[Congressional Record (Bound Edition), Volume 152 (2006), Part 3]
[Senate]
[Pages 3568-3596]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                                  2007

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
resume consideration of Senate Concurrent Resolution 83, which the 
clerk will report.
  The legislative clerk read as follows:

       A concurrent resolution (S. Con. Res. 83) setting forth the 
     congressional budget for the United States Government for 
     fiscal year 2007 and including the appropriate budgetary 
     levels for fiscal years 2006 and 2008 through 2011.

  Pending:

       Specter amendment No. 3048, to increase the advance 
     appropriations allowance in order to fund health, education 
     and training, and low-income programs.
       Stabenow amendment No. 3056, to provide $5 billion for our 
     emergency responders so that they can field effective and 
     reliable interoperable communications equipment to respond to 
     natural disasters, terrorist attacks, and the public safety 
     needs of America's communities, and fully offset this by 
     closing tax loopholes and collecting more from the tax gap.
       Menendez amendment No. 3054, to provide an additional $965 
     million to make our ports more secure by increasing port 
     security grants, increasing inspections, improving existing 
     programs, and increasing research and development, and to 
     fully offset this additional funding by closing tax 
     loopholes.
       McConnell amendment No. 3061, to provide funding for 
     maritime security, including the Container Security 
     Initiative, improved data for targeted cargo searches, and 
     full background checks and security threat assessments of 
     personnel at our nation's seaports.
       Byrd amendment No. 3062, to provide $184 million over five 
     years for the Mine Safety and Health Administration to hire 
     additional mine safety inspectors, paid for by closing 
     corporate tax loopholes.
       Chambliss (for Dayton) amendment No. 3018, to restore 
     funding for the Byrne/JAG grant program to the FY 2003 level 
     of $900 million, offset with an across the board cut to 
     administrative expenses, travel and consulting services.
       Murray amendment No. 3063, to restore funding for the 
     Community Development Block Grant Program to the fiscal 2004 
     level by closing tax loopholes previously slated for 
     elimination in Senate-passed legislation.

  The PRESIDENT pro tempore. The Senator from Arizona is recognized.


                           Amendment No. 3068

  Mr. KYL. Mr. President, I thought the chairman of the Committee on 
the Budget, Senator Gregg, might give us a little bit more texture 
about the order of the day, but I think the majority leader pointed out 
what the schedule is going to be. The first amendment, as I understand 
that is to be laid down, is an amendment which I now ask unanimous 
consent to call up.
  The PRESIDENT pro tempore. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. Kyl], for himself and Mr. 
     Cornyn, proposes amendment numbered 3068.

  Mr. KYL. Mr. President, I ask unanimous consent the reading of the 
amendment be dispensed with.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To designate $2 billion in immigration- and homeland 
security-related funding for interior enforcement purposes, including, 
    but not limited to: federal detention bed spaces and personnel; 
 implementation of an expanded and user-friendly Electronic Employment 
 Verification System; and, additional worksite enforcement personnel, 
    including additional immigration enforcement agents, forensics 
  auditors, fraud agents, intelligence research assistants, employer 
                    outreach assistants, and others)

       On page 24, line 24, increase the amount by $2,000,000,000.
       On page 24, line 25, increase the amount by $2,000,000,000.
       On page 27, line 23, decrease the amount by $2,000,000,000.
       On page 27, line 24, decrease the amount by $2,000,000,000.

  Mr. KYL. Mr. President, I ask unanimous consent Senator Cornyn be 
added as an original cosponsor of this amendment.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. KYL. By way of brief explanation, this amendment adds, with an 
offset from the function 920, a total of $2 billion to the fiscal year 
2007 budget for the purpose of additional immigration and Homeland 
Security resources. The actual tally of costs that we are probably 
going to have to bear exceeds this amount. But in effect, this will be 
a downpayment toward the necessary work to be done in beginning to 
prepare for a temporary worker program, a worker eligibility or 
verification program and other elements of a comprehensive immigration 
reform that would be necessary to fit together once the Senate acts and 
the House acts on such a system.
  In addition, funding that could be included within this $2 billion is 
the State Criminal Alien Assistance Program, or SCAAP funding, which 
the budget currently does not fund but which historically has been 
funded at up to about $600 million. Last year, it was a little more 
than a third that much. Clearly, Congress needs to act to reinstate the 
funding for the SCAAP program. This amendment can accommodate that 
funding as well.
  Let me list the primary elements of this particular amendment that 
funds programs necessary to begin the development of the worker 
verification program in connection with comprehensive immigration 
reform.
  One thing we need to do is to implement an electronic employment 
verification system and clean up the Social Security database and 
reissue a secure Social Security card and number to workers in the 
United States as the primary method of verifying worker eligibility. 
That is going to require not only work to clean up the database itself 
but a broadening of the current basic pilot program which is the only 
program currently in existence that can electronically verify 
employment. The Congressional Budget Office has estimated it will take 
about $450 million to erect the system and, in effect, to make the 
basic pilot program through the Department of Homeland Security 
mandatory, rather than discretionary, over a period of 5 years, about 
$90 million each year.
  The Social Security Administration has estimated costs with regard to 
creating a system to produce a secure Social Security card and 
distribute that. Those costs vary widely in terms of the estimates. One 
estimate that could be made, based upon information that has been 
provided, would provide a cost of about $1.14 billion a year to 
actually get this entire system up and running. That cost, or part of 
that for 1 year could be included within the $2 billion that is 
specified in this amendment.
  Second, we are going to need worksite enforcement personnel. One of 
the areas that has been neglected in the current enforcement regime is 
the following up or auditing of employers who, in many cases, are 
employing illegal immigrants. The Bureau of Immigration Enforcement, 
responsible for enforcing immigration laws at the worksite, has 
requested 200 full-time employees, about a $23 million expense in 2005. 
In 2006, an additional $18 million above the 2005 level, and the 2007 
budget requests $47.1 million for worksite enforcement to add 206 
agents and support staff for this effort.
  However, there are clearly a lot more requirements to be met. Some 24 
million business entities file income tax returns and the number that 
can be checked is far less than that.
  So it is clear we need additional administrative personnel so the 
auditing can be done and we can lay the basis for a workable worksite 
verification and enforcement program. Any immigration bill that passes 
the Congress this year will fail unless the requisite number of 
worksite enforcement personnel is actually funded this year.
  Let me just restate that. Whatever we do this year, we are going to 
have to begin the process of adding the personnel, so that once we act, 
we can begin to enforce whatever it is we pass. If we wait until after 
the President signs a bill into law to do this, then there will be at 
least a year delay as we ramp up the personnel and necessary other 
systems to implement the law. So we need to begin this process now.
  There is a potential to fund additional Border Patrol agents that 
would be authorized under the program. There is, importantly, an 
estimate to increase the amount of detention space that we are going to 
need that could be funded from this.
  The 2007 budget for the Department of Homeland Security requests over 
$400 million to add about 6,700 additional detention beds, rather than 
the

[[Page 3569]]

8,000 beds currently authorized each year, which would bring the total 
to 27,500. Clearly, at least 10,000 additional beds over the next 5 
years are going to be needed.
  Let me explain the primary reason for this. The illegal immigrants 
who are apprehended here, who come from countries other than Mexico, 
cannot easily be returned to their home countries in every case. In 
fact, in most cases, there is quite a delay. In fact, in some cases, 
the countries will not even take them back. Clearly, either those 
people have to be detained until they can be removed to their home 
country or they are released into our society.
  The current policy has been one of ``catch and release,'' which means 
hundreds of thousands of people who come from countries other than 
Mexico--many of them from countries of special interest; in other 
words, countries from which terrorists have come--are simply melding 
into our society, never reporting for removal. It is an unacceptable 
situation, everybody recognizes.
  In order to have the space to detain them until they can be removed 
to their home country, we need to appropriate additional money. This 
provides the authorization for that additional detention space.
  Finally, Mr. President, I mentioned the State Criminal Alien 
Assistance Program. The estimated cost to reimburse the States--about 
30 cents on the dollar--is $700 million this year. This funding 
provided for in this amendment would enable us to provide that funding 
to the States and to the local governments, which have had to carry the 
burden of housing these illegal immigrant criminals, people who have 
been convicted in State courts of crimes, and then the States have had 
to pay the expense of their incarceration. The Federal Government has 
in the past deemed there is at least some responsibility to help bear 
these costs. I think this amendment can go a long way toward meeting 
this responsibility.
  This additional $2 billion in no way covers all of the expenses that 
would need to be covered. But in addition to that which is already 
provided for in the budget--I have to take one second to compliment the 
chairman of the Budget Committee and the ranking member for their hard 
work to gain additional resources in the budget for a variety of 
programs to deal with comprehensive immigration reform. Their additions 
this year are historic and welcome and needed. What this funding does 
is to complement that in some additional areas they have not covered so 
we can get a start on comprehensive immigration reform and not be 
lagging behind 2 or 3 years simply because we did not anticipate the 
kind of expenses that would be needed to make such a program work.
  So I compliment the members of the Budget Committee for their hard 
work. I think this amendment should be accepted as an additional 
complement to what they did.
  Mr. President, I yield the floor at this time and hope to hear from 
my cosponsor, Senator Cornyn from Texas.
  The PRESIDING OFFICER (Mr. Brownback). The Senator from Texas.
  Mr. CORNYN. Thank you, Mr. President.
  Mr. President, I congratulate the Senator from Arizona for his 
tremendous leadership in this area. I wish to detail some of that 
leadership and some of the work he has done. I have been proud to work 
with him.
  I think what the amendment really helps to do is to serve as a wake-
up call, a wake-up call to the Senate, a wake-up call to the Federal 
Government, and really a message that is being delivered day in and day 
out by people in my State and people all across America, who say they 
are sick and tired of the Federal Government not living up to its 
responsibilities when it comes to securing our international borders.
  We all know in minute detail how porous our borders are, and we know 
that in the past the American people have been asked to accept 
solutions--like amnesty in 1986--on the condition that the Federal 
Government would provide a means whereby employers could determine the 
eligibility of prospective employees to work legally in the United 
States. But while the American people were given an amnesty program, 
legalizing roughly 3 million individuals, the Federal Government did 
not provide the means for employers to determine whether that 
prospective employee could legally work in the United States.
  The Senator from Arizona mentioned the basic pilot program which was 
supposed to be the means to that end, but it was a purely voluntary 
program, and thus employers were left with a conundrum. They needed the 
workforce, but they did not necessarily have access to a means to 
determine the legal status of prospective employees. So what they 
relied upon were oftentimes what turned out to be fake identification, 
whether driver's licenses, Social Security cards, passports, or the 
like. We do not expect the employers in this country to try to be FBI 
agents or to conduct an independent investigation as to the legal 
status of prospective employees.
  What this amendment will do is two important things. No. 1, it will 
begin to cause the Federal Government to step up to finally begin to 
provide the resources necessary to have a bona fide electronic 
verification system. But perhaps more importantly, it will demonstrate 
the seriousness of the Federal Government to finally live up to its 
responsibilities.
  The people across America, the U.S. Chamber of Commerce--we are 
hearing a lot from sectors of the employment community saying they need 
a temporary worker program, a guest worker program. I think we all 
acknowledge it is important for us to determine who the 10 or 11 
million people are who are currently in the country who have come here, 
perhaps legally in the first instance, but at least 40 percent of them 
have outstayed their visas and are currently out of status or people 
who have literally walked across or swam across the Rio Grande River to 
come here.
  But in a post-9/11 world, there can be no doubt we must know who is 
in our country and what their reasons are for being here, so we can 
cull out the criminals, the people who come here to do us harm, and 
including the potential prospects of terrorists exploiting these known 
vulnerabilities in our way too porous border. So we need a national 
strategy to deal with that.
  As the current occupant of the chair knows and the Senator from 
Arizona knows, as members of the Judiciary Committee, we are working 
hard to try to come up with a solution to this extraordinarily complex 
problem. The difficulty is compounded by the fact that, here again, we 
are playing catchup.
  But the purpose ultimately served by this amendment as well as the 
budget resolution that is pending on the floor--and the Senator from 
Arizona rightly praised the chairman of the Budget Committee for moving 
funds into building infrastructure along our border--the American 
people need to know we are making a firm and solid commitment to do 
whatever it takes to make this system work and to finally bring it 
under control. Because people are not going to accept the bait and 
switch that essentially was foisted upon them in 1986, when they said 
take an amnesty, and then, on the condition we will have an employer 
verification system, we will actually sanction people for hiring people 
who cannot legally work in the United States, I do not think people 
will be fooled again. I certainly do not plan to be part of that.
  I know there are many in Congress and in the Senate who are 
absolutely committed to coming up with a solution to this problem. It 
is not easy. But again, I do not believe the American people or our 
constituents sent us here necessarily to do just easy things. They 
expect us to come here and do more than go to receptions or meetings at 
the White House. They actually expect us to do some real work. But it 
is going to take some real work, and it is going to take some real 
money to finally make the investment the Federal Government has to make 
in order to bring this broken system under control.
  So I gladly join as a cosponsor of this amendment and ask for the 
support of all of our colleagues for this very important step forward.

[[Page 3570]]

  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, let me say on this side we agree entirely 
with the need to put more resources into enforcing the border. And that 
part of the Senator's amendment on our side we strongly support.
  Let me just register, as I have registered on previous amendments, 
that the problem I see with this amendment is how it is paid for. It is 
paid for out of section 920. But there is no money in section 920. We 
keep passing amendments that are theoretically funded by that source. 
But before we started voting for additional amendments taking money out 
of 920, 920 was already $500 million underwater.
  So what happens? What is the practical effect? The practical effect 
is that there will be an across-the-board cut on all discretionary 
accounts. We have now passed $10 billion in amendments that will be 
funded by across-the-board cuts in discretionary accounts. That means 
we will reduce homeland security, we will reduce law enforcement, we 
will reduce national defense in order to pay for these amendments which 
are theoretically funded out of 920 because there is no money in 920.
  So what we are left with is, at the end of the day, the appropriators 
had $873 billion before this amendment, and after this amendment they 
will have the same amount of money--$873 billion. If they are to use 
more money within that allocation for this purpose, they will simply 
have to reduce the other discretionary accounts. Of course, the biggest 
one is defense. They will have to reduce homeland security. They will 
have to reduce law enforcement. They will have to reduce the others. 
That is the practical effect.
  I know there are a whole series of other amendments that use 920 as a 
funding source, when there just is no money in 920. So at the end of 
the day, what is going to happen is there will be an across-the-board 
cut in all domestic accounts, and that will include defense, that will 
include homeland security, that will include law enforcement. So that 
is the practical effect.
  The hard reality is, we had $873 billion for the appropriators before 
this amendment. After this amendment, we will have that same amount of 
money for the appropriators. They will ultimately have to decide how it 
is funded.
  With that, I want to indicate we would be willing to take this 
amendment on a voice vote, if the Senator from Arizona would be willing 
to so do.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I certainly am.
  Let me, first of all, say I think the comments of the ranking member 
of the Budget Committee are entirely appropriate, and they are 
absolutely accurate. It is a matter of setting priorities.
  And to the point that we are requiring the appropriators to engage in 
a very difficult job of setting those priorities and having to choose 
between different programs, I certainly take his point. He is 100 
percent right. It is our view that, of course, among the highest of 
priorities is national defense, homeland security, and this is part of 
that.
  We hope to work with him and with the members of the Appropriations 
Committee to try to make sure the priorities are established in the 
appropriate way. I do appreciate his cooperation here, and we are ready 
to take the vote.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3068) was agreed to.
  Mr. CONRAD. Mr. President, I move to reconsider the vote and to lay 
that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. CONRAD. The regular order is now to go to Senator Nelson, is that 
correct?
  The PRESIDING OFFICER. The regular order is the amendment by the 
Senator from Iowa, Mr. Grassley.
  Mr. NELSON of Florida. Will the Senator from North Dakota yield?
  Mr. CONRAD. I am happy to yield.
  Mr. NELSON of Florida. I would proffer a unanimous consent request 
that since the Senator from Iowa is not able to be here right now--it 
is my understanding he is delayed in traffic--I be able to proceed by 
offering my amendment.
  Mr. CONRAD. Mr. President, Senator Gregg and I have an agreement that 
neither one of us do unanimous consent requests without the other 
informed or on the floor. I have been told by his staff that it is OK 
with Senator Gregg. With that assurance, I have no objection. I thank 
Senator Nelson very much for being here to expedite the business of the 
Senate. It is gracious of him to do so.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Florida.
  Mr. NELSON of Florida. I ask unanimous consent that the next 
amendment be my amendment instead of the regular order of the Grassley 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3009

  Mr. NELSON of Florida. I call up amendment 3009.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Florida [Mr. Nelson] proposes an amendment 
     numbered 3009.

  Mr. NELSON of Florida. 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 establish a deficit-neutral reserve fund to protect 
  medicare beneficiaries who enroll in the prescription drug benefit 
                              during 2006)

       At the end of title III, add the following:

     SEC. ___. DEFICIT-NEUTRAL RESERVE FUND TO PROTECT MEDICARE 
                   BENEFICIARIES WHO ENROLL IN THE PRESCRIPTION 
                   DRUG BENEFIT DURING 2006.

       The Chairman of the Committee on the Budget of the Senate 
     may revise the allocations, aggregates, and other appropriate 
     levels and limits in this resolution for a bill or joint 
     resolution, or an amendment thereto or conference report 
     thereon, that would--
       (1) extend the annual open enrollment period under the 
     Medicare prescription drug program under part D of title 
     XVIII through all of 2006 without imposing a late enrollment 
     penalty for months during such period; and
       (2) allow a one-time change of plan enrollment under such 
     program at any time during 2006;

     by the amount provided in such measure for those purposes, 
     provided that such legislation would not increase the deficit 
     for the period of fiscal years 2006 through 2011.

  Mr. NELSON of Florida. Mr. President, this is the deadline amendment 
on the Medicare prescription drug, Medicare Part D, that the Senate has 
heard about now over the course of the last 6 months. Each time we have 
been in a parliamentary procedure where we have been able to receive a 
majority of votes, in excess of 51 votes, but because of the 
parliamentary procedure we have found ourselves in, a 60-vote majority 
was required. Not so today. This amendment can pass with a simple 
majority vote, according to how many Senators are here, whatever is the 
simple majority.
  It is an amendment all of our Senators have been hearing a lot about. 
As we have gone home to our States, clearly every Senator has received 
an earful from senior citizens of their States in which the seniors 
have not only implored but in some cases begged for an extension of the 
May 15 deadline for signing up for the Medicare prescription drug 
benefit.
  Why? Why are senior citizens confused and bewildered and, in some 
cases, frightened? They are confused because they are facing a 
multiplicity of plans. For example, in my State of Florida, 18 
companies are offering 43 stand-alone plans, 43 prescription drug plans 
that a senior citizen is to try to make a determination about which is 
the best for them according to the prescription drugs they need. They 
are confused and bewildered and, in some cases, frightened. Why are 
they frightened? Because they know if by the deadline they don't make a 
choice, they are going to be penalized 1 percent of the overall drug 
premium prices per month or 12 percent a year.
  Indeed, the Congressional Budget Office, in determining what is the 
cost of

[[Page 3571]]

this amendment over 5 years, has taken that into account and has said 
it is going to be an additional cost on average to a senior citizen of 
6 to 7 percent. Our senior citizens cannot afford that. So they are 
frightened.
  They are also frightened in knowing if by the deadline they are 
confused and they pick a plan hastily in order to satisfy the deadline, 
they know if they happen to choose the wrong plan, they are stuck for a 
year. That causes considerable consternation and fright, because the 
medicines they take often are life giving. And thank the good Lord, we 
have progressed to the point that now the miracles of modern medicine 
through prescriptions have become an opportunity for us to have a much 
higher quality of life. A lot of the ailments that afflicted us 20, 30, 
and 40 years ago that had to be dealt with in a hospital by surgery and 
hospital procedures today can be taken care of, in large part, by 
prescription drugs. Naturally, senior citizens are confused. They are 
bewildered and, in some cases, they are frightened.
  Every one of the Senators here has been hearing from their folks back 
home who are saying: Help us. Yet this body has taken a position. We 
are looking out for Medicare instead of looking out for the people 
Medicare serves. It is the beneficiaries of Medicare, the senior 
citizens of this country, we ought to be looking out for. So we have 
had this issue twice in front of us with a majority vote. We are going 
to have another opportunity today.
  The stakes are high because simply we need to provide our seniors 
with the time and the resources they need to make an informed decision. 
In some cases, this is a matter of life or death, especially for those 
who are frail. How do we expect an artificial deadline to be handled 
with someone who has the onset of dementia?
  Further complicating matters, the Medicare prescription drug benefit 
has been marred by implementation problems. These appear to be 
widespread, and they are clearly adversely affecting vulnerable 
beneficiaries. How many news stories have all of us read that talk 
about the senior citizen who is distraught because they go to the 
pharmacy and the pharmacy says: Your particular prescription is not on 
the formulary of the new plan. We saw that in what is called dual 
eligibles, in the shifting of Medicaid recipients over to Medicare. 
Hopefully that is going to be worked out, but it is all a part of this 
implementation of a new program that is having difficulty. Hopefully we 
will get it right, but we need to give senior citizens a break and not 
hold them with the guillotine over their head with an artificial 
deadline of May 15.
  If we pass this amendment by delaying the late enrollment penalties 
and giving every beneficiary a chance to change plans once during the 
first year of the prescription drug benefit, then we can make sure our 
citizens are not going to have to make hasty decisions.
  This amendment that I offer on behalf of a bipartisan group of 
Senators, including Senator Snowe of Maine, instructs the Senate 
Finance Committee to extend the annual open enrollment period under the 
Medicare prescription drug program through all of 2006 without imposing 
a late enrollment penalty and to allow a one-time change in the plans 
at any point in 2006.
  We are going to hear some Members oppose this amendment by saying 
that the Congressional Budget Office recently rescored the cost of 
extending the deadline. When the amendment was here before us a month 
or so ago, CBO had scored it at about a $300 million cost over 5 years. 
CBO now says it is going to cost $2 billion over 5 years. It is 
important to note that the new score by CBO is mainly due to the fact 
that the enrollment program has gone so poorly. The new cost reflects 
the fact that 10 million fewer people will be signing up for the drug 
benefit than previously estimated. That is not the senior citizens' 
fault. Why should they be penalized by saying this is going to cost 
more when, in fact, it has had such a problem in its implementation and 
it is not quite as attractive to seniors as the administration had once 
thought?
  According to CBO's new estimates, if we extend the deadline for 
signing up through all of 2006, 1.1 million more beneficiaries will 
sign up before the end of the year. In addition, 10 million 
beneficiaries will pay lower premiums because they will have fewer 
penalties. So on the one hand, CBO is saying it is going to cost more 
because the enrollment program has gone so poorly, but on the other 
hand, the Congressional Budget Office is saying, indeed, if we extend 
it, we are going to have more beneficiaries sign up, over a million 
more, they are saying, will sign up if we extend the deadline. And they 
are saying the beneficiaries who sign up--they are estimating 10 
million--will pay lower premiums because they will have fewer 
penalties. What Senator would want to vote against this amendment and, 
therefore, increase the cost to the senior citizens?
  By opposing this amendment, if, indeed, the chairman of the Finance 
Committee, Senator Grassley, is going to oppose it, it would seem that 
those who would oppose would suggest that you don't want to allow an 
additional million beneficiaries to enroll in the program. I would 
think we would want to enroll everybody as much as possible. And why 
would we want to punish 10 million beneficiaries with higher premiums 
through penalties?
  It is kind of arcane language but also, according to the 
Congressional Budget Office, they have reevaluated the cost of the 
Medicare prescription drug benefit, and it is now projected over the 
next 5 years, the overall program, to cost $5 billion less than 
originally estimated by CBO. They also say by extending the deadline, 
it is going to cost another $2 billion over 5 years. That means that 
net, it is going to be costing $3 billion less than originally 
anticipated. So in every way we look at it, it is a win-win.
  It is a win for the seniors. It is certainly a win for the seniors in 
taking them out of the confusion and bewilderment. It is a win for the 
seniors in them not paying more on their premiums with the penalties 
that the CBO estimates. And it is also a win in that the overall cost 
of the program would be net less than what it was originally expected 
to cost.
  This is a time-limited, very important step which would help ease the 
pressure of the first year of this new drug program. So I think it is 
time that we now go on the record with a majority vote and pass the 
extension for the relief of our senior citizens.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time in opposition?
  The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I have some points I would like to make. 
Before I do that, I will respond to a couple of points that the Senator 
from Florida made. One was his speaking about the bewilderment among 
seniors about the program. I would say that a great deal of the 
bewilderment comes from the confusion that people have because of the 
rhetoric of people who don't like this plan and have tried to kill it 
with rhetoric because they didn't have the votes on the floor of the 
Senate. That has not created a very good environment.
  On the other hand, I can say that at my town meetings--I held 16, 
Monday through Thursday, during our last break--people who came 
expressed some wonderment about exactly what program to get into. But 
people who also had already selected a program gave very positive 
comments about the benefit of the program to them.
  The other point I would like to make, Mr. President, is the point 
that was made that maybe the cost is coming in less than what was 
anticipated because not enough seniors are coming in. I think it is 
very clear that the reason this is costing $8 billion less than what 3 
years ago CBO estimated it would be for this year is because of the 
competition. As a conferee, as I was going through ironing out the 
differences between the House and Senate on this bill, we were very 
nervous that our anticipation of the premium being $37 a month, on 
average, might end up being much higher. And we, as writers of this 
legislation, would be embarrassed about that.
  Competition has brought that premium down to $25. Instead of $37, the 
average premium is $25. We were estimating that there would be all 
sorts of

[[Page 3572]]

savings from competition because we were patterning this program after 
what the Federal Employees Health Benefits Plan had been for 4 years. 
It worked so well for Federal employees, we felt it would work very 
well for seniors, and it is working very well in this respect for 
seniors. But we estimated there would be certain savings.
  Quite frankly, we were nervous about whether these savings would 
materialize. But they did materialize--to the point of adding up to 
that $8 billion that I have referred to. But with specific drugs--we 
have drugs and pharmacists coming in under these plans--brand-name 
drugs are coming in on an average of 18 percent less than otherwise in 
a pharmacy. If it is mail order, it is about 26 percent less. In the 
case of generics bought at a pharmacy, it is 55 percent less, and for 
mail order it is 66 percent less.
  So I suggest to the Senator from Florida that enrollment has nothing 
to do with it. The savings are coming because competition is working.
  Now, another confession we have to make is that as we were writing 
this bill, we wondered whether we would have enough plans sign up so we 
would have this competition that works so well in the Federal Employees 
Health Benefits Plan--even to the point where we decided we needed a 
backup plan. Just in case only one plan signed up, we would make sure 
the Government set up a competitive plan so that there would be some 
choice for our seniors. We ended up with lots of plans, and we hear 
from the other side there are too many plans. Well, the marketplace 
brought plans in and drove down the price. Some of these plans are 
going to get out because the marketplace is going to drive them out. 
Hopefully, we still have plenty of choice when this all happens. But 
competition is working.
  Now, also, I hear the rhetoric about too many plans being confusing. 
I just read in the newspaper in a whole other area, but to throw it out 
for comparison, I heard that in regard to people signing up for health 
savings accounts--HSAs--you have to have a catastrophic insurance 
policy go with it. There are 96 companies selling catastrophic 
policies. Yet we have had 3 million Americans sign up in less than a 
year for catastrophic policies. I don't know whether it is confusing to 
them or not, but they are joining. That is twice as many plans that are 
available. We don't hear people complaining about too many plans out 
there for health savings accounts.
  So I don't know why--except for rhetoric to gain political 
advantage--we talk about too many plans out there for seniors. The more 
plans, the more choice.
  Do you think Congress has the ability to write one plan that is going 
to fit the needs of 44 million seniors and disabled people? First of 
all, if you did that, it would have to be mandatory. If you make it 
mandatory, it would be evidence that you never learned a lesson from 
the last time we tried to extend Medicare and make it mandatory when we 
put a catastrophic program in in 1988 or 1989, which passed this body--
I don't know--it was a closer vote than it was repealed.
  But when you go home to the grassroots of Iowa, and every other State 
in the Nation, there is an uproar because it was mandatory and people 
had to pay for something they didn't want to use. And in a year or two 
it was almost unanimously repealed by this body. So we believed it 
ought to be voluntary, and it is voluntary. So if you don't want to 
join, you don't have to join.
  But if you want to join, everybody has different needs and desires 
and you ought to have some choice, just like Federal employees have. If 
it has worked 40 years for Federal employees, it seems to me that it is 
a pattern that we ought to have enough respect for the seniors of 
America to give to them.
  Mr. President, I would like to go to the issue before us, an issue 
that we have discussed before, not an issue that I entirely disagree 
with the Senator from Florida on because I don't know what the 
situation is going to be by May 15. But I know if you had an amendment 
up to extend the deadline for filing income tax on April 15 and you 
moved it to May 15, everybody would be going to the post office on May 
15 to drop in their income tax forms, and I would be one of them. 
Americans procrastinate until the last minute. Some are going to 
procrastinate until the last minute on joining one of these plans.
  The extent to which people benefit from this plan, particularly lower 
income people, because it is highly subsidized--up to 98 percent--it 
seems to me the extent to which you want to give them more leeway, you 
are not being very humane to them if they can benefit from the program 
today instead of tomorrow.
  So you may be right, but today you are not right. You may be right on 
May 1. Maybe your timing is off. Maybe I am conceding too much. My 
staff will probably tell me when I am done I was too good to you, that 
you are too right. But there are other ways of doing what you want to 
do, and I am going to suggest a way. You are probably going to disagree 
with it.
  Before I get to that point, I want to give some background. The 
amendment by Senator Nelson is going to extend the open enrollment 
period. Information on the Medicare prescription drug benefits first 
became available last October, and then the open enrollment period 
began November 15. So today the open enrollment period has been going 
on for 4 months, and there are still 2 months left before open 
enrollment ends on May 15.
  I personally think that enrollment is going well. About a quarter 
million people--250,000 beneficiaries, in other words--enroll each 
week. Enrollment in stand-alone plans in my State of Iowa increased by 
71 percent between January and February. At this rate, Medicare is on a 
track to reach the goal of 28 million to 30 million beneficiaries with 
coverage by May 15.
  I think making decisions about one's health care can, in fact, be 
difficult. That is why information about the available plans went out 
way back in October. That is why beneficiaries have 6 months to make a 
decision. That is why there are many resources to help beneficiaries 
learn about their options and make their decisions. That is why 
beneficiaries can change their plan choice once before May 15. But that 
said, I know there is concern that beneficiaries may need more time. So 
the amendment I am offering would grant the Secretary of Health and 
Human Services the authority to extend the enrollment period. We are 
just 2\1/2\ months into this new benefit--the first expansion of 
Medicare in 40 years.
  Personally, I think it is premature to change this date. So I offer 
this amendment as a compromise. The amendment would grant the Secretary 
definitive authority to extend the enrollment period. It would waive 
the application of the late enrollment penalty, and it would extend 
beneficiaries' rights to change their plan, and to change it once. 
Despite the rhetoric that we constantly hear around here, I hope 
everyone wants this benefit to be successful.
  I know there have been some disappointing startup problems, 
especially for some of our Nation's most frail and vulnerable 
beneficiaries. But what would you expect when, on January 1, you have 
44 million people rushing into a brand new Government program? There 
are obviously going to be some roadblocks, when people sign up on 
December 31 and go to the drugstore on January 2 to get drugs under a 
plan that you are trying to squeeze 44 million Americans into. It is 
quite obvious that there would be some problems.
  I think the administration has made great progress in getting these 
problems solved. The Secretary of HHS has sat down with our committee 
on three occasions to hear both Republicans and Democrats, to listen to 
what the problems are.
  I think it is mutually agreed that there were about seven areas where 
there were problems. The question I asked three times was: Is there any 
change in law that is necessary for the Secretary of HHS in order to 
grapple with these problems? And the Secretary said, no, he had ample 
authority to do that. He pointed out to us the seven problems. He 
pointed out to us

[[Page 3573]]

how he was going to solve those problems. Between meetings, he gave us 
updates on progress being made toward solving those problems.
  So I think we have a Secretary of Health and Human Services and we 
have a director of CMS who are working more than full time, and a lot 
of these problems, quite frankly, are simply the technicians it takes 
to make sure the computer software is working right.
  What is the problem?
  The PRESIDING OFFICER (Mr. Vitter). The Senator will note that the 
time on this amendment has expired, although the amendment of the 
Senator from Iowa is next in line and it would be appropriate to 
proceed to that amendment.
  Mr. GRASSLEY. Mr. President, I think we have a Secretary who is 
working hard on it. There are problems, but at the same time, we are 
writing a million prescriptions a day without incident. Beneficiaries 
are saving a lot of money.
  I spoke with the Senator from Florida about how the average premium 
is now $25 a month, 20 percent lower than we first projected. I spoke 
with the Senator from Florida about the lower drug costs, saving the 
taxpayers dollars as well. Just this year, the benefit, as I said, will 
cost $8 billion less than originally thought. The 10-year cost has 
dropped by $180 billion.
  I heard from a couple in Iowa who are saving nearly $2,800 a year. 
Another Iowan is saving $1,750 a year. And here is another one. A 
person from Massachusetts is saving $17,000--$17,000--a year on 
medicine because they are participating in this program.
  Getting this level of savings depends on strong competition among the 
plans, and we have that. Many people will remember the skepticism on 
whether many plans would participate at all. Some would say that we 
have too many choices and that is why beneficiaries need more time. 
Those choices, in fact--let me put it this way: It is not just choices, 
but because of choice, we have competition keeping premiums low, and 
they are letting people pick the plan that best suits their medical 
needs.
  My amendment strikes an effective compromise, I believe, to Senator 
Nelson's amendment, which is before us. Senator Nelson's amendment 
calls for a unilateral extension of the enrollment deadline right now, 
and it would extend it until the end of the year and into the 
enrollment period of next year.
  As I said, I think it is premature to make that decision now. Some 
people think 6 months is not enough time to make a decision on a plan. 
Yet millions are enrolling even now.
  Many people are also concerned about the late enrollment penalty. 
This penalty is modeled after the way Medicare Part B has worked since 
its origination in 1966. There is a late enrollment penalty in Part B 
that anybody who doesn't sign up for it when they get to be 65 will 
pay, and that is there to encourage people to enroll early and to think 
of Part B as not some Government program, just a Government program, 
but to see all of this--whether it is Part B or it is Part D, as in 
drugs--as an insurance policy.
  People who are 65 today thinking about signing up for the Part D drug 
program under Medicare may be very healthy and may think they have 
never taken a pill in their life and that they will never take a pill, 
but that is today when they are 65. They are not going to know what 
their health needs are when they are 70 and maybe get sick and have to 
take a lot of medication.
  It is a little bit as if you were never going to have a car accident, 
you would never buy car insurance. If you were never going to have a 
fire in your house, you would never buy fire insurance. But Americans 
see insurance as a very useful tool, a necessary tool to manage their 
risks, and our seniors and disabled people ought to see this as an 
insurance policy, maybe not needed today, but that will be needed some 
day, and they ought to be enrolled.
  Obviously, if you didn't have that penalty in Part B and now in Part 
D, the drug part, then who would ever sign up until the day before they 
have to buy their first pill, just as you would not buy your car 
insurance policy until the day before you were going to have a car 
accident.
  So I hope people see it as a good investment, as an insurance policy, 
as it has been for Federal employees for the last 40 years.
  The late enrollment penalty is designed to encourage enrollment, and 
as with other coverage of insurance, it spreads these costs across many 
enrollees. The more people enroll, the lower the costs are for 
everyone.
  So if the Senator from Florida wants to keep these costs continually 
low, get more people under the umbrella, sell an insurance policy, as 
he has been so successful selling people on the importance of keeping 
Senator Nelson in the Senate.
  The open enrollment creates an enrollment deadline. The deadline that 
is involved in the open enrollment period encourages people to act, to 
get the protection against unexpected drug costs. We all know that 
people sometimes wait until they need coverage to get it. It would be 
the same as if only people with a burning house get fire insurance. If 
you waited until the day before your house was going to burn down to 
buy fire insurance, fire insurance would be awfully expensive. That 
leads to higher costs for everyone.
  For the same reasons then, there is an enrollment period and a late 
enrollment penalty under Medicare Part B, not at all a new idea. The 
premise of the Nelson amendment is that Congress needs to override that 
6-month open enrollment period and make it even longer. The Nelson 
amendment would do that today even though enrollment is on track. It 
would extend the open enrollment period now even though we don't know 
whether it will be necessary 2 months from now. It presupposes a bad 
outcome to the enrollment of Part D of Medicare. It plans for failure, 
and I think this plan, particularly with how successful the competition 
is, for failure is wrong.
  Frankly, I think Senator Nelson's amendment has the potential to do 
more harm than good, regardless of his good intentions. Without the 
pressure of that May 15 deadline, many beneficiaries may forgo savings 
by putting off their decision.
  Now, it may turn out that the enrollment period needs to be extended, 
as I said in my first remark to my colleague from Florida. And if that 
is the case, then my amendment would give the Secretary the authority 
to do that right away. No further congressional action would be needed.
  Under my amendment, if in 2 months the Secretary determines the 
enrollment period should be extended, if enrollment is lagging, for 
example, then he has clear authority to do that.
  My amendment would also automatically delay the late enrollment 
penalty if the enrollment period is extended by the Secretary of HHS.
  My amendment would provide the funding needed to continue the open 
enrollment period. This funding is needed to continue the round-the-
clock operations of the 1-800 Medicare number, and the expanded 
operations for that open enrollment period.
  I close this debate by reading an editorial from the New York Times 
in 1966. This was an editorial about the implementation of the original 
Medicare Program we have had on the books since 1966. A quote from the 
New York Times:

       But as Medicare gets underway, the danger is that the 
     strains on it will generate pressures for unsound change. 
     They will come from those who will be disappointed because 
     they have been led to expect too much as well as from those 
     who see failure in every shortcoming. Changes will come in 
     time, but they should be made on the basis of Medicare's own 
     experience. This great new experiment must be given ample 
     time to get over its growing pains.

  Those growing pains for Part D Medicare are now just 2\1/2\ months 
old. So I go back to the first sentence, for the consideration of my 
friend from Florida, ``that the strains on the system will generate 
pressures for unsound change.'' I think his is an unsound change. This 
quote speaks volumes about our current situation with Part D Medicare.
  I urge my colleagues to support my amendment and to oppose the Nelson 
amendment.

[[Page 3574]]

  Mr. President, do I have to ask to have a previous amendment set 
aside in order to send my amendment to the desk?
  The PRESIDING OFFICER. No, but the Senator should seek consent that 
the time already used be charged against this new amendment.
  Mr. GRASSLEY. You mean the time I used off the bill.
  The PRESIDING OFFICER. Correct.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that time be 
charged to my amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3073

  Mr. GRASSLEY. I send my amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 3073.

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

  (Purpose: To establish a reserve fund to allow for deficit-neutral 
legislation that would provide for an extension of the Medicare part D 
                           enrollment period)

       At the end of title III, insert the following:

     SEC. ___. RESERVE FUND FOR EXTENSION OF THE MEDICARE PART D 
                   ENROLLMENT PERIOD.

       If the Committee on Finance of the Senate reports a bill, 
     or if an amendment is offered thereto, or if a conference 
     report is submitted thereon, that--
       (1) authorizes the Secretary of Health and Human Services 
     to extend the initial open enrollment period under part D of 
     title XVIII of the Social Security Act beyond May 15, 2006;
       (2) provides funding to the Centers for Medicare & Medicaid 
     Services and the Social Security Administration for the 
     purpose of conducting enrollment activities for the period of 
     any extension of the initial open enrollment period;
       (3) waives the application of the late enrollment penalty 
     for the period of any extension of the initial open 
     enrollment period; and
       (4) permits beneficiaries to change their enrollment 
     election in such part D once during the initial open 
     enrollment period, including throughout any extension of the 
     initial open enrollment period;

     the Chairman of the Committee on the Budget of the Senate may 
     make the appropriate adjustments in allocations and 
     aggregates to the extent that such legislation would not 
     increase the deficit for fiscal year 2007 and for the period 
     of fiscal years 2007 through 2011.

  Mr. NELSON of Florida. Mr. President, will the Senator yield for a 
question about this amendment?
  Mr. GRASSLEY. Let me get a copy of my amendment.
  The PRESIDING OFFICER. The Senator from Iowa has control of the time.
  Mr. GRASSLEY. Mr. President, I will yield to whatever the Senator 
wants me to listen to.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. NELSON of Florida. Mr. President, I want to ask the distinguished 
Senator from Iowa, does his amendment waive the penalties to senior 
citizens or does it give the Secretary of HHS discretion to waive the 
penalties?
  Mr. GRASSLEY. Mr. President, to the Senator from Florida, Mr. Nelson, 
if the Secretary extends the period, it automatically then waives the 
penalty for that period of time.
  Mr. NELSON of Florida. Mr. President, I ask the distinguished 
Senator, if the Secretary waives the requirement--so the Senator's 
amendment gives the Secretary discretion to waive the requirements of 
the May 15 deadline?
  Mr. GRASSLEY. The purpose of my amendment is--I think I am answering 
the Senator's question. Let's say May 14 comes and the Secretary 
decides we need more time and he makes a decision to extend that period 
of time. Let's say he extends it from May 15 to September 15. During 
the period of May 15 to September 15, there would be no penalty.
  Mr. NELSON of Florida. Mr. President, I thank the Senator for 
answering the question.
  I would inquire of the Chair, under the previous order, does the 
Senator from Florida have time to discuss the Senator's amendment?
  The PRESIDING OFFICER. The time in opposition is controlled by the 
Senator from North Dakota.
  Mr. CONRAD. Mr. President, how much time do I have on this amendment?
  The PRESIDING OFFICER. There is now a total of 13 minutes 30 seconds 
in opposition.
  Mr. CONRAD. Mr. President, I am happy to yield 5 minutes to the 
Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I thank the Senator. I 
understand the good intentions of the Senator from Iowa in what is a 
difficult situation for him. The Senator from Iowa has indicated he had 
a number of townhall meetings, of which there seemed to be complete 
acceptance and happiness with this prescription drug benefit. I want 
the Senator to know that I, too, have had innumerable townhall meetings 
in my State of Florida, and I get exactly the opposite result. Perhaps 
that is because it is a demographic fact that Florida has a higher 
percentage of senior citizens than most States. Perhaps it is that our 
senior citizens are very aware and current on events and on news. 
Perhaps it is also because there is a great deal of activity in our 
State of Florida with regard to wanting to sign up for this plan, 
because we have the beneficence of the fact that so many seniors around 
the country, including from the State of Iowa, the State of the 
Senator, retire and move to the State of Florida. So there is great 
consternation, I want the Senator to understand, among seniors in our 
State.
  The Senator mentioned earlier in his comments--and I don't take the 
comments personally--he said there was a politicizing of this 
particular issue. This Senator from Florida has an obligation to stand 
up and fight for his people. I can tell you that the senior citizens of 
my State are concerned and they are confused and they are bewildered 
and, in some cases, they are frightened because of this. I will concede 
to the Senator from Iowa that what he said is true, that normal human 
behavior is when we have a deadline, we wait until it is close to that 
deadline to sign up. However, I would suggest to the Senator in his 
consideration of this issue, and to the Senate as they decide between 
the amendment of the Senator from Iowa or this Senator's amendment, we 
should be looking at what is not best for the Medicare Part D benefit 
but what is best for the beneficiaries, the senior citizens. When the 
Senator from Iowa tells us in fact his amendment is going to give the 
discretion to the Secretary of HHS, look what the Secretary has said; 
he throws it right back to the Congress. He says:

       If people haven't had time to enroll, that is a policy 
     decision that Congress has to make.

  He said that a month ago, the Secretary of HHS, a distinguished 
Secretary in the President's Cabinet.
  I would suggest to the Senator if we are going to make the policy 
here, let's consider these people, these senior citizens who are 
anguished at this point.
  I will simply close with this: Medicare first thought they were going 
to have about 35 million seniors enrolled in this program. Now they are 
expecting that they are going to be about 10 million short, that there 
is going to be only about 25 million enrolled. CBO has estimated if we 
extend the deadline, we are going to get at least another million 
enrolled this year, and over the life of the program we will get that 
additional 10 million. So why would we not want to go on and extend the 
deadline and prohibit those penalties that CBO said will average to 
senior citizens 5 to 7 percent? Why would we not want to go on and 
extend that deadline instead of leaving it to the discretion of the 
Secretary of HHS?
  The PRESIDING OFFICER. The Senator from Florida has used the 5 
minutes allotted to him.
  Mr. GRASSLEY. Mr. President, I have 35 seconds?
  The PRESIDING OFFICER. The Senator from Iowa is recognized for 35 
seconds.
  Mr. GRASSLEY. Mr. President, I only want to clarify two things. One, 
if I said there were no complaints at my town meetings about the 
program, there were, but I found a great deal of

[[Page 3575]]

people who had enrolled very satisfied and also satisfied with the 
process.
  The second thing is, it has to be a policy decision by Congress to do 
what I want to do, so it is still up to Congress to make this decision. 
I would be willing to make this decision if it was made first, but your 
amendment is up today. So it is still a choice we are making.
  I yield the floor.
  Mr. CONRAD. Mr. President, was the Senator in the middle of his 
thought that he wanted to complete? Can he do that?
  Mr. NELSON of Florida. Of course.
  Mr. CONRAD. Mr. President, let me yield 1 minute to the Senator from 
Florida, and then we are going to go to the Senator from Pennsylvania 
for 5 minutes, and then we are going to come back on this amendment. 
The Senator from Pennsylvania has another obligation, so we want to try 
to accommodate him on that. But I give an additional minute at this 
time to the Senator from Florida, and I will tell him we will have more 
time for him momentarily after the Senator presents his amendment.
  Mr. NELSON of Florida. Mr. President, I can sum this up in 60 
seconds. The choice here is between a direction by the Congress to 
definitely extend the deadline, or the alternative Senator Grassley is 
offering, which is to give the Secretary of HHS the discretion to 
extend the deadline.
  The policy of the administration is clear. I asked Dr. McClellan, the 
head of CMS, his position on extending the deadline and he said:

       Senator, we are not supporting that legislation at this 
     time.

  So I think it is clear, the choice is clear for the Senate between 
these two amendments.
  I yield the floor.
  Mr. CONRAD. Mr. President, now we will go to the Senator from 
Pennsylvania for 5 minutes to offer his amendment, and then we will 
come back to this subject. So I alert the Senator from Florida, we have 
some time remaining.
  I yield to the Senator from Pennsylvania.


                           Amendment No. 3050

  Mr. SANTORUM. Mr. President, I ask unanimous consent to call up 
amendment No. 3050.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Santorum], for himself, 
     Mr. Coleman, Ms. Collins and Ms. Snowe, proposes an amendment 
     numbered 3050.

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

(Purpose: To increase funding for the Community Development Block Grant 
                                Program)

       On page 17, line 22, increase the amount by $1,300,000,000.
       On page 17, line 23, increase the amount by $1,300,000,000.
       On page 18, line 2, increase the amount by $1,300,000,000.
       On page 18, line 3, increase the amount by $1,300,000,000.
       On page 18, line 6, increase the amount by $1,300,000,000.
       On page 18, line 7, increase the amount by $1,300,000,000.
       On page 18, line 10, increase the amount by $1,300,000,000.
       On page 18, line 11, increase the amount by $1,300,000,000.
       On page 18, line 14, increase the amount by $1,300,000,000.
       On page 18, line 15, increase the amount by $1,300,000,000.
       On page 27, line 23, decrease the amount by $1,300,000,000.
       On page 27, line 24, increase the amount by $1,300,000,000.
       On page 28, line 1, decrease the amount by $1,300,000,000.
       On page 28, line 2, decrease the amount by $1,300,000,000.
       On page 28, line 4, decrease the amount by $1,300,000,000.
       On page 28, line 5, decrease the amount by $1,300,000,000.
       On page 28, line 7, decrease the amount by $1,300,000,000.
       On page 28, line 8, decrease the amount by $1,300,000,000.
       On page 28, line 10, decrease the amount by $1,300,000,000.
       On page 28, line 11, decrease the amount by $1,300,000,000.

  Mr. SANTORUM. Mr. President, this is an amendment I am offering on 
behalf of Senator Coleman as well as Senator Collins and Senator Snowe 
on the CDBG Program. This is an amendment I worked with Senator Coleman 
on last year. He offered it last year, and I want to thank him for his 
cooperation in allowing me to step forward.
  This is an important issue to my State. It is an important issue to 
most States across America. This is a program that is, I believe, one 
of the most effective programs we have in the Federal Government to 
help localities deal with housing problems, local economic development 
problems, and community problems we have. In Pennsylvania we get well 
over $50 million a year for this program. I don't know of anything that 
unites Republicans and Democrats on a local level more than the CDBG 
Program.
  The Community Development Block Grant Program, CDBG, is a program 
that takes money from the Federal Government and distributes it into 
the local communities for local priorities. There is a broad degree of 
discretion in this program and it allows the local communities to 
leverage Federal dollars to attract, in some cases, private dollars 
and, in some cases, other State dollars or philanthropic dollars that 
are used for projects that are vital to the local community.
  Unfortunately, in the last few years, the President has reduced the 
funding allocation for this program. Last year we were able to put back 
some of that money into CDBG. We ended up with about $3.7 billion for 
the CDBG last year. My amendment would add $1.3 billion. That would 
bring it up to $4.3 billion for this year. That level, by the way, is 
exactly the level that was appropriated for CDBG in the year 2004. So 
we are not talking about an outrageous increase; we are just trying to 
get back to historic levels of funding for this program.
  Again, it is a program that is vitally important for the local 
community. This is offset with section 920. I have heard the Senator 
from North Dakota talk about there being no money in section 920, and 
he is absolutely right, there is no money in section 920. But what this 
amendment does is set priorities. It says to the appropriators that the 
Congress--I think this amendment will be approved overwhelmingly--that 
the Congress and the Senate believe this is a program that needs more 
robust funding. This is a program that is a priority for the Senate and 
for folks on both sides of the aisle.
  I appreciate the opportunity to come here to speak on this very 
important amendment. It sends a very clear signal that this is an area 
we need more resources devoted to. I thank the Senator from North 
Dakota and the Senator from New Hampshire for allowing me the 
opportunity to speak at this time.


                           Amendment No. 3073

  The PRESIDING OFFICER. The Senator from North Dakota is now 
recognized to go back to the previous amendment.
  Mr. CONRAD. Will the Chair inform me how much time I have on that 
amendment?
  The PRESIDING OFFICER. There is 6 minutes 12 seconds.
  Mr. CONRAD. Mr. President, I will not take all of that time. Let me 
say this: I voted for the Medicare prescription drug program. I voted 
for it because I think it will help a substantial number of my seniors. 
Also, that legislation contained provisions to make Medicare 
reimbursement for rural hospitals more equivalent to what urban 
hospitals receive. In my State, under the old law, our hospitals were 
receiving about one-half as much to treat the same illness as a more 
urban hospital. That was in part corrected in the Medicare prescription 
drug legislation.
  Let us be frank. The handling of the Medicare prescription drug 
implementation has been a fiasco from beginning to end. I think every 
one of us has heard loudly and clearly from our States--I certainly 
have. I have done nine meetings in my State, including hosting 
Secretary Leavitt, on this

[[Page 3576]]

question. It has been botched. The implementation of the Medicare 
prescription drug bill has been botched. On the day, the initial day, I 
have never seen such chaos. You couldn't get through on the phones. You 
couldn't get through on the Internet. You couldn't get accurate 
information. Cards weren't in people's hands. They automatically 
enrolled those who were eligible for both Medicare and Medicaid in 
plans that often didn't cover the drugs that they were on.
  That is a fact. This was very badly handled by the administration, as 
badly handled as anything that I have seen in 20 years representing my 
State in the Senate. It was an absolute fiasco. That is a fact.
  The question is, What do we do to try to improve the circumstance? 
The Senator from Florida, who has a very large elderly population, has 
made one constructive suggestion. He has said let's extend the 
deadline.
  Let me just say, in my State, 37 or 38 percent of the people who are 
eligible have signed up so far. We have over 100,000 people eligible 
and only 37,000 have signed up and about half of those were 
automatically enrolled. So the true signup, the voluntary signup is 
very low.
  It is clear we need more time. One of the problems is there are so 
many plans that it just confuses people. There are 41 plans in North 
Dakota. In all of the meetings I have had, people have said to me: 
Senator, how can you make any sense out of this, especially since, when 
you go to the phone lines you can't get an answer; when you go to the 
computer, the Internet sites, you can't get an accurate answer? I think 
the Senator from Florida is responsible in saying we ought to extend 
the deadline.
  According to the department, we now know that some 10 million people 
will not have signed up in time. That means they will start to have 
penalties imposed on them. Ten million seniors, many of them frail and 
elderly, will start to be penalized because they can't make sense out 
of this profusion of plans and this confusion.
  Senator Nelson has a very straightforward approach. He extends the 
deadline. The Senator from Iowa has an alternative. His approach is to 
give the department that has botched this signup the decision about 
whether the deadline is extended. That is a very clear choice. Do we 
really want the decision whether the deadline is extended to be made by 
the people who made a hash of this program's implementation? Or are we 
going to take responsibility and extend the deadline so 10 million 
people aren't penalized through no fault of their own. I think that 
choice is very clear.
  Mr. MENENDEZ. Mr. President, as I have been traveling across the 
State of New Jersey on a listening tour, I have heard from countless 
seniors and their loved ones that the new prescription drug plan has 
brought much confusion, concern, and difficulty.
  In townhall meetings and in senior homes, these sentiments of 
puzzlement are echoed over and over again.
  Knowing the challenges seniors are facing, I am committed to doing 
whatever it takes to make this drug benefit something that helps 
instead of hurts, which is why I am speaking in support of Senator 
Nelson's amendment.
  This amendment will make sure that instead of penalizing our seniors 
for taking a little more time in choosing a plan, it will accommodate 
them.
  This amendment will make sure that instead of penalizing our seniors 
for choosing the wrong plan, it will give them the flexibility to 
change to the right one.
  It is already March 14, just about 2 months before the May 15 
deadline for seniors to signup for a plan without being penalized by 
the late enrollment fee.
  And the tune I hear in New Jersey and across the country hasn't 
changed. Seniors need more time to figure out how the new program works 
and which drug plan is best for them.
  And it isn't just the seniors that need more time--let's not forget 
that the Federal Government needed more time, too.
  As a matter of fact, when the new drug plan was implemented, New 
Jersey, like many other States, stepped up to the plate to provide 
emergency drug coverage to ensure that no one went without the 
lifesaving drugs they needed.
  They did not do it because that was planned; they did it because it 
was the right thing to do. They did it to make sure that there was no 
loss of life or emergency hospitalization due to the inability for 
individuals to get their lifesaving and life-enhancing drugs.
  The Federal Government dropped the ball, and our States picked it up. 
While the Centers for Medicare and Medicaid have agreed to reimburse 
New Jersey and other States for their emergency coverage costs, our 
States still haven't seen a check, and it will probably be a while 
until they.
  I think our seniors deserve the same flexibility and understanding 
granted to our Government.
  We have a responsibility in Washington to ensure that the initial 
confusion and problems with implementation do not go any farther.
  Our seniors should not be punished for the shortfalls of this new 
drug benefit. It is an issue of fairness. It is about keeping your 
word, about being accountable. And today we have the opportunity to 
give our seniors the much needed extension of time and flexibility they 
need to choose a plan.
  I voted against the Medicare Modernization Act at the time because I 
didn't think it would provide adequate assistance, and I have been 
sorry to see that the implementation has not gone as promised.
  However, this is the prescription drug plan we have, and we must do 
everything we can to make it as helpful and beneficial as possible.
  For that reason, I hope my colleagues will join me in supporting 
Senator Nelson's amendment. It is the least we can do to make things 
right.
  Mr. CONRAD. Mr. President, has all time been yielded back on the 
other side on this amendment?
  The PRESIDING OFFICER. All time has been consumed.
  Mr. CONRAD. All time has been consumed. I am prepared to yield back 
the time on my side on this amendment so we can then go to Senator 
Murray so she can respond on Senator Santo-
rum's amendment.
  Mr. GREGG. That is fine.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, I ask after we complete the Santorum debate 
we move to your amendment on avian flu and then that be followed by--
you have another amendment?
  Mr. CONRAD. We have an amendment by Senator Wyden, or Senator Byrd, 
that is next in the queue. I think Senator Wyden is our next amendment, 
and we will be prepared to go to that.
  Mr. GREGG. I ask unanimous consent that after we complete the 
Santorum amendment we go to the Conrad amendment on avian flu, and then 
we go to the Wyden amendment on Medicare.
  Mr. CONRAD. Let's reserve on that one until I make certain.
  Mr. GREGG. Other than that, go to yours.
  Mr. CONRAD. Yes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Washington is recognized for 5 minutes.


                           Amendment No. 3050

  Mr. CONRAD. How much time is left on the amendment of Senator 
Santorum?
  The PRESIDING OFFICER. The opposition on that amendment has the full 
15 minutes available.
  Mr. CONRAD. I yield the full 15 minutes to the Senator from 
Washington for her use, or anybody she would designate.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Washington is recognized.
  Mrs. MURRAY. Mr. President, I am here because the Senator from 
Pennsylvania came to the floor this morning and offered an amendment on 
funding for Community Development Block Grant Programs. First of all, I 
am delighted that the other side recognizes that the assumption in this 
budget, to

[[Page 3577]]

cut $1 billion from Community Development Block Grant Programs, is 
absolutely unacceptable. Their assumption is absolutely accurate.
  Across our country today, mayors and other community leaders are up 
in arms about the billion-dollar cut to Community Development Block 
Grant Programs that is in this budget, on top of what I might remind 
all of my colleagues was the $500 million cut from last year.
  We all know these essential programs. They are essential for housing, 
an absolutely critical part of our infrastructure, making sure we help 
develop many of our neighborhoods across this country with that 
critical seed money that brings those communities back up to standard 
and makes sure people have adequate housing while it creates jobs and 
economic development in communities across our country. Robbing those 
communities of those funds right now when our country is struggling to 
get back on its feet is the wrong thing to do, and the Santorum 
amendment recognizes that.
  Here is my problem. Last night I was on the floor of the Senate. I 
offered a real amendment to restore the funding for Community 
Development Block Grant Programs. It provides $1.3 billion, and it does 
it by adding real money to the budget amendment by closing corporate 
loopholes. The amendment offered by Senator Santorum is simply a 
``let's not worry, be happy until after the election'' amendment and 
doesn't provide one dollar.
  How do I know that? I keep hearing the other side go to the floor 
and--whether it is veterans or Community Development Block Grant 
Programs or defense--say we are going to take money out of function 
920. I went to the budget resolution book and I looked up 920 to see 
how much money was left. I was astounded to find out there is no money 
in function 920. In fact, they are half a billion dollars in the hole 
right now.
  I see the ranking member, Senator Conrad, on the floor. If he 
wouldn't mind, I wanted to ask him a question because he knows this 
budget better than anybody.
  I ask, through the Chair to the ranking member, am I wrong, in 
looking at this budget resolution, that the Republican Members are 
coming to the floor offering amendments to pay for funding for CDBG or 
veterans or defense, when there is no money? I ask my colleague if he 
could respond?
  Mr. CONRAD. Mr. President, unfortunately the Senator is completely 
correct. There is no money in function 920. The Senator is absolutely 
correct that when we started this process, function 920 was $500 
million in the hole.
  I guess what is even more remarkable is we have now had $10.5 billion 
of additional funding supposedly covered by function 920 when there 
never was any money to begin with.
  Mrs. MURRAY. Mr. President, I ask my colleague, the ranking member of 
the Budget Committee, then am I to assume that function is now $11 
billion in the hole? And we are hearing our colleagues on the other 
side say: Don't worry, be happy; simply take it out of the function 
where there is no money? I ask my colleague, the ranking member on the 
Budget Committee, is that real?
  Mr. CONRAD. No, it is not real. What is happening now--I must say my 
colleagues on the other side have got an increasing habit of spending 
money that doesn't exist. We started out with function 920 having no 
money, in fact, being $500 million in the hole. They have now passed 
amendments that take another $10.5 billion out of a function that has 
no money. What will the practical effect be? The practical effect will 
be an across-the board cut in all the domestic discretionary accounts. 
What are they? It will cut defense, it will cut homeland security, it 
will cut law enforcement. That is what is really happening.
  It is the difference between doing something and acting like you are 
doing something but not doing it. The fact is, as to the amendments 
they have offered, before they offered them there was $873 billion 
available to the appropriators for the domestic accounts. When all 
their amendments are finished, the appropriators will have--guess 
what--$873 billion, not a nickel more. So this is all a sham. It is 
creating funding that does not exist. The Senator is correct. The 
amendment that she offered really did offer new funds, additional funds 
to buttress the community development block grant.
  Mrs. MURRAY. Mr. President, that sounds completely irresponsible to 
me, to send a false promise by some kind of sham vote that you are 
supporting veterans or Community Development Block Grant Programs or 
all the other programs that we hear from the other side. I heard the 
Senator from Pennsylvania say this will just tell the Appropriations 
Committee that this Senate says you are to spend that money.
  I am the ranking member on the Transportation-HUD subcommittee. We 
are already looking at a transit cut of $100 million, an Amtrak cut, 
which I know the Senator from Pennsylvania cares about, a cut of $394 
million, and the FAA is cut by $561 million, a safety factor.
  I say to my colleague from North Dakota, I am completely worried 
about the irresponsible message that these amendments are sending and 
the sham that they are. I heard last night when I offered my amendment, 
the chairman of the Budget Committee said we were raising taxes to pay 
for our amendments on this side.
  I want to ask this of the ranking member on the Budget Committee. My 
amendment I am offering today is to restore Community Development Block 
Grant Programs at a real, significant number. The $1 billion cut in the 
budget is irresponsible. Trying to pay for it out of sham money that is 
not there is irresponsible. We are asking for $1.3 billion by closing 
corporate tax loopholes. I heard those on the other side say that is 
raising taxes. I know my colleague, who happens to be the ranking 
member, who happens to be one of the most fiscally responsible Members 
on this side, is also a member of the Finance Committee. I would like 
to ask him, through the Chair, how he would respond to that being a tax 
increase.
  Mr. CONRAD. I do not believe it is a tax increase, to require people 
to pay taxes that are legitimately owed and due now that they are 
failing to pay.
  We could easily pay for the amendment of the Senator by shutting down 
two sham operations. Let me describe them. One is American companies 
and American wealthy investors--this will be hard to believe, but this 
is really going on--buying sewer systems in Europe, depreciating them 
on their books to reduce their taxes in America, and leasing back those 
sewer systems to European cities so that they can run them. Shutting 
down that scam, is that a tax increase? I don't think so.
  Let me describe one other. The other day my colleague showed an 
office building in the Cayman Islands, a five-story office building 
that is the home to 12,700 companies. I say that is a remarkable 
building. That is a real smart building, to be able to house 12,700 
companies.
  What is really going on? What is really going on is a giant tax scam. 
They say they are doing business in the Cayman Islands. They are not 
doing any business in the Cayman Islands. They have a file clerk in 
this building who takes their financial records so they can claim they 
are doing business there. Why do they want to be doing business in the 
Cayman Islands when they are really not doing business in the Cayman 
Islands? Because the Cayman Islands is a tax haven. It is a place where 
you can show your profits and not pay taxes.
  We could pay for your amendment five times over by shutting down 
those two scams alone. That is not a tax increase. That is stopping a 
tax scam.
  I might say, of the the amendments that have been passed so far that 
have been theoretically funded by section 920, we had an amendment to 
increase defense by $3 billion. That was funded out of section 920 when 
920 had no money. We passed an amendment for veterans, supposedly to 
increase funding for veterans by $823 million, funded out of section 
920 when section 920 has no money.
  We funded an increase in education by $2 billion out of function 920 
when

[[Page 3578]]

there is not any money. We had border security this morning, and $2 
billion was supposedly paid for out of function 920 when we all know 
there is no money in 920. So what will happen is there will be across-
the-board cuts and they will cut defense, they will cut homeland 
security, they will cut law enforcement, and cut everything else. The 
fact is there is no new money to pay for any of them.
  Mrs. MURRAY. Mr. President, I thank the ranking member for clarifying 
that. I think it is important for all of us to understand that.
  These votes we take today will have real consequences. How do I know 
that? Not just because of the respect I have for the ranking member and 
his explanation, because this is exactly what happened on this floor 
last year when the Senators on the other side of the aisle offered a 
``don't worry, be happy'' amendment to restore funding for community 
development block grants, critical money for neighborhood restoration, 
for low-income housing for our communities across the country.
  Do you know what happened when we got to Appropriations? We didn't 
have the flexibility because our subcommittee also has to fund Amtrak, 
airlines, transit, and other housing programs. There was no way to do 
it despite what the Senate voted on. They ended up having to cut $.5 
billion from the community development block grants.
  It is a sham to me to watch these amendments march through here on an 
account that has no money, that is deficit spent already, and try to 
sell to their constituents that we are doing something about it when 
every Senator on this floor knows we ran into a train wreck last year 
which lasted well into this year on the Appropriations bills. Who was 
hurt? Not the Senators who voted for it, but our neighbors and friends, 
mayors and city councils and people on the ground across this country 
who are trying very desperately today to try make sure that the most 
important citizens have critical housing infrastructure, that we create 
jobs, that we have economic development, and that our communities 
become strong again.
  I have said time and time again on this floor that we need to make 
our country strong again. The most important way we can do it is to 
invest real dollars in our infrastructure. The CDBG Program is one of 
the best ways to do that. Every Senator here knows it. The votes we 
will take later today will be for sham accounts or a real vote. And 
when will it count? Next fall, when our friends and neighbors see the 
reality of these amendments and the budget impact on it.
  I will conclude by saying that I have been around my State talking to 
many mayors, talking to many community developers, hearing story after 
story about how our communities have taken this small amount of money 
from the Federal Government and invested it wisely, created jobs, 
created housing, improved the lives of our citizens.
  I know this CDBG cut, if we don't pass real money, will mean that 
Pennsylvania will lose $46 million in funding. It means Minnesota will 
lose $15 million in funding. In my home State, it means $16 million. 
Those are not just items on a budget; those are real dollars that make 
a difference in the lives of our friends and neighbors and communities 
across the country.
  This afternoon we will have an opportunity to cast votes for a real 
amendment--the Murray amendment--that restores funding and makes sure 
our Appropriations Committee has the allocation that will allow us to 
fund the CDBG, or we can take a political vote and be happy for a day. 
But it will not change anyone's life at home, and it will not restore 
hope and opportunity that this country so desperately needs today.
  I thank my colleagues, and I yield the floor.
  Mr. LEAHY. Mr. President, it is regrettable, and it is frustrating, 
that once again we find ourselves having to speak out on the shortfalls 
in the budget resolution for key community and economic development 
programs. The budget before us slashes Federal assistance to distressed 
and underserved communities. These cuts are shortsighted, they are ill-
advised, and they represent a significant retreat from our longstanding 
commitment to invest in our Nation's communities.
  In just a few weeks, the Senate will again be asked to appropriate 
tens of billions more to help Iraq. Though the President's request for 
Iraq funds is once again off the budget so that it avoids our normal 
budget rules, the Iraq supplemental funding request once again is for 
real taxpayers' dollars--no less real than the domestic cuts that the 
Bush-Cheney budget proposes for the priorities of the American people 
here at home.
  That is why I am proud to join Senators Murray and Sarbanes, as well 
as 14 more of our colleagues--17 of us in all--in offering an amendment 
to the fiscal year 07 budget resolution to provide for an increase of 
$1.3 billion to restore the community development block grants, or 
CDBG, to the fiscal year 04 level of $4.3 billion. We fully pay for the 
increase in funds by closing egregious tax loopholes that more than 90 
Members of this Chamber have already gone on record in support of 
closing.
  Our amendment is supported by those who know best how effective and 
important this program is to America's communities. The list of 
endorsements includes the National Association of Counties, the 
National League of Cities, the National Conference of Black Mayors, the 
National Association of Local Housing Finance Agencies, the National 
Association for County Community and Economic Development, the National 
Association of Housing and Redevelopment Officials, the Council of 
State Community Development Agencies, and the Local Initiatives Support 
Corporation. I ask unanimous consent that a letter from these groups in 
support of our amendment be printed in the Record.
  The CDBG Program is the centerpiece of the Federal Government's 
efforts to help States and localities meet the needs of low-income 
communities. CDBG funds vital housing rehabilitation, supportive 
services, public improvements, and economic development projects in 
communities across the Nation. It serves more than 1,100 entitlement 
communities, urban counties and States, and more than 3,000 rural 
communities. These investments help change the face of our communities 
for the better and help improve the standards of living of Americans 
across the Nation, right where they live, in their communities.
  CDBG is one of the most effective Federal domestic programs helping 
to revitalize neighborhoods, and it has a proven record of results. For 
example, in 2005, Vermont used CDBG grants to rehabilitate 771 units of 
affordable housing and to help create or preserve more than 500 jobs, 
directly helping to raise the standard of in Vermont's communities. 
There are hundreds of similar stories across the Nation, but in each of 
them the message is the same: CDBG funds are critical building blocks 
for improving our communities, our neighborhoods, and our economy.
  The CDBG formula allocation was $4.41 billion in 2001. Since then it 
has decreased by $670 million, or 15.2 percent, with a 5-percent cut in 
fiscal year 05 and a 10-percent cut in fiscal year 06. The budget 
resolution for the coming year would further reduce the formula funding 
by 25 percent, cutting the formula allocation by over a third in just 3 
years. Communities that benefit from CDBG will be devastated if further 
cuts in funding are made to this program.
  I recently led a bipartisan letter with Senator Coleman to the Budget 
Committee attesting to the effectiveness of CDBG and urging that it be 
funded at $4.3 billion in the coming fiscal year. Fifty-three Members 
of the Senate from both sides of the aisle joined me in this letter, 
which I ask to have printed in the Record at the conclusion of my 
remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1)
  Mr. LEAHY. I wish to take a moment to explain the differences between 
the Murray-Sarbanes-Leahy CDBG amendment and the amendment offered by 
Senators Santorum and Coleman. The

[[Page 3579]]

amendment we offer facilitates restoring these CDBG funds by increasing 
the budget cap by closing tax loopholes that the Senate has already 
supported closing, in previous votes. This, in turn, makes real money 
available to the Appropriations Committee to be able to spend for next 
year.
  Increasing the cap is important because the budget resolution we are 
considering assumes domestic spending will be capped at the same level 
as the President's request. Simply put, the budget resolution assumes 
that funding for CDBG will be reduced by the same amount as the 
president has proposed, which would be a cut of $1 billion from fiscal 
year 06 levels.
  A separate amendment offered by our colleagues, Senator Santorum and 
Senator Coleman, also supports an increase of funding for CDBG, but it 
would do so by asking the Appropriations Committee to impose across-
the-board cuts on all other domestic programs.
  Speaking as an appropriator, I can tell you that all their amendment 
will do if it passes is to tell the Appropriations Committee that the 
Senate supports CDBG. But that will not be enough to guarantee that the 
committee will hear and provide the Transportation-Treasury-HUD, TTHUD, 
Appropriations Subcommittee with a higher allocation to increase 
funding for CDBG.
  My colleagues should note that the Santorum-Coleman amendment is the 
same as the CDBG amendment that passed last year. However, because it 
provided no additional funding to the Appropriations Committee, the 
TTHUD Subcommittee received an allocation that was inadequate to fund 
all of the programs within its jurisdiction. CDBG was the program that 
was on the chopping block, suffering cuts of more than $400 million.
  So if my colleagues want to simply signal their support for CDBG 
funding to the Appropriations Committee, then they should vote for the 
Santorum-Coleman message amendment. Unfortunately, if they choose to do 
that and that amendment passes at the expense of our amendment, they 
will find that when it comes time to write the TTHUD appropriations 
bill, they will have failed to protect this important program from 
further cuts.
  The choice is clear. Those who want to vaguely express support for 
the CDBG Program can support the other amendment, which is a nice 
sentiment, like a Candygram. But for those who also really want to get 
the job done, I urge support of our amendment.
  I challenge each Member to go back to their States and to take stock 
of the benefits that communities have reaped through CDBG investments. 
I challenge each Member to visit with their local community action 
groups and hear how they use the community services block grant to 
support the neediest in their communities. These programs fill a real 
need and have proven results.
  A cut of $1 billion in Federal funds, which is proposed in this 
budget resolution, will result in the loss of at least $9 billion in 
matching funds from local and State governments and nonprofit and 
private sector investments. I fail to see the wisdom in dismantling 
programs that are so vital to our communities.
  I encourage my colleagues to join me in support of the Murray-
Sarbanes-Leahy amendment and express their real support for these 
important programs.

                               Exhibit 1

                                                   March 14, 2006.
       Dear Senator: The undersigned organizations thank you for 
     joining 52 of your colleagues in signing a letter (attached) 
     to the Budget Committee leadership in support of a budget 
     allocation sufficient to fund the Community Development Block 
     Grant (CDBG) program at $4.3 billion for FY 2007. The 
     resolution approved by the Senate Budget Committee last 
     Friday would not allow for such a funding level. In fact it 
     adopts the funding level proposed in the President's FY 2007 
     budget, which cuts CDBG formula grants by an additional $1 
     billion over this year's $3.71 billion. Today the Senate will 
     consider alternative amendments to the budget resolution to 
     increase CDBG funding. We support a Murray/Leahy/Sarbanes 
     amendment to increase funding for the CDBG program by 
     increasing the overall discretionary cap. It is offset by 
     closing corporate tax loopholes, an approach that has had 
     overwhelming support by a bipartisan group of Senators. This 
     is the only way that the Appropriations Committee can 
     increase CDBG funding because it means additional dollars. 
     Reluctantly, we cannot support an amendment by Senators 
     Santorum and Coleman that increases funding for CDBG paid for 
     by an across-the-board cut in other domestic programs 
     (Function 920). This amendment is similar to an amendment 
     offered by Senator Coleman last year that passed the Senate. 
     In spite of this, the final FY 2006 appropriations bill cut 
     CDBG formula grants by 10 percent.
       We strongly urge you to vote for the Murray/Sarbanes/Leahy 
     amendment that would allow appropriators to restore the CDBG 
     formula amount to the FY 2004 funding level. Thank you for 
     your continued support of the CDBG program and the good work 
     it does in our nation's urban, suburban and rural areas.
           Sincerely,
       National Association of Counties.
       National League of Cities.
       National Conference of Black Mayors.
       National Association of Local Housing Finance Agencies.
       National Association for County Community and Economic 
     Development.
       National Association of Housing and Redevelopment 
     Officials.
       Council of State Community Development Agencies.
       Enterprise.
       Local Initiatives Support Corporation.
                                  ____



                                                  U.S. Senate,

                                    Washington, DC, March 8, 2006.
     Hon. Judd Gregg,
     Chairman, Committee on the Budget,
     U.S. Senate.
     Hon. Kent Conrad,
     Ranking Member, Committee on the Budget,
     U.S. Senate.
       Dear Chairman Gregg and Ranking Member Conrad: As you near 
     consideration of the FY 2007 Budget Resolution, we urge the 
     Budget Committee to oppose the budget proposal to cut funding 
     for the Community Development Block Grants (CDBG) Program by 
     nearly $1 billion, or 25 percent. Instead, we urge the Budget 
     Committee to maintain the Federal government's commitment to 
     community development programs at the Department of Housing 
     and Urban Development (HUD) and support a budget allocation 
     of $4.3 billion in Function 450 for CDBG.
       The communities that have benefited from CDBG will be 
     devastated if the HUD proposal to cut funding is enacted. 
     CDBG serves more than 1,100 entitlement communities, urban 
     counties and states, and more than 3,000 rural communities 
     nationwide. It is the centerpiece of the Federal government's 
     efforts to help states and localities meet the needs of low-
     income communities. The Program funds vital homeownership, 
     housing rehabilitation, public improvements, public services 
     and economic development projects in communities nationwide. 
     It also supports community-based organizations and the 
     crucial work they do to deliver human services and rebuild 
     neighborhoods.
       CDBG is one of the most effective Federal domestic programs 
     to revitalize neighborhoods with proven results. Over 95 
     percent of the FY 2005 CDBG funding went to activities 
     principally benefiting low- and moderate-income persons. 
     Twenty-eight percent of CDBG funds supported housing 
     activities in distressed communities, 24 percent supported 
     public improvements, 15 percent went to the provision of 
     public services, and 7 percent supported economic development 
     activities. In FY 2005, CDBG housing projects assisted over 
     166,000 households, including financial assistance to new 
     homeowners and rehabilitation assistance to the elderly and 
     other existing homeowners. Economic development programs 
     benefiting from CDBG last year created or retained over 
     91,000 full-time jobs. CDBG also has a strong record in 
     business retention: CDBG has ensured that over 80 percent of 
     the businesses assisted through the program were still in 
     operation after three years.
       The CDBG formula allocation was funded at $4.41 billion in 
     FY 2001. Since then, the formula allocation has decreased by 
     $670 million, or 15.2 percent, with a five percent cut in FY 
     2005 and a 10 percent cut in FY 2006. The FY 2007 HUD budget 
     would reduce the formula funding by an additional 25 percent, 
     cutting the formula allocation by over a third in just three 
     years.
       In light of these drastic cuts, communities have struggled 
     to continue their programs and have discontinued critical 
     projects for low- and moderate-income persons. We therefore 
     ask you to reject the proposed cut and ask you to support 
     $4.3 billion in funding for the CDBG Program.
       Thank you for your consideration. We look forward to 
     working with you to ensure that communities across the 
     country can provide good jobs, affordable housing, and public 
     services to meet the needs of all Americans.
           Sincerely,
         Norm Coleman; Tim Johnson; Mel Martinez; Byron L. Dorgan; 
           Dianne Feinstein; Barbara A. Mikulski; Patrick

[[Page 3580]]

           Leahy; Deborah Ann Stabenow; Daniel K. Akaka; Frank 
           Lautenberg; Paul S. Sarbanes; Robert Menendez; John D. 
           Rockefeller IV; Thomas R. Carper; Russell D. Feingold; 
           Mary L. Landrieu; Joe Lieberman; Tom Harkin; Barack 
           Obama; Susan Collins; Richard Durbin; Conrad Burns; 
           David Vitter; Max Baucus; George V. Voinovich; Maria 
           Cantwell; Jeff Bingaman; Bill Nelson; James M. 
           Jeffords; Blanche L. Lincoln; Mark Pryor; Barbara 
           Boxer; Jack Reed; Mark Dayton; Lincoln D. Chafee; Patty 
           Murray; Carl Levin; Saxby Chambliss; Hillary Rodham 
           Clinton; Charles E. Schumer; Ron Wyden; Arlen Specter; 
           Johnny Isakson; Mike DeWine; Olympia J. Snowe; Joseph 
           R. Biden; John F. Kerry; Christopher J. Dodd; James M. 
           Talent; Christopher S. Bond; Edward M. Kennedy; Herb 
           Kohl; Rick Santorum.

 Mr. COLEMAN. Mr. President, I rise to express my strong 
support for Senator Santorum's amendment to restore budget cuts to the 
Community Development Block Grant Program, or CDBG. I was proud to 
sponsor a similar amendment during last year's budget, and today I am 
pleased to work with my good friend from Pennsylvania to restore CDBG 
funding in this year's budget.
  I am also pleased to have worked with the Senator from Vermont, 
Senator Leahy, in leading a bipartisan coalition of 53 Senators this 
year in sending a message to the Senate Budget Committee expressing our 
strong commitment to CDBG and reminding folks that cities from 
Montpelier to Minneapolis need CDBG to create economic opportunity and 
to grow jobs.
  When we consider the budget, there are always a lot of tough choices 
to be made. We need to be fiscally responsible, and this is a fiscally 
responsible budget. We need to look at the myriad of Federal programs 
and ask ourselves, does the program work? Is it cost-effective? Is it 
achieving its goals?
  In the case of CDBG, the answer is yes, yes, and yes. CDBG was 
enacted in 1974 and has been assisting America's communities for 30 
years. It is a public-private partnership that helps State and local 
government address community development challenges, including 
infrastructure and housing. Over the first 25 years, it has created 2 
million jobs and contributed in excess of $129 billion to the Nation's 
gross domestic product. Dollar for dollar there is no better initiative 
to help States and localities undertake important economic development 
activities than the Community Development Block Grant Program.
  CDBG is not some abstract community and economic development program 
but rather one that provides practical and long-lasting individual and 
community wide benefits.
  CDBG success stories abound in every State--just ask all the local 
mayors who are visiting our offices this week. They will tell you that 
CDBG is the lifeblood of community development.
  As a former mayor, I know first hand the importance of the CDBG 
program. While mayor of St. Paul, CDBG provided funding that helped 
make the Main Street Program--a downtown economic revitalization 
program--a success.
  However my city of St. Paul is just one of many small and large 
examples of CDBG's success in Minnesota.
  In the city of Moorhead, CDBG has provided critical affordable 
housing and rehabilitation assistance to the city's low and moderate 
income families. By way of example, CDBG funding has enabled Moorhead 
to provide energy, electrical and structural repairs to John and Avis 
Pearson both senior citizens with a combined income of $25,000. CDBG 
funding has also helped to revitalize Romkey Park, a formerly blighted 
area of the city, through the rehabilitation of run down apartments.
  In Anoka County, a major suburb of the twin cities, CDBG has provided 
funding for the replacement of dilapidated mobile homes and the 
redevelopment of the city of Centerville. These are the sorts of 
projects that improve the quality of life not just for those least 
well-off but for the entire community by making it a more attractive 
place to live and do business in.
  Then there is the small town of Brewster which was awarded a one-time 
CDBG grant a few years ago. Thanks to that grant, Brewster was able to 
revitalize a run down part of the town and in turn attract the 
Minnesota Soybean Processor, which led to the creation of 40 jobs. The 
company has now also opened a biodiesel division, which now employs 
additional workers.
  Despite the longstanding Federal, State and local bipartisan support 
for this program and its long record of achievement, the future of CDBG 
is in serious jeopardy given the President's budget proposal to reduce 
funding by $1 billion to $2.7 billion. Since fiscal year 2001, the 
program has endured a 15.2 percent reduction. In my home State, funding 
has steadily declined during the past several years with funding 
decreasing from $68.4 million in fiscal year 2004 to $58.5 million for 
the current fiscal year. At the President's proposed funding level, 
Minnesota would receive approximately $43.7 million for fiscal year 
2007 or a 36 percent reduction from the fiscal year 2004 level.
  I came to the Senate promising to be Minnesota's mayor in Washington. 
As a mayor, I know that CDBG works, and as a Senator, I am proud to 
support this program and urge my colleagues to support the Santorum 
amendment, which would provide the funding necessary for the program to 
effectively assist States and localities.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. There is 10 seconds.
  Mr. CONRAD. I yield it. I thank the President.
  Mr. GREGG. Mr. President, I ask unanimous consent that at 1 o'clock 
today the Senate proceed to vote in relation to the Murray amendment 
No. 3363, to be followed by 2 minutes of debate and a vote in relation 
to the Santorum amendment No. 3050; provided further that following the 
vote on the Santorum amendment, the Senate recess until 3 p.m. in order 
for the Senate to proceed to the House for the joint meeting.
  The PRESIDING OFFICER. Is there objection?
  Mr. WYDEN. Mr. President, reserving the right to object, and I have 
no intention of objecting, I want to clarify what the distinguished 
chairman and ranking member said--and they have been very helpful. My 
understanding is that we go to the Conrad amendment after that, the 
avian flu amendment. It is my understanding per the agreement between 
the chairman and ranking minority member that after the Conrad 
amendment has been discussed, we would next go to the Snowe-Wyden 
amendment.
  Is that the understanding of the chairman and the ranking minority 
member?
  Mr. GREGG. Mr. President, actually there will be another amendment 
dealing with the avian flu by Senator Burr, and then we would to go to 
the Wyden-Snowe amendment.
  Mr. WYDEN. Mr. President, is there a time limit for these amendments?
  Mr. GREGG. They are all 15 minutes.
  Mr. WYDEN. That would mean that somewhere in the vicinity of a half 
hour or 40 minutes or so we would deal with it.
  Mr. GREGG. The Wyden-Snowe amendment would be up sometime around 
11:25.
  Mr. WYDEN. Without being argumentative, it is the Snowe-Wyden 
amendment, but we are talking about the same thing.
  I thank both the chairman and the ranking minority member.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. GREGG. Mr. President, I wish to claim the remainder of the time 
on the Santorum amendment.
  The PRESIDING OFFICER. There is 9\1/2\ minutes remaining.
  Mr. GREGG. I thank the Chair.
  This discussion which recently occurred between the Senator from 
Washington and the Senator from North Dakota----
  Mr. CONRAD. Mr. President, will the Senator yield for a moment? It 
has been brought to my attention that these amendments which we have in

[[Page 3581]]

train, while we have an agreement they would be 15-minute amendments, 
that has not been agreed to in a unanimous consent agreement.
  Mr. GREGG. Mr. President, I ask unanimous consent that the amendments 
we have outlined so far--the Conrad amendment, the Burr amendment, the 
Wyden-Snowe, and if there is an agreement from our side in response to 
Wyden-Snowe, they will all be 15 minutes.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. CONRAD. Mr. President, without second degrees.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New Hampshire is recognized.
  Mr. GREGG. I understand I have 9 minutes. Good.
  The discussion which just occurred between the Senator from North 
Dakota and the Senator from Washington is a discussion which reflects 
the difference between our views and how you should budget. Essentially 
what the Senator from North Dakota and the Senator from Washington said 
is we should break the cap, we should spend additional money, and we 
should raise taxes. Their approach to budgeting is to tax and spend. 
Our approach, on the other hand, has been to say if there is a priority 
which the Senate feels is a high priority, whether it is veterans' 
benefits or CDBG--and there will be other amendments like these--that 
the Senate should declare there is a priority and set up a process 
where other programs will have to be reduced in order to pay for that 
program within the cap. The Senator from North Dakota correctly 
referred to it as an across-the-board cut.
  Section 920 is a technical event. It does not have money in it, and 
it never has. But when you identify a 920 expenditure, it creates a 
mechanism where another program activity would be cut across the board.
  That is the philosophical difference between our parties.
  This budget increases the size of Government from last year to next 
year by over $100 billion. That is the growth in this budget--over $100 
billion. The growth in the discretionary account will be about $30 
billion under this budget. Those are huge numbers of growth. That is 
expanding the Government in a very dramatic way and a very significant 
way, much more so than I would personally wish to do. I wish to see us 
control, for example, entitlement spending a little more aggressively 
around here, which is the majority of growth. But the fact is that is 
the growth.
  What the Democratic proposals are saying--there have been innumerable 
ones--is we should grow Government even more, we should expand 
Government even more, and then we should raise taxes to pay for that. 
The traditional Democratic approach to Government is basically no end 
to the size of Government. There is no end to the amount of taxes they 
are willing to raise.
  And this argument that they are going to use loopholes, I have to 
say, is a little shallow. There was this loophole around here called 
Customs fees which would be used to pay for new spending around here 45 
different times. People said we are going to take it out of Customs 
fees, and then they offset it because they didn't get a budget point of 
order against it.
  This building in the Caymans is the new Customs fee. The simple fact 
is if you eliminated all the loopholes which they are talking about--
they may or may not be loopholes; I certainly think some of them sound 
legitimate--that would be $11 billion you would raise over 5 years, all 
of them. They have proposed $133 billion in new taxes. So they are $121 
billion short.
  Where is that going to come from? That is going to come from 
increasing maybe the death tax, increasing rates, and increasing taxes 
on working families, on small businesses, so they can expand 
Government. That is the difference of opinion which we have.
  We don't believe that is the way you control the size of Government, 
to grow it and then raise more taxes to pay for it. We believe the way 
to control the size of Government is to set a hard spending level, 
which we have done, $873 billion, and hold that, and then within that 
spending level set priorities.
  A lot of amendments come through here saying what the priorities 
should be. I think they are fairly reasonable; some aren't. The fact is 
they will all have to be shoehorned under that hard spending cap as 
long as we maintain that spending cap, as we have done so far in this 
budget process.
  But every amendment offered so far from the other side of the aisle 
has been a spending amendment which has broken that spending cap--
increase the size of Government; grow the Government; then raise taxes 
to pay for it, representing that it is a corporate loophole closing, 
which it can't be because they have already gone well beyond the 
estimates that are reflected in those loopholes which they allege 
exist.
  There is a difference of opinion here. We happen to think we are 
doing it the right way by setting the priorities under the cap. They 
think they are doing it the right way by growing the size of Government 
beyond the spending cap and then paying for it with tax increases on 
working Americans. It is a difference of opinion.
  I yield the remainder of our time on the Santorum amendment and we 
can move on to the Conrad amendment.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for the Conrad amendment.
  Mr. CONRAD. Mr. President, before I go to the Conrad amendment, I 
will take 5 minutes off the resolution.
  The Senator is correct; we are now talking about the fundamental 
differences between us. We believe you ought to pay for your spending. 
We believe we ought to pay the bills we are generating. We believe on 
the Democratic side that you ought to match your spending with your 
revenue so you are not increasing the debt.
  Our friends on the other side of the aisle have taken a distinctly 
different position. Their position is you increase spending. The 
Senator has identified the increased spending in his own budget, but he 
will not raise the revenue to cover his spending. He won't make the 
hard choices. He won't cut his spending to match the revenue he is 
willing to raise, and he will not raise revenue to cover his increases 
in spending.
  The result is the debt is mounting dramatically because our friends 
on the other side of the aisle refuse to pay the bill. They want to 
spend the money, but they do not want to pay for it.
  When I grew up, common sense told you, responsibility told you, that 
you pay your bills. You pay your bills. If you don't have the money, 
you don't spend the money. That is the way I was raised.
  Here is what is happening.
  Mr. GREGG. Mr. President, will the Senator yield?
  Mr. CONRAD. No, I will not. I had a chance to listen and now I will 
have a chance to answer.
  Mr. GREGG. Do we know how long we are going with this little aside?
  Mr. CONRAD. I don't know until I have completed my thought.
  Here is what is happening with our colleagues on the other side of 
the aisle. Here is what is happening to the budget. The debt is going 
up, up, and away. Every year under this budget plan they are going to 
add to the debt. Here it is. We have a 5-year budget plan out here and 
they are going to add to the debt $680 billion in 2007; $656 billion in 
2008; $635 billion in 2009; $622 billion in 2010; $662 billion in 2011, 
because they won't pay the bills.
  They are running up the debt of this country in a way that is 
unprecedented, which risks our economic security, which risks our 
national security, and it is utterly reckless and it is irresponsible. 
This budget is going to lead to interest rate increases. It will hurt 
the economy. It is going to endanger our national security.
  The Senator is entirely right. We have a fundamental difference in 
view about how to handle the fiscal affairs of our country. We believe 
on our side if you want to spend the money, pay for it. That is what we 
have done with

[[Page 3582]]

our amendments. When we have sought to increase funding or eliminate 
the cuts that the President's budget proposes--for example, the 
President's budget proposes cutting education $2 billion. We do not 
believe it is right to cut the budget of education $2 billion. However, 
we also do not believe it is right just to put it on the charge card, 
run the debt up--we paid for it.
  The Senator talked about the amendments we offered in committee. He 
said we spent $126 billion. Yes, we did. And we raised the money, more 
than enough money, to pay for it. We raised $133 billion. The Senator 
says over and over that we increased the taxes to do it. No, we did 
not. We paid for it by, No. 1, closing the tax gap--the difference 
between what is owed and what is being paid. That gap now is $350 
billion a year. That is no tax increase, to insist that people pay what 
they owe.
  Now the other side says there is not the money in the tax gap to pay 
for that. Yes, there is. The Revenue Commissioner testified we could 
recover $50 billion to $100 billion a year by getting companies and 
individuals to pay what they legitimately owe. That is just a fraction 
of the tax gap.
  I yield myself an additional 5 minutes off the resolution.
  The PRESIDING OFFICER. The Senator has used 5 minutes and gives 
himself an additional 5 minutes.
  Mr. GREGG. What is the regular order?
  Mr. CONRAD. The Senator is recognized and the Senator continues to 
hold the floor, and I have an additional 5 minutes I have granted 
myself.
  The PRESIDING OFFICER. The consent order to go to amendments does not 
preclude yielding time off the resolution. That is what is occurring 
now--time off of the resolution from the Senator's time.
  Mr. CONRAD. Mr. President, we also paid for our amendments by closing 
corporate loopholes.
  The Senator says there wasn't the money in corporate loopholes to 
cover the spending we have provided. That is not true. In fact, we have 
taken a corporate loophole closing this body has previously passed and 
used it to fund high priorities such as money for education, such as 
money for veterans.
  How has the other side done it? They have offered a series of 
amendments to add more spending, but they have taken it out of a 
function that does not have any money in it. They have raised money for 
defense, but they took it out of function 920, which does not have a 
dime in it. They said they raised spending on defense $3 billion. There 
is no money in the fund from which they say they are taking the money.
  It is right here in the budget book, page 29. Go to function 920. 
Here it is. It says function 920 is $500 million in the hole. That is 
before they increased defense spending by $3 billion and supposedly 
took it from function 920. That is before this morning, when they took 
$2 billion to supposedly strengthen our borders. They took it out of 
function 920, where there is no money. It was $500 million in the hole.
  The Senator is exactly right. This does define the differences 
between our parties. We think we ought to pay for the spending; the 
other side just wants to put it on the charge card, run up the debt. 
They have become a party of borrow and spend, borrow and spend, spend 
and borrow, run up the debt. That is exactly what they are doing today. 
They are running up the debt of this country in a way that is reckless, 
that is radical and should be stopped. That is why we are going to urge 
our colleagues to vote against this budget when the opportunity comes.
  Let me go back to exactly what is happening. This chart shows 
graphically the dramatic runup in debt in this country. When this 
President came to office, the debt of the country was $5.8 trillion; 
that was the end of his first year. Today, the end of this year, it 
will be $8.6 trillion. If this budget is agreed to, it will be $11.8 
trillion. They will have doubled the debt with this policy of borrow 
and spend.
  That does define the differences. I am glad we have had a chance to 
have this discussion.
  I understand the Senator from Maryland has an inquiry?
  Mr. SARBANES. Will the Senator yield?
  Mr. CONRAD. I yield an additional 5 minutes to myself off of the 
resolution.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. This borrow-and-spend policy which the other side of 
the aisle is pursuing is the direct cause of the runup in the national 
debt, is it not? This chart which shows the incredible expansion of the 
national debt is the consequence of pursuing this policy. We are 
running record budget deficits, is that correct, I ask the Senator?
  Mr. CONRAD. This has been the largest deficit in dollar terms in our 
country's history. But of course the size of the deficit does not equal 
the increase in the debt; the increases in the debt that these budgets 
are providing are much more than the deficit. For example, the year we 
are in now, they say the deficit will be $371 billion, but the debt is 
going to go up by about $650 billion.
  Our friends on the other side do not want to pay the bills. They want 
to spend the money, but they do not want to raise the revenue to cover 
their spending. That is what is really going on. They are unwilling to 
cut the spending to match the revenue they are willing to raise, and 
they are unwilling to raise the revenue to meet their spending. Either 
way, they will not cut the spending to match the revenue, and they will 
not raise the revenue to match their spending. The result is they tack 
it on the debt. Borrow, borrow, borrow.
  They say things are getting better. Really? Things are getting 
better? Here it is. Here is what will happen if this budget passes. 
They will add to the debt every year for the next 5 years more than 
$600 billion a year until we get to a point of over $11.8 trillion in 
debt.
  The proof is in the pudding. Later today, they will come before the 
Senate and ask to raise the debt limit in one fell swoop by $781 
billion--a further confirmation of the policy of this administration 
and our colleagues, which is a policy of borrow and spend, spend and 
borrow, borrow, borrow, borrow, run up the debt. That is where we are.
  Mr. SARBANES. Will the Senator yield?
  Mr. CONRAD. I am happy to yield.
  Mr. SARBANES. This also reflects or demonstrates a sense of 
priorities.
  To take the amendment we were just considering, the Murray amendment, 
and then the Santorum amendment, the Murray amendment sought to avoid 
increasing the deficit by adding money for the community development 
block grant. All of the State and local governments are petitioning 
Congress for this. It is desperation time for them. She was prepared to 
pay for it by closing some corporate tax loopholes, all of which have 
previously been approved by the Senate, as I understand it.
  So in terms of priorities, in effect, we are saying: Support the 
Community Development Block Grant Program, but pay for it by closing 
these corporate tax loopholes; that is a higher priority. You do not 
raise the deficit, and you do not increase the debt by that amount. Is 
that correct, I ask the Senator?
  Mr. CONRAD. The Senator is entirely correct. That does define the 
differences here.
  The Senator from Pennsylvania, on the Republican side, offered an 
amendment to add $1.3 billion for community development block grants. 
But his amendment seeks to fund that amount how? By taking it out of 
function 920, just as we have had one amendment after another from the 
other side seeking to fund things out of function 920, where there is 
no money. They were $500 million in the hole when we started this 
process, and they have increased defense $3 billion. How did they pay 
for it? By function 920, where there is no money. And then this 
morning, $2 billion to strengthen our borders. How did they pay for it? 
Function 920, where there is no money. They say that is responsible 
budgeting, that this is the difference which defines our parties. They 
are exactly right--this is the difference which defines our parties.
  When Democrats were in control, we paid down the deficit. We actually 
were

[[Page 3583]]

in surplus and, in fact, we were able to stop taking Social Security 
money to pay other bills. Now, with them taking over, we have reversed 
course, going from record surpluses to record deficits and even higher 
running up of the debt.
  What they propose with this budget is more of the same--borrow and 
spend, spend and borrow, put it off, put it on the charge card, do not 
worry about it, tell the American people: You can have every tax cut 
and every spending increase, and you do not have to pay for anything.
  I yield myself another 5 minutes off the resolution.
  Does the Senator inquire further?
  Mr. SARBANES. I inquire of the Senator, when the Bush administration 
came in in 2001, wasn't the Federal budget in surplus?
  Mr. CONRAD. Yes. The Federal budget was in surplus by $128 billion. 
In fact, we had a string of surpluses as the Clinton administration 
during those 8 years brought spending down and revenue up. So we paid 
our bills. We stopped raiding Social Security. Now it has all been 
reversed, and we have record deficits with bigger amounts adding to the 
deficit, and they are taking the Social Security surplus to pay other 
bills. Under this budget plan, they will take almost $180 billion of 
Social Security surplus--money that is not really in surplus; it will 
all be needed, it will all have to be paid back--and they are taking 
every dime to pay other bills. Just more of the same--run up the debt, 
and we will worry about it tomorrow.
  At some point, we better start worrying about it today. The result of 
these policies is that foreign holdings of American debt have exploded, 
absolutely exploded. It took 224 years to run up $1 trillion of 
external debt. That is U.S. debt held by foreigners. This President has 
more than doubled that amount in just 5 years. It is stunning, but that 
is what is happening.
  The Dubai Ports deal, what is that about? I suggest that part of it 
is a result of our fiscal policy which is running up these massive 
debts, increasingly funded by foreigners, so foreigners are holding all 
these dollars. What are they going to do with them? In part, they are 
going to buy U.S. assets. They might as well put up a for-sale sign on 
the country because what is happening is all this money we are 
borrowing because our friends will not pay the bills, they just want to 
borrow the money, and the result is we owe Japan $668 billion and we 
owe China over $263 billion. And guess what. They are sitting on all 
this money. We owe the Caribbean bank centers almost $100 billion. They 
take that money. They have to do something with it. What are they 
doing? They are buying American assets.
  So if you like the idea of shipping American jobs overseas, if you 
like the idea of running up the debt, if you like the idea of going 
deeper and deeper into the ditch, this budget is the one you ought to 
vote for because it continues this policy. At some point, this is going 
to have to come to a screeching halt because the bill is going to come 
due.
  Mr. SARBANES. Will the Senator yield for a question? Isn't more and 
more of this debt we are running into being held overseas rather than 
here at home? Hasn't there been a shift in who holds the debt, so we 
are becoming increasingly dependent upon strangers to finance this 
deficit and this debt? Is that correct?
  Mr. CONRAD. The Senator is exactly correct. Of the publicly held 
debt, now almost 50 percent of it is held by foreigners. Isn't that 
stunning?
  Mr. SARBANES. Absolutely stunning.
  Mr. CONRAD. It used to be we borrowed the money from ourselves.
  Mr. SARBANES. Yes.
  Mr. CONRAD. Not anymore. Now we are borrowing from Japan primarily. 
China is next. Great Britain is third. The Caribbean banking centers 
are fourth. We owe them $98 billion. We even owe the South Koreans $60 
billion.
  As to our colleagues on the other side, it is fine with them: Keep 
borrowing the money. Spend the money. Borrow the money. This is the 
defining difference. I am glad our colleague, the chairman of the 
committee, made the point that this defines the difference. It 
certainly does. We do not believe the appropriate policy is to keep 
running up the debt of the country, to keep borrowing the money, but 
that is what this budget does.
  Mr. SARBANES. Furthermore, doesn't this budget make it clear their 
prime priority on the other side is to provide these tax cuts, which 
overwhelmingly benefit the wealthy? The consequence of that is either 
we run up the deficit and debt or we cut programs that are badly needed 
across the country, particularly for working people.
  So the priority that is being established is tax cuts first and 
foremost, which upon analysis are seen to benefit--I understand the tax 
breaks for millionaires that have passed under the Bush administration, 
the people with more than $1 million of income each year, amount to $41 
billion in the coming year--$41 billion. The community development 
block grant proposal was for $984 million, one-fortieth of the amount 
going out in the tax cuts.
  So those are the priorities that are being established here--the tax 
cut first and foremost--and the consequence is, you run up the deficit 
and cut programs which are badly needed by ordinary citizens all across 
America.
  The PRESIDING OFFICER (Mr. Graham). The Senator's 5 minutes has 
expired.
  Mr. CONRAD. I thank the Senator.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I yield myself--the Senator from North 
Dakota and the Senator from Maryland took about a half an hour. I took 
about 5 minutes. So I am going to yield myself 25 minutes to discuss 
this issue in some depth because it is an important issue. I do believe 
the characterizations here are interesting but inconsistent with the 
facts.
  The Senator from North Dakota says we are running up the debt. I 
suppose you can argue that is true, yes, because we are operating the 
Government. But the second question would be, Who is running up the 
size of the Government? That would be probably a more appropriate 
question. If you look at the Democratic proposals, as they have hit the 
floor of the Senate, they are running up the size of the Government. 
That is their goal.
  They proposed amendments in committee that increase the size of the 
Federal Government by $127 billion. That is a huge expansion of the 
Federal Government. I give them credit, they pay for it with taxes on 
the American people, raising them $133 billion. And they are not tax-
loophole closers.
  The Senator from North Dakota has claimed: Well, if you just 
collected taxes that are owed, you might get up to $100 billion. That 
may or may not be true, and we are going to try to do something to 
accomplish that. But as he well knows, CBO will not score that. They 
score that as zero. So in order to get that $133 billion, they are 
going to have to raise taxes on working Americans because loophole 
closers simply do not generate anything like that. The maximum amount 
you can score for loophole closers is about $11 billion. So they are 
going to have to raise taxes at least $121 billion on working 
Americans.
  And then the Senator from Maryland says there is $41 billion out 
there that you can just take from high-income Americans. If you grab 
that, well, that is clearly a rate increase and a tax increase. But it 
is an inaccurate statement. Actually, the high-income Americans today 
are paying more--paying more--than they have paid at any time in 
history as a relative burden of taxes. Their number has gone up 
significantly. In fact, the time when they got the best deal, 
ironically, was during the Clinton administration.
  During the Clinton administration, high-income Americans actually 
paid less as a percentage of the gross tax burden, total tax burden in 
America, than at any other time. It is only in the last few years that 
their percentage of the burden has gone up.
  Why is that? Well, it is something called economic activity. When 
people go out and they work hard and they are being productive, they 
end up paying

[[Page 3584]]

more taxes. When tax rates are high, people seek tax shelters, and they 
hide income, and they invest it in things that give them avoidance of 
taxes. Some of the things the Senator from North Dakota would like to 
eliminate I would like to eliminate, too, that are inappropriate. But 
they also do things that are appropriate to avoid taxes so they do not 
have to pay that high tax rate.
  When you have a capital gains rate of 30 percent, people do not sell 
their assets. They hold on to them because they do not want to pay all 
that money to the Federal Government, especially high-income people. So 
what we have seen is when we cut rates, high-income people started 
doing things that generated revenue for the Federal Government, and it 
also generated a tax burden on them that was higher. They were willing 
to take that because they were making more money. And it is shown 
definitively by the revenues we have received as a Federal Government 
as a result of the cut in the capital gains rate.
  Now, the other side of the aisle considers the cut in the capital 
gains rate to be poison. They think it just benefits the rich and it 
should not have occurred. They want to repeal it. They tried to put in 
place pay-go to force the repeal of it, and they have all sorts of 
ideas for how you eliminate it because this is the rate they see as the 
problem in America, the capital gains rate being 15 percent instead of 
what it was. It used to be 30 percent.
  What was the effect of cutting capital gains rates? It actually 
generated huge revenue to the Federal Government. Why? Because people 
went out and started to undertake economic activity. They went out and 
sold stock. They went out and sold small businesses. They went out and 
sold real estate. That generated economic activity, which generated 
taxes to the Federal Government, taxes which we did not expect to get 
of $81 billion. Then they took the money they generated as a result of 
selling those assets and reinvested it in more productive activity and 
created more jobs, took more risks. As a result, the economy is 
growing.
  We have had month after month after month of growth in this economy. 
We created 5 million jobs. We have had, I think, 30 months of growth in 
this economy. And the 5 million new jobs we have created actually 
exceeds the combined jobs created in Japan and Europe during that same 
period of time. That is good economic policy.
  Just last month, we created 234,000 jobs. Why? Because we created an 
atmosphere where people are willing to go out and take a risk, where 
they are willing to go out, invest their money, take a risk, and create 
a job as part of taking that risk, and create revenue for the Federal 
Government because they create income. As a result, the revenues have 
gone up in this country.
  So another chart is pretty dramatic. These are the revenue growths--
the yellow lines--in the last few years and what we project out into 
the future--a 14-percent jump in revenue last year. Now, the other side 
will say: But that is from a historic low. Yes, it is a historic low, 
which was driven in large part by the Internet bubble of the late 
1990s, the largest bubble in the history of this country or in the 
world. It was a bigger bubble than the tulip bubble or the South Seas 
bubble. When the Internet bubble collapsed, we went into recession, and 
that dropped revenues dramatically. Then we were attacked on 9/11, and 
that dropped revenues even more.
  So the President, with considerable foresight, I would say, decided 
to cut taxes before we got deep into the recession. As a result, there 
was economic activity generated, and that has produced a significant 
upturn in revenues--one of the most significant upturns in revenue in 
history.
  Now, here is the bottom line of this whole argument: We are reaching 
a point where we are back to a historic level of what taxes have been 
in this country. Historically, taxes in this country have represented 
about 18.4 percent of gross national product. And yes, they dipped well 
below that because of the Internet bubble and because of the attack on 
9/11 and the economic slowdown that occurred. But now they are headed 
back up because of the economic policies this President has put in 
place, including creating more incentive for people to go out and be 
more productive.
  So within a year, or maybe a year and a half, we are going to be back 
to a tax burden in this country which is generating essentially what 
has been the historic norm, which is about 18.4 percent--18.4 percent--
of gross national product, with a Tax Code that does it by saying to 
people: Go out and take a risk. Create a job. As a result of doing 
that, give us some more revenue--because there will be more people 
paying taxes.
  But if you look at the Democratic proposals which have come forward 
under this budget, what they are suggesting is that this tax burden, 
this historic tax burden of 18.4 percent, is not high enough. The 
American people are fundamentally undertaxed, they are saying. They 
have to be taxed more. And Government has to grow more. Government has 
to grow a lot more. We have to grow Government by $127 billion more, 
and then we have to hit people with another $133 billion in taxes. We 
will get that tax burden up around 19 or 20 percent of gross national 
product, maybe get it up to 21 percent, 22 percent. Who knows how high 
it is going to go. It is going to go as high as they want to spend 
money. That is the difference between our parties. They believe in 
expanding the Government and expanding taxes to pay for it.
  When our members have come to this floor and suggested there is a 
priority for CDBGs or there is a priority for veterans, what they have 
said is they want that money to be spent there, but they are willing to 
do it under a cap. They are going to control spending on the 
discretionary side of the ledger.
  When the members from the other side have come to the floor and said 
there is a priority for veterans or there is a priority for CDBG, they 
have said: We don't want to have to be limited to any spending regime 
around here. We want to blow that cap. We want to add another $127 
billion to the cost of Government, grow the Federal Government, and we 
will raise taxes to pay for it.
  At least they have integrity on that point. I agree with that. They 
are saying: Grow Government, grow taxes, take that tax burden over the 
norm of 18.4 percent. Take it up to 20 percent. Take it up to 19 
percent of gross national product. And then take the size of Government 
and drive it up, too, over 20 percent, 21 percent, 22 percent.
  What our people are saying--
  Mr. DORGAN. Will the Senator yield for a question?
  Mr. GREGG. No, I am not going to yield. Your side did not yield to me 
when you were talking.
  What our people are saying is we have priorities, too. We recognize 
that some things need more money than other things. We are willing to 
do it within a controlled atmosphere of a spending cap that is $873 
billion. Within that cap, we are going to offer amendments to spend 
money on this item or that item, and in exchange for that we are going 
to cut across the board under 920. That is what it does. That is the 
difference. We are willing to set priorities and limit spending. They 
are willing to set priorities, increase spending, and raise taxes to 
pay for it.
  This argument that these taxes are going to come out of some nonpenal 
event to the American people, that it is not going to affect the 
American people's income, that it is going to come from some corporate 
loophole or that it is going the come from some Cayman Islands place, 
is just--well, it is like the Customs fees. Forty-five times we used 
Customs fees around here to claim we could raise spending. Finally, we 
actually did use the Customs fees, so we don't here about them anymore 
around here. Hopefully, someday we will wipe out the Cayman Islands 
building so we won't hear about that anymore, either. But in the 
process, you cannot generate enough revenue from doing that to address 
the $133 billion of taxes that are being raised here. The maximum you 
can generate out of those items is $11 billion.

[[Page 3585]]

  So this has been an interesting aside, well discussed, well 
presented. But I would like to suggest to the Senator from North Dakota 
that we get on to the amendment process.
  Mr. CONRAD. Does the Senator yield?
  Mr. GREGG. I am not yielding the floor. I am asking the Senator from 
North Dakota if he would like to get on with the amendment process. I 
have not yielded the floor.
  Mr. CONRAD. Momentarily----
  Mr. GREGG. I yield for a question.
  Mr. CONRAD. I am not going to ask a question. I will respond to your 
question and just say, I think this is a healthy thing. Debate has 
broken out here, which is a rare occurrence. You have done an excellent 
job of presenting your view. I have tried to represent our view. I 
would like to respond briefly to some of the points you have made. 
Perhaps you would then like to respond briefly to some of mine.
  Mr. GREGG. I would suggest, then, that we spend another 6 minutes on 
this. You take 3; I take 3. Then we move on to your amendment.
  Mr. CONRAD. I wouldn't be prepared in 3 minutes to respond to your 
very excellent presentation over the last 15. It will take me a little 
bit of time to respond to these things. I do think it is a healthy 
debate. It will actually, perhaps, save us time because maybe we can 
then reduce our wrap-up time at the end of the debate.
  Mr. GREGG. I will yield the floor, recognizing that I will probably 
reclaim it for the amount of time that the Senator from North Dakota 
uses.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I say to my colleague, for whom I have 
great respect, the chairman of the committee, we have a very real 
difference. We are highlighting that difference. That is a healthy 
thing. It is a debate.
  Let me respond to something the Senator said. I have the same chart, 
a little different colors, that looks at the spending and revenue lines 
of the Federal Government going back to 1980. The red line is the 
spending line. The green line is the revenue line. This is as a 
percentage of GDP. What you see is that during the Clinton years, the 
spending came down as a share of GDP each and every year. The revenue 
went up. The result was, we stopped deficit spending. We stopped 
running up the debt. In fact, we were paying down the debt. Then 
President Bush came into office. The spending went up.
  They make the assertion that we are the big spenders, but the fact 
is, during the Clinton years, spending went down each and every year as 
a share of gross domestic product. During the Bush years, spending has 
gone up virtually every year.
  On the revenue side of the equation, when President Bush came in, the 
revenue side of the equation collapsed. The Senator says it collapsed 
because of economic slowdown, because of the Internet bubble. Yes, in 
part it did. But he never mentions the tax cuts. Hello? The tax cuts 
accounted for half of this drop. The result was discretionary spending 
went up. Why did discretionary spending go up? For defense, homeland 
security, and rebuilding New York. All of us agreed with that. On a 
bipartisan basis we agreed to spend more money to respond to the 
attacks on our country. So spending went up, but the revenue went way 
down. The result is, more and more deficit, more and more debt.
  Here is our fundamental difference. Our Republican friends want to 
spend the money, but they don't want to pay for it. They don't want to 
raise the revenue to meet their spending line, and they don't want to 
reduce their spending to match their revenue line. The result is the 
debt is skyrocketing.
  Here it is. This is the result of their policies. This is what the 
debt was at the end of President Bush's first year, $5.8 trillion. We 
don't hold him responsible for the first year because he was still 
under the Clinton budget. But look what has happened since. The 
President told us he was going to have maximum paydown of the debt. At 
the end of this year the debt will be $8.6 trillion. It has gone up, 
up, and away. And if this budget is approved that our colleagues on the 
other side have put before us, and the President has put before us, the 
debt is going to go to $11.8 trillion. They will have almost doubled 
the debt.
  Our colleagues on the other side have a mistaken notion on the issue 
of taxes. I would love to cut taxes 50 percent across the board. I 
would be a huge beneficiary myself if we did that. But what would 
happen? The debt would go up even more. Since we are borrowing almost 
half of this debt from abroad, we would be even more in debt to 
foreigners, the Japanese, the Chinese. Is that what we want to do for 
our future? I don't think so. I think that weakens us.
  Our colleague keeps saying: If you cut taxes, you get more revenue. 
The only evidence my colleague presents is in one type of tax, capital 
gains. He doesn't want you to look at the whole revenue picture because 
he knows what I know: Revenue has not gone up with all these tax cuts.
  Here is what has happened to total revenue. Remember, he has just 
talked about a small part of the revenue base, capital gains. But here 
is total revenue. In the year 2000, total revenue for our country was 
just over $2 trillion. The next year it went down. And in that next 
year, 2001, we had massive tax cuts. What happened to revenue the next 
year? Did it go up or did it go down? It went down to $1.85 trillion. 
How about the next year; did the revenue go up or did it go down? It 
went down again, to $1.78 trillion. How about 2004; did the revenue at 
that point exceed what it was in 2000? No. It was still far below what 
we got in 2000. It was $1.88 trillion. We didn't get back to the 
revenue base of the year 2000 until 2005. Those are the facts. Their 
idea didn't work. But they can't admit they were wrong. The result is 
they keep on spending the money, but they won't raise the money to pay 
for their spending. So what happens? The debt goes up, up, up.
  Our colleague said the economy is really humming under their plan. We 
are seeing modest growth. But let's look in comparison to other times 
in our history when we were going through an economic recovery. First, 
median household income has declined for 4 straight years. That is not 
a good sign. When we look at economic growth and we compare this 
recovery to previous recoveries and we look at the nine recoveries 
since World War II, nine periods when we were coming out of a 
recession, on average in those nine other recoveries, economic growth 
averaged 3.2 percent. This time it is only 2.8 percent.
  In addition, we looked at business investment. We went back and 
looked at the nine previous business cycles, the nine recoveries since 
World War II. That is the dotted red line in terms of business 
investment. If at this stage in the cycle, we compare it to this 
recovery, which is the black line, do you know what we find? Business 
investment is running 62 percent behind the average of the nine 
previous recoveries. And job creation? They are bragging about job 
creation. Let me just say, there were 22 million jobs created during 
the Clinton years. When we compare this recovery to the nine previous 
recoveries since World War II, again, the dotted red line is the 
average of the nine previous recoveries--job creation in this recovery 
is the black line--we are 6.6 million private sector jobs short of the 
average recovery since World War II.
  Again, I go back to the fundamental difference that we have. Our 
Republican friends have a budget before us that is going to increase 
the debt over the next 5 years by $3.5 trillion. That is their plan. Is 
that what we want to do? Half of it is funded by foreigners. So the 
bizarre thing they are doing--because this budget increases spending. 
This is their budget. It increases spending. The chairman has described 
that. And it cuts taxes, even though we can't pay our bills now. So 
guess what. We get more debt funded by foreigners, more vulnerability 
to the country, more money we owe the Japanese, more money we owe the 
Chinese. And then we wonder why the Dubai Ports deal occurred. There 
are going to be a lot more Dubai Ports deals under this fiscal plan 
because, under this fiscal

[[Page 3586]]

plan, we are going to owe a boatload more of money.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, for the sake of figuring out where we are 
going, I can never remember who is the junior or senior Senator any 
longer because the Senator from North Dakota came, went, and came back. 
How much time do you think Senator Dorgan would like?
  Mr. DORGAN. I would like 5 minutes.
  Mr. GREGG. Why don't we give 5 minutes to Senator Dorgan, and then I 
will respond.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 5 minutes.
  Mr. DORGAN. Mr. President, this has been fascinating. I came in at 
Senator Gregg's presentation, nearly at a fever pitch, depending on 
what appears to be the indefensible. But it reminded me of how one 
argues in court. You take the best you have and then go at it with 
volume--if possible, as much volume as is possible--and hope some of it 
sticks. It reminded me a little bit, too, of the message that Gen. 
George Armstrong Custer received just before they actually got to 
Harden, MT, with the 7th Calvary. His scouts came back and said: Things 
look pretty good up ahead. Things look pretty good.
  General Custer got that message. It is the message I heard this 
morning as I walked onto the floor of the Senate from our colleague, 
Senator Gregg: Things look pretty good up ahead.
  Let's look up ahead for a moment. On page 28 of the resolution that 
sits on the desks of Members of the Senate, let's look up ahead, see if 
things look pretty good up ahead. It doesn't matter how many trees you 
cut down to produce the charts, how much ink you use to create your bar 
graphs. That doesn't mean a thing. Let's look up ahead just a bit.
  In 2011, what is going to happen to this country under the best of 
circumstances, under the most optimistic circumstances offered by the 
majority party in their resolution? In 2011, we will be required as a 
country to borrow over one-half of a trillion dollars. That is how much 
the debt will increase in 2011. So somebody brings this to the floor of 
the Senate and says: We have a plan. Our plan is to put our fiscal 
house in order, and 5 years from now we are going to borrow over half a 
trillion dollars and we call that order.
  I said yesterday, I yearn for the old Republican Party. Both 
political parties provide grand opportunities for this country, and 
have for two centuries. They both contribute to the well-being of 
America and to the building of this great Nation. But there was one 
thing you could always count on the Republican Party to do, and that is 
they wore gray suits. They were conservative. They would wear wire rim 
glasses, and they would look like they just swallowed a lemon. They 
were very serious. You could always trust them to stand for fiscal 
responsibility--always. Pay your bills, they would say. Balance your 
budget. That is what you would count on them for.
  That has changed a lot because the new majority party here says this 
is paying our bills and balancing our budget, page 29. Five years from 
now, they say, their plan will have us borrow over one-half trillion 
dollars in that year alone. During the entire 5 years, as my colleague 
has said, we will borrow over $3.5 trillion. And that is putting our 
country back on track? I don't think so.
  It is time that even when we look in the mirror we be honest. It is 
time this Congress be honest with itself. It doesn't take charts, 
doesn't take the ink on charts. It reminds me of that old western movie 
line: What are you going to believe, me or your own eyes?
  Let me choose to believe my own eyes. Let me choose to believe what 
is in the most optimistic assessment in this fiscal policy. This 
country is deep in debt, going deeper in debt. And, by the way, we are 
going to borrow about $600 billion this year, and that doesn't include 
the $700-plus billion of trade deficit. So we are going to borrow about 
$1.3 trillion this year alone, just in this year alone, and we are 
told: Gee, things are good. Things are good. Just like General Custer's 
scouts, things are really good up ahead. They are not. This country 
deserves the seriousness of purpose on the part of Republicans and 
Democrats who are willing to stare truth in the eye. The truth is on 
page 28.
  This country is off course, off track, and it is unsustainable. Yes, 
in trade it is off track. We are shipping jobs overseas at a wholesale 
rate, we are closing American plants, and we are up to our neck in 
debt. We are selling America piece by piece, $2 billion a day, 7 days a 
week, all year long.
  In fiscal policy, we are borrowing and borrowing. My colleague from 
New Hampshire talks about taxes. I understand the issue of taxation. I 
especially understand the issue of those who don't want to tax but want 
to borrow and spend and say let the kids pay for it. That is not 
conservative. That is a new conservatism that, in my judgment, doesn't 
do well by this country's future.
  Mr. GREGG. Mr. President, the Senator from North Dakota makes my 
case. The seriousness of purpose would require that they present a 
budget, and if they did, they would be presenting a budget that had 
dramatic tax increases in it and dramatic expansion of the Federal 
Government, as has been shown by the amendments they have brought to 
the floor--over $127 billion of expansion of the Federal Government, 
over $133 billion in tax increases.
  That is just the start. The senior Senator from North Dakota 
basically questioned this recovery. I suppose you can always walk 
around with a dark cloud over your head and claim there is no sunlight 
when the sun is shining on you. The fact is, this recovery has been 
pretty good, especially in the context of the fact that we are fighting 
a war and we have had basically the entire Gulf States wiped out as a 
result of catastrophic natural events, Hurricane Katrina and Hurricane 
Rita. If we look at some of the issues that affect people the most in 
this recovery, let's look at the price of homes. They have gone up; 
there have been historic increases. When that happens, everyone's net 
worth in America jumps. All homeowners' net worth jumps when the price 
of homes goes up. So everybody who is a homeowner has a little more of 
a cushion to their life.
  Dividend income has jumped dramatically as a result of the cut in 
dividends. Why? Because corporations, instead of borrowing and instead 
of using mechanisms where they reinvest maybe overseas--which seems to 
upset our colleagues on the other side--have decided to pay out 
dividends. So people who own stock in this country--the vast majority 
of Americans, by the way, either directly or through pension funds--are 
benefiting from the fact that dividend income has jumped radically 
under this administration.
  Unemployment, during a period of fairly significant recession at the 
beginning of this administration, and a period of war that has been 
going on throughout this administration, and a period where the gulf 
coast has been overwhelmingly hit by an economic downturn as a result 
of the impact of the catastrophic events of Katrina and Rita, 
unemployment continues to drop.
  In fact, I remember a couple years ago, under this administration, 
when the other side of the aisle was claiming we weren't creating 
enough jobs. We don't hear that routine anymore. Jobs are being created 
at a significantly faster rate than historic norms, and we are seeing a 
lot of people being employed--5 million jobs added, which is more than 
the combined increase of Japan and Europe--which, by the way, has a 
population of about half again as large as ours--over the same period 
of time.
  Productivity growth. This is an important one because it is a 
function of the tax laws that we put in place. Productivity growth is 
higher than almost all prior business cycles. We have maintained 
extremely high productivity growth as a result of the fact that we have 
created a tax climate where people are having incentive to invest and 
create jobs, which we have talked about earlier. That is a hugely 
important factor, something that if you listen to former Chairman 
Greenspan, who I think is a fair arbiter of economics in this country, 
he will tell

[[Page 3587]]

you productivity growth is probably the most important thing. If you 
can keep that ahead of inflation, you are going to have a robust 
economy, and we have certainly done that as a result of the policies of 
this administration.
  We have had 17 consecutive quarters of economic growth, economic 
expansion. That is a very robust recovery under any definition of 
recovery--17 consecutive months. It may not be as strong as other 
recoveries, but it is certainly a very strong recovery and something we 
as a nation should be taking a fair amount of pride in.
  That brings us back to the issue of tax policy because if you listen 
to the other side of the aisle, you would think that revenues were 
still down as a result of Katrina, as a result of the attack of 9/11, 
and as a result of the burst of the Internet bubble, and they claim it 
is as a result of tax cuts. Revenues are not down; they are proceeding 
to go up. They continue to grow. At least their chart shows they are 
back to a historic level. That level that they are at is essentially 
the level they should be at, which is the historic level that we pay 
taxes as a percentage of gross domestic product. The Federal Government 
should not be taking more than 18.4 percent of GDP out of the economy 
for tax purposes. We are growing at a dramatic rate. These bars go up 
significantly, and they are going to continue to go up significantly 
because of the fact that we have in place tax policy that encourages 
economic activity, risk taking, and job creating, which is so critical 
to the generation of revenue to the Federal Government. So we get back 
to what is the essence of the debate because I think it needs to be 
restated.
  The essence is this chart--they have their chart, and it is basically 
the same chart, but we look at them differently. We agree that the 
chart is the same. The point is this: Revenues are coming back to their 
historic levels, 18.4 percent of gross national product. Spending, 
however, is not coming down as much as it should, and it is not coming 
down not because we have not made a commitment to try to control 
spending--we have done that. Last year, we passed the first deficit 
reduction attempt on entitlements in 8 years. We got two votes from the 
other side of the aisle. There was no attempt to control entitlements 
from the other side of the aisle last year. There was opposition to 
spending control there. Then we put into place a cap on spending, and 
again we didn't get any votes from the other side of the aisle.
  What their proposal is, is shown in their amendment, which 
essentially says we are going to grow the size of Government, grow it 
above that line where it is now, which is 20 percent; and we are going 
to raise taxes and grow the revenues well above the 18.4 percent, which 
is the historic norm. So they are basically saying they are willing to 
take much more out of this economy to grow the Government, make the 
Government bigger than what has historically been the case, and they 
are also willing to take much more in taxes.
  We don't think we should go that way. We think we should put into 
place spending restraint. We would love it if the other side of the 
aisle would support this. But there is no attempt to support the caps 
from any amendment offered on the other side of the aisle. Every 
amendment that has come forward from them has raised the caps, raised 
the size of Government.
  There was no support for entitlement control on the other side of the 
aisle--none. Well, there were two votes, I am sorry. I respect those 
votes and I thank them. But the vast majority of the other side of the 
aisle didn't want to do any entitlement restraint. To the extent we 
have seen spending go up, it has only gone up in two categories--
entitlements and national defense. National defense is something you 
have to do when you are at war. So when the Senator from the other side 
of the aisle points to the spending chart going up, he knows and I know 
that the extent that is discretionary spending, it is 95 percent 
national defense because that is what we have to do when we are at war.
  So if you are going to control the rate of growth of Government, you 
have to control the discretionary side and the entitlement side. There 
is no attempt to do that on the other side. There is an attempt to 
expand it. Yes, the debt goes up. Their argument is that we are 
expanding debt. Well, that is true because we are fighting a war that 
we have to pay for and because we cannot get any support in a 
bipartisan way to address what is driving the debt most, which is 
entitlement spending.
  The President comes forward with a proposal on Social Security and 
says everything is on the table. The other side says we won't accept 
anything. He comes forward with a Medicare proposal. Immediately, the 
leader on the other side of the aisle said the proposal was 
inexcusable, even though it was put forward by MEDPAC, an independent 
organization of health professionals, which suggested you can restrain 
the rate of growth nominally with a couple of changes.
  The same is true of Medicaid. What a battle we had last year to save 
$5 billion in Medicaid spending, with over a $1.2 trillion base, so we 
took the rate of growth from 40 percent to 40 percent. We didn't even 
change it. There was opposition every step of the way from the other 
side.
  So it is very hard to give a lot of credibility to the idea that 
there is a desire to control spending on the other side of the aisle. 
What this is on the other side of the aisle is shown by this chart, 
which is to increase spending, increase the size of Government, 
increase taxes and, as a result, we refer to that as tax and spend, a 
term which I believe is reasonably accurate in this context.
  At this point, I will yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, I yield 5 minutes to myself off the 
resolution. We have heard from the other side that we have proposed 
additional spending in the committee. Yes, we did. The difference 
between our spending and the spending the other side offered--and they 
have offered, repeatedly, amendments to increase spending--is that we 
paid for ours. We paid for it.
  The Senator has a list that shows we offered in committee amendments 
that have increased spending $126 billion. Let me explain where almost 
all of that spending was. One amendment. One amendment to say that 
veterans of our country should have their spending considered mandatory 
rather than discretionary--mandatory rather than discretionary. I think 
most Americans would say spending on veterans is not a discretionary 
matter.
  We asked them to go to war, asked them to put their lives on the 
line. In many cases, they have come back wounded, injured, and in need 
of care. Is it discretionary to fund those accounts, to take care of 
their medical needs? We don't think so. We think it should be on the 
mandatory side of the ledger. That is scored as $104 billion of our 
$126 billion of spending.
  Now, yes, I will look anybody in the eye and say that was spending 
that was responsible, to keep the promise made to our Nation's 
veterans. And we paid for it. We didn't just run up the debt the way 
our colleagues do. Over and over, they have voted for spending. We have 
shown the lines. Spending has gone up under this administration. But 
revenue has gone down. They voted for all the spending, and they voted 
for all the tax cuts, and the result is the debt is going up, up and 
away. So they are the party of borrow and spend. Borrow and borrow, 
spend and spend. They don't want to reduce any spending.
  I don't see any amendments that they have offered to cut spending. 
They offered amendment after amendment to increase spending, but they 
don't want to pay for it.
  The Comptroller General has told us that ``continuing on this 
unsustainable fiscal path will gradually erode, if not suddenly damage, 
our economy, our standard of living, and ultimately our national 
security.'' He is talking about this runup of debt.
  I want to conclude. My colleague said they had a deficit reduction 
plan and they didn't get a single vote from our side for it. He is 
right. They didn't have any deficit reduction. There is no deficit 
reduction in their plan. The deficit went up. They passed their plan

[[Page 3588]]

and the deficit went up. In 2005, the deficit was $319 billion. They 
passed their deficit reduction plan without a single Democratic vote. 
In fact, some on their side voted against it. And now the deficit is 
going to be $371 billion.
  So the Senator is absolutely correct. We didn't vote for their so-
called deficit reduction plan that didn't reduce the deficit; it 
increased the deficit. And we are not going to vote for this plan that 
runs up the debt $600 billion a year each and every year for the next 5 
years, taking us to a debt of $11.8 trillion before the baby boomers 
ever retire. So that is the difference between the parties.
  In terms of economic performance, I say to my colleague, he says that 
the productivity numbers are a result of the Tax Code. I don't think 
so. I think the productivity numbers are the result of the hard work of 
the American people, the ingenuity of the American people, not as a 
result of the Tax Code. The productivity numbers were going up 
dramatically when we had the previous Tax Code. So the notion that the 
Tax Code is the reason for the productivity gains is just imaginary.
  If we want to talk about economic performance, in the Clinton 
administration we got twice as much increase in real average hourly 
earnings. We got 50 percent more increase in real disposable personal 
income. And we got 10 times as much job creation. That is with the 
previous Tax Code.
  So it is not the Tax Code that is producing those results. It is the 
hard work and ingenuity of the American people.
  Mr. WYDEN. Will the Senator yield?
  Mr. CONRAD. I will be happy to yield. I say to my colleague, would 
this be an appropriate time to go to Senator Wyden's amendment?
  Mr. GREGG. Mr. President, I understand Senator Grassley wishes to 
respond to Senator Wyden. That may be the appropriate time. Let Senator 
Wyden make his presentation.
  Mr. WYDEN. I appreciate that. What Senator Snowe and I want to do is 
not spend any taxpayers' money; we want to save some taxpayers' money. 
I appreciate that. I was here about 45 minutes ago thinking that was 
the point where we would be in the queue. When Chairman Grassley gets 
here, we would appreciate the chance to discuss our bipartisan 
amendment.
  Mr. CONRAD. Mr. President, I say to the Senator, this would be the 
appropriate time for him to make his presentation, and we can go 
forward with the amendments.
  The PRESIDING OFFICER (Ms. Murkowski). The Senator from Oregon is 
recognized.


                           Amendment No. 3004

  Mr. WYDEN. Madam President, with the consent of both sides, I call up 
amendment No. 3004, the Snowe-Wyden amendment.
  The PRESIDING OFFICER. Without objection, the clerk will report.
  The legislative clerk read as follows:

       The Senator from Oregon [Mr. Wyden], for Ms. Snowe, for 
     herself and Mr. Wyden, proposes an amendment numbered 3004.

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

 (Purpose: To ensure that any savings associated with legislation that 
   authorizes the Secretary of Health and Human Services to use the 
  collective purchasing power of 40,000,000 Medicare beneficiaries to 
  negotiate the best possible prices for prescription drugs provided 
 through part D of title XVIII of the Social Security Act in fallback 
plans, by private drug plans (if asked) and in other circumstances, but 
 not permitting a uniform formulary or price setting, is reserved for 
       deficit reduction or to improve the Medicare drug benefit)

       At the end of title III, insert the following:

     SEC. ____. RESERVE FUND FOR THE NEGOTIATION OF THE BEST 
                   POSSIBLE PRICE FOR PRESCRIPTION DRUGS THROUGH 
                   MEDICARE PART D.

       The Chairman of the Committee on the Budget of the Senate 
     may revise the aggregates, allocations, functional totals, 
     and other appropriate levels and limits in this resolution 
     upon enactment of legislation that allows the Secretary of 
     Health and Human Services to use the collective purchasing 
     power of 40,000,000 Medicare beneficiaries to negotiate the 
     best possible prices for prescription drugs provided through 
     part D of title XVIII of the Social Security Act in fallback 
     plans and, if asked, by private drug plans, and in other 
     circumstances, but not permitting price setting or a uniform 
     formulary, by the amount of savings in that legislation, to 
     ensure that those savings are reserved for deficit reduction 
     or to improve the Medicare part D drug benefit.

  Mr. WYDEN. Madam President, we all have seen the frustrations and the 
heartache that senior citizens have experienced over these last few 
months as the prescription drug legislation has gone into effect. 
Certainly, some folks are being helped, and we are glad to see it. But 
in order to really make a prescription drug benefit work, we have to 
contain the costs of medicine. That is what Senator Snowe and I are 
trying to do. We are trying to do it by using marketplace forces, not 
Government but marketplace forces to hold down the cost of medicine.
  A majority of the Senate is now on record as favoring this proposal. 
A majority of the Senate voted for it last fall before all the 
headaches and the frustrations that seniors have experienced. So in my 
view, the case is a lot stronger today than it even was last fall when 
a majority of the Senate voted for it.
  I think that is the reason the American Association of Retired 
Persons has written to the Senate saying they are in support of the 
bipartisan Snowe-Wyden legislation. They have something they call their 
Rx Watchdog group. It is an effort by AARP--a very laudable effort--to 
monitor the cost of medicine. They report that the cost of medicine is 
going up twice the rate of inflation.
  Of course, we know older people use more medicines than the rest of 
the population. It would be one thing if people were trying to go about 
doing this in an arbitrary kind of fashion, using a one-size-fits-all 
Government approach or price controls. That is not what the bipartisan 
Snowe-Wyden legislation does.
  We want to be very clear, as we offer this legislation, that at line 
13 and line 14 of this amendment, there is a statutory prohibition on 
price controls as an effort to hold down the cost of medicine.
  Let me repeat that to the Senate. The bipartisan Snowe-Wyden 
legislation at line 13 and line 14 includes a bipartisan statutory ban 
on price setting as an effort to control the cost of medicine. This is 
about using marketplace forces to hold down the cost of these drugs 
that are clobbering our older people.
  I don't see how anyone can oppose this amendment and, in fact, 
Secretary Tommy Thompson, the former Secretary of Health and Human 
Services, said in his last press conference that he just wished he had 
this authority. He wished he had the kind of authority that is in this 
amendment. It doesn't mean it is going to be used all the time, but it 
means it is a tool, an opportunity like we have every single day in the 
private sector of our economy to hold down the cost of medicine.
  The way Medicare is going to go out and buy these prescription drugs 
reminds me of somebody going to COSTCO and buying one role of toilet 
paper at a time. Nobody would go shopping that way. Everybody who is in 
a position to do so exercises their marketplace clout, the opportunity 
to be a savvy shopper, the opportunity to say I am going to purchase a 
lot of something. I want to get my money's worth.
  I just hope the Senate this time, when we have seen all the 
frustrations older people are having, uses this chance to do something 
about it.
  We know lots of lobbyists are against this amendment. Last week we 
had a discussion on lobbying reform. I can tell colleagues in the 
Senate that probably the biggest trophy on a lobbyist's wall is to 
defeat the bipartisan Snowe-Wyden amendment, but that doesn't make it 
right. What we need to do is what is right for older people and at a 
time when millions of seniors are walking on an economic tightrope, 
balancing their food costs against their fuel costs, and their fuel 
costs against their medical bills, this is a chance to use marketplace 
forces to hold down the cost of medicine.
  For older people, there are no costs going up like prescription 
drugs. Some

[[Page 3589]]

are saying: We can get these cost savings without the Snowe-Wyden 
amendment. A lot of those people are the same ones who said that the 
rollout of the prescription drug program would go perfectly. We say 
that certainly has not been the case.
  Now there is a chance to go home at this break and say you actually 
moved to do something important that older people are talking about at 
their kitchen table every single day, and that is the cost of medicine.
  I don't know of any special interest group in this country that got 
the kind of sweetheart arrangement in this legislation that the 
pharmaceutical sector has. There is no other group in this country, no 
other group that got a specific carve-out so we couldn't use 
marketplace forces to hold down the cost of medicine. It is really 
staggering that one group was singled out to be immune from the forces 
of the marketplace.
  Secretary Thompson thought it made no sense. It certainly makes no 
sense right now when older people are being clobbered by the cost of 
medicine and finding it hard to secure the benefits of this program. In 
fact, my sense is one of the reasons a lot of older people have been 
reluctant to sign up is they can't see any cost savings in the program.
  Here is a chance to generate some real cost savings. That is why AARP 
indicated its support for the amendment. That is why Secretary Thompson 
said he wished he had the authority. That is why every timber company, 
steel company, and auto company in the country uses its marketplace 
clout to hold down the cost of medicine. Fifty-one Senators voted for 
it last fall before we saw all the older people have the problems they 
have had over the last couple of months.
  I hope colleagues, on a bipartisan basis, will support this 
amendment. Senator Snowe and I have worked on this now for 3 years. We 
said we were going to work on it at the time the original legislation 
was voted on. AARP, like Senator Snowe, like myself, like Chairman 
Grassley, for whom I have enormous respect--we are all in support of 
the original legislation. I still have the welts on my back to show for 
my support for the legislation. But as AARP says, don't miss the 
opportunity to improve on this legislation which we can do by using 
marketplace forces.
  I urge colleagues, particularly in light of some of what has been 
written, to take a look at line 13 and line 14 of the amendment which 
specifically prohibits the use of price controls under this amendment 
as a tool to hold down the cost of medicine.
  Madam President, I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator's time has expired. The Senator 
from Iowa.
  Mr. GRASSLEY. Madam President, here we are again. Today's discussion, 
as the famous words go, is deja vu all over again.
  First of all, we heard the words ``sweetheart deal'' for drug 
companies. If drug companies had their way, they would want no 
formularies, which is what the Wyden amendment would require. These 
drug companies would want all drugs covered regardless of cost. So 
don't tell me this is a sweetheart deal. If we didn't have formu-
laries like we would have if the Wyden amendment is adopted, then all 
drugs would be covered regardless of cost. Then they would not have to 
compete. But this legislation requires competition building upon the 
practices that we have used for the Federal employee health plan for 40 
years. We patterned this legislation after that because that is what 
saves money.
  I am beginning to lose count of the number of times that this issue 
has come before us. So I have to keep repeating--but it doesn't seem to 
sink in--that the Medicare Modernization Act does not prohibit 
negotiations with drug companies. Nothing could be further from the 
truth. But hearing the last speech, one couldn't come to that 
conclusion. In fact, the law requires Medicare plans to negotiate with 
drugmakers for better prices. These negotiations are at the heart of 
the Medicare drug program.
  It is an absurd claim that the Government will not be negotiating 
with drugmakers comes from the noninterference clause in the Medicare 
law. The noninterference clause does not prohibit Medicare from 
negotiating with drugmakers. What it does is it prohibits the Center 
for Medicare Services from interfering with these negotiations.
  To be clear, the noninterference clause is at the heart of the bill's 
structure for delivering prescription drug coverage. This clause 
ensures those savings will result from market competition rather than 
through Government price fixing. The average beneficiary premium is 
$25. That is $12 less than the $37 that was estimated less than 12 
months ago, going back to July of last year. That clearly demonstrates 
that the law's structure is accomplishing that objective and then some; 
otherwise, we would have $37-a-month premiums or more instead of the 
average $25 premiums that we have.
  This year's cost to the Government then is $8 billion less than what 
we thought it would be last July. The 10- year cost has dropped by $180 
billion, as we tried to estimate ahead what programs might cost 10 
years into the future.
  The Center for Medicare Services and the Consumers Union have 
reported that beneficiaries are getting substantial savings under this 
drug benefit. These plain and simple facts ought to take the wind out 
of the sails of the argument that private companies can't deliver an 
affordable benefit for our beneficiaries and even for the taxpayers. 
These plans can deliver, and they are delivering. That is competition, 
not something that they set out to do. That is the market forces 
bringing down prices.
  Some might say: Well, if the plans can do that, imagine what the big 
bureaucracy of the Federal Government can do. To those folks, I urge a 
word of caution. First, the Government doesn't have such a great track 
record when it comes to price negotiation. When we considered the 
Medicare Modernization Act, the Center for Medicare Services' actuary 
reported that drugs in Part B:

       Were reimbursed at rates that, in many instances, were 
     substantially greater than the prevailing price levels.

  Even The Washington Post editorial of February 17, 2004, said:

       Governments are notoriously bad at setting prices, and the 
     U.S. Government is notoriously bad at setting prices in the 
     medical realm.

  My second point is beneficiaries don't have one-size-fits-all 
prescription drug needs. They need choices. Forty-four million 
different Americans have 44 million different solutions--or you can't 
have one plan fits all, I guess is what I should say. The companies 
offering the drug benefit must offer coverage for a wide array of brand 
and generic drugs. The companies also are offering plans with lower or 
even no deductible. Many are offering additional coverage so that there 
is no doughnut hole.
  The bottom line is the approach taken in the Medicare Modernization 
Act has resulted in affordable choices for beneficiaries while saving 
the taxpayers money.
  When we crafted this act, the Congressional Budget Office concluded 
that the market-based approach would result in better prescription drug 
cost management for Medicare than any other approach that was being 
considered at that time by the Congress. Here is what the Congressional 
Budget Office said about eliminating the noninterference clause in a 
letter last year:

       The Secretary would not be able to negotiate prices that 
     further reduce Federal spending to a significant degree.

  The Congressional Budget Office went on to say:

       CBO estimates that substantial savings will be obtained by 
     the private plans.

  That estimate is now a reality.
  We also had an analysis from the chief actuary for the Medicare 
program.
  The chief actuary for the Medicare program, who is required by law to 
provide independent actuarial analysis on issues facing Medicare, 
concluded that he does not:


[[Page 3590]]

     believe that the current Administration or future ones would 
     be willing and able to impose price concessions that 
     significantly exceed those that can be achieved in a 
     competitive market.

  In fact, more astonishingly, the chief actuary pointed out that if 
Medicare establishes drug price levels it will reduce competition not 
increase it.
  The report stated that the

     establishment of drug price levels for Medicare by the 
     Federal government would eliminate the largest factor that 
     prescription drug plans could otherwise use to compete 
     against each other.

  So let's be clear, direct Government negotiation is not the answer. 
The Government does not negotiate drug prices. The Government sets 
prices and it does not do a very good job at it.
  The law's entire approach is to get beneficiaries the best deal 
through vigorous market competition, not price controls.
  The new Medicare drug benefit creates consumer choices among 
competing, at-risk private plans.
  It is abundantly clear that Medicare plans have leveraged the buying 
power of millions of beneficiaries to lower drug prices.
  I urge my colleagues to oppose efforts to change the law and oppose 
efforts to get the Government involved in setting drug prices.
  It is a prescription for higher costs and fewer choices for 
beneficiaries.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CONRAD. Madam President, I yield 3 minutes to the Senator from 
North Dakota and then 3 minutes to the Senator from Oregon.
  Mr. DORGAN. Madam President, I am proud to be a cosponsor of the 
amendment that has been offered. I was thinking that people listening 
to this debate must surely think this is a foreign language: 
noninterference clauses and doughnut holes, and so on and so forth. 
This is very simple. Let me try and do it in English, if I can.
  When Congress passed the prescription drug benefit to provide 
benefits to senior citizens, a little clause was put in there. My 
colleague calls it a sweetheart deal. It is even sweeter than that. A 
clause was put in that says: By the way, the Federal Government cannot 
negotiate with the drug companies for lower prices. Cannot do it. The 
Defense Department does it. The VA does it. The evidence is that those 
negotiations produce about 50 percent of the savings that is reducing 
the drug prices by 50 percent, but the Medicare prescription drug plan 
cannot have that happen. The Government cannot negotiate for lower 
prices.
  My colleague describes this as a noninterference clause. About the 
time you think you get a handle on something here and have an 
aggressive debate, they change the titles and change the subject. This 
is not about noninterference. There is no noninterference involved. The 
question is, Should the Federal Government be able to negotiate for 
lower prescription drug prices in this plan, as we do in the VA and as 
we do in the Defense Department? The answer is yes.
  My colleague talks about 10-year savings, 10 years out. Look, 
economists who can't remember their home phone numbers are telling us 
what they think is going to happen in 10 years. I know what is going to 
happen. We are going to break the back of this Government financially 
if we don't negotiate lower prices. This is similar to hooking a hose 
up to the tank and sucking the tank dry. Let the pharmaceutical 
companies decide to tell us what they are going to charge us and, by 
the way, we can't negotiate better prices as we do in the VA system for 
veterans. That doesn't make any sense to me.
  The toughest job in the Senate is to come to the floor and justify or 
defend a proposal that we can't negotiate for lower prices. The second 
toughest job is for those who vote against this amendment to go home 
and explain to their constituents how they defied common sense.
  It makes common sense for us to say: Let's get the best price we can 
from these pharmaceutical companies. How do you do that? You do that by 
the power of the purse, having the Federal Government negotiate for 
lower prices. We have done it in the VA, we have done it in the Defense 
Department. We saved 50 percent of the cost by doing it. My colleague 
is dead right. Yes, this is a sweetheart deal. This is not about 
noninterference; it is about whether we can negotiate with the 
pharmaceutical industry for lower prices. The answer ought to be, of 
course, we ought to do that. We ought to do it aggressively in order to 
save the taxpayers money; otherwise, we are going to break the bank. I 
thought fiscal conservatism was about trying to save the taxpayers 
money.
  This amendment will do more to save the taxpayers money in the next 
10 years than almost anything else we can do.
  The PRESIDING OFFICER. The Senator's time has expired. The Senator 
from Oregon.
  Mr. WYDEN. Madam President, Senator Snowe will close this afternoon 
for our bipartisan amendment, but I want to highlight a couple of 
points. There is a reason that AARP strongly supports the Snowe-Wyden 
amendment. There is a reason that Secretary Thompson, before he left 
the Health and Human Services Department, said he wanted this 
authority, and that is this is just plain common sense.
  Everybody else in the marketplace who is in a position to use their 
clout does it but not Medicare.
  I want to set the record straight on a couple of comments that were 
made by my friend, the chairman of the Finance Committee. Again, at 
lines 13 and 14 of the bipartisan Snowe-Wyden amendment, in addition to 
the prohibition against price controls, there is a prohibition against 
a uniform formulary. So we are using all of the same forces in the 
marketplace of the private sector under this amendment that go on all 
across the land today. There are no price controls. There is no uniform 
formulary. For colleagues who want to see the language, it is at line 
13 and line 14 of the Snowe-Wyden amendment.
  Let us have some practical, smart shopping with respect to this 
program, where the costs are going into the stratosphere. I don't know 
of anybody in the United States who would shop the way Medicare is 
shopping today for prescription drugs. It would be one thing if it was 
working.
  AARP supports this amendment because the cost of medicine is rising 
twice the rate of inflation. So if you want to say to the seniors when 
you go home next week that you took some practical steps to control the 
costs of medicine, you will support the Snowe-Wyden amendment. If you 
think everything is working fine right now--and we don't--then I guess 
you oppose us. But I hope colleagues will, as they did last November, a 
majority of them, support us because now they can make a difference. 
They can make a difference for older people. They can make a difference 
for taxpayers. I hope my colleagues, when Senator Snowe wraps up for 
our side this afternoon, will support this bipartisan amendment because 
it is just plain shopping smart at a crucial time when older people 
need that approach to hold down the cost of health care.
  I yield the floor.
  Mr. BYRD. Madam President, the Snowe-Wyden amendment purports to 
create a reserve fund within the budget that could be used to allow the 
Federal Government to improve its negotiating position with respect to 
lowering the price of prescription drugs. I will vote in favor of this 
amendment because much more needs to be done to insure that Americans 
will not be forced to give up their medications because of rising 
prices.
  However, I know that a number of veterans in West Virginia are 
concerned about what a Governmentwide prescription drug negotiation 
program would mean to the prices of medicines dispensed through 
hospitals in the Department of Veterans Affairs. There are concerns 
that veterans would lose access to the medications they need at 
advantageous prices.
  It is important for West Virginians to understand that the Snowe-
Wyden amendment does not have the force of law, and, even if it should 
be adopted today, the amendment would have no impact on the VA's 
ability to negotiate favorable drug prices for our veterans.

[[Page 3591]]

Additional legislation would have to be passed by Congress and signed 
into law before any changes to the VA's prescription drug negotiating 
power could be made. I will continue to keep the concerns of West 
Virginia's veterans in mind should the Senate take up a debate on 
legislation that relates to the price of prescription drugs.
  Mr. BROWNBACK. Madam President, today I rise to speak on the 
amendment offered by Senator Snowe to S. Con. Res. 83. This amendment 
addresses the question of whether the Federal Government should play a 
role in negotiating the prices of Medicare prescription drug plans. In 
the past, I have supported similar measures that would allow the 
Federal Government to negotiate prescription drug plan prices, based on 
the idea that there was a need to contain rising prescription drug 
costs and that negotiation would have the effect of driving down costs.
  However, we are now seeing dramatically lower costs than we had 
anticipated. Specifically, CMS recently announced that the average 
premium of a Medicare prescription drug plan is $25; this is thirty 
two-percent reduction from the premium estimates of 1 year ago. Also, 
CMS has reported almost doubling of discounts and rebates of drugs 
under the Medicare prescription drug program from original projections. 
These effects are a result of the fact that under the Medicare 
prescription drug program, similar to the Federal Employees Health 
Benefits Program, numerous plans are in competition to offer consumers 
the lowest possible prices.
  In view of this, today, I am voting not to support this amendment, 
and instead, am lending my support to offering America's seniors the 
lowest and most affordable prices on their prescription drugs. We now 
have evidence that the lowest prices are offered through what makes 
this nation's economy one of the most robust in the world--healthy 
competition.
  Mr. CRAPO. Madam President, I yield off of our time 2 minutes to the 
Senator from Iowa to respond.
  Before I do that, however, I understand that there is an order in 
place that the next amendment will be the Conrad amendment, followed by 
the Byrd amendment. We would like to ask unanimous consent to reverse 
that order, so that following the Snowe-Wyden amendment, we would move 
to the Byrd amendment next, rather than the Conrad amendment. So I ask 
unanimous consent for that change in the order of the amendment 
process.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Madam President, two speakers ago, the Senate heard the 
Senator from North Dakota say that the drug bill says that the 
Secretary cannot negotiate. It doesn't say that anywhere in the law. It 
doesn't say it anyplace. They made that up. I don't know what sort of 
political points they want to make, but keeping the speeches to what 
the law says, and not what somebody thinks it says, seems to be very 
important to intellectually honest debate.
  To the Senator from Oregon, drug companies want cash-paying customers 
with no coverage because those people, as we all know, pay the highest 
prices. The drug companies don't have to negotiate with anyone when 
seniors don't have any drug coverage, such as they didn't have before 
this law went into effect. Part D provides that drug coverage, and now 
the drug companies have to compete to offer lower prices and to get 
plans to put their drugs on their preferred drug list. It is very 
necessary. They would like to have the environment that you want: No 
formulary. Then they have everything the way they want it. That is how 
negotiations work, to drive down prices, to get your plan approved, and 
that is how competition works to reduce prices, and that is what we see 
after 2\1/2\ months of the operation of this legislation. Don't give 
the drug companies what they want: no formulary.
  Mr. CONRAD. Madam President, at this point, the Byrd amendment is in 
order; is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. CONRAD. Madam President, I want to thank Senator Byrd for 
graciously coming to the floor as we sought to accommodate other 
Senators so they could make quorums in other committees. It was very 
gracious of him to come on short notice so that this time would not be 
lost.
  The PRESIDING OFFICER. The Senator from West Virginia.


                           Amendment No. 3086

  Mr. BYRD. Madam President, I thank my distinguished colleague for his 
kind remarks. At this time, I offer an amendment cosponsored by myself 
and Senators Lautenberg, Clinton, Dorgan, Lieberman, Kerry, Biden, 
Durbin, Menendez, and Jeffords.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from West Virginia [Mr. Byrd], for himself, Mr. 
     Lautenberg, Mrs. Clinton, Mr. Dorgan, Mr. Lieberman, Mr. 
     Kerry, Mr. Biden, Mr. Durbin, Mr. Menendez, and Mr. Jeffords, 
     proposes an amendment numbered 3086.

  The amendment is as follows:

  (Purpose: To preserve a national intercity passenger rail system by 
 providing adequate funding of $1.45 billion for Amtrak in Fiscal Year 
 2007 and to fully offset this additional funding by closing corporate 
                             tax loopholes)

       On page 3, line 13, increase the amount by $550,000,000.
       On page 4, line 1, increase the amount by $550,000,000.
       On page 4, line 13, increase the amount by $550,000,000.
       On page 5, line 4, increase the amount by $550,000,000.
       On page 16, line 21, increase the amount by $550,000,000.
       On page 16, line 22, increase the amount by $550,000,000.
       On page 53, line 1, increase the amount by $550,000,000.
       On page 53, line 2, increase the amount by $550,000,000.
  Mr. BYRD. Madam President, this amendment adds $550 million to the 
fiscal year 2007 budget for Amtrak. All aboard for Amtrak. Amtrak.
  The Bush administration's budget for the coming year assumes that 
Amtrak will be handed a funding cut of almost $400 million--a whopping 
cut of more than 30 percent. As in past years, there is absolutely no 
inherent logic underlying this budget request. Every observer who has 
testified before the Congress regarding Amtrak's financial needs has 
concluded that dramatic cuts--dramatic cuts--of this kind would result 
in Amtrak being thrown into bankruptcy, endangering rail service in 
every region of the Nation, including the Northeast corridor.
  Amtrak is not just a high-speed train service for the residents of 
Boston, MA, New York City, and Washington, DC. Amtrak is also a network 
that links cities such as Portland, ME, and Wells, ME, with that 
Northeast corridor. It also links communities such as Prince, in 
Raleigh County, WV, with cities such as Cincinnati, OH. It connects 
White Fish, MT, with St. Cloud, MN. It connects rural America with the 
central transportation and economic networks of our country.
  This amendment would restore Amtrak's funding to the level of $1.45 
billion. This funding level stands some $150 million higher than the 
current funding level. However, it also is $150 million below the level 
that has been requested by Amtrak's board of directors. I should point 
out that every member of Amtrak's board of directors was appointed by 
President George Bush and this slate of Bush appointees is telling us 
they need $1.6 billion to invest adequately in the railroad, guarantee 
quality service, and restore this increasingly aging infrastructure of 
the Amtrak system.
  This amendment would provide $1.45 billion. That is the precise 
funding level that 97 Senators across the political spectrum, 
Republican and Democrat alike, voted for when we passed the 
Transportation-Treasury Appropriations bill less than 5 months ago. I 
hope today, with the passage of this amendment, we can make the same 
affirmative bipartisan statement to our States and communities that 
their Amtrak service will be secure for yet another year.
  Amtrak recently reported that it had achieved a record year for 
ridership for the third year in a row. The number of citizens using the 
Amtrak network grew to 24.5 million last year. Amtrak

[[Page 3592]]

is growing in popularity in all regions of the country. For example, on 
Amtrak's Empire Builder--which serves Illinois, Wisconsin, Minnesota, 
North Dakota, Montana, Idaho, and Washington--ridership has grown by 
more than 14 percent over the last year. The Downeaster service in 
Maine grew by 10 percent, while the Heartland Flier service between 
Oklahoma City and Ft. Worth, TX, grew by a healthy 23 percent.
  For those of my colleagues who like to complain that Amtrak is a 
bloated, excessively costly railroad, I point out that just as Amtrak 
has achieved record ridership in each of the last 3 years, so has it 
reduced its employment levels over each of these years. Between 2001 
and 2005, Amtrak has reduced its workforce by over 22 percent.
  If the Senate adopts this amendment this afternoon, we can make an 
affirmative statement to these millions of Amtrak riders across the 
entire country that we will not allow them to be left standing at the 
platform next year because of the White House's budgetary shenanigans.
  I understand the junior Senator from Pennsylvania is expected to 
offer an amendment concerning Amtrak. The amendment by the Senator from 
Pennsylvania would do nothing to help Amtrak or the millions of riders 
who rely on Amtrak. The amendment purports to help Amtrak but it does 
no such thing. The amendment does not increase the allocation to the 
Appropriations Committee. Instead, the amendment pretends to pay for 
increased Amtrak funding by cutting something called function 920 
allowances. When it comes to the real work of passing appropriations 
bills, the Senate has to cut real programs. We cannot cut something 
called ``allowances.'' This amendment is a magic asterisk. It is not 
fiscal discipline.
  My amendment is paid for by eliminating loopholes in the Tax Code, 
loophole closures that have been voted on by a majority in this body on 
several occasions. In reality, what the distinguished Senator from 
Pennsylvania would be asking the Senate to do is pass an amendment that 
will force cuts in critical programs. What programs would the Senator 
have us cut? Funds for the troops? Funds for medical care for our 
veterans? Funds for educating our children? Would the Senator have the 
Senate cut border or port security? Would he have the Senate cut grants 
for Low Income Home Energy Assistance?
  The budget resolution that is before the Senate provides 
discretionary funding that is so limited for domestic programs that 
cuts in such critical programs are just not likely, they are 
inevitable. The amendment by the Senator from Pennsylvania would 
precipitate even deeper cuts.
  I urge Senators to vote for this amendment, the Byrd amendment, 
cosponsored by myself and the other Senators listed. I send the list to 
the desk.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Who yields time? The Senator from Idaho.
  Mr. CRAPO. I yield the time we have in opposition on this amendment 
to the Senator from Iowa.
  Mr. GRASSLEY. I don't think I am going to use more time than has been 
allotted on this amendment, but just in case, I hope the manager would 
give me a minute or two off the bill.
  Madam President, I wish to speak through the Chair to the Senator 
from West Virginia. I am going to speak not specifically against your 
amendment, but you have identified closing corporate tax loopholes as 
one way of raising revenue to offset yours. I am going to take 
advantage of my time against your amendment to speak because Members on 
your side of the aisle have used this approach in the past, and I want 
to say how there are some problems doing that.
  Virtually all Democratic Members had a common theme in their 
amendments--raising taxes for more spending. The purported offset for 
each of these amendments--several yesterday and more today--would close 
tax loopholes to pay for whatever popular spending program is proposed. 
The Senate tax relief reconciliation bill that is now in conference 
between the House and Senate--and that is a reconciliation bill left 
over from last year's budget resolution, some of the unfinished 
business of last year that we have to get worked out this spring--this 
conference's bills already include $20 to $30 billion of loophole 
closers. Ironically, many of the proponents of these amendments that 
have been offered on the other side of the aisle, using tax loophole 
closers, were among the small minority of Members who opposed the tax 
relief reconciliation bill that contained offsets. In some cases, the 
proponents have acknowledged that the Finance Committee, which I chair, 
has already used these loophole closers. The Finance Committee will be 
responsible, then, if these amendments are adopted, for creating new 
loophole closers.
  That is not a problem. I don't consider that a problem because I am 
looking to close abusive uses of the Tax Code. My Finance Committee 
staff has proven itself quite effective in the past in identifying 
offsets. Just in the period of time since 2001, our committee has 
raised around $200 billion in new revenues by shutting down tax 
shelters, by closing inversions, and other abusive tax schemes.
  In the year 2004 alone, the Finance Committee fully offset a $137 
billion tax bill at no expense to the American taxpayers. This was what 
was known at that time as the FSC-ETI repeal bill. So I think the 
Finance Committee, since 2001--or using the year 2004 alone--has a 
pretty good handle on what is possible in the ``raisers'' category. So, 
implied, do the Democrats who are proposing closing tax loopholes know 
it is not necessarily an easy job, a job we have been working on, a job 
we have been successful at, but the more of this you do, the less there 
is to take care of what they are trying to bring us to do, closing tax 
loopholes?
  I might imply that maybe they are taking the easy way out because of 
using the term ``loophole closers.'' That may not be such an easy way 
out for those of us who have to do it.
  This brings me then to the amendments that have been proposed. The 
sponsors say they have offset the costs of the amendments by closing 
tax loopholes. I wish to know what loopholes they have in mind. If we 
use the inventory of Senate-acceptable offsets, we can raise about $11 
billion over 5 years. But that $11 billion, even if we accomplish it, 
is a far cry from the cumulative demands of the amendments that have 
already been offered from the other side and probably will be offered 
yet today and tomorrow. We are probably going to have to find more 
revenue raisers just to cover the items that Members say they support 
in the tax relief agenda that is out there that everybody wants me to 
get passed.
  The Finance Committee staff hopes to use the full $30 billion that is 
already in conference in the Senate tax relief reconciliation bill. 
Some have referred to the recent ``tax gap'' report of the Joint 
Committee. But this is also going to be a heavy lift. When Members try 
to use some unidentified loophole closers--and these have all been 
unidentified--to pay for their amendments, what they are saying is that 
we should use something out of the $30 billion that has been set by the 
Finance Committee staff that we are considering in conference committee 
right now. So, in fact, the proponents' amendment is going to displace 
something covered by the resolution. That point has to be made crystal 
clear, because this is the crux of the problem. If you use a loophole 
closer that is already called for in the tax relief package that is in 
conference, it means that something in the tax cut package will have to 
be taken out.
  What do my colleagues, who are using loophole closers, suggest that 
we take out that most of them think ought to be law because they voted 
for it in the first place? The tax relief reconciliation bill covers a 
number of items that Members on the other side do support. For example, 
it covers, through the year 2010, provisions that they support such as 
tuition deduction, such as low-income savers credit, small business 
expensing. These are sunsetted. They have to be reenacted to keep 
existing tax policy. You have to have offsets for them.

[[Page 3593]]

  Also covered are 1-year provisions that they say they support, such 
as business extenders like research and development. Several States 
have sales taxes that will not be deductible anymore if we don't pass 
this bill. The alternative minimum tax hold harmless----
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. GRASSLEY. Could I have 1 more minute?
  Mr. CRAPO. I yield the Senator 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. There is the alternative minimum tax hold harmless, so 
that 22 million more Americans do not get hit by the alternative 
minimum income tax. Middle-income people who were never intended to pay 
it will if we don't get this bill out of conference with these offsets 
in it. Everybody on the other side of the aisle doesn't want an 
alternative minimum tax to hit middle-income people, so they are going 
to take those revenue raisers, those tax loophole closers that we are 
using for this to use for something such as Amtrak, now before us, as 
an example.
  There are other provisions.
  The reconciliation number covers these items. Yet this amendment 
would tear away the revenue offsets needed to pay for these items.
  You can't say you are for these items and not provide room for the 
tax cut that is in the reconciliation bill in conference. You can't use 
the offsets for something else without providing for those items. You 
can't have it both ways, in other words.
  What is the loophole closer you would use, I ask them. There are none 
of them identified. Will it be taken from the $30 billion 
reconciliation already accounted for in that bill or is there a new 
issue we haven't seen? If you have a secret revenue loophole closer out 
there, I want to know about it. A loophole closer actually has to raise 
money. Members need to know that some of the leftover items from last 
year may not raise any money in the current year when they want to 
spend it. You can't rely on raisers that were done in the past.
  We also need to remember that many of these leftover offsets were 
rejected by the House.
  It is not enough to call for ``more loophole closers.'' The 
amendment's sponsor needs to tell us where the money is coming from; 
otherwise the call for offsets is just a call for ``funny money,'' in a 
sense.
  Members need to know that the till is empty. A fictitious offset will 
not suffice. We have a lot of heavy lifting to do under this resolution 
as written. If you want to add more weight to the problem, you need to 
tell us where the money is going to come from.
  I ask you to vote against these amendments because they are not 
identifying loophole closers.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Madam President, I rise to talk about the Amtrak issue. 
This is a very important issue to me, to my State, to Philadelphia, and 
the 30th Street station. It is the second busiest train station 
nationally, with over 3.7 million boarding a year. Amtrak and the 
health of Amtrak is important. In addition, we have about 3,000 
employees based in Pennsylvania who are employed by Amtrak. It not only 
makes a difference for us from the standpoint of our communities in 
southeastern Pennsylvania but the employment picture as well.
  The continued health of Amtrak is important. That is why over the 
years you have supported efforts on the floor of the Senate to increase 
funding for Amtrak. I voted for appropriations bills as well as budget 
proposals.
  I rise in opposition to the Byrd amendment. The chairman of the 
Finance Committee articulated it well--that in essence what Senator 
Byrd wants to do is increase taxes to pay for this amendment. I cannot 
support hurting the economy of this country by supporting something 
that is important from an appropriations standpoint. I think we need to 
set priorities in appropriations. We have done that in the past.
  Amtrak has fared very well here in the Senate, and we have had 
support in the House to be able to get funding for this program. In 
fact, over the years we have increased funding. Last year the Senate 
version had $1.45 billion, which is obviously more than the $900 
million in the current budget proposal. I will be offering an amendment 
to increase that funding from the $900 million which is in the bill 
right now to the $1.45 billion level and adding $550 million. I will do 
so through the section 920 account. I anticipate my colleague from 
North Dakota coming up and saying again that there is no money in the 
920 account. He is correct; there is not money there, but there will be 
a very strong message sent by passing this amendment, if it is 
successful, to the appropriators of the importance of this program.
  Again, I think we have seen that without raising the cap or without 
raising taxes, the Senate has been able to come up with a robust number 
for Amtrak which I will support within the context of a responsible 
budget. We have done it year after year, and we will continue to do 
that.


                           Amendment No. 3015

  I call up my amendment No. 3015.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Santorum], for himself 
     and Mr. Specter, proposes an amendment numbered 3015.

  Mr. SANTORUM. Madam 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 an additional $550,000,000 for Amtrak for fiscal 
                               year 2007)

       On page 16, line 21, strike ``$78,268,000,000'' and insert 
     ``$78,818,000,000''.
       On page 16, line 22, strike ``$75,774,000,000'' and insert 
     ``$76,324,000,000''.
       On page 27, line 23, strike ``-$500,000,000'' and insert 
     ``-$1,050,000,000''.
       On page 27, line 24, strike ``-$500,000,000'' and insert 
     ``-$1,050,000,000''.

  Mr. SANTORUM. Madam President, Senator Specter is an original 
cosponsor of this amendment. Obviously there is no greater supporter of 
Amtrak out there than Senator Specter. We hope this amendment will be 
passed and the Byrd amendment will be defeated. But understand that the 
commitment of Senator Specter and my commitment is that we will work 
through the appropriations process to make sure Amtrak is adequately 
funded in the appropriations process.
  I think I have said all I need to say on the Amtrak issue.
  I ask unanimous consent to add Senator Vitter and Senator Talent as 
cosponsors to my amendment No. 3050, which is increasing funding for 
the CDBG Program.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Madam President, the Senator from Pennsylvania correctly 
anticipated my concern about his amendment, not the additional funding 
for Amtrak. I completely agree with the Senator from Pennsylvania, and 
I agree with the Senator from West Virginia on the desirability of 
providing that additional $550 million.
  There are two very different ways to do it. One is the approach of 
Senator Byrd, which is to close additional tax loopholes. I commend the 
Finance Committee. They have done an exceptionally good job over the 
last several years of working to shut down some of these very abusive 
tax loopholes. I salute the chairman of the Finance Committee for his 
interest in doing that. I salute his very professional staff for the 
work in that regard. We all know there is more to be done. I have 
offered just two that would easily cover this expenditure--in fact, 
cover it many times over.
  One is what is going on in the Cayman Islands with this incredible 
scam of companies saying they are doing business there when they are 
not. They are doing business there, or claiming they are doing 
business, in order to escape income taxes in this country. Why are they 
in the Cayman Islands? Because the Cayman Islands is a well-known tax 
haven. There are 12,700 companies headquartered in a five-story little 
office building in the Cayman Islands. That is a scam. It ought to be

[[Page 3594]]

shut down. It would save tens of billions of dollars if it were. That 
is what Senator Byrd says should be done to finance this additional 
money for Amtrak.
  The Senator from Pennsylvania says take money out of function 920. 
The problem with that is there is no money in function 920. I refer my 
colleagues to page 29 of the concurrent resolution on the budget. If 
you go to page 29, what you see going down to function 920--it is 
called allowance--there is no money there. In fact, it is $500 million 
under water before we ever started. We have had a whole series of 
amendments offered on the other side today to take money out of that 
account to pay for things. There is no money.
  If we want to talk about ``funny money'' financing, as the chairman 
of the Finance Committee did, that is it. That is it--taking money from 
an account that has no money. That is the whole problem with this 
budget. This whole budget takes money we don't have. The result is we 
keep running up the debt.
  I am told that Senator Lautenberg is on his way to the Chamber to 
address this issue. I inquire how much time is left on this amendment.
  The PRESIDING OFFICER. The opposition has 4 minutes; the proponents 
have 3\1/2\ minutes.
  Mr. MENENDEZ. Madam President, I rise in strong support of the Byrd-
Lautenberg amendment to provide additional funding for Amtrak, and I do 
so to protect the 25 million people who ride Amtrak each year, as well 
as the one hundred thousand New Jersey commuters who depend on Amtrak's 
infrastructure every day.
  The current level of funding in this budget for Amtrak does not 
recognize the tremendous benefits generated by intercity rail in this 
country. Not the billions of dollars generated in commerce, nor the 
thousands of businesses along the Northeast Corridor whose employees 
are dependent on Amtrak, nor the national security value of having an 
additional mode of transportation, nor the benefits to our environment 
by taking cars off the road.
  Every year, we hear complaints that Amtrak has already received too 
much money from the Federal Government, but the fact is that we have 
spent less money on Amtrak in the last 35 years than we will on 
highways in this year alone. And highways don't pay for themselves, 
even with the gas tax. Neither does mass transit, either in this 
country or anywhere else in the world. But we subsidize them because 
they improve the quality of our lives. And that is what transportation 
is about. It is not just getting from one place to another. It is about 
creating jobs, revitalizing neighborhoods, stimulating commerce, 
redeveloping underutilized land, and making us more secure.
  We have never provided the kind of commitment to Amtrak that we have 
for other modes of transportation, and this amendment will be an 
important step to getting Amtrak off the starvation budgets that it has 
subsisted on for far too long. A vote for the Byrd-Lautenberg amendment 
is a vote for a strong Amtrak, and a stable national network of 
intercity rail, and I urge my colleagues to support it.
  Another issue that I would like to bring up regarding the Amtrak 
budget is the misconception that New Jersey and other States along the 
Northeast Corridor are not paying their fair share. I believe that 
misconception may have led to the insertion of a provision in the 
fiscal year 2006 transportation appropriations bill that directed the 
Department of Transportation to assess additional fees to commuter 
railroads on the Northeast Corridor.
  New Jersey currently pays over $100 million a year to Amtrak, and has 
invested roughly $1.8 billion in the Northeast Corridor since 1991. New 
Jersey Transit also maintains and operates the stations along the 
corridor in New Jersey, all at no cost to Amtrak. It pays no operating 
subsidy because the Northeast Corridor turns an operating profit. But 
this new provision in the appropriations bill could cost New Jersey 
tens of millions of additional dollars, a cost which would eventually 
be borne by New Jersey commuters.
  As we continue this debate throughout the year, I hope that my 
colleagues will recognize the investment that New Jersey already makes 
for intercity passenger rail, and I look forward to working with them 
to come to a resolution that ensures equitability for all States.
  Mr. CONRAD. Madam President, we have votes scheduled to start at 1 
o'clock. Is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. CONRAD. Madam President, maybe the Senator from Idaho wishes to 
take some of the remaining time, and perhaps we would have a chance to 
hear Senator Lautenberg before we vote.
  Mr. CRAPO. Madam President, I wish to take a couple of moments to do 
a little housekeeping business and then we can be set up for the vote 
while we wait on Senator Lautenberg.
  First, I ask unanimous consent on behalf of Senator Gregg, Senator 
Conrad, and Senator Byrd to withdraw the Byrd amendment No. 3062, 
reserving the right of the Senator from West Virginia or his designee 
to offer an amendment in relation to amendment No. 3062 prior to final 
action on this resolution.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. CRAPO. Madam President, secondly, I ask unanimous consent that at 
3 o'clock today the Senate proceed to the votes in relation to the 
following amendments: Senator Stabenow, amendment No. 3056; Senator 
McConnell, No. 3061; Senator Menendez, No. 3054; Senator Chambliss, No. 
3018; Senator Grassley, No. 3073; Senator Nelson, No. 3009; the Snowe-
Wyden amendment, No. 3004; the Byrd amendment, No. 3086; and Senator 
Santorum, No. 3015.
  The PRESIDING OFFICER. Is there objection?
  Mr. CONRAD. Madam President, reserving the right to object, I have 
slightly different numbers on two of the amendments. Maybe we could get 
that straightened out. I have Chambliss No. 3018.
  Mr. CRAPO. That is the number I have.
  Mr. CONRAD. Grassley is 3073?
  Mr. CRAPO. Yes.
  Mr. CONRAD. Perhaps I heard that incorrectly.
  There is no objection on this side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Madam President, the Senator from New Jersey is here.
  How much time do we have remaining?
  The PRESIDING OFFICER. There is 3 minutes 15 seconds.
  Mr. CONRAD. I yield that time to the very able Senator from New 
Jersey.
  Mr. LAUTENBERG. Madam President, I rise to talk about an amendment 
Senator Byrd and I are offering to adequately fund Amtrak. I understand 
there is an alternative that has been offered by the Senator from 
Pennsylvania which, very frankly, I think amounts to an empty gesture. 
It is an amendment that looks as though it has funding for the 
continuation of Amtrak's operations but in fact it doesn't because it 
doesn't have a source of funding that has any reliability to it.
  The bottom line is if we want to fund Amtrak, if we want to keep it 
going, a vote has to be made for the Byrd-Lautenberg amendment.
  President Bush proposed to initially bankrupt Amtrak in last year's 
budget. The American people and the Democrats and Republicans in 
Congress stood up and said no. So this year, instead of trying to kill 
Amtrak outright, President Bush wants to put it on a starvation diet.
  This is no time for us to be looking at trying to kill Amtrak because 
Amtrak in many cases is our only alternative to the crowded skies, to 
the crowded highways, to be able to move people in the event of 
emergencies, and as a way to get to work and take care of people's 
needs. Amtrak and transit in general offers one of the few options.
  When we look back at what happened on 9/11, the only transit 
transportation facility that was available on that terrible day was 
Amtrak. We never thought it could happen, but we shut down aviation 
completely. Here we are, and some of our friends on the other side of 
the aisle think that eliminating Amtrak might be a good idea.

[[Page 3595]]

  What was proposed by our colleague from Pennsylvania, the junior 
Senator, was that we find a funding source somewhere in magic land. The 
money is not there. It is something called 920, which is to hide behind 
the facts and not tell the truth. But when I look at what is happening 
in the State of Pennsylvania in terms of Amtrak, I frankly cannot 
figure out what the mission is here. Pennsylvania has over 4.9 million 
riders a year on Amtrak.
  It is not just Philadelphia and New York; it is not just Philadelphia 
and Washington; it is places such as Harrisburg and other communities 
within the State of Pennsylvania that require service. Instead, what 
they are getting here today is a sleight of hand, saying, Well, we want 
to put more money in Amtrak, more money than has been proposed in the 
budget by some $500 million. The fact is there is no money there. There 
is a colloquialism that has developed in America which says ``show me 
the money.'' There is no ``show'' and there is no ``dough.'' That is 
where we are.
  Our amendment accounts for the funding necessary by taking it from 
corporate loopholes and tax shelters.
  I hope people here will understand how valuable Amtrak is to our 
country, how necessary it is, and vote for the Byrd-Lautenberg 
amendment and not the alternative that has been proposed.


                           Amendment No. 3063

  The PRESIDING OFFICER (Mr. Thune). There is now 2 minutes of debate 
equally divided on the Murray amendment.
  Mr. LAUTENBERG. I ask unanimous consent to add Senator Carper from 
Delaware as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Mr. President, the Senate is about to vote on the Murray 
amendment which is the only amendment before this Senate that will 
restore actual dollars to the $1 billion cut to the Community 
Development Block Grant Program. We will see another amendment that is 
paid for by a 920 account that is now $10.5 billion in the hole--not 
real money.
  When our Committee on Appropriations gets that next fall, all of the 
Senators will be asking: Why are we cutting CDBG? We did not put real 
money in to restore that cut, unless we pass the Murray amendment that 
is paid for by closing tax loopholes.
  Real dollars are the difference between this and next fall when our 
Senators are asking us about CDBG money and why it is being cut. We 
will relate it directly back to this vote on this amendment.
  Let everyone know where the real vote is. If no one believes me, read 
the Wall Street Journal article, ``Republican Budget Plan Advances as 
Challenges By Democrats Fail,'' outlining that Republicans in tighter 
reelection races are offering amendments that are not paid for.
  I ask unanimous consent to have this article printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Mar. 15, 2006]

    Republican Budget Plan Advances as Challenges by Democrats Fail

                           (By David Rogers)

       Washington--A Republican budget plan advanced in the 
     Senate, after Democrats narrowly failed to lift proposed 
     spending caps and impose tighter antideficit rules that would 
     make it harder to extend expiring tax cuts.
       Senate Budget Committee Chairman Judd Gregg (R., N.H.) 
     predicted passage of the resolution this week. But a 
     succession of 50-50 roll-call votes underscored the fragile 
     support for the plan, which projects higher deficits than the 
     White House's budget for the fiscal year that begins Oct. 1.
       Adding to the tension is that senators must temporarily set 
     aside the resolution today to address a companion bill that 
     would raise the nation's debt ceiling by $781 billion. The 
     new $8.965 trillion ceiling represents an estimated 50% 
     increase since Mr. Bush took office, and Sen. Kent Conrad 
     (D., N.D.) complained that the nation's debt is rising like a 
     ``scalded cat.''
       Meanwhile, top House Republicans reached agreement last 
     evening on a set of lobbying and ethics-rules changes in 
     response to recent scandals. Elements include a moratorium on 
     privately funded trips for the remainder of this Congress, a 
     ban on lobbyists accompanying lawmakers on corporate 
     aircraft, and improved audits of disclosure reports filed by 
     lobbyists.
       ``I think we have a good package here,'' said House Rules 
     Committee Chairman David Dreier (R., Cal.). Majority Leader 
     John Boehner (R., Ohio) hopes to begin moving major pieces--
     such as the travel moratorium--through the House early next 
     month.
       In the budget debate, Republicans admit they are more 
     cautious this election year in trying to use the budget 
     process to effect change in spending or tax policy. Mr. Gregg 
     has largely abandoned any attempt to use his power to order 
     Senate committees to come up with savings to slow the growth 
     of government benefits like Medicare. And the five-year 
     savings from such programs in his resolution is a fraction of 
     the $39 billion deficit-reduction bill signed by the 
     president last month.
       This leaves the proposed $872.5 billion cap on 
     discretionary appropriations as a last symbol of fiscal 
     discipline, and Republicans have clung to the provisions for 
     fear of opening the door to unchecked spending.
       Mr. Gregg would transfer more money to health and education 
     programs to win support from moderate Republicans. But 
     domestic cuts would be required, and by the chairman's 
     account, his adjustments are largely ``illusory.''
       Republicans in tight re-election races are offering 
     amendments endorsing more spending for causes such as 
     veterans health care and education for the disabled, but 
     these are for show since no money has been added above the 
     cap. For example, $3 billion was restored for defense by Sen. 
     James Talent (R., Mo.) who said the ``highly skilled people'' 
     in today's military result in higher personnel costs.
       ``There's no such thing as a grunt anymore in America's 
     military.'' Mr. Talent said. The most serious challenge came 
     from Sen. Edward Kennedy (D., Mass.) who proposed to raise 
     the cap by $6.3 billion to make room for education 
     priorities. But he failed 50-50 for lack of support from Sen. 
     Arlen Specter (R., Pa.), who is pursuing a less-direct 
     challenge to his leadership.
       Mr. Specter is proposing that lawmakers get around the 
     $872.5 billion ceiling by allowing an extra $7 billion in 
     ``advanced appropriations,'' a category of spending often 
     used to fund education programs ahead of a school year. Mr. 
     Conrad appeared cool to this approach, but if Mr. Specter 
     could win over supporters of Mr. Kennedy's amendment, he 
     could prevail in a roll-call vote today.
     * * * crucial to the nation's competitiveness. They are also 
     vital to U.S. defense industries, with many of the most-
     advanced components and electronics made at newer facilities.
       Economists point to growing import competition and an 
     exodus of U.S. production work to low-cost countries as 
     reasons for the birthrate slump. One indication is the 
     ballooning U.S. trade deficit, which hit another record in 
     January.
       La-Z-Boy Inc., Monroe, Mich., a maker of recliners and 
     other furniture, felt the imports' bite in 2001, when 
     inexpensive wooden furniture from China began pouring into 
     the U.S. market. In response, the company closed 20 U.S. 
     factories and outsourced most of its own wood-furniture 
     production to China.
       To be sure, some manufacturers are adding bricks and 
     mortar. Last year, computer maker Dell Inc. of Round Rock, 
     Texas, opened a $100 million assembly plant in North 
     Carolina, while Owens-Illinois Inc. of Toledo, Ohio, poured 
     $120 million into a Colorado factory that now churns out one 
     billion beer bottles a year.
       But most of this growth is concentrated in a relatively 
     narrow array of sectors, such as food, rail equipment and 
     building materials, according to Commerce Department data. 
     The cement industry, for instance, is planning to add 18 new 
     plants at a total cost of $3.6 billion over the next four 
     years.
       One measure of new factory construction--investment in 
     industrial structures--rose last year to $18.7 billion, up 
     more than 15% from 2004. ``But this spending is still just a 
     shadow of what it used to be,'' says Tom Runiewicz, an 
     industrial economist at Global Insight, a Lexington, Mass., 
     economic consulting firm. In 1998, this type of investment 
     was about $43.7 billion, he said. It has become far more 
     common for companies to pour money into upgrading existing 
     plants to make them more productive. This helps explain how, 
     although U.S. industrial production has recovered, the urge 
     to build big new factories remains relatively weak, he says. 
     ``Our existing plants are just far more efficient.''
       USG Corp., for instance, is rebuilding one plant in 
     Virginia and putting up a new one in Pennsylvania. The 
     Chicago maker of wallboard says the new plants will use 
     machinery that allows them to make wallboard far faster. 
     ``What we make is big, heavy, and relatively inexpensive,'' 
     says Robert Williams, a USG spokesman, ``so usually, you make 
     it close to where you want to sell it.'' Indeed, USG has 40 
     plants scattered around the U.S. and has no plans to reduce 
     its manufacturing footprint.
       One factor that gets lost is the size of individual plants. 
     Mr. Meckstroth believes many

[[Page 3596]]

     of the operations that are dying off are smaller companies 
     that have had trouble adapting to the rise of import 
     competition and other competitive forces. ``But the bigger 
     companies are surviving, because they have the size and 
     scale,'' he says. ``They can afford to put in the new lines 
     or move operations overseas themselves if necessary.''

  Mr. GREGG. Mr. President, this is a classic liberal amendment that 
increases the size of Government, increases taxes on the American 
people. A much more appropriate way to do this, if we believe CDBG is 
important, is vote for the Santorum amendment which makes that a 
priority but does so within the caps. So it has to compete with other 
programs that we as a Congress can declare as a priority by using the 
Santorum amendment.
  To follow the Murray proposal is to increase spending by $1.3 billion 
and increase taxes by $1.3 billion; grow the Government, grow the 
taxpayer. For the American people, that is not the right way to do 
this.
  I yield back my remaining time.
  Mrs. MURRAY. I ask for the yeas and nays.
  Mr. GREGG. I ask unanimous consent the yeas and nays be deemed in 
order for all the amendments that will be called up in this group.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
No. 3063.
  The clerk will call the roll.
  The assistant journal clerk proceeded to call the roll.
  Mr. McCONNELL. The following Senator was necessarily absent: the 
Senator from Minnesota (Mr. Coleman).
  Further, if present and voting, the Senator from Minnesota (Mr. 
Coleman) would have voted ``yea.''
  Mr. DURBIN. I announce that the Senator from Minnesota (Mr. Dayton) 
is necessarily absent.
  I further announce that, if present and voting, the Senator from 
Minnesota (Mr. Dayton) would vote ``yea.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 45, nays 53, as follows:

                      [Rollcall Vote No. 43 Leg.]

                                YEAS--45

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carper
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Voinovich
     Wyden

                                NAYS--53

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Chafee
     Chambliss
     Coburn
     Cochran
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Thune
     Vitter
     Warner

                             NOT VOTING--2

     Coleman
     Dayton
       
  The amendment (No. 3063) was rejected.
  Mr. GREGG. I move to reconsider the vote and move to lay that motion 
on the table.
  The motion to lay on the table was agreed to.

                          ____________________