
this course, he told us in 2001:

       [W]e can proceed with tax relief without fear of budget 
     deficits, even if the economy softens.

  That is what he told us. Look at what has happened. Now we can look 
back and we can check the record and we can see whether the President 
was right or was he wrong.
  Back at the time in 2001 that the President proposed these massive 
tax cuts, this was the outlook according to the Congressional Budget 
Office and the administration. This was their outlook going forward, a 
range of possible outcomes from a worst-case scenario to the best-case 
scenario. They adopted the midline that told us we were going to 
experience some $6 trillion of surpluses over the next 10 years.
  But look what happened in the real world. Look what happened in 
actuality. We didn't get the worst possible outcome under the 
projections that were provided. We got way below the worst possible 
outcome. This red line is what actually happened compared to the 
projections, and instead of trillions of dollars of surpluses, what we 
have are trillions of dollars of debt.
  I can remember when we were having that debate. My Republican 
colleagues told me when I warned them that you can't bet on this 10-
year forecast, that it is highly unlikely to come true, many of my 
Republican colleagues told me: Kent, you are far too conservative. 
Don't you understand, when we have these big tax cuts, we are going to 
get even more revenue. We are not going to be at this midrange of 
forecasts of possible outcomes; we are going to be well above it 
because these tax cuts are going to generate much more revenue.
  Again, now we can go back and check the record as to what actually 
happened. We did not get some great boost. Instead what we got was an 
ocean of red ink. Instead what we got were these massive deficits.
  Previous Presidents have said that facts are stubborn things. Facts 
are stubborn things. And the facts are that this fiscal policy has 
taken us deep into the deficit ditch. Despite all of the President's 
promises that would not occur, he was simply wrong.
  The next year the President told us:

     . . . [O]ur budget will run a deficit that will be small and 
     short-term. . . .

  We can go back and check the record on that as well. He said that in 
2002. Look what has happened since. The deficits have exploded. In 
2003, we had what was then the largest deficit ever. In 2004, the 
deficit got even bigger. In 2005, the deficit was the third largest we 
have ever had. So, again, the President was simply wrong in his 
prediction.
  If we look at this from a historic vantage point and look back to 
1980 and look at the outlays or spending of the United States and the 
revenues, we see some very interesting things. This is all expressed as 
a percentage of our gross domestic product, which is what economists 
say is the best way to make these comparisons because it takes out the 
effect of inflation and real growth. So we are comparing apples to 
apples here.
  Look what has happened. This is the spending line of the United 
States. It was up over 23 percent of gross domestic product in the 
previous Bush administration. Then we got to the nineties, and the 
Democrats put in place a plan that led us to reduce spending, and each 
and every year spending came down as a share of GDP.
  In 2000, we had a change of administration, and here is what has 
happened to spending. Spending has gone up. Spending has gone up, but 
it is still well below where we were in the eighties and nineties. 
These are facts.
  Why did the spending go up? The spending went up largely for three 
reasons. One, national defense; two, homeland security; three, 
rebuilding New York and bailing out the airlines.
  All of us supported on a bipartisan basis this increase in spending. 
This was in response, obviously, to 9/11 and a national emergency. So, 
yes, spending went up. Virtually all of it is accounted for by defense, 
homeland security, and rebuilding New York and aid to the airlines.
  Now we are at a place where spending is at about 20 percent of gross 
domestic product. But look what happened on the revenue side of the 
equation. Again going back to the eighties, we were at about 19 percent 
of gross domestic product on revenue. We had a series of tax cuts then 
that opened up deficits as spending was not reduced to make up the 
difference. Then we got to the nineties and again we had a plan that 
was put in place. Revenue increased every year until we actually got to 
the circumstance in which we were running surpluses. For 2 years, we 
not only ran surpluses, but we stopped using Social Security money for 
other purposes.
  Then in 2000, with the change of administration, a series of tax cuts 
was put in place, and we experienced an economic slowdown and the 
revenue side of the equation collapsed. Until last year, we had the 
lowest revenue as a share of gross domestic product since 1959. We have 
had an increase in this last year, but the forecasters are saying that 
will level out going forward as a share of gross domestic product, 
leaving us with this very large gap between spending and revenue and, 
hence, ongoing massive deficits. That is the reality we find ourselves 
in today.
  The next year, in 2003, the President told us:

     [O]ur budget gap is small by historical standards.

  I think if you measure it fairly, what you find out is that is not 
the case either. What the President has been focusing on is only the 
deficit. The deficit this last year was $319 billion, but that isn't 
what got added to the debt. What got added to the debt of the country 
was not $319 billion, it was $551 billion. The largest part of the 
difference is Social Security because last year, under the President's 
plan, $173 billion of Social Security money was taken to pay for other 
programs. That all gets added to the debt, but it is not counted in the 
deficit calculation.
  When you add in those items that were not counted in the deficit, 
what you find is that the increase in the debt was, instead of the 2.6 
percent that many have asserted, the actual difference between spending 
and revenue, the actual difference in addition to the debt was 4.5 
percent of gross domestic product, and that number is a danger sign.
  Most economists say your deficits should not be above 2.5 percent of 
GDP. The truth is, what got added to the debt last year was 4.5 percent 
of GDP. In the European Union, you cannot be a member in good standing 
if you run deficits in excess of 3.0 percent of GDP.
  The big difference is what is happening with Social Security because 
back in the eighties, the deficits had almost nothing to do with Social 
Security. Social Security was running very small surpluses at the time. 
In fact, if you go back to 1983, there was no Social Security money to 
take to spend for other programs. There was no surplus in Social 
Security. But look what has happened since. Social Security surpluses 
have grown dramatically. This was intended, this was designed to 
prepare for the retirement of the baby boom generation. The whole idea 
was to use these surpluses to pay down debt or to prepay the liability. 
That is not what has been done.
  Under the President's policy, all of this Social Security money is 
being taken to pay for other programs. That is what is happening. All 
of it is getting added to the debt, all of it has to be paid back, and 
there is no plan to do it.
  This is the difference between the eighties and now. In the eighties, 
almost no Social Security funds were available to be taken to pay for 
other items, now we have--just last year--$173 billion in that year 
alone.
  Over the next 10 years, under the President's plan, they are going to 
take $2.4 trillion of Social Security money to pay for other things. 
That is a dangerous course.
  Now, the President told us just last year:

     So I can say to you that the deficit will be cut in half over 
     the next 5 years . . .

  All of his assertions so far have been proved wrong. Now he tells us: 
Do not worry, we are going to cut the deficit in half over the next 5 
years.
  First, I do not think that is the appropriate test because we are in 
the

[[Page 24308]]

sweet spot of the budget cycle. This is the time when we should not be 
running deficits at all because this is right before the baby boomers 
retire, and we are running these massive surpluses in Social Security. 
Those funds should have been used to either pay down debt or prepay the 
liability. Instead, the money has been hijacked. The money has been 
taken to pay for other things--digging a much deeper hole for the 
future. So when the President says the deficit will be cut in half over 
the next 5 years, that is not even the right test. This is not a time 
when we should be running deficits at all.
  Beyond that, if one pierces the veil on the President's claim that 
the deficits are going to be cut in half, here is what they find out: 
He got there by just leaving out things. He just left out war costs, 
did not have any war costs in his budget past September 30 of this 
year. Does anybody believe the war costs ended on September 30 of this 
year? That is what the President's budget said.
  He did not just leave out war costs, he left out the cost of dealing 
with the alternative minimum tax. The alternative minimum tax, which is 
the old millionaire's tax and is rapidly becoming a middle-class tax 
trap. It costs $700 billion to fix. The President just left that out of 
his budget.
  The President wrote a 5-year budget instead of the 10-year budgeting 
that used to be done because at the end of the fifth year, the cost of 
his tax cut proposals explodes, driving us deeper into deficit and 
deeper into debt. Apparently, he did not want to share that information 
with the American people.
  When one looks at the long-term outlook with those things added back 
in that the President left out, what one sees is a slight improvement 
in the deficit in the short term, but then it just explodes beyond the 
5-year budget window. Why is that the case? Well, I have mentioned some 
of the reasons.
  The first reason is war costs. In the mid-session review, the 
President had included $50 billion for ongoing military operations, but 
the Congressional Budget Office tells us that $50 billion does not 
begin to cover the real costs. They say the real cost is going to be 
$333 billion. So the President has left out a big chunk of spending 
that others say we will experience.
  Second, by adopting a 5-year budget--it used to be 10-year budgets--
the President is hiding this fact: The cost of his tax cut proposals 
explodes right beyond the 5-year budget window. Is this not 
interesting? This dotted line is the end of the 5 years of the budget 
proposal presented by the President. Look what happens to the cost of 
his tax cut right beyond the fifth year. The cost of the President's 
tax cut proposal explodes right beyond the end of the fifth year.
  Maybe it should not be a surprise that the President switched from 
10-year budgeting to 5-year because he would have had a very hard time 
explaining how his plan will reduce the deficit when factoring in the 
exploding cost of his tax cuts, the additional cost of war, and the 
cost to fix the alternative minimum tax.
  By the way, the pattern is much the same with the alternative minimum 
tax. The alternative minimum tax, which virtually everyone says needs 
to be reformed, the President did not put one thin dime in his budget 
proposal to deal with that. According to the Congressional Budget 
Office, it will cost $774 billion to fix. The President does not have 
any of it in his budget.
  Look at the pattern. Here again, the dotted line is the end of the 5-
year budget proposal of the President. Here is the pattern of costs of 
fixing the alternative minimum tax. What happens if we do not fix the 
alternative minimum tax? Well, here is what happens: In 2005, 3.6 
million taxpayers were affected. If we fail to act, by 2010, 29 million 
taxpayers will be affected. So people are in for a big surprise. They 
thought they were going to get a tax cut? Instead, they are going to 
get into the swamp of the alternative minimum tax: 3.6 million people 
affected this year, 29 million affected 5 years from now if we fail to 
act. It costs $770 billion to fix, and there is not one dime in the 
President's budget to do it.
  Here is what the President said in 2001 about the importance of 
paying down debt. The President told us at the time:

     . . . (M)y budget pays down a record amount of national debt. 
     We will pay off $2 trillion of debt over the next decade. 
     That will be the largest debt reduction of any country, ever. 
     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.

  The President was right about one thing. We do owe that 
responsibility to future generations, but he did not pay down any debt. 
Instead, the debt has exploded. The budget that my colleagues on the 
other side of the aisle passed and the budget that we are moving to 
take final action on does not pay down any debt. It explodes the debt. 
It takes the debt from $7.9 trillion now, and it increases it by more 
than $600 billion a year each and every year of the life of this 
budget--this after the President told us he is going to have maximum 
pay-down of the debt. There has been no pay-down of the debt. He is 
exploding the debt.
  Every minute in 2005, the budget policies of our colleagues on the 
other side of the aisle increased the national debt by over $1 million. 
Every minute of every day, they have increased the debt by over $1 
million.
  What are the consequences of this fiscal failure? The consequences 
are very clear. Foreign holdings of our debt have exploded. It took 200 
years to run up $1 trillion of debt held by foreign countries and 
foreigners. This President has doubled it in 4 years. We have gone from 
$1 trillion of foreign holdings of our debt to $2 trillion. That is an 
utterly unsustainable course. That is the outcome of the fiscal policy 
of this administration. It is not conservative; it is reckless. This is 
a policy of exploding our debt.
  Who holds this debt? Well, I might add it is interesting that 
President Bush did in 4 years what 42 Presidents took 224 years to do. 
Forty-two Presidents ran up $1 trillion of external debt. This 
President exceeded them in 4 years. This President ran up more debt 
held by foreigners in 4 years than the other 42 Presidents combined in 
the history United States. Let me repeat that. This President ran up 
more debt held by foreigners in 4 years than 42 other Presidents ran up 
in 224 years. That is a record of fiscal failure unmatched in the 
history of this country.
  They call themselves conservatives? Why, they should call themselves 
borrowers because that is what they are doing. They are engaged in the 
greatest borrow-and-spend spree in American history.
  Who are we borrowing the money from? Increasingly, we are borrowing 
it from foreigners, from foreign governments, from foreign investors. 
Now we owe Japan over $684 billion. We owe China over $240 billion. We 
owe the United Kingdom over $170 billion. My favorite, the Caribbean 
Banking Centers, we owe the Caribbean Banking Centers over $100 
billion. Where did they get their money? Anybody here do their banking 
in the Caribbean? We owe them over $100 billion. This is conservative? 
What is conservative about this? Some say this is strengthening the 
country. How is that? How does it strengthen the country to borrow more 
and more money from abroad?
  This is all happening at the worst possible time--before the baby 
boomers retire. We are facing a demographic tsunami, and here it is: 
This is a depiction of the numbers of people in the baby-boom 
generation. We have less than 40 million people who are eligible for 
Social Security and Medicare now, and we are headed for 81 million. 
That changes everything. Instead of preparing for it, this President 
has dug the hole deeper and deeper. There is nothing conservative about 
what is being done.
  Let us go back to the so-called budget reconciliation that is before 
us today. The cover on the book says: Deficit Reduction. One has to 
read the book. They have to read every chapter of the book to find out 
the conclusion, and the conclusion has nothing to do with deficit 
reduction. Oh, no. The first chapter cuts spending $39 billion, but the 
second chapter cuts revenue $70 billion. So guess what: No deficit 
reduction here. The deficit is increased, not reduced. Then one has to 
read the third

[[Page 24309]]

chapter of the book. What is found there? They are going to increase 
the debt $781 billion--one of the biggest increases in our national 
debt ever. If they get that increase, this President alone, in the 4 
years he has been in power so far, will have run up the debt by $3 
trillion.
  In the next 5 years, he is going to run up the debt another $3 
trillion. There used to be a TV show--what did they call it--the ``Six 
Million Dollar Man''? We have the $6 trillion President because the 
effect of his policies will be to run up the debt of this country by $6 
trillion. That is truly stunning.
  Here is the record. In 2002, debt was increased by $450 billion. In 
2003, debt was increased by $984 billion. In 2004, it was increased by 
$800 billion. Now our friends on the other side want to increase the 
debt by $781 billion. That is a grand total of more than $3 trillion of 
additional debt. We know that, if this budget is passed, they are going 
to add another $3 trillion of debt over the next 5 years--a combined 
total of this President's policies of $6 trillion. That is this 
President's plan. Unfortunately, that is the plan of this Congress.
  Don't take my word for it. This is a budget they euphemistically call 
a deficit reduction plan. If this weren't so serious, this would be 
very amusing. They place the title of ``Deficit Reduction'' on this 
plan. Come on. Here is what this plan does according to their own 
tables. Go and look in the conference report on the budget that was 
done earlier this year by the majority party in the House and the 
Senate. This is their conclusion about what is going to happen. This is 
their conclusion. You see the debt going up every year by more than 
$600 billion. That is their plan. If you look at the next 5 years, the 
debt under their plan is going to increase by more than $3 trillion, 
and they are out here with this book entitled ``Deficit Reduction 
Act,'' and their plan increases the debt by $3 trillion over the next 5 
years. Have words lost their meaning? They call this deficit reduction. 
They are increasing the debt over $3 trillion, and they label this 
deficit reduction. That is breathtaking.
  Chapter 2 of this book is to extend certain tax benefits, tax cuts. 
Many of those I support, but some of them are just overwhelmingly 
directed at the most wealthy among us. If you look at chapter 1 being 
written here, and chapter 1 being written over on the House side--by 
the way, the House budget is very clear. It is going to cut food 
stamps. It is going to cut Medicaid. The House bill takes from the 
least among us so that they can give to those who have the most.
  When I say ``give to those who have the most,'' let me talk about two 
provisions that are in their tax plan. Extending dividends and capital 
gains cuts will, on average, give a millionaire a tax break for 1 year 
of over $35,000. Those earning less than $50,000 a year will get $6. 
Those earning from $50,000 to $200,000 a year, on average, will get 
$112. Those earning from $200,000 to $1 million a year will get, on 
average, $1,480. Those earning more than a million dollars a year will 
get $35,000 a year. It is a very interesting set of values. It is a 
very interesting set of priorities, to cut Medicaid and cut food 
stamps. This is not the Senate bill I am talking about. I am talking 
about the House bill. The House bill cuts food stamps, cuts Medicaid, 
cuts aid for those who are the least among us, takes the resources and 
gives them to those who have the most.
  I don't know in what Bible they read that. I have not read any Bible 
that says the value ought to be take from those who have the least and 
give to those who have the most. In fact, I don't know of any holy book 
of any religion that says that is a value, that what we ought to be 
doing is taking from those who have the least among us to give to those 
who have the most among us. I don't know of any religion that has that 
as a value.
  I know our colleagues on the other side will say: Wait a minute here. 
These tax cuts have fueled economic growth.
  There are tax cuts that are helpful to economic growth. That is 
undeniable and clear. In 2001, I supported a significant package of tax 
cuts, tax cuts that the Congressional Budget Office told us would get a 
large bang for the buck in terms of economic growth. Part of those were 
included in the package. In fact, many of them were, and I supported 
those.
  But many of these provisions simply went too far in terms of their 
cost and have pushed us over into a sea of red ink, massive deficits, 
and massive debt. They simply went too far.
  Here is the record on revenues as a share of gross domestic product. 
In 2000, we were at a historic high. That is absolutely clear. Tax cuts 
were justified in 2000. I didn't think the magnitude of the tax cuts 
were justified, but clearly we needed tax cuts, partly to give lift to 
the economy. My own proposal to our colleagues actually had more tax 
cuts in the short term, much more than the President's plan, to give 
lift to the economy because that made good economic sense. But they put 
tax cuts on top of tax cuts on top of tax cuts and plunged revenue to 
16.3 percent in 2004. That is the lowest it has been since 1959, and 
far below the level of spending for which they have all voted. So the 
result is red ink, massive red ink.
  Here is what the Chairman of the Federal Reserve has said about 
deficit-financed tax cuts, because that is what is going on here now. 
We are borrowing the money to give tax cuts. From whom are we borrowing 
the money? Increasingly, we are borrowing it from the Japanese, the 
Chinese, Caribbean banking centers, to give tax cuts to the most 
wealthy among us. Does that really make sense? Is that really 
defensible? I don't think it makes any sense.
  I am not alone. Chairman Greenspan, in his testimony before the 
Budget Committee last year, said:

       If you are going to lower taxes you should not be borrowing 
     essentially the tax cut. That over the long run is not a 
     stable fiscal situation.

  Chairman Greenspan has it right. We should not be borrowing to 
provide tax cuts, and we certainly should not be borrowing from foreign 
governments and foreigners to finance tax cuts. We certainly should not 
be borrowing more and more money from Japan and China and Caribbean 
banking centers and who-all knows who else in order to finance these 
tax cuts, driving us deeper and deeper into the deficit ditch before 
the baby boomers retire.
  About the baby boomers, that is not a projection. They are alive 
today. They are going to retire. They are going to be eligible for 
Social Security and Medicare. About all I hear from the other side is 
they will cut Social Security, and they will cut Medicare in order to 
fill in the difference. That is where this is all headed. Make no 
mistake about it. Our colleagues on the other side of the aisle, their 
full intention is to shred Social Security and to shred Medicare in 
order to avert a fiscal disaster. We are headed for a train wreck. It 
is just as clear as it can possibly be.
  What have our colleagues done? They have come out with this very, I 
would say misleading title on a book, saying it is a Deficit Reduction 
Act. When you read all the chapters of the book, it is not a deficit 
reduction proposal. It increases the deficit and explodes the debt.
  Chapter 1, yes, they cut spending $39 billion over 5 years. Chapter 
2, they cut revenue $70 billion over the same time. That increases the 
deficit by $31 billion. But chapter 3, that is the one they do not want 
you to read. You will not hear them talking about chapter 3 at all out 
here because they do not want you to know about chapter 3. In chapter 
3, they are going to increase the debt by $781 billion. This is after 
they have already run up the debt over $2.5 trillion over the last 4 
years. Now they are fixing to increase the debt another $3 trillion 
over the next 5 years, and they are out here with a book called 
``Deficit Reduction.'' Oh, no, I don't think the American people are 
going to buy that. I don't think the American people are going to be 
fooled by that. I don't think the American people are going to conclude 
that what this is about is reducing the deficit because it is not.
  The simple truth is, this budget plan increases the deficit and it 
explodes the debt.

[[Page 24310]]

  Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. The Senator began with 5.5 hours, and he has 
consumed 42 minutes. So it is approximately 4 hours 45 minutes, 
approximately, remaining.
  Mr. CONRAD. Mr. President, let me say that on our side we have 
enjoyed working with the chairman of the committee very much. He is 
absolutely professional and fair and his word is good. We have had a 
very good working relationship on the Budget Committee. Obviously, we 
have disagreements about policy, but on the committee we have tried not 
to disagree in a disagreeable fashion. I have respect and admiration 
for the chairman of the committee, and we are going to try to work 
together to handle amendments in an expeditious and professional way so 
the time is well used.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, let me echo the comments of the Senator 
from North Dakota relative to his staff and himself. They are 
extraordinarily professional. As he mentioned, we do have some 
disagreements, but we do it in what I think is an appropriate way. We 
discuss the policy. We disagree on policy. But it is never personal, 
and there is always a cooperative spirit to try to do the business of 
the Senate. I greatly admire his professionalism and his staff's 
professionalism.
  I understand the Senator from North Dakota has another 4 hours. I 
regret we are not going to hear him speak for that entire period of 
time because this last hour was certainly ``chartlizing''; not 
scintillating but ``chartlizing.''
  The Senator has made a number of points, some of which I actually 
agree with but most of which I must say I find inconsistent with the 
facts that are on the ground. With what do I agree? I agree with the 
fact we are headed toward a fiscal problem of immense proportions 
primarily driven by the fact that we have a tremendous baby boom 
generation that is about to retire. Yesterday I spoke at some length 
about that. That is why we need to initiate efforts to get under 
control spending of the Federal Government, especially in the mandatory 
accounts--mandatory accounts being those accounts which people have a 
right to, simply because of their situation, whether it is a fiscal 
situation or personal situation. They may be a former member of the 
military--veterans benefits; they may be of a certain age; they may be 
of a certain income.
  The most significant mandatory programs which are facing us are, of 
course, the entitlement programs benefiting retired individuals--Social 
Security, Medicare, and Medicaid. The only way you can address retired 
programs, mandatory programs, is through a reconciliation bill which is 
what we have before us today, a deficit reduction bill, because you 
have to change the law in order to accomplish changes in the ways those 
bills are going to spend money over the years to come.
  So the Republican Congress, the leadership and the membership, has 
stepped forward with an aggressive proposal to try to do that. It is 
the first time in 8 years that we have seen an effort to try to put 
some brakes on the rate of spending on the mandatory side of the 
Federal Government.
  Thirty-five billion dollars, $35 billion original instruction, and 
$30 billion is what the committees of the Senate have reported back in 
deficit reduction initiatives in this bill which is before us today. It 
cannot be discounted so casually, as the Senator from North Dakota has. 
He has essentially said it is not a deficit reduction because there 
will be a bill afterward that will give tax relief or it is not deficit 
reduction because the debt goes up. The simple fact is that those are 
inaccurate statements.
  This bill, if you vote for it, will reduce the deficit by $39 billion 
in its present form. That is a fact, a simple, incontrovertible fact. 
There will be a tax relief bill that will follow this bill.
  I wish to point out that my colleague from North Dakota--and he has 
openly said this--is going to probably vote for a lot of the amendments 
to that tax relief bill because they are good initiatives which need to 
be done. As he mentioned, the AMT, as he mentioned--I am not sure he 
mentioned it, but others have mentioned the State and local sales tax 
deductibility or deductibility of certain education expenses which 
teachers incur when they are trying to spend money on their classroom 
or the savings credit--all of these--or the R&D tax credit which makes 
us more competitive as a nation. The other side of the aisle is saying 
all those taxes should be raised on all those people. Are they saying 
that the 8 million people who fall under AMT should have their taxes 
raised? Are they saying people in the United States who get to deduct 
their sales tax should have their taxes raised? Are they saying that 
teachers who buy crayons for the classroom should have their taxes 
raised? Are they saying that small businesses, especially those that go 
out and invest in opportunity and creativity by doing R&D expansion, 
should have their taxes changed and raised? Maybe they are. Clearly, if 
they are claiming that the next bill, the tax relief bill, is a bad 
bill--that is what they are claiming because that bill is going to be 
made up primarily of those initiatives.
  We can get into a debate about dividends and capital gains, also.
  What has generated the revenue in this country in the last few years? 
We have seen one of the most dramatic expansions in revenue in this 
country in the last 20 years and rate of growth of revenue as a result 
of having cut taxes and given people more incentive to be creative, go 
out and invest, create careers for people, and create economics to 
create jobs.
  This chart shows, as we have watched the tax cuts put into place, 
that revenues have been jumping every year. Why? They are headed back 
to the historical mean where they have been traditionally. They have 
been jumping because people have had an incentive to go out and invest, 
to create economic activity, to take risks, to create careers, create 
jobs, and that is taxable activity which is coming back to the Federal 
Government.
  Sure, revenues have dropped dramatically, as many of the charts the 
Senator from North Dakota pointed out show. But the drop in those 
revenues was a function of two events which we had very little control 
over: the bursting of the bubble of the 1990s, which was the largest 
bubble in the history of world, bigger than the South Sea Bubble. It 
was the Internet bubble, and it burst. Quite honestly, we should have 
gone into a dramatic depression as nation as a result of that burst. 
But because this President had the foresight to put into place a tax 
credit on the productive side of the ledger, we did not see that 
dramatic economic downturn. We saw a reduction, and that reduction 
dropped revenues.
  We were hit with 9/11. Never before has this Nation been hit with an 
event like 9/11 where we lost thousands of people on our soil here in 
the United States. Pearl Harbor, obviously, is a comparable. But the 
civilian losses were overwhelming, and the economic loss was dramatic. 
We were hit with a body blow to our economy. So that line went down 
again.
  We had the bursting of the bubble, compounded by the single largest 
attack on our Nation certainly since Pearl Harbor, arguably exceeding 
Pearl Harbor in many ways, and the economic impact forced the economy 
down further. That is why the economy dropped. It wasn't the tax cuts 
that dropped the revenue. The tax cuts have been shown to increase 
revenues and will continue to increase revenues.
  For the other side to take the position that anything else is 
happening is wrong because the facts are clear. The revenues are going 
up, and they are jumping dramatically back to the norm, 18 percent 
gross domestic product for the revenue. A lot of that is a function of 
tax relief which we will be seeing in the tax package which will be 
coming here to extend those tax relief initiatives in the next bill. 
But this bill is about reducing the deficit by $39 billion, $35 billion 
being the original instruction. It is a huge step in the right 
direction.
  Now we should ask, I believe--and I think the Senator from South 
Carolina

[[Page 24311]]

is going to make this point rather dramatically--what is the response 
from the other side of the aisle? The response from the other side of 
the aisle, as I believe the Senator from South Carolina is going to 
point out, is that their proposal is to spend more money. That is their 
proposal for reducing the debt around here. They are going to spend 
more money. That doesn't work.
  Since January, they have proposed spending increases which have 
exceeded or reached almost a half-trillion dollars in new programs, new 
initiatives, which isn't too surprising because that is the philosophy 
of the other side of the aisle. I don't think anyone takes that as a 
surprise. On the other hand, where is their proposal to cut the 
deficit, to reduce the debt, which the Senator from South Carolina 
talks about?
  We searched, and we found their proposal. Wow.
  Here it is. Here is the Democratic proposal on the budget. They have 
no budget. They haven't proposed a budget. Even when they were in the 
majority, they didn't propose a budget. At least they didn't bring one 
to the floor. They have no proposal at all to reduce the deficit or to 
reduce the debt. They do have a lot of concerns about our proposal. 
That is understandable because we wrote it. They didn't vote for it. 
There was not one Democratic vote for our budget. You wouldn't expect 
us to basically draft their language, but we are willing to take 
proposals, if they have them, to reduce the debt, to reduce the 
deficit, proposals which are constructive. But so far, there has been 
no budget from the other side of the aisle.
  There will be a lot of targeted amendments, I presume, to spend more 
money, which will raise taxes on working Americans and on Americans 
generally. But as a practical matter, their efforts to reduce the 
deficit or reduce the debt are extraordinarily limited, especially 
compared to what we have done.
  This is the summary of what this bill does. It is not the tax bill. 
This is not the tax relief bill. This is the debt reduction bill. It 
reduces by $71 billion entitlement spending, and $32 billion of new 
spending is put in place because we believed it was important to assist 
certain groups and because it was fair. The vast majority or large 
percentage of the $71 billion came from education accounts by reducing 
the corporate subsidies for lenders. Rather than take all of that money 
in deficit reduction, we believed a significant amount of that money--
about half--should flow back into student accounts to assist low-income 
students in getting a college education. It is a good proposal. The key 
to our Nation's capacity to compete is that we have creative and 
productive people. That means you have to send people to college. We 
have to help especially low-income kids get to college. This bill does 
that to the tune of $11 billion. Maybe the other side is opposed to 
that.
  In addition, we want to make doctors more available to patients. We 
want senior citizens, when they walk into a clinic or into their health 
care area, to be able to see a doctor. We know that under the present 
law, doctors are going to be cut by 4.5 percent in their spending, and 
they are going to drop out of the Medicare system. The Finance 
Committee decided to fix that and hold doctors harmless by essentially 
freezing their pay rather than cutting it 4.5 percent. That is where 
the money is.
  But the net effect of this bill is a $39 billion reduction in the 
deficit. You can say it is not much. I happen to think it is a lot. In 
South Carolina, $39 billion is a lot of money. In Ohio, $39 billion is 
a lot of money. In New Hampshire, $39 billion is a lot of money.
  This bill is a lot of money put toward debt reduction. In my opinion, 
we should be passing it and actually should be passing it on a 
bipartisan basis because if the other side genuinely wants to reduce 
the debt and reduce the deficit, they have to vote for this bill. This 
is their opportunity.
  I yield the floor to the Senator from South Carolina who will have a 
lot of thoughts on this issue.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. GREGG. Mr. President, I suggest the absence of a quorum.
  Mr. CONRAD. Mr. President, I have recognition.
  The PRESIDING OFFICER. The Senator from North Dakota has the floor.
  Mr. CONRAD. Mr. President, I understand the frustration of my 
colleague because his party has given him an impossible task--to come 
out and defend a budget plan that explodes the debt.
  You notice there was not one comment by the Senator about the debt. 
Here is why there was no comment about the debt. Here is what has 
happened to debt under their watch. When President Bush took office, 
the gross debt of the United States was $5.6 trillion. Each and every 
year, the debt has gone up by $500 billion or $600 billion. In 2002, it 
went up to $6.2 trillion, a $500 billion increase; in 2003, $6.8 
trillion, it went up another $600 billion; the next year, $7.4 
trillion, another $600 billion; the next year, $7.9 trillion, it went 
up another $500 billion. Here is what it is slated to do under the 
budget plan they have put in place.
  The debt keeps going up, up, up, by $600 billion a year by their own 
calculation, and they are out here touting that they have a deficit 
reduction package. Excuse me. Have words lost their meaning? They are 
out here talking about reducing the deficit, and their fiscal plan has 
done nothing but explode the debt of our country from $5.7 trillion 
when they took over and we are headed for over $11 trillion of debt by 
the time they are done. And they are out here touting a plan of deficit 
reduction. Come on. Come on. That doesn't pass the laugh test.
  I understand the Senator from South Carolina was up here with a chart 
the other day that he called the Democratic Spend-O-Meter chart. Let me 
address that.
  The Democratic Spend-O-Meter chart of the Senator from South Carolina 
is a complete concoction. He claims that the Democratic amendments this 
year would cost $470 billion. Absolute nonsense. Their Spend-O-Meter 
ignores the fact that many of the Democratic amendments were offset. He 
didn't count those offsets. In fact, because they included additional 
deficit reduction, the net effect of all Democratic amendments on the 
budget resolution would have reduced deficits by $57 billion.
  Their Spend-O-Meter also double-counts the cost of some Democratic 
amendments because they treat them as if they were a package instead of 
offered individually. Some Democratic amendments covered the same 
subject area as an earlier amendment and would never have been offered 
if that earlier amendment had passed.
  Their Spend-O-Meter also overstates the cost of Democratic amendments 
by misleading and falsely assigning 5-year costs to 1-year amendments. 
Most of these Democratic amendments were for only 1 year, but they have 
taken them and made them into 5-year amendments.
  Those weren't our amendments. That is your concoction. That is your 
fabrication. That is not right.
  Democratic amendments to the 2006 budget resolution would have 
reduced the deficit by $57 billion. Republican amendments to the 2006 
budget resolution actually worsened the deficit by $79 billion. That is 
the real story of what happened earlier this year--net cost of GOP 
amendments: $79 billion of additional red ink; net effect of Democratic 
amendments: $57 billion of reduction in the deficit.
  I also want to respond to the more general accusation that Democrats 
just want to spend. I would like to remind my colleagues of the record. 
Under the last Democratic administration, spending as a share of the 
economy came down steadily year after year, falling from 22.1 percent 
of gross domestic production to 18.4 percent of gross domestic 
production. During the term of the Democratic administration, spending 
went down.
  Now I will compare that to the time since the Republicans gained 
control. Under our Republican friends, spending has gone from 18.4 
percent of gross domestic production to 22.2 percent of gross domestic 
production. Who are the big spenders? When we were in control, spending 
went down. When they have been in control, spending has gone up.

[[Page 24312]]

  That is not the end of the story. The bottom line is deficits. Here 
is the difference in the deficit records of various administrations 
going back to the Reagan administration. They were in significant 
deficit the entire period of the Reagan administration. The Bush 
administration, Bush 1, dramatically increased the deficits. Under the 
Clinton administration, we pulled out of deficit and actually went into 
surplus for 3 years. In fact, 2 of the 3 years we were actually able to 
stop raiding Social Security trust funds.
  Here is the deficit record under the second Bush administration: They 
plunged us right back into deep deficits and massive increase in debt. 
Now they have a budget plan that, by their own terms, by their own 
calculations, increases the debt of the country by $3 trillion over the 
next 5 years--and they are out here talking about reducing the deficit.
  I suppose they can make the claim, but I don't think it will stand up 
very well. I don't think it will stand up to much scrutiny because we 
can look at the package--even this little package before the Senate 
right now. The fact is, there are many chapters to this book. The first 
chapter cut spending $39 billion. That is in the face of increasing the 
debt by $3.4 trillion over the next 5 years. They talk about it being a 
good start. I would say it is virtually no start. It is no start when 
you consider the second chapter which will cut the revenue by $70 
billion. The combined effect is to increase the deficit.
  If anyone wonders, go to chapter 3 where they increase the debt in 1 
year alone by $781 billion. And they call themselves fiscally 
conservative? My goodness, that is conservative? That is not any 
definition of conservative I have read anywhere.
  Let's see what is happening to the debt under our friends. They came 
in and it was $5.7 trillion and they have already run it up to $8 
trillion. Here is what their budget proposal is doing now. If we adopt 
the 5-year budget plan, they will have run the debt of the country from 
$5.7 trillion to over $11 trillion. That is their record.
  What are the results of these policies? The results of these policies 
are to build a wall of debt. Every year, debt is going up $600 billion 
a year under their budget plan. These are their numbers. Not my 
numbers, their numbers.
  What does that translate into? That translates into an increase of 
debt by over $1 million a minute. That is the fact. That is what we are 
talking about.
  What is the result? The result is in 4 years, they have doubled the 
debt held by foreign countries. U.S. debt held by foreign countries and 
foreign investors has doubled. It took 224 years to run up $1 trillion 
of foreign-held debt. In only 4 years, they have doubled it.
  Here is the record, looking at the other 42 Presidents in American 
history. It took them 224 years to run up $1 trillion of external debt. 
This President has exceeded them in 4 years. This President has run up 
over $1 trillion of foreign-held debt in his term: $1.05 trillion 
versus 42 other Presidents, $1.01 trillion. It is pretty stunning what 
has happened.
  And the result? Here it is: We now owe Japan over $684 billion. We 
owe China $248 billion. We owe the United Kingdom over $174 billion. We 
owe the Caribbean Banking Centers over $100 billion. This strengthens 
the country? How does that strengthen the country?
  They do not want anyone to read chapter 3 of the book. No. They want 
to talk about deficit reduction. It is a wonderful title, but it has no 
relationship to the facts. The budget they have before the Senate does 
not reduce any deficit. They increase the deficit. They explode the 
debt. Under their own calculations they will increase the debt over the 
5 years of this budget proposal by over $3 trillion. They have the 
chutzpah to come out here and talk about deficit reduction.
  Let's read the third chapter of their book. The third chapter 
increases the debt limit of the United States in 1 year by $781 
billion. And they are out here talking about deficit reduction? Come 
on.
  The chairman said accurately we did not present a budget. That is 
exactly right, we did not present a budget. Why didn't we present a 
budget? Because they are in control. They are in control of the White 
House. They are in control of the Senate. They are in control of the 
House. We first had to try to defeat their proposal. Only then would we 
have had an opportunity or a chance to offer an alternative.
  The first test was, can we defeat their budget? I tried my darnedest. 
The chairman knows that. I tried very hard to defeat the budget 
proposal they put before our colleagues because it exploded the debt by 
their own calculations by more than $3 trillion over the next 5 years. 
But I didn't succeed. They won. They passed their budget. If we could 
have stopped them, if we could have defeated them, then an alternative 
would have been in order and I would have been happy to offer an 
alternative if we had a chance to prevail. There was no chance to 
prevail. They won. The country lost, but they won. The country lost 
because their budget did not reduce the deficit. It increased the 
deficit and it exploded the debt.
  By their own calculations, this 5-year budget they have put together 
will increase the debt of our country by $3 trillion. That is a fact.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from New 
Hampshire.
  Mr. GREGG. I yield such time as the Senator from South Carolina may 
use.
  Mr. SARBANES. Mr. President, could I inquire what the parliamentary 
situation is.
  The PRESIDING OFFICER. Time is controlled today between the Senators 
from New Hampshire and North Dakota.
  Mr. SARBANES. How much time is available to each side?
  The PRESIDING OFFICER. The Senator from North Dakota has 4 hours 33 
minutes. The Senator from New Hampshire has 4 hours 3 minutes.
  Mr. SARBANES. I understand the Senator from New Hampshire has now 
yielded to the Senator from South Carolina. Could I inquire, so I have 
some idea of the sequencing, how much time the Senator from South 
Carolina will be using?
  Mr. DeMINT. Ten or 15 minutes.
  Mr. GREGG. After the Senator from South Carolina speaks, I intend to 
speak for 15 minutes and offer an amendment. Then it would be back to 
your side for whatever time you wish to take, so about half an hour 
from now.
  Mr. SARBANES. Would it be possible to make an opening statement 
before the chairman of the committee offers an amendment?
  Mr. GREGG. I want to get the amendment in the queue. I will offer the 
amendment and then I will let the Senator from North Dakota yield to 
you for whatever you need for an opening statement--15 minutes?
  Mr. SARBANES. Ten minutes.
  Mr. GREGG. And then back to me to explain the amendment.
  Mr. SARBANES. I thank the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. DeMINT. Mr. President, I thank the Senator for yielding.
  I find the comments of the Senator from North Dakota very curious, if 
not amusing. I find the opposition to this deficit reduction package 
perplexing.
  How can we come to the Senate and rail against deficits and, at the 
same time, rail against spending cuts? Some of my colleagues have 
gotten comfortable with voting against something before they vote for 
it.
  In 1993, when the Senate was considering mandatory spending 
reductions much like we are considering today--only then it was $77 
billion, about twice as much as we are considering cutting today--the 
Senator from North Dakota supported it. Not only did he support it, he 
took the lead in pushing for more spending cuts. To quote the Senator 
from North Dakota:

       I am one of those on the Democratic side who insisted on 
     more spending cuts . . . I did so because I believed very 
     strongly that we had to have more spending cuts to have 
     balance in this program . . . Madam President, we succeeded . 
     . . We got more spending cuts.

  The Senator also said:

       When we talk about there being too much spending, when we 
     talk about the Federal

[[Page 24313]]

     budget being out of control, Medicare and Medicaid are part 
     of the explanations.

  And, again, in 1997, when the Senate was considering mandatory 
spending reductions which totaled $107 billion, which is almost three 
times what we are considering today, the Senator from North Dakota 
supported it, too. Again, he not only voted for it but he called for 
even more spending cuts.
  Again, the Senator said:

       I, too, am proud to have voted for the provisions that we 
     passed this morning that will finish the job of balancing the 
     unified budget . . . Frankly, I would have done more by way 
     of deficit reduction. I wish we had been more ambitious. I 
     wish we would have done more in the long-term reform of 
     entitlement programs, but that was not to be. That is for 
     another day.

  This is all very confusing to me. How can the Senator be for spending 
reductions in 1993, in 1997, but then oppose them today? I don't want 
to make any assumptions, but this appears to be politically driven 
because the only thing that has changed since 1993 and 1997 is the man 
in the White House.
  The Senator is correct that the Republicans are now in the majority. 
But history will show that the Republicans in the majority in the 1990s 
worked with President Clinton to cut the budget and balance the budget 
over time.
  Our country faces many difficult challenges. But my colleagues 
continue to talk a good game while they obstruct at every turn. It 
actually reminds me of an experience when I was a teenager taking 
lifeguarding classes at a swimming pool. One of the parts of the final 
test for that lifeguarding class was to swim to the bottom of the deep 
end, pick up a concrete block, bring it back to the surface and then 
swim to the other side of the pool. Every day when I get up in 
Washington, DC, I feel I have to go down to the bottom of the pool and 
pick up my Democratic colleagues and drag them across the pool.
  On energy, while we hear rhetoric in the Senate blaming the President 
for high energy prices, the Democrats vote en bloc to keep us from 
developing the oil resources we have in this country. In a committee 
meeting last week we wanted to build new refineries, modern, 
environmentally safe refineries on old military bases, but the 
Democrats voted en bloc to stop it.
  I heard this morning from the Senator from North Dakota about 
spending Social Security on other things. Yet when Republicans this 
year proposed we stop spending Social Security on other things and save 
it in Treasury notes, they en bloc came out against it.
  The same thing is happening today on deficit reduction.
  They say they want deficit reduction, but they are on the floor 
speaking out against it. I find the comments coming from the other side 
of the aisle very interesting. I keep hearing how ``we are opposed to 
budget deficits,'' but this chart will show how they spend, spend, 
spend.
  If I could--and my colleague from North Dakota referenced some of the 
amendments that we brought up last week, which they said were offset--I 
think it is important, when we speak on the floor, we get our facts 
straight. Because these are the amendments offered by the Democrats 
that would increase the budget by over a half a trillion dollars, none 
of which were offset. There were other amendments offered with some 
offsets, but, as shown on this chart, this would increase the spending 
and the deficit by over a half a trillion dollars.
  If we look at it in total--since we are using some moving charts this 
morning--if we want to be accurate--again, this gets back to the 
concrete block analogy--we are trying to cut spending in this Senate, 
which is only a third of what we did last time we went through this 
same procedure, with Democratic support, yet amendments have been 
offered that have taken this all the way up to the top of $500 billion 
and beyond, with the new amendments that were offered last week.
  It is important, as a nation, we address difficult issues in a sound, 
fiscally responsible way. This bill before us this week is very modest, 
with spending cuts that reduce no care to the poor; they are cutting 
wasteful spending and fraud from Medicaid and other programs. This 
should be an easy vote for every Member of the Senate. There is other 
spending that we need to address. This bill should be easy.
  I encourage all of my colleagues to set the rhetoric aside. Let's 
leave the concrete block at the bottom of the pool and swim across it 
together and get this done on behalf of the American people.
  Mr. President, I thank the Chariman for this time and yield back.
  The PRESIDING OFFICER. The Senator from New Hampshire.


                           Amendment No. 2347

  Mr. GREGG. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from New Hampshire [Mr. Gregg], for Mr. Frist, 
     for himself and Mr. Gregg, proposes an amendment numbered 
     2347.

  Mr. GREGG. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To provide amounts to address influenza and newly emerging 
                               pandemics)

       At the appropriate place, insert the following:

     SEC. __. ASSISTANCE TO COMBAT INFLUENZA AND NEWLY EMERGING 
                   PANDEMICS.

       (a) In General.--Out of any money in the Treasury of the 
     United States not otherwise appropriated in title VII, there 
     are appropriated $2,780,000,000 to enable the Secretary of 
     Health and Human Services to carry out the activities 
     described in subsection (c).
       (b) Additional Amounts.--Out of any money in the Treasury 
     of the United States not otherwise appropriated in title III, 
     there are appropriated $1,174,000,000 to enable the Secretary 
     of Health and Human Services to carry out the activities 
     described in subsection (c).
       (c) Activities.--From amounts appropriated under 
     subsections (a) and (b), the Secretary of Health and Human 
     Services shall utilize--
       (1) $577,000,000 to intensify surveillance of influenza and 
     other newly emerging pandemics and outbreaks;
       (2) $2,800,000,000 for the development and stockpiling of 
     antivirals and vaccines for influenza and other newly 
     emerging pandemics; and
       (3) $577,000,000 to establish a seamless network of 
     Federal, State, and local authorities for preparedness 
     relating to influenza and other newly emerging pandemics.

  Mr. GREGG. Mr. President, it is my understanding that at this point 
the Senator from North Dakota is yielding time to the Senator from 
Maryland, and it will be taken from the time of the Senator from North 
Dakota. After the Senator from Maryland makes his statement, I will 
reclaim the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. I thank the Chair.
  Mr. President, I rise to speak on the measure before us. As we well 
know, budgets are all about priorities. The budget resolution which was 
passed earlier this year paved the way for the reconciliation 
legislation which is now before us, legislation which I strongly 
believe represents the wrong set of priorities for America.
  I say this for two primary reasons. One is the adverse impact this 
legislation will have on the Nation's soaring budget deficit; in 
effect, what it does to the fiscal underpinnings of our economy. The 
second very strong reason is the impact this legislation will have on 
families all across the country.
  I commend the able Senator from North Dakota, Mr. Conrad, for his 
very effective leadership on this issue. He has been consistent 
throughout in trying to bring a sense of fiscal responsibility to our 
budget deliberations. His presentation earlier today has maintained 
that strong commitment, as he set out the fiscal consequences of the 
path on which we are proceeding.
  The reconciliation process, which originated in the mid-1970s, 
provides fast-track procedural protections for reconciliation bills, 
which are supposedly designed to help achieve the goal of reducing 
budget deficits. Regrettably, that goal has been absent from the 
reconciliation process since 1997, which was the last time the Congress 
considered a reconciliation bill that actually sought to bring down the 
deficit. In fact, in recent years, the reconciliation process has been 
used not to bring down the deficit but to cut

[[Page 24314]]

taxes. So a process designed to help reduce budget deficits has 
actually made our deficits worse, significantly worse, by speeding 
through the Congress package after package of excessive tax cuts.
  This year's reconciliation process is no different. The budget 
resolution, which passed on a party-line vote earlier this year, 
provided fast-track procedural protection for both a spending bill and 
a tax bill. Both were provided this protection under the reconciliation 
process. So if one is to see the impact made on the deficit by the 
reconciliation process, one has to take into account both of these 
measures. Only one of the two is before us today. But the other is 
scheduled to follow next week. They constitute part of a package.
  Now, the budget resolution, passed earlier in the year, required 
various committees to make $35 billion in spending cuts. The effort to 
implement that is reflected in the legislation before us today. That 
same budget resolution required the Finance Committee to report a tax 
bill that reduces revenues by $70 billion. So we have a requirement, 
under the budget resolution now being implemented by this fast-track 
procedure, of $35 billion in spending cuts which I understand is 
actually coming in at $39 billion--and $70 billion in tax cuts.
  The consequence of using this reconciliation process for both the 
spending cuts and the tax cuts will be to increase the budget deficit 
by more than $30 billion. So the reconciliation legislation, originally 
designed for the purpose of budget deficit reduction, is not, in fact, 
going to reduce the budget deficit; it is going to increase the budget 
deficit. This bill is really about trying to make room for more tax 
cuts, primarily benefitting the people at the very top of the income 
and wealth scale.
  When you look at the reconciliation instructions in the budget 
resolution, on both the tax and spending sides, that conclusion is 
inescapable. The reconciliation legislation is a clear example of a 
fiscal policy that places a higher priority on tax cuts than on funding 
needed services and reducing the deficit. To me, that is a misplaced 
priority but, regrettably, one that has marked this administration.
  Now, if the ranking member would yield for a couple of questions?
  Mr. CONRAD. Yes, sir.
  Mr. SARBANES. It is my understanding that when President Bush came 
into office in 2001, the fiscal situation which he inherited was one 
where we actually we were running a surplus in the Federal budget, if I 
am not mistaken. We were projecting a surplus, over the next 10-year 
period--2002 to 2011--of $5.6 trillion. I say to my colleague; is that 
correct? That was the projection at the time?
  Mr. CONRAD. That is correct.
  Mr. SARBANES. Of course, these were projections. We recognize that. 
But they were the best estimate that could be made. Over a 10-year 
period, we were projecting a surplus of $5.6 billion. In fact, some 
said we were paying down the debt too quickly, if the Senator will 
recall?
  Mr. CONRAD. Yes, they did. In fact, they were concerned we were going 
to pay off too much debt.
  Mr. SARBANES. As I understand it, today, after this series of 
excessive tax cuts the President has pushed through, using this 
reconciliation process--actually, I think, abusing it, not using it, 
because it was designed to reduce deficits, not to increase deficits--
but using this fast-track procedure, the President and his allies in 
the Congress have pushed through a series of excessive tax cuts.
  So as I understand it, we are now in deficit, $317 billion for the 
fiscal year that just ended, and we are facing projected deficits, over 
the next 10 years, of $4.5 trillion; is that correct?
  Mr. CONRAD. The Senator is correct. So we have had a swing from 
projections of a $5.6 trillion surplus to more than a $4 trillion 
deficit. That is a swing of $10 trillion.
  Mr. SARBANES. Mr. President, I want to underscore what the very able 
Senator from North Dakota has pointed out. This is an incredible 
deterioration in the fiscal position of our Nation. We have gone, in 
less than 5 years' time, from projecting a surplus of $5.6 trillion, 
over a 10-year period, to a point where we are now projecting a deficit 
of $4.5 trillion over a 10-year period. And as the able Senator points 
out, that is a swing in our fiscal position of $10 trillion--$10 
trillion in the wrong direction. It is incredible when one stops to 
think about it.
  Mr. CONRAD. I would say to the Senator, if I could, the situation is 
even much worse. Why is it much worse? Because the deficits understate 
what is happening to the debt.
  Last year, for example, the deficit went up by something over $300 
billion, but the debt went up by $551 billion. Most of the difference 
is the money they are taking from Social Security. Last year, they 
took, under the President's plan, $173 billion of Social Security money 
and used it to pay for other things. It all gets added to the debt, but 
none of it counts toward the deficit calculation.
  Mr. SARBANES. Could I ask the Senator, who is holding this debt?
  Mr. GREGG. Will the Senator yield for a question?
  Mr. SARBANES. Certainly.
  Mr. GREGG. As the Senator knows, I did yield to the Senator to make 
an opening statement. The understanding was it would be for about 10 
minutes. It has been about 15 now. I am wondering if the Senator is 
planning on going on for an extended period of time.
  Mr. SARBANES. If I could have 4 or 5 more minutes, I could draw to a 
close.
  Mr. GREGG. That would be great. I thank the Senator.
  Mr. SARBANES. I thank the chairman.
  Well, as was pointed out, rather than conserving the budget surplus, 
which President Bush inherited, he has chosen to risk our fiscal future 
through excessive tax cuts--tax cuts targeted to those who need them 
the least. This reconciliation process before us will only continue 
that pattern.
  The reconciliation process is supposed to provide special protection 
to measures to bring the deficit down, not to provide special 
protection to a combination of measures, as we have here: some spending 
cuts but greatly exceeded by tax cuts.
  So the net result of the reconciliation measures to be considered 
this week and next week will be an increase in the deficit of $30 
billion. I don't know anyone who can contest that. It is pretty well 
conceded.
  The instructions made it clear from the outset there was to be $35 
billion in spending cuts--and they have increased it a few billion--and 
$70 billion in tax cuts. You put the two together, you have an increase 
in the deficit of over $30 billion.
  We are facing serious future challenges. The Senator from North 
Dakota has been the leader in pointing out to us the need to consider 
the baby boomers as they approach retirement age, the impact that will 
have on the fiscal situation of the country, and how we can deal with 
that in a balanced and equitable way. That discussion is not taking 
place. Instead, we have this fast-track process in which the most 
vulnerable amongst us are asked to make the sacrifices in terms of the 
programs being cut, such as Medicaid and Medicare.
  The New York Times, in an editorial on October 26, titled ``Stalking 
the Poor to Soothe the Affluent,'' said:

       Impoverished Americans are being set up as targets this 
     week in Congress's desperate attempt to find budget cuts 
     after four straight years of tax cuts for the affluent.

  I ask unanimous consent that the editorial be printed in the Record 
at the conclusion of my remarks.
  The PRESIDING OFFICER (Mr. Sununu). Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. SARBANES. As I draw to a close, I just want to underscore what is 
happening. I had put a question to the Senator from North Dakota and 
there wasn't an opportunity to answer. Our debt is escalating at a 
faster rate than the budget deficit, which compounds the situation. Who 
is holding this debt? Who is buying this paper and, therefore, has 
claims against U.S. citizens looking out into the future?

[[Page 24315]]


  Mr. CONRAD. Increasingly, this debt is being held by foreign 
countries and foreign investors. If you think about it, during the 
President's watch so far, he has increased the debt from $5.6 trillion 
to $7.9 trillion. That is a $2.3 trillion increase in the debt so far 
under his watch. I keep urging my colleagues to understand that you 
can't tell a book by its cover. This cover says it is deficit 
reduction. That is just the first chapter. You have to read all the 
chapters to conclude what is happening.
  What is happening is, as the Senator has correctly described, the 
first chapter is, cut a little bit of spending. The second chapter is, 
cut even more revenue. The third chapter is--and this is the one they 
really don't want people to read--increase the debt of the country by 
$781 billion for 1 year. That will take the total up to over $3 
trillion of added debt in just the 5 years that this President has been 
in power. Who is holding the debt?
  Increasingly, it is foreigners. This President has increased foreign 
holdings of our debt by a trillion dollars. It took 42 Presidents 224 
years to run up a trillion dollars of external debt. This President has 
more than doubled that amount in 4 years.
  Mr. SARBANES. Mr. President, I close with this observation: In one of 
his plays, Tennessee Williams has a character, Blanche Dubois, who 
says: I have always depended on the kindness of strangers. That is what 
is happening to the fiscal future of the United States of America. We 
are becoming increasingly dependent on foreign nations, in many 
instances central bankers, not individuals, central bankers buying our 
debt, holding this paper, financing this deficit, underwriting this 
debt. The United States, as a consequence, is losing a measure of its 
strength and independence which only underscores the seriousness of the 
situation we confront.
  Mr. CONRAD. Well, we owe Japan over $680 billion.
  Mr. GREGG. Mr. President, point of order: No question was asked by 
the Senator from North Dakota. Is it correct to have an interchange of 
this nature?
  Mr. CONRAD. I interpreted a question from the Senator.
  Mr. SARBANES. I asked the Senator who was holding the debt.
  Mr. CONRAD. He had asked who was holding the debt, and this is who is 
holding the debt.
  Mr. GREGG. The Senator from North Dakota's response was not in 
relationship to a question.
  The PRESIDING OFFICER. The Senator from Maryland has the floor. He 
may not ask questions of other Senators, but he may respond to 
questions from other Senators.
  Mr. CONRAD. I would be happy to ask the Senator from Maryland a 
question, if he would yield for that purpose.
  Mr. SARBANES. Certainly.
  Mr. CONRAD. The Senator can see here the answer to the question he 
posed to me. I would ask: Who is holding the debt?
  Mr. SARBANES. As I look at the chart which the Senator has presented, 
Japan has $684 billion of it; China, $248 billion--and that is rapidly 
escalating, moving upwards very fast--the United Kingdom, $174 billion. 
Caribbean banking centers are holding over $100 billion of our national 
debt. This is a recipe for eventual disaster if we don't get this 
situation under control. The budget reconciliation process ought not to 
be used in such a way that the ultimate result is going to be an 
increase in our deficit and a further runup of the debt.
  I thank the chairman and the ranking member for this opportunity to 
speak. I again commend Senator Conrad from North Dakota for the 
effective and consistent leadership he has provided over the years in 
addressing the important question of the fiscal underpinnings of our 
national economy.
  I yield the floor.

                               Exhibit 1

                Stalking the Poor To Soothe the Affluent

       Impoverished Americans are being set up as targets this 
     week in Congress's desperate attempt to find budget cuts 
     after four straight years of tax cuts for the affluent. House 
     Republicans propose harmful cuts in Medicaid access and 
     benefits, while forcing another 10 hours of work from welfare 
     families and giving states free rein to pile more draconian 
     reductions onto the most vulnerable citizens.
       This gross political posturing does not even translate into 
     true savings. While imperiously proclaiming cuts of $50 
     billion over five years, Congressional leaders are determined 
     to fiddle more harmfully with the revenue half of the budget 
     and to pass an additional $70 billion in upper-bracket tax 
     cuts.
       The proposals would have the federal government--supposedly 
     the protector of the neediest--give the states broad leeway 
     to restrict current benefits; to require co-payments by the 
     poor for medicine and for care by doctors and emergency 
     rooms; and to cut preventive care for children, who represent 
     half of the Medicaid roll. The food stamp program would 
     probably also be hit with a $1 billion cut, and even welfare 
     payments to elderly people who are sick would be crimped by 
     using federal bookkeeping tricks.
       One particularly boneheaded proposal would severely cut the 
     funds for child support enforcement by $4 billion. This 
     program currently returns $4 in benefits from natural parents 
     for every dollar invested.
       The proposals are so appalling that moderate Republicans 
     are even said to be considering a show of life on the floor. 
     In contrast, Senate Republicans are shaping cuts that would 
     spare the poor's Medicaid and other safety nets, while 
     finding savings in Medicare overpayments.
       The Senate approach is obviously preferable, but it is also 
     rooted in the G.O.P.'s pre-election fiction that overspending 
     is the basic problem. The tax cuts should be scuttled and the 
     poor protected.

  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I had, as a matter of courtesy, yielded the 
floor so the Senator from Maryland could speak; he said for 10 minutes. 
It has now been a half hour. Cooperation does help in this institution.
  Cooperation also helps on bills such as this. The Senator from North 
Dakota has taken considerable time to talk about the reduction in the 
deficit in the 1990s and the fact that we went into surplus, claiming 
it as an action of the Democratic Party. The deficit reduction which 
occurred during that part, there was another player in that, and that 
was the Republican Congress which essentially asked President Clinton 
to pursue a course of a balanced budget. And with some reticence, the 
final agreement was reached, and a balanced budget bill was passed. It 
was passed in cooperation. There was cooperation from Republican 
membership with a Democratic President.
  It would be nice if we had that cooperation today from our Democratic 
colleagues. I find it uniquely ironic that they have decided to oppose 
a bill which reduces the deficit by $35 billion--that initially was the 
demand; it was a proposal put forward; now it is up to $39 billion--on 
the representation that, well, they can't support this bill because 
there may be a later bill that gives tax relief. You can't have it both 
ways. You can't claim you are for deficit reduction and for reducing 
the debt and then vote against the one opportunity you are going to 
have to do so. The one opportunity is this bill. This isn't a tax 
relief bill. There are no tax relief proposals in this bill at all. 
This is not a bill that in any way harms people of lower incomes.
  In fact, the vast majority of the new spending in this bill is 
directed specifically at low-income students and patients on Medicare 
and assisting both of them. The Medicaid proposals in this bill were 
crafted by the Finance Committee to make sure they focused on making 
that program more efficient. It will actually, if the language in this 
bill passes, have an impact on the pharmaceutical industry but not on 
low-income individuals who benefit from Medicaid. In fact, because it 
has significant expansion of the flexibility of Governors to deal with 
Medicaid, most of the Governors you talk to, any that are sort of good 
managers, are saying they can do a lot more. They are going to be able 
to deliver a lot more Medicaid services to a lot more people as a 
result of the language in this bill, even though it saves money in the 
Medicaid accounts, because they are giving Governors more flexibility.
  This is a bill which actually produces significant improvements in 
the delivery of services in this country to low-income individuals, 
especially those who want to go to college, those who are benefiting 
from Medicare, and those who are benefiting from Medicaid. At the same 
time, it reduces the

[[Page 24316]]

deficit by $39 billion, or $35 billion if the amendment I just offered 
happens to be passed.
  To say that you are not going to vote for this bill because there may 
be some bill coming down the road that gives tax relief to people is 
not consistent, and then to argue that you are for deficit reduction on 
top of that. This is your opportunity to vote for deficit reduction. 
This is it. This is the only vote you are going to get--at least in 
this exercise of reconciliation--to reduce the deficit. So vote for 
this. And if you are not happy with the tax relief package, vote 
against the tax relief package. Take the good, which you allegedly 
claim you want, which is deficit reduction, and reject what you 
consider to be bad, which is the tax relief package coming later.
  Mr. SARBANES. Will the Senator yield for a question?
  Mr. GREGG. No, I will not yield at this time.
  The tax relief package to which they are opposed, which is coming 
down the pike, which they allege is part of this package so they have 
to vote against the debt reduction deficit reduction package, let's 
talk about what is in that package potentially.
  The alternative minimum tax: Something like 8 million people will be 
added to the alternative minimum tax if we don't extend what is known 
as the patch, if we don't exempt those people from being added to it. 
That is a $30 billion item right there. The folks on the other side 
want to vote against the tax reconciliation bill. They want to raise 
taxes on 8 million people. They want to create a tax revenue of $30 
billion by making the alternative minimum tax apply to middle-income 
Americans. That is their choice.
  The research and experimentation tax credit, the R&D credit, this is 
the credit which allows entrepreneurs, especially small businesses, to 
invest in R&D, which produces jobs, which makes our country more 
competitive, which keeps jobs from going overseas, which gives people 
careers. This is one of the most important tax initiatives in our Tax 
Code because it increases economic activity and increases opportunity 
and jobs. They want to vote against that one. Fine. Raise the taxes on 
small business and entrepreneurs who want to do R&D. That is the second 
largest item, $7 billion, that is going to expire in the next 2 years.
  The deductibility of qualified credits, teachers' deductibility. We 
talked about that before. When teachers go out and buy things for their 
classrooms, they get a deduction for it. If they want to raise taxes on 
teachers, go ahead, have a tax increase on teachers.
  The deduction for State and local sales taxes: Which States benefit 
from the deductibility of State and local taxes? Massachusetts, 
Connecticut, New York, New Jersey, Illinois, California--those are the 
high tax States. They are the ones with the highest sales taxes. How 
many Republican Senators are there from those States? I don't think 
there are any. But that is one of the items. They appear to want to 
raise taxes on people in those States by making their sales tax not 
deductible.
  I have to tell you, I come from New Hampshire. We don't have a sales 
tax or an income tax. If you want to eliminate the deductibility of 
sales taxes, it is no skin off our nose. But I don't think it happens 
to be that great a policy. But that appears to be the position that is 
being taken here, if you listen to the other side as they excoriate the 
package of proposals that is coming at us as a result of the 
reconciliation process: First, the deficit reduction bill, the debt 
reduction bill; second, the reconciliation bill on taxes, the majority 
of which includes these right here. And these are the ones that are 
expiring in the next 2 years.
  Then the third is the debt ceiling, which is put under 
reconciliation. Well, you know, we are at war. We had a downturn of 
dramatic proportions as a result of the bursting of the Internet 
bubble, and this country's expenses have gone up rather significantly 
because of those two factors--especially the cost of the war. In fact, 
if you look at discretionary spending, almost the entire increase is an 
attempt to fight terrorism and protect our Nation. Now, it may be that 
the other side of the aisle does not want to pay those bills, that they 
think we should not do a debt increase. Well, if you do that, the 
Federal Government defaults on its debt, chaos occurs in the 
marketplace, and people's savings will be wiped out not only in the 
United States but across the globe.
  Maybe that is the fiscal position of the other side of the aisle. A 
debt reduction bill is a technical step in the sense it increases our 
ability to borrow the money. We are going to borrow the money because 
we have the debts. It is like saying, when you get your credit card 
bill, you are not going to pay it. Well, the practical implication of 
not paying is you file bankruptcy. Maybe the other side's position is 
let's file bankruptcy. It seems to be we should do nothing. However, 
the rate at which that credit card is being charged--because this is 
the only bill that does that. This is a deficit reduction bill. The $39 
billion bill that is pending before us is a deficit reduction bill. So 
if you are not going to vote for this bill, you have no credibility on 
the issue of whether you are willing to cut the deficit or debt. It is 
one separate bill.
  Mr. SARBANES. Will the Senator yield.
  Mr. GREGG. I will not yield. I yielded to the Senator for 30 minutes 
when he asked for 10, and to tell you the truth, I don't think that was 
consistent with the comity of the Senate.
  Mr. SARBANES. Now, the Senator should yield on that point.
  Mr. GREGG. No, I will not yield.
  Mr. SARBANES. On questioning the comity of the Senate, the Senator 
should yield on that point.
  Mr. GREGG. I will not yield on that point.
  The next item: The second point is how much money have we generated 
from this tax cut. The tax cut has energized a significant increase in 
revenue to us relative to the budget. We have seen a 14-percent 
increase in 2005. We will see a 6-percent increase in 2006, and it is 
projected that this will continue to go up significantly as we move 
into the outyears. That is because as you reduce the tax rate on 
working Americans, you significantly expand the revenue of the Federal 
Government because people become more productive and they generate more 
activity, which generates income to the Federal Government.
  That has been proven over and over and over again. The tax cuts of 
President Bush have shown that, the tax cuts of President Reagan showed 
it, and the first person to show it in fairly definitive terms was 
President John F. Kennedy, who put forth his tax cut which generated 
significant revenues to the Federal Government.
  We are seeing a dramatic expansion in the revenue activity of this 
Government. To say anything else is inaccurate. Yes, the budget deficit 
is $314 billion, but it was supposed to be $440 billion or $420 
billion. We have generated $100 billion of reduction in the deficit and 
almost all of it, almost all of it has been a function of new revenues 
coming into the Federal Government. There has also been essentially a 
freeze on discretionary spending, nondefense, which has been good, but 
essentially all that revenue has come out of this, come out of the fact 
that we cut taxes and we have generated more economic activity.
  So when the argument is made that the tax cuts are inappropriate and 
that we are generating cuts for wealthy individuals at the expense of 
low-income individuals, it is just not consistent with the fact. The 
fact is, this deficit reduction plan significantly reduces the deficit 
but does it in a way that does not impact low-income individuals. In 
fact, the new spending initiatives in this plan, which are fully paid 
for by offsetting reductions, dramatically benefit low-income 
individuals, especially those who are working, who are going to 
college, and who are trying to benefit from Medicare.
  Secondly, the tax provisions which will be coming in the next 
exercise, which is independent of this exercise, are provisions which 
are generally supported by most Americans. They are the deductibility 
of the R&D tax credit, deductibility of education credits,

[[Page 24317]]

deductibility of savings credits, State and local taxes, sales taxes, 
and, of course, the AMT fix. The tax revenues of this country are going 
up dramatically on an annual basis, and they are projected to continue 
to go up. So we don't have a problem that we are an undertaxed society. 
We have a problem that we are not controlling spending.
  The pending amendment which I sent to the desk is an amendment to 
address the fact that we are confronting a very significant threat in 
the world called avian flu. This Congress, this Senate, has tried to 
address this issue a couple times, but we know the avian flu issue is a 
ticking time bomb out there. Whether it is going to happen today or 
whether it is going to happen--well, not today, obviously, but whether 
it is going to happen within 12 months or 2 years or 5 years, we know 
the threat should avian flu transfer from birds over to humans is huge 
because we have a record to look to, which is the pandemics of the 
early part of this century.
  We need to get ready for it, and we all recognize it, and there is an 
urgency to do that. It has been a bipartisan push to try to accomplish 
that. So this amendment essentially takes some of the dollars which 
have been saved in excess of the original reconciliation instruction 
and applies those dollars to try to address the pandemic situation.
  In trying to accomplish that, we have addressed what I think is a 
significant need. In addressing the avian flu issue, it is more than 
just a money issue. We all know that. There has to be an incentive for 
the vaccine industry to aggressively pursue some sort of cure to 
address not only avian flu but avian flu as it mutates through various 
systems. That has not been accomplished yet. But we know it will not be 
accomplished until we are successful in standing up to the vaccine 
industry and making sure that they have the resources to pursue an 
adequate treatment.
  This amendment tries to accomplish that, and thus I have offered it.
  At this point I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I think the chairman of the Budget 
Committee just summed up the position of his party when he said we have 
to borrow the money because we have the debt. That is exactly right. 
Their party has put us on a fiscal course to explode the debt. And when 
the Senator talks about deficit reduction, which is on the cover of the 
book of the matter that we are discussing today--it says deficit 
reduction--it just doesn't have any credibility because it is part of a 
package. The package is the budget that was passed earlier this year. 
This reconciliation process we are going through now was authorized by 
that budget. That budget didn't reduce any deficit; it increased the 
deficit. Most seriously, it exploded the debt.
  Well, here it is. The budget we are working to conclude increases the 
debt by $3.4 trillion over the next 5 years. The spending cut they have 
out here right now is $39 billion. By the way, they are about to reduce 
that because the first amendment from our colleagues on the other side 
is a spending amendment.
  But let's look at the whole package, the whole package that our 
colleagues have offered the country, have offered the Senate. If 
doesn't reduce the deficit, it doesn't reduce the debt, it dramatically 
expands the debt--not by my calculation but by their calculation. Here 
is their calculation of the increase in the debt of their 5-year budget 
proposal. They are going to run up the debt $3.4 trillion. This 
spending out here over 5 years of $39 billion basically does not touch 
it.
  Now, my colleague had a whole list of possible tax cuts and said, 
well, maybe we are for increasing the taxes on the American people, on 
those various items. I support extension of many of those tax cuts, but 
I believe they ought to be paid for. That is the way we used to do 
business around here. We used to have a provision we called pay-go, and 
if you wanted to increase spending or you wanted to have more tax cuts, 
you could do it, but you had to pay for it. There is an old-fashioned 
idea: pay for it. Our colleagues over here don't want to pay for 
anything. They want every tax cut, they want every spending provision--
this increase in spending. They are in control. The spending they are 
complaining about, they passed it. They control the Senate of the 
United States. They control the House of Representatives. They control 
the White House. Every dime of this spending that they are complaining 
about, they passed--every dime of it. The President has not vetoed one 
spending bill. Every dime of this spending they supported.
  But here is what they did on the revenue side. This is what has 
happened to the revenue. The revenue side of the equation collapsed, 
and, yes, we have had an upkick in the last year, absolutely. The 
Senator is correct. Revenue has increased in the last year. But look at 
where it is. It is way below the historical level. The result of this 
combination of their spending increases and their tax cuts has been to 
explode the deficits. We have had in the last 3 years the largest 
deficits in the history of the country. They have exploded the debt--
not by my calculation but by their own calculation and by the historic 
record.
  Look, when this President came in, the debt was $5.7 trillion. In 5 
years he is going to have added $3 trillion, if this budget plan 
passes. They ran up the debt another $551 billion for the last year 
alone. They are going to increase the debt of this country in the 5 
years of this Presidency by $3 trillion, and in the next 5 years they 
are going to run it up another $3 trillion.
  Now, facts are stubborn things. It is very interesting that my 
colleague on the other side, when he put up the possible tax cuts they 
are talking about, left this one out. You didn't see this. You didn't 
see this one mentioned, the capital gains and dividends tax cuts. Here 
is the distribution of those tax cuts, who gets them: Those earning 
over $1 million a year will get, on average, a $35,000 tax cut. Those 
earning less than $50,000 a year, this is what they get: $6--$6. That 
is what my colleagues on the other side of the aisle think is a fair 
distribution of the tax cuts--$6 for those earning less than $50,000 a 
year, $35,000 for those earning over $1 million a year. And one of the 
ways they reduce the cost of all this is to take from the least among 
us.
  Go look at what the House of Representatives is proposing by way of 
their spending cuts. They are going to cut Medicaid, they are going to 
cut food stamps, the things that go to the least among us so that they 
can give additional tax cuts to those who have the most among us.
  That is not a value that I have read in any Bible. My Bible does not 
say take from the least among us to give to the most among us. I have 
not seen that in any chapter of the Bible or, for that matter, in any 
holy book. Virtually every religion--perhaps every religion--has as a 
value that we help the least among us. We don't take from the least 
among us to give to those who have the most. But that is exactly what 
is before us in this proposal.
  Again I say to my colleagues, you can't separate out the first 
chapter of the book they have labeled deficit reduction; you have to 
read the whole book. You have to read all the chapters. If you read the 
chapters of this book, what you find is in chapter 1, they cut a little 
bit of spending, in chapter 2 they cut even more revenue, and in 
chapter 3, they explode the debt by $781 billion. And they call it 
deficit reduction? Please.
  If you look at the whole book, if you read the entire book, what you 
find is they are going to increase the debt of our country by $3 
trillion over the next 5 years. And they are out here talking about 
deficit reduction? No, that dog won't hunt.
  I rise to offer an amendment with Senator Nelson and Senator Feingold 
to restore some budget discipline. We want to go back to the pay-as-
you-go rule that served this country so well in previous years. I thank 
Senator Nelson and Senator Feingold for their leadership on this issue. 
I see Senator Feingold is on the floor.
  Our amendment is simple. It restores the original pay-go rules 
preventing new mandatory spending and new tax

[[Page 24318]]

cuts unless they are paid for. My colleague talks about all the 
additional tax cuts he wants. That is fine. I will support a lot of 
them, but we have to pay for them. Otherwise, we are borrowing money 
from China, Japan, the Caribbean Banking Centers, and all the rest to 
give tax cuts that, in many cases, go predominantly to the wealthiest 
among us. What a bizarre strategy that is.
  The proposal we are making today eliminates a loophole in the current 
pay-go rule which exempts tax cuts and spending increases that are 
provided for in the budget resolution. We don't have to pay for them if 
they are in the budget resolution. This huge loophole encourages 
fiscally irresponsible behavior, which is exactly how I would 
characterize the budget that is before us. It is fiscally 
irresponsible--fiscally irresponsible to increase the debt by $3 
trillion when we have already almost $8 trillion of debt. If people are 
serious about fiscal discipline, this is their chance to prove it.
  I would like to take a moment to remind my colleagues of the history 
of pay-go and why it is important to reinstate the original pay-go 
rule.
  The rule was adopted in 1990 at a time when the Federal Government 
was facing unprecedented deficits, just as we are today. Originally, 
the pay-go rule created a 60-vote point of order against tax cuts and 
mandatory spending that would increase the deficit. Tax cuts and 
increased spending either had to be paid for or face a 60-vote point of 
order. Back in the nineties, the budget discipline of pay-go helped us 
turn record deficits into record surpluses. But the pay-go rule we have 
now has lost its teeth. What we are left with is a pale reminder of 
what pay-go used to be.
  The current pay-go rule exempts all policies assumed in every budget 
resolution. As a result of these changes, the budget resolution this 
year advocated borrow-and-spend policies. Here is what our current 
fiscal picture looks like: record budget deficits as far as the eye can 
see; an ocean of red ink. That is where we are now, and that is where 
we are headed.
  In this year's budget, the majority paved the way for these 
reconciliation bills that are before us now that will actually increase 
the budget deficit. How? By shaving $39 billion of spending over 5 
years, but then by cutting revenue $70 billion. The combined effect is 
to increase the deficit by $31 billion, and we already have record 
deficits. The whole idea of reconciliation was to provide fast-track 
protection to deficit reduction. Now it has been hijacked, and they are 
using these special provisions and special protections to increase the 
deficit. It is a perversion of the process.
  Federal Reserve Chairman Alan Greenspan opposes tax cuts that are 
financed by increasing the deficit. Here is what he told Congress last 
year.
  Question from Congressman Spratt:

       Let me ask you this. You said you were for extension of the 
     original pay-go rule, which would apply to tax cuts as well 
     as to entitlement increases. Does that mean you would advise 
     us that as we approach these sunsets and expirations in 
     existing tax cuts, that they be offset before the renewal be 
     passed?

  Mr. Greenspan:

       Yes, sir.

  That is the answer the chairman was perhaps seeking. He wants to 
extend these tax cuts. Many of them I do as well. But I want to pay for 
them. That is what pay-go provides. Here is what the Fed Chairman had 
to say on the question of restoring the original pay-go: ``Yes, sir,'' 
when asked a direct question if we should restore pay-go. Earlier this 
year in testimony before the House Budget Committee, Chairman Greenspan 
again reiterated his support for fully offsetting the costs of all tax 
cuts:

       If you're going to lower taxes, you shouldn't be borrowing 
     essentially the tax cut. And that over the long run is not a 
     stable fiscal situation.

  That is what we are doing here: Put it on the charge card, run it up, 
borrow the money. Where are we borrowing it? Increasingly we are 
borrowing it from abroad. Under this President, we have increased our 
debt held by foreign countries by over 100 percent. It took 42 
Presidents 224 years to run up a trillion dollars of external debt. 
This President has doubled it in 4 years. That is an utterly 
unsustainable course.
  Chairman Greenspan said before the House Budget Committee earlier 
this year:

       All I'm saying is that my general view is that I like to 
     see the tax burden as low as possible. And in that context, I 
     would like to see tax cuts continued. But, as I indicated 
     earlier, that has got to be, in my judgment, in the context 
     of a pay-go resolution.

  That is what we are offering today, a pay-go resolution. You can have 
more spending; you have to pay for it. You can have more tax cuts; you 
have to pay for them. That is the budget discipline we had earlier in 
the nineties, and it worked well in drawing us out of record deficits 
and back into surplus.
  In the past, the chairman of the Budget Committee has agreed with the 
Fed Chairman's wise counsel. During the fiscal year 2002 supplemental 
bill, the Budget chairman had this to say. This is Chairman Gregg:

       The second budget discipline, which is pay-go essentially 
     says if you are going to add a new entitlement program or you 
     are going to cut taxes during a period, especially of 
     deficits, you must offset that event so that it becomes a 
     budget-neutral event that also lapses.

  He went on to say:

     . . . If we do not do this, if we do not put back in place 
     caps and pay-go mechanisms, we will have no budget discipline 
     in this Congress and, as a result, will dramatically 
     aggravate the deficit which, of course, impacts a lot of 
     important issues, but especially impacts Social Security.

  The Budget Committee chairman was right then, and if he took the same 
position now, he would be right now because the measure we are offering 
is pay-go. If you want to have new spending, pay for it. If you want to 
have more tax cuts, pay for them. That is critically important given 
the fact that the deficits and debt are going up, up, and away under 
this underlying budget resolution.
  What we are offering today eliminates the pay-go loophole. The 
current pay-go rule exempts all tax cuts and mandatory spending 
increases assumed in any budget resolution, no matter how much they 
increase deficits. Our proposal is to go back to what has worked in the 
past. It is traditional pay-go. It says all mandatory spending and all 
tax cuts that increase deficits must be paid for or they have to get a 
supermajority vote of 60 votes.
  Mr. President, I yield to my colleague from Wisconsin such time as he 
may use.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I am very pleased to cosponsor the 
amendment that will be offered by my good friend, the Senator from 
North Dakota. There is no Senator more dedicated to a fiscally 
responsible Federal budget and to restoring sound budget rules than 
Senator Conrad. I have had the pleasure of watching him do his work, 
now in his 13th year of leadership on this issue. He is an acknowledged 
expert on the budget and the rules that govern its consideration.
  You don't actually have to be a Kent Conrad to understand the pay-go 
rule. As he said, it is very straightforward. It is a commonsense 
requirement. Whenever Congress wants to spend money through 
entitlements or the Tax Code, we have to pay for it. That rule, as he 
pointed out in the past few minutes, has been an effective restraint on 
the appetites of Congress and the White House, and it was absolutely 
critical to our ability and success in balancing the Federal books 
during the 1990s.
  It is no coincidence that when this body stopped following that rule, 
the bottom dropped out from under the budget. Four and a half years 
ago, the Congressional Budget Office projected that in the 10 years 
thereafter, the Government would run a unified budget surplus of more 
than $5 trillion. Now we are staring at what is almost a mirror image 
of that 10-year projection, except instead of healthy surpluses under 
any reasonable set of assumptions, we are now facing immense deficits 
and backbreaking debt.
  This has to stop. Running deficits causes the Government to use the 
surpluses of the Social Security trust fund

[[Page 24319]]

for other Government purposes rather than to pay down the debt and help 
our Nation prepare for the coming retirement of the baby boom 
generation.
  As Senator Conrad has noted, it isn't just the annual budget deficits 
that are the problem, it is our debt. Every dollar we add to the 
Federal debt is another dollar we are forcing our children to pay back 
in higher taxes or fewer Government benefits.
  As I noted before during the pay-go debates we have had over the 
years, when the Government in this generation chooses to spend on 
current consumption and to accumulate debt for our children's 
generation to pay, it does nothing less than rob our children of their 
choices, to which I think they should be entitled, just as we have 
been. We make our choices to spend on our wants, but what we are doing 
here is saddling them with the debts they must pay from their tax 
dollars and their hard work, and that is not right.
  That is why I am proud to join Senator Conrad in offering this 
amendment to reinstate the pay-go rule. We need a strong budget 
process. We need to exert fiscal discipline. When the pay-go rule was 
in effect, that tough fiscal discipline governed the budget process. 
Under the current approach, it is exactly the other way around. The 
annual budget resolution determines how much fiscal discipline we are 
willing to impose on ourselves and that, obviously, simply has not 
worked.
  When Congress decides it would be nice to create a new entitlement or 
enact new tax cuts, and then adjusts its budget rules to assist those 
policies, we are inviting a disastrous result. And that is exactly what 
we have seen happen.
  As I noted during the budget resolution, if you want to lose weight, 
you set the total calories you are allowed to consume first, and then 
you make the meals fit under that cap. It is not the other way around. 
Imagine trying to lose weight by deciding what you want to eat first 
and then setting the calorie limit to accommodate your cravings. If you 
want to eat cake, fine; dial up the limit on your calorie intake. If 
you want a couple of extra beers--which, of course, in Wisconsin we are 
fond of--that is fine, too. Raise the calorie limit accordingly.
  It may taste pretty good at the time but one will probably almost 
certainly end up gaining weight, just like this Nation is racking up 
debt.
  Because this ill-advised diet is exactly how the current mutated 
version of pay-go works, and we have seen the results, the debt we are 
leaving our children and grandchildren that we will have has been 
putting on massive amounts of weight. This amendment that the Senator 
from North Dakota will offer would simply return us to the rule under 
which Congress operated for the decade of the 1990s.
  As the Chair well knows, it was instrumental in balancing the Federal 
budget. Many of us lived under that rule, and we know how effective it 
was. This amendment is a truth test. Our colleagues who are genuinely 
serious about reducing the deficit and returning to a balanced budget 
will vote for it.
  A real pay-go rule by itself will not eliminate the annual budget 
deficits and balance the budget, but we also know that we will never 
get there without a real pay-go rule.
  I, again, thank Senator Conrad for his leadership on this and the 
other critical budget issues and I strongly urge my colleagues to 
support his commonsense, time-tested amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank my colleague, Senator Feingold, 
one of the most valued members of the Budget Committee, somebody who 
has been absolutely consistent on these issues and who has tried over 
and over to get the pay-go rules reinserted so we would have some 
assistance in restoring budget discipline.
  I told a reporter the other day I have never seen this town so 
disconnected from reality as it is today. We have a measure before us 
that they call deficit reduction in the first chapter when we all know, 
if we read the whole book, it has nothing to do with deficit reduction. 
It is explosion of debt. Because by the time we get to the third 
chapter, what we find out is they are going to increase the debt by 
$781 billion all the while they are talking about reducing the deficit. 
It is like words have lost their meaning. It is as though, what is the 
book, ``1984,'' George Orwell--war is peace, love is hate, deficit 
reduction is deficit increase. This labeling ceases to have meaning 
when people come out and say they are doing one thing, when they are 
doing precisely the opposite thing.
  It is going to be hard to fool people about this because people know 
we have big deficits. The last three deficits are the biggest in our 
history and people know the debt is increasing. They may not know the 
exact numbers, but they know the debt is not going down; the debt is 
going up. The hard reality is this budget package that is steaming 
through is going to increase the debt of the United States by $3 
trillion over the next 5 years and that is by their own calculations. 
That is not my calculation. That is not the calculation of Senator 
Feingold. That is their own budget document's calculation. It says they 
are going to increase the debt $3 trillion. They are talking about over 
the same period of time a $39 billion spending cut, which is chapter 1. 
Chapter 2 is they cut the revenue $70 billion, so now they have 
increased the deficit. Chapter 3, they are going to increase the debt 
by $781 billion. That is just one year. The 5-year effect of their 
budget, and this is all part of the package, is to increase the debt $3 
trillion, and they are going to spend a week talking about how they are 
reducing the deficit.
  One of the best things we can do is restore the pay-go rules. Pay-go 
rules say if one wants to spend more money, pay for it; want more tax 
cuts, pay for them. That is a rule we ought to have. That is a rule we 
used to have. That is a rule that helped. It was not the only thing 
that worked, but it helped.
  I hope very much that this body will adopt the pay-go provision we 
are putting before them.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I have been listening to this debate, and my 
least favorite part of being in the Senate is probably the floor debate 
that we have because it is rhetoric. It is not the substance that we 
ought to be debating on the Senate floor.
  What we are talking about right now is an omnibus deficit reduction 
reconciliation bill, and it has $39 billion worth of savings in it. One 
can go ahead and talk about other legislation that will come up later 
and add those in different directions and come up with different 
numbers, but what we are talking about right now is deficit reduction. 
We spent a lot of time and a lot of effort to get it that way. Much of 
it is bipartisan, but we will not hear that kind of discussion on the 
floor probably. One will from me because I want to give some credit to 
the people who have worked with me on arriving at the biggest part of 
this reconciliation package in a very bipartisan way.
  Senator Kennedy is the ranking member on the HELP committee, and my 
committee had responsibility for $13.65 billion in spending cuts over 5 
years. We not only met that goal, we exceeded that goal. I want to say 
a little bit about how we did it. We did it in several areas. One of 
them is higher education. We provided more for kids going to college 
while we also provided savings. In the pensions area, we reduced 
potential outlays, and that saves money. In the area of FDIC reform, we 
reduced outlays so that we had savings so that we could provide for 
insurance for people at their retirement time that will aid 
communities. I will talk about all of that as we go along. I would like 
to begin by commending Leader Frist and Chairman Gregg for keeping the 
budget reconciliation process on track this year. Our shared commitment 
to meaningful deficit reduction is the reason that this package is on 
the floor this week. The omnibus deficit reduction reconciliation bill 
of 2005, which is S. 1932, is an ambitious step toward meaningful 
deficit reduction.

[[Page 24320]]

  The budget agreement that Congress approved in April requires eight 
authorizing committees to produce $34.7 billion in spending cuts. As 
chairman of the Committee on Health, Education, Labor, and Pensions, 
that is a big bite of the apple, but it is not when it comes to the 
budget spending. My committee received the largest reconciliation 
instruction. It was $13.65 billion in spending cuts over 5 years. That 
is nearly 40 percent of the overall target. I am pleased to report that 
we exceeded that target and reported legislation with a net savings of 
$16.4 billion over 5 years.
  That is an additional $2.75 billion beyond HELP's reconciliation 
target. So there is a significant amount of extra savings in the 
health, education, labor, and pensions component of this package, title 
VII, which I will discuss momentarily.
  Now, 2 weeks ago, the HELP Committee reported a bipartisan bill that 
garnered support from four Democrats, in addition to all of the 
committee Republicans. We achieved this savings in several ways. One 
was the Higher Education Act reauthorization. It has been held up for 
some period of time because we are trying to identify proper funding 
levels, and reform programs so that more people can get more training. 
This will ultimately lead to students obtaining better skills, 
resulting in fewer jobs being outsourced. It is not just a college age 
situation. It is a college age-to-retirement situation and it includes 
careers. We addressed that separately in the Workforce Investment Act 
reauthorization. That separate bill passed 20 to 0 in the committee. So 
it was unanimous and unanimously bipartisan.
  I also mentioned that the HELP Committee passed a bipartisan pension 
bill that garnered support from both sides of the aisle, but it was not 
unanimous. I have to explain why. We also have to solve the pension 
problem in this country so that people who have earned pensions get the 
pensions. We have worked on a comprehensive pension package. In fact, 
we passed a comprehensive pension package in the HELP committee and 
then we merged it with a comprehensive pension reform bill from the 
Finance Committee. We have to go through the process of getting that 
bill through on the floor and then conferencing it with the House who 
have yet a third version of the bill. I am hoping that we can do that 
full package that way. But in that part of the process, when we were 
doing that bill as a stand-alone bill, there was one section in there 
that dealt with some hybrid forms of pension plans. I had one person on 
one side of the aisle who did not think we had gone far enough and one 
person on the other side of the aisle who thought we had gone too far. 
So we had two dissenting votes on that whole package.
  When we take the pension reconciliation to the floor, as we are doing 
right now, we are not able to do the comprehensive pension package that 
we had reported previously. We are limited to reducing the outlays, 
which means increasing the fees. That would not be my preference for 
the way to go. There is a little provision in there that says that if 
we pass a complete reform, it will supersede what we are doing in 
reconciliation. I am assuming, and am pretty sure, the dissenting votes 
that we had when we worked the reconciliation package out of committee, 
which was both a combination of the education package and the pensions 
package, that the dissension was over having to raise fees in the 
pension part of the package. Otherwise, if it had been, again, just a 
stand-alone on the education part, I am pretty sure we would have had a 
unanimous, bipartisan vote. But we did have people from both sides of 
the aisle, in what I consider to be fairly significant numbers, 
supporting this. Writing this package has been a challenging process 
because it has required months of bipartisan negotiations. Spending 
reconciliation bills involve tough choices, about which programs to 
responsibly reform and how to reinvest subsequent savings, while still 
meeting deficit reduction goals. I am pleased about the role that the 
Health, Education, Labor, and Pensions Committee has played in this 
process.
  I would like to briefly walk through the Health, Education, Labor, 
and Pensions title of the reconciliation bill. The HELP Committee's 
title has two components, as I mentioned, one dealing with higher 
education, the other with pensions. The higher education provisions in 
the reconciliation legislation are similar to the comprehensive higher 
education reauthorization bill that the HELP Committee agreed to 
unanimously in September, as I mentioned.
  In addition to exceeding our reconciliation target, the title VII of 
the legislation provides additional benefits to students and 
strengthens access to higher education. Now, I have to say that one of 
the ways that we worked enthusiastically on doing this was when we were 
doing the budget process and outlining how much had to be saved by the 
various parts. First, in the pension area, we worked hard to come up 
with a reasonable number that could happen without businesses being put 
out of business. We wanted to do it so that people would be encouraged 
to continue pensions. I think that we have done that.
  In the education portion, I asked the chairman of the Budget 
Committee if we could not work a little deal where if we saved more 
than the $7 billion that we were required under the budget act to save, 
if we could not have half of what we saved, with it really not starting 
until we got to the $7 billion. We had to get to $7 billion but if we 
got to $14 billion we would get half.
  That gave us some incentive to look at what is actually happening in 
the higher education area and see ways that we could save.
  I appreciate the enthusiastic participation of everybody on the 
committee and their staff because that is what allows these things to 
happen.
  I have to tell you that the largest part of this, of course, comes 
from ending some corporate subsidies.
  Title VII of the reconciliation bill reduces the deficit by $9.8 
billion over 5 years. That is an additional $2.8 billion beyond the 
committee's $7 billion higher education savings target.
  This also provides over $8 billion in increased grant assistance for 
low- and middle-income students, including $2.25 billion targeted to 
juniors and seniors in college majoring in math and science subjects or 
foreign language critical to national security. That is a junior-senior 
package for low- and middle-income students that will, I hope, bridge 
the gap that we are beginning to have with China and India on having 
people who are technically capable of keeping our economy growing.
  Again, I want to emphasize that is $8 billion of increased grant 
assistance for low- and middle-income students. I don't think I used 
the word ``rich'' students in there. Did I? No, low- and middle-income 
students with a special target of math, science, and foreign languages 
critical to national security. We have to do something in this country 
to launch a greater interest in math and science if we are going to 
maintain the economic edge that we have at the present time. Our kids 
have to realize there is competition out there, that there are people 
who want their jobs, that there are people out there who want to be the 
employer of Americans, not the employee of Americans.
  We have the $8 billion in increased grant assistance for low- and 
middle-income students.
  It also reduces borrower origination fees which will benefit the 
students who finance some or part of their education through loans. 
That is a cost of $1 billion.
  It incorporates language to provide financial relief to students 
impacted by Hurricane Katrina, including cancelling loans disbursed in 
the 2005-2006 academic year to students in impacted areas. That is a 
cost of $105 million.
  Those are loans that could be difficult to use in light of the 
hurricane. But it takes care of that part.
  We have an interest in doing some other things and need to do some 
other things with it yet.
  But that is an outline of how cumulatively the higher education 
reforms save approximately a net of $9.8 billion, bringing the total 
deficit reduction in the package to $16.4 billion over 5 years.

[[Page 24321]]

  I want to emphasize that those things are paid for that we talk about 
there.
  The second component of the HELP Committee title addresses premiums 
to the Pension Benefit Guaranty Corporation, PBGC. The understanding 
when the resolution was adopted in April was that an additional $6.65 
billion in deficit reduction would be achieved through pension reforms. 
It continues to be my hope that these savings can be accomplished in a 
bipartisan fashion outside of reconciliation. In reconciliation, 
however, we are in a position to only raise the PBGC premium instead of 
also addressing the funding rule that will ultimately determine plan 
solvency. In other words, this could drive more people into bankruptcy. 
But it is the best that we can do under the rules we have under budget 
reconciliation.
  This legislation makes three changes to the current law that will 
generate approximately $6.7 billion in savings over 5 years. Here is 
how it does it.
  It first increases the flat-rate premium paid by all single-employer 
plans, and it increases it from $19 to $46.75 per participant and 
indexes the increase to wage inflation.
  Next, it raises the participant premium for multi-employer plans from 
$2.60 to $8 immediately, and likewise indexes the increase to wage 
inflation.
  Third, it includes a new premium requiring companies to terminate 
their defined benefit plans through bankruptcy to pay a premium of 
$1,250 per participant for 3 years but only after the company 
successfully emerges from bankruptcy.
  Why did we do that third part? That should be a part of coming out of 
bankruptcy--to repay some of the money that had to be potentially paid 
out, and paid out during the time the company was going through 
bankruptcy. But if we don't do that third part, what we were faced with 
doing was going with the singly-employer plan, flat-rate premium going 
from $19 to $59. We were able to keep it back at $46.75. Under the 
comprehensive bill, again, which I prefer to do, but it is not an 
option at this point in time, that would raise the premium to only $30 
per participant. That is still a pretty significant rate, $19 to $30 
per participant. And the reconciliation measure before us raises the 
premium to $46.75 per participant.
  There are savings under the comprehensive reform, but this meets the 
requirements of getting to that $6.7 billion with the assurance that 
PBGC will be able to meet its payments as people's retirements come up 
who have been relegated to that system.
  The short answer to why the premium was raised so high is we do not 
have as many legislative options in reconciliation as we have outside 
reconciliation. But it has to be done. This is one of the two to get it 
done. None of us want this premium ultimately to be enacted into law. 
Adopting a comprehensive reform will solve that problem. But for now, 
the premium of $46.75 is the ``least bad'' option that we face.
  To be clear that this premium label will be reduced, the bill 
language includes a special rule that the premiums contained in the 
reconciliation bill shall not go into effect if comprehensive pension 
reforms that accomplish the same savings are enacted before the end of 
this year. It is a pretty tight timeline.
  I would also like to address some of the additional titles in the 
reconciliation package.
  Two weeks ago, the Senate Banking Committee passed a budget 
resolution package that included S. 1562, the Safe and Fair Deposit 
Insurance Act of 2005. That is a bill that I introduced this year along 
with Senators Johnson, Hagel, and Allard. S. 1562 gained the support of 
a wide majority of Republicans and Democrats on the Banking Committee 
before the markup. It is also supported by the Department of the 
Treasury and the FDIC. I believe passing S. 1562 is crucial for the 
healthy operations of our Nation's banks and credit unions. The current 
FDIC system is in desperate need of improvement. Over the past 20 
years, deposit insurance has been eroded by inflation and growing 
deposits falling to the dangerously low levels we have today. S. 1562 
would give the FDIC statutory authority to make the deposit insurance 
fund healthy again, and in a way that accounts for the riskiness of 
each of the institutions it insures.
  This bill is very important to keep the retirement funds and savings 
of Americans safe. In our rural towns and communities, depositors 
depend upon their local credit union or their local bank to deposit 
their hard-earned money. These financial institutions, in turn, lend 
money to local businesses and invest in their communities. This 
relationship benefits the customer, the institution, and the community. 
My bill would ensure that this relationship can continue into the 
future, adapting to changing economic cycles or unexpected crises.
  I am also pleased the Senate Energy Committee included provisions to 
meet its budget reconciliation target that allows for responsible 
exploration in ANWR. With the energy crises our Nation faces, it is 
imperative that we make the most of our domestic supply. Wyoming is 
contributing dramatically to that supply but nothing like what could be 
done with ANWR. ANWR is a world-class resource, and with proper 
protections in place--and there are proper protections--we can recover 
the resource without damaging the area.
  While the ANWR provisions will help our Nation's energy crisis, 
another rumored provision threatens to further burden consumers and 
burden an important industry in my State. Fortunately, the Judiciary 
Committee did not include a tax on explosives to meet their 
reconciliation goal. Such a tax would have been extremely costly to the 
mining industry and, in my view, did not make sense. The committee's 
decision to use other methods to meet their reconciliation number 
ensures that in this energy crisis consumers are not forced to pay even 
more to heat their homes and keep on the lights.
  I want to reiterate just a little bit that in this budget 
reconciliation package the biggest part of the heavy lifting comes from 
Health, Education, Labor and Pensions.
  We worked in a bipartisan way to provide for higher education and 
additional benefits for low- and middle-income students, and for 
juniors and seniors in that low- and middle-income situation to provide 
even more, if they will do math and science to meet some critical needs 
for their country. We have taken care of pensions.
  There are some important things in this bill that should not be 
confused with other bills or other times. There are some very 
significant things that can happen if we can get this done. They can 
happen immediately for many of our college students.
  I will work as much as possible to make sure that any savings that 
come from education go to education.
  I really think that is the way it has to be. That is the principle 
under which my committee worked to make sure that we had the incentive 
for savings.
  In closing, I look forward to working with my colleagues this week 
and in conference to complete work on this important legislation.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from North 
Dakota.


                             Amendment 2351

  Mr. CONRAD. Mr. President, I ask unanimous consent to lay aside the 
pending amendment and to call up my amendment on pay-go, which is at 
the desk.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from North Dakota [Mr. Conrad], for himself, 
     Mr. Nelson of Florida, and Mr. Feingold, proposes an 
     amendment numbered 2351.

  Mr. CONRAD. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To fully reinstate the pay-as-you-go requirement through 
                                 2010)

       At the end of title VI, insert the following:

     SEC. __. PAY-AS-YOU-GO POINT OF ORDER IN THE SENATE.

       (a) Point of Order.--

[[Page 24322]]

       (1) In general.--It shall not be in order in the Senate to 
     consider any direct spending or revenue legislation that 
     would increase the on-budget deficit or cause an on-budget 
     deficit for any 1 of the 3 applicable time periods as 
     measured in paragraphs (5) and (6).
       (2) Applicable time periods.--For purposes of this 
     subsection, the term ``applicable time period'' means any 1 
     of the 3 following periods:
       (A) The first year covered by the most recently adopted 
     concurrent resolution on the budget.
       (B) The period of the first 5 fiscal years covered by the 
     most recently adopted concurrent resolution on the budget.
       (C) The period of the 5 fiscal years following the first 5 
     fiscal years covered in the most recently adopted concurrent 
     resolution on the budget.
       (3) Direct-spending legislation.--For purposes of this 
     subsection and except as provided in paragraph (4), the term 
     ``direct-spending legislation'' means any bill, joint 
     resolution, amendment, motion, or conference report that 
     affects direct spending as that term is defined by, and 
     interpreted for purposes of, the Balanced Budget and 
     Emergency Deficit Control Act of 1985.
       (4) Exclusion.--For purposes of this subsection, the terms 
     ``direct-spending legislation'' and ``revenue legislation'' 
     do not include--
       (A) any concurrent resolution on the budget; or
       (B) any provision of legislation that affects the full 
     funding of, and continuation of, the deposit insurance 
     guarantee commitment in effect on the date of enactment of 
     the Budget Enforcement Act of 1990.
       (5) Baseline.--Estimates prepared pursuant to this section 
     shall--
       (A) use the baseline surplus or deficit used for the most 
     recently adopted concurrent resolution on the budget; and
       (B) be calculated under the requirements of subsections (b) 
     through (d) of section 257 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 for fiscal years beyond 
     those covered by that concurrent resolution on the budget.
       (6) Prior surplus.--If direct spending or revenue 
     legislation increases the on-budget deficit or causes an on-
     budget deficit when taken individually, it must also increase 
     the on-budget deficit or cause an on-budget deficit when 
     taken together with all direct spending and revenue 
     legislation enacted since the beginning of the calendar year 
     not accounted for in the baseline under paragraph (5)(A), 
     except that direct spending or revenue effects resulting in 
     net deficit reduction enacted pursuant to reconciliation 
     instructions since the beginning of that same calendar year 
     shall not be available.
       (b) Waiver.--This section may be waived or suspended in the 
     Senate only by the affirmative vote of \3/5\ of the Members, 
     duly chosen and sworn.
       (c) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this section shall be 
     limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     \3/5\ of the Members of the Senate, duly chosen and sworn, 
     shall be required to sustain an appeal of the ruling of the 
     Chair on a point of order raised under this section.
       (d) Determination of Budget Levels.--For purposes of this 
     section, the levels of new budget authority, outlays, and 
     revenues for a fiscal year shall be determined on the basis 
     of estimates made by the Committee on the Budget of the 
     Senate.
       (e) Sunset.--This section shall expire on September 30, 
     2010.

  Mr. CONRAD. Mr. President, I also ask unanimous consent that the 
Democratic leader be recognized when the Senate reconvenes at 2 p.m.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, I now yield 10 minutes to the Senator from 
Florida, Mr. Nelson, who is a very important member of the Senate 
Budget Committee. Senator Nelson has been one of the most consistent 
Members on the Budget Committee, insisting on a return to fiscal 
discipline. I very much appreciate his leadership on this pay-go 
amendment, which is an attempt to restore the basic budget discipline.
  The PRESIDING OFFICER. Does the Senator from North Dakota yield time 
off general debate or the amendment?
  Mr. CONRAD. I will yield time off the amendment.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. NELSON of Florida. Thank you, Mr. President.
  As we judge this question of whether we have any fiscal sanity here, 
I thought, in the old days, when I came here 27 years ago and was a 
freshman member of the House Budget Committee, that fiscal conservatism 
was that we tried to balance the budget and that we did so through the 
very painful process of spending cuts and tax increases.
  Yet we have been on a course since I came back to Washington 5 years 
ago, having entered into a fiscal condition of this country where we 
had a very healthy surplus, that is exactly the opposite. We have gone 
on a course that calls for tax cuts and spending increases, and, ``va-
boom,'' suddenly the big surplus has vanished. We have a huge deficit 
and a huge deficit that is projected for years into the future to add 
to the national debt by some $5 trillion over the course of the next 
decade.
  Is it any wonder that some economic sectors of the economy are 
getting a little shaky? I can tell you that the demands on spending are 
not going to subside.
  I just came back from Florida yesterday, from a very poor section of 
Florida that got hit with winds clocked as high as 158 miles an hour 
coming off of Lake Okeechobee at Belle Glade and Pahokee and South Bay. 
And those communities are devastated. They need help in jobs. They need 
help with infrastructure. They need help with trying to exist.
  Yet we are facing a budget brought to the Senate today to cut social 
programs in order to finance additional tax cuts. Something is wrong 
with this picture. It is not bringing America back to the fiscally 
conservative position of moving toward balancing the budget.
  We had a fiscal year ending with a deficit of over $400 billion. We 
are moving to a deficit in this fiscal year of over $300 billion and 
all of that is adding to the national debt.
  We have a budget that, in fact, is providing $39 billion in savings, 
but next week we will consider a budget that is going to take away all 
of those savings with $70 billion in tax cuts, for a net of $31 billion 
more in debt. Is this the kind of fiscal policy we ought to be 
conducting and an annual deficit that keeps going up and up, that took 
us out of surplus, and is taking us into the red more and more with the 
national debt? I don't think so.
  I thank my former chairman and the ranking member, the distinguished 
Senator from North Dakota, who says this Senator has been consistent in 
saying exactly this. It seems it is wrongheaded and reverse 
conservative economics.
  When we look at where some of these spending cuts are coming from, 
they are coming from student loans, $7 billion in cuts and increased 
fees. By the way, I visited two of our State universities this past 
weekend, visiting with the administration of two of the distinguished 
universities in Florida. Florida tuition rates are going up. The 
minority communities, particularly in Historically Black Colleges, are 
having a very difficult time. They have dropping enrollment because 
those students are not able to get the financial assistance. Is this 
the equal opportunity society we want for America? I don't think so. 
Why are we cutting student loans?
  The ability of America to be competitive in the global marketplace 
depends on us having an educated public. So we are adopting, if this 
budget is passed, a policy that says we do not think student loans and 
financial assistance are a priority. That is like the farmer who goes 
out and eats his seed corn and then he doesn't have any corn the next 
year to plant for the crop. This is not the kind of policy we should 
have.
  On the other side of the Capitol, the House has cuts in their budget 
that will come to conference, and of course they will insist in 
conference committee that their cuts prevail--food stamps, cut $844 
million. They had $9.5 billion cut in Medicaid, the health care program 
for the poor. Food stamps, the food program for the poor. Child support 
enforcement, $5 billion cut in the House.
  I thought we were in a society that wanted to encourage going after 
deadbeat dads to support their children. Are we going to cut this 
enforcement of child support? That is what is coming over from the 
House. Federal foster care assistance; how many children do we have 
today who need foster care? We need to promote adoption, but we

[[Page 24323]]

do not get all of the adoptions completed. There are children who need 
homes. And we are going to cut that Federal support for foster care?
  Somehow if we continue down the line of this kind of thinking, we are 
continuing to push this country to a country of haves and have-nots. 
That is not where we want to go. I am going to offer an amendment next 
week when we have the tax section of this budget reconciliation to say 
if we are going to have tax cuts, true fiscal conservatism, we are 
going to have to pay for them. What the American people want, if we are 
going to have spending increases and if we are going to have additional 
tax cuts--which is the drop in revenue the American people want--is for 
spending increases and tax cuts to be paid for. We have one right here. 
It is Senator Conrad's amendment. We will have another one next week 
and it will be my amendment. Let's start supporting some fiscal 
conservatism around here.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank the Senator from Florida for his 
remarks. I thank him, as well, for his leadership. I have thought many 
times I wish there were more Bill Nelsons in the Senate because he has 
been a very strong voice on fiscal responsibility and in paying our 
bills and not shoveling the debt off to our kids and not continuing 
this policy of borrowing more and more money from abroad.
  Is the Senator seeking recognition to respond?
  Mr. ENZI. I was going to offer an amendment Senator Kennedy will want 
to speak on. We are working here together.
  Mr. CONRAD. Mr. President, parliamentary inquiry: At this point we 
are on the pay-go amendment. It would require consent, would it not, to 
lay aside the pending amendment?
  The PRESIDING OFFICER (Mr. Allen). That is correct.
  Mr. CONRAD. If I might say to my colleague, if we could go to Senator 
Kennedy, he has only requested 5 or 10 minutes, and then at that point 
we could consider the amendment.
  Mr. ENZI. I have no problem.
  Mr. CONRAD. Senator Kennedy is recognized for 10 minutes.
  Mr. KENNEDY. Seven minutes is fine.
  Mr. CONRAD. I yield 7 minutes or the time the Senator might consume.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I commend the Senators from North Dakota 
and from Florida, my colleagues, who have spoken so eloquently about 
the fundamental challenge facing this Nation in terms of its 
priorities. They have outlined in significant detail the choices before 
this country. We will define the priorities this week and next week in 
allocating scarce resources for this Nation. They have spoken very 
clearly, effectively and convincingly. I intend to support their 
leadership on the underlying legislation.
  A few hours ago I had the opportunity with my friend and colleague, 
the chairman of the Subcommittee on Appropriations for Labor, Health 
and Human Services and Education, Senator Specter, to attend at NIH the 
President's announcement of his program on the avian flu virus. This is 
an issue which the Senate has also, appropriately, focused on.
  We have had a number of colleagues very much involved in this debate, 
led by my friend, the Senator from Iowa, Senator Harkin, including 
Senator Obama from Illinois, Senator Reid from Nevada, Senator Bayh 
from Indiana, and Senator Durbin from Illinois. Others have been very 
much involved in this issue, including the majority leader and others.
  Last week, the Senate appropriated $7.9 billion to develop the 
vaccines, antivirals, global detection system, surge capacity, and 
other priorities necessary to protect the public health. The President 
reiterated strong support for those efforts. Global detection is a high 
priority; the ability to detect locally in the United States, a high 
priority; the development of vaccines, a high priority; the development 
of antivirals, a high priority; and cell research, a high priority, so 
we can have an alternative in the development of vaccines as opposed to 
research on eggs which have been used in the past.
  We have, at last, a proposal by the administration on how we ought to 
deal with the avian flu. I commend the leadership provided by the 
chairman of our HELP Committee, Senator Enzi, and also Senator Burr, 
who has been very involved and active in developing legislation, 
including incentives to attract new investment into developing and 
stockpiling antivirals and vaccines.
  Hopefully, we will be able to work out a system by which those, 
particularly the first responders, who take the vaccines or antivirals 
and suffer adverse consequences will have some opportunity for 
compensation. We also want to make sure the companies are going to 
reproduce these products in ways which meet high standards, and we are 
in the process of doing that.
  Senator Enzi and Senator Burr have been working on this issue for 
some time. We have all enjoyed working with them. We will all examine 
carefully the details of the President's preliminary proposal. The 
Senate is on record now, voting for $7.9 billion for these endeavors. 
This has been an enormously important undertaking.
  The President has talked about $7.1 billion; the Senate passed the 
Harkin proposal for $7.9 billion; and Senator Gregg has offered $4.4 
billion. The appropriations will have to be worked on through. Under 
the leadership of Senator Harkin, the Senate has responded to this 
challenge with a very effective downpayment. We certainly look forward 
to working with the administration on the proposal we have just 
received.
  As we talk about priorities for this country, I also want to mention 
the achievement of our Committee on Health, Education, Labor and 
Pensions under the leadership of Senator Enzi. The bill we reported 
significantly and dramatically increases need-based aid and other 
benefits for students struggling to afford college. The bill includes 
$11.5 billion in new funding for this purpose, and still meets the 
reconciliation target for savings mandated by the Committee on the 
Budget. The House did not follow that pattern.
  The House did not follow the pattern of the Senate. But we will see 
an increase from $4,050 to $4,500 in the maximum grant for Pell-
eligible students. That is an extraordinary achievement and 
accomplishment. As one who has been out here, even recently, trying to 
get an increase of $200 in the Pell grants, to know this is going to be 
achieved--a $450 increase--is enormously important. Then there are the 
additional kinds of programs that will provide some $1,500 on top of 
that for Pell-eligible students studying math and science and high-need 
foreign languages. It is really a downpayment, in a very important way, 
in improving the nation and making the nation more competitive in math 
and science.
  So I certainly hope our colleagues will get a chance to examine 
exactly what we did on the higher education proposals. There are some 
items that I might have altered or changed, but I think the overall 
results on this will be enormously important to students.
  Mr. President, how many minutes do I have remaining?
  The PRESIDING OFFICER. The Senator from Massachusetts has 15 seconds 
remaining.
  Mr. KENNEDY. Mr. President, I ask the Senator, may I have 2 more 
minutes?
  Mr. CONRAD. Mr. President, I am happy to yield an additional 2 
minutes to the Senator.
  Mr. KENNEDY. Finally, when we are talking about the substance of the 
matter on education and what has been achieved, we also want to be very 
conscious of the fact that some 370,000 children in the Gulf area--in 
Louisiana, Mississippi, and Alabama--were displaced by the hurricanes. 
We know there has been an enormous upheaval in these children's lives. 
We have not, to this date, provided help and assistance to those 
children and to the schools that are trying to educate those children.
  I certainly hope in this reconciliation bill we have the opportunity 
to provide

[[Page 24324]]

a downpayment to help those children. We have listened to the eloquence 
of the Senators from Louisiana, from all the Senators from the gulf 
region, but particularly the Senators from Louisiana, Mary Landrieu and 
David Vitter--others as well--on this issue. But I would hope from the 
eloquence and the sense of need that has been outlined on the floor, 
and in meetings that all of us have had with Senator Landrieu and 
others about the needs of these children, that we would somehow find 
the opportunity to provide help and assistance to these children in 
this current legislation.
  I see on the floor the former Secretary of Education, Senator 
Alexander, who has fashioned and shaped and worked with us on a 
proposal that can make an important difference to the children in that 
region. I am very thankful to him, and to Senator Dodd, and of course 
to our chairman, Senator Enzi, for all their work on this. I am very 
hopeful we will have an opportunity, this week, to meet our 
responsibilities to these children. These children did not know about 
this hurricane. The hurricane affected children in public schools and 
private schools. I think this is an urgent national challenge in a very 
real way. When children are presented with that kind of a situation, 
common sense, decency, and our values require us to provide help and 
assistance to them. Our children and our schools cannot wait any longer 
for the relief they so obviously and urgently need and deserve. I look 
forward to working with our colleagues to address those particular 
needs this week.
  I thank my colleague, Senator Conrad, for yielding this time.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I ask unanimous consent to set aside the 
pending amendment so I can offer an amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. CONRAD. Mr. President, reserving the right to object, and I will 
not object, I do want to, for the record, indicate we have had a number 
of requests that we move to delay the offering of this amendment. I 
will not do that.
  Senator Enzi has been a very responsible member of the committee. He 
has every right to offer his amendment. The fact is, if he were delayed 
at this point, he could offer his amendment later. So those who are 
seeking to delay might force him into the vote-a-thon, but I believe 
Senator Enzi, who has been a fully responsible member of the committee, 
deserves his opportunity to offer this amendment, and I will not 
object.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2352

 (Purpose: To provide elementary and secondary education assistance to 
    students and schools impacted by Hurricane Katrina and to lower 
                           origination fees)

  Mr. ENZI. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will please report.
  The assistant legislative clerk read as follows:

       The Senator from Wyoming [Mr. Enzi], for himself, Mr. 
     Kennedy, Mr. Alexander, and Mr. Dodd, proposes an amendment 
     numbered 2352.

  Mr. ENZI. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. ENZI. Mr. President, I join my colleagues, Senator Kennedy, 
Senator Alexander, and Senator Dodd, in offering an amendment to S. 
1932, the Deficit Reduction Omnibus Reconciliation Act of 2005.
  As chairman of the committee on Health, Education, Labor, and 
Pensions, my committee received the largest reconciliation instruction 
of $13.65 billion in spending cuts over 5 years. That is nearly 40 
percent of the overall target. I am pleased to report that we exceeded 
that target, and reported legislation that will net $16.4 billion over 
5 years. That is an additional $2.75 billion beyond HELP's 
reconciliation target. So there is a significant amount of extra 
savings in HELP's component of this package--Title VII--which this 
amendment addresses.
  This amendment ensures that extra savings generated from education 
will be returned to education. Let me be clear, additional savings from 
students should be returned to students, just as they are in the other 
part of the reconciliation bill.
  The amendment provides additional relief for students enrolled in 
postsecondary education who take out Federal student loans to pay for 
their education expenses. This amendment also addresses the elementary 
and secondary education challenges faced by the 372,000 schoolchildren 
displaced by Hurricane Katrina, their families, and the schools that 
opened their doors to accommodate the thousands of displaced students.
  I congratulate Senator Alexander for his tremendous work in this 
area. He is in charge of the subcommittee that handles this area and 
did a tremendous job of pulling together different people, different 
opinions, different situations in coming up with a very comprehensive 
amendment that would solve those issues. I have to say, he did that in 
conjunction with Senators Kennedy and Dodd and myself. It was a very 
bipartisan effort.
  There are some very sticky issues in this area that needed to be 
dealt with, and were dealt with, and it will take care of a significant 
body of students that need some significant help to make sure they get 
their education this year. We do not want kids in K through 12 out of 
school. We want them in school. And when we are forcing them on to 
other schools, we want to make sure that is taken care of, too.
  First, I will discuss the additional relief for students enrolled in 
postsecondary education. The Higher Education Act amendments that are 
included in S. 1932 represent a significant boost in need-based grant 
aid for our neediest postsecondary students. Also included is a 
provision to relieve the fees that students pay to borrow under the 
Federal student loan programs.
  The amendment I am offering today provides significant benefits to 
student borrowers, and makes Federal student loans more affordable. The 
amendment would reduce even further those origination fees for 
postsecondary students. The current fee of 3 percent would be reduced 
to 2 percent. Origination fees were originally applied to help reduce 
Federal spending on the guaranteed student loan program. It is time 
that students stop paying these fees to ensure the program's solvency.
  Reducing these fees for students will save dependent students up to 
$500 dollars and will save independent and graduate students even more.
  The average dependent student borrowing under the Federal Family 
Education Loan program or the Direct Loan program currently pays 
several hundred dollars in origination fees. Since the majority of 
students capitalize these fees, they will also pay interest on these 
fees for 10 years or more. Independent students could pay twice as 
much.
  Over the life of the student's loan, these fees and the interest paid 
on them can add up to several thousand dollars, and they do not help 
students pay for tuition. These fees do not make any difference on the 
ability of students to afford college, and in many cases they only 
represent additional expenses.
  This amendment begins to phase out these fees. At the 6.8 percent 
interest rate in the underlying higher education bill, this change 
could save dependent students nearly $500 over the life of their loans. 
Over $125 of that would be interest payments. With this amendment, 
independent students could save more than $1,000 and graduate students 
would save even more.
  This amendment also addresses the elementary and secondary education 
challenges faced by the 372,000 schoolchildren displaced by Hurricane 
Katrina, their families, and the schools that opened their doors to 
accommodate them.
  This amendment includes provisions from the Hurricane Katrina 
Elementary and Secondary Education Recovery Act, which is S. 1904, a 
bipartisan

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compromise that accomplishes the common goal of providing relief to 
support the instruction and services that the students displaced by 
this terrible storm need in order to continue their education, 
regardless of whether it is in a public or nonpublic school.
  Over 300,000 students and their families were displaced by Hurricane 
Katrina. Their lives were disrupted, and they have no sense of when 
they will be able to return to their home communities. With this 
amendment we will be providing one-time, temporary, emergency aid on 
behalf of these students. All of us can agree that these displaced 
students deserve help to continue their education under these 
extraordinary circumstances caused by a disaster of unprecedented 
scope.
  According to the U.S. Department of Education, schools in 49 States 
and the District of Columbia have opened their doors to help students 
displaced by this storm. Nine States have received more than 1,000 
displaced students. Texas has enrolled as many as 60,000 students. The 
Houston independent school district alone enrolled 4,700 displaced 
students, hired 180 new teachers, added 37 new bus route, and ordered 
about 10,000 new textbooks to accommodate them. These statistics 
represent just the tip of the iceberg in terms of the number of schools 
that have accepted displaced students from the Gulf States. 
Approximately 25 to 30 percent of these students were attending 
nonpublic schools, and in their new communities the nonpublic schools 
have opened their doors to these students.
  These States and schools need realistic, fiscally responsible 
assistance from the Congress to accommodate the students they have 
taken into their education system. This amendment will provide the 
relief necessary to support the instruction and other school services 
the displaced students need regardless of the school they are 
attending. Students will get the education services they need so that 
they can return as quickly as possible to their home school district 
without losing educational ground at a time when their lives have been 
turned upside down.
  Our top concern was to make sure that all displaced students 
continued their education. School provides a sense of routine that is 
important in assuring students that things will return to normal. 
School provides them with access to a support system of friends and 
teachers, which is invaluable as they and their families continue to 
come to grips with the aftereffects of the storm. Some students are 
already returning home as their schools reopen, but severe problems of 
displacement do remain. Many schools will remain closed for the entire 
school year.
  This amendment does not make permanent changes to Federal education 
laws. It is a one-time, temporary solution that sets aside ideological 
differences to make sure children are not harmed unnecessarily by the 
impact of this unprecedented disaster.
  Developing this language was a difficult task, as we have limited 
resources, but we are faced with an almost unlimited need. It provides 
a comprehensive approach to address the needs of the hundreds of 
thousands of students who have been displaced. It focuses on the 
immediate needs of students with the expectation that they will return 
home to their local school.
  Let me describe what this amendment does. First and foremost, it 
provides support for all displaced students, ensures accountability, 
and is fiscally responsible. Children displaced by this storm do not 
have the resources of their home communities to rely on for friends, 
activities, learning opportunities, and stability. These resources will 
assist students in their adjustment to new schools, new materials and 
standards, new classmates, and new teachers.
  The amendment provides for a restart fund for special school 
reopening grants for school districts directly affected by the 
hurricane. These grants are meant to supplement FEMA funding to ensure 
the effective use of Federal funds. They can be used to repurchase 
textbooks and instructional materials, establish temporary facilities 
while repairs are being made, help reestablish the data that was 
destroyed, and pay salaries of teachers and other personnel who are 
working to reopen these schools.
  The largest portion of the funding under this amendment is focused on 
easing the temporary transition of students into new schools, both 
public and nonpublic, through one-time emergency aid. These funds will 
be used to help defray the additional costs incurred as a result of 
enrolling displaced students, and they can be used for purposes such as 
supporting basic instruction, purchasing educational materials and 
supplies, and helping schools temporarily expand facilities to relieve 
overcrowding.
  It provides assistance to schools in a nonideological and responsible 
way. It is based on the number of students, public and nonpublic, 
reported by local school districts to the State. The funding flows 
through regular channels to local school districts and accounts 
established on behalf of students attending nonpublic schools. The 
amendment maintains public control of public money to ensure 
accountability.
  Quarterly payments are made based on the head count of the displaced 
students temporarily enrolled in schools, with a maximum amount of 
$6,000--$7,500 for students with disabilities--per displaced students, 
or the cost of tuition, fees and transportation for nonpublic students, 
for the four payments.
  States apply for these funds and are required to establish income 
eligibility criteria for aid on behalf of students in nonpublic 
schools. Nonpublic schools must waive or reimburse tuition in order for 
accounts to be established for their displaced students. Parents of 
displaced students must clearly make the choice for their child to 
attend a nonpublic school, and the nonpublic school must attest to the 
use of funds and the numbers of displaced students in attendance. 
Nonpublic schools shall use funds in secular and neutral ways, not for 
religious instruction, proselytization, or worship. Displaced children 
cannot be discriminated against on the basis of their race, color, 
national origin, religion, disability, or sex.
  The assistance provided through this amendment is temporary. It 
sunsets at the end of this school year. This amendment is necessary 
because of the extraordinary circumstances and the emergency nature of 
this situation.
  Through the savings in this reconciliation bill, we have the 
opportunity not only to authorize programs that will serve the 
thousands of children affected by Hurricane Katrina, but to defer the 
costs required to meet their education needs. Investing these funds in 
this way will meet an immediate need, but education is a longer-term 
investment in the future of our country and its ability to compete in a 
global economy. We must focus our efforts on ensuring that the 
educational needs of the children affected by this unprecedented 
emergency are addressed, and I believe that this amendment achieves 
that goal.
  I urge my colleagues to support this amendment, and support returning 
additional education savings to the education needs of our students. I 
urge my colleagues to support student access to postsecondary 
education, which is critical to our ability to compete in the global 
marketplace. I can think over no better investment in the future of our 
students, businesses and Nation.
  I ask unanimous consent that Senator Landrieu be added as a cosponsor 
of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENZI. I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, when Senator Reid is recognized at 2 p.m., 
I yield him such time as he may consume.
  I understand the Senator from Virginia has a motion at this time.
  The PRESIDING OFFICER. The Senator from Virginia.

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