[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[Senate]
[Pages 23348-23357]
[From the U.S. Government Publishing Office, www.gpo.gov]




  MILITARY CONSTRUCTION AND VETERANS AFFAIRS APPROPRIATIONS ACT, 2008

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to the consideration of H.R. 2642, which the clerk will report 
by title.
  The legislative clerk read as follows:

       A bill (H.R. 2642) making appropriations for military 
     construction, the Department of Veterans Affairs, and related 
     agencies for the fiscal year ending September 30, 2008, and 
     for other purposes.

  Mr. REED. Mr. President, I believe the Senator from Arizona has a 
request.
  The PRESIDING OFFICER. The senior Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the 
Senator from Arizona, who has given up his 10 minutes in morning 
business, be allowed to speak between 2:20 and 2:30 this afternoon.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2656

                (Purpose: In the nature of a substitute)

  Mr. REED. Mr. President, on behalf of the Appropriations Committee, I 
call up an amendment in the form of a committee substitute which is at 
the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Rhode Island [Mr. Reed] proposes an 
     amendment numbered 2656.

  Mr. REED. 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 printed in today's Record under ``Text of 
Amendments.'')
  Mr. REED. Mr. President, I am pleased to bring the fiscal year 2008 
Military Construction and Veterans Affairs, and related agencies 
appropriations bill to the Senate. This is a unique bill for many 
reasons, not the least of which is it is the first appropriations bill 
that will be considered under the requirements of S. 1, the Honest 
Leadership and Open Government Act of 2007. On August 2, 2007, the 
Senate approved S. 1 by a vote of 83 to 14, clearing the measure for 
the President's signature. When signed by the

[[Page 23349]]

President, this ethics reform legislation will significantly improve 
the transparency and accountability of the legislative process.
  Although the White House has requested the Senate not submit the 
legislation to the President until he returns from his overseas 
travels, I wish to assure Senators we intend to abide by the 
requirements of S. 1 during the consideration of this bill. The 
legislation requires that the chairman of the committee of jurisdiction 
certify that certain information related to congressionally directed 
spending be identified and that the required information be available 
on a publicly accessible congressional Web site in a searchable format 
at least 48 hours before a vote on the pending bill.
  The information required includes identification of the 
congressionally directed spending and the name of the Senator who 
requested such spending. This information is contained in the committee 
report numbered 110-85, dated June 18, 2007, and has been available on 
the Internet for over 2 months.
  In addition, pursuant to the standards required by Chairman Byrd and 
Senator Cochran, letters from each Member with a congressionally 
directed spending item in this bill or accompanying report are 
available on the Internet certifying that neither the Senator, nor his 
or her spouse, has a pecuniary interest in such spending item.
  I am submitting for the Record the certification by the chairman of 
the Committee on Appropriations.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Senator Byrd: I certify that the information that will be 
     required by S. 1, when it becomes law, related to 
     congressionally directed spending, has been identified in the 
     Committee report numbered 110-85, filed on June 18, 2007, and 
     that the required information has been available on a 
     publicly accessible congressional website in a searchable 
     format at least 48 hours before a vote on the pending bill.

  Mr. REED. Before yielding to Senator Hutchison, I would like to thank 
Chairman Byrd and Senator Cochran for their leadership in bringing this 
bill to the floor. Also, I would like to thank the ranking member of 
our subcommittee, Senator Hutchison, for her support and assistance, 
her knowledge and experience on the subcommittee, and her dedication to 
veterans and the military have been tremendous assets in developing 
this bill. I am particularly pleased to bring the bill to the floor 
today in anticipation of welcoming Senator Johnson back. He is our 
subcommittee chairman. He will return tomorrow. This bill is a 
testament to Senator Johnson's tenacity in the face of adversity and to 
his leadership, even though as he recuperated, he was involved in the 
process and proceedings and he too shared the deep concerns of the 
Nation's military families and our Nation's veterans. I am deeply 
honored to be managing this bill on the floor for him.
  I yield to the Senator from Texas.
  The PRESIDING OFFICER. The senior Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I wish to first thank the Senator from 
Rhode Island for allowing me to speak before he gives his major talk 
about the bill itself because of time constraints. I appreciate that. 
It was very nice of him to do that.
  Let me first say it has been very helpful--it has been terrific--
working with the Senator from Rhode Island. He was, as he said, 
substituted. This was thrown at him early this year. I know it is 
something he wanted to do because he has a great record serving in the 
military himself, but to step in for Senator Johnson because of his 
illness was a great thing that Senator Reed was able to do, and he has 
done a great job. I might add that his able staff has had a lot of 
experience on this bill and were also very helpful. Tina Evans, B.G. 
Wright, and Chad Schulken have been subcommittee staff members for a 
long time--longer than any of us, I might say--and it has been very 
helpful to have that knowledge and experience working with us. Of 
course, my own staff, Dennis Balkham, Christine Heggem, Yvonne Stone, 
and Sean Knowles have also contributed greatly to this complicated 
bill. It is a big bill that affects all our veterans and our military 
personnel because we do deal with military construction as well as 
veterans affairs.
  This bill, I think, balances all the needs that are necessary very 
well. We have to take into account, of course, the Active-Duty 
servicemembers in making sure they have the military construction they 
need to do the job we are asking them to do. The Guard and Reserve, 
which I will mention later, is well funded in this bill, and it is 
something we must do because they are carrying such a huge burden in 
the war against terror. Local communities, family members of 
servicemembers, and taxpayers all have a part in balancing any 
appropriations bill and especially this one.
  This bill does address the infrastructure requirements as well as 
health care and benefits of our veterans. We hope to move it 
expeditiously across the floor today, I think because Senator Reed and 
I have worked so well on the bill that we have solved most of the 
issues that have come forward, and I believe we have done a good job in 
funding everything that was necessary.
  Let me mention a couple of the main points. This subcommittee, with 
Senator Feinstein and myself, were instrumental in the rebasing effort 
that has occurred in the Department of Defense. We are bringing back 
70,000 of our troops from overseas to be able to train in the United 
States. This was part of an overseas basing commission bill that 
Senator Feinstein and I cosponsored that was adopted by Congress and 
results in 70,000 troops coming back--mainly from Germany and South 
Korea.
  That also has had an impact on military construction because we found 
when we went overseas that there were training constraints in the bases 
overseas. We had capacity in America for better training and better 
opportunities for families. So in this bill we had to address the needs 
of the military construction for those troops that will be moving back 
home over the next 5 to 6 years.
  In addition, Congress has the responsibility to fund the BRAC. We 
have a time limit for the Department of Defense to implement BRAC. That 
requires building not only in the places where troops will be moving in 
and facilities that will be needed for additions to bases, but also to 
take care of the needs of bases that are going to be closed. We did 
fully fund BRAC, and I am pleased that we did. It was our 
responsibility to do it because we put a deadline on the Department of 
Defense for the implementation of BRAC. We certainly have to do the 
required construction in order to meet the deadline.
  Army modularity: We are changing the concept. There are smaller 
fighting units now. We have accommodated that modularity effort through 
our military construction efforts. Of course, in the global war on 
terror, which is the major overlying conflict that is going on today 
with our military personnel, we certainly have to meet the needs of 
those who are being trained and are going to be deployed in the war on 
terror, and we have to take care of their families.
  The military construction section of the bill provides over $21 
billion for construction projects, and it is very strong. It is very 
important in our transformation effort that we have increased the end 
strength of the military, as well as changed the types of fighting 
units that we will have in the military. So that has also provided 
requirements for different military construction. We are doing exactly 
what we should be doing in the bill, and we worked very closely with 
the authorization committee to assure that their priorities and our 
priorities were the same.
  I am very pleased that we also have addressed the needs of the Guard 
and Reserve. I have to say--and I think everybody who knows the subject 
would agree--that the funding needs of the Guard and Reserve have not 
been well represented in the Department of Defense budget submission in 
the past because of other high priorities for our defense dollars. But 
the Guard and Reserve are doing so much in the war on terror. They are 
being deployed and redeployed. We need to make sure they

[[Page 23350]]

have the facilities and support they need to fulfill their very vital 
function in the war on terror.
  The other part of this bill, which is a major responsibility, is, of 
course, the Department of Veterans Affairs. The veterans affairs 
portion of the bill has many good features. As we move forward in the 
process, I am committed to continuing to work with my colleagues to 
make sure that every dollar is spent wisely and efficiently to serve 
the needs of our veterans. We have expanded resources to treat the 
types of injuries and illnesses that our veterans are facing today. We 
are doing more in mental health and trying to help people with post-
traumatic stress syndrome.
  We are trying to make sure our facilities are kept up. We have a huge 
building program. Minor construction will be $751 million. Major 
construction will be $727 million. It is going to be a major effort to 
make sure these facilities are cutting edge.
  Severe trauma and brain injury is another area we are addressing more 
fully in this bill than we ever have before. Also, research into 
prosthetics and the use of artificial limbs is another important focus 
because we know more of our young soldiers are losing limbs, and we 
need to make sure we are doing the very best for them to be able to 
lead normal lives.
  We are doing more research into gulf war illness and, as well, 
geriatric care for the older veterans. These are critical needs. We 
will never quit looking for answers, and this fully funds the research 
for the areas in which we need to do more and better for our veterans.
  We must continue to adapt to the types of injuries that our warriors 
experience in the different theaters in which they serve. We must also 
prepare for future weapons, such as chemical and biological, that may 
be used against our soldiers.
  Mr. President, I think every Member of Congress shares in the desire 
to fairly compensate, medically treat, and honor the veterans who have 
sacrificed and borne the responsibility of military service. The VA 
provides health care free of charge to address any and all service-
connected illnesses or disabilities, mental or physical, including 
those conditions which may manifest decades after military service.
  The VA also provides health care free of charge to low-income 
veterans regardless of service-connected disability or illnesses. We 
always have--and always will--take care of our Nation's veterans.
  In summary, this Congress has shown its resolve time and again to 
care for our men and women in uniform, as well as the more than 7 
million veterans in America. We owe them our gratitude. We owe them 
what they deserve, and that is that we take care of their needs.
  I appreciate working with Senator Reed. I appreciate that we have 
done everything we could with the dollars we had. I will just note that 
President Bush has said if the bill stays as it is now, he plans to 
sign it so that we can implement it quickly. But I do hope as we go 
through the conference process and finish the bill on the Senate floor 
that we will keep to the intention of the bill, that we will make sure 
we stay within the guidelines we have.
  We have added $4 billion above the President's request already. That 
money is allocated, so there will be relatively few changes I think we 
should make if we are going to expeditiously send the bill to the 
President for his signature and assure that he will sign it.
  Once again, I thank Senator Reed and his able staff for accommodating 
me and allowing me to make my statement. I look forward to getting this 
bill out tomorrow and on to the President very soon.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Mr. President, I ask unanimous consent that the substitute 
amendment be considered and agreed to; that the bill, as thus amended, 
be considered as original text for the purpose of further amendments; 
and that no points of order be considered waived by this agreement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2656) was agreed to.
  Mr. REED. Mr. President, I commend Senator Hutchison for her hard 
work and that of her staff. She has been a very positive and laudable 
member of the committee. She has vast experience, having served on the 
committee many years, and has made a major contribution to this 
legislation, and she should be acknowledged for that contribution.
  Mr. President, this is a critically important piece of legislation, 
and I hope that the Senate will act on it expeditiously. Both the 
Department of Veterans Affairs and the veterans service organizations 
have urged prompt action on this bill, and the President himself has 
cited the importance of not delaying crucial funding for our Nation's 
veterans and military forces.
  The Military Construction and Veterans Affairs Appropriations bill 
funds urgently needed investments in the facilities in which our 
military forces and their families live and work and train for battle. 
It also provides funding for the benefits and medical care acutely 
needed by our Nation's veterans.
  The bill before the Senate today provides a total of $109.2 billion 
in funding, including $64.7 billion in discretionary funds. In all, the 
discretionary funding is $4 billion over the President's budget 
request. As Senator Hutchison said, the President is prepared to sign 
the legislation as it is.
  Funding for the Department of Veterans Affairs totals $87.5 billion, 
of which $44.5 billion is for mandatory programs and $43 billion is for 
discretionary programs, an increase in discretionary funding of $3.6 
billion over the President's budget request.
  We have independently determined additional needs for military 
construction and veterans affairs, and we found a responsible way to 
meet these additional needs.
  More than 70 percent of the increase--$2.6 billion--is for the 
Veterans Health Administration. This increase will allow the Department 
of Veterans Affairs to dedicate additional resources to deal with 
spiraling health care needs for veterans, including the urgent needs of 
Iraq and Afghanistan war veterans. Chief among needs, in terms of 
widespread impact, is the treatment of traumatic brain injury and post-
traumatic stress disorder.
  The extent of these problems among returning veterans--and the strain 
that the treatment of them is placing on the Veterans health care 
system--is only now coming to be fully understood. The Defense 
Department estimates that as many as 30 percent of returning Iraq and 
Afghanistan war veterans suffer from traumatic brain injury or post-
traumatic stress disorder--or both. This is a startling statistic and a 
looming crisis that needs to be addressed immediately.
  The urgency of this problem was among the top findings cited in the 
report of the President's Commission on Care for America's Returning 
Wounded Warriors, better known as the Dole-Shalala Commission. The 
commission's report, which was released earlier this summer, spotlights 
the need to aggressively prevent and treat post-traumatic stress 
disorder and traumatic brain injury, including preparing for the long-
term consequences of these injuries.
  Many of the veterans wounded in Iraq and Afghanistan will require 
years, if not a lifetime, of medical care from the Department of 
Veterans Affairs. And this new influx of veterans is occurring at a 
time when the veterans from previous wars are aging and requiring 
substantial increases in medical services as well as long-term care.
  It is vital that the Department of Veterans Affairs have adequate 
resources to address these emerging and unanticipated requirements 
without draining funds from other needed and high priority programs, 
such as long-term care for aging veterans.
  Unfortunately, for too long, the President's Office of Management and 
Budget has ignored the financial impact of the wars in Iraq and 
Afghanistan on the Department of Veterans Affairs, and has continued to 
penny pinch the Department's budget.

[[Page 23351]]

  As a result, the Department of Veterans Affairs has struggled over 
the past several years--often unsuccessfully--to keep pace with the 
rising demands for veterans health care. It has been Congress that has 
had to lead in providing the resources to bail out the Department when 
its projected health care costs fell abysmally short of the mark. And 
it has been Congress that has led the effort to provide the Department 
with more resources for mental health care programs at a time when the 
requirement for such services is soaring.
  I am pleased to report that the bill before the Senate today corrects 
the deficiencies of the past and provides the necessary investment to 
guide the Department into the future.
  And there is more good news for veterans in this bill. This 
legislation provides $1 billion over the President's budget request for 
minor construction and nonrecurring maintenance of veterans hospitals 
and clinics. Last February--after the President submitted his fiscal 
year 2008 budget request and after the deplorable conditions at Walter 
Reed Medical Center were revealed--the Veterans Affairs Department 
released a report identifying roughly $5 billion worth of deficiencies 
in its facilities system-wide. If we do not want to see another Walter 
Reed horror story in veterans' facilities, we need to move aggressively 
to correct these deficiencies, and the funding in this bill will allow 
the Department to do so.
  The bill also includes $131 million to hire at least 500 new claims 
processors to reduce the growing backlog of veterans' disability 
claims. The Veterans Benefits Administration currently has a backlog of 
almost 400,000 pending claims, with the average claim taking almost 6 
months to process. In testimony before the Senate Veterans Affairs 
Committee in March, the GAO highlighted the need for the VA to take 
steps to reduce the existing backlog of claims and improve the accuracy 
and consistency of decisions. This bill takes dead aim at correcting 
those problems.
  I know, as all my colleagues do--because we get the calls in our 
State offices from veterans who need help and have an unusually long 
time in which their claim is being processed--that sometimes the claims 
are rejected and have to be resubmitted or are pending appeals. All of 
this is going to be corrected, and it is going to help the people who 
need help, veterans who need access to the veterans system quickly and 
efficiently, and we hope this bill will do that.
  On the military construction side, which is the other major provision 
in our legislative agenda, the bill provides $21.2 billion. While this 
is a substantial increase over last year's funding level, it should be 
noted that more than half of the budget request was to fund the 2005 
base realignment and closure program and the President's Grow the Force 
Initiative. For military construction associated with conventional 
mission requirements, the budget request, following the trend of the 
past 5 years, was basically flatlined, but we have two major 
initiatives--the BRAC of 2005 and the new initiative of the President 
to increase principally the size of the Army--and those initiatives 
have required additional funding.
  The Senate bill fully funds the President's $8.2 billion request for 
BRAC 2005 and for his Grow the Force Initiative, and it increases 
funding for the regular military construction program by nearly $400 
million over the President's request. Especially in a time of war, we 
must not skip on funding the basic infrastructure needed to support our 
men and women in uniform.
  The Senate bill also provides $320 million--that is $100 million over 
the President's budget request--for the BRAC 1990 legacy program. This 
goes back to the prior BRAC in 1990.
  It is important that the Government keep its commitment to the 
communities affected by prior BRAC rounds and ensure that environmental 
cleanup of closed military installations is completed as thoroughly and 
rapidly as possible. Although it has been nearly 13 years since the 
last round of closures under the previous BRAC rounds, the backlog and 
environmental cleanup remains at $3.5 billion. At the current rate, it 
will take decades to return some of that property to a safe and usable 
condition. In the meantime, affected communities cannot use much of the 
land on which these bases sit.
  I am particularly pleased that this bill adds $234.6 million above 
the President's budget request for Guard and Reserve military 
construction projects. The Guard and Reserve are central components of 
our Nation's military forces. Yet the President's request for military 
construction to support these components has been steadily declining. 
The Senate bill corrects that deficit.
  Because of the enhanced scrutiny of earmarks under the requirements 
of S. 1 and the guidance of Chairman Byrd and Senator Cochran, it is 
important to understand how the military construction portion of this 
bill is funded. The vast majority of military construction funding is 
project based. That means Congress cannot correct deficiencies in the 
President's budget request simply by increasing the top line of 
individual accounts. Military construction funding is allocated by 
project and by law. Each and every major construction project must be 
individually authorized and individually funded. The President's 
military construction budget request is composed primarily of earmarked 
projects, and congressional increases to the budget request must also 
be earmarked for specific projects.
  The 2008 Senate bill includes 665 individual earmarks, of which 580 
were requested by the President. The staff of the Military Construction 
and Veterans Affairs Subcommittee worked diligently to identify every 
earmark in the Senate bill. Every Senator was required to submit to the 
committee both a written request and a letter of financial interest 
before a request would be considered. Moreover, the military 
construction title of this bill is developed in close coordination with 
the Senate Armed Services Committee, and every congressionally directed 
project in the appropriations bill is authorized in the Defense 
authorization bill. The process could not be more open and aboveboard.
  It has been reported that the Senate bill harbors $6.5 billion in 
undisclosed earmarks, which comprises the funding for construction 
projects in the BRAC 2005 account. This characterization reflects an 
unfortunate misunderstanding of the BRAC account which I am pleased to 
clarify for the record.
  Unlike the regular military construction program, the BRAC account 
does not require line-item authorization and appropriation for 
individual projects. Instead, the account receives lump-sum funding 
from which the Defense Department develops a spending plan to implement 
the recommendations of the Base Closure and Realignment Commission. 
Neither Congress nor the Defense Department has the authority to 
deviate from the Commission's recommendations. It is the policy of this 
committee to not earmark or accelerate funding for specific projects 
within the BRAC account because of the complicated domino effect of 
closing and realigning facilities among installations. Thus, each of 
the BRAC 2005 projects identified in the committee report was 
determined by the administration, in accordance with the BRAC law. The 
account includes no congressional earmarks.
  I regret that due to a lack of understanding of the BRAC process, the 
Military Construction and Veterans Affairs appropriations bill has been 
used as a poster child for undisclosed earmarks. Such an assertion is 
inaccurate on its face, but to correct any lingering misconceptions, I 
have prepared a list of the 189 BRAC 2005 projects that were published 
in the report accompanying the bill, annotated to show that each 
project, since it was funded through the President's budget request, 
was requested by the President.
  I ask unanimous consent to have the list printed in the Record so 
there can be no question as to the origin of these projects.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 23352]]

TS04SE07.001



[[Page 23353]]

TS04SE07.002



[[Page 23354]]

TS04SE07.003

 

[[Page 23355]]

  Mr. REED. Mr. President, it has been a remarkable process putting 
this bill together, principally because of the staff of the 
subcommittee on both sides. I wish to particularly thank Christina 
Evans, B.G. Wright, and Chad Schulken for the majority, and Dennis 
Balkham, Chris Heggem, and Yvonne Stone for the minority for their hard 
work and cooperative effort to produce this bill.
  I believe the 2008 Military Construction and Veterans Affairs and 
Related Agencies Appropriations Bill is an excellent piece of 
legislation, one that is needed now, not later. It is needed to fund 
programs that are crucial to our national defense, to the defense of 
the Nation, and to the well-being of our veterans. I hope and urge that 
the Senate quickly pass this bill.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The junior Senator from Texas is recognized.


                        Nomination of Jim Nussle

  Mr. CORNYN. Mr. President, the August recess has given us all an 
opportunity to return to our constituents and reconnect with the people 
of our States and listen to what is on their minds, not just what we 
hear inside the bubble in Washington, DC. For my part, the issues I 
encountered wherever I went in Texas were concerns about the economy, 
about jobs, about Government spending. Many people are concerned, and 
given, unfortunately, the recent history of the Congress and the budget 
that has already passed, I don't blame them for their concerns. There 
are some very real reasons they should remain concerned about taxing 
and spending in the Congress.
  Mr. President, you will recall that in 2001 and 2003, when 
Republicans were in the majority, Congress passed well-timed tax relief 
that helped the economy overcome the fallout from corporate accounting 
scandals of the late 1990s, the bursting of the tech bubble, and the 
horrific attacks of September 11, 2001. This well-timed and important 
tax relief put money back into the pockets of working families all 
across America, in the pockets of small businesses and entrepreneurs, 
and as a result, the economy has bounced back in an incredible and 
impressive way. Items such as bonus depreciation and the $100,000 
expensing have allowed entrepreneurs and small businesses to grow, not 
only helping their owners and their families but also creating jobs for 
their community.
  We doubled the child tax credit for working parents. We provided tax 
relief to all taxpayers from higher marginal tax rates. We reduced the 
marriage tax penalty and protected millions of taxpayers from the 
alternative minimum tax. We also provided capital gains and dividends 
tax relief for small investors, which have helped increase economic 
activity and fill the Government's coffers.
  We continue to benefit from this tax relief we are enjoying by seeing 
8.2 million new jobs created, nearly 6 years of uninterrupted economic 
expansion, and surging tax revenues that have far outpaced projections 
and helped lower the deficit. In fact, last month, the Congressional 
Budget Office reported that the budget deficit will fall by more than 
one-third this year and is almost $20 billion lower than its previous 
estimate. Meanwhile, it was reported that the economy grew by 4 percent 
last quarter alone.
  Unfortunately, there are some on the other side of the aisle who want 
to fix what is not broken and roll back the progress we have made with 
the tax relief passed in 2001 and 2003. Instead of talking about tax 
relief for hard-working Americans, there are those who are talking 
about raising taxes on Americans. Instead of talking about supporting 
the American entrepreneurial spirit, some are talking about expanding 
the size of Government and increasing Government spending.
  First, we passed a budget a few months ago that contemplated the 
largest tax increase in our Nation's history, not as a result of the 
vote of Members of the Congress but by allowing the temporary tax 
provisions I mentioned a moment ago to expire without taking a single 
vote. This budget stacked the cards against taxpayers by making it 
easier for Washington to raise taxes. Then the Senate considered tax 
policies on a so-called Energy bill that produced no new domestic 
sources of energy. Instead, it would have reinforced America's 
dependence on foreign energy sources. At the same time, we have seen 
legislation pass that raises taxes that especially hits low- and 
middle-income individuals hard.
  Next, we saw proposals rejected that would have forced Congress to 
err on the side of the people by making it more difficult for the 
Senate to raise taxes. For example, a 60-vote point of order against 
legislation that raises income taxes that overwhelmingly passed the 
Senate but was later stripped out during the conference committee on 
the budget.
  In addition, some on the other side of the aisle have proposed to 
raise the Federal gas tax at a time when the price of gasoline remains 
around $3 a gallon. They have also proposed legislation that slaps what 
I believe could accurately be called a competition tax on America's 
entrepreneurs and small businesses by making it more difficult to keep 
capital at home and to attract capital from abroad. After all, capital 
formation is the lifeblood of domestic job creation.
  Finally, some have actually advocated rolling back the 2001 and 2003 
tax relief that has done so much good for American businesses and 
provided my home of Texas with historically low unemployment rates.
  As this chart shows, American workers will have to work 79 days just 
to pay for their Federal taxes this year. And that, of course, is on 
top of the 41 days to pay their State and local taxes--which we can see 
far exceeds any other category, whether it is housing and household 
operation or health and medical care or transportation, clothing, or 
other items. They are far exceeded by the Federal tax bite taken out of 
the average taxpayer's paycheck.
  We have been treated to an interesting debate during the Presidential 
primaries already to see how leading Presidential candidates compare on 
various tax issues. We have seen proposals from the top Democratic 
candidates to actually raise the individual tax rate to 39.6 percent 
from 35 percent. We have seen proposals from the top Democratic 
candidates to tax private equity, carried interest at higher ordinary 
income rates, and we have seen a proposal to preserve the death tax.
  On the other hand, top Republican candidates have proposed to 
preserve the tax cuts, including the 35 percent top rate, preserving 
the lower capital gains rate for carried interest, and we see on the 
bottom the difference in the way the top Democratic candidates for 
President and top Republican candidates for President would treat 
capital gains and other taxes.
  Invariably, it seems as if the differences are between those who 
would take more of a tax bite out of the hard-earned income of the 
American taxpayer and spend more on Federal Government and those who 
believe the people who earn the money deserve to keep more of what they 
earn. This tax relief has given rise to an unprecedented expansion of 
the economy and job creation beyond some of our wildest dreams.
  The politics of tax and spend has unfortunately crept back into 
Washington and threatened to undo a lot of good work that has been done 
over the past several years. One rather confusing example is the recent 
passage of the reauthorization of the Children's Health Insurance 
Program. This bill increased the CHIP budget by 300 percent, 
effectively raising taxes to cover the expenditure. But this program 
has also increased the scope of CHIP coverage to include families of 
four with an income of more than $80,000, some 400 percent of the 
poverty level. This creates the double standard of such families being 
in need by CHIP standards but wealthy under the Tax Code. Our laws 
should never contain such a ridiculous double standard.
  This battle for higher taxation and fiscal irresponsibility is 
nowhere more evident than it is with the confirmation of Jim Nussle as 
the head of the Office of Management and Budget, a nomination we will 
be voting on later today. Despite the progress and economic boom that I 
have described,

[[Page 23356]]

many Members of Congress are fighting against this nomination, even 
though this former chairman of the House Budget Committee was a major 
architect of these successful tax policies which I have described. The 
House majority leader even remarked that from 2001 to 2006 Congress had 
``pursued the most fiscally irresponsible policies.'' And while our 
current economy seems to contradict that statement, the American 
taxpayer must certainly disagree.
  Congressman Nussle has a long and well-established history of 
financial responsibility and is considered by many to be a leading 
expert on budget issues and the Federal budget process. Congressman 
Nussle has worked hard to try to pass meaningful earmark reform, even 
before it became a popular political rallying cry. He was instrumental 
in writing the welfare reform bill, and he successfully passed six 
budgets. Finally, Congressman Nussle has been repeatedly praised for 
his work on taxes by national organizations such as Americans for Tax 
Reform, the National Taxpayers Union, Citizens Against Government 
Waste, the Council for the Committee on Government Reform, and the 
National Tax Limitations Committee.
  As we move forward, the last thing we should do is to reverse the 
policies that have helped bring around America's economy, reduced the 
deficit and put more money in the pockets of Americans. Indeed, we must 
pursue economic policies that encourage growth and protect the 
interests of America's taxpayers. The best way to do that is by 
maintaining the tax relief that has already helped millions of hard-
working Americans and by confirming Jim Nussle as head of the Office of 
Management and Budget.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Carper). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator is recognized.


                              The Economy

  Mr. KYL. In just a few minutes, we are going to start the discussion 
of the confirmation of Jim Nussle as head of the OMB--the Office of 
Management and Budget. And since a lot of what he has to work with in 
terms of budget depends upon decisions we make in the U.S. Congress, I 
thought it might be a good time to review some of the economic news and 
information that has been coming out over the course of the last 
several days and weeks. The majority of this information is very 
encouraging for our future, and I will go through briefly and explain 
why it matters.
  It shows, first of all, that we had 4 percent economic growth in the 
second quarter of this year. That is phenomenal and well above the 
historical average. Continuing low unemployment; now it is 4.6 percent. 
More than 8 million jobs have been created in the course of the last 5 
years. And though the stock market has been up and down in recent 
weeks, it is still growing at better than 7 percent this year, which is 
very good. In fact, since 2003, the stock market has grown at an 
average of 12 percent, which is at about the historical average of the 
stock market. The poverty rate has declined to 12.3 percent. By 
contrast, for example, under the Clinton administration, it averaged 
13.3 percent, so it is 4 percent lower than it was during that time.
  Clearly, the economic growth that has characterized our economy 
generally has benefitted many segments of our society. Nearly 70 
percent of Americans now own their own homes. That is higher than at 
any time, for example, during the previous administration. And the 
average home price has increased by more than 50 percent since 2001, 
meaning that a home worth $200,000 in 2001 is, on average, worth about 
$300,000 today. That kind of appreciation for housing has obviously 
increased the wealth of American homeowners by literally billions of 
dollars.
  Those are just some of the numbers, Mr. President, but I think they 
illustrate a very important point, and that is that success in the 
economy is not an accident, first of all. We in Washington need to 
appreciate that we don't create success. That is created by the 
American people--the entrepreneurs, the people who work hard, and the 
thousands, millions, literally, of decisions made every day in working 
through our free market economy. But government can also have a big 
impact on whether that success exists or not by decisions we make 
relating to regulatory and tax-and-spend policy. And what we do here, I 
think one would have to acknowledge, can have a big impact on the 
decisions that working Americans and investors make in their economic 
lives.
  It is now undeniable that one of the key factors in the economic 
growth that I referred to earlier is the 2001 and 2003 tax relief 
passed by the Republican Congress and signed by President Bush, and it 
has been a big boon to the economy.
  Let me explain what we have done to create the conditions for growth, 
in other words. We have rewarded work and investment through lower tax 
rates. We have refused to punish success by taxing the rich even more. 
We have given small businesses financial incentives to grow and to add 
jobs to the economy, and we have encouraged investors to move their 
capital around efficiently so that businesses can get the money they 
need to grow.
  We need to continue to encourage hard work, savings, and investment. 
We need to protect the pocketbooks of working families and the cash 
registers of the small businesses by protecting them against tax 
increases. And, frankly, we need to stop wasteful Washington spending 
because when Washington goes on a spending spree, the next thing that 
happens is politicians start looking to raise taxes.
  Now, what are the economic plans of the Democrats by comparison? Are 
they also aimed at encouraging growth? I would, unfortunately, say, no, 
I don't think so. Under the budget that was passed, the Democrats will 
raise taxes by $716 billion. Those new taxes would discourage 
investment, punish hard work, and block jobs from being created. And 
repeatedly this year the Democratic Congress has overspent the budget. 
The war supplemental included billions in agricultural pork projects. 
The omnibus continuing resolution included billions in extra spending, 
and the appropriations bills that have passed out of the House of 
Representatives and are being considered in the Senate are all over the 
President's budget request. This is going to make Jim Nussle's job a 
lot more difficult.
  And how do the tax-and-spend plans of the Democrats help economic 
growth? The answer is simple: not at all. The fact is, my Democratic 
colleagues rarely talk about economic growth. They don't claim the $716 
billion in new taxes would be a boost to the economy, of course, 
because it wouldn't. Instead, they advocate new taxes and new spending 
programs and just assume that economic growth will occur regardless of 
whether they bust the budget and raise taxes on the American people.
  It pains me to say it, but I don't think these folks understand why 
economic growth matters to the average family. Otherwise they wouldn't 
be proposing this kind of counterproductive policy. Let's look at what 
would happen if we abandoned the current economic policies that have 
enabled our economy to grow in the last quarter, as I said, at over a 4 
percent clip.
  If the economy is not expanding, there will be very few new jobs. 
Most obvious and painful are the job losses. If the economy is 
contracting, people will be losing their jobs. And there is a 
multiplier effect. When one worker loses his job, his family and 
community suffer. All the money he or she has been earning was either 
being spent or invested. Now, the people relying on those dollars 
suffer as well. Those who keep their jobs will see very little wage 
growth, cuts in their benefits, such as health care, longer work hours, 
for example, more people working multiple jobs and spending even less 
time with their families.

[[Page 23357]]

  You can see the multiplier effect of this kind of economic loss. And 
there is a flip side. Without economic growth, there is no expansion of 
existing business facilities, such as expansions to factories, which 
would lead to more local jobs. No new businesses. For the most part, 
you don't see large-scale business startups during economic downturns. 
And it is not just the potential worker for that company who loses out, 
it is the supplier and vendor and every business partner who would also 
have the opportunity to thrive if the conditions were better. And your 
retirement suffers. Retirement savings don't grow; 401(k)s and pensions 
and savings accounts remain stagnant and can even lose money. Even your 
Social Security suffers because government depends on economic growth 
for increased revenues. With lower Social Security tax receipts, the 
date when the Social Security trust fund goes bankrupt gets even 
closer.
  You can talk about these multiplier effects all day. They are very 
real. And that is why we have to support policies that strengthen 
economic growth and assure that American families continue to have 
opportunity rather than problems. Economic growth drives higher tax 
revenues to the State and local and Federal Government. The economic 
growth since the Republican tax cuts went into effect has led to 
dramatic increases in State and Federal income taxes. Think about it--
we lowered taxes on everyone, but our Federal revenues to the Treasury 
have increased. That just doesn't happen in times of recession. Just 
the opposite occurs--there are lower tax revenues.
  Even at the local level, with schools, for example, and cities--the 
roads, the police, the libraries, the parks--all of these things depend 
upon collecting tax revenues. Economic growth is essential at all 
levels of government. So if you care about good schools, for example, 
you care about economic growth.
  Let me talk just one more little bit about the increase in taxes 
because this is one of the key factors that can inhibit economic 
growth, and it is one that concerned me most about the budget that was 
passed by the Democrats. The plan, as I said, is to repeal the 2001 and 
2003 tax rate reductions--that tax relief. Every American benefitted 
from those tax cuts, so this would be a big mistake for two reasons.
  First of all, everyone received some benefit. Even those who didn't 
pay taxes received money back from the Federal Government, and we 
created a new 10-percent bracket for the very lowest bracket of 
taxpayers so they wouldn't have to pay as much in taxes. So it wasn't 
just people at the upper economic stratum that benefitted. It was all 
Americans, including even some who didn't pay taxes.
  Second, everyone benefitted not just because of the specific relief 
they got but because the economy grew. It was John F. Kennedy who said, 
in 1963, in supporting the tax rate cuts that he proposed at that time, 
that a rising tide lifts all boats. What he meant by that was as 
economic growth continues, it helps everybody in our society--more jobs 
created, wages increased, business investment increased, and money put 
back into the communities. So even if we just passed the tax relief for 
lower income people, our economy would still be hurt. Our priorities 
should be about encouraging economic growth and preventing a recession. 
High taxes and spending send us in exactly the wrong direction.
  Well, Mr. President, let me conclude with this thought. We still have 
challenges, obviously. We are fighting a global war against Islamic 
extremists. It is enormously costly. But that is another reason we need 
a strong economy, so people have good jobs and our government has the 
revenue it needs to address that conflict.
  While overall inflation is extremely low, in certain specific areas, 
such as gasoline prices, they are too high. So we need to work on 
creating energy independence and look at the viability of alternative 
fuels. We face rising health care costs with insurance premiums that 
continue to rise. This is a big issue, and obviously we are working on 
it. But Republicans know that Americans don't want radical changes that 
turn our health care into some kind of Washington-run bureaucratic 
government program--a one-size-fits-all. We need patient-centered 
health care in this country. We can debate about these specific 
solutions to these other problems, but without a vibrant and growing 
economy producing more and more wealth, any of those things will be 
difficult to address. We can help solve these problems, but the last 
thing an American family needs is the economic policies that would 
result in higher taxes, more spending, and all of the devastating 
consequences of economic recession.

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