[Congressional Record (Bound Edition), Volume 153 (2007), Part 5]
[Senate]
[Pages 6964-7025]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                                  2008

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of S. Con. Res. 21, which the clerk 
will report.
  The legislative clerk read as follows:

       A concurrent resolution (S. Con. Res. 21) setting forth the 
     congressional budget for the United States Government for 
     fiscal year 2008 and including the appropriate budgetary 
     levels for fiscal years 2007 and 2009 through 2012.

  Pending:

       Sessions amendment No. 466, to exclude the extension of tax 
     relief provided in 2001 and 2003 from points of order 
     provided in the resolution and other budget points of order.
       Cornyn amendment No. 477, to provide for a budget point of 
     order against legislation that increases income taxes on 
     taxpayers, including hard-working middle-income families, 
     entrepreneurs, and college students.

  The ACTING PRESIDENT pro tempore. The Senator from Nevada is 
recognized.
  Mr. ENSIGN. First, I compliment Senator Conrad on his relationship 
with Senator Gregg. The cooperation they have displayed over the past 
several years should serve as an example to everyone in this body how 
the Senate can, and should, work. They battle fiercely, battle for 
their own ideas, but the collegiality they demonstrate and the respect 
they show one another is a good example for the rest of us in the 
Senate. One we should follow. It is really the way we should legislate 
around here. I offer them my compliments.


                           Amendment No. 476

  Mr. ENSIGN. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside so that I may call up amendment No. 476.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Ensign] proposes an amendment 
     numbered 476.

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

   (Purpose: To ensure that our troops serving in harm's way remain 
    America's top budget priority by: ensuring full funding for the 
   Department of Defense within the regular appropriations process, 
    reducing reliance on supplemental appropriations bills, and by 
      improving the integrity of the Congressional budget process)

       On page 41, strike lines 9 through 11 and insert the 
     following:
       (2) for fiscal year 2008,
       (A) for the national defense (050) function, 
     $498,844,000,000 in new budget authority and $507,394,000,000 
     in outlays; and

[[Page 6965]]

       (B) for all other functions, $443,468,000,000 in new budget 
     authority and $514,013,000,000 in outlays.

  Mr. ENSIGN. Mr. President, to briefly describe the amendment, it is a 
defense firewall amendment. This is not a new idea. We have had defense 
firewalls in the past. They have worked with some success. There have 
been a few problems with them, but overall they worked with some 
success.
  We drafted the defense firewall in this amendment in a little 
different way than previous firewalls. These changes, I believe, will 
actually result in the firewall having its intended effect. That is, to 
make sure that the defense money in the budget is actually spent on 
defense.
  In past years, a defense firewall has, frankly, been necessary. The 
chairman of the Budget Committee can attest to the fact that, under 
Republican control, this budget enforcement tool should have been in 
place. I have been very critical of Republicans when we chose to 
underfund defense purposely to shift money to other programs. Over the 
last several years, we used a kind of sleight of hand and budget 
gimmicks, and then restored defense spending later on in emergency 
supplementals. In effect, this raises overall spending for the 
Government.
  Instead of honest budgeting and trying to increase certain non-
defense programs in the open, we hid our spending habits from the 
American people. I have always said, that if you want to increase non-
defense spending, have an honest vote to do so rather than using a 
gimmick. Fund defense honestly rather than what we have been doing, 
which is dishonest budgeting. We have not had the transparency under 
which I believe this institution should operate.
  When the Democrats were campaigning last year, they criticized us in 
a lot of ways for using budget gimmicks, and I think rightly so. It is 
their time to keep what they have campaigned on--honest budgeting and 
true transparency. That is what we need in this place.
  I want to take a minute to demonstrate what I have talked about for 
the last several years. Unfortunately, given how the new Democrat 
majority has chosen to fund BRAC, this Congress is continuing the bad 
habits of Congresses past.
  What this chart shows is, in 2002, we added $1.9 billion in new 
spending. We took away from defense, about $1.9 billion, and then added 
that amount back in a supplemental. And this happens because everybody 
knows that Congress is going to fund defense to add that spending back 
later. We don't want to vote to actually cut defense, so we shift the 
money in the regular appropriations process and put it back in during 
an emergency supplemental. But what happens is that the $1.9 billion in 
2002 gets added into the baseline for the next year. Then the next 
year, we underfunded defense by $11.5 billion, we shifted the money to 
other programs, and then added back the defense spending during the 
supplemental. The effect of this is to add on to the previous year--all 
of that in fiscal year 2004.
  You can see the green bar at the bottom is the combination of the 
previous 2 years; that is added into the baseline. Then you do this 
again. Robbing from defense to once again add to the nondefense part of 
the baseline. This continues each year all the way up, and then you see 
what happens until we get to 2006. The cumulative effect of this is 
shown on the next chart.
  I know the chairman of the Budget Committee likes charts, so we 
wanted to make sure we would have some of our own today. The cumulative 
effect of doing this each year for 5 years is a total of $84 billion. 
We don't have the new numbers for 2007 yet, but it is about an extra 
$40 billion. So we are probably well over $125 billion for a 6-year 
total in new spending. That really is the problem.
  People are not being honest. If they want to increase spending, do it 
honestly. What our defense firewall says is that if you want to adjust 
defense spending, it cannot be done during the appropriations process; 
it has to be done during the budget process so that we are being honest 
with the American people. Since we assume a defense number in this 
budget, this amendment puts a wall around that amount so that it cannot 
be taken during the appropriations process. That wall says we will not 
take any more money out of defense to put into the other appropriations 
bills. This is transparency. This is honesty in budgeting.
  When Republicans were in the majority, the Democrats claimed that we 
were fiscally irresponsible. They promised that they were going to come 
to power and be fiscally responsible. This is an amendment that will 
give them the opportunity to do just that. It gives them the 
opportunity to reject one of the budget gimmicks that has been used to 
add new spending.
  I call on my colleagues in the majority to join with me in putting 
transparency into the budget process so we can help restrain Federal 
spending. Why do I say that? It is because when the Defense bill comes 
up as part of the process, no one, especially during a time of war, is 
going to vote to cut defense. So knowing that the Defense bill has to 
pass, the other bills get funded first. Defense comes up and it is 
slightly underfunded, so they know they have to make that up during an 
emergency bill. The emergency bill comes to the floor, and everybody 
knows it is going to pass. That is how this whole budget gimmick ends 
up increasing overall spending.
  If you support fiscal responsibility, if you don't want to add a 
burden of debt and higher taxes onto young people and future 
generations, vote for this amendment. This is a fiscally responsible 
way to budget and to bring transparency into the Senate. This is the 
kind of amendment we need going forward. Both parties should operate 
under this kind of honesty when it comes to budgeting. I encourage all 
of my colleagues on both sides of the aisle to support this amendment.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota is 
recognized.
  Mr. CONRAD. Mr. President, I thank my colleague for this amendment. I 
don't favor this amendment, but it is a thoughtful, serious amendment, 
and it deserves thoughtful, serious consideration.
  Let me just indicate that the budget resolution, as it stands with 
respect to funding for defense and funding for the war, is not affected 
by this amendment. The budget resolution has the President's full 
request for the war. So I wish to be clear that the Ensign amendment 
doesn't affect that. What the Ensign amendment does provide is a 60-
vote point of order against any legislation that exceeds the budget 
authority, which he sets for defense and nondefense discretionary 
spending, which is in the resolution. So what he is seeking to do is 
prevent money from going from defense to nondefense or the other way, 
from nondefense to defense. That is something we have done in the past.
  My own analysis of it is that firewalls have not worked particularly 
well. We had them under the 1990 budget agreement. I think what we 
learned from that experience was they just didn't work as intended. Why 
not? Because instead of preventing games, I am afraid it encouraged 
games.
  Let me say why I believe that is the case. No sooner were firewalls 
created for defense and international spending and domestic spending in 
the 1990s than our colleagues started to become very creative about how 
to jump over the firewalls.
  For example, Congress started to dramatically expand the amount of 
medical research done by the Department of Defense. Instead of doing it 
at the National Institutes of Health, they tried to, in effect, evade 
the firewall--which, again, is absolutely well intended. But by doing 
the medical research not at NIH over in the domestic discretionary 
spending, they shifted the cost over into defense spending.
  I am very strongly in favor of medical research, as I know my 
colleague from Nevada is. But does anyone in this Chamber really 
believe that we would have increased breast cancer research more 
effectively by not having it done at NIH rather than by the United 
States Army? And since firewalls were put in place, successive 
administrations have now started putting

[[Page 6966]]

FBI budget authority over in the Defense Department. This is the kind 
of game that I think, in many ways, the Senator is seeking to prevent 
but I am afraid may just be encouraged.
  Why has that been done? It has been done to evade the firewalls. It 
is not clear to me what problem this amendment would actually solve. We 
haven't had firewalls in the last several years. Yet defense spending 
has grown rapidly.
  Since 2001, defense, as a share of gross domestic product, has grown 
very significantly. Here is a chart that shows what has occurred.
  Defense, as a share of gross domestic product--which all the 
economists say is the best way to measure--has gone from 3 percent in 
1999 to 4.2 percent of GDP now.
  Seen another way, defense spending--this is not a share of GDP, but 
this chart is expressed in constant 2008 dollars so that we have a fair 
apples-to-apples comparison.
  We can see that defense spending has gone up very dramatically. In 
fact, we are now past, in real terms, the spending at the President 
Reagan defense buildup peak, and we are now set to go beyond the 
Vietnam war spending peak.
  The Ensign amendment will actually take away flexibility from 
appropriators about how best to live within their overall total 
allocation. They have a much closer perspective on the programmatic 
needs of the various agencies, and I don't think we should be reducing 
that flexibility.
  If the Appropriations Committee were to move to eliminate $50 million 
in wasteful spending at the Department of Defense--let's presume for a 
moment that we found $50 million of waste at the Department of 
Defense--I think those of us close to this know that is not a 
theoretical possibility--that if $50 million of wasteful spending was 
found at the Department of Defense, it couldn't be easily reallocated 
to Homeland Security because it would face this defense firewall block. 
I think that is a mistake.
  Finally, I note for my colleagues on the other side that a vote for 
the Ensign amendment is a vote to endorse and enforce not just defense, 
but also the nondefense discretionary spending levels in the Democratic 
budget resolution. My colleagues will be voting to endorse $443.5 
billion in nondefense discretionary spending because this firewall 
works both ways.
  If my colleagues think money ought to be transferred from domestic 
nondefense spending to defense spending, it would face this same 
firewall. It would have the same 60-vote hurdle.
  On that basis, while I absolutely respect the constructive intention 
of the Senator from Nevada, I believe it would have precisely the 
opposite effect that he intends.
  I thank the Chair and yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  Mr. GREGG. Mr. President, I yield myself such time as I will take.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I wish to speak in support of the amendment 
of the Senator from Nevada. I think it is a critical amendment as we 
look at the budget with which we are dealing.
  We know the budget we received from the other side of the aisle is a 
classic tax-and-spend budget. It raises taxes by $900 billion. It 
raises spending $144 billion in nondefense discretionary. The practical 
effect of that is very clear. The size of Government is going to grow 
dramatically, and the American workers are going to have to pay a heck 
of a lot more in taxes.
  But there is something else we need to be sensitive to, and that is--
and I credit the Senator from North Dakota for doing this--the Senator 
from North Dakota has put in place the numbers the President asked for 
to fight the war--$145 billion I believe is the number; something like 
that--for the 2008 budget. The problem is that unless that money is 
secured in a way that it cannot be gamed or used or reallocated, it can 
be used to grow the Government in nondefense discretionary activity. We 
have seen that happen. We have seen that happen, regrettably, all too 
often around here where money, which is defense money, is taken out of 
the Defense Department, moved over to the social spending side of the 
ledger because there is some account somebody wants to spend money on, 
and then halfway through the year, the Defense Department starts to run 
out of money and everybody is going to vote to replenish the Defense 
Department with a supplemental. That is the way it works around here.
  Regrettably, it happened last year that way. Regrettably, it happened 
the year before last that way. Regrettably, it happened the year before 
the year before last that way. That is exactly what happens around 
here. Money is taken out of the Defense Department, put into the social 
spending accounts, it grows the base of the social spending accounts, 
and then the Defense Department is replenished through a supplemental 
because everybody knows we have to fund the Defense Department, 
especially during a time of war.
  What the Senator from Nevada is trying to do is make sure that where 
we have this massive amount of money sitting there, these warfighting 
funds, and where we have increased the defense base by so much money, 
we essentially protect that money from being raided for the purposes of 
being used for everyday accounts around the operation of Government and 
for building the base of the operation of Government.
  When we look at the history of the Congress, that type of action is 
needed. We need that type of protection. So a defense firewall is 
absolutely critical to fiscal discipline, and, I would argue--and I 
think history stands with me on this argument--if we don't have a 
defense firewall, it is very clear that the social nondefense, 
nondiscretionary spending number isn't going to increase by $144 
billion, which is the number which is in this bill, which is a pretty 
significant increase over the President's number, by the way--the 
President jumped it up by a significant amount--it is going to increase 
by a lot more because we know defense money is going to flow into those 
accounts throughout the appropriations process in order to take care of 
this issue or that issue that somebody believes is important to their 
agenda.
  We heard yesterday the Senator from Massachusetts talk about how No 
Child Left Behind had to receive more money, how IDEA had to receive 
more money, how Pell grants had to receive more money. The Senator from 
North Dakota has put more money into those accounts, significantly more 
money, and the President has put more money into those accounts, 
significantly more money. But I can assure my colleagues that when that 
appropriations bill hits the floor with those dollars in it, it is 
going to go up even further because there is going to be money taken 
out of the Defense Department and put into the Labor-HHS bill for the 
purpose of expanding those programs because that money is sitting there 
and the money is defenseless, to use a term of art. The money is 
defenseless. It is going to be raided and taken over to the social side 
of the ledger from the Defense Department.
  The Senator from Nevada has the right approach to set up this 
firewall and make it clear that we are going to have fiscal discipline. 
That is what we need, fiscal discipline. This budget doesn't have much 
fiscal discipline in it. In fact, it doesn't have any to speak of. But 
as a practical matter, it shouldn't get worse. We should put in place 
some limits that allow us to make sure even with this massive increase 
in nondefense discretionary money, that is where it stops, and we don't 
end up with the Defense Department being used as the piggy bank to fund 
even more nondefense discretionary spending.
  The Senator is on the right track. It has been done before. It was 
actually quite effective before. I disagree with the characterization 
of it by the Senator from North Dakota. It made life a little more 
difficult with the appropriators and others who wanted to take 
advantage of defense dollars in order to use them on the nondefense 
discretionary side of the ledger, for social spending or whatever 
projects were floating around they wanted to do.

[[Page 6967]]

  It will also have a direct impact, quite honestly, on earmarks. It 
will make it more difficult to earmark because there won't be money 
available with which to earmark. If you are opposed to earmarks, for 
fiscal discipline, if you think the Defense Department should get the 
money we promised them to fight the war, you have to vote for the 
Ensign amendment.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, as the Senator from New Hampshire well 
knows, the war funding is secure. It is absolutely secure. At his 
urging, we put the war funding in a sidecar. Our cap adjustment for war 
costs is available only for war costs. That is a red herring of an 
issue, and he knows it.
  Let's go back to this question of how things really work. I must say, 
I am sympathetic to the basic notion of trying to exert discipline and 
not having money that is appropriated for defense used for something 
else. I am absolutely sympathetic to that. The problem is, I don't 
think this works, and I am asking to have the list of earmarks that is 
in the Defense appropriations bill brought to me because I will then 
read that list. It will take me a good part of the day because we all 
know what is really happening around here.
  The Senator talked about somehow suppressing earmarks. Please, do I 
really have to read the list of earmarks that has been put in the 
Defense appropriations bill that have nothing----
  Mr. GREGG. Will the Senator yield at that point?
  Mr. CONRAD. Let me complete the thought. I will be happy to yield. 
Don't we all know, haven't we all read the Defense appropriations bill 
and seen earmark after earmark after earmark put into that Defense bill 
that has nothing whatsoever to do with defense? I will be happy to 
yield.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, my point was that this will increase the 
piggy bank available to nondefense discretionary to be used for 
earmarking because it will take defense dollars and move them over to 
nondefense discretionary accounts. I don't argue with the argument that 
there is a significant number of earmarks in the defense budget. I hope 
that as part of reading his Defense Department earmarks--which I will 
be happy to agree exists--he will at the same time list the earmarks 
that were added into the Labor-HHS bill over the last 4, 5, 6 years as 
a result of literally billions of dollars being taken out of the 
Defense Department to pump up the Labor-HHS bill. That is where the 
earmarks occurred.
  Mr. ENSIGN. Will the Senator yield?
  Mr. CONRAD. I will be happy to yield in a minute, if I may just 
respond to the Senator. I think we all know the truth of this 
institution is that as soon as we create something such as a firewall, 
very creative minds go to work in this institution to find a way around 
it. That is the hard reality. I am happy to yield.
  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. ENSIGN. Mr. President, first of all, the Senator from North 
Dakota made the point that defense funding is secure. We do not in any 
way think we are going to underfund defense or the war funding. The 
point we were making about defense spending is that because everybody 
is going to make sure defense spending is secure, once the money for 
defense is put in there, money is taken out and put into other spending 
programs, then later in the year it is filled back in for defense.
  Everybody knows we are going to fund the war. Everybody knows we are 
going to do the critical needs of the Department of Defense. What we 
are arguing is that other spending is going to be increased because of 
the budget gimmicks because there is no transparency.
  What my amendment does is put transparency back into the process. 
That is why the Senator from New Hampshire and myself are arguing how 
critical this amendment is if we want to actually have some fiscal 
restraint, if we want to not just continue to blow up the deficits and 
pass this huge debt on to future generations.
  Without transparency, without all the budget gimmicks, the numbers 
that my colleagues saw that I put up and the charts I put up for the 
last 5 years--let's put those charts back up. For the last 5 years, $84 
billion total has been added in nondefense, other types of social 
spending programs. And it was done, in a way, with budget gimmicks, 
where people, kind of sleight of hand over here, looked as though they 
were being fiscally responsible, but they were not. They said they were 
operating within the budget caps that were set out, but because then 
the Defense spending was declared as emergency, that allowed people to 
get around the Defense caps.
  What we are trying to do is to install some fiscal discipline. That 
is why we put a 60-vote, supermajority, point of order against this 
kind of activity. There is still flexibility. If people wanted to 
argue: let's take the money out, let's increase these accounts the way 
it has been done in the past, at least there is a supermajority 
required to do so.
  I keep going back to last fall's election and before that, when the 
Democrats accused Republicans in the majority of being fiscally 
irresponsible. This is a chance to fulfill their campaign promise of 
being fiscally responsible. It is time to step up, put mechanisms in 
place that will put the discipline into this body to help hold down the 
spending that goes on in this place.
  I will not argue that games won't be played. What we are going to do, 
though, is to make it more difficult to play the games. There will 
always be people who will try to get around whatever budget discipline 
we put in. The appropriators are famous for that. What we are trying to 
do here is to put in budget discipline, to put in a steeper wall to 
climb over to get around these sleight-of-hand budget tricks.
  That is what this amendment is about, to say let's for once be 
fiscally responsible around this place. Let's think about the children 
and future generations as far as spending is concerned. I ask my 
colleagues to support this amendment when it comes up to the full 
Senate for a vote.
  Mr. BYRD. Mr. President, at Andrews Air Force Base in 1990, I helped 
to craft the first statutory firewalls as part of the budget summit 
that resulted in 
the Budget Enforcement Act of 1990. That act created three categories 
of discretionary spending--defense, international, and domestic 
discretionary.
  At the time, the device of the three separate caps to protect each 
category from being raided by another category made sense. There was a 
definable military threat, and nondefense funds did not contribute 
significantly to the defense of the Nation. That is not the case 
anymore. The September 11 attacks blurred the line between defense and 
nondefense spending. Military threats can no longer be viewed as 
matters that are fought solely through the Defense Department. The 
enemy may attack our troops overseas or civilians here at home. Within 
a matter of weeks, the focus of our war against terrorism can shift 
from military efforts abroad, to our homeland security efforts here at 
home, and then back again.
  To respond to this threat, the Congress should maintain maximum 
flexibility to shift funds to where they are needed most--whether for 
our homeland security needs here at home or for our troops overseas or 
for our veterans who need health and medical care. With so much 
uncertainty regarding the threat of terrorism and the war in Iraq, it 
makes no sense to limit how those funds can be spent.
  Senators should know that firewalls in the past have forced the 
Congress to resort to all sorts of machinations to pass its annual 
spending bills. Firewalls were used in past years, as part of a 
partisan budget process, to hold nondefense discretionary spending at 
unrealistically low levels. These spending levels were set early in the 
year under different fiscal circumstances and at levels that neither 
the administration nor the Congress expected to stay within. The result 
was always unnecessary delays in the appropriations

[[Page 6968]]

process and even more spending as nearly all budgetary discipline 
evaporates in the push to pass an end-of-the-year omnibus bill.
  These kinds of budget gimmicks undermine the people's confidence in 
the Congress to manage the Nation's spending priorities.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. OBAMA. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Who yields time?
  Mr. CONRAD. Mr. President, how much time would the Senator like?
  Mr. OBAMA. Mr. President, I was hoping for 10 minutes.
  Mr. CONRAD. I will be happy to yield 10 minutes to the Senator off 
the bill.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois is 
recognized for 10 minutes.


                              The Iraq War

  Mr. OBAMA. Mr. President, on Thursdays, Senator Durbin and I hold a 
constituent coffee so we can hear from the folks back home. A young man 
came a few months ago who was about 25, 26 years old. He had been back 
from Iraq for a year. The first 6 months of that year he spent in a 
coma. An explosion had shattered his face, blinded him in both eyes, 
and has left him without the use of one arm.
  He told us about how he was going through rehab, and he introduced us 
to his family. He has a wife and two young daughters like I do, and his 
wife talked for a bit about the adjustments they were making at home 
since dad got hurt. I found myself looking at not just him, but at his 
wife, who loves him so much, and I thought about how their lives were 
forever changed because of the decision that was carried out 4 years 
ago.
  The sacrifices of war are immeasurable.
  I first made this point in the fall of 2002, at the end of the speech 
I gave opposing the invasion of Iraq. I said then that I certainly do 
not oppose all wars, but dumb wars--rash wars. Because there is no 
decision more profound than the one we make to send our brave men and 
women into harm's way.
  I have thought about these words from time to time since that speech, 
but never so much as the day I saw that young man and his wife.
  The sacrifices of war are immeasurable. Too many have returned from 
Iraq with that soldier's story--with broken bodies and shattered nerves 
and wounds that even the best care may not heal. Too many of our best 
have come home shrouded in the flag they loved. Too many moms and dads 
and husbands and wives have answered that knock on the door that is the 
hardest for any loved one to hear.
  And the rest of us have seen too many promises of swift victories, 
and dying insurgencies, and budding democracy give way to the reality 
of a brutal civil war that goes on and on and on to this day.
  The sacrifices of war are immeasurable. It was not impossible to see 
back then that we might arrive at the place we are at today.
  I said then that a war based not on reason but on passion, not on 
principle but on politics would lead to a U.S. occupation of 
undetermined length, at undetermined cost, with undetermined 
consequences. I believed that an invasion of Iraq without a clear 
rationale or strong international support would only strengthen the 
recruitment arm of al-Qaida and erode the good standing and moral 
authority that took our country generations to build. There were other 
experts, and leaders, and everyday Americans who believed this too.
  I wish we had been wrong. I wish we weren't here talking about this 
at the beginning of the war's fifth year. Because the consequences of 
this war have been profound. And the sacrifices have been immeasurable.
  Those who would have us continue this war in perpetuity like to say 
that this is a matter of resolve on behalf of the American people. But 
the American people have been extraordinarily resolved. They have seen 
their sons and daughters killed or wounded on the streets of Fallujah. 
They have spent hundreds of billions of dollars on this effort--money 
that could have been devoted to strengthening our homeland security and 
our competitive standing as a nation.
  No, it has not been a failure of resolve that has led us to this 
chaos, but a failure of strategy--a strategy that has only strengthened 
Iran's strategic position; increased threats posed by terrorist 
organizations; reduced U.S. credibility and influence around the world; 
and placed Israel and other nations friendly to the United States in 
the region in greater peril.
  Iraq has not been a failure of resolve, it has been a failure of 
strategy--and that strategy must change. It is time to bring a 
responsible end to this conflict is now.
  There is no military solution to this war. No amount of U.S. soldiers 
not 10,000 more, not 20,000 more, not the almost 30,000 more that we 
now know we are sending--can solve the grievances that lay at the heart 
of someone else's civil war. Our troops cannot serve as their 
diplomats, and we can no longer referee their civil war. We must begin 
a phased withdrawal of our forces starting May 1, with the goal of 
removing all combat forces by March 30, 2008.
  We also must make sure that we are not as careless getting out of 
this war as we were getting in, and that is why this withdrawal should 
be gradual, and keep some U.S. troops in the region to prevent a wider 
war and go after al Qaida and other terrorists.
  But it must begin soon. Letting the Iraqis know that we will not be 
there forever is our last, best hope to pressure the Iraqis to take 
ownership of their country and bring an end to their conflict. It is 
time for our troops to start coming home.
  History will not judge the architects of this war kindly. But the 
books have yet to be written on our efforts to right the wrongs we see 
in Iraq. The story has yet to be told about how we turned from this 
moment, found our way out of the desert, and took to heart the lessons 
of war that too many refused to heed back then.
  For it is of little use or comfort to recall past advice and warnings 
if we do not allow them to guide us in the challenges that lie ahead. 
Threats loom large in an age where terrorist networks thrive, and there 
will certainly be times when we have to call on our brave servicemen 
and women to risk their lives again.
  But before we make that most profound of all decisions--before we 
send our best off to battle, we must remember what led us to this day 
and learn from the principles that follow.
  We must remember that ideology is not a foreign policy. We must not 
embark on war based on untested theories, political agendas or wishful 
thinking that has little basis in fact or reality. We must focus our 
efforts on the threats we know exist, and we must evaluate those 
threats with sound intelligence that is never manipulated for political 
reasons again.
  We must remember that the cost of going it alone is immense. It is a 
choice we sometimes have to make, but one that must be made rarely and 
always reluctantly. That is because America's standing in the world is 
a precious resource not easily rebuilt. We value the cooperation and 
goodwill of other nations not because it makes us feel good, but 
because it makes all the world safer--because the only way to battle 
21st century threats that race across borders--threats like terror, and 
disease, and nuclear proliferation--is to enlist the resources and 
support of all nations. To win our wider struggle, we must let people 
across this planet know that there is another, more hopeful alternative 
to the hateful ideologies the terrorists espouse--and a renewed America 
will reflect and champion that vision
  We must remember that planning for peace is just as critical as 
planning for war. Iraq was not just a failure of conception, but a 
failure of execution, and so when a conflict does arise that requires 
our involvement, we must do

[[Page 6969]]

our best to understand that country's history, its politics, its ethnic 
and religious divisions before our troops ever set foot on its soil.
  We must understand that setting up ballot boxes does not a democracy 
make--that real freedom and real stability come from doing the hard 
work of helping to build a strong police force, and a legitimate 
government, and ensuring that people have food, and water, and 
electricity, and basic services. And we must be honest about how much 
of that we can do ourselves and how much must come from the people 
themselves.
  Finally, we must remember that when we send our servicemen and women 
to war, we make sure we have given them the training they need, and the 
equipment that will keep them safe, and a mission they can accomplish.
  We must respect our commanders' advice not just when its politically 
convenient but even when it is not what we want to hear. And when our 
troops come home, it is our most solemn responsibility to make sure 
they come home to the services, and the benefits, and the care they 
deserve.
  As we stand at the beginning of the fifth year of this war, let us 
remember that young man from Illinois, and his wife, and his daughters, 
and the thousands upon thousands of families who are living the very 
real consequences and immeasurable sacrifices that have come from our 
decision to invade Iraq.
  We are so blessed in this country to have so many men and women like 
this--Americans willing to put on that uniform, and say the hard 
goodbyes, and risk their lives in a far off land because they know that 
such consequences and sacrifices are sometimes necessary to defend our 
country and achieve a lasting peace.
  That is why we have no greater responsibility than to ensure that the 
decision to place them in harm's way is the right one. And that is why 
we must learn the lessons of Iraq. It is what we owe our soldiers. It 
is what we owe their families. And it is what we owe our country--now, 
and in all the days and months to come.
  Mr. President, I yield the floor.
  Mr. CONRAD. Mr. President, I commend the Senator from Illinois, 
Senator Obama, for the wisdom he has displayed with respect to the 
conflict in Iraq. I read a speech he gave when he was a State Senator 
warning about the dangers of going to war in Iraq. In many ways it 
reflected many of the same feelings and analysis I had given in my 
speech on the floor of the Senate.
  I gave the last speech before that fateful vote to authorize going to 
war in Iraq. I believed at the time it was a mistake to go to Iraq 
before finishing business with Osama bin Laden. After all, it was 
Saddam Hussein in Iraq whom this administration decided to go after. 
But it was not Saddam Hussein or Iraq that attacked this country on 9/
11, it was Osama bin Laden and the al-Qaida network that had attacked 
this country. We have still never held Osama bin Laden to account. I 
have always felt that was an extremely serious mistake, a military 
mistake for this country. I was so impressed that the Senator from 
Illinois, who was a State senator at the time, had the wisdom and the 
judgment to see that. I wish more had seen it.
  I, again, thank the Senator from Illinois.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire is 
recognized.
  Mr. GREGG. Mr. President, so we can get the order, I understand we 
are going to go to Senator Bunning next; is that the game plan? He is 
on his way to the floor.
  Mr. CONRAD. Yes. I thank the Senator very much for his continuing 
courtesy as we try to move through this. Senator Bunning, we are told, 
is on his way to the floor to offer an amendment. We are also asking 
Senator Bingaman to come.
  I see Senator Bunning is here now. We can go to his amendment.
  Mr. BUNNING. Mr. President, what is the pending business?
  The ACTING PRESIDENT pro tempore. The Ensign amendment is the pending 
question.
  Mr. BUNNING. I ask unanimous consent the pending amendment be set 
aside.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                           Amendment No. 483

  Mr. BUNNING. I send an amendment to the desk and ask for its 
immediate consideration.
  The ACTING PRESIDENT pro tempore. The clerk will report.
  The legislative clerk read as follows.

       The Senator from Kentucky [Mr. Bunning], for himself and 
     Mr. Enzi, proposes an amendment numbered 483.

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

  (Purpose: To provide a point of order against any budget resolution 
       that fails to achieve an on-budget balance within 5 years)

       At the end of title II, add the following:

     SEC. __. CIRCUIT BREAKER TO PROTECT SOCIAL SECURITY.

       (a) Circuit Breaker.--If in any year the Congressional 
     Budget Office, in its report pursuant to section 202(e)(1) of 
     the Congressional Budget Act of 1974 projects an on-budget 
     deficit (excluding Social Security) for the budget year or 
     any subsequent fiscal year covered by those projections, then 
     the concurrent resolution on the budget for the budget year 
     shall reduce on-budget deficits relative to the projections 
     of Congressional Budget Office and put the budget on a path 
     to achieve on-budget balance within 5 years, and shall 
     include such provisions as are necessary to protect Social 
     Security and facilitate deficit reduction, except it shall 
     not contain any reduction in Social Security benefits.
       (b) Point of Order.--If in any year the Congressional 
     Budget Office, in its report pursuant to section 202(e)(1) of 
     the Congressional Budget Act of 1974 projects an on-budget 
     deficit for the budget year or any subsequent fiscal year 
     covered by those projections, it shall not be in order in the 
     Senate to consider a concurrent resolution on the budget for 
     the budget year or any conference report thereon that fails 
     to reduce on-budget deficits relative to the projections of 
     Congressional Budget Office and put the budget on a path to 
     achieve on-budget balance within 5 years.
       (c) Amendments to Budget Resolution.--If in any year the 
     Congressional Budget Office, in its report pursuant to 
     section 202(e)(1) of the Congressional Budget Act of 1974 
     projects an on-budget deficit for the budget year or any 
     subsequent fiscal year covered by those projections, it shall 
     not be in order in the Senate to consider an amendment to a 
     concurrent resolution on the budget that would increase on-
     budget deficits relative to the concurrent resolution on the 
     budget in any fiscal year covered by that concurrent 
     resolution on the budget or cause the budget to fail to 
     achieve on-budget balance within 5 years.
       (d) Suspension of Requirement During War or Low Economic 
     Growth.--
       (1) Low growth.--If the most recent of the Department of 
     Commerce's advance, preliminary, or final reports of actual 
     real economic growth indicate that the rate of real economic 
     growth (as measured by real GDP) for each of the most 
     recently reported quarter and the immediately preceding 
     quarter is less than 1 percent, this section is suspended.
       (2) War.--If a declaration of war is in effect, this 
     section is suspended.
       (e) Supermajority Waiver and Appeals.--
       (1) Waiver.--Subsections (b) and (c) may be waived or 
     suspended in the Senate only by an affirmative vote of three-
     fifths of the Members, duly chosen and sworn.
       (2) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this subsection shall 
     be limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     sworn, shall be required to sustain an appeal of the ruling 
     of the Chair on a point of order raised under this 
     subsection.
       (f) Budget Year.--In this section, the term ``budget year'' 
     shall have the same meaning as in section 250(c)(12) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985.

  Mr. BUNNING. Mr. President, this amendment is almost identical to the 
language that was included in the fiscal year 2003 budget resolution 
that Chairman Conrad authored. This amendment provides that, starting 
with the fiscal year 2009 budget, if CBO's budget and economic outlook 
reports projections that the Social Security surplus will be spent for 
non-Social Security programs during any year covered by its 
projections, then the budget resolution must present a plan

[[Page 6970]]

to protect Social Security by reducing those deficits.
  As you can see by this chart, in 2009, 2010, 2011, and 2012, these 
are the Social Security dollars that are being used in this current 
budget that has been proposed for other purposes. From $423 billion up 
to $1.027 trillion. If the budget resolution fails to put the budget on 
a glidepath to protecting the Social Security surplus within 5 years, 
it will be subject to a point of order in the Senate. There is an 
exception for times of war and low economic growth, and it can be 
waived by a vote of three-fifths of the Senators.
  The purpose of this circuit breaker is to put the budget on a path to 
balance without spending the Social Security money that is needed for 
the baby boomers' retirements. It ensures that Social Security trust 
funds will be used for their intended purpose and that is for 
retirement of the baby boomers and all after.
  We all know the challenges the Social Security system faces as the 
first of the baby boomers start to retire very shortly. The effects of 
this demographic tidal wave will begin to grow rapidly as the years 
progress. Chairman Conrad will point to a provision in this budget that 
he calls the ``save Social Security first'' point of order. However, 
this point of order does not--I say emphatically does--not protect the 
Social Security surplus the way my amendment will do it. In fact, the 
budget resolution before us spends, as I showed you, over $1 trillion 
additional of the Social Security surplus. My amendment says that just 
because we have been spending the Social Security surplus for decades 
doesn't mean we should continue. We have dug ourselves into a big 
ditch. The budget before us keeps digging.
  My amendment says stop digging. It forces Congress to make a plan to 
protect the Social Security surplus. I urge my colleagues to think 
about the future of Social Security retirees and support this 
amendment. We have this amendment before us. It is almost exactly like 
the amendment the now chairman of the Budget Committee put in the 2003 
budget resolution, and his rationale for knocking out the point of 
order in the budget markup was: ``Well, we have been doing it for 
years.''
  Yes, we have been doing it for years, and it is time to stop. Stop 
spending the Social Security surplus for other purposes--other purposes 
being any other functions for which the Federal Government might need 
money. What does that do to my grandchildren and the grandchildren of 
everybody else in this body and those listening? It says to your 
grandchildren: You have to fend for yourself. We are going to leave you 
with this pile of debt, such that in 2017 we are not going to have 
enough money in the trust funds to pay off your Social Security 
benefits--in 2017, when we start spending this money out of the trust 
funds--with the interest we are supposed to be getting from it. By 
2040, we will have spent down all the trust funds and all the interest. 
What does that mean? That means in 2041 those benefits in Social 
Security will be 74 percent of what we promised our recipients. That is 
the money that will be coming in, in Social Security taxes at that 
time. We will only be able to pay out 74 percent of the benefits 
because we have prespent the trust funds for other purposes.
  My amendment says: Stop. Think about what you are doing, Members of 
the Senate, Members of the Congress. Stop digging the hole. We are 
going to bury our future generations in a massive debt situation where 
their benefits will not be able to be paid.
  I ask support for this amendment when it comes up for the vote.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time? The Senator from 
North Dakota.
  Mr. CONRAD. Mr. President, the Senator talks about Social Security 
money being spent in the Democratic budget resolution--and he is right. 
There is money spent, Social Security money, in the Democratic budget 
resolution. Why? Because our friends on the other side, in the 6 years 
they have controlled everything, have dug such a deep hole it is going 
to take us a while to climb out. Look at the President's budget. That 
is the only budget from the other side. The other side has not 
presented a budget other than the President's budget.
  Here is what the President's budget does in terms of spending Social 
Security money. The President's budget spends $1.16 trillion of Social 
Security money over the next 5 years--every dime that is available. We 
use $1.03 trillion. So let's be clear. The only budget from the other 
side uses more Social Security money than does our budget. Both budgets 
use Social Security money because we are now in such a deep hole it is 
going to take time to dig out.
  Here is the record from the other side. The record from the other 
side is they have so far spent $1.1 trillion of Social Security money 
and, if the President's budget is followed, they will have spent $2.5 
trillion by 2017. Every dime of Social Security money that is available 
to spend will have been spent by our friends on the other side. That is 
their record.
  Look, we inherited this mess. We have to climb out and we are making 
progress. Our budget balances by 2012, and over time we will end this 
practice of using Social Security money. Let me indicate that in this 
budget resolution, we have passed a ``save Social Security first'' 
amendment. It says there can be no new mandatory spending or tax cuts 
until the 75-year Social Security solvency is restored, unless it is 
paid for or gets a supermajority vote. That is in the underlying budget 
resolution to protect Social Security.
  I say to my colleague, he has offered an amendment I previously 
offered. When I offered it, it was before we descended into this 
deficit and debt ditch. It was designed to prevent us from going that 
road, from going down the path of using Social Security money to fund 
other things. Unfortunately, our colleagues on the other side opposed 
it and defeated it. They prevented it from being put in force, which 
would have hopefully prevented all this from happening. But that was 
not the case. Now it is akin to closing the barn door after the cattle 
are gone. Now the Senator from Kentucky offers this amendment.
  The upshot of this amendment, if it were to pass, would be to create 
a 60-vote hurdle against having a budget resolution next year. That is 
what the effect of the Bunning amendment would be. If people want to 
vote for it as a symbolic measure, that is fine with me. Members should 
know they are free to vote however they think is the right way when we 
vote on the Bunning amendment later this evening.
  Ms. STABENOW. Will my colleague yield for a question?
  Mr. CONRAD. I am happy to yield.
  Ms. STABENOW. I thank you, as chairman of the Budget Committee, for 
bringing forward the ``save Social Security first'' amendment in 
committee. It makes it very clear in the budget resolution that we 
intend to come out of this hole and are committed to making sure Social 
Security moneys are restored.
  Last night we heard from other colleagues on the other side of the 
aisle. Senator Sessions offered an amendment that basically would fly 
in the face of Senator Bunning's amendment, wouldn't you say, because 
it essentially would take away the ability to have a 60-vote point of 
order as it relates to extending the tax cuts that created the hole in 
the first place. Because isn't it true that essentially the tax cuts 
were paid for by using Social Security surplus funds?
  Mr. CONRAD. The Senator is certainly right. Senator Sessions' 
amendment would allow all of the tax cuts to be extended without having 
to be paid for, without having to be offset. So it does directly 
contradict at least the spirit of the Bunning amendment.
  I must say, I am very much in sympathy with the spirit of the Bunning 
amendment because, after all, it was my amendment back in 2002 when it 
really would have done some good because that was before we went down 
this path of using Social Security funds to pay all kinds of other 
bills.
  I have said many times that what is being done here in Washington is 
a basic violation of any kind of the sense

[[Page 6971]]

of the trust fund because trust fund moneys that are in temporary 
surplus before the baby boomers retire are being used to pay other 
bills. You could not do that in any other institution. You could not do 
that in any private business. You could not do that in any other 
private sector institution. You could not take the retirement funds of 
your employees and use them to pay your operating expenses. If you did 
that, you would be in violation of Federal law. You would be on your 
way to a Federal institution, but it would not be the Congress of the 
United States, it would not be the White House; you would be headed for 
the big house because that is a violation of Federal law. But that is 
the practice that has grown up. It has been, unfortunately, the case 
here for 30 years, with only 2 years of exception: The last 2 years of 
the Clinton administration, we were able to stop using Social Security 
funds to pay other bills. That was one of the greatest achievements of 
the Congress and the administration. Unfortunately, under this new 
administration, they went right back the other way, using every dime of 
Social Security money to pay other bills. Now we are in such a deep 
hole that it is going to continue for some period of time until we are 
able to dig out.
  Ms. STABENOW. If I might ask a second question of my friend. Again, I 
will start by congratulating the Senator. I remember, as a new member 
of the Budget Committee, coming in in 2001 when there were record 
surpluses, that the Senator was warning us about what could happen. 
Actually, is it not true that at that time, the Senator was suggesting 
a third of the surpluses go to prefunding the liability of Social 
Security so we would not find ourselves in this mess? Would not that 
have had a very different outcome on where we are today?
  Mr. CONRAD. Yes. I thank the Senator for remembering that. I did have 
a plan. Instead of giving the outsized tax cuts the President proposed, 
I proposed giving a $900 billion tax cut, very large tax cuts, but to 
use the rest of the money to strengthen Social Security, to either 
prefund the liability or pay down the debt.
  Instead, a different judgment was made. Social Security money that 
really never was in what I would consider surplus--because it is all 
needed when the baby boomers retire--has been taken and has been used, 
every dime under the President's fiscal plan, to pay other bills and to 
finance tax cuts. I think that was a profound mistake. That is why I 
offered the amendment the Senator from Kentucky has now offered, an 
amendment I offered back in 2002, to prevent us from ever going down 
this path. Now we have gone down it. Both budgets, if we are to be 
honest, use Social Security funds. We use somewhat less than the 
President's budget. It is going to take time to dig out.
  The PRESIDING OFFICER (Mr. Cardin). The Senator from Kentucky.
  Mr. BUNNING. Mr. President, two wrongs do not make a right. The fact 
is that the President's budget includes it, every President's budget 
has included it since Ronald Reagan. That includes Bush 1, Bill 
Clinton's budget for 8 years, and now George W. Bush's budget. They 
have included spending the Social Security trust funds that are in 
surplus in every budget for over 15 years that I know of.
  Now that my good friends from the Democratic Party are in the 
majority, they are doing the same thing. They are spending our trust 
funds that the Social Security system must buy bonds with. That is the 
law. We do not have another law that says you can take the Social 
Security trust funds and you can put it in this little box and you must 
keep it. No. The law says--and I was on the Ways and Means Committee 
with the current chairman of the Senate when we tried to wall off 
Social Security trust funds. It did not pass over in the House at that 
time. So we have been spending them ever since. That does not make it 
right. It is still wrong to spend it.
  The other side said they are going to fix the surplus problem. Well, 
they are not. I hope they do. This amendment gives some teeth to that 
promise because it holds the majority--whoever is the majority--
accountable.
  Now that they are in the majority, they do not want to hold 
themselves responsible for the Social Security trust funds. They say: 
Oh, because we have been doing this all this time, it is too late to 
stop. We can save $1.027 trillion if we stop now and do not include 
this in our 5-year projections.
  I hate to tell you, if we moved this out to 10 years, what it would 
look like. I am not going to do that because the budget is a 5-year 
budget. But $1 trillion, to my grandkids and their retirement or 
Senator Conrad's grandkids or anybody's kids, is a lot of money, and 
the more we can save for their retirement, the less we are going to 
have to borrow down the road.
  So, please, when you are considering this amendment, consider the 
consequences of what we are doing here. We are doing more of the same. 
It is time we stopped doing it.
  I ask for your support. This is a very important amendment. It is not 
a feel-good amendment; it is a substantive amendment that we actually 
are doing things to stop spending the Social Security trust funds.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I thank the Senator from Kentucky, who may be one of the 
most effective spokespersons in the Senate on the issue of protecting 
the Social Security accounts and making sure that as we move forward, 
we are responsible in that area.
  This amendment accomplishes exactly that. It is a brilliantly drafted 
amendment because it was, of course, drafted by the chairman of the 
Budget Committee and offered by him.
  Mr. Chairman, it reflects that the times have changed. Well, they 
really have not; the numbers have changed. Instead of $2 trillion, we 
are now talking $1 trillion of Social Security money that is going to 
be used in this budget.
  You know, the cattle are not out of the barn; they truly are in the 
barn. And we figure each cow is worth a dollar. We should be protecting 
them, and we should be at least addressing them. What I think the 
amendment does is it highlights the essence of one of the most 
significant problems with this budget; that is, although it spends a 
lot of money and it raises a lot of taxes, it does nothing on the issue 
of the long-term solvency of this Government, which is the most 
significant threat we face.
  The chairman of the Budget Committee has held numerous hearings on 
this issue. I have congratulated him on being focused on this issue. 
But, unfortunately, he brought forward a budget which does not address 
this. We have created a government which is not going to be affordable 
to our children because the costs of Social Security and the costs of 
Medicare when the baby boomer generation retires is simply going to 
overwhelm their fiscal ability to support that generation.
  We should be getting on right now and doing things that correct this. 
There were ideas put forward which would accomplish this that the 
President put forward in the area of Medicare. There are things you can 
do in the area of Social Security. For example, you can get the 
reimbursements correct on the COLA.
  But what this budget does is nothing. It does nothing to protect or 
address this outyear problem. What it does do is aggravate the problem 
by digging the hole deeper by using $1 trillion of Social Security 
funds to operate the Federal Government over the 5 years of this 
budget.
  So when the chairman of the committee drafted the amendment, he was 
thinking correctly. And when he said that--he was speaking here 
relevant to the use of Social Security funds by the administration in 
prior budgets--they included as the definition of a balanced budget one 
that raided the Social Security trust fund of every dime. Then he 
claimed that it was a balanced budget. That was no balanced budget; 
that was a budget built on massive borrowing disguised as balancing the 
budget.
  Well, that is essentially a statement which could be applied exactly 
to this budget. So the chairman was right with that statement. Then he 
went on

[[Page 6972]]

further and said: It threatens Social Security to take $180- to $190 
billion of Social Security money, to use it, instead of paying down the 
debt or prepaying the liability, to use to it pay operating expenses of 
the Government, it threatens Social Security. That again is being done 
within this budget to the tune of $1 trillion.
  So the Senator from Kentucky in his own way is once again 
highlighting the issue effectively and has put forward language which 
will accomplish the goal. It was good language when it was offered by 
the Senator from North Dakota, and it is good language offered by the 
Senator from Kentucky. I certainly hope we support it.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, first of all, I want to say I have been 
put at a disadvantage here because the Senator from Kentucky, whom I 
like very much, whom I respect very much, has offered an amendment I 
drafted.
  Unfortunately, they did not support it when I offered it back in 
2003. It really would have helped us avoid this disaster of using 
Social Security money. So maybe we have here a coming around to support 
an issue at least at a later point. I am going to recommend to my 
colleagues that we vote for this amendment on the floor, as a symbolic 
measure if for no other reason.
  When I drafted this amendment and offered it back in 2002, what a 
difference it would have made if it had been adopted. But, 
unfortunately, our colleagues who have just spoken so eloquently in 
favor of it now opposed it then. They opposed it when it actually would 
have done something. Well, I still appreciate the fact that they now, 5 
years later, appreciate the wisdom of my words then. I certainly will 
not stand in the way of adopting this amendment tonight. In fact, my 
vote will be cast in favor of this amendment.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I don't want to prolong the debate because 
the Senators from New Mexico and Tennessee have an amendment ready to 
go. But I would note that the most recent inconsistency on this is not 
our side, it would be on the Democratic side, in that the Senator from 
North Dakota voted against this amendment in committee, which he now is 
going to vote for on the floor. I wanted to make that point. So the 
inconsistency is in the eye of the beholder.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Let me say that I cast that vote in committee because the 
practical effect of this amendment now is not going to protect Social 
Security. The practical effect of this amendment is to create a 60-vote 
hurdle to pass a budget resolution next year.
  But, look, I am proud of the amendment I crafted 5 years ago. I think 
we have to send every message we can that it is wrong to be using 
Social Security trust funds to pay other bills. I believe that with 
every fiber of my being. Senator Bunning has offered this amendment 
unfortunately 5 years too late. I am going to support it even though it 
is 5 years too late.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I will conclude my comments by saying that 
I hope the Senator from North Dakota is not cynical, because of his 
rather negative view of what this amendment will do. I hope it does not 
come to fruition.
  I hope what the amendment does is force the people who bring the 
budget next year to look at Social Security and figure out how we are 
going to deal with it and thus put in place some entitlement reform 
which addresses this issue and gets us into a position where we are 
able to protect it.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, it is for that reason that I will support 
the amendment, because it may, even at this late hour, help build 
pressure for what the Senator from New Hampshire and I both want to do, 
which is somehow find a path to addressing these long-term entitlement 
challenges. It may help do that.
  In that spirit, I will support the amendment tonight.
  Now we have Senator Bingaman ready.
  The PRESIDING OFFICER. The time yielded to the Senator from New 
Mexico?
  Mr. CONRAD. How much time does the Senator from New Mexico seek?
  Mr. BINGAMAN. I need at most 15 minutes. I know my colleague from 
Tennessee needs a comparable amount of time. I know there are others 
who wish to speak, but I don't know if they will be able to come to the 
floor at this point.
  Mr. CONRAD. I yield 15 minutes to the Senator from New Mexico. And 
then the Senator from Tennessee, how much would the Senator seek?
  Mr. ALEXANDER. Up to 15 minutes, please.
  Mr. CONRAD. Would the Senator from New Hampshire provide the Senator 
from Tennessee with time off his side on this amendment?
  Mr. GREGG. I would. I understand the Senator from South Carolina 
wants to speak on the Bunning amendment. Should we complete that 
debate?
  Mr. CONRAD. I think in fairness to the other two Senators, we should 
let them go forward with their amendment. Then we could come back to 
the Senator from South Carolina for his comments on the Bunning 
amendment.
  Mr. GREGG. Sounds good.
  The PRESIDING OFFICER. Is the Senator from North Dakota seeking 
consent to set aside the Bunning amendment so we may proceed to this 
amendment?
  Mr. CONRAD. Yes, I think we should set aside the Bunning amendment so 
that the Bingaman amendment may be offered. The Senator from Tennessee 
could speak on that. We did ask them to come at this time to do so. I 
apologize to Senator DeMint. We were not aware that he was on his way 
to the floor. In fairness, that is what we should do.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New Mexico is recognized.


                           Amendment No. 486

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

       The Senator from New Mexico [Mr. Bingaman], for himself, 
     Mr. Alexander, Mr. Lieberman, Mr. Domenici, Mr. Ensign, and 
     Mr. Reid, proposes amendment numbered 486.

  Mr. BINGAMAN. 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 additional funding resources in FY2008 for 
    investments in innovation and education in order to improve the 
                 competitiveness of the United States)

       On page 10, line 9, increase the amount by $1,008,000,000.
       On page 10, line 10, increase the amount by $428,000,000.
       On page 10, line 14, increase the amount by $345,000,000.
       On page 10, line 18, increase the amount by $179,000,000.
       On page 10, line 22, increase the amount by $35,000,000.
       On page 11, line 1, increase the amount by $18,000,000.
       On page 14, line 9, increase the amount by $11,000,000.
       On page 14, line 10, increase the amount by $9,000,000.
       On page 14, line 14, increase the amount by $3,000,000.
       On page 26, line 12, decrease the amount by $1,019,000,000.
       On page 26, line 13, decrease the amount by $437,000,000.
       On page 26, line 17, decrease the amount by $348,000,000.
       On page 26, line 21, decrease the amount by $179,000,000.
       On page 26, line 25, decrease the amount by $35,000,000.
       On page 27, line 4, decrease the amount by $18,000,000.

  Mr. BINGAMAN. Mr. President, I am offering this amendment on behalf 
of myself and Senators Alexander, Lieberman, Domenici, Ensign, and 
Reid. This is an amendment that I believe will go a long way toward 
ensuring that the United States maintains

[[Page 6973]]

its preeminent status in our global economy.
  On March 6, Senator Reid and Senator McConnell and many of the rest 
of us held a press conference on the introduction of a bill we called 
the America COMPETES Act. The bill represents recommendations from two 
reports on the status of our Nation's ability to compete in the global 
economy. Those reports are the National Academy of Sciences report on 
``Rising Above the Gathering Storm,'' and the Council on 
Competitiveness report entitled ``Innovate America.''
  Obviously, this is not the right time to try to enact that 
legislation. Let me make it clear to my colleagues that we are not 
proposing that legislation as an amendment to the budget resolution. 
What we are proposing, though, is an amendment that tries to make sure 
that the budget ceilings, the overall amounts that are permitted for 
the various agencies and functions of the Government, are as high as 
possible so that there is room in this budget to actually go forward 
and appropriate the funds called for in that authorizing legislation. 
We hope we will bring up that authorizing legislation some time in the 
next couple of months and get it passed and sent to the President.
  Let me describe briefly what this amendment would do. It would 
provide for the National Science Foundation to meet the President's 
requested funding level of $6.4 billion for the Department of Energy. 
It would allow the budget to meet the President's request for the 
Office of Science at $4.4 billion, as well as provide funding that 
would allow for a program similar to that administered by the Hertz 
Foundation for training a new generation of Ph.D. students in the 
physical sciences. For the National Institutes of Science and 
Technology, it will provide necessary funding to meet the $704 million 
authorization level in the bill, thereby strengthening programs such as 
the Hollings Manufacturing Extension Partnership to help small and 
medium-sized businesses compete in the global economy.
  The reports I referred to were important in that they tapped into and 
identified a growing uneasiness that is being experienced throughout 
the country about our ability to remain competitive in world markets. 
It is clear that we are slipping in our world leadership role in 
science and engineering. We are losing site of the importance of long-
term investments in creating the conditions for prosperity.
  In 1995, Alan Greenspan was quoted as saying:

       Had the innovations of recent decades, especially in 
     information technologies, not come to fruition, productivity 
     growth would have continued to languish at the rate of the 
     preceding 20 years.

  Recent work that has been done by the Federal Reserve bears out that 
a broader category of such intangible investments now accounts for a 
full 11 percent of our gross domestic product and that much of our 
economic growth is attributable to these activities: research and 
development and information technologies. The statistics that we have 
bear out that while we are not yet at a point of crisis, we are 
approaching one. At the macro level, the fastest growing economies 
continue to increase their research and development investments at 
nearly five times the rate of the United States. Collectively, we have 
China and Ireland, Israel, Singapore, South Korea, and Taiwan 
increasing their research and development investment rates by 214 
percent between 1995, when Alan Greenspan made his statement, and 2004. 
During that same period when they were increasing their investment by 
over 200 percent, the United States was increasing its investment by 43 
percent.
  A recent survey of several industries in the United States and Europe 
found that 48 of 235 recent or planned research and development 
facilities would actually be located in this country; 55 were to be 
located in China, 18 in India. Indeed, on a trip I took to India a 
couple years ago, we learned that the Intel Design Center for Intel 
Corporation in Bangalore is now designing chips that are fabricated by 
a manufacturing plant in New Mexico. It used to be the other way 
around. It used to be that we would do the design work, the high-end, 
value-added work here, and the manufacturing would occur elsewhere.
  The achievement and interest level of U.S. students in math and 
science is a serious problem for all of us. In fact, the most recent 
NAEP assessments of educational progress in math reveal that only 23 
percent of 12th graders in this country performed at or above 
proficient. That is in the year 2005. Unfortunately, this assessment in 
science reveals that the scores for 12th graders have declined since 
1996 in each of the science areas--in the earth sciences, physical 
sciences, and life sciences. Only 18 percent of 12th graders scored at 
or above proficient in science.
  So the issues are serious. They are ones about which more and more of 
the opinion leaders and thoughtful students of this subject have come 
to be concerned. These reports have been a major contribution to the 
dialog. Those of us in Congress are now called upon to actually put in 
place some solutions to these problems.
  I believe passing this amendment to the budget resolution to ensure 
that there will be room in the budget for funding to meet these very 
important needs is extremely important.
  Let me also acknowledge--and this is something for which I commend 
the chairman of the Budget Committee--the budget resolution before us 
increases funding for education by more than $6 billion over what the 
President proposed. Much of that increased funding is to allow for full 
funding in the appropriations process of some of these math and science 
education initiatives and also strengthening math and science teaching 
skills for our Nation's teaching workforce. That is clearly intended by 
the budget resolution. The amendment we are offering today does not 
propose increases in funding in that area because, in fact, the budget 
resolution itself does make room for the funding increases that America 
COMPETES calls for.
  Let me acknowledge the extremely impressive leadership of my 
colleague from Tennessee, Senator Alexander, in focusing the attention 
of the Congress on this issue. He has been the single most aggressive 
Member of the Senate in making sure we continue to address this issue 
at every stage. As I see it, our amendment is one step in that process. 
I know it has the support of Senator Reid. I believe it also will have 
the support of the managers of the legislation. I hope it has the 
support of all Senators, Democratic and Republican.
  I should point out that the offset that this legislation calls for is 
essentially whatever change in funding the Appropriations Committee 
chooses to make in so-called function 920. It gives them discretion to 
either do a very modest across-the-board cut in other funds or find 
some other way to locate the funds needed.
  This legislation would add $1.9 billion that is currently not 
permitted in the budget for these essential items. It is important that 
we pass the amendment. I urge all my colleagues to do so.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I congratulate the Senator from New 
Mexico. He has been working at this a long time. He helped originate 
the report by the National Academy of Sciences to which he referred, 
``Rising Above the Gathering Storm.'' He has also performed a service 
to the Senate and the country by doing some of the hard, less 
glamourous work, because he has worked his way through the budget 
process and, in his words, we are making sure with this amendment that 
we have room in the budget to appropriate funds to support what I 
believe is the single most important legislation before the Congress 
this year; that is the America COMPETES Act which has been introduced 
by the Democratic leader, Senator Reid, and by the Republican leader, 
Senator McConnell.
  At one stage in its development over the last 2 years it had 70 
Senators, an equal number of both parties, supporting it and has been 
vetted and worked on by at least a half dozen of our committees. I 
thank Senator Bingaman for his long-time leadership

[[Page 6974]]

on this effort, especially for making sure there is room in the budget 
for it.
  On this side of the aisle, we talk a lot about progrowth policies and 
progrowth investments. We usually mean tax cuts when we talk about 
that. I learned a long time ago that while low taxes and balanced 
budgets are one important part of a progrowth strategy, they are not 
the only important part.
  When I was Governor of my State, the Senator from New Hampshire was 
Governor of his State. That is a low-tax State. It was nearly as low a 
tax State as Tennessee when we were both Governors. That was important. 
But we also found out in Tennessee that if we wanted an auto industry, 
we had to have good four-lane highways. If we wanted to grow new jobs, 
we wanted to have a good banking. That was part of a progrowth 
strategy.
  But more than anything else, the most important part of a progrowth 
strategy in my State was schools, colleges, and universities. We 
learned that better schools, colleges, and universities meant better 
jobs.
  So this legislation we are talking about is about America's 
brainpower advantage. It is the reason why we produce a third of all 
the money for about 5 percent of all the people in the world. It is 
because of the big ideas that have come out of our country. From the 
automobile, to the electric light bulb, to Google--they have been 
created here. The jobs are here and the standard of living is higher 
here.
  But the rest of the world has figured that out. They have the same 
brains we do, and suddenly China is recruiting the most distinguished 
Chinese professors from great American universities to come back to 
China to build up China. You heard what Senator Bingaman said about 
what is happening in India.
  We are talking about a little money for progrowth investments here. 
We would make room for $1 billion the President requested--that the 
President requested--to restore funding for basic scientific research 
in math and science education so we can keep our brainpower advantage. 
This is the real way to keep our good jobs from going to China and 
India and other countries in the world.
  It is important to keep that $1 billion over the next year in 
perspective. That is half what we spend in the war in Iraq in a week. 
We spent $237 billion on debt last year, $378 billion on Medicare, $545 
billion on Social Security, at least $70 billion on hurricanes. We are 
going to be asked to pass a $100 billion supplemental request for the 
war in Iraq.
  We will not have enough money to pay all these important bills unless 
we keep enough money in the budget for the investments that keep our 
brainpower advantage so we can keep our jobs. That is where we get all 
that money.
  The Bingaman-Alexander amendment would help make room for the $1 
billion requested by the President to fund basic research in math and 
science education.
  Specifically, one, it would restore $398 million for the National 
Science Foundation, bringing the total to $6.429 billion, as requested 
by the President.
  Two, it restores $610 million for the Department of Energy's Office 
of Science, bringing the total to $4.481 billion, which meets the 
President's request, and then adds $70 million extra for three programs 
that are part of the Reid-McConnell America COMPETES Act: Discovery 
institutes, PACE Graduate Fellows, and Distinguished Scientists.
  It adds $11 million for the National Institute of Standards and 
Technology, as authorized for next year by the Reid-McConnell 
legislation.
  The majority leader and the minority leader, in the midst of some 
contentious discussions in the Senate--which we have regularly--are 
rising above that and putting this piece of legislation into play. I 
know of no other piece of legislation that has that kind of bipartisan 
support that is that important to the future of our country. It is 
based on work Senator Bingaman, Senator Domenici, Senator Mikulski, 
Senator Ensign, Senator Lieberman, Senator Hutchison, and many others 
have been a part of. Senator Frist and Senator Reid put the bill in, in 
the first place, toward the end of last year.
  It began because Senator Bingaman and I and others walked down the 
street to the National Academy of Sciences and said: Please tell us 
exactly what we ought to do, in priority order, to keep our brainpower 
advantage. Give us 10 specific things to do. They gave us 20, in 
priority order. That was put together with other important work done by 
the Council on Competitiveness. Then here we are today with the 
``Rising Above the Gathering Storm'' report and with the Council on 
Competitiveness' report.
  The bill, the America COMPETES Act, to which this amendment relates, 
authorizes $16 billion in new spending over 4 years. But this is a 
significant savings over the original legislation, the one that was 
sponsored by 70 Senators and reported by the committees. We took out $3 
billion from the bills passed by Energy and Commerce. We avoided a 
number of duplicative undergraduate scholarship programs. We wanted 
progrowth investment, but we wanted to do it wisely and prudently.
  I wish to conclude my remarks with some of the provisions of the 
America COMPETES Act. I know the Senator from South Carolina is waiting 
to speak, and others will be speaking, too, so I will conclude my 
remarks quickly. But it includes such matters as doubling funding for 
the National Science Foundation. It will set the Department of Energy's 
Office of Science on track to double in funding over 10 years. It will 
strengthen the skills of thousands of math and science teachers, and 
others.
  As I said, provisions of the America COMPETES Act include double 
funding for the National Science Foundation, or NSF, from $5.6 billion 
in fiscal year 2006 to $11.2 billion in fiscal year 2011; setting the 
Department of Energy's Office of Science on track to double in funding 
over 10 years, increasing from $3.6 billion in fiscal year 2006 to over 
$5.2 billion in fiscal year 2011.
  Another provision is to strengthen the skills of thousands of math 
and science teachers by establishing training and education programs at 
summer institutes hosted at the National Laboratories and by increasing 
support for the Teacher Institutes for the 21st Century program at NSF.
  Another provision is to expand the Robert Noyce Teacher Scholarship 
Program at NSF to recruit and train individuals to become math and 
science teachers in high-need schools.
  Another provision is to assist States in establishing or expanding 
statewide specialty schools in math and science that students from 
across the State would be eligible to attend--as they do now in North 
Carolina and other States.
  Another provision is to expand Advanced Placement, AP, and 
International Baccalaureate, IB, programs by increasing the number of 
teachers prepared to teach these math, science, and foreign language 
courses in high schools. This would allow thousands of new students to 
take these outstanding college preparatory classes.
  Another provision is to provide grants to universities to establish 
programs modeled on the successful UTeach program at the University of 
Texas--where students getting a bachelor's degree in math or science 
can concurrently earn teaching credentials and become the new 
generation of math and science teachers.
  Another provision is to create partnerships between National 
Laboratories and local high-need high schools to establish centers of 
excellence in math and science education.
  The challenge America faces today is really about brainpower and 
jobs.
  We Americans--who constitute just 5 percent of the world's 
population--produced about 30 percent of the world's wealth last year. 
Yet we worry that America may be losing its brainpower advantage. We 
see what is happening in China and India and other countries, too, such 
as Finland, Singapore, and Ireland. We face a new ``flat'' world where 
more and more countries can compete with us, and we must rise to the 
challenge. That is why we must fund this progrowth investment in our 
economy and create the best new jobs here instead of shipping them 
overseas.

[[Page 6975]]

That is why I hope all my colleagues will join in supporting this 
amendment.
  One more point. We asked our National Academies what to do to keep 
our brainpower advantage. We worked 2 years through various committees 
and many changes to bring our legislation to this point. We still have 
some way to go, although a parallel path is being pursued in a 
bipartisan way in the House.
  I believe we will get there, and get there soon, with this kind of 
leadership. But we should realize President Hu of China walked over to 
the National Academy of Sciences in China last July, and they do things 
in a little different way. He announced to his joint academy meeting in 
the Great Hall of the People exactly what China's innovation effort 
would be over the next 10 years, how they are going to increase their 
percentage investment in the gross domestic product, how they are going 
to improve their universities and elementary and secondary schools, and 
exactly what they would do to recruit distinguished Chinese leaders to 
come back, because they know their brainpower advantage, to the extent 
they can develop and improve on it, is the most important aspect of 
creating good jobs and a higher standard of living here.
  So this legislation is a step in that direction for us. We have much 
more to do. We have the research and development tax credit to make 
permanent. We have provisions in the immigration legislation which have 
passed once, which I hope pass again, to in-source brainpower, to give 
a preference to people with high skills in science, technology, 
engineering, and math. Let them stay here, create jobs here instead of 
in other countries. We are going to continue to work on that.
  But Senator Bingaman has, by his leadership and persistence, come up 
with an amendment, which I join him in cosponsoring, which will make 
room for funding. We need to properly support the America COMPETES Act 
that Senator Reid and Senator McConnell have cosponsored, along with 40 
of us right now. Hopefully, we will be keeping that brainpower 
advantage and, therefore, keeping our good jobs.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. CONRAD. Mr. President, I ask the Senator to withhold for 1 
minute.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I wish to comment very briefly on the 
amendment that was offered.
  I commend Senator Bingaman and Senator Alexander for one of the most 
thoughtful amendments I have seen being offered on the budget 
resolution. It is bipartisan. It is something that has been very well 
thought through. It is almost a model for how things ought to be done 
in this Chamber. So I especially commend Senator Bingaman and Senator 
Alexander for this effort, and many other colleagues who have been 
involved in it. I hope it serves as an example for everybody about how 
we do business around here. I thank the two Senators very much.
  Mr. President, we now have Senator DeMint who wants to comment 
briefly on the Bunning amendment and also lay down an amendment. We 
have an understanding we have the potential of a side-by-side amendment 
with the DeMint amendment, if that becomes necessary. Senator Gregg and 
I have talked about that.


                        Importance of Education

  Mr. BINGAMAN. As the chairman knows, strong math and science 
education is critical if we, as a nation, are going to continue to have 
a skilled and educated workforce that can compete in the global 
economy.
  Mr. CONRAD. Yes, I agree.
  Mr. BINGAMAN. Does the chairman agree that we need to improve K-12 
math and science education for all students in this country and do all 
we can to strengthen the math and science teaching skills of the 
teaching workforce?
  Mr. CONRAD. Yes, these are both very important elements to 
maintaining our economic edge.
  Mr. BINGAMAN. I am very pleased that the chairman's mark increases 
funding for education by more than $6 billion over the President's 
proposed budget, and I ask, was it the chairman's assumption that this 
increase should be used, in part, to fund provisions that will 
strengthen K-12 math and science education and strengthen the math and 
science teaching skills of the teaching workforce?
  Mr. CONRAD. That is correct.
  Mr. BINGAMAN. I thank the chairman and look forward to working with 
him to ensure these critical programs receive funding.
  Mr. DOMENICI. Mr. President, today I join Senator Bingaman and other 
colleagues to offer an amendment to increase our investment in our 
Nation's economic competivenes.
  Our amendment will provide just over $1 billion for the coming fiscal 
year to support world-class research in the physical sciences and for 
educating our next generation of scientists.
  Just over a year ago, the National Academy of Science report, 
``Rising Above the Gathering Storm,'' focused national attention on a 
challenge of enormous significance. We are not doing enough to harness, 
and develop, our national brainpower.
  Earlier this month, I joined a bipartisan group of Senators to 
introduce the America COMPETES Act, S. 761. This act is the result of a 
remarkable cooperative effort, involving three Senate committees and 
valuable contributions from a number of Senators. We have the support 
of the majority leader and the minority leader, and we are going to 
make this happen.
  All of us that worked to write this legislation are deeply concerned 
about maintaining our Nation's ability to compete in the high-tech, 
global marketplace.
  Our bill increases our investments in science and mathematics 
education at all levels--kindergarten through high school, college, and 
graduate school. The America COMPETES Act will also build on 
educational programs at Department of Energy laboratories. These 
programs will strengthen the teaching skills of math and science 
teachers throughout the country.
  The America COMPETES Act authorizes a doubling of research dollars to 
key research agencies, including the Department of Energy Office of 
Science, the National Science Foundation, and the National Institute of 
Standards and Technology.
  The amendment we offer today will allow us to follow through on the 
promise of the America COMPETES Act. We need to devote the resources 
necessary to meet the goals of this important legislation.
  We need to take action now to support our standard of living and 
ensure we continue to grow and prosper. If we do not, we can expect 
other nations to rival our global competitiveness--and one day to 
surpass us.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. DeMINT. Mr. President, I ask unanimous consent that we set the 
pending amendment aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 489

  Mr. DeMINT. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from South Carolina [Mr. DeMint] proposes an 
     amendment numbered 489.

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

   (Purpose: To establish a reserve fund for Social Security reform)

       At the end of title III, insert the following:

     SEC. __. RESERVE FUND FOR SOCIAL SECURITY REFORM.

       If the Senate Committee on Finance reports a bill or joint 
     resolution, or an amendment is offered thereto, or a 
     conference report is submitted thereon, that provides changes 
     to the Federal Old Age, Survivors, and Disability Insurance 
     Benefits Program established under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) by--
       (1) requiring that the Federal Old Age and Survivors Trust 
     Fund and the Federal Disability Insurance Trust Fund are to 
     be used

[[Page 6976]]

     only to finance expenditures to provide retirement income of 
     future beneficiaries of such program;
       (2) ensuring that there is no change to current law 
     scheduled benefits for individuals born before January 1, 
     1951;
       (3) providing participants with the benefits of savings and 
     investment while permitting the pre-funding of at least some 
     portion of future benefits; and
       (4) ensuring that the funds made available to finance such 
     legislation do not exceed the amounts of the Chief Actuary of 
     the Social Security Administration's intermediate actuarial 
     estimates of the Federal Old Age and Survivors Trust Fund and 
     the Federal Disability Insurance Trust Fund, as published in 
     the most recent report of the Board of Trustees of such Trust 
     Funds;
     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 2008 and for the period 
     of fiscal years 2008 through 2012.

  Mr. DeMINT. Mr. President, as we all came into this debate on the 
first Democrat budget, a lot of us had high hopes. If you think back to 
the November elections, it seemed, at least for a few months, that 
Republicans and Democrats, in many ways, were saying a lot of the same 
things. We all decided it was very important we stop wasteful spending. 
We talked about reducing the debt. We even talked about keeping some of 
the tax relief that had gotten our economy going and created more jobs, 
although there is certainly some disagreement as to which tax cuts 
should be kept in place.
  As we see the Democratic budget at this point, there are certainly a 
number of us who are disappointed, particularly as we see this budget 
allows crushing tax increases to hit Americans at every income level, 
as well as tax increases on the businesses that provide us all our 
jobs. Even more, there is nothing in this budget that does anything to 
cut spending. We all know there is wasteful spending throughout this 
Federal Government. We need to get about the task of finding it and 
cutting it.
  Perhaps the worst example of wasteful spending is when we take the 
taxes people pay for Social Security and, instead of saving them, we 
spend them on other things. For a number of years now, the amount of 
taxes all Americans pay in every paycheck for their future Social 
Security income--they have actually been more than we need to pay the 
benefits of current retirees. It is what we refer to as the Social 
Security surplus. But instead of saving this surplus over the years, we 
take that money and put it in the general fund and spend it on all 
kinds of things.
  Even worse than spending Social Security on other things is we do not 
count it as debt when we talk about the deficit every year. So using 
the Social Security money is actually a way to hide even more wasteful 
spending without counting it as debt.
  Now, for everything we borrow from Social Security, we put an IOU in 
this so-called trust fund, with this idea someday we are going to pay 
it back. But we need to try to remind the American people there are no 
plans in this Congress--and there never have been any plans--to pay 
that money back. Unfortunately, the Democratic budget that has been 
proposed over the next 5 years will spend over $1 trillion additionally 
in Social Security taxes, as well as the interest that is supposed to 
be paid on that money that has already been borrowed. So the money that 
should be saved for the future of Americans in their retired days is 
being spent every year, and it is being used to conceal more and more 
wasteful spending.
  A lot of us have heard the news reports over the last year or two 
about the number of corporate pension plans that are going broke. The 
reason for that is, over the years not enough money has been put in 
those pensions to allow the companies to actually pay the benefits that 
have been promised. We call that an underfunded pension plan. It is 
creating huge problems for us throughout our country and for a number 
of workers who are counting on those pensions in their retirement.
  But as we consider Social Security, it is a pension plan. It is a 
pension plan Americans pay into with the reasonable expectation that 
one day they will be able to get their promised benefits. But Social 
Security is not only an underfunded pension plan, it is a completely 
unfunded pension plan. Not one dime of all the trillions of dollars 
that have been put into Social Security over our lifetime is saved. As 
I said before, it is actually being used to obscure a bigger debt and 
to obscure more and more wasteful spending at the Federal level.
  I commend Senator Bunning for his amendment that would require our 
budgeting needs not budget these Social Security dollars for other 
spending. I think it is very important that we take this a step 
further. Not only should we not spend the Social Security surplus, but 
we should take that money and put it in a reserve account so we 
actually save it for the future instead of giving it to the general 
fund to spend on anything we in Congress can come up with. Take the 
Social Security surplus--the cash itself will be about $80 billion this 
year; if you count the interest, it gets well more than that--put it in 
a reserve account and not spend it.
  The amendment I have offered would allow us, within the budgeting 
process, to set this money aside and not spend it. Unless we support 
this amendment as part of the budgeting process, when we bring this up 
to actually get it done some time this year, there will be a point of 
order against it and it will not be allowed to pass. So it has to be 
done now. That is the purpose of this amendment.
  Now, what will happen if we pass this amendment and we take this 
money off the table and no longer allow Congress to spend it? Then we 
are going to have to be honest about our debt, and we are probably 
going to have to cut some wasteful spending because this money is not 
going to be available for us to spend. It will put a lot of pressure on 
both parties, Republicans and Democrats, to figure out how to cut 
wasteful spending and how to save the Social Security money we promised 
to future generations. If we put it in a reserve account, we will also 
start the process to create a funded Social Security system, a Social 
Security system that has real money so we can keep our promises to 
future generations.
  So I support Senator Bunning's amendment. I offer another that will 
take it a step further, so that the money we take off the table cannot 
be spent on anything else; it has to be in a reserve account and can 
only be spent on Social Security in the future. I wish to thank the 
Senator for allowing me to offer that amendment.
  I yield the floor.
  Mr. CONRAD. Mr. President, would the Senator be open to some 
questions with respect to his amendment so we might clarify it so we 
might have a floor understanding of the intention of the Senator?
  Mr. DeMINT. Yes, I will.
  Mr. CONRAD. Let me first say that in large measure, I am in agreement 
with what I hear the Senator saying. I have always thought we are 
engaged in ``funny money'' accounting around here, taking Social 
Security money and using it to pay other bills. That is the object of 
the Senator's amendment; is that correct?
  Mr. DeMINT. Well, that is part of the goal. The goal is not to spend 
it on other things but to actually set it aside so we don't spend it. 
In the past, as the Senator knows, we talked about lockboxes, where we 
don't spend it, but in effect we do spend it, even if it is paying down 
the debt.
  The goal of the amendment is to take money that is surplused for 
Social Security and say it will only be spent for Social Security. This 
amendment doesn't take it any further than that. It doesn't tell 
Congress how the money should be saved or invested; it doesn't get into 
the more controversial aspects of will it go into personal accounts. It 
does not establish individual ownership at all. These are the things 
that have divided us in the past.
  But I think we agree with the basic concept: Let's take Social 
Security off the table and somehow save it in a way that we can't spend 
it so we can be more honest in our accounting.
  Mr. CONRAD. That raises a whole series of questions, and that is 
another thing I wanted to ask the Senator

[[Page 6977]]

about. If it is set aside, if it is not used to pay down the debt, how 
would those funds be invested under the amendment from the Senator?
  Mr. DeMINT. My amendment doesn't specify. Congress would have to 
determine that. As the Senator knows, as part of the budget process, 
this does not affect it happening. We would still have to perform the 
act of taking the money off the table. I think, again, as a majority 
Senator, you would have a greater determination of how that money is 
saved. There is no intent in my amendment to direct how it is saved. It 
could be T bills or something within the Federal Government. But the 
hope is we will put it in some type of holding or savings that is not 
part of the general fund anymore. It is not spent.
  Mr. CONRAD. Mr. President, is there anything in this amendment that 
would prevent it from being invested in some other securities other 
than Government bonds?
  Mr. DeMINT. There is nothing that allows for it or prevents it. So I 
assume, again, with my colleagues in control of what comes to the 
floor, there is no danger of it drifting into any controversial area. I 
think we can certainly agree on some safe savings that would be risk 
free for the American people.
  Mr. CONRAD. Is there anything that would prevent the funds from going 
to private accounts?
  Mr. DeMINT. It does not allow for that in any way. That would have to 
be a separate piece of legislation, so that would be determined by--
this legislation does not open the door for private accounts.
  Mr. CONRAD. I thank the Senator for his answers to those questions. 
Has the Senator sent the amendment to the desk?
  Mr. DeMINT. Yes.
  Mr. CONRAD. I appreciate that. We have an understanding that if there 
is a desire to have a side-by-side amendment, that will be open to our 
side. I thank the Senator for answering those questions and for 
offering the amendment.
  Mr. DeMINT. I thank the Senator.
  Mr. CONRAD. Mr. President, I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, in the interest of trying to move things 
along with some dispatch, we have now had a number of amendments 
offered, including the Bunning amendment, the DeMint amendment, the 
amendment by Senators Bingaman and Alexander. We now want to make 
certain we are ready to go to the Allard amendment. We are told Senator 
Allard will be here momentarily. That would be the next amendment in 
order. We are trying then to go to the Baucus amendment. We are trying 
to reach his staff to see if that would be accommodated within his 
schedule. We also have Senator Collins. When would she be available?
  Mr. GREGG. Mr. President, as I understand it, Senator Collins expects 
to be here by 11:45 to present her amendment. Then, as I also 
understand it, at 12:30, we go to an hour which is agreed to and under 
the rule they have an hour certainly available to them on the Humphrey-
Hawkins, and that would be Senator Brownback and Senator Schumer, I 
believe, who have that hour.
  Mr. CONRAD. Let us check with Senator Baucus and see.
  Mr. GREGG. We certainly want to accommodate Senator Baucus on our 
side.
  Mr. CONRAD. All right. Let's see if we can't work that out in the 
next few moments. Until then, I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I see Senator Allard has now come to the floor. We want 
to thank him for helping expedite the consideration of the budget 
resolution. We very much appreciate his coming on short notice to the 
floor to offer his amendment.
  Senator Allard's amendment is now in order.
  The PRESIDING OFFICER. Does the Senator seek unanimous consent to set 
aside the pending amendment?
  Mr. CONRAD. Precisely so.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Colorado is recognized.
  Mr. ALLARD. Mr. President, while I am getting set up, I ask unanimous 
consent to set aside the pending business. I have two amendments at the 
desk, and I ask unanimous consent to call them up en bloc and send them 
to the desk.
  Mr. CONRAD. Reserving the right to object, we have only been noticed 
on this side about one amendment.
  Mr. ALLARD. Yes. I plan on calling it up--I wish to call up both 
amendments so I have votes on them. The first amendment, and then the 
second amendment I plan on putting in the group of amendments we will 
vote on at the end, which we only allow a few minutes for debate. The 
first amendment I was going to call up--this will be the one we will 
debate and take up floor time.
  Mr. CONRAD. All right. Fair enough.
  Mr. ALLARD. Mr. President, I wish to send up----
  Mr. CONRAD. Could we get the second amendment?
  Mr. ALLARD. I will be glad to get those to my colleagues. Here is the 
one on discretionary spending, the one we will be debating during this 
time period. Would the Senator like the second amendment before I send 
it up?
  Mr. CONRAD. We have a procedure we try to follow so that we see 
amendments before they are sent to the desk. That would be very helpful 
to us. We were noticed on the Senator's first amendment. That is the 
amendment the Senator offered in the committee; am I correct?
  Mr. ALLARD. That is the one that was offered in committee dealing 
with discretionary spending. The second amendment deals with mandatory 
spending.
  Mr. CONRAD. I appreciate that. If the Senator could send up the one 
we have seen and withhold on the other until we have had a chance to 
look at that.
  Mr. ALLARD. That would be fine.
  Mr. CONRAD. I appreciate it very much.
  Mr. ALLARD. I wish to make sure we get an opportunity to vote on the 
second amendment.
  Mr. CONRAD. Yes, the Senator's right will be protected to have both 
of these amendments voted on.
  Mr. ALLARD. I thank the Senator very much.


                           Amendment No. 491

  The PRESIDING OFFICER. The clerk will report the single amendment.
  The bill clerk read as follows:

       The Senator from Colorado [Mr. Allard] proposes an 
     amendment numbered 491.

  Mr. ALLARD. 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:


                           amendment no. 491

 (Purpose: To pay down the Federal debt and eliminate government waste 
   by reducing spending on programs rated ineffective by the Program 
                        Assessment Rating Tool)

       On page 4, line 6, decrease the amount by $4,270,000,000.
       On page 4, line 7, decrease the amount by $4,427,500,000.
       On page 4, line 8, decrease the amount by $4,675,500,000.
       On page 4, line 9, decrease the amount by $4,972,500,000.
       On page 4, line 10, decrease the amount by $5,284,000,000.
       On page 4, line 15, decrease the amount by $870,000,000.
       On page 4, line 16, decrease the amount by $2,752,500,000.
       On page 4, line 17, decrease the amount by $4,580,500,000.

[[Page 6978]]

       On page 4, line 18, decrease the amount by $4,877,500,000.
       On page 4, line 19, decrease the amount by $5,189,000,000.
       On page 4, line 24, decrease the amount by $870,000,000.
       On page 4, line 25, decrease the amount by $2,752,500,000.
       On page 5, line 1, decrease the amount by $4,580,500,000.
       On page 5, line 2, decrease the amount by $4,877,500,000.
       On page 5, line 3, decrease the amount by $5,189,000,000.
       On page 5, line 7, decrease the amount by $870,000,000.
       On page 5, line 8, decrease the amount by $3,622,500,000.
       On page 5, line 9, decrease the amount by $8,203,000,000.
       On page 5, line 10, decrease the amount by $13,081,000,000.
       On page 5, line 11, decrease the amount by $18,269,500,000.
       On page 5, line 15, decrease the amount by $870,000,000.
       On page 5, line 16, decrease the amount by $3,662,500,000.
       On page 5, line 17, decrease the amount by $8,203,000,000.
       On page 5, line 18, decrease the amount by $13,081,000,000.
       On page 5, line 19, decrease the amount by $18,269,500,000.
       On page 25, line 12, decrease the amount by $20,000,000.
       On page 25, line 13, decrease the amount by $20,000,000.
       On page 25, line 16, decrease the amount by $102,500,000.
       On page 25, line 17, decrease the amount by $102,500,000.
       On page 25, line 20, decrease the amount by $270,500,000.
       On page 25, line 21, decrease the amount by $270,500,000.
       On page 25, line 24, decrease the amount by $487,500,000.
       On page 25, line 25, decrease the amount by $487,500,000.
       On page 26, line 3, decrease the amount by $719,000,000.
       On page 26, line 4, decrease the amount by $719,000,000.
       On page 26, line 12, decrease the amount by $4,250,000,000.
       On page 26, line 13, decrease the amount by $850,000,000.
       On page 26, line 16, decrease the amount by $4,325,000,000.
       On page 26, line 17, decrease the amount by $2,650,000,000.
       On page 26, line 20, decrease the amount by $4,405,000,000.
       On page 26, line 21, decrease the amount by $4,310,000,000.
       On page 26, line 24, decrease the amount by $4,485,000,000.
       On page 26, line 25, decrease the amount by $4,439,000,000.
       On page 27, line 3, decrease the amount by $4,565,000,000.
       On page 27, line 4, decrease the amount by $4,470,000,000.
       On page 41, line 9, decrease the amount by $4,250,000,000.
       On page 41, line 10, decrease the amount by $850,000,000.

  Mr. ALLARD. Mr. President, I wish to make a few comments about the 
PART program in general, which is a program that has been put in place 
by the Congress through a piece of legislation that was passed more 
than a decade ago. This program directs the agencies to set up 
measurable goals and objectives, and then we go in later on and those 
goals and objectives are evaluated to see if the agency is actually 
meeting those goals and objectives.
  The piece of legislation, which was passed more than a decade ago, 
was called the Government Results and Procedures Act. So these agencies 
have had time to work with this program for some time under the Clinton 
administration as well as the Bush administration.
  When making funding decisions, Members of Congress should consider 
what they are buying for the taxpayer. Funded programs should be 
effective and efficient. The Federal Government has completed 
comprehensive assessments of the performance of almost 1,000 programs, 
representing 96 percent of the total program funding using this Program 
Assessment Rating Tool, which is referred to as PART. These detailed 
program assessments and the evidence on which they are based are 
available for the public to view at www.expectmore.gov. It is a very 
good reference for the public to use--for, in fact, Members of Congress 
or any agencies to know exactly where they stand as far as where their 
performance standards are concerned.
  These assessments represent the combined wisdom of career officials. 
This is not a political process, these are objective evaluations done 
by career officials at agencies and OMB--the Office of Management and 
Budget--and are based on evidence of that program's performance.
  Programs assessed with the PART receive an overall rating. The best 
rating they can get is ``effective.'' Then it goes to ``moderately 
effective,'' ``adequate,'' ``results not demonstrated'' or 
``ineffective.'' While a program's overall rating should not be the 
sole determinant of its funding, Congress should prioritize funding 
programs that perform well. Ineffective programs, in particular, should 
be scrutinized to determine if the resources they use could be better 
spent elsewhere and if their goals could be achieved through another 
means.
  When determining where to invest resources, Members of Congress can 
look to the PART for important information. No. 1: Does the program 
address an existing problem, interest or need, and those that do not 
should not be funded.
  The other question to be asked is: Does the program have performance 
goals that relate to the outcomes the American people want? Those that 
do not may not be worthwhile investments of taxpayer dollars. Do 
independent, rigorous evaluations demonstrate that the program is 
effective? If not, Congress may want to reconsider whether to fund the 
program.
  If evaluations have not been conducted, Congress may want to consider 
investing some money in an evaluation to determine if the program is 
having its intended impact.
  Is the program working to improve its performance is another question 
we ask. A program that does not have an improvement plan in place or is 
not working aggressively to improve may not be the best investment of 
resources.
  The other question: If an increase in funding is requested for a 
program, has the program explained how the additional funding will 
impact its performance? Programs that cannot articulate how they will 
use their resources simply aren't the best candidates for investment.
  So that is what the PART Program is all about. It is a good program, 
and it is being implemented more and more throughout the agencies.
  Some of the PART findings are programs that have been ineffective. 
Let's look at a few of those.
  PART found that actual additional natural gas reserves attributable 
to technology developed by the Natural Gas Technology Program have been 
relatively small. Moreover, as noted by the National Academy of 
Sciences:

       It is difficult to separate the contributions made by the 
     Department of Energy and contributions made by industry and 
     others.

  Another program rated ineffective by PART is the Migrant and Seasonal 
Farmworkers Program, which may not concentrate enough on providing 
training and employment. Each year, more than 60 percent of the 
program's approximately 30,000 participants receive only supportive 
services, such as emergency cash assistance. They don't carry on with 
the goal and objective, which is training and employment. Although 
these services are important, they are not contributing significantly 
to helping participants gain stable, year-round employment. If we want 
to train them, we need to look at that program.
  PART found the same thing with the Health Professions Program. One 
study found that only 1.5 percent of the physicians trained by 
institutions receiving the program's family medicine training grant 
provided health care in areas with a physician shortage, compared to 
1.1 percent of physicians trained by other institutions. There is only 
a four-tenths of a percent performance difference. What is that program 
accomplishing?
  PART found no evidence that the Radiation and Exposure Screening and 
Education Program reaches the maximum number of beneficiaries or the 
beneficiaries who are at the greatest risk. There is not even an 
estimate of the number of people potentially affected by uranium and 
nuclear testing activities and where they might live.
  Another program rated ineffective by PART is the Juvenile 
Accountability Block Grants Program. It was found ineffective because 
it has no measurable

[[Page 6979]]

impact on either juvenile crime or the juvenile justice system to date.
  These are only a few of the programs that have been looked at by the 
PART Program. I think they provide the information Members of Congress 
need to evaluate whether programs are ineffective.
  The amendment before us just addresses a portion of discretionary 
spending. The full PART Program evaluates mandatory programs and 
discretionary programs.
  I put forward two amendments. The amendment before us is the 
discretionary program where we will get a considerable amount of 
debate. The mandatory amendment is one the chairman asked be reviewed, 
and he assured me I will have an opportunity to offer that amendment at 
a later time.
  So I rise today asking Members to support this amendment where we 
deal with the discretionary spending as the PART Program is being 
applied. The overall purpose of the amendment is to pay down the 
Federal debt and eliminate Government waste by reducing spending on 
programs rated ``ineffective'' by the Office of Management and Budget's 
PART program. This is through the career professionals in the agency. 
This is not driven by any kind of political agenda. PART is a 
Government-wide assessment of the performance of almost 1,000 programs, 
again, representing 96 percent of total program funding.
  If we look at programs in the discretionary spending area which are 
rated ineffective, it amounts, over the time period of this budget, 
which is 5 years, to $88 billion of program spending. My amendment says 
we will reduce 25 percent of the spending in this area, which is about 
$17 billion over the period of 5 years. We will say that those programs 
are ineffective and we need to reduce spending for those so that we 
motivate the agencies to redo their programs, so they truly are 
accomplishing what was laid out for the original purpose of the 
program.
  What happens in our budget that is before us is we have $900 billion 
in increasing taxes by default because we don't do anything to extend 
those tax provisions which are expiring in 2010 and before. So my point 
is this: We are forcing the taxpayers to pay more into the Federal 
budget, and at the same time we are spending $88 billion on ineffective 
programs.
  My amendment says we are going to take a portion of the $88 billion--
about $18 billion--out of here for a strong signal from the Congress 
that we want to support effective programs and we want the taxpayer 
dollars spent in a responsible way. My amendment doesn't take all of 
the $88 billion, realizing there may be points in time when another 
program is not meeting its goals and needs more money. So that 
flexibility is allowed in this particular amendment. It doesn't target 
any specific program. Those programs which I recounted to you are just 
representative of some of the efforts that happen under the PART 
Program. It is a wonderful way for the Members of Congress to begin to 
evaluate whether a program is effective, and then not just leave it 
there but say, through the budget, to those agencies: You have to get 
your act together; we don't tolerate using taxpayer dollars--
particularly when we are increasing your taxes--to allow those programs 
to go on in an ineffective manner.
  Almost worse than being rated ineffective, we have programs out there 
that have made absolutely no effort at all to measure their results. I 
believe these are the worst offenders. In the following years, I hope 
Congress will look at those programs. They have absolutely refused to 
do anything to create accountability so that the Members of Congress 
can evaluate what is going on in those programs.
  So that is what my amendment is all about. It is about saving 
taxpayer dollars in a responsible way; it is about forcing managers of 
these programs to put in effective goals and objectives so that they 
accomplish what the legislation intended. The budget authority is about 
$4.3 billion in each year, from 2008 to 2012. That comes close to about 
$18 billion or so, which is used to pay down the Federal debt.
  I ask my colleagues in the Senate to join me in trying to bring 
forward more accountability in the programs we have passed. I think 
this is a wonderful tool we have for whatever administration is in 
control. This is a direct message to the agencies to get their act in 
order, because we are concerned about how taxpayer dollars are being 
spent. This is not an onerous amendment. It is trying to bring 
accountability to Government programs that we pass.
  I reserve the remainder of my time, Mr. President.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, I say to Senator Allard, as I expressed in 
the committee, the only problem I have with this amendment is that, 
unfortunately, a budget resolution cannot assure the right things would 
be cut. As you know, we don't really have that power. We just give a 
block of money to the Appropriations Committee and they decide how to 
spend it.
  Mr. President, does the Senator need more time or could we go to 
Senator Baucus?
  Mr. ALLARD. Mr. President, let me summarize my comments and respond. 
I think if we look at our budget process, we hopefully--maybe not this 
year but next year--will be able to put in some instructions to the 
committees. I understand we cannot specifically tell them but, as 
budgeteers, we have an opportunity to put in instructions to the 
various committees to participate.
  I hope this passes, and maybe we can deal with this in conference. If 
not, maybe the chairman would look at it either in conference committee 
or in future years and we can put in some kind of instructions and say: 
Look at those programs under your jurisdiction and look at the ones 
classified as ineffective and begin to demand more accountability on 
those particular programs.
  I hope we can get a ``yea'' vote on both of these amendments to send 
a message, if nothing else, to the conference committee to get it 
passed. If it doesn't work out this year, maybe we can work it out in 
future years.
  I ask unanimous consent that a letter from Citizens Against 
Government Waste in support of both of my amendments be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                      Council for Citizens Against


                                             Government Waste,

                                   Washington, DC, March 20, 2007.
     U.S. Senate,
     Washington, DC.
       Dear Senator: Soon you will be voting on S. Con. Res. 21, 
     the Concurrent Resolution on the Budget for Fiscal Year 2008. 
     The Council for Citizens Against Government Waste (CCAGW) 
     believes there are serious fiscal problems with this budget 
     proposal. It spends more money than the president requested; 
     it raises taxes by allowing the tax cuts that have led to our 
     robust economy to expire; and it doesn't address the looming 
     financial crisis our Nation faces--the exploding costs of 
     Medicare, Medicaid, and Social Security. Furthermore, it does 
     not cut a single program, even those with questionable 
     results, or go after waste, fraud and abuse.
       The budget proposal needs substantial improvements. Two 
     amendments, which will be offered by Sen. Wayne Allard (R-
     Colo.), are a good place to start.
       One amendment will help eliminate government waste by 
     reducing spending on programs that have been rated 
     ineffective by the Program Assessment Rating Tool or PART. 
     The amendment cuts discretionary spending by $4.3 billion in 
     the years 2008-2012 by simply reducing these ineffective 
     programs' annual funding by 25 percent.
       The other amendment will reduce mandatory spending by 
     eliminating waste, fraud, and abuse by 1 percent. In a May 
     2004 Government Accountability Report (GAO), ``Opportunities 
     for Congressional Oversight and Improved Use of Taxpayer 
     Funds,'' several suggestions to find savings in mandatory 
     spending programs were provided to Congress. The amendment 
     saves $13 billion in the first year and $71 billion over 5 
     years.
       In both instances, any savings from these amendments will 
     reduce the debt and cannot be used for new spending.
       On behalf of the more than 1.2 million members and 
     supporters of CCAGW, I urge you to support these amendments. 
     All votes on S. Con. Res. 21 will be among those considered 
     in CCAGW's Congressional Ratings.
           Sincerely,
                                                    Thomas Schatz,
                                                        President.

  Mr. ALLARD. I yield back my time.

[[Page 6980]]


  Mr. CONRAD. Mr. President, I think now would be a good time to go to 
Senator Baucus. I apologize to the Senator from Montana for the 
miscommunication that occurred this morning. I apologize to him for 
that. As a result, he came at 10 o'clock seeking time, which we all 
agreed was to be his time. Through a miscommunication, we wound up 
going to another Senator. I very much thank the Senator for his 
acceptance of the apology.
  The PRESIDING OFFICER. Without objection, the Allard amendment is set 
aside.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I thank my good friend from North Dakota, 
Senator Conrad. He has done a super job, almost impossible job putting 
this budget together. It is tough enough to get agreements in this 
body, and it is more difficult when it is a budget resolution. I 
compliment my colleagues on both sides of the aisle for their excellent 
and diligent work. I also say to him I appreciate his offer of an 
apology with respect to the misunderstanding and miscommunication. This 
Senator is probably as much a part of the miscommunication as anybody.


                           Amendment No. 492

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

       The Senator from Montana (Mr. Baucus], for himself, Ms. 
     Landrieu, Mr. Pryor, Mr. Bayh, Mr. Nelson of Nebraska, and 
     Mr. Nelson of Florida, proposes an amendment numbered 492.

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

  (Purpose: To provide tax relief to middle class families and small 
    businesses and to expand health insurance coverage for children)

       On page 3, line 13, decrease the amount by $200,000,000.
       On page 3, line 14, decrease the amount by $52,700,000,000.
       On page 3, line 15, decrease the amount by 
     $126,916,000,000.
       On page 3, line 22, decrease the amount by $200,000,000.
       On page 3, line 23, decrease the amount by $52,700,000,000.
       On page 4, line 1, further decrease the amount by 
     $126,916,000,000.
       On page 4, line 8, increase the amount by $5,000,000,000.
       On page 4, line 9, increase the amount by $5,000,000,000.
       On page 4, line 10, increase the amount by $5,000,000,000.
       On page 4, line 17, increase the amount by $5,000,000,000.
       On page 4, line 18, increase the amount by $5,000,000,000.
       On page 4, line 19, increase the amount by $5,000,000,000.
       On page 5, line 1, increase the amount by $5,200,000,000.
       On page 5, line 2, increase the amount by $57,700,000,000.
       On page 5, line 3, increase the amount by $131,916,000,000.
       On page 5, line 9, increase the amount by $5,200,000,000.
       On page 5, line 10, increase the amount by $62,900,000,000.
       On page 5, line 11, increase the amount by 
     $194,816,000,000.
       On page 5, line 17, increase the amount by $5,200,000,000.
       On page 5, line 18, increase the amount by $62,900,000,000.
       On page 5, line 19, increase the amount by 
     $194,816,000,000.
       On page 18, line 20, increase the amount by $5,000,000,000.
       On page 18, line 21, increase the amount by $5,000,000,000.
       On page 18, line 24, increase the amount by $5,000,000,000.
       On page 18, line 25, increase the amount by $5,000,000,000.
       On page 19, line 3, increase the amount by $5,000,000,000.
       On page 19, line 4, increase the amount by $5,000,000,000.
       On page 49, line 6, decrease the amount by $15,000,000,000.

  Mr. BAUCUS. Mr. President, I again commend the chairman for his able 
work in bringing this budget to the floor. He has done a superb job.
  The budget resolution before us leaves a surplus of $132 billion in 
the year 2012. The amendment I now offer on behalf of Senators 
Landrieu, Pryor, Bayh, and Bill Nelson would state the Senate's will on 
what we should do if that surplus materializes.
  In sum, our amendment says that the Senate's highest priority for any 
surplus should be American families. Our amendment would put children 
first. It would take $15 billion out of that $132 billion and devote it 
to improving children's health care coverage under CHIP, the Children's 
Health Insurance Program. The budget resolution already recognizes this 
priority in a deficit-neutral reserve fund.
  Our amendment would also reduce the amount in that reserve fund. So 
we are not increasing the net amount of spending on CHIP. It will be 
the same. We are just making that work on CHIP more likely.
  We are saying if we have a surplus in 2012, then we ought to spend 
some part of that surplus on children's health, and we are saying if we 
have a surplus in 2012, we should not raise taxes to pay for all of the 
Children's Health Insurance Program. If we have a surplus in 2012, we 
should not cut Medicare to pay for all of CHIP. Rather, we should use 
some of that surplus to fund children's health; that is, put children 
first.
  Then our amendment takes the rest of the surplus and returns it to 
the hard-working American families who created it. Our amendment 
devotes the rest of the surplus to the extension and enhancement of tax 
relief for hard-working American families.
  Here are the types of tax relief about which we are talking. We are 
talking about making the 10-percent tax bracket permanent. That is a 
tax cut for all taxpayers. Obviously, if the 10-percent tax bracket is 
made permanent--that is, for all years--all taxpayers who pay income 
taxes, irrespective of their income, irrespective of their bracket, get 
a tax break.
  We are talking about extending the child tax credit. That provides a 
$1,000 tax credit per child. This tax credit recognizes a family's 
ability to pay taxes decreases as family size increases. Unless we act, 
the child tax credit will fall to $500 per child. Currently, it is at 
$1,000. The child tax credit should be made permanent. We need to 
recognize the financial responsibilities of childbearing.
  We are also talking about continuing the marriage penalty relief, 
which is a tax cut on which the American family has come to rely. It is 
going to continue. We know that. We should recognize that fact. 
Marriage penalty relief makes sure a married couple filing a joint 
return has the same combined tax liability as they would have if they 
were not married.
  We are also talking about enhancing the dependent care credit. 
Clearly, this credit is very important to working families. It 
recognizes the additional cost for raising children in this fast-paced 
society.
  We are talking about improving the adoption credit. The majority of 
adoptions cost over $20,000. This provision offers a credit of $10,000 
for those willing to give a home to a needy child.
  We are talking about providing combat pay under the earned-income tax 
credit, otherwise known as the EITC. Under current law, income earned 
by a soldier in a combat zone is exempt from income tax. That is good. 
This actually, however, hurts low-income military personnel under the 
EITC. If not for the EITC combat pay exception, combat zone pay would 
not count as earned income for purposes of determining the credit. This 
amendment makes that exception permanent so that military families can 
get the full benefit of the EITC.
  We are talking about reforming the estate tax. We want to try to give 
American families certainty. We want to support America's small farmers 
and ranchers, and in this amendment, we have allowed room for estate 
tax reform that will do that.
  And we talk about returning surplus revenues to hard-working American 
families.
  That is what our amendment does. It is very simple, very 
straightforward. It says we should put America's kids and families 
first. It says if we have a surplus, these are the priorities it should 
be used for. I urge my colleagues to join me in supporting this 
amendment.
  The PRESIDING OFFICER (Ms. Klobuchar). The Senator from North Dakota 
is recognized.

[[Page 6981]]


  Mr. CONRAD. Madam President, they have changed presiding officers on 
me. It is good to have you in the chair.
  Madam President, I thank very much Senator Baucus for his leadership 
on this very important amendment. This amendment is to reassure all 
those who have benefited from the middle-class tax cuts that those tax 
cuts will go forward, that those children who are not now currently 
covered under the SCHIP legislation will have the opportunity to be 
covered.
  The Senator has also provided for small business because we have a 
number of provisions that are critically important to small business 
and, of course, to prevent the estate tax from having this bizarre 
outcome, which is now in the law, where the exemption would go down to 
$1 million from $3.5 million just two years before. That makes no 
sense. So the Senator provides for room in this amendment to deal with 
estate tax reform.
  The precise contours of that will be up to, obviously, the Finance 
Committee. The Senator is providing the resources to provide for the 
middle-class tax cuts, to have estate tax reform, to have SCHIP funded 
so those kids will be funded, and to have critical elements of small 
business covered as well.
  I appreciate very much the leadership the Senator has provided in 
putting this amendment together. All of us know if those provisions 
came to the floor, they would enjoy broad bipartisan support. In fact, 
they would probably get supermajorities. They might get 70 votes on the 
Senate floor. So it makes sense to have them in the resolution.
  I thank Senator Baucus. He has spent a lot of time energy, and effort 
bringing colleagues together around this amendment. I, for one, 
appreciate it. I hope my colleagues will support the Baucus amendment. 
I know there have been dozens of colleagues--I think virtually every 
member of our caucus--who have been involved in the discussions about 
the elements of the amendment that the chairman of the Finance 
Committee has offered.
  Madam President, would the Senator like more time?
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Madam President, I believe this amendment should be 
adopted by every Senator because essentially it is saying if we have a 
surplus in 2012, as contemplated by the budget resolution, these are 
priorities all of us support. If these were before the Senate today as 
actual tax provisions--and they will be, I am sure, at some future date 
because the current tax cuts don't expire until 2010--that we will vote 
for them anyway because it is the right thing to do.
  Marriage penalty relief, child tax credit, the combat pay exception 
for soldiers, adoption credit, the 10-percent bracket--these are all 
provisions that are very important. The American public deserves them. 
I hope very much this amendment will be adopted by all Members because 
I think it is something all Members and all the citizens of our country 
support.
  I see the ranking member is on the floor. I would be interested in 
knowing the degree to which he enthusiastically supports the amendment.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Madam President, I suspect I will support it, although I 
don't know, but I wish to ask the chairman of the Finance Committee a 
few questions so I get more specifics on the amendment.
  What is the total cost of this amendment?
  Mr. BAUCUS. It is approximately $195 billion. It allocates the 
projected surplus that is in the budget resolution.
  Mr. GREGG. If I might ask, Madam President, further, of the chairman, 
the surplus, however, is in the year 2012. So what happens to these 
rates in 2011 that will expire? Are those picked up?
  Mr. BAUCUS. That is a good question. The answer to that is 
essentially this is a 5-year budget resolution, so we want to balance 
the budget in 5 years, in 2012. But because the tax cuts that are 
mentioned in the amendment currently expire in 2010, the Senator raises 
the question about 2011, 2012. If I understand the import of the 
question of the ranking member of the Budget Committee, it is what 
happens in 2011.
  Mr. GREGG. Or 2010.
  Mr. BAUCUS. In the earlier years, 2010, there would be a deficit, but 
by the time we finish the 5 years, there would be a surplus. We have 
written this amendment in a way to prevent a yo-yo, on-off effect of 
the tax provisions. To make it perfectly perfect, so there is not a 
deficit in any year, 2010, 2011, or 2012, we can have the tax cuts go 
up or down, and so forth, but I think it is best for the American 
people not to have a yo-yo effect, not go up and down, but to extend 
across the board those provisions which are contained in the amendment 
at the end of the day would not be a deficit.
  Mr. GREGG. Would it be appropriate--if I can ask the chairman of the 
Finance Committee or the chairman of the Budget Committee--I want to 
get to what the tax cuts are specifically, but they would be extended 
if they expired in 2010, 2011, or 2012, they would be extended through 
that period. If that is the case, then the Senator must be using more 
than the surplus in 2012. He must be using some number in 2010 by which 
you increase the deficit and 2011 by which you increase the deficit.
  My question is, what is the number the Senator is using for 2010 and 
2011 to account for those extensions in those years?
  Mr. BAUCUS. It is true, in those years there is deficit spending, but 
it comes in balance in 2012.
  Mr. GREGG. But how do they score in those 2 years?
  Mr. BAUCUS. I think it is $194 billion for those 3 years 2010, 2011, 
2012.
  Mr. GREGG. So there is another $60 billion on top of the surplus that 
is used; is that correct?
  Mr. BAUCUS. Approximately.
  Mr. ALLARD. I have a question, if the Senator will recognize me for a 
question, if the Senator will allow me to ask a question of Senator 
Baucus. I think the Senator from New Hampshire has the time.
  Mr. GREGG. I think I have the time for the purpose of asking 
questions.
  The PRESIDING OFFICER. The question by the Senator from New Hampshire 
is pending.
  Mr. ALLARD. I have a question.
  Mr. GREGG. I yield to the Senator to ask whatever questions he has. I 
have additional questions.
  Mr. ALLARD. In effect, this adds to the debt?
  Mr. BAUCUS. Sorry?
  Mr. ALLARD. In effect, this amendment adds to the total debt?
  Mr. BAUCUS. No, we are back in balance by 2012 at the end of the 5-
year period contemplated by this amendment. In the meantime, we are in 
deficit for the years 2010 and 2011.
  Mr. GREGG. I think the answer to your question, if I might interject, 
is it increases the debt by $195 billion.
  Mr. ALLARD. I had $194 billion, but $195 billion. That seemed to me 
it did increase the debt. Maybe we can check that out.
  Mr. GREGG. That would have to be what it does.
  May I ask a further question of the Senator. It costs $195 billion 
over the 3 years to extend these tax cuts. Is the education tuition tax 
credit presumed in that number?
  Mr. BAUCUS. There is an underlying answer to all these questions; 
namely, these are questions the Finance Committee is going to address 
and find the appropriate offsets and deal with the pay-go when it comes 
up at that time. But essentially, education tuition tax credits are not 
provided for in this amendment, but are in the budget resolution.
  Mr. GREGG. If I may ask further, Madam President, would the expensing 
section 179 accounts be included in that number?
  Mr. BAUCUS. Section 179 expensing is not contemplated.
  Mr. GREGG. In this number. Is capital gains contemplated in this 
number?
  Mr. BAUCUS. It is not.
  Mr. GREGG. Is continuing the dividend rate contemplated in this 
number?

[[Page 6982]]


  Mr. BAUCUS. It is not.
  Mr. GREGG. I thank the Senator. I think that answers my questions. I 
am presuming what is contemplated in this number then will be the 
marriage tax penalty and the child credits; is that correct?
  Mr. BAUCUS. Those two and some others, correct, including the 10-
percent bracket.
  Mr. GREGG. And the 10-percent bracket. I am presuming I certainly 
will be supportive of this amendment in its present form. However, I do 
suspect we are going to have an amendment which picks up the other 
extensions.
  Mr. BAUCUS. I expect we will.
  Mr. GREGG. It is the arbitrariness of the process around here that 
the Senator from Montana is first to the surplus that was left, but the 
practical effect of our amendment will be essentially the same as the 
Senator's, which is to extend the tax credit rates. That is tax 
deductions--tax rates. I also think the ones we are going to suggest we 
extend--and we will get to this in our debate--are ones which are more 
oriented toward economic activity, generating or creating economic 
activity, than the extensions which are included in the chairman's 
proposal, which are all good and appropriate but which don't translate 
other than through maybe greater consumption directly into economic 
activity, such as the capital gains and the dividend rate does, and the 
expensing, obviously.
  We will have that discussion when we offer ours, and I appreciate the 
chairman's courtesy in allowing me to ask him these questions.
  Mr. BAUCUS. If the Senator will yield.
  Mr. GREGG. Madam President, I yield the floor.
  Mr. BAUCUS. Madam President, I will say to the body, the world, and 
also primarily to the Senate and the ranking member of the Budget 
Committee, of course, these are all issues--that is, those issues 
raised basically by the ranking member of the Budget Committee--that 
the Finance Committee is going to work on over the next several years. 
It is up to us, up to the committee, and up to this body to find the 
offsets to pay for them. We will do the very best we can. I think we 
don't want to get into a deficit situation.
  Mr. GREGG. Madam President, if the Senator will yield for one further 
question, what is the chairman, within his score, what is he 
anticipating as to how the death tax treatment would be dealt with?
  Mr. BAUCUS. The estate tax provision.
  Mr. GREGG. The death tax.
  Mr. BAUCUS. Some people call it the death tax. We all know what we 
are talking about. This amendment contemplates extending the estate tax 
provisions that are in effect in 2009 permanently.
  Mr. GREGG. If the chairman will yield further, and through the 
President, I would ask, in 2009, what is the exempted amount?
  Mr. BAUCUS. Again, under current law I think the exempted amount is 
$3.5 million.
  Mr. GREGG. That would be the minimum in 2009 also?
  Mr. BAUCUS. The 2009 extension. The point is that the resolution also 
contemplates--well, it has an additional $4 billion that can be used 
for other tax purposes, including changing the provisions of the 
Federal estate tax.
  Mr. GREGG. Madam President, I thank the chairman for his courtesy.
  Mr. CONRAD. Madam President, I again want to thank very much Senator 
Baucus for offering this amendment, which is to protect the middle-
class tax cuts and to make certain we don't have this anomaly of the 
estate tax being at $3.5 million in 2009 and then going down to $1 
million. That makes no sense. The Senator has said very well that the 
amendment he has provided would prevent that from occurring, and there 
are some additional funds that would be used to make those provisions 
even more attractive, or they could be used for other tax provisions.
  The truth is, the budget resolution doesn't cite that. We give 
certain instruction to the Finance Committee and, ultimately, the 
Finance Committee is going to make these judgments. What the chairman 
of the Finance Committee has said is that it is his intention to have 
estate tax reform to protect the middle-class tax cuts and also to have 
the resources to extend children's health care coverage to every child 
in America. Every single witness before our committee, and I think it 
is fair to say virtually every witness before the Finance Committee, 
has said that covering children, as the Senator from Montana has so 
aggressively pursued--coverage for every child in America is the right 
thing to do substantively for this country. Covering children is the 
least expensive thing to do and has the greatest payoff as an 
investment because a child's entire life is then improved if they catch 
a health care problem when they are young.
  I think the Senator from Montana has put together an amendment that 
deserves the support of every Member of the body.
  Mr. BAUCUS. I thank the Senator. I might ask the question, Madam 
President: Basically, what are budgets? Budgets are an expression of 
priorities. This budget is designed to express what this body thinks, 
what so many of us think are the proper priorities for this country. 
Since the resolution has about a $132 billion surplus, we think the 
strong priority should be to use that to help middle-income Americans.
  The provisions in this amendment provide for that and clearly help 
kids get health insurance. A major problem in this country, clearly, is 
health care. We spend so much on health care. Yet there is some 
question what we get out of it. This country spends $6,300 per person--
that is per capita--on health care, which is almost twice as much as 
the next most expensive country. Yet we are not twice as healthy. The 
problem, clearly, is coverage; that is, not everybody has health 
insurance. Everybody in America should have health insurance.
  The other question is cost, but this amendment addresses the coverage 
side of it; that is, trying to help more people get health insurance, 
people who do not now have health insurance. Where do we begin? We 
think we begin with kids. Currently, there are about 6 million children 
who are covered under the Children's Health Insurance Program. There 
are about 6 million others who are eligible but not covered. We 
believe, and this amendment states, that if we begin providing health 
insurance coverage for more Americans, we should certainly begin with 
kids. When we begin with kids, let's help those kids who don't have the 
same financial means that other kids have.
  A lot of other kids, fortunate for them, their families, father and 
mother, have a good job and health insurance is part of the job. But we 
are talking about kids who don't have that. These are kids whose income 
levels, or their parents' income level, is just above the qualifying 
rate for Medicaid. Medicaid does provide health insurance for kids, but 
there are a lot of kids who don't get health insurance because their 
family's income is just above the Medicaid cutoff. That needs to be 
covered under the Children's Health Insurance Program, on which this 
amendment is designed to expand.
  So I would summarize by saying that I think it is a proper set of 
priorities, given the resources we have, and I hope every Senator 
supports this amendment.
  Madam President, I yield the floor.


                           Amendment No. 480

  Ms. COLLINS. Madam President, I call up amendment No. 480, and I ask 
for its immediate consideration.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
set aside, and the clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Maine [Ms. Collins], for herself, Mr. 
     Warner, and Mr. Smith, proposes an amendment numbered 480.

  Ms. COLLINS. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page 6983]]

  The amendment is as follows:

(Purpose: To provide for a deficit-neutral reserve fund for permanently 
   extending and increasing the above-the-line deduction for teacher 
 classroom supplies and expanding such deduction to include qualified 
                   professional development expenses)

       At the end of title III, add the following:

     SEC. ___. DEFICIT-NEUTRAL RESERVE FUND FOR EXPANSION OF 
                   ABOVE-THE-LINE DEDUCTION FOR TEACHER CLASSROOM 
                   SUPPLIES.

       The Chairman of the Senate Committee on the Budget may 
     revise the allocations, aggregates, and other levels in this 
     resolution by the amounts provided by a bill, joint 
     resolution, amendment, motion, or conference report that 
     would permanently extend and increase to $400 the above-the-
     line deduction for teacher classroom supplies and expand such 
     deduction to include qualified professional development 
     expenses, provided that such legislation would not increase 
     the deficit over the total of the period of fiscal years 2007 
     through 2012.

  Ms. COLLINS. Madam President, the amendment that I have proposed, 
with my colleagues, Senator Warner and Senator Smith, would establish a 
deficit-neutral reserve fund to allow for the expansion of an existing 
tax credit for schoolteachers and other educators who buy supplies for 
their classroom. The reserve fund that our amendment creates would 
allow for an increase in the current $250 deduction to $400, and it 
would make it permanent. This tax deduction is available to educators 
who incur out-of-pocket expenses in order to improve the educational 
experience of their students.
  The amendment would also allow this above-the-line tax deduction to 
be claimed for expenses related to professional development.
  This amendment builds upon a $250 tax deduction in the current law 
that Senator Warner and I authored in 2001. It became law as part of 
the tax relief package that passed that year. This tax relief was later 
extended through the end of this year, and I would suggest that there 
is no reason for us to have the uncertainty about the continuation of 
this valuable tax deduction. We should move to make it permanent.
  Teachers who buy classroom supplies in order to improve the 
educational experience for their students deserve more than just our 
gratitude. They deserve this modest tax incentive to thank them for 
their commitment and their hard work. So often teachers across this 
country, and certainly in the State of Maine, earn modest salaries. Yet 
they dig deep into their own pockets to spend money to improve the 
classroom experience of their students.
  A survey by the National Education Association found that teachers 
spend, on average, $443 a year on classroom materials. Other surveys 
show that they are spending even more than that. In fact, a survey 
conducted by the National School Supply and Equipment Association has 
found that educators spend, on average, $826 to supplement classroom 
supplies, plus an additional $926 for instructional materials on top of 
that; in other words, a total of $1,700 out of their own pockets.
  I have spoken with literally dozens of teachers in Maine who tell me 
that they routinely spend far in excess of the $250 deduction limit 
that is in current law. I have made a practice of visiting schools all 
over Maine. In fact, I visited approximately 160 schools during the 
past 10 years, and I have seen firsthand the dedication of our 
schoolteachers to their students. At virtually every school that I have 
visited, teachers are spending their own money to benefit their 
students.
  Year after year, teachers spend hundreds of dollars on books, 
bulletin boards, computer software, construction paper, stamps, ink 
pads, just about anything you can think of. Let me give a couple of 
examples. There are two elementary school teachers in Augusta, ME, 
Anita Hopkins and Kathy Toothacher, who purchased books for their 
students so they could have a classroom library, as well as workbooks 
and sight cards. They have also purchased special prizes to give to 
their students as positive reinforcement. Mrs. Hopkins estimates that 
she spends between $800 and $1,000 of her own money on extra materials 
to make learning more enjoyable and to create a more stimulating 
classroom environment.
  In addition to increasing the amount of this deduction, I think we 
should also expand it so that it can be used by educators who are 
paying for their own professional development. We hear a lot of 
discussion about the provisions of the No Child Left Behind Act and 
about the need for highly qualified teachers. One of the best ways for 
teachers to improve their qualifications is through professional 
development. Yet in towns in my State, and I expect throughout the 
country, school budgets are often very tight and money for professional 
development is often very small or even nonexistent.
  That is why I think we should allow this tax deduction to also be 
claimed when a teacher takes a course or attends a workshop and has to 
pay for it out of his or her own pocket. In my view, it is the students 
who are the ultimate beneficiaries when teachers receive professional 
development to sharpen their skills, or perhaps teach them a more 
innovative way to teach the material and present it to their students.
  Studies have consistently shown that other than involved parents, the 
single greatest determinant of classroom success is the presence of a 
well-qualified teacher. I know from talking to educators across Maine 
that they are eager to take advantage of professional development 
opportunities in order to make an even more positive impact on their 
students.
  The teacher tax relief that we have made available since 2001 is 
certainly a positive step, and I am very proud, along with my 
colleague, Senator Warner, to have authored that law. Today, we can set 
the stage for making that deduction permanent, for expanding it to 
include professional development, and to increase it to $400 to more 
accurately reflect what educators really spend in the classroom.
  This amendment is a small but appropriate means of recognizing the 
many sacrifices that teachers make each and every day to benefit 
children across America. I am very pleased that the National Education 
Association has endorsed this amendment, and I ask unanimous consent 
that a letter from the NEA supporting the amendment be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                               National Education Association,

                                   Washington, DC, March 21, 2007.
     U.S. Senate,
     Washington, DC.
       Dear Senator: On behalf of the National Education 
     Association's (NEA) 3.2 million members, we urge your support 
     for an amendment (S. Amdt. 480) to be offered by Senators 
     Collins (R-ME), Warner (R-VA), and Smith (R-OR) to the Senate 
     Budget Resolution that would increase, expand, and make 
     permanent the tax deduction for educators' out-of-pocket 
     classroom supply expenses. Votes associated with this issue 
     may be included in the NEA Legislative Report Card for the 
     110th Congress.
       The educator tax deduction helps recognize the financial 
     sacrifices made by teachers and paraprofessionals, who often 
     reach into their own pockets to purchase classroom supplies. 
     Studies show that teachers are spending more of their own 
     funds each year to supply their classrooms, including 
     purchasing essential items such as pencils, glue, scissors, 
     and facial tissues. For example, the National School Supply 
     and Equipment Association found that in 2005-2006, educators 
     spent out of their own pockets an average of $826.00 for 
     supplies and an additional $926 for instructional materials, 
     for a total of $1,752.
       The amendment would add a deficit neutral reserve fund to 
     the Budget bill, directing funding sufficient to increase the 
     deduction to $400, make it permanent, and expand it to cover 
     professional development expenses. This expansion is critical 
     as teacher quality is the single most critical factor in 
     maximizing student achievement. Ongoing professional 
     development is essential to ensure that educators stay up-to-
     date on the skills and knowledge necessary to prepare 
     students for the challenges of the 21st century.
       The current deduction was extended at the end of 2006, but 
     will expire again at the end of this year absent additional 
     congressional action. Increasing, expanding, and making the 
     deduction permanent will acknowledge the sacrifices made by 
     those who have dedicated their lives to educating our 
     children and will alleviate the uncertainty they face as they 
     wait each year to see if the deduction will be extended.
       We urge your support for this important amendment.
           Sincerely,
     Diane Shust,
       Director of Government Relations.

[[Page 6984]]


     Randall Moody,
       Manager of Federal Policy and Politics.

  Ms. COLLINS. Madam President, I hope the managers of the bill might 
be willing to act on this amendment shortly.
  Madam President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The journal clerk proceeded to call the roll.
  Mr. GREGG. Madam President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Madam President, we have a unanimous consent request we 
are working on. I do not yet have that printed version before us so 
that Senator Gregg and I might be able to enter into that.
  I would like to talk for a moment to the Senator from Maine about her 
amendment. If the Senator from Maine could tell me, what is the cost of 
her amendment and what is the proposed way of paying for it?
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Ms. COLLINS. Madam President, the way I have drafted the amendment is 
to use a technique that has been commonly used in the budget resolution 
of creating a deficit-neutral reserve fund. That means the committee of 
jurisdiction, the Finance Committee in this case, would be required to 
come up with an offset for the cost to avoid an impact on the budget. I 
do not have a cost estimate from CBO yet on the proposal. It is not an 
expensive tax incentive, but we have followed the wisdom and advice of 
the leaders of the Budget Committee by drafting it in such a way that 
it would not have a budget impact.
  Mr. CONRAD. I thank the Senator. Does the Senator have a rough, even 
back-of-the-envelope estimate of the cost?
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Ms. COLLINS. Madam President, I would say to the chairman of the 
Budget Committee that we have requested an estimate, but we have not 
yet received one. Because of that uncertainty, we did go the route of 
the deficit-neutral reserve fund so that, regardless of the cost, it 
would be offset by the decisions made by the Finance Committee.
  Mr. CONRAD. I thank the Senator for the thoughtfulness of her 
amendment. I thank her for doing it as a deficit-neutral reserve fund 
so it does not impact the budget and says to the committee of 
jurisdiction that, if they come forward with the proposal, they will 
find a way to offset the costs. I certainly appreciate what the Senator 
has done so as to not have an adverse impact on the budget. We do 
appreciate that.
  Madam President, does the Senator require a rollcall vote?
  Ms. COLLINS. Madam President, I do not.
  Mr. CONRAD. Madam President, we have to check with the Finance 
Committee before we can take this on a voice vote, but it is my 
intention, if we get clearance, to try to do that at the appropriate 
time. I thank the Senator from Maine.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Madam President, I thank the chairman and ranking member 
for working with me on this issue. I think it is a modest approach that 
can make a real difference to the thousands of teachers across this 
country who dig deep into their own pockets in order to enrich the 
classroom experience for their students. It is a modest but appropriate 
way for us to recognize their financial sacrifice. I hope the two 
managers of the bill will be able to clear the amendment.
  Mr. CONRAD. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GREGG. Madam President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Madam President, I have given an amendment, which I hope 
to bring up at this time, to the majority as a courtesy. I am waiting 
for them to take a look at it before I offer it.
  Essentially, this amendment deals with reconciliation. Reconciliation 
is a fairly arcane exercise, but it has significant impact around here. 
Reconciliation is the tool the Budget Committee has, to put some teeth 
into our efforts to try to control spending. There are no 
reconciliation instructions in the majority proposal. I wish there 
were. I wish there were reconciliation instructions on entitlements, 
and I wish those reconciliation instructions had followed the 
suggestions of the President, as I said in my opening statement, where 
he made recommendations that were very reasonable and would not have 
affected beneficiaries but would have saved $8 trillion over the 75-
year life of Medicare and would have helped move them toward balance by 
getting the providers paid correctly and by having very high-income 
individuals contributing to the cost of their insurance, especially 
drug insurance.
  But there is also another side to reconciliation, and that is, as 
committees are given reconciliation instructions which save money, 
sometimes they take that money and they spend it, which is not the 
purpose of reconciliation. Reconciliation should not be used for a 
cover event for the purposes of spending money.
  The majority has put in place a point of order that would make it 
very difficult to use reconciliation for the purposes of reducing 
taxes. It is perfectly reasonable that we should also make it very 
difficult for doing that for purposes of spending money. I didn't want 
to eliminate the ability to spend money. Some money is going to be 
needed, at least that these programs as they get adjusted in 
reconciliation should have, maybe, some adjustment. For example, 2 
years ago, when the HELP Committee received reconciliation instructions 
on education accounts, they basically reduced the subsidy that went to 
lenders by approximately $20-some-odd billion, I think $21 billion or 
$22 billion. At the same time, they took some of that reduction in 
subsidy and put it toward expanding the Pell Grant Program, especially 
for people who were going into the math and science disciplines.
  That was a good policy decision, and I don't want to tie the hands of 
our authorizing committees excessively, but I think there has to be an 
understanding that reconciliation is primarily an effort to control 
spending and to discipline spending on the entitlement side of the 
accounts. It doesn't deal with discretionary spending.
  This amendment will essentially say that for every $10 you save under 
reconciliation expense, no more than $2 could be actually spent. So it 
says you can't spend more than 20 percent of the savings that are 
generated in a reconciliation exercise. It is an attempt once again to 
put some discipline in here.
  Why is it relevant to a budget that doesn't have any reconciliation 
at all? As I said, I wish this did have reconciliation. It is relevant 
because the House has put reconciliation instructions in, a very small 
amount. It appears to me the intention of the House honestly is to use 
reconciliation as a cover for spending, not as a cover for controlling 
spending--which would be, in my opinion, an inappropriate action. That 
is why I brought forward this language. I hope others would agree with 
me that that would be inappropriate and certainly inconsistent with 
reconciliation as a concept.
  I am handed a note to point out that when we did the reconciliation 
instruction in 2005, we had net savings in that of approximately $40 
billion, which was the most recent large reconciliation instruction we 
pursued in this Congress and which was constructive and which actually, 
in the outyears, turns into very significant savings.
  This is basically to put in place a discipline which will allow us to 
be sure the Budget Act's purposes are not abused and it is not used to 
run interference and allow an easier path to

[[Page 6985]]

greater spending on the entitlement side of the account.
  It is a very reasonable approach. It doesn't totally bind the hands 
of the authorizing committees but makes it clear that a budget should 
be for the purposes of a budget, which is to discipline the spending of 
the Federal Government, and having this discipline in place is 
appropriate.
  I would like to offer that amendment, hopefully in the near term, so 
we can get it in the queue here.
  At this point, I yield the floor.
  Mr. CONRAD. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Conrad). Without objection, it is so 
ordered.
  Ms. KLOBUCHAR. Mr. President, I rise today in support of the budget 
resolution currently before the Senate. I particularly wanted to speak 
in support of the additional funding that the resolution provides for 
the Veterans' Administration, funding that will help one of the most 
important challenges facing the Nation today.
  That challenge is how do we repay our men and women in uniform who 
have sacrificed for us on the frontlines, on the battlefield, when they 
return home, and how do we ensure they have all the support and 
services they need to resume their lives.
  But before I turn to the VA funding, I want to first speak about the 
current economic situation in America and how this resolution will help 
to even the economic playing field for the people of this country. When 
I would go around, especially in rural America, which I think you 
understand, Mr. President, and start talking about economic issues, I 
would be in a situation where I would think 10 people would come to a 
small cafe and 100 people would show up.
  When the price of gas goes up over $3 a gallon, such as it did last 
summer, people who have a longer way to drive will feel it first. When 
they have two kids they are trying to send to college, and tuition at 
the University of Minnesota goes up 110 percent, they feel it first. 
When their health care premiums go up 60 percent in 7 years, such as 
they have been in our State, middle-class people feel it first. When it 
is their kids who are going to war and their neighbors and their 
cousins and their grandkids, they feel it first in their hearts.
  That is what this is about, at the national level, the economic 
policies that produce record deficits and ever-mounting debt. What was 
a $128 billion Federal budget surplus in 2001 turned into a $258 
billion deficit in 2006. A $5.6 trillion 10-year projected surplus in 
2002 has turned into a $2 trillion projected deficit.
  Federal deficits have gone up by $1.5 trillion, with most of it being 
held by Government and companies in China and India and many of our 
economic competitors. This resolution will begin the effort to restore 
fiscal sanity and responsibility to our Government. It includes a 
strong pay-as-you-go rule that requires that we pay for any new 
mandatory spending or offsets or else get 60 votes to approve it. There 
will be no more spend-as-you-like bills.
  This does not mean there will be no new mandatory spending or tax 
cuts to help working families. In fact, the resolution includes a 
reserve fund for new tax relief measures but only if we find 
appropriate offsets. It means we have to work to implement them in a 
fiscally responsible way.
  The resolution also makes it much harder to push through budget 
reconciliation measures that are now used in the opposite way than they 
were intended, to increase the budget deficit or decrease the budget 
surplus. This resolution signals an end to the spend-as-you-like 
policies that have created our current fiscal problems at the national 
level.
  My colleagues and I have, in the Budget Committee, started reversing 
this trend and putting the interests of middle-class families front and 
center. This budget resolution is a good start.
  I would like to address the veterans provisions in the resolution, 
which I think are also very important to the middle-class families in 
our country.
  In the past 4 years, American military service personnel and their 
families have endured conditions that are unprecedented, including 
repeated deployments. I cannot tell you how many families I speak to 
where their kids have been asked to serve not once in the National 
Guard but to be repeatedly called back, and every time they say 
``yes.''
  One and a half million American service men and women have served in 
Iraq and Afghanistan. These wars are creating a new generation of 
veterans who need their country to stand with them. These are men and 
women who have served our country on the frontline, and when they come 
back to the country, they are too often shunted to the end of the line 
waiting for health care, waiting for education benefits, and now as the 
shocking revelations from Walter Reed have shown us, some have been 
left waiting in the most squalid of conditions.
  I wish to commend you, Mr. President, and members of the Budget 
Committee for recognizing that the President's request for fiscal year 
2008 severely shortchanged the needs of veterans in this country. 
Passage of this resolution, with $3.5 billion added to the President's 
request for a total of $48.1 billion in discretionary veterans spending 
should be our highest priority.
  At a time when we are spending billions on awards of reconstruction 
projects overseas, we can certainly afford this increase in veterans 
funding at home.
  In addition to providing billions more for veterans health care and 
other support programs, this resolution rejects the President's 
apparent belief that now is the time to increase mandatory fees that 
veterans must pay under TRICARE. The President's budget called for an 
increase in TRICARE pharmacy copayments from $8 to $15. It calls for an 
annual enrollment fee based on a veteran's family income. It proposed 
to require veterans to cover their entire copayment for nonservice-
connected disabilities. This budget resolution blocks those outrageous 
proposals.
  This administration has shockingly underestimated the number of 
veterans who would require medical care. To give you an example, in 
fiscal year 2005, the Department of Defense estimated it would have to 
provide care for 23,500 veterans when they came home from Iraq and 
Afghanistan. In reality, Mr. President, more than four times that 
number required help.
  Last year, the Pentagon underestimated the number of veterans who 
would require care by 87,000. That this administration underestimated 
and underfunded veterans programs should not come as a surprise. Ever 
since the war in Afghanistan and Iraq began, the administration has 
seemed oblivious to the fact that when you send hundreds of thousands 
of solders into battle, you must have a plan to provide for the 
hundreds of thousands of veterans whom you are creating and Active-Duty 
soldiers who will require substantial support when they return home.
  With this additional discretionary spending, we can begin to 
seriously address the repair of traumatic brain injury and 
polytraumatic injuries suffered by the soldiers in Iraq and Afghanistan 
that have so tragically become the signature injuries of this war.
  We can enhance and expand the recovery and rehabilitation centers for 
the 30,000 wounded Iraq and Afghanistan veterans. We can provide 
increased counseling and create greater awareness of the tens of 
thousands of veterans suffering from post-traumatic stress disorder and 
other mental illnesses. According to a Veterans Health Administration 
report, roughly one-third of Iraq and Afghanistan veterans who sought 
care through the VA have been diagnosed with potential symptoms of 
post-traumatic stress, drug abuse or other mental disorders.
  On an issue that is particularly important to Minnesotans, we can 
increase benefits for National Guard

[[Page 6986]]

members and Reservists who are being asked to play the role of Active-
Duty soldiers on the battlefield but then are treated as second-class 
veterans when they return home.
  This past weekend, I traveled to Iraq with three of my colleagues to 
visit our troops in the field and assess the situation on the ground. I 
was fortunate to have the opportunity to thank the brave men and women 
from my State for their sacrifice. The sacrifices our troops are making 
and the risks they are taking was driven home in a poignant and 
powerful moment at the Baghdad airport, when I stood with nine Duluth 
firefighters who are members of Minnesota's National Guard.
  They were there to show their respect for fallen soldiers. They stood 
there and saluted as six caskets were loaded onto an airplane, all of 
them draped in the American flag. I watched these men stand stoically 
but sadly, and then I saw them return to their task at hand.
  With all the political noise in Washington about the war in Iraq, we 
often lose touch with what the perspective is of the men and women on 
the frontline. I went to Iraq to find that perspective. I met marines 
in Fallujah from Roseville and Rochester. I met a Navy Seabee from 
Appleton, MN. I met Army soldiers assigned to help train Iraqi troops 
from Minneapolis and St. Paul. I met Army Reservists based out of Fort 
Snelling. I met National Guardsmen attached to the fighter wing in 
Duluth. These soldiers and National Guard members I met in Kuwait, 
Baghdad, and Fallujah, they did not ask about the resolution the Senate 
was debating, they did not ask me about what my plan was to bring them 
home to their families; they did not ask about the shortages in 
equipment and body armor; they did not ask about repeated tour 
extensions. They only asked about two things: First, they wanted to 
know what the results were of the Minnesota High School Hockey 
Tournament.
  But they asked one more thing. They asked that we take care of them 
when they return home. I pledged to them, and I bring that point to the 
Senate floor today, that their sacrifice will not be overlooked, that 
their service will not be forgotten, and their debt will be repaid.
  The VA funding in this resolution is the first in a series of 
payments toward the debt we owe these soldiers on the frontlines who 
have sacrificed for us. I have always believed when we ask our young 
men and women to fight and to make the ultimate sacrifice for our 
Nation, we make a promise we are going to give them the resources they 
need.
  This has always been a country that believed in patriotism, and 
patriotism means wrapping our arms around those who have served us.
  In his second inaugural address, President Lincoln reminded the 
American people that in war, we must strive to finish the work we are 
in, to bind up the Nation's wounds, to care for him who shall have 
borne the battle and for his widow and his orphan.
  Today, Americans are again called to bind up our Nation's wounds and 
to care for those who have borne the battle, as well as their families 
who have shouldered their own sacrifice.
  Let us live up to this solemn obligation to bring our troops home 
safely and to honor our returning soldiers and their families by giving 
them the care and the benefits they have earned.
  That is why I support the veterans funding included in this budget 
resolution.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Menendez). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I ask unanimous consent that the time from 12:30 to 1:30 
today be for debate only, equally divided and controlled between 
Senators Schumer and Brownback--this is the Humphrey-Hawkins report 
that is part of any consideration of a budget resolution; that at 1:30, 
Senator Grassley be recognized to call up two amendments, one relating 
to payment limits and one relating to the Smithsonian institution; that 
there be a total of 60 minutes for debate with respect to the two 
Grassley amendments, with the time controlled 30 minutes for Senator 
Grassley and 30 minutes for the chairman of the Budget Committee; that 
no amendments be in order to either amendment during this debate time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I thank my colleagues for their continuing cooperation.
  On the Collins amendment, we could accept that amendment at this 
point.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I can't speak for Senator Collins. I don't know if she 
needs a vote or not.
  Mr. CONRAD. I asked her the direct question if she would require a 
rollcall vote. She said she did not.
  Mr. GREGG. Then let's proceed.
  Mr. CONRAD. Mr. President, I ask unanimous consent, on the Collins 
amendment creating a deficit-neutral reserve fund for a teacher 
classroom expense deduction, that that amendment be considered on a 
voice vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to amendment No. 480.
  The amendment (No. 480) was agreed to.
  Mr. GREGG. 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 12:30 hour having arrived, this is time controlled by 
Senators Schumer and Brownback.
  Mr. GREGG. Mr. President, we hope to also, later this afternoon, 
after Senator Grassley has proceeded with his two amendments, proceed 
potentially to amendments from the other side of the aisle relative to 
SCHIP and from our side of the aisle relative to SCHIP and then an 
amendment in response to the amendment of the Senator from Montana, the 
chairman of the Finance Committee. That would be the sequence I hope we 
can get to later today. Those are all important amendments. We would 
like to get them done. It would be constructive.
  Mr. CONRAD. The Senator is correct. That is the intention. After the 
amendments of Senator Grassley are discussed and debated, we would then 
be able to turn to a discussion of SCHIP with both sides participating, 
Senator Kyl thereafter to be recognized to offer an alternative to the 
amendment offered by the Senator from Montana.
  We await the Senators whose time has been reserved. I suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SCHUMER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SCHUMER. Mr. President, I rise to speak as chairman of the Joint 
Economic Committee in terms of our Humphrey-Hawkins budget debate time.
  Today, we are going to begin putting the Nation's fiscal house back 
in order and to get our economic policy priorities straight. I salute 
the chairman of the Budget Committee, the indefatigable Kent Conrad, 
for the great job he has done over the years in trying to get our 
country back on the right fiscal track.
  For the last 6 years, we have been governed by a shallow economic 
strategy, guided by deep and indiscriminate tax cuts. The strategy has 
produced burgeoning deficits, mediocre economic performance, and a 
serious global trade imbalance. My colleagues and I on this side of the 
aisle have a different policy vision. We believe the middle class is 
the backbone of the country and that when we pursue policies to help 
the middle class feel confident about their economic future, we produce 
a strong economy, capable of meeting just about any challenge.
  We have not had those kinds of policies or that kind of economy over 
the past 6 years. The economy went

[[Page 6987]]

through the most prolonged jobs slump since the 1930s, as it struggled 
to recover from the 2001 recession. Then, while the economy was 
growing, it was not producing enough jobs. In the summer of 2003, job 
creation began to turn upward again but not as rapidly as we were used 
to in past economic recoveries. Something was still missing--growth in 
real wages.
  In the past, increased productivity meant real wages increased. In 
recent years, American workers have continued to be remarkably 
productive. However, while our output per hour grew 18 percent from 
2001 through 2006, after adjusting for inflation, workers' pay and 
benefits grew only by half as much--8.7 percent. That is serious stuff. 
When output goes up and workers only retain less than half of it, 
something is the matter.
  Even that modest growth in compensation came much more from benefits 
than from wages. It is not that employers were becoming more generous 
in providing benefits. To the contrary, benefit costs have been 
increasing because health care insurance costs are rising, and 
employers have had to make contributions to restore the solvency of 
their pension plans. Those higher benefit costs squeezed take-home pay, 
but workers have not been getting more generous benefits in return. 
They are shouldering more of the burden for their health insurance, and 
their pensions remain in jeopardy.
  So where have the benefits from economic growth been going? They have 
been going to profits and salaries and bonuses of top executives. 
Profits as a share of national income are at an alltime high, and 
incomes at the very top of the economic scale have been soaring. At the 
same time, middle-class families and families striving to get into the 
middle class have been struggling to get ahead.
  I wish I could say businesses have been investing their profits to 
make the economy grow, but another remarkable feature of the current 
economic recovery is how slowly business investment is growing relative 
to profits. Business profits have been flush, yes, but business 
investment spending has been weak. There hasn't been any real trickle 
down from the President's huge tax cuts to the rest of the economy. We 
had a small growth spurt for a couple of years, but the most recent 
news paints a picture of an economy that is growing at a pace below its 
long-term sustainable potential.
  The main results of the President's tax cuts have been, A, larger 
budget deficits, and B, reduced national savings. With less of our own 
savings, we are borrowing more from the rest of the world to support 
our current standard of living. The record current account deficit last 
year--the amount we had to borrow from the rest of the world to finance 
our trade deficit--was equal to a stunning 6.5 percent of the entire 
GDP; 6.5 percent of the GDP goes to financing our trade deficit. We are 
borrowing more than ever from the rest of the world. Those debts will 
be paid back with interest from the income of our children. The Federal 
Government is increasingly reliant on the rest of the world to buy our 
public debt, and who knows what kind of financial crisis would ensue if 
the rest of the world decided they no longer wanted to hold such vast 
quantities of U.S. debt. Even if they don't, the idea that we are 
saddling our children to repay this debt is not fair to them and not 
good for the future of America.
  To conclude, it is no wonder that middle-class families do not give 
President Bush much credit for the economy. They are paying more for 
gas and utility bills. Their health insurance and prescription drug 
costs are rising much faster than their pay, and college tuition costs 
are through the roof. They see good manufacturing jobs disappearing and 
a wave of new competition from economies such as China and India. They 
are also less likely to support expanded trade because they sense that 
the Government is not on their side when it negotiates trade 
agreements, and they see that some of our largest trading partners 
regularly flout the rules of free trade. They see a Federal Government 
that doesn't pay its bills and is building up foreign debt that will be 
a burden on our children and our grandchildren.
  I commend Senator Conrad for crafting a budget resolution that gets 
us started on the road to recovery from these misguided policies. There 
is much work to do, but we are off to a good start with this budget 
resolution.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. BROWNBACK. Mr. President, I thank my colleagues for having this 
discussion on the budget.
  I am ranking member on the Joint Economic Committee. I wish to 
discuss some of the things Senator Schumer was talking about on 
economic performance. What I would like to do in making this 
presentation--I will speak for 10 minutes now and 20 minutes later--is 
to talk first about what has taken place in the economy recently and 
then to talk about human capital development that is important for us 
to develop more and into the future.
  I think we have a bit of a different presentation on the factual 
setting of what has happened as a result of the tax cuts. I believe 
there would be agreement that if the economy has not substantially 
performed as well as some may suggest, as the Senator from New York 
suggested, then the answer is certainly not a big tax increase. That 
would clearly not be the case if what we want to do is stimulate 
economic growth. I believe there would be a broad basis of support and 
a realization of that from economists and people around the world. If 
your economy is not performing well, the answer is certainly not to put 
on a trillion-dollar tax increase to try to stimulate that economy to 
perform better. That would be clearly the wrong answer. Yet we are 
finding that in this budget.
  I am here to discuss what has taken place in the economy. One of the 
key questions the Senate will address during this debate is what 
procedural rules to put in place to help instill budgetary discipline 
on this institution. Unfortunately, those proposed fiscal discipline 
measures which appear in this budget amount to a little more than a 
guaranteed tax increase for the American public on the magnitude of 
$900 billion to $1 trillion.
  As my colleague from New Hampshire has noted, it is the largest tax 
hike ever on American workers and their families--the largest ever. 
That certainly would not be the prescription I would hear from most 
economists as to how to get the economy performing better, to put on a 
$1 trillion tax hike.
  As part of the majority's rhetoric, we will hear much talk about how 
the fiscal policies--most notably the pro-growth tax policies--of the 
past 6 years have not benefitted everybody in this society. To 
substantiate that assertion, one can only rely on bits and pieces of 
data and not the full view and the big picture of what has happened in 
the economy, which is what I would like to cover, and cover now, and 
cover with charts, to let people see what the facts are and draw their 
own conclusions.
  It is undeniable our Nation was heading into recession during the 
year 2000, the last year of President Clinton's administration. I was 
in the Senate, and one could certainly see that in the economic data. 
The dot-com bubble was bursting; economic growth turned negative in the 
third quarter of 2000. The unemployment rate bottomed out in April of 
2000 and began its rise. In the period from January 2001 to August 
2001--the first year of the Bush administration--only 1 month 
registered positive job growth. In that period, 700,000 jobs--nearly 
three-quarters of a million--were lost.
  Then came the horrors of 9/11, and the Nation's economy tumbled 
further. It was like hitting a brick wall and falling. From September 
to December more than a million jobs were lost. We all remember the 
trauma to us as a country, and the trauma to the economy at that time.
  I have a number of charts I will present today, and I hope they will 
put some perspective on our debate. We can argue about the degree to 
which pro-growth and pro-job tax relief enacted in 2003 caused the 
economic turnaround. I think that is a legitimate debate. I would note, 
however, that recent economic conditions display a

[[Page 6988]]

striking contrast to the conditions that prevailed prior to enactment 
of pro-growth tax relief under the Jobs and Growth Tax Relief 
Reconciliation Act of 2003 that was passed in May of 2003.
  Consider these charts and the data behind them, and then draw your 
own conclusion.
  Let's look at this chart on economic growth since 2000: inflation-
adjusted annualized GDP growth. You can see where we were prior to and 
then in 2000 and 2001 with negative economic growth rates taking place. 
You can see anemic growth rates taking place afterwards. You can see 
what took place: tax relief enacted in May of 2003 and the strong 
spike, continuous spike in growth that took place.
  Since the enactment of tax relief in 2003, annualized growth in the 
inflation-adjusted GDP, our gross domestic product--that is, the size 
of the pie, the size of the economy in the country--has averaged a 
robust 3.5 percent growth rate. That compares with the relatively tepid 
average of 1.3 percent from the first quarter of 2001 to the second 
quarter of 2003.
  So you look at this period before tax relief: 1.3 percent; you look 
at the period since the tax cut enactment: a 3.5-percent average growth 
rate. I would much rather have a 3.5-percent growth rate than a 1.3-
percent growth rate.
  What about investment? That is a key part of our growth, to make 
productivity grow, to make wages grow. Business investment is a key 
component of economic growth.
  Since the enactment of tax relief in 2003, growth in real business 
fixed investment has averaged 5.7 percent. With tax relief enacted. You 
can see where we were beforehand, negative investment; afterwards, 
positive investment at a nice rate, 5.7 percent.
  Prior to the enactment of tax relief, from the first quarter of 2001 
through the second quarter of 2003, business investment declined at an 
average rate of 5.6 percent; but it increased 5.7 percent on average 
afterwards--a direct mirror opposite with the investment and tax cuts 
that took place.
  Let's talk about unemployment rates. That is certainly a key. We want 
to have people employed in this economy, and employed at an aggressive 
growth rate. The unemployment rate has declined from a peak of 6.3 
percent in June of 2003, when tax relief was implemented, to 4.5 
percent in February of 2007.
  So you can see again, with tax relief enacted, a decline in the 
unemployment rate takes place. At 4.5 percent, the unemployment rate 
stands below the average rate of the 1960s, the 1970s, the 1980s, and 
the 1990s. Where we sit today stands below those average unemployment 
rates.
  Again, tax relief was enacted. We can argue about, did that cause it 
or not, but I think you have to clearly say we have had a nice 
improvement that has taken place in the time period following enactment 
of tax relief.
  What about payroll employment changes since 2000? There have been 42 
months of consecutive gains in payroll employment. Close to 7.6 million 
new payroll jobs have been created during the period since September 
2003--again, that period when we did the tax relief.
  From June of 2003 through February 2007, payroll employment gains 
have averaged a healthy 169,000 per month. In contrast, 91,000 jobs 
were lost on average in the period between January of 2001 and May of 
2003.
  Again, you get this mirror situation where you were losing jobs prior 
to this time period, and you are growing them at a nice, strong, clip 
and engagement rate which is taking place after the enactment of tax 
relief. Good, positive rates have taken place.
  With that, Mr. President, I believe in our time agreement I had until 
12:50, and then I have 20 minutes at a later point. I will go through a 
series of additional charts later, but my colleague from Pennsylvania, 
I believe, was going to speak. I do not know if the manager would like 
to take the time of Senator Casey at this point in time.
  Mr. President, I ask the manager of the bill if her side desires to 
have the floor at this point in time.
  Ms. KLOBUCHAR. Yes, we would like to do that. We are awaiting the 
arrival of Senator Casey. I thank the Senator.
  Mr. BROWNBACK. Mr. President, if I could, I will yield to Senator 
Casey as soon as he arrives on the Senate floor, if that would be 
acceptable to the manager?
  Ms. KLOBUCHAR. That would be acceptable. He is on his way.
  Mr. BROWNBACK. I thank the Senator.
  Mr. President, let's look at these numbers, the Institute for Supply 
Management activity indexes. This indicates whether expansion or 
contraction is taking place. The Institute for Supply Management 
indexes of manufacturing and non-manufacturing activities signals 
expansion or contraction taking place in the economy. When it is above 
50, there is expansion. When it is below 50, there is contraction. 
This, again, displays robust expansion following tax relief. In 
contrast, it displays contraction or tepid growth prior to tax relief.
  So you can see, again, the tax relief point that took place, as shown 
on this chart. You had some growth. You had some decline taking place 
at this 50-percent point. Where it is below that 50-percent point, you 
have contraction. Where it is above that 50-percent point, you have 
expansion. After tax relief, you have a strong expansion rate, which is 
taking place in these numbers.
  While correlations do not imply causality, there has been a clear and 
striking turnaround in a wide array of economic indicators from signals 
of contraction or tepid growth prior to enactment of the pro-growth tax 
relief in 2003 to signals of strong expansion and robust growth 
following tax relief taking place.
  One final point. A key to increases in incomes, wages, and living 
standards is growth in productivity, as this chart clearly shows.
  Again, we have a period where there is productivity growth and real 
hourly compensation going up. Pro-growth tax relief, such as that 
enacted in 2003, lays a solid foundation for continued strong growth in 
the productivity of American workers. That growth is ultimately what 
boosts the wages, salaries, benefits, and living standards of American 
workers and their families--built on a solid economic basis. Raising 
taxes--raising taxes--as some on the other side are suggesting--is not 
a productive way to proceed in us increasing real wages, real incomes 
for individuals to stimulate the economy. In fact, the other route is 
the way to go: get the economy growing built on fundamentals and built 
on cutting taxes.
  With that, Mr. President, I know my colleague from Pennsylvania is in 
the Chamber.
  I yield the floor and reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, I thank the Senator for yielding.
  Mr. President, I would like to speak today about the budget we are 
going to be debating and about our economic prospects as we go forward. 
I also want to thank those who have been working so diligently to put 
this budget package together. Senator Schumer has worked, especially as 
the chairman of the Joint Economic Committee, to focus our attention on 
some of the economic realities we face in the weeks ahead.
  The fact is, when we look at the economic data, Wall Street has done 
pretty well over the last 6 years, but the average American, however, 
has not shared in that prosperity.
  Since 2001, median household income is down after inflation. More 
than 5 million more people--a total of 37 million Americans--live in 
poverty today, including 1.3 million more children. So now we have some 
12.9 million children in poverty.
  Long-term unemployment is up 80 percent. Three million manufacturing 
jobs have been lost in that time period, many from my home State of 
Pennsylvania, like in manufacturing States across the country.
  We also have to look beyond the data from where we are now and have 
been in the past. We have to look to the future. We all know we face a 
tremendous challenge when the retirement of the baby boom generation 
begins in

[[Page 6989]]

earnest. The coming retirement of those Americans means the Social 
Security and Medicare obligations we owe them, because of their decades 
of work, are coming due. At the same time, this administration has been 
issuing debt, in my judgment, at an irresponsible and reckless pace--
most of it being purchased by governments across the world and by 
individual countries we are competing against.
  We hear a lot in the context of our energy policy about reducing our 
dependence on foreign oil. There is tremendous agreement about that 
goal. I think in the economic context we can use the same language. It 
is about time the U.S. Government, especially this administration, 
began to get on the road of reducing our dependence on foreign debt. We 
need to have policies that will do that.
  For the last 10 years, prior to coming to Washington as a Senator, I 
was a public official in Pennsylvania--8 as auditor general and 2 as 
treasurer. One of the jobs I had, especially as auditor general, was to 
be one of the so-called issuing officials. We issued debt in State 
government. As part of that, one of my responsibilities, one of my 
basic requirements, by statute, was to certify that Pennsylvania was 
not only staying within its constitutional debt limit but was assuring 
it was not straining its borrowing capacity from an economic or fiscal 
standpoint because doing so would undermine Pennsylvania's debt rating 
and drive up the cost of future borrowing.
  I do not think there is anyone in this administration, or in this 
Congress for that matter, who could certify or would certify the 
Federal Government is not straining its borrowing capacity today, and 
certainly for the last several years. The fact is, our debt is not just 
a piece of paper filed away in some cabinet. It is real. It represents 
a lot of things. It represents, first of all, a dependence upon other 
governments in terms of our foreign debt. It often represents a taking 
away from investments in very important programs for people.
  I say to the Presiding Officer, you understood that in your work in 
the Congress and now in the Senate. You understand those critical 
investments. If you drive up the cost of borrowing, you make it more 
difficult for us to not only borrow money but to invest. All of our 
families will be the losers in that scenario.
  So I think in addition to gaining control of our fiscal house and 
putting our fiscal house in order and beginning to reduce our 
dependence on foreign debt, we must also, at the same time--and I think 
it is obviously related--increase our investment in American families. 
We need to start to do that by keeping our promises to those of our 
families who rely upon good investments by the Federal Government.
  We all know in a global economy--and certainly the newer global 
economy--it is very clear that goods can be moved all over the world. 
We are happy about that. It is amazing what technology and 
transportation have done to bring that about. Money can move in a 
matter of minutes now. We know that. But people, by and large, tend to 
be much more stationary in the sense that they do not move nearly as 
fast as money or goods.
  America, in particular, has been able, over a long period of time, to 
develop our own talent--the talents of our people--and to attract 
talent from all over the world. But the only way we are going to 
maintain that, to maintain our competitive edge, to be able to invest 
in strategies that will work, is to actually focus our attention on the 
skills and the education and the advancement of the American people. In 
order to do that, we have to give the American people the tools they 
need to compete in a global economy.
  We all know if we do that and we meet our obligations and keep our 
promises, we will ensure the global marketplace and trade are conducted 
on a fair basis and that we don't put our workers at an unfair 
disadvantage. But in order to do that, we have to invest. That is why, 
as the Presiding Officer knows from listening to our colleagues in the 
Democratic caucus, and certainly by analyzing the budget that was put 
together by the Budget Committee, especially under the leadership of 
Chairman Kent Conrad from North Dakota, what that budget has done, what 
the proposal does is puts together a budget that makes sense, that 
makes fiscal sense, that begins to reduce our deficit and brings us 
into balance by 2012. In fact, it brings us beyond balance. It gives us 
a $132 billion surplus.
  Also, it realizes that right now we are in a hole because of how we 
have been conducting fiscal business in this town for the last several 
years. It realizes that when you are in a hole, as the old expression 
goes, you should stop digging. It realizes people are our most valuable 
resource. This budget invests in them in so many ways. One good example 
of that, or two actually, is the State Children's Health Insurance 
Program, the so-called SCHIP program, and the Presiding Officer knows 
in the State of New Jersey the benefit that program has had in his 
State and in the State of Pennsylvania and in so many others. We have 
to make sure we get that right, not only to maintain the coverage for 
the millions of children already enrolled and their families and their 
communities and the economy as a whole benefit when they are enrolled, 
so we have to keep them covered, but we also have to meet the larger 
challenge of insuring the 9 million other children who have no health 
insurance at all and won't even begin to be covered under the 
President's budget. That is an important investment this budget 
proposal makes.
  It also increases education funding at the same time by funding No 
Child Left Behind, making sure our families get help with higher 
education and all the rest. This budget makes sure we are making the 
right decisions on Medicare and Medicaid. The Presiding Officer knows 
Medicaid increasingly and overwhelmingly is about making sure that 
older citizens have the opportunity to get quality care in nursing 
homes, and it is also ensuring we are covering poor children and poor 
families.
  This budget does all of this while also being fiscally responsible by 
reducing the size of the deficit and by beginning to lower our debt to 
foreign governments, and making sure we are doing this in the context 
of both reducing debt and deficit, but also making important 
investments. This budget focuses on the right priorities in an economic 
sense, but it also bears in mind that we have obligations. We have 
promises to keep. This budget goes a long way toward making sure we are 
being fiscally responsible and keeping our promises.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Kansas is recognized.
  Mr. BROWNBACK. Mr. President, I appreciate the chance to talk about 
some of these economic issues, and I join my colleagues from Minnesota 
and Pennsylvania in a discussion of these items.
  I note from the discussion of my colleague from Pennsylvania that he 
focuses on human capital, which I absolutely agree with. I have a few 
charts I will cover in a few minutes about an investment in human 
capital I hope we can all agree on, and that is trying to encourage and 
rebuild the family structure in the country. This is something I have 
worked on across the aisle with my colleagues, particularly in the 
District of Columbia when last year I was chairman of the DC 
Appropriations Subcommittee. We were deeply concerned about the lack of 
family formation in the District of Columbia, so it became the key area 
and the initial place to begin to develop human capital being within 
the family structure.
  We are finding in the District of Columbia and in many urban areas in 
particular, and all across the country, but in the District of Columbia 
in total we had 63 percent of our children born out of wedlock. This 
puts a child in a situation where it is more difficult to develop human 
capital. You can develop a child and a child can be raised well in that 
setting, but it becomes much more difficult. I worked with the Mayor at 
that time, Mayor Williams, and I worked with Delegate Eleanor Holmes 
Norton, and we put together a

[[Page 6990]]

program called the Marriage Development Account. If you were at 85 
percent of poverty or below and got married, we would put in a Federal 
dollar, raise two private sector dollars, and you as a couple would put 
in a dollar. We would match this 3 to 1 to encourage the formation of 
married units--a family--around which to build a family.
  This has broad bipartisan support, left and right support this, and I 
am hopeful we can look at ways in reforming welfare programs in 
particular to encourage the formation of families as one of the key and 
vital steps for human capital development and growth. This is something 
we ought to be able to agree on across the aisle. We have agreed 
previously, and I hope we can do that now, because we have to develop 
human capital. We particularly have to do it now, and the best place to 
start is the family and developing the human capital there. Clearly, 
one of the best ways we can break the poverty cycle is forming more 
family units. That shows up in all of the data. It is broadly supported 
in a bipartisan fashion and it is something where we need to change the 
welfare policies.
  I wish to also look at this idea that tax policies since 2003 have 
been more beneficial to upper income households and less beneficial to 
lower income households in the United States. Here again, I have a 
series of charts. I will first start with conditions under the Clinton 
administration and look at impacts of Federal policies as far as a 
share of the overall economy. This is an instructive chart when you 
look at income, after-tax income, distribution data during the Clinton 
years. Let's consider the distribution. The data for all of these 
charts comes from CBO's December 2006 historical effective Federal tax 
rates. The data are from 1979 to 2004. First, it is interesting to look 
at what happened to after-tax income between 1992 and 2000. These would 
be the Clinton administration years. The only group of households that 
saw a share of the Nation's after-tax income increase was the top 20 
percent. Their share during the 1992 to the 2000 time period--you see 
these arrows all going down: the lowest 20 percent, the second lowest 
20 percent, middle, second highest, everyone is down, down, down; up is 
the top 20 percent. Their share of after-tax income went up during the 
Clinton administration years and their tax policy.
  Now let's postulate the same question--because the charge is often 
made that the tax cuts have only benefitted--the wealthy in this 
country. I have seen the charts repeatedly, and it is important to 
discuss what the data have shown. What happened for 2000 through 2004 
is the opposite of what happened during the Clinton years as far as who 
grew what share of after-tax income that happened during 1992 to 2004. 
It went the opposite. The only group that didn't see a share of after-
tax income increase was the top 20 percent. Everybody else saw their 
share of the after-tax income grow: the lowest 20 percent, the second 
lowest 20 percent, middle, the second highest. The only people who went 
down were the top 20 percent.
  It is important to point out, when we have talked about these things 
in generic numbers and phrases--about only the upper income households 
having benefitted--but we ought to look at the actual data we have 
available to us.
  Again, I will go back to what happened in 1992 and remind people 
these are the Clinton years. The lower income all saw their share of 
after-tax income decrease; the upper income group saw theirs go up. In 
2000 to 2004, we saw a reversal of those arrows under these tax 
policies that are being so castigated as being against lower income. 
The share of after-tax income received by the top 1 percent of 
households grew 42 percent, from 10.9 percent in 1992 to a peak of 15.5 
percent at the end of the Clinton years. Again, we are talking about 
the Clinton years, the share of after-tax income, the top 1 percent of 
all households, up 42 percent during the Clinton era and the Clinton 
years. That is what took place.
  What happened from 2000 to 2004 is after-tax income received in the 
top 1 percent of households actually declined. This declined at the end 
of the first Bush term. They do not support the assertion that there 
has been a massive shift of income to the highest income households 
since 2000. The data don't support it. The critics of the pro-growth 
tax policies enacted after 2000 assert that the highest income 
households have disproportionately benefitted. That simply is not 
supported by the data.
  Let's look at the top 10 percent of households paying their share of 
income taxes. Since 1984, the top 10 percent of households have paid an 
increasing majority of all Federal income taxes. In 2004, the final 
year of data available in CBO's report, the share of Federal income 
taxes paid by the top 10 percent of households reached a high of 70.8 
percent--70.8 percent. So you can see it was continuing to grow.
  It is worth noting that in 2004, the bottom 40 percent of households 
paid a negative share of Federal income taxes. I want to show that 
chart. That is, they received resources from the income tax system. In 
other words, they were paid by the income tax system--not paid into. 
They received from the income tax system. Since 2000, the ``relative 
Federal income tax burden,'' or the share of all Federal income taxes 
paid compared to the group's share of all income, has declined for all 
income groups except the top 20 percent--except the top 20 percent. So 
again we have these tax lines going in a different direction.
  Striking is the fact that the relative Federal income tax burden of 
the top 1 percent of households declined for 1992 to 2000 during the 
Clinton administration. So again we have this comparison of Clinton 
policies to Bush policies. This is the relative Federal income tax 
burden of the top 1 percent of family households income. That declined, 
the percentage, their share that they paid of the overall tax burden, 
and it went up in 2000 and 2004 in the Bush years. In 2004 it not only 
increased but it was higher than in 1992 when President Clinton took 
office.
  The CBO's report also reveals that for the time period from 2000 to 
2004, the effective total Federal tax rate reduction has been the 
highest on a percentage basis for the lowest income groups. In other 
words, you have the most decline as far as the Federal tax rates for 
the lowest income groups. I think that is as it should be. We shouldn't 
be critical of the tax policy saying it is harming low income and 
benefitting disproportionately high income when the data don't support 
that.
  The same is true if you look at the income tax rate reductions. 
Again, the lowest 40 percent of households have a negative effective 
income tax rate and a negative income tax share. In other words, they 
were paid back by the Federal income tax system.
  Clearly the tax policies enacted since 2000 have benefitted all 
income groups and have not resulted in a shift in income shares in 
favor of high-income households or in tax burdens toward lower income 
households. Indeed, the data say the opposite. The top 10 percent of 
households are paying a bigger share of total Federal taxes and total 
Federal income taxes than in any prior time covered by the report.
  I appreciate my colleagues' indulgence, but the falsehoods about tax 
cuts and a bigger share of the pie for the wealthy need to be 
addressed. I think it is important that we do address these.
  I also note in yesterday morning's Wall Street Journal in discussing 
this budget, it says the Senate Budget Committee chairman is pulling 
off a neat magic trick--and here I am quoting the Wall Street Journal:

     . . . of claiming his budget includes ``no tax increase,'' 
     even as it anticipates repeal of the Bush tax cuts after 
     2010.

  These are the same tax cuts I have been discussing, the tax cuts that 
have helped stimulate growth, that have helped stimulate employment, 
that have helped reduce the tax burden on the lower income people in 
the United States.
  The Wall Street Journal goes on to say:

       How does he pull that rabbit out of his hat? By positing 
     what amounts to a giant asterisk where the tax increase is 
     supposed to go and hoping no one will notice.


[[Page 6991]]


  In other words, the taxes go up after 2010, since the tax reductions 
put into place in the Bush tax cuts are not continued.
  The article continues that the chairman has:

     . . . no intention of extending the Bush tax cuts, which he 
     voted against and whose repeal would slap the economy in 2011 
     with the largest tax increase in U.S. history. But Senate 
     Democrats don't want anyone to know this, at least not before 
     the 2008 election. . . . All of this is really sleight-of-
     hand to disguise that Democrats are intent on repealing the 
     Bush tax cuts.

  What would the impact of that be? People talk about it in generic 
terms, but let's unpack it a little bit. The Wall Street Journal 
reports that:

       This would raise the tax on capital gains to 20 percent 
     from 15 percent, more than double the tax rate on dividends 
     to 39.6 percent from 15 percent, and sharply increase 
     marginal tax rates at all levels of income.

  This will hurt growth, this will hurt investment, this will hurt job 
creation, and this will hurt wages. This backdoor tax increase sends a 
bad signal to the economy. That bad news, if allowed to stand, will be 
bad news for the economy throughout for the working men and women of 
this country. This isn't fiscal responsibility; it is bad tax policy 
that hurts people.
  This budget will only increase the burden on families. We need to 
step back and be willing to get control of entitlement spending and 
across-the-board spending. We need policies that encourage the 
formation of families, and support the preservation of traditional 
families, as a way of developing human capital.
  We need to help those who need a hand, but we are quickly reaching a 
point where we are asking too few people to carry too much of a burden 
on the tax rates. We are on the verge of killing incentive and 
initiative.
  We need to get serious about reforming a tax system that even the 
most educated Americans cannot comprehend. We need to put in place an 
alternative flat tax and let people choose a tax system. This current 
tax system is unintelligible, burdensome, manipulative, and it needs to 
be changed. We are in desperate need of a tax system that is simple, 
efficient, and globally competitive. We need to just have a fair 
system. Our tax system needs to treat everyone the same, not heap 
dizzying layers of regulation on top of regulation or carve out 
loopholes for the privileged who have the ability to hire lobbyists.
  Despite the chairman's call for simplifying the Tax Code, there is 
nothing in his budget that promotes greater simplicity. Despite the 
chairman and his colleagues in the majority being fully aware of the 
need for entitlement reform, they choose to totally ignore our looming 
fiscal problem. They choose, in this budget, to completely ignore the 
urgent need to address entitlement reform, especially as the first baby 
boomers begin retiring next year. This budget does not contain any 
proposals that, on net, would reduce mandatory spending or the debt. 
The majority, evidently, wishes to simply wait for a fiscal train wreck 
to happen.
  If we sit on our hands and let this budget and its ``magic act'' 
budget enforcement provisions take effect, all we will do is impose the 
largest tax increase in American history at the worst possible time--
when the fiscal train wreck begins as the baby boomers enter their 
golden years of retirement. That is not a budget; that is recipe for 
disaster.
  I look forward to further debate on this budget, and I really hope we 
can start working together on it in a bipartisan fashion to address the 
clear problems we have. We can do that, and we need to do it. Now is 
the time. The sooner we act, the more options we have.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized.
  Ms. KLOBUCHAR. Mr. President, I am here to speak on behalf of the 
budget resolution and to share some statistics about what has been 
going on in this country for middle-class families. I have to tell you 
this before I show the statistics. Having met with people all over our 
State and having sat in living rooms and had meetings with people, they 
could not really understand why their kids who just graduated from 
college could not buy a house, and they could not understand why they 
were struggling to send their kids to college and why they were 
struggling to go on vacations because of the high gas prices.
  While having meetings with these people, lightbulbs would go on in 
their heads about these things. That is what is going on with a lot of 
people in this country. That is what the statistics show. That is why 
it is so important to have a budget that gets these families and kids 
on a strong fiscal track. At least this budget brings us back to the 
pay-as-you-go rule. At a time when the wealthiest have been getting 
wealthier and wealthier, at least this budget says how can we help the 
middle class going forward.
  Let's look at the statistics.
  First, look at the productivity. Typically, real compensation for 
workers--the wages and benefits--tends to track productivity growth. 
That is what it did in the late 1990s. This hasn't really happened 
since the 2001 recession. Our productivity growth, as you can see, has 
been strong, as the blue line on this chart represents, but 
compensation growth has been relatively weak. That is the red line 
there.
  Recent gains in real compensation have not significantly narrowed the 
gap that has been opened. Workers have a long way to go to catch up 
with the gaps they have missed out on so far in this recovery. So it is 
because of their work that we are seeing this productivity gain, but 
they are not getting their piece of the pie. That is what we see in the 
increasing gap every year.
  We have to look at the next chart reflecting real earnings growth. 
This looks complicated at first, but it makes sense when you look at 
what the lines represent. The bluish-purplish bars are for the kinds of 
real earnings growth we saw in the late 1990s. If we focus on usual 
weekly earnings of full-time workers, we see only modest gains--and 
that is the red here--in the distribution from 2000 to 2006. This 
contrasts sharply with the gains you see in the late 1990s, which is 
the blue part of the graph, when productivity first accelerated.
  I note this marked difference between what you saw from 1996 to 2000 
and from 2000 to 2006. This doesn't even include bonuses of highly paid 
executives or capital gains and other nonwage income earned at the very 
top of the income distribution. This chart shows how real earnings 
growth has been weaker and more unequal than in the late 1990s. For me, 
when I think about those people in the living rooms in Brooklyn Park, 
MN, as they talk about how they could not afford health care, this is 
what it is about, because their real earnings growth has been much 
weaker and it has been harder for them to afford these important parts 
of their expenditures, such as health care, gas, and those things. 
Those prices have gone up.
  Now, at the same time we have this going on, we have this: CEO 
compensation, right now, is 350 times average work pay. I think the 
average person has to work an entire year to make up for what so many 
of our top CEOs make in the first day of the year. In 1980, the average 
CEO made about 50 times as much as the average worker. In 2004, that 
ratio was nearly 350. The average CEO made 350 times the pay of the 
average worker.
  So you can see what has been going on with the share of wealth in 
this country and why we have these people all over the country who are 
working hard and who are the engine of the economy--the middle class--
and it is harder and harder for them to keep up and to get by. That is 
what we are trying to do in this budget resolution--start the process 
of getting the country back on track so that we respect the people 
doing the work, the middle class, the hard-working men and women of 
this country.
  The last thing I wish to share with you is about the distribution of 
wealth in this country. This is a similar way of looking at the CEO 
distribution issue. In 2004, the wealthiest 1 percent of households had 
more net worth than the bottom 90 percent of households.

[[Page 6992]]

So here you have the top 1 percent. This is their portion of the pie, 
33 percent. Here is the bottom 90 percent, the middle class people; 9 
out of 10 people are here, and their wealth is actually less than this 
top 1 percent of the people in this country. Even when you go to the 
next 9 percent, which is about 36 percent of the wealth, when you 
include them until you have the top 10 percent, the wealthiest 10 
percent of people in this country, they have more than two-thirds of 
the total wealth.
  So statistics are important, but what really matters is the people in 
this country. When you look at the statistics, you understand why, for 
a student from the University of Minnesota, Jay Boler, it was hard to 
get by day after day and to afford college tuition when it had gone up 
110 percent at 4-year colleges in the last 2 years. He is not in that 
top 1 percent. That is not where he is. You can understand why Jeanne 
O'Hearn, who owns a drycleaner in Robbinsdale, MN, is trying to get by 
with few employees. It is hard to afford health care for her employees. 
You can understand because she is not in that top 1 percent. You can 
understand why a mom in Mahnomen, MN, whose child had been called back 
to Iraq for the third time, cannot sleep at night and why she is upset 
because he is probably not going to get the benefits he needs when he 
gets back. She is not in that top 1 percent.
  What this budget resolution does is at least acknowledge the fiscal 
issues of this country by putting back pay-as-you-go, because this 
interest doesn't hurt the top 1 percent, but it hurts everybody else in 
this country. It also says we are going to start helping the people who 
have helped us; that is, the middle class.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I rise to offer an amendment on the 
agricultural portion of the bill to provide payment limitations on 
payment to farmers. The American people recognize the importance of 
family farmers in our Nation and the need to provide an adequate safety 
net for family farmers. That is what a farm program is all about.
  In recent years, however, assistance to farmers has come under 
increased scrutiny, and it should. Take a look at some of the headlines 
that ran last year on the front page of the Washington Post. The first 
headline reads:

       Farm program pays $1.3 billion to people who don't farm.

  That is going to make any taxpayer, rural or urban, mad because the 
general assumption is that farm programs support family farmers and do 
not go to people who don't farm.
  A second headline reads:

       Federal subsidies turn farms into big business.

  In other words, the Federal taxpayers are paying to help big farmers 
get yet bigger.
  The article goes on to say:

       The shift in subsidies to wealthier farmers is helping to 
     fuel this consolidation of farmland. The largest farm's share 
     of agriculture production has climbed from 32 percent to 45 
     percent, while the number of small- and medium-size farms has 
     tumbled from 42 percent to 27 percent.

  These were just a couple of headlines from a series of articles from 
the Washington Post on waste and abuse in farm program spending.
  Critics of farm payments have argued that the largest corporate farms 
reap most of the benefits of these payments. What is more, farm 
payments that were originally designed to benefit small- and medium-
size family farms have contributed to their own demise. Unlimited farm 
payments have placed upward pressure on land prices and have 
contributed to overproduction and lower commodity prices driving many 
family farmers off the farm.
  The law creates a system that is out of balance. This is pointed out 
in the chart I have, which shows that we have a system where 10 percent 
of the farmers--10 percent of the farmers--maybe I should say just 10 
percent of the farmers get 72 percent of the benefits, and the top 1 
percent of the biggest farmers get almost 30 percent of the benefits. I 
believe we need to correct our course and modify the farm programs 
before those programs cause further concentration and consolidation in 
agriculture and lose the support of urban taxpayers because without 
their support, we could not have a farm safety net.
  Today, most commodities are valued off demand. Markets dictate 
profitability. When farmers overproduce by planning for, according to 
the farm program, whether its a loan or the LDP Program or whatever it 
might be, then markets are not functioning.
  I mentioned earlier that the Federal farm programs are influencing 
land prices across the country. Iowa land is now selling for between 
$4,000 and $6,000 an acre in counties near my home of New Hartford, IA.
  When I was chairman of the Senate Finance Committee, before the last 
election, I was also a member of the Budget Committee and the 
Agriculture Committee. I have used those committee positions as 
opportunities to file amendments that I believe will help revitalize 
the farm economy for young people across this country.
  My amendment today will put a hard cap on farm payments at $250,000. 
The average taxpayer listening to me might say: What planet did you 
come from--$250,000 is an awful lot of support. But I am saying in 
comparison to limits that are now in the bill of $360,000 and legal 
subterfuge to get around the law to allow some farmers to get millions 
of dollars. So this is a $250,000 hard cap--still too high for some 
family farmers but a compromise that has gotten through this body in 
the past and I am counting on getting through this time.
  No less important, this will close those legal subterfuges or 
loopholes--whatever you want to call them--that have allowed large 
operations to evade even the $360,000 limit and, as a result, receive 
benefits many times larger.
  To remind everybody, I voted against the conference report of the 
present farm bill in the year 2002, and this was one of my many 
reasons, because it did not have this hard cap in there, even though it 
passed the Senate. I have been fighting to reduce large-scale subsidies 
for over 30 years. If one looks at the Congressional Record in the 
1970s, it will show I was leading in that area. More recently, I worked 
with the good Senator from North Dakota, Mr. Dorgan, on a similar 
measure in the 2002 farm bill, and it passed with bipartisan support of 
66 to 31. That amendment, as I said, was taken out in conference. So I 
urge my colleagues to check their past votes on this issue during the 
last farm bill debate.
  One section that was added in the farm bill was section 1605, which 
set up a Commission on the Application of Payment Limitations for 
Agriculture. The purpose of the Commission, after the failure of our 
legislation in 2002 in the farm bill because it didn't come out of 
conference, was to set up this Commission. The purpose of the 
Commission was to study this issue. The Commission also said that the 
2007 farm bill is the time for these reforms to be made as part of the 
change to permanent law. So that is why it is legitimate to have it as 
part of this budget debate.
  Congress enacted the Agricultural Reconciliation Act of 1987, called 
the Farm Program Integrity Act, to establish eligibility conditions for 
recipients and to ensure that only entities engaged actively in 
agriculture receive farm payments. To be considered actively engaged in 
farming, that act required an individual or entity to provide a 
significant contribution of inputs--capital, land, equipment--as well 
as significant contributions of services of personal labor or active 
management to the farming operation. But people have been able to find 
loopholes around this act, facilitating huge payments that our hard cap 
is meant to overcome.
  I held a hearing through the Finance Committee on a Government 
Accountability Office report that was released

[[Page 6993]]

about 3 years ago, April 24, 2004. The GAO report recommended that 
measurable standards and clarified regulations would better assure that 
people who receive payments are, in fact, engaged in farming.
  Of the $17 billion in payments the USDA distributed to recipients in 
2001, $5.9 billion went to just 149,000 entities. Corporations and 
general partnerships represented 39 and 26 percent of these entities 
respectively.
  Here is an example from the March 2005 Washington Post article of 
someone who qualified for payments. I quote from the newspaper:

       If the purpose of farm subsidies is to make family farms 
     viable, it's hard to see why payments of more than $400,000 a 
     piece should have gone to 54 deceased farmers between 1995 
     and 2003, or why residents in Chicago should have collected 
     $24 million in farm support over that period.

  This type of arrangement, and others such as that, raises questions 
about the interpretation and enforcement of the 1987 act's requirements 
that each partner be actively engaged in farming. This is why I wrote 
the Government Accountability Office to conduct that study I referred 
to on which we held a hearing in the Finance Committee. I encourage 
Members of this body to take a look at that report as well.
  During past markups of the Senate Budget Committee, I was able, with 
the help of the current chairman, Mr. Conrad, to include a sense-of-
the-Senate amendment expressing support for stronger farm payment 
limits. The proposed amendment would cap Farm Commodity Program 
payments at $250,000 a year per person during any one year. This would 
encompass direct payments, countercyclical payments, loan deficiency 
payments, and marketing loan gains. Gains from commodity certificates 
will be counted toward limitations, closing another very abusive 
loophole, particularly those farming in cotton and rice.
  By adopting this amendment, it could save the taxpayers over $500 
million in savings over a 5-year period of time and more than $1 
billion over 10 years. With these savings, the amendment that is being 
presented by Senator Grassley and Senator Dorgan would put money toward 
conservation, nutrition, research, value-added agriculture, and 
renewable energy programs.
  The budget resolution before us provides a very much needed reserve 
fund for the farm bill of $15 billion. Every penny of this fund will be 
needed if we are to adequately respond to the major needs and 
opportunities to increase energy independence, restore cuts in 
conservation, improve farm income through value-added grants, reduce 
hunger, and invest in the future of food and agriculture through 
cutting-edge research.
  However, the reserve fund is conditioned on offsets. The amendment I 
am offering is part of the solution to this reserve fund dilemma. A 
vote for this amendment, then, will help us get a better farm bill 
done, not just to help farmers but to help the entire society as it 
includes so much that benefits people just beyond agriculture.
  Not only has the Senate previously agreed to payment limit reform, 
but the President, in his past budgets--I think at least the last 3 
years--has supported a broad set of savings proposals recommending 
reduction in subsidies for larger, more financially secure farmers and 
promoting more efficient production decisions, although this year the 
administration proposed that no one should get farm payments if they 
have an adjusted gross income of over $200,000 a year. That is just 
another way, and not a bad way, but another way of getting what I am 
trying to get through this hard cap. So I don't find fault in what the 
administration is proposing in that area. I think the administration is 
proposing a very good bite and another bite at the apple.
  I have been hearing directly from producers for years exactly what 
the Secretary of Agriculture heard at his farm bill forums. We are 
hearing that young producers are unable to carry on the tradition of 
farming because they are financially unable to do so because of high 
land values and cash rents.
  Neil Harl, a distinguished agricultural economist at Iowa State 
University and one of the contributors to the Payment Limitation 
Commission, wrote this:

       The evidence is convincing that a significant portion of 
     the subsidies is being bid into cash rents--

  Making the cash rents higher--

     and capitalized into land values.

  All making it very difficult for new, young farmers to get started in 
farming. If investors were to expect less Federal funding or none at 
all, land values would likely decline, perhaps by 25 percent.
  On March 20, 2005, the Atlanta Journal-Constitution printed this:

       As time has gone by, smaller farmers most in need have 
     received less and less of the government's support and 
     corporate-like farms more and more.

  By voting in favor of this amendment, we can restore the cuts that 
were made to conservation, rural and renewable energy programs during 
the markup of the Ag section of reconciliation. We can allow young 
people to get into farming and lessen the dependence on Federal 
subsidies. This will help restore public respectability for Federal 
farm assistance by targeting this assistance to those who need it, 
where it has traditionally been over the 70 years of the farm program.
  Before I close, I wish to remind everyone who voted against a similar 
amendment during the 2005 reconciliation vote, the argument that we 
need to wait until the farm bill debate is not going to work anymore--
that was the argument some people who changed their vote used at that 
particular time--because this is the year of farm bill debate. This is 
the budget that contains the baseline for the farm bill that we are 
going to pass this year.
  Let's stop kicking the can down the road and say we have to wait 
until the farm bill debate. The here and now is the here and now. How 
can you say you are for conservation or you are for renewable energy or 
you are for child nutrition--that you are for all those things and then 
come to the floor and vote the opposite way? This is an opportunity to 
show to the people of this country we are not going to subsidize the 
biggest farmers getting bigger, wasting taxpayers' money, keeping young 
people off the farms and out of the farming profession and bringing 
ill-repute to a farm program that it takes city folk, represented in 
the Congress, to vote for in order to sustain the safety net for 
farmers.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, my understanding is the Senator from Iowa 
has this half hour. I ask the Senator from Iowa if he will yield me 10 
minutes?
  Mr. GRASSLEY. I will yield 10 minutes, yes.
  Mr. DORGAN. I am pleased to be a cosponsor, as I have been in the 
past. The Senator from Iowa is offering a budget amendment. It is a 
good amendment. The Senator from Iowa will join me in introducing some 
legislation on this subject following this discussion. Some will say: 
Let's have this during the farm bill. We will have this debate then, 
too, I assume.
  Let me say, I don't think there is a bigger supporter or stronger 
supporter in this Chamber for family farmers than I am. I know my 
colleague from Iowa is a family farmer. It goes without saying he has 
been supportive. But I am not interested in supporting the corporate 
agrifactories that have grown up this country. That is not the purpose 
of a farm program.
  I come from a rural State. I am proud to stand here and support 
farmers who have names, in my State: Olsen, Larson, Christianson, 
Johnson, Schmidt, Schmaltz, Cooper. I am proud to support them. They 
are out there living under a yard light, struggling, trying to make a 
living. They plant a seed and hope it will grow. If it grows, they hope 
it doesn't hail. They hope it rains enough and it doesn't rain too 
much. Finally, when they get in and get the seed off and the crop off 
and after that seed has grown into a plant, they put it through a 
combine, take it to the elevator, and then they hope and pray there is 
a decent price, so in the end, if everything went right, maybe they 
made a living for themselves and their families. It is a big struggle 
for them.

[[Page 6994]]

  What is the value of having these families living out there? A friend 
of mine from North Dakota wrote a piece about that. He said: What is it 
worth? What is it worth for a kid to know how to fix a tractor, to plow 
a field, to hang a door, to butcher a hog, to pour cement, to weld a 
seam? What is it worth for a kid to know all those things? That 
university is on a family farm; that is where kids learn it. What is 
that worth to our country?
  We have on the floor of the Senate this issue of a farm program. A 
farm program is a safety net, a bridge over troubled times when prices 
collapse, when the crops are destroyed. This is a bridge over price 
valleys, a bridge over difficult times. Regrettably, it has grown to 
become a set of golden arches for some of the biggest enterprises in 
the country, and we propose that we put some payment limits on here 
that are reasonable payment limits. I am pleased to be a cosponsor 
along with my colleague, Senator Grassley. I think this is common 
sense.
  Let me give some examples of what persuades us to come to the floor 
of the Senate. Ten years ago, the top 10 percent of recipients of farm 
program payments received just over half of all farm payments. Now, 10 
to 11 years later, the top 10 percent get 72 percent. It has grown from 
about half to about three-quarters for the top 10 percent. The top 1 
percent receive nearly a quarter of all farm payments.
  Mr. President, a 61,000-acre operation in a southern State got $38 
million in farm payment programs over 5 years. I didn't come to fight 
for that. I don't support that. The farm was organized into 66 separate 
corporations so its 39 owners could avoid payment limits. That is not 
farming the land. That is farming the farm program. I don't support 
that.
  A 12,000-acre cotton farm took in $2.1 million, a cotton factory in 
California, $16 million over 8 years. This is not the farm program we 
ought to be supporting.
  The U.S. Department of Agriculture pointed out that they paid 
$400,000 each to 55 farmers who were dead; 27 of the dead farmers 
received payments every year for 9 years--$400,000 each for dead 
people. That is unbelievable.
  I support a farm program, one I can be proud of, one that says to 
families living out there: We want to help you. We know you take 
unbelievable risks, and when you run into trouble, into tough times, we 
want to reach out our hand to say we are with you, we want to help you. 
That is what the farm program is supposed to be about. But it is 
becoming a perverse program when millions of dollars are taken from 
taxpayers in the form of taxes and then transferred to big corporate 
agrifactories who get millions of dollars.
  From the Government Accountability Office: Eleven partners ran an 
11,900-acre farm and collected a million dollars, and every single one 
of the farmers lived outside the State where the farm was located. The 
only engagement they had in the farm was a telephone conversation.
  Six partners received $700,000 in farm payments for a 6,400-acre 
farm. They said they provided daily management, living several hundred 
miles away.
  I don't think we need to say more. It does not take much more to 
illustrate the absurdity of what is happening. My colleague and I are 
offering--get this--a proposal that limits program payments to 
$250,000. Let me say again, I come from farm country. No one here cares 
more about family farmers than I do. I believe in the farm program. I 
fought for a good farm program. But I have not fought for a program 
that hands over millions of dollars to people who reorganize into farm 
factories in order to farm the farm program and suck money out of what 
we put aside to help people during tough times.
  It is beyond me why we would not take this step quickly and easily, 
to say payment limitations that would be effective are the right thing 
for us to do. This should not be controversial at all. This ought to be 
accepted by unanimous consent. That is what ought to happen. We ought 
to have a unanimous consent request.
  I will say this. If there are those who argue that multimillion 
dollar operations need millions of dollars from the American taxpayer 
to continue their operations, then there is something horribly wrong 
with the farm program that accedes to that request. That is not why we 
created a farm program in this country. We said we want America's 
landscape to be dotted by yard lights that represent a farm. I 
understand that big corporate agrifactories could farm from California 
to Maine. I understand we have operations that milk 3,000 to 4,000 cows 
a day, three times a day. That has nothing to do with family farming. I 
understand you could farm from the west coast to the east coast and you 
would not have to have people living out there.
  But I also understand that there is value to this country, cultural 
value to this country, where the seedbed of family values began, on the 
farm and in small towns, and rose to our big cities as a set of family 
values that this country has always appreciated.
  That is the cultural value of having family farms. It is the economic 
value of having family farms. The way we will keep family farms is to 
have a decent farm program that says, when you are in trouble, when you 
have prices collapse, you have a safety net. That is what we are trying 
to do. We will try to save it. What will happen is we will lose the 
farm program one day with stories that say this program gives millions 
of dollars to people with millions of acres who do not need this help.
  I am pleased be a cosponsor with my colleague, and I look forward to 
working with him on these issues.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. I thank the Senator from North Dakota for his support, 
not only this year but over the long period of time we have been 
fighting this battle.
  I send this amendment to the desk, and I would then like to make a 
unanimous consent request and also a request of some abeyance by my 
colleagues--if I could have permission in the 5 minutes I have left--
to, first of all, set the amendment I sent up to the side and then to 
call up another.


                           Amendment No. 464

  The PRESIDING OFFICER. The Senator will suspend for a moment. The 
clerk will report.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for himself and Mr. 
     Dorgan, proposes an amendment numbered 464.

  The amendment is as follows:

 (Purpose: To limit farm payments to $250,000 per person per year and 
apply the savings to renewable energy/rural development, conservation, 
                             and nutrition)

       On page 13, line 9, decrease the amount by $22,000,000.
       On page 13, line 10, decrease the amount by $22,000,000.
       On page 13, line 13, decrease the amount by $117,000,000.
       On page 13, line 12, decrease the amount by $117,000,000.
       On page 13, line 17, decrease the amount by $116,000,000.
       On page 13, line 18, decrease the amount by $116,000,000.
       On page 13, line 21, decrease the amount by $115,000,000.
       On page 13, line 22, decrease the amount by $115,000,000.
       On page 13, line 25, decrease the amount by $116,000,000.
       On page 14, line 1, decrease the amount by $116,000,000.
       On page 12, line 9, increase the amount by $8,000,000.
       On page 12, line 10, increase the amount by $8,000,000.
       On page 12, line 13, increase the amount by $39,000,000.
       On page 12, line 14, increase the amount by $39,000,000.
       On page 12, line 17, increase the amount by $39,000,000.
       On page 12, line 18, increase the amount by $39,000,000.
       On page 12, line 21, increase the amount by $39,000,000.
       On page 12, line 22, increase the amount by $39,000,000.
       On page 12, line 25, increase the amount by $39,000,000.
       On page 13, line 1, increase the amount by $39,000,000.
       On page 16, line 10, increase the amount by $7,000,000.
       On page 16, line 11, increase the amount by $7,000,000.
       On page 16, line 14, increase the amount by $39,000,000.
       On page 16, line 15, increase the amount by $39,000,000.

[[Page 6995]]

       On page 16, line 18, increase the amount by $39,000,000.
       On page 16, line 19, increase the amount by $39,000,000.
       On page 16, line 22, increase the amount by $38,000,000.
       On page 16, line 23, increase the amount by $38,000,000.
       On page 17, line 2, increase the amount by $39,000,000.
       On page 17, line 3, increase the amount by $39,000,000.
       On page 20, line 12, increase the amount by $7,000,000.
       On page 20, line 13, increase the amount by $7,000,000.
       On page 20, line 16, increase the amount by $39,000,000.
       On page 20, line 17, increase the amount by $39,000,000.
       On page 20, line 20, increase the amount by $38,000,000.
       On page 20, line 21, increase the amount by $38,000,000.
       On page 20, line 24, increase the amount by $38,000,000.
       On page 20, line 25, increase the amount by $38,000,000.
       On page 21, line 3, increase the amount by $38,000,000.
       On page 21, line 4, increase the amount by $38,000,000.


                           Amendment No. 502

  Mr. GRASSLEY. I ask unanimous consent to set that amendment aside for 
the consideration of an amendment dealing with the Smithsonian.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 502.

  The amendment is as follows:

   (Purpose: To ensure the appropriate use of funds provided for the 
            Smithsonian Institution, and for other purposes)

       On page 41, line 9, decrease the amount by $17,000,000.
       On page 41, line 10, decrease the amount by $15,000,000.
       At the appropriate place insert the following:

     SEC. __. ADJUSTMENT FOR SMITHSONIAN INSTITUTION SALARIES AND 
                   EXPENSES.

       (a) In General.--The Chairman of the Senate Committee on 
     the Budget may revise the allocations, aggregates, and 
     discretionary spending limits for one or more bills, joint 
     resolutions, motions, amendments, or conference reports that 
     make discretionary appropriations for fiscal year 2008 for an 
     amount appropriated, but not to exceed $17,000,000 in 
     budgetary authority and outlays flowing therefrom, once the 
     Comptroller General of the United States has submitted a 
     certification to Congress that since April 1, 2007--
       (1) the Smithsonian Institution does not provide total 
     annual compensation for any officer or employee of the 
     Smithsonian Institution greater than the total annual 
     compensation of the President of the United States;
       (2) the Smithsonian Institution does not provide deferred 
     compensation for any such officer or employee greater than 
     the deferred compensation of the President of the United 
     States;
       (3) all Smithsonian Institution travel expenditures conform 
     with Federal Government guidelines and limitations applicable 
     to the Smithsonian Institution; and,
       (4) all Smithsonian Institution officers and employees are 
     subject to ethics rules similar to the ethics rules widely 
     applicable to Federal Government employees.
       (b) Criteria for Certification.--In making the 
     certification described in subsection (a), the Comptroller 
     General of the United States should take into account the 
     following:
       (1) The Smithsonian Institution is a premier educational, 
     historical, artistic, research, and cultural organization for 
     the American people.
       (2) The Inspector General for the Smithsonian Institution 
     recently issued a report regarding an investigation of 
     unauthorized and excessive authorized compensation, benefits, 
     and expenditures by the Secretary of the Smithsonian 
     Institution.
       (3) The Inspector General's findings indicate that the 
     actions of the Secretary of the Smithsonian Institution are 
     not in keeping with the public trust of the office of the 
     Secretary of the Smithsonian Institution.
       (4) Priority should be given to funding for necessary 
     repairs to maintain and repair Smithsonian Institution 
     buildings and infrastructure and protect America's treasures.
       (5) Priority should be given to full funding for the Office 
     of the Inspector General for the Smithsonian Institution so 
     that the American people and Congress have renewed confidence 
     that tax-preferred donations and Federal funds are being 
     spent appropriately and in keeping with the best practices of 
     the charitable sector.

  Mr. GRASSLEY. Mr. President, this amendment, as I said, focuses on 
the Federal Government's support for the Smithsonian Institution. The 
American people, I believe, have been shocked and outraged to read in 
newspapers and see on their TVs a story about the out-of-control 
spending at the Smithsonian by the Secretary of the Institution: First-
class air travel for the Secretary and his wife, a palace for an 
office, and hundreds of thousands of dollars spent on the Secretary's 
own home for things such as chandelier cleaning and pool heaters are 
impossible to justify. As my colleagues know, the Federal Government 
provides over 70 percent of the Smithsonian's approximately $1 billion 
budget. Most of the rest of the budget comes from tax-preferred 
charitable donations. Directly or indirectly, the Federal taxpayers pay 
for almost everything in the Smithsonian.
  My amendment is very straightforward. The budget resolution provides 
for a $17 million increase for the Smithsonian. I commend the chairman 
of the Budget Committee for increasing the spending for the 
Institution, and I support that action. As a report issued today from 
the Smithsonian Arts External Review Committee made clear, there are 
very significant problems at the Smithsonian in terms of maintaining 
and protecting the Smithsonian infrastructure and exhibits. The 
Smithsonian is the keeper of America's treasures, and we want a museum 
we can all be proud of. So I support the additional $17 million.
  But similar to many Americans, my reaction to the Secretary's 
spending is I want to make sure we are not having new money used to 
order another round of champagne. My amendment basically fences the $17 
million increase but allows the chairman of the Senate Budget Committee 
to revise the allocations--effectively to release the $17 million in 
new spending--once and only after the General Accounting Office has 
certified the following:

  No. 1, that no one at the Smithsonian is getting paid more than the 
President of the United States, as was proposed by the House 
Appropriations Committee last year; no more paying for French doors at 
the Secretary's home, in other words. There are many fine museums and 
charities that receive the same amount of charitable donations as the 
Smithsonian that are able to hire very able directors for what we pay 
the President of the United States.

  No. 2, the Smithsonian must follow the travel expenditure guidelines 
of the Federal Government. No more first-class flights with wife and 
Secretary to Hawaii to enjoy Thanksgiving.

  No. 3, the Smithsonian must have ethics rules similar to the ethics 
rules of Federal Government employees. No more sitting on corporate 
boards, making big, big money--corporations that have contractual 
relations with the Smithsonian and possible conflicts of interest.

  The amendment also makes clear that the actions of the Secretary are 
not in keeping with the public trust of the office.

  Finally, the amendment states that a priority should be given to 
funding for repairing and maintaining the Smithsonian and to fully fund 
the Office of Inspector General at the Smithsonian so the American 
people and the Congress can have renewed confidence that the $700 
million-plus in Federal funds the Smithsonian has is used properly and 
appropriately.

  I am still working with the chairman and with Senator Gregg to make 
certain this amendment is drafted in a manner that meets their 
concerns. I am confident we can do that.

  I yield the floor.

  The PRESIDING OFFICER. The Senator from North Dakota.

  Mr. CONRAD. Mr. President, very briefly--because I know Senator 
Lincoln is waiting and we will be giving her 15 minutes and giving 
Senator Chambliss 10 minutes to respond to this--on the most recent 
amendment, I would say to Senator Grassley, do you need a rollcall vote 
or is this something we can take on a voice vote?
  Mr. GRASSLEY. We do not need a rollcall vote.
  Mr. CONRAD. That would be enormously helpful. If we could spend a 
little time working together so we make

[[Page 6996]]

sure we get this drafted so this works with the larger resolution, I 
think it is something we can take on a voice vote. But let's make sure 
we have it drafted in a way all of us intend.
  Mr. GRASSLEY. I am sure we will be able to work that out.
  Mr. CONRAD. I thank the Senator from Iowa very much.
  Now we are back to the question of payment limits. I yield 15 minutes 
to the Senator from Arkansas.
  The PRESIDING OFFICER (Mr. Cardin). The Senator from Arkansas.
  Mrs. LINCOLN. I thank the chairman for his tireless work. He and his 
staff are remarkable in the way they go at this budget. They do a 
tremendous job of trying to balance so many different items of interest 
to this diverse body, and certainly to the priorities of the American 
people. I compliment him on the hard work he has put into this effort.
  I know the Senator from Iowa knows the great respect I have for him. 
He and I have worked together on the Finance Committee on multiple 
things. Unfortunately we come today with a large disagreement. I rise 
today in strong opposition to the amendment offered by the Senator from 
Iowa regarding further payment restrictions, because we did deal with 
this issue in the 2002 farm bill.
  We came to a compromise, and a compromise is just that: It is where 
two sides come together and figure out something that is reasonable for 
everybody. But this amendment goes farther on payment restrictions on 
the farm safety net offered by Senator Grassley and Senator Dorgan. 
This issue of payment limitations is not a new topic of debate. Yet, 
unfortunately, it will no doubt be a topic of much debate as we work to 
craft a new farm bill this year. I have been here in the Congress 
during two debates, two farm bills. We have produced two farm bills, 
and I have been a part of that.
  I realize that is an important avenue and the place where this debate 
should be taken. In my view, it is within the context of our farm bill, 
not the context of this budget debate, that this issue should be 
debated. We do not need to be here talking within the context of the 
budget about policy decisions that should be debated and decided in the 
farm bill through the Agriculture Committee.
  This issue remains largely misunderstood for many both inside and 
outside the beltway. While I wish this were not the case, I gladly take 
this opportunity to provide some clarity to this issue, hopefully some 
passion as well, because as a farmer's daughter I take a tremendous 
amount of pride in telling others about the farmers whom I represent 
and what American farmers provide this Nation and this world.
  Just as Senator Dorgan talked about the solidness of the names of his 
farmers, guess what. The names of my farmers are not any less American 
or any less solid. I have got to say, I am as proud of those farmers in 
my State who plant seed in the ground and help to provide food and 
fiber for this world and for our country as he is. It does not 
necessarily mean how wholesome your name might be whether you are a 
good American farmer.
  They talk about 10 percent of our farmers get roughly 72 percent in 
terms of these payments. Well, I will also let you know the other side 
of that coin, and that is 10 percent of our producers out there 
represent 90 percent of what is produced in this country.
  Yes, we have some large farmers. We have farmers who are hardcore and 
diligent and as red-blooded and as American as some of the smaller 
farmers are. Yes, they do produce a tremendous amount, 90 percent of 
the food and fiber we have in this country. It is critically important 
to remember that. It is not size that is important. The dollars, these 
dollars we talk about, do not go into their pockets, these dollars go 
to the banker, the local seed dealers and the implement dealers to pay 
off the notes it takes to farm, particularly in southern parts of this 
country because of the capital-intensive crops we grow.
  Senator Dorgan brings up dead individuals who get payments. I would 
propose that that is illegal. That is not a problem this issue takes 
care of. That is a problem for USDA, and it is one that should be taken 
care of. But it misrepresents what the debate here today is all about. 
That is what I want to bring people back to.
  Above all else, our farm policy seeks to do one thing for all of our 
farmers, whether you are in one region of the country or another. It 
seeks to provide for those producers of commodities a strong level of 
support, a safety net, not a hammock but a safety net, to protect these 
producers against low prices brought on by factors that are completely 
beyond their control, including but not limited to foreign tariffs and 
subsidies some five or six times greater than the help that is provided 
to farmers across this globe and what we provide our growers. Yet they 
still provide us with the safest, most abundant, and affordable food 
supply in the world.
  One of the fatal flaws of the 1996 bill, which was called Freedom to 
Farm, was its lack of an adequate safety net in the face of foreign 
subsidies and tariffs that dwarf our support of U.S. producers.
  I know Senator Grassley and Senator Dorgan and many of my colleagues 
on both sides of the aisle recognize the challenges our U.S. producers 
and industries face in an uncertain and often, quite frankly, unfair 
global marketplace. I am proud to say the 2002 farm bill corrected that 
mistake. It was a hard-fought compromise, as I mentioned. We came to 
the table and we agreed each other had points to be made, and we came 
up with something that was in the middle of the road, and would at 
least be acceptable by both.
  The amendment now before us would seek to further limit that very 
support at a time the producers need help the most, creating a gaping 
hole in the safety net for farmers. Furthermore, during hearings and 
listening sessions on the proposals for a new farm bill, most farm 
organizations support the compromises agreed to in the 2002 bill, and 
they recognize that future arbitrary limits on farm payments only serve 
to diminish our producers' ability to compete globally.
  Proponents of tighter limits continue to sensationalize this issue by 
citing misleading articles about large farm operations receiving very 
large payments as a reason to target support to smaller farmers. 
Because my farmers are larger does not mean they are not family farmers 
or they are not young farmers; it means they are doing what they have 
to do to compete.
  Unfortunately, sensationalized stories only serve to cloud this 
misunderstood issue further. Senators need to understand this amendment 
has very serious implications. Let me attempt to provide a bit of 
clarity on this issue of farm size.
  First, payment limitations have disproportionate effects on different 
regions of this country; there is no doubt about it. Simply put, the 
size of farm operations is relative to your region. Put even more 
simply, a small farm in Arkansas may be a huge farm in another area of 
the country, which leads me to my next point. This amendment continues 
to unfairly discriminate on a regional basis because it does not 
differentiate between crops that are extremely cost intensive and those 
that are not cost intensive. In Arkansas, we raise rice and cotton, two 
of our largest commodities, and we do so because that is what we are 
suited to grow; that is what any farmer would grow. These crops happen 
to be the most expensive crops to produce in the entire country.
  This amendment would lump cotton and rice into the same category with 
crops that require half as much of an input in terms of cost.
  Finally, on the issue of size, farmers of commodities are not getting 
larger to receive more payments. They do not want to have to become 
larger farmers; it creates more of a challenge and certainly more 
obstacles for them. They get larger in an attempt to create an economy 
of scale, to remain competitive internationally. You can see it in 
business. How do they offer lower prices to their consumers? They 
create an economy of scale that allows them to be able to do that. That 
is exactly what our farmers are doing in the

[[Page 6997]]

southern growing areas of the country. At a time when we were telling 
our farmers to compete on the global market, we now hear of in this 
budget debate an amendment that would discourage farmers from acquiring 
the very economies of scale they will need to compete in that global 
marketplace.
  If you limit the amount of support farmers may receive, you are 
placing on them a substantial domestic disadvantage before sending them 
out to compete in an international marketplace that is already unfair 
for our producers. This is not the case in Europe and other foreign 
markets where agricultural subsidies and tariffs are at a level far 
higher than we see in the United States.
  Finally, I say to those who feel farmers are getting rich at the 
expense of the taxpayer, there is a reason why our sons and daughters 
are not rushing back to the farm and their family's heritage. It is 
because farming is a very tough business with a lot of challenges. 
Senator Dorgan mentioned the challenges his farmers face. My farmers 
face similar challenges, if not greater challenges, in terms of 
demographics and climate, in terms of pests and all of the many 
problems they face, as well as the international marketplace, trade 
barriers, and a multitude of other things.
  Farms that have been in families for generations are being sold 
because farm income is insufficient to meet the rising input cost 
associated with raising a crop, particularly in our area. I have to 
tell you, I have a wonderful farm family farming 5,000 to 6,000 acres, 
which in some places would seem to be a very large farm. It is a farmer 
with two sons who farm the land of three widow women who live down the 
lane from him, and several, yes, inheritants of farm land who want to 
keep their farm in their family, perhaps for their children who do not 
live there any longer.
  Do they not have the right to maintain their farms to ensure that if 
there is a farmer there who can increase his amount of land enough 
through rental property and others, to be able to keep that land in 
production, to keep his family farm alive and theirs as well? He 
reaches to that economy of scale because it is the only way he can 
survive, he and his two children.
  I urge my colleagues to take this opportunity to send a strong 
message to all of our farmers, not one region of the country or 
another, one that tells them their Government will stand behind them 
and their rural communities they support.
  I have to say, we are coming dangerously close to a trade deficit in 
agriculture. Do we want to see that happen? You know, it is unfortunate 
the American people have become very accustomed to almost taking for 
granted the fact we not only produce an abundant food supply but that 
we produce a safe and affordable one, the lowest per capita of any 
other developed nation in what we pay for food for our families, not to 
mention our growers grow our crops in regard to all of the regulations, 
whether it is the regulation of their chemical application and the 
tests they have to take, whether it is making sure they are meeting the 
guidelines of keeping wetlands conservation areas, making sure they are 
not stripping the land or not using the land properly, but they are 
doing it in the best sense of what it means to everybody involved to be 
good conservationists.
  We do that, and we do that at a small cost, a small cost, which is a 
safety net program that is less than one-half of 1 percent of the 
overall budget, the agriculture budget. What an investment for our 
children to know they will be able to maintain not a trade deficit in 
agriculture but maintain domestic production of crops, food, and fiber 
that they know are going to be healthy and that are going to be grown 
with the kind of regulations that produce a crop that is safe, not an 
imported crop that is being grown with chemical applications that we 
banned 10 years ago, or practices that are less than phytosanitary 
conditions. We want to make sure--and this is the way we do it--to 
provide the safety net for all farmers in a way that they can maintain 
the economy of scale. They have to in order to be able to be 
competitive.
  I have to say, if we do not stand behind the farmers of this country, 
the producers--all of them--and assure them their Government will 
support the production of food and fiber in this country, recognizing 
the regional differences and the challenges our producers face in the 
global marketplace, making sure that for them we will appreciate the 
safe and abundant food and fiber supply they provide, we will have made 
a sorry mistake.
  We have to make sure that we assure them that we are not going to 
outsource our food production but, rather, that we are committed to 
ensuring that production stays here where it belongs. I urge my 
colleagues to think sensibly about this amendment, to vote against this 
amendment, and not to unfairly disadvantage farmers in one region of 
the country, in my State and elsewhere. Furthermore, the budget 
resolution is not the appropriate venue for this debate.
  I ask my colleagues to oppose the Grassley-Dorgan amendment. Let's 
deal with this in the farm bill, the appropriate place. Let's come 
together. If there needs to be a compromise, we will come to a 
compromise as we did last time. We worked hard. We got a good one. I do 
not think this amendment is necessary.
  I thank my colleagues for their time and attention. I hope they will 
thoughtfully review what we have presented today and not support the 
Grassley-Dorgan amendment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Georgia.
  Mr. CHAMBLISS. I think I have 10 minutes.
  The PRESIDING OFFICER. The Senator from Georgia is recognized for 10 
minutes.
  Mr. CHAMBLISS. Mr. President, I commend my colleague from Arkansas 
for a forceful, correct, and direct argument on this issue. Here we go 
again. This is the annual debate we have over whether the farm bill 
should be rewritten during budget resolution, which is what was tried 
last time, when the appropriate place to write the farm bill is during 
debate on the farm bill. That is going to take place later this year. 
Once this budget is completed, we will have the numbers to move ahead 
in deciding what the new 5-year farm bill will be like. We are in the 
sixth year of the current farm bill that was written in 2002. Yet here 
we are, in the last year of the farm bill, debating a major provision 
of that legislation.
  Frankly, if one goes to farmers all across America--and I say this 
because I have done it. Senator Grassley, who is my dear friend, has 
not. I held eight field hearings all across America last summer as 
chairman of the Senate Ag Committee in which we asked farmers: What do 
you think about the 2002 farm bill? We even got specific and talked 
about payment limits: What do you think about the payment limit 
provision?
  There is a general, overwhelming consensus all across America that 
the 2002 farm bill is working exactly the way farmers and ranchers 
wanted it to work; that is, it has been a very market-oriented farm 
bill. In years when prices have been low, there have been Government 
payments to farmers. In years when prices have been high, there have 
been a minimal number of payments going to farmers.
  As a result of that farm bill being very market oriented, we have 
saved $17 billion over the projected amount of the expenditure in the 
farm bill from 2002. Nobody is talking about that. Nobody is talking 
about the fact that our farmers have been very efficient. They have 
done whatever is necessary to go back and rework their operations to 
make sure they maximize efficiency. As a result, they have saved that 
$17 billion.
  What Senator Grassley has done today is to stand up and say: If you 
make this change, and we limit these big payments to farmers, we are 
going to save $486 million. The fact is, he is not going to save one 
dime because what he does is, he takes that $486 million and spends it 
elsewhere. So we are saving not one dime with the passage of this 
amendment.

[[Page 6998]]

  What does this amendment do? It takes the 2002 farm bill and 
interrupts it during the last year of the farm bill so that farmers and 
ranchers across America, and the bankers who have financed those 
farmers and ranchers, now are going to be in a state of flux as to 
whether what we decided in 2002 was going to be proposed for our 
farmers and ranchers for a 6-year period of time will, in fact, be 
lived up to by the U.S. Congress. The appropriate time and place to 
debate any payment limit proposal is during reauthorization. That is 
going to be coming up shortly.
  The Farm Security and Rural Investment Act of 2002 authorized a 
commission on payment limitations for agriculture. That commission has 
already been referred to by Senator Grassley. The purpose of this 
commission was to conduct a study on the potential impact of further 
payment limitations on direct payments, countercyclical payments, as 
well as the marketing assistance loan benefits on farm income, land 
values, rural communities, agribusiness infrastructure, planting 
decisions of producers affected, and supply and prices of covered and 
other agricultural commodities. In other words, this commission was to 
look at all aspects of farming and decide what would be the effect of 
changing payment limits on agriculture in general.
  The first recommendation of the commission stated:

       Any substantial changes should take place with 
     reauthorization of the next farm bill.

  No other aspect of Federal farm policy has been studied as 
extensively as payment limitations. The top recommendation of those who 
studied this issue was not to make any change. I admit I come from a 
State where we would be negatively impacted by tighter payment limits.
  I want to take note of the commission members. This was a balanced 
panel from all across the Nation. The commission consisted of 10 
members. They were from Kansas, Texas, Mississippi, Illinois, North 
Dakota, Iowa, Georgia, Arizona, and USDA. They agreed to recommend that 
no substantial changes in payment limits should take place outside of 
the reauthorization of the farm bill.
  Another recommendation of the commission stated as follows:

       Changes in payment limits should be sensitive to 
     differences in commodities, regions, and existing 
     agribusiness infrastructure.

  We talk about where the major portion of the payment limits issue 
comes from. It actually comes from all over the country. But farmers in 
the Southeast will be negatively impacted, probably more so than most 
others. Guess where the largest number of payments goes to farmers. It 
doesn't go to my home State of Georgia. It goes to Senator Grassley's 
State of Iowa. Do I have a problem with that? Absolutely not because I 
know he has farmers who get dirt under their fingernails. They know how 
to change oil in their tractors. They know how to farm their farms the 
way they can most effectively derive an income from them, and they 
deserve to have support when times are tough. I have no problem with 
that. They are doing exactly what the farm bill allows them to do and 
that is absolutely fine.
  One common misconception in regard to farm program payments is that 
10 percent of farmers--and this has been stated today--receive 80 to 90 
percent of farm program payments. That is simply wrong. According to 
Kansas State University Economics Professor Dr. Barry Flinchbaugh, 
those numbers are far from the truth. It should be noted that Dr. 
Flinchbaugh was chairman of the USDA Commission on the Application of 
Payment Limits. Dr. Flinchbaugh makes the point that small farms, those 
defined with gross sales of less than $100,000, make up 84 percent of 
the farms in the United States. They receive 30.5 percent of the 
payments while producing 21 percent of the food supply. Medium-sized 
farms, which are defined as farms with sales between $100,000 and 
$500,000, comprise 12.2 percent of total farms while producing 28 
percent of the food supply and receive 42.7 percent of farm program 
payments. Large farms that have sales in excess of $500,000 and consist 
of 3.8 percent of the farms, receive 27 percent of farm program 
payments and provide over 50 percent of the food supply.
  In the words of Dr. Flinchbaugh:

       These programs are designed for the medium-sized farmers. 
     They've done what they were supposed to do. So what's the 
     issue? It's a farce.

  My point is that Senator Grassley's amendment is not simply a budget-
saving measure; it is a complex issue that deserves thorough discussion 
when all farm policies are reviewed later this year, not during the 
budget debate. The Grassley amendment substantially alters farm policy 
rules that farmers and their bankers expect to be in place through the 
life of this farm bill. His amendment fails to recognize differences in 
commodities, regions, as well as agribusiness infrastructure. Senator 
Grassley blatantly ignores the recommendations of the commission that 
studied this issue extensively, an issue that has been studied more 
than any other aspect of Federal farm policy.
  Let me close by saying the Senator from North Dakota, who is also a 
great friend of agriculture and a good friend of mine and I have great 
respect for him, brought up the fact that dead farmers are receiving 
payments. I agree with my colleague from Arkansas. If that is the case, 
then that is the individual who ought to be gone after, not the payment 
limits in the farm bill. But if somebody is getting a payment that 
ought not to receive a payment, there ought to be a fraud charge filed 
and pursued against that particular individual. That is easy enough to 
do. If anybody has the names, if they get them to me, I will get them 
in the right hands, and they are going to be pursued from a fraud 
standpoint. That is the issue involved there, not whether payment 
limits are a problem with those particular individuals.
  The other issue, we talk about farm payments in general. I think all 
of my farmers in the southern part of the United States would just as 
soon not get farm payments. The fact is, though, the Europeans pay 
subsidies, true subsidies in the amount of four times greater than the 
payments that are made under the farm bill.
  I urge a ``no'' vote on the Grassley amendment at the appropriate 
time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. How much time remains?.
  The PRESIDING OFFICER. There is 2 minutes.
  Mr. CONRAD. I yield 2 minutes to the Senator from Georgia, Mr. 
Isakson.
  Mr. ISAKSON. Mr. President, I rise in full support of Senator 
Chambliss, the farmers of Georgia, and farmers around the United States 
of America. This amendment, while I am sure it is well-intended, has 
the effect of destroying agriculture in the South and in particular in 
Georgia. The cost of operations in Georgia is tremendous. To have an 
arbitrary cap such as this will be absolutely destructive to our part 
of the State and to the No. 1 industry in the State of Georgia.
  Why are we trying to hurt farmers who only wish to provide a decent 
living for their families? This is a diverse and distinguished Senate 
with Members who have all kinds of experience. But I doubt anyone here 
has ever bought a cotton picker--not one, not two. Many Georgians have 
to have two. When they buy them, they buy them at a quarter of a 
million apiece. That investment in infrastructure alone, added to the 
trucks, the pickers, the bins, and all the other facilities one needs, 
shows that this limitation would be absolutely punitive to the farmers 
of the South.
  While I respect greatly the Senator from Iowa and those who bring 
this amendment forward, I strenuously object to it on behalf of the 
farmers of

[[Page 6999]]

Georgia. I concur with the other Senator from Georgia, Mr. Chambliss, 
that we should join other Members of the Senate in ensuring defeat of 
the Grassley amendment.
  Passage of this amendment would result in many traditional family 
farms going out of business in many, many States.
  The Farm Service Agency is already going to be overwhelmed by many of 
the new programs included in this bill. This amendment would result in 
increased costs to the government and to farmers.
  Supporters of this amendment say that these payments go to the few 
and the big. I could not disagree more.
  This amendment punishes the farmer whose livelihood depends solely on 
the farm. In my part of the country, a farmer must have a substantial 
operation to make ends meet.
  In the name of common sense, why should anyone want to punish family 
farmers who have made large investments in order to become competitive 
in an international marketplace?
  Why are we trying to hurt farmers who only wish to provide a decent 
living for their families even though they are facing soaring cost of 
production?
  As I have stated, this is a diverse and distinguished Senate with 
Members that have all kinds of experience. But I doubt anyone here has 
ever bought a cotton picker. You know what a cotton picker costs today? 
The average price for a new one off the John Deere lot in Albany, GA, 
is about a quarter million dollars.
  If you're an average farmer in south Georgia, you're going to need 
two of them. That's just the beginning of the equipment needs. There's 
tractors, grain carts, trucks--are all needed to put a crop in.
  By the way, you know where those cotton pickers are made? In a great 
State: Iowa. I wonder if those employees at that manufacturing plant 
support this amendment?
  The cost of producing crops today costs several hundred dollars per 
acre. Reduced payment limits and increased benefit targeting flies in 
the face of skyrocketing production costs and record-low commodity 
prices.
  In fact, this amendment would give less support to Southern farmers 
than the current farm bill does.
  My colleagues, I will not stand witness to the demise of farming the 
South. Therefore, I oppose this amendment and ask my colleagues to do 
the same.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the time 
until 3:15 be on the subject of SCHIP and controlled by our side; from 
3:15 to 4:15 be controlled by Senator Kyl, and that is equally divided.
  Mr. GREGG. Do we equally divide the time? Why don't we give Senator 
Kyl 40 minutes and your side 20 minutes.
  Mr. CONRAD. All right, 40 minutes to Senator Kyl, 20 minutes to our 
side. Then we have Senator Cornyn from 4:15 to 4:45.
  Mr. GREGG. On SCHIP.
  Mr. CONRAD. We may need 10 minutes in response to him. Then from 
4:50, 5 minutes, to respond to Senator Cornyn, 4:50, Senator Dorgan, 
and then we are going to go to votes.
  The PRESIDING OFFICER. Let's make sure we have that correct. Would 
the Senator repeat the unanimous consent request.
  Mr. CONRAD. Mr. President, I would be happy to: that the time until 
3:15 be controlled by our side on the subject of SCHIP; from 3:15 to 
4:15 on the subject of the Kyl amendment, with 40 minutes for the 
minority, 20 minutes for the majority; then from 4:15 to 4:45 the time 
to be under the control of Senator Cornyn on SCHIP, with 10 minutes 
after that reserved for a response by our side on the Cornyn amendment; 
and then----
  Mr. GREGG. The last 5 minutes.
  Mr. CONRAD. The last 5 minutes under the control of Senator Dorgan.
  The PRESIDING OFFICER. Is there objection?
  Mr. CONRAD. Mr. President, we should also make clear we have not done 
second degrees. We are not doing second degrees. That is an 
understanding we have on both sides.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request?
  Without objection, it is so ordered.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that all the 
pending amendments be temporarily laid aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 504

  Mr. BAUCUS. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus], for himself, and Mr. 
     Rockefeller, proposes an amendment numbered 504.

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

 (Purpose: To affirm the Senate's commitment to the reauthorization of 
             the State Children's Health Insurance Program)

       On page 48, line 19, before ``The'' insert the following:
       (a) Priority.--The Senate establishes the following 
     priorities and makes the following findings:
       (1) The Senate shall make the enactment of legislation to 
     reauthorize the State Children's Health Insurance Program 
     (SCHIP) its top health priority for the remainder of fiscal 
     year 2007, during the first session of the 110th Congress.
       (2) Extending health care coverage to the Nation's 
     uninsured children is an urgent priority for the Senate.
       (3) SCHIP has proven itself a successful program for 
     covering previously uninsured children.
       (4) More than 6 million children are enrolled in this 
     landmark program, which has enjoyed broad bipartisan support 
     in Congress, among our Nation's governors, and within state 
     and local governments.
       (5) SCHIP reduces the percentage of children with unmet 
     health care needs.
       (6) Since SCHIP was created, enormous progress has been 
     made in reducing disparities in children's coverage rates.
       (7) Uninsured children who gain coverage through SCHIP 
     receive more preventive care and their parents report better 
     access to providers and improved communications with their 
     children's doctors.
       (8) Congress has a responsibility to reauthorize SCHIP 
     before the expiration of its current authorization.
       (b) Reserve Fund.--

  Mr. BAUCUS. Mr. President, I am offering an amendment that I hope 
will garner unanimous support. The amendment simply puts children first 
in America's budget.
  The amendment I am offering today, along with Senator Rockefeller, 
says reauthorization of the State Children's Health Insurance Plan, 
otherwise known as SCHIP, is the top health priority of this Congress.
  I applaud the work of Chairman Conrad and other members of the Budget 
Committee for reporting out a budget that provides up to $50 billion 
over 5 years for reauthorization of CHIP.
  I am hopeful that the Senate will adopt the other amendment that I 
offered earlier today. That amendment will move $15 billion of that 
CHIP funding from the reserve fund into the numbers of the resolution. 
It would make the funding even more likely to happen.
  The $50 billion level of funding in the budget will ensure that CHIP 
can meet the demand for services. This funding will ensure that CHIP 
fulfills its promise of providing health coverage for children who are 
eligible for CHIP and Medicaid but not enrolled.
  Congress has a historic opportunity to help millions of children and 
families this year. We must get this right.
  As we look at CHIP's track record, we can be very proud of its 
accomplishments over the past decade.
  Since 1997, the share of children without health insurance has 
dropped by one-fifth. Among the poorest children--those with family 
incomes less than twice the poverty level--one-third fewer children are 
uninsured today than in 1997. Just as Congress intended, the Children's 
Health Insurance Program is making inroads to help more children get 
health coverage.

[[Page 7000]]

  The Children's Health Insurance Program has also helped to decrease 
racial and ethnic disparities in children's coverage. Today, the 
poorest African-American children are one-third more likely to have 
health coverage, and Hispanic children are one-quarter more likely to 
have health coverage than they were in 1997.
  The Children's Health Insurance Program has also helped to improve 
the quality of care children receive by increasing the likelihood 
children have a ``medical home''--that is, a doctor, clinic, or HMO 
they routinely visit for care. Research demonstrates that 97 percent of 
children enrolled in CHIP and Medicaid have a ``medial home.'' That is 
much better than the 72 percent of uninsured children.
  We can all agree--CHIP is a great program that has had tremendous 
benefit for millions of children. But we also know that we can do much 
better.
  Today, three-fourths of the 9 million uninsured children in our 
Nation are eligible for--either Medicaid or CHIP; but they are not 
enrolled. CHIP reauthorization holds the promise of helping us make a 
difference in these children's lives.
  CHIP provides a funding stream to help States provide health coverage 
to children in need. But that funding stream is often unpredictable and 
does not always track the demands for coverage in the State. We can do 
better.
  But we will not be able to address these problems unless we move 
forward with reauthorization this year. And we must do so quickly.
  If Congress does not enact a reauthorization bill before CHIP funding 
expires on September 30, we will lose the $25 billion in CHIP funds 
that are now in the Congressional Budget Office baseline.
  We simply cannot afford to miss this deadline. We cannot tell States 
that we just could not get it done. We cannot tell millions of children 
that they will have to lose coverage. Failure is not an option.
  CHIP is certainly not the only solution to the health care problems 
facing our Nation. I share the concerns voiced by so many of my 
colleagues about the need for broader health reforms. But CHIP can be a 
first step toward this broader goal of health reform.
  This amendment commits the Senate to move forward to reauthorize CHIP 
before the deadline, this year. It is a simple statement about the 
program's importance and of our will to put children first in our work 
this year.
  Let me be clear. CHIP is not a Democratic priority or a Republican 
priority. This program was created in a bipartisan spirit fostered by 
the late Senator John Chafee and Senator Hatch, working together with 
Senators Kennedy and Rockefeller.
  Reauthorization must also be a bipartisan priority. I intend to 
continue in this spirit and work with my colleague, Senator Grassly, 
and other members of the Finance Committee to get this done the way it 
should be this year.
  I urge my colleagues to join me in supporting this amendment to 
reinforce our bipartisan commitment to reauthorize CHIP this year. Our 
children are depending on us. We must not let them down.
  I strongly urge adoption of this amendment at the appropriate time.
  In conclusion, we can all agree this is a great program with 
tremendous benefit for millions of children. We also know we can do 
much better.
  Mr. President, we have a list of cosponsors on this amendment which I 
do not have with me at the moment. We will get that later for the 
Record. But I strongly urge the adoption, at the appropriate time, of 
this amendment because we then would be putting children first.
  Mr. President, I ask unanimous consent that my colleague from Montana 
be given 3 minutes at this time. He has been waiting very patiently.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Montana is recognized.
  Mr. TESTER. Mr. President, I thank Senator Baucus for allowing me to 
speak. I also thank the good Senator from North Dakota.


                           Amendment No. 464

  Mr. President, I rise to speak on amendment No. 464, the Grassley-
Dorgan amendment on farm payment limitations, making those limitations 
max out at $250,000. That is a quarter of a million dollars. That is 
how much money that is going to be maxed out for individual family 
farmers to get. That is a reasonable request. I think it makes the farm 
bill more defendable to the American people.
  I am a family farmer. I understand family farmers are the backbone of 
this country. They keep our food security there so we do not have 
people going hungry. What the farm program has meant to do, and has 
always been meant to be, is a safety net for farmers so when market 
prices drop they have that safety net to depend upon. There is not one 
farmer I know of who does not want to get their income from the 
marketplace. So we need to keep it that way.
  We need to encourage fair trade deals. We need to encourage more 
competition in the marketplace. We need to make sure our freight rates 
are, what I would call, not abusive, if we are going to keep family 
farmers on the land.
  Some 30 years ago, the student body in the high school I went to in a 
farming community had 160 kids in it. Today, that same student body is 
less than half that size because we have not had a farm bill that has 
worked for the farmers.
  This amendment makes sense because it puts a cap of $250,000 on the 
benefits from farm program subsidies and eliminates those big 
agribusinesses that have been taking money they do not need, quite 
frankly. They do not need that safety net that the farm program 
subsidies provide in our farm program.
  So with that, Mr. President, I ask that all the Members of the Senate 
support amendment No. 464, the Grassley-Dorgan amendment, because it is 
the right thing to do.
  The PRESIDING OFFICER. The Senator from West Virginia.


                           Amendment No. 504

  Mr. ROCKEFELLER. Mr. President, I speak today in support of the 
budget resolution. I have many highly complimentary things I could say 
about Senator Conrad, who has probably the toughest job in the Senate. 
He has proceeded brilliantly, fairly, calmly, and within the public 
interest. The public interest is, to me, the most important. He has 
shown that commitment by including $50 billion for the reauthorization 
of the Children's Health Insurance Program.
  I reserve a note of personal privilege. I first became aware of what 
happens to children--in this case, in rural America--when I was a Vista 
volunteer in West Virginia in 1964 and 1965. I saw children and their 
families who had no concept of health care. Never in their lives did 
they have health care or most anything else that really counted in 
terms of giving them hope. So that has been kind of my moral compass 
ever since. It is the way I vote, it is the way I feel, and it is who I 
am.
  I know this budget was not easy for the chairman of the Budget 
Committee. But I am so proud the chairman and the Democrats are 
standing up for children and making CHIP reauthorization the top health 
priority of this year. This is not a Democratic program. This is not a 
Republican program. If there is anything at all that was ever an 
American program--Governors, everybody--nobody can disagree on the 
power of this program, with the exception that it is now in deep 
stress. It has been cut by two-thirds from its present inadequate 
funding.
  This amendment would not only restore the full 6 million children who 
are not covered--and, again, I want you to contemplate a child not 
covered, a child who develops a toothache, a child who develops a 
stomachache, a child who is miles from a hospital and whose family may 
not have a car to get that child there.
  Children's health insurance means everything. Immunization, 
preventive care--CHIP is the only program that has ever done this. We 
did this with Medicare in 1965. We did it 30 years later with the 
Children's Health Insurance Program. I think it is the single

[[Page 7001]]

most accepted Federal program in my State of West Virginia, with the 
exception, obviously, of Medicare, Social Security, and Medicaid.
  The problem is the budget was cut. So of the 6 million who originally 
were covered, many are now not covered. We have many problems facing 
us. The budget chairman, Senator Conrad, has corrected these problems. 
He has included not only the 6 million who were on it but many of whom 
were cut or would be cut, and then he has included the 6 million more 
who are eligible because they qualify in every way except there is not 
the money to cover them. There would now be the money to cover them.
  I have never faced the problem, to be honest, could I make it in life 
in some way or another, where was my next meal coming from, what would 
happen if I had some kind of an illness. That is not the typical 
experience in lots of rural America and urban America. That is where my 
heart lies, with those people. I think we have a sacred responsibility 
as a Senate, on the most bipartisan issue I can possibly think of, to 
remedy this problem and to take care of it quickly by adopting this 
piece of legislation.
  We remember, in 1977, there were 10 million uninsured children. The 
failure of health care reform in the early 1990s took away our will, 
took the wind out of our sails. It turned us into incrementalists. So 
we did not start thinking about the big picture, how to cover Americans 
broadly.
  I can remember standing on the floor of the Senate with the senior 
Senator from Massachusetts. People were saying: Well, this is 
nationalized health insurance. We were waving our Blue Cross-Blue 
Shield cards. It did not make any difference, once it was labeled that 
was it: dead on arrival. That was a tragedy and now is a particular 
tragedy with respect to children.
  So today we have almost 9 million children under the age of 18, and 
they still have absolutely no health insurance. How does one walk into 
this body, with the health insurance we have, with the people we 
represent, and allow a situation like that to continue? It is a 
profound moral issue. It takes the form of legislation, it takes the 
form of goodwill and determination, but it is a profound moral 
obligation of the richest country in the world.
  So I am strongly for this Baucus legislation. I think we have an 
obligation to adopt it. I hope we have the courage and the skill to do 
so.
  I thank the Presiding Officer and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. Mr. President, I ask the Senator from Massachusetts, how 
much time does he desire?
  Mr. KENNEDY. Mr. President, 7, 8 minutes.
  Mr. CONRAD. Mr. President, I yield 7\1/2\ minutes to the Senator from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, will the Chair let me know when there is 
a minute and a half remaining?
  Mr. President, first of all, I think all of America ought to 
understand a basic and fundamental principle: this budget debate is 
really about national priorities. It is about a national priority. That 
is why we rise here.
  Senator Baucus, Senator Rockefeller, myself--it is not just the 
Democrats on this issue of the Children's Health Insurance Program, but 
Republicans as well--but we have been around here for many years, and 
what a difference a year makes because in this particular budget we are 
putting children first. We are putting children first. We are putting 
children's health care first, and we are putting children's education 
first. What a difference it is from the recent years where all we had 
is tax breaks, after tax breaks, after tax breaks. This budget is 
different. This budget is very different. It says children are going to 
be first.
  Secondly, it says that we know there are probably 9 million children 
who do not have any kind of health insurance, but about 6 million of 
them are eligible for Medicaid and CHIP. We find that working Americans 
are having more and more difficulty affording health insurance. One of 
their great concerns is not just for themselves but for their children.
  Help is on the way with this budget because with this budget makes a 
commitment of $50 billion, to help those working families get health 
insurance for their children. So if their child has an earache, if that 
child is suffering from asthma, if that child has intestinal flu, the 
parent will not have to stay awake all night and wonder whether that 
child is $225 sick, because that is what it is going to cost that 
working family to take that child down to the emergency room. They 
won't have to worry about sending that child to school sick while they 
go out to work. That day, the child will be able to get good, quality 
health care. That is what we stand for on this side.
  We see the success of this program. We have seen over the period of 
these last years the growth of millions of enrolled children, up to 6 
million children, and we know this program can work for an additional 6 
million children.
  But we are faced with a budget on the opposite side by the 
Republicans, and what would that do? It would effectively drop almost 
half of the children who are currently covered.
  Here is a map which says 14 States will run out of SCHIP funds in 
fiscal year 2007 under what the administration has proposed. Big 
alternative. You asked about alternatives. Our budget would provide the 
full coverage. This is what happened in the red States on the chart. If 
you live in those red States and have children, you are in big trouble. 
Here it is in 2008, an increasing number of States that are going to be 
excluded.
  Finally, by 2012, under the Republican budget--look at this--
virtually 80 percent of the States will see a drop in the coverage for 
their children. With the program that has been put forward by Senator 
Conrad and others, it will mean all of this will be white because we 
will make sure all of those children are covered.
  Now, what is the impact in terms of health disparities? Let's talk 
now about the impact on children. We talked about the numbers. We 
talked about the budget. Let's talk about what the health impact is on 
the children.
  The SCHIP program reduces health disparities. This chart shows the 
disparities between the various groups before the enrollment--between 
White, African American, and Hispanic--and after enrollment. Look at 
this dramatic reduction in terms of the disparities.
  Health disparities are one of the principal problems we are facing in 
our health care system today. This is one of the best ways to resolve 
the health disparities, with the Baucus amendment, to try to make sure 
that there is coverage for every child in America, because of all of 
the long-range implications of reducing the costs of health care, but 
most of all because we care about the children.
  This shows one particular disease: asthma. We have seen the rate of 
asthma virtually double over the period of the last 5 years. The 
principal reason for that is because this administration has relaxed 
environmental protections and increased numbers of toxins that are in 
the air. We have double the number of children who are dying from 
asthma now, this year, than we had 9 years ago.
  But look at what this does for those children who have asthma, before 
enrollment and after enrollment--the dramatic reduction. Here are the 
number of asthma attacks, the number of medical visits, and we see the 
dramatic reduction of attacks in terms of the children of this country.
  So it really comes down to this: This chart demonstrates the 
alternatives, what is included in the Baucus-Rockefeller amendment and 
what we have with the Republican proposal. Their proposal is less than 
half than what is needed to maintain the current services--the current 
services; not increasing and providing the health care coverage for 
children but just for current services--and the Senate budget 
resolution is the $50 billion to cover all eligible children. That is 
the issue. This

[[Page 7002]]

budget puts the children first, and the most dramatic example of that 
is the strong commitment to ensure that all the 6 million children who 
are eligible for CHIP and Medicaid are covered. Those who are basically 
the sons and daughters of working families in this country will know 
that under this budget, help is on the way. This will be true in every 
State across this country.
  This has been a success, and it has been bipartisan. I take my hat 
off to my colleagues and friends, Senator Hatch, Senator Snowe, and 
Senator Smith--all Republicans. Republicans and Democrats have worked 
together. But on this issue in terms of priorities, which is a key 
element in this budget debate and a key difference between the two 
views about the budget, this amendment is an essential aspect of the 
budget proposal, and I commend Senator Conrad and those on the Budget 
Committee for supporting it.
  I yield back the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. Mr. President, let me thank the Senator from 
Massachusetts and thank those who have spoken on SCHIP.
  I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  Mr. CONRAD. Mr. President, could we do 5 minutes?
  Mr. KENNEDY. Five minutes, yes.
  Mr. CONRAD. I thank the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota yields 5 minutes 
to the Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, if you would let me know when there is 1 
minute left.
  I would like to take a few minutes to respond to the points the 
senior Senator from New Hampshire made yesterday regarding the track 
record of the administration and the Republican Congress on education 
funding.
  Senator Gregg points to the historic increases in the No Child Left 
Behind Act funding under President Bush, but what he doesn't point out 
is that most of the increase happened after the first year of enactment 
of the No Child Left Behind Act when Democrats controlled the Senate 
and demanded a substantial increase. Since then, new funding for 
elementary and secondary education has plummeted.
  These are the figures. The President's budget for fiscal year 2002 
contained virtually no increase in funding for No Child Left Behind. In 
the two years following that, he actually proposed cuts in funding for 
No Child Left Behind. The year after that saw a minimal increase and 
then No Child Left Behind was actually cut. In fact, since President 
Bush has been in office, most increases in funding for education have 
come about due to pressure from Congressional Democrats.
  No Child Left Behind is only half the story. Under Republican control 
of the Senate, increases in funding for education programs overall have 
gotten smaller year after year.
  Two years ago, funding for education was actually cut by over half a 
billion dollars. Last year, the President proposed the largest cut to 
overall education funding in the history of the Department of 
Education--$2.2 billion--and again this year, the President's proposal 
is an overall cut of $1.3 billion.
  So my colleague from New Hampshire is right. President Bush claims to 
include an increase of $1 billion in No Child Left Behind funding in 
his budget for this year, but that is not a real increase. First, it 
does nothing more than fill the cut that was enacted in 2006, and 
worse, as he has time and again, the President robs other education 
programs to pay for it.
  As I mentioned, he proposes a $1.3 billion cut to education programs 
overall. That is not providing new resources for our schools; that is a 
shell game. But even more important than these points is the fact that 
the funding which has been secured is simply insufficient to fulfill 
the bipartisan promise to leave no child behind. That was a promise, 
not a political slogan. But year after year of broken promises by the 
White House and the Republican Congress have left 3.7 million children 
behind. Their budgets have meant larger, not smaller, class sizes. 
They've meant fewer teachers trained. This irresponsible neglect comes 
at a time when schools are being asked to do more.
  We had the debate and the discussion yesterday, and my colleagues 
listened to my friend and colleague from New Hampshire talk about all 
the increases in education. Go ask any school board in this country, go 
ask any superintendent in the country, go ask any teacher in this 
country what has happened in their school and what has happened in 
their district and what has happened in their community on education. 
You will hear the answer: It has been cut, cut, cut, cut. That has been 
the answer. You can make all the charts in the world. But go out and 
ask the schoolteachers, go out and ask the superintendents of schools, 
and they know what has been happening. It has been as we have described 
here.
  That has certainly been true as well in the Republican reconciliation 
bill last year, which my colleague from New Hampshire claimed provided 
$9 billion in student benefits and did not cut $12 billion from the 
student loan programs. The facts are that $22 billion was cut from the 
student loan programs. About $9 billion was spent by that bill more 
than half of it on sweetners for the banks, such as increased loan 
limits on federally subsidized loans and reduced origination fees which 
translate to increased profits for banks.
  A small grant program was included, but as my friend from New 
Hampshire acknowledged yesterday, 90 percent of students are not 
eligible for that program. 4.7 million Pell eligible students were left 
out in the cold.
  The Senate bill included $6 billion in grant aid for all Pell 
eligible students, but the Republicans jettisoned that proposal in a 
partisan conference. This program also wrongly limits eligibility to 
students enrolled in school full time. So forget it if you're trying to 
support a family and have to work while you're trying to get your 
degree. This limitation and others related to curriculum also exclude 
virtually all community college students.
  But the most important fact is one conceded by the Senator from New 
Hampshire. The vast majority of the cuts to student loan programs were 
not dedicated to student aid. Instead, $12 billion was used to offset 
tax giveaways for the wealthy.
  Our schools, children and families deserve more than accounting 
gimmicks. Our schools need new resources to make progress on reform, 
and families need real help to afford a college education for their 
children. Republican budgets have provided neither.
  How much greed do those lending companies want? Has anybody read the 
New York Times recently about what is happening with the investigations 
of the student loan program, those billions of dollars going to the 
student loan program? Sallie Mae--the value of its stock was $3.17 in 
January 1995; it has traded above $50 per share for most of this year. 
That is coming from students and from low- and middle-income families.
  But when you talk about investing in children, don't listen to the 
Senator from New Hampshire and don't listen to me; listen to your 
superintendent of schools, listen to the schoolteachers, listen to 
parents, and you will find out what has been happening and where the 
cuts have been over the past years. If there is a question about what 
has been happening in student loans, ask any middle-income or low-
income family. Ask any students who are going to our fine public and 
private colleges. You will find out the tuitions have been going up 
through the roof, and a substantial part of that is by the fact that we 
have a student loan program that works for the banks and not for the 
students.

[[Page 7003]]

  The PRESIDING OFFICER (Mrs. McCaskill). Who yields time?
  Mr. CONRAD. Madam President, unfortunately, we have two Senators and 
we have about 12 minutes remaining. Senator Reed, how much time do you 
need?
  Mr. REED. Five minutes.
  Mr. CONRAD. Madam President, I yield 5 minutes to Senator Reed and 
then the remaining time to Senator Murray.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Madam President, I thank the Senator for his gracious 
yielding of time and for his exceptional work on this budget.
  I wish to speak particularly to the issue of SCHIP. Shortly, Senator 
Cornyn will offer an amendment that was offered in the Budget Committee 
and defeated there, and it should be defeated on the floor of the 
Senate. His amendment seeks to tie the hands of the Finance Committee 
and make policy determinations on a program that has direct impact on 
millions of American families and children.
  Millions of low-income Americans receive their health care under the 
State Children's Health Insurance Program, SCHIP. This program is a 
safety net for low-income families. Rhode Island has provided 
extraordinary support to families working and struggling to provide 
health care for their children. By most estimates, the number of 
uninsured is going up in this country--most recently estimated at about 
46 million. If we undermine the SCHIP program, those numbers will 
increase and particularly, obviously, in the ranks of uninsured 
children.
  SCHIP provides approximately 20,000 Rhode Islanders with health 
insurance coverage. My State worked hard on a bipartisan basis--
Republican Governors, Democratic Governors, and the Democratic 
assembly--to build a health care system for children that works. A few 
years ago, we had one of the lowest rates of uninsured children in the 
Nation because of SCHIP and local efforts. In the last several years, 
the rate of uninsured children, even in Rhode Island, has gone up.
  We have to have the resources to keep this program going forward. 
These dollars mean the difference between children getting access to 
health care and being denied health care. It affects their ability to 
learn in school and their long-term ability to be productive and 
contributing citizens. This is a vital program.
  We see these shortfalls perennially in some States that aggressively 
support the SCHIP program. We have been able to make fixes in the past, 
redistributing funds. This time, we need a budget--and Senator Conrad 
has provided it--that will give us the resources and flexibility to 
reauthorize SCHIP so it will work in the future.
  Senators Boxer, Conrad, and Rockefeller have put forth responsible 
amendments to deal with the SCHIP policy issue. Unlike the proposed 
amendment of Senator Cornyn, the Baucus-Rockefeller amendment puts the 
needs and interests of children first in the context of 
reauthorization.
  I believe this budget, including up to $50 billion to expand SCHIP, 
is exactly the right direction. When you go to Rhode Island, or any 
State, and you talk to particularly the working people who are 
struggling to make ends meet, the No. 1 issue on their minds is: How 
can I afford health care insurance?
  I had a neighbor rush across the street last Friday morning, while I 
was clearing the snow off my car, who said: I don't know what I can do; 
my health insurance just went up 66 percent. That is the crisis real 
Americans face every day. This is a response--a very important 
response--but not a final answer to health care in the United States. 
Goodness gracious, if we cannot take care of children and give them 
health care, then what else should we do? What is more important than 
that?
  I think we have to recognize that some States, such as mine, have 
been able to expand this program to include the parents of some of 
these children. That is a positive step because it provides better 
health care for the whole family. In fact, the statistics and analyses 
show if you can have a family treated as a whole, you have a better 
health outcome. Also, it provides, again, another way to stop the ever 
increasing number of uninsured Americans, be they children or adults.
  I congratulate Chairman Conrad for his work and commitment. I hope 
when we leave this budget debate, we can proclaim loudly and proudly we 
have expanded coverage health care coverage for children in this 
country. That is something I think we can all take great pride and 
claim satisfaction in doing. I urge us to reject the Cornyn amendment 
and support this budget. I commend Senator Conrad for what he has done.
  I will make several quick points about the budget. It restores fiscal 
discipline. I commend the chairman for that. It adds important assets 
and commitments to affordable housing funds. The language allows us to 
go forward on that. Education and veterans are important priorities. 
This budget is one of which the people can be proud. I know the people 
of Rhode Island will be.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Mrs. MURRAY. Madam President, I rise to support the Baucus amendment 
as opposed to the Cornyn amendment. I am thrilled this budget before us 
addresses health care in a responsible way in the amendment from this 
side. We provide up to $50 billion for this critical Children's Health 
Insurance Program over the next 15 years that will allow eligible 
children, who are not today enrolled, to be able to get the coverage 
they so necessarily need, and it is a critical step.
  I commend the authors on this side and Senator Conrad for his 
tremendous work on that amendment. I rise also to thank Senator Conrad 
for his tremendous leadership in finally bringing us a budget that 
redirects the priorities of America's working families. Our families 
across the country want us to focus on strengthening our country from 
within. That starts by investing at home in our schools, as Senator 
Kennedy talked about, and in our infrastructure, and in our 
communities. That is exactly what this budget does. It still provides 
every dollar the President asked for for Defense spending over the next 
5 years.
  Americans want us to make investments in our future in a responsible 
way. Every family knows the importance of fiscal discipline and the 
importance of keeping a balanced budget. They expect the Federal 
Government to share that responsibility. With this budget, we are 
restoring an important pay-as-you-go rule that means we are being 
responsible today, and we are not burdening our grandchildren with new 
debt tomorrow.
  American families, we know, also need relief from taxes that are too 
much today squeezing the middle class, and the budget Senator Conrad 
has put forward provides relief from the alternative minimum tax for 2 
years and avoids any tax increases. I commend him for his responsible 
approach.
  With this budget, we are proving we can invest in our people and our 
communities and our security without sacrificing the future. It is 
important to note, as we debate the budget today, that it reflects a 
new direction for our country. I recall last November when the American 
people demanded a change, and this budget reflects that call. It says 
across this country that we will no longer see our veterans 
shortchanged on their medical care; we will no longer see our 
communities facing very painful cuts in housing; we will no longer have 
our ports having gaping security holes they have faced for too long; no 
longer will our schools be so underfunded; no longer will community 
health care be undermined continuously at the Federal level; and 
importantly, no longer will we keep forcing more debt onto our children 
and grandchildren, without a plan to bring this budget back into 
balance.
  On this side, we have said for a number of years there is a better 
way, and this budget proves that. I recognize, as we all do, we cannot 
fund everything everybody wants. No budget can. But this budget, I 
believe, moves us in the right direction in a responsible way, and that 
is a dramatic new start for

[[Page 7004]]

this Senate. Last year, we were struggling to protect critical needs. 
This year, we are investing in them.
  I wish to highlight some of the national priorities in this budget. 
We know the Bush administration has not adequately funded veterans 
health care. Now, as we begin the fifth year of this war this week, 
that becomes more and more evident across the country--whether it is 
our veterans, who have been struggling to get mental health care, or 
are waiting in long lines for benefit claims, or a lack of focus on the 
signature issue of this war, traumatic brain injury, that we have seen 
highlighted in the press over the last several weeks, or seeing that 
veterans are shortchanged at medical facilities, as we saw with Walter 
Reed.
  This budget we are presenting to America increases our support for 
veterans by $3.5 billion over the President's proposal. In fact, the 
total $43.1 billion we are now investing in veterans' care represents a 
full 98 percent of the independent budget. That is the budget that has 
been devised by our veterans service organizations that, as we all 
know, clearly have proven to be fairly accurate in what they have told 
us they needed over the last years.
  Our budget also, importantly, rejects the President's proposal that 
would have imposed new fees and higher drug copayments on some of our 
veterans. Those fees would force more than 100,000 of our veterans to 
leave the VA health care system, and that was wrongheaded.
  I have seen personally the detrimental effects of underfunding 
veterans health care. As everybody knows, I have fought very hard on 
this floor to fix the administration's funding blunders and had to work 
hard here to increase veterans funding by $3 billion in 2005 and 2006. 
By increasing funding for veterans, this budget finally does what the 
administration has failed to do, and that is recognize the service and 
sacrifice of those men and women who have paid the price of this war.
  We heard Senator Kennedy a few minutes ago make a strong statement on 
education. This budget begins to invest here at home in our schools. We 
have seen years of painful cuts. After that time, we have produced a 
budget today that addresses the needs of American families who worry so 
much about finding and affording educational opportunities for their 
children. This budget provides the largest increase in funding for 
elementary and secondary education programs in 5 years. That is going 
to make a real difference for families across this country. We increase 
funding for the Department of Education by $6.1 billion above the 
President's budget and restore all of the painful cuts he proposed--in 
Perkins grants, Pell grants, Head Start, No Child Left Behind, and the 
Individuals with Disabilities Act. Those are not just names of 
programs; those are real children who are impacted by the lack of 
funding we have seen, and this budget restores that.
  I can tell my colleagues that as a former educator and a parent, I 
know the importance of having the full partnership of the Federal 
Government in supporting our children and our students. I am so glad 
this budget strengthens the partnership and eliminates harmful cuts.
  I also wish to mention the important investment in this budget in 
securing our ports. Last year, I worked with other Senators on both 
sides of the aisle to pass the Safe Ports Act. Unfortunately, even with 
the passage of that authorization, the President didn't adequately fund 
this vital program for the security of our country. We, in this budget, 
increased funding for the Safe Ports Act and provided $400 million for 
the Port Security Grant Program. That funding means more radiation 
detectors, more partners in safe trade, and more customs officials who 
are needed in order to facilitate our trade.
  I am very proud that this budget takes real steps, concrete steps to 
improve port security, while also making sure we maintain and improve 
our trade efficiency.
  Finally, I give my personal thanks to Senator Conrad and his staff 
for their tireless work in leading the fight on this budget. It has 
been a privilege to stand at his side on the Budget Committee and to 
work with him to right this fiscal ship.
  This budget, once again, invests in the true priorities of the 
American people while keeping the needs and aspirations of our future 
generations in mind. I look forward to passing this budget so we can 
move forward with the new direction the American people have demanded.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Madam President, it is my understanding that under the 
prior order, Senator Kyl is now recognized for an hour, with Senator 
Kyl having 40 minutes under his control and the Democratic side having 
20 minutes under their control.
  The PRESIDING OFFICER. That is correct.
  Mr. KYL. Madam President, I thank the Senator from New Hampshire, the 
ranking member of the committee, for all his hard work and support for 
those of us who have prepared amendments and would like to offer them.
  This is actually the Kyl-Graham amendment. The Senator from South 
Carolina will be offering this amendment and, incidentally, as soon as 
we have the exact text typed, we will present that for actual formal 
submission, but I can begin talking about it right now. Let me begin 
doing that.
  The purpose of this amendment is to demonstrate, I believe, that 
there is sufficient ability in this budget to take care of a couple of 
problems that are very important and which we believe should be 
included within this budget before it gets passed: provisions that 
provide for the education of American children, provide for capital 
gains and dividend tax relief to continue to exist both for our 
families and businesses and the competitiveness of our economy, as well 
as other provisions which were not included in the underlying budget, 
such as death tax reform, which I think most of us acknowledge needs to 
occur and which we need to provide for in the budget.
  This amendment Senator Graham and I will be offering in a moment is 
designed to include these very important provisions which I think most 
of us support in the budget. Not to do so would clearly represent a 
very big hole, I suggest, in the budget.
  There is a suggestion in the amendment that was offered by the 
Senator from Montana and others that what Republicans have been saying 
about this budget resolution--namely, that it raises taxes on every 
American taxpayer--is, in fact, the case because as approved by the 
Budget Committee on a party-line vote, I might add, this budget raises 
taxes by $916 billion over the 5 years of the budget, which would be, 
of course, the biggest tax increase in the history of the country.
  The chairman of the Senate Finance Committee, the Senator from 
Montana, well understood this, and I suggest probably is the reason for 
his offering of the amendment to reduce the revenue that is projected 
by the budget resolution and then, in his case, purports to dedicate 
that revenue to middle-class tax relief. He wouldn't be offering this 
amendment were it not for the recognition that there is a huge tax 
increase in the budget that came from the Budget Committee.
  So I submit, to begin this conversation, that Senator Baucus's 
amendment is a good start, but it leaves in place the tax hikes on 
millions and millions of Americans, and that is not something most 
Republicans want to see.
  If the Baucus amendment is adopted, then Democrats will be proposing 
to raise taxes on hard-working Americans by $736 billion over 5 years, 
rather than the $916 billion, still the biggest tax increase ever. We 
don't think this is right.
  Incidentally, on a technical note, according to the Republican Budget 
Committee staff, the Baucus amendment increases the deficit in 2010 and 
2011. This is important. When the interest is factored in, the Baucus 
amendment would take the budget out of balance in 2012 by some $6 
billion. In the past, the Budget Committee members have had an informal 
agreement that interest would not be computed for amendments because it 
would be too cumbersome.

[[Page 7005]]

  While this amendment would take the budget further into deficit--
preventing tax increases is more important than worrying about a small, 
manageable size deficit--it may be interesting to note that the Baucus 
amendment would have this effect.
  In addition to raising taxes, we are talking about increasing the 
amount of deficit.
  The Senator from Montana notes that his amendment would extend the 
10-percent bracket, the child tax bracket, the marriage penalty relief, 
the adoption tax credit, the earned-income tax credit for combat pay, 
and provide modest estate tax relief. I agree with the Senator on all 
these policies except with the modesty of the death tax relief.
  Senator Baucus and some of his cosponsors, especially the two 
Senators Nelson, have always supported repeal of the death tax, as have 
I. So it is disappointing to many family businesses and farm owners 
that we now have sponsors who had supported the repeal of the death tax 
endorsing an amendment that would set the death tax rate at what I 
believe is a confiscatory 45 percent and set the exemption at only $3.5 
million, which most of us believe is too low. This leaves more than 
22,000 families subject to the estate tax each and every year, 
according to the Joint Tax Committee.
  Another one of the cosponsors of the amendment of the Senator from 
Montana, the Senator from Arkansas, says on his Senate Web site that he 
supports a $5 million exemption and a 35-percent rate. I am 
disappointed he would then be endorsing a proposal that would have a 
45-percent rate. A 45-percent rate allows the Government--think about 
this for a moment--to take almost half a family farm or business over 
the $3.5 million exempted amount at the time of death.
  There is a reason this particular policy has been supported by life 
insurance companies. I think everybody can understand that. It keeps 
the onerous death tax in place and would require these family 
businesses and farms to continue to pay exorbitant premiums to 
insurance companies.
  One of the reasons we would like to eliminate the death tax is so we 
don't have to pay the burden of trying to avoid the tax, which a lot of 
these small businesses have to do.
  As I said, the Kyl-Graham amendment we think substantially improves 
the Baucus amendment by modifying the year-to-year revenue numbers so 
that certain tax provisions that have been essential in helping 
families pay education expenses essential to our economic recovery, 
essential to savings for retirement, senior citizens, and families 
facing the death tax are provided for in this budget. Let me quickly go 
through them and then ask my colleague, Senator Graham, to make further 
comments.
  On the matter of education, the Baucus amendment fails to extend the 
many education tax provisions that are scheduled to expire. Our 
amendment, on the other hand, makes higher education more affordable 
for middle-class Americans by extending the tuition deduction, 
extending the modifications to the Coverdell education savings 
accounts, extending certain provisions for the student loan interest 
deduction, and for extending the exclusion for employer-provided 
educational assistance.
  These are important provisions to American families. They need to be 
recognized in this budget.
  Our amendment permanently extends the $250 deduction for expenses of 
elementary and secondary school teachers who, on many occasions, are 
required to pay for the very school supplies they feel are necessary 
and are important for educating the kids for whom they are responsible.
  These are the education provisions.
  On capital gains and dividends, who can argue that the capital gains 
and dividend tax rate reductions have been two of the most important 
reasons for the strong economic recovery that our country has made. Yet 
the Baucus amendment fails to prevent an increase in these two 
important tax rates.
  An extension of the current rates would allow our economic recovery 
to continue. Allowing these rates to expire and to go back up to where 
they were would be devastating for our economy and for the 
competitiveness of our capital markets and, by the way, for the 
retirement savings of many Americans.
  So the Kyl-Graham amendment permanently extends the reduced tax rate 
for qualified dividends and capital gains for nearly 18 million 
families and individuals every year. That, too, is an important 
component that should be in this budget.
  Quickly on two items before I turn to the discussion of the death 
tax, this goes to competitiveness. What our amendment would do is 
prevent tax increases that would clearly hurt our competitive position 
in the world economy. We talk about outsourcing of jobs and 
competitiveness and the rest of it. If you want to know what will save 
American jobs and will allow us to continue to grow, it is the tax 
rates that Senator Graham and I preserve in this budget.
  America cannot be the home for worldwide capital markets if it is 
hostile to American investors. So the amendment makes the existing tax 
rates for long-term capital gains and for qualified dividends permanent 
tax policy. We understand that the lower tax rates that were 
implemented in 2003 and extended again in 2006 have been a tremendous 
success for our economy and have benefited a broad range of American 
citizens.
  Growth, since the 2003 tax relief, has averaged more than 3.5 percent 
a year, while it averaged 1.3 percent from the first quarter of 2001 
through the second quarter of 2003, before these tax rates were put 
into effect.
  The Dow Jones industrial average has risen by 40 percent since the 
lower investment tax rates were enacted.
  The average 401(k) balance has risen by about 65 percent since 2003, 
very good news for American families and investors.
  Why would we want to destroy this tremendous growth in the economic 
wealth of Americans? All of this investment activity makes it easier 
for entrepreneurs and businesses to raise funds to expand and grow 
their businesses, create more jobs, and improve the standard of living 
for all Americans.
  By the way, to answer the question of who benefits by all this, some 
of our colleagues are prone to suggest it is only the wealthy who 
benefit. Not so. It is interesting to note that most Americans who are 
benefiting from these lower tax rates are middle-income taxpayers. 
Fully 43 percent of tax filers in 2004 reporting capital gains had 
adjusted gross income of under $50,000. These are not the wealthy; 
these are not the rich. Just 9.5 percent of filers reporting capital 
gains had an adjusted gross income of $200,000 or above.
  So the majority of Americans benefiting from these lower tax rates, 
the rates we preserve in the budget if our amendment is adopted, are 
average, middle-class Americans.
  For lower income Americans, the current 5-percent rate for 
investments, which drops to zero in 2008, is another important but 
sometimes forgotten benefit, especially, important, I might add, to our 
senior citizens.
  According to statistics calculated by the Joint Committee on 
Taxation, more than 75 percent of all elderly taxpayers' returns 
reporting capital gains income have adjusted gross incomes of less than 
$100,000; more than 40 percent have incomes of $50,000 or less. Again, 
wealthy, the rich? No, we are trying to preserve lower tax rates for 
middle-income Americans and for senior citizens who rely significantly 
on their investment income in their retirement.
  Madam President, 79 percent of all elderly taxpayers' returns 
reporting dividend income have incomes of $100,000 or less, and 44 
percent have incomes of $50,000 or less, adjusted gross income. So 
clearly, continuing these lower tax rates is important for our senior 
citizens and for middle-income Americans.
  Incidentally, these lower tax rates, far from blowing a hole in the 
budget, have actually helped increase revenues far beyond the 
projections of CBO.
  I note that since 2003, Treasury has collected $133 billion more in 
capital gains revenue than was originally projected by CBO and exceeded 
the official CBO projections by 68 percent.

[[Page 7006]]

  In the meantime, all the additional tax revenue flowing into the 
Treasury from our growing economy has caused our budget deficit to 
shrink below 2 percent of GDP, which is below the historical average.
  If we stay on this current path, we can see continued increase in 
revenues, continued reduction in the deficit, and continued growth of 
our economy, not to mention support for our families and retirees.
  Last point. What happens if the budget is adopted without providing 
for the continuation of these lower tax increases? Last fall, Goldman 
Sachs conducted a very interesting analysis. They wanted to see how the 
economy would react if taxes were increased in 2011, as the Democrats 
advocate.
  Their analysis showed that the tax increase, and I am now quoting, 
``would almost surely mark the onset of a recession.'' Their analysis 
assumed that the Federal Reserve would step in and cut interest rates 
to boost the economy, and I am quoting here, ``In an effort to 
resuscitate demand, the Fed immediately cuts the federal funds rate, 
bringing it 250 basis points below the status quo level over the next 
year and one-half. Despite this, output growth remains well below trend 
over that period, putting downward pressure on inflation as slack in 
the economy increases.''
  That is a projection of what would occur if this were to happen. We 
want to prevent this. We want to keep the economy strong and not allow 
anything that would cause it to go into recession.
  Just a final point having to do with the death tax reform. We can't 
pass a budget that doesn't include an assumption that we are going to 
reform the death tax. We ought to be repealing the death tax. But what 
we have done in this amendment is to provide an amount of money that 
would accommodate the kind of death tax reform that has been supported 
by both Republicans and Democrats.
  Last year, the senior Senator from Louisiana introduced a death tax 
reform bill, S. 3626, which would provide for a $5 million exemption 
per estate, indexed for inflation. It would provide for a family 
business ``carve out,'' a 35-percent rate to taxable estates, and it 
would begin in the year 2010. The Senator from Arkansas, Mr. Pryor, has 
endorsed death tax reform that meets these specifics in a statement, 
according to his Web site.
  Now, our amendment provides room in the year-by-year revenue numbers 
in the budget to accommodate death tax reforms such as those which were 
proposed by Senator Landrieu and endorsed by Senator Pryor. There have 
been other Members on the Democratic side of the aisle who have 
supported proposals I have introduced on death tax reform.
  What we are very much hoping is that all of the people, both 
Republicans and Democrats, who have supported these proposals in the 
past will remain true to their commitments to their constituents to 
make sure small farms and small business owners aren't going to have to 
prepare for or pay the death tax and that we would make room for that 
in this budget. If we fail to do that, then clearly we are not going to 
be able to provide the kind of relief our constituents demand and 
deserve.
  Our amendment provides room in the year-by-year revenue numbers to 
accommodate death tax reform such as that which has been proposed by 
our Democrat colleagues and, I would add, that I have proposed as well.
  Now, of course, budget resolutions don't dictate policy to the 
Finance Committee, so it would certainly be our intention to work with 
a lot of different Senators. I worked with Senator Lincoln in the past, 
and certainly we would want to work with Senators Landrieu and Pryor 
and all of the others who have indicated they would be willing to 
support a kind of death tax reform. As long as we have provided the 
numbers in the budget as Senator Graham and I propose here, then we can 
work to make those provisions law.
  I would hope we could craft an estate tax proposal that would provide 
an exemption of at least $5 million, indexed for inflation, that 
provides workable relief for the smallest estates, and that provides 
for a top death tax rate which is no higher than 35 percent--no higher 
than 35 percent. Workable relief could mean a lower rate for the 
smallest estates; it could also mean a family business carve-out as 
long as it actually works for small businesses and farms and doesn't 
drive up their administrative costs and leave them with planning 
uncertainty.
  All of these are goals both Democrats and Republicans have endorsed. 
We hope our colleagues on both sides of the aisle will therefore agree 
with us that it is important for us to accommodate in this budget room 
to extend the important tax provisions for education, capital gains and 
dividends, and for the estate tax.


                           Amendment No. 507

  Madam President, I understand the amendment about which I have just 
been speaking is actually at the desk. I would like to call it up at 
this time, and I ask unanimous consent that Senator Graham be added as 
an original cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Arizona [Mr. Kyl], for himself and Mr. 
     Graham, proposes an amendment numbered 507.

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

  (Purpose: To protect families, family farms and small businesses by 
raising the death tax exemption to $5 million and reducing the maximum 
 death tax rate to no more than 35 percent, to extend college tuition 
deduction, to extend the student loan interest deduction, to extend the 
  teacher classroom deduction, to protect senior citizens from higher 
  taxes on their retirement income, to maintain U.S. financial market 
competitiveness, and to promote economic growth by extending the lower 
               tax rates on dividends and capital gains)

       On page 3, line 11 increase the amount by $390,000,000.
       On page 3 line 12, decrease the amount by $184,000,000.
       On page 3, line 13, decrease the amount by $3,796,000,000.
       On page 3, line 14, decrease the amount by $31,544,000,000.
       On page 3, line 15, decrease the amount by $36,398,000,000.
       On page 3, line 20 increase the amount by $390,000,000.
       On page 3 line 21, decrease the amount by $184,000,000.
       On page 3, line 22, decrease the amount by $3,796,000,000.
       On page 3, line 23, decrease the amount by $31,544,000,000.
       On page 4, line 1, decrease the amount by $36,398,000,000.
       On page 4, line 6, decrease the amount by $9,000,000.
       On page 4, line 7, decrease the amount by $14,000,000.
       On page 4, line 8, increase the amount by $78,000,000.
       On page 4, line 9, increase the amount by $912,000,000.
       On page 4, line 10, increase the amount by $2,552,000,000.
       On page 4, line 15, decrease the amount by $9,000,000.
       On page 4, line 16, decrease the amount by $14,000,000.
       On page 4, line 17, increase the amount by $78,000,000.
       On page 4, line 18, increase the amount by $912,000,000.
       On page 4, line 19, increase the amount by $2,552,000,000.
       On page 4, line 24, decrease the amount by $399,000,000.
       On page 4, line 25, increase the amount by $170,000,000.
       On page 5, line 1, increase the amount by $3,874,000,000.
       On page 5, line 2, increase the amount by $32,456,000,000.
       On page 5, line 3, increase the amount by $38,950,000,000.
       On page 5, line 7, decrease the amount by $399,000,000.
       On page 5, line 8, decrease the amount by $230,000,000.
       On page 5, line 9, increase the amount by $3,645,000,000.
       On page 5, line 10, increase the amount by $36,101,000,000.
       On page 5, line 11, increase the amount by $75,051,000,000
       On page 5, line 15, decrease the amount by $399,000,000.
       On page 5, line 16, decrease the amount by $230,000,000.
       On page 5, line 17, increase the amount by $3,645,000,000.
       On page 5, line 18, increase the amount by $36,101,000,000.

[[Page 7007]]

       On page 5, line 19, increase the amount by $75,051,000,000
       On page 25, line 12, decrease the amount by $9,000,000.
       On page 25, line 13, decrease the amount by $9,000,000.
       On page 25, line 16, decrease the amount by $14,000,000.
       On page 25, line 17, decrease the amount by $14,000,000.
       On page 25, line 20, increase the amount by $78,000,000.
       On page 25, line 21, increase the amount by $78,000,000.
       On page 25, line 24, increase the amount by $912,000,000.
       On page 25, line 25, increase the amount by $912,000,000.
       On page 26, line 3, increase the amount by $2,552,000,000.
       On page 26, line 4, increase the amount by $2,552,000,000.

  The PRESIDING OFFICER. Who yields time?
  Mr. KYL. I yield to the Senator from South Carolina, Madam President.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. GRAHAM. If that is acceptable with my colleagues, I will speak 
now, Madam President.
  Ms. STABENOW. If I may inquire, Madam President, is the Senator 
speaking on this amendment?
  Mr. GRAHAM. Yes, I am.
  Ms. STABENOW. I would ask to be recognized after that.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAHAM. Madam President, I really don't have much to add because 
Senator Kyl has done an outstanding job in explaining our amendment and 
the benefits to the country if we pass this amendment.
  To the people in South Carolina who might, by chance, be listening, 
the reason I am so passionate about trying to extend the tax cuts and 
making sure this budget does not deal a death blow to tax cuts that 
have been in place in some form or manner since 2003 is the evidence is 
overwhelming that they have helped our economy.
  Just to kind of build on what Senator Kyl has said, my belief is the 
global economy of the 21st century is going to require America to 
rethink across the board how we engage our global competitors. 
Americans have to ask themselves these questions: Is our tax structure 
going to be globally competitive? Are we going to have a tax structure 
that will allow capital to be welcome in this country so that people 
who take risk can be rewarded here or will we drive people somewhere 
else?
  The regulatory side of government, the litigation side of our 
American experience here needs to be looked at anew out of a sense of a 
need to fit into a global economy and to be fair to all our citizens. 
In my opinion, the worst thing we can do is to create a tax structure 
that drives jobs overseas.
  In this economy, where anyone can do business anywhere in the world, 
people do look at tax rates in making decisions about whether to invest 
here or somewhere else. From the Government's point of view, the 
evidence is overwhelming that the tax reductions in dividends and 
capital gains, particularly capital gains, have generated revenue to 
the Federal Government. As we have lowered the rate down to 15 percent, 
in some cases to zero and other cases 5 and 10 percent, with a maximum 
capital gains rate of 15 percent, people have generated a lot of 
capital gains transactions that have been good for the economy and good 
for the Federal Treasury, and they are due to expire.
  This budget, the way it is drafted, is going to deal a death blow to 
tax reductions that have been beneficial to the economy--and without a 
good reason, in my opinion. There is no good reason. The question is, 
Does this budget deal a death blow to tax cuts? The answer has to be 
yes, simply because Senator Baucus is trying to extend tax cuts by an 
amendment. And I wish to congratulate him. I am not here to play 
``gotcha'' politics. What he is trying to do in his amendment is a 
wonderful thing. He is trying to make sure the 10-percent tax bracket 
is extended for a couple more years in this budget. He is trying to 
make sure the $1,000 child tax credit is extended as far as this budget 
applies and we don't revert back to a $500 per child tax credit. In 
South Carolina, a $1,000 per child tax credit for the families who have 
been eligible has made a world of difference to people.
  My State, like every other State, has great success stories 
economically and where you have people living paycheck to paycheck. The 
marriage penalty relief has been good for families in my State. The 
dependent care credit has been good for people trying to work and raise 
kids. Adoption credits have been good, helping to create new families. 
There is nothing more exciting as a lawyer than to be involved in an 
adoption where you get a child who has no home and you marry them up 
with a family that wants a child. It is just a wonderful experience. 
There is combat pay and the EITC exemption.
  None of us disagrees with those. Why not go forward into the other 
areas where we have cut taxes that have benefited the Treasury and 
benefited job creation? The only reason I can think of is there is a 
view that there are some Americans who are entitled to tax relief and 
some who are not. The ones to whom we don't want to give tax relief in 
this budget have been labeled ``the rich'' and are somehow unworthy of 
being included in this budget.
  Class warfare is a time-tested political endeavor whose time has 
passed. We are in this together. There are about 270,000 people in my 
State who depend on capital gains income and dividend income. Senator 
Kyl has gone through, in very detailed fashion, who benefits from 
capital gains and dividend tax reductions, and there are a lot of 
seniors.
  At the end of the day, though, we have a choice to make as a 
Congress. We can do what Senator Baucus wants, which I wholeheartedly 
support, and we can stop believing that people on the other side of the 
river, when it comes to taxes, just make too much money or they do not 
need the help. I would argue that if you are in business today, 
creating a product for sale in the global economy, you need help when 
it comes to your taxes because some of your competitors have tax rates 
a lot lower than the United States.
  When it comes to lowering dividend tax rates, how does that help 
America? People will invest in companies that pay dividends, they will 
buy stock, which helps American corporations capitalize, if the tax 
rates are lower. It is not just a theory; it is a fact. When you are 
trying to grow your business, you can get investors from the private 
sector or you can go to the bank and borrow money. It seems to me we 
would want to create an environment so that corporate America, whatever 
the size, could get money from the private sector to grow their 
businesses without being so debt laden, and the people who are 
receiving dividends, that would be income to help them in their retired 
years, which would be a win-win situation.
  We can't afford to divide America any longer based on how much one 
makes or this concept that some of us are more worthy of protection 
from the Tax Code than others. The Tax Code is not going to allow us as 
a nation, in its current form, to survive in a global economy. But if 
we extend the tax cuts in this budget, it would be a good signal to the 
private sector in America that they are going to be able to count on--
for at least a couple more years--some tax cuts that have worked to 
produce jobs.
  The real challenge of this Congress lies ahead; that is, trying to 
find a way to simplify the Tax Code. That is a debate for another day. 
Our friends on the other side have been in charge of the Congress now 
for a couple of months, and this is a test, in my opinion, of how the 
Democratic Congress views the needs of America across the board in a 
global economy. Again, the evidence is overwhelming. There is 
overwhelming evidence that the dividend tax reductions and the capital 
gains tax reductions have been beneficial to the Treasury.
  The amendment of Senator Baucus to extend tax cuts for working 
families, to extend marriage penalty relief, and the $1,000 child tax 
credit, to make sure it doesn't go to $500, should be applauded. I see 
the need, as a Senator from South Carolina, for what he is

[[Page 7008]]

doing. It is frustrating that I cannot convince my friends on the other 
side that the need exists in abundance in South Carolina and everywhere 
else in the country to keep our tax rates low when it comes to the 
entrepreneurial spirit that has made us great, that the capital gains 
rates need not go up. They need to stay where they are, as long as we 
can keep them that low, until we find a new Tax Code. The dividend tax 
rates need not go up or double in a few years. They need to stay low 
because America needs jobs. The way you create jobs is you leave as 
much money as reasonably possible in the private sector and you have a 
tax structure that rewards people who decide to take risk and invest.
  What America needs more than anything else is some certainty as to 
the death tax dilemma we created. There is a great debate going on in 
this country about the role of the death tax in the 21st century. It is 
indefensible, apparently, to say that the current rates and the current 
exemptions are fair. I think we have won the argument that the death 
tax, without change, is going to put a lot of people at risk who have 
made something of their lives, the family farm or the small business. 
As Senator Kyl said, there is a lot of buy-in with our Democratic 
colleagues that we need to increase the exemptions fairly dramatically 
because people can be land-rich and cash-poor. I know in South Carolina 
there are a lot of people who have inherited tracts of land, and the 
death tax appraisal requires the family to break up the property and 
sell it. About 70 percent of small businesses, they tell me, never make 
it to the third generation--one of the reasons the business has to be 
bought back from the Government.
  I think we have all bought into that as a body, that the exemptions 
need to change. I hope we have bought into the idea that the rates need 
to be lower because they are oppressively high. But here is the dilemma 
we have created for the country. It is my understanding, given the tax 
packages we have passed over the last several years, the death tax 
exemptions go up over time and eventually go to zero in 2010. In 
January 2011, unless we do something as a body, they go back to the old 
system.
  I have been a lawyer for a long time. There are going to be a lot of 
mysterious deaths on New Year's Eve 2010 because if you live the next 
day there is going to be a big hit to the family when it comes to tax 
rates. It is not right for us to put the American business community 
and the family in that position. We need to help straighten this mess 
out. I am very openminded to compromises, but it is not fair for 
someone, if they live 1 day longer than they should, half of what they 
have worked for all their life goes to someone they don't know. We can 
do better than that. That is the place we find ourselves in America. 
The Congress has created the dilemma that if you die on New Year's Eve 
2010--I think that is the correct date--your family has absolutely no 
estate tax liability. If you die the next day, almost half of what you 
have worked for in your entire life is gone through taxation. We can do 
better than that.
  One way to start doing better is to pass a budget that would include 
what Senator Kyl has described on the list of Senator Baucus.
  I do believe the country is dying for us to come up with a rational 
system of how we tax the American people, including low-income, middle-
income, and upper-income Americans. I am trying the best I can to 
express to a lot of people in South Carolina, who live paycheck to 
paycheck, that we are all in this together. If I overtax the business 
owner, your job is threatened because his business may move offshore. 
People back home in South Carolina very much get that.
  If you are in a manufacturing State, as I am, like Michigan, one of 
the reasons our jobs are leaving this country is because you can go to 
places such as China and other places and not have the burdens you have 
here. I do not want to chase China to the bottom, don't get me wrong. I 
want to put a floor on what China does. I think we will make a mistake 
chasing China to the bottom. But I think we would make an even bigger 
mistake if we do not address, in this budget, tax relief that has 
worked for Americans across the board.
  We have a chance in this amendment to do something about death taxes 
that is extremely rational and would get America out of the dilemma of 
dying on the wrong day. We have something in this amendment that would 
allow the capital gains rate reductions to stay in place a couple of 
years longer and keep the dividend taxes low because they more than 
paid for themselves, and we have some education tax relief.
  If we add this amendment with what Senator Baucus has done, I think 
we could say this budget does a very good job of trying to extend for 
the life of this budget tax relief across the board that has worked for 
all Americans.
  Finally, if we buy into the idea that there is a certain group of 
Americans who are not worthy of tax relief, we are going to, over time, 
make it very difficult for the American economy to survive globally, 
and we are going to create a dynamic in the 21st century that I think 
will come back to haunt us over time.
  With that, I urge my colleagues to vote for the Kyl-Graham amendment 
because when you marry it up with the Baucus amendment, we have done a 
pretty good job of extending tax relief across the board in a way that 
will help the American economy from top to bottom.
  With that, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. CONRAD. Madam President, might I inquire of the Senator from 
Arizona what the cost of his amendment is?
  Mr. KYL. Madam President, may I say to the Senator, the chairman of 
the committee, our amendment is some four pages long, and it has the 
amounts increased and decreased stated. I am sorry I have not totaled 
up the exact amount and then subtracted out the cuts. I will be happy 
to try to do that for the Senator.
  Mr. CONRAD. Does the Senator have some rough idea of what the 
amendment costs?
  Mr. KYL. All of the provisions that we have in this amendment are 
accommodated by the budget that has been provided to us by the 
committee. Let me get the exact number.
  Mr. CONRAD. Could the Senator tell us how he pays for the amendment?
  Mr. KYL. Madam President, the so-called payment for this is the same 
as other things are paid for in this budget, by the assumption that 
revenues will be available. As a result, there is no specific cost, if 
that is what the Senator is asking.
  Mr. CONRAD. That is the problem. I am told this amendment costs in 
the range of $75 billion and has no offset. Here is our problem. 
Senator Baucus has previously offered an amendment that extends the 
middle-class tax relief and also addresses the problem that the Senator 
from South Carolina addressed with the estate tax. We have this anomaly 
in the estate tax where we go to a 3.5-million-dollar-per-person 
exemption and then we drop down the next year to $1 million, going 
backwards.
  Senator Baucus, in the amendment he has offered, does a series of 
things. The amendment addresses all the middle-class tax cuts--the 10-
percent rate, the marriage penalty, the childcare credit. It extends 
those. It does it within the budget room that we have for 2012, so we 
still are able to achieve balance in 2012. It also deals with the 
problem of the estate tax going backwards, going from $3.5 million per 
person as an exemption back to $1 million. The Baucus amendment deals 
with that. It actually is a little better than that because the Baucus 
amendment also contains $4 billion that is not accounted for that would 
be available to the Finance Committee to improve the estate tax 
provisions. He also deals with the SCHIP, the need for us to fund 
SCHIP. He does that within the budget room that is available in 2012 so 
we do not have a deficit.
  As I understand the amendment of the Senator from Arizona, that would 
take the budget into substantial deficit

[[Page 7009]]

in 2012. And there is no pay-for; there is no offset. The money that 
did exist in the budget resolution, the money that was available, has 
been taken by the Baucus amendment.
  Mr. KYL. Madam President, I now have a number. The Senator from North 
Dakota was very close in the estimate which he gave. I believe the 
number is $72.3 billion for 5 years, which is very close to the number 
that the Senator had. Of course, since the budget raises taxes by $916 
billion, that more than accommodates what we provide.
  Mr. CONRAD. The problem is, all the money is spoken for. So to add 
the Kyl amendment would drive us back into deficit, substantial 
deficit. I say to my colleagues, I think that would be a mistake. 
Unless the Senator provides an offset--there are things that are in his 
amendment for which I might have some sympathy. I personally believe we 
ought to have a goal of keeping rates low and having a broad base to 
our tax system so we can pay our bills and at the same time be a 
strongly competitive economy. In fact, my own conclusion from all of 
the debates on both sides is we need fundamental tax reform, and it is 
that, in part, for which this budget resolution tries to create an 
incentive.
  We have some time because we do not face any of these tax measures 
expiring for the next 3 years. But during that time, I think we have to 
engage in a discussion of fundamental tax reform.
  The bottom line is, I hope very much that colleagues will support the 
Baucus amendment. I hope very much they will resist the Kyl amendment 
at this point because it is not paid for, it is not offset, and it will 
take us back to the deficit in a substantial way.
  How much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 14 minutes.
  Mr. CONRAD. How much time remains on the other side?
  The PRESIDING OFFICER. They have 6 minutes.
  Mr. CONRAD. Does the Senator from Michigan request some time?
  Ms. STABENOW. Yes.
  Mr. CONRAD. How much time?
  Ms. STABENOW. I ask for 5 minutes.
  Mr. CONRAD. I yield 5 minutes to the Senator from Michigan.
  Ms. STABENOW. Madam President, to add to what the distinguished 
Senator from North Dakota indicated, we have tax cuts built into this 
budget. We are in a global economy. We need to be competitive. There 
are a number of ways in which we need to be competitive.
  My friend from South Carolina and I are working together on the 
question of trade enforcement. That is a critical part of it--investing 
in education, a skilled workforce, innovation. That is a very big part 
of it. That is a big part of this budget, making education a top 
priority.
  Changing the way we fund health care, getting it off the back of 
businesses, addressing health care costs is a big part of being 
competitive and is addressed in this budget.
  We say every child in a family where the folks are working ought to 
have access to health insurance, and this budget finds a way to do 
that. We address other issues. Health information technology, that 
Senator Snowe and I and others are working on together, is addressed in 
this budget. So we address a number of items, including tax cuts.
  We address one of my biggest concerns, and I know my Democratic 
colleagues share this concern, of what is happening with the 
alternative minimum tax and how it is going to be shifted more and more 
to middle-income taxpayers and is becoming the alternative middle-class 
tax. We address that.
  Through this Baucus amendment we say when we get into surplus, when 
we get out of the hole that has been dug in the last 6 years and 
actually begin to have a surplus, we are going to capture that $132 
billion, both to make sure that children's health care is funded and to 
expand on investments in tax cuts, including what has been talked about 
in terms of extending the exemptions on the estate tax for a certainty.
  We want folks to know that once you get to 2010, you can keep living 
a healthy life, continue, and, in fact, the same rates, at a minimum, 
will continue. So the Baucus amendment is about making sure we can do 
that. We all come together around the education cuts and making sure 
that we have the child tax credit and the 10-percent tax rate and other 
areas that are very important to working families, middle-class 
families. But we do this within the context of another very important 
value that Americans hold, and that is we pay the bills. We do it 
within a framework of fiscal responsibility.
  In the last 6 years we have seen this tax policy, we have seen a war 
that has not been paid for, we have seen other spending that has been 
rolled over onto the national debt creating the largest deficit in the 
history of the country. We are now trying--and with this budget we will 
succeed--to dig our way out of that. But this amendment adds over $72 
billion back into the hole. It keeps on digging. That is what this 
budget resolution is committed to stop: fiscal responsibility, and to 
invest in the priorities of American families and American businesses 
and invest in middle-class tax cuts.
  I have heard on the other side of the aisle over and over that we 
should not pick who receives tax cuts. That is exactly what the current 
policy has done. If you earned over $1 million last year, you received 
at least $118,477 worth of a tax cut. That is more than the average 
person in Michigan makes in a year, and that was the tax cut.
  I suggest, looking at this chart, for someone earning less than 
$100,000, it was $692. We can go on down. If someone was, in fact, 
earning less than that, those numbers go all the way down to less than 
$100.
  I would suggest that the priority was set the previous Congress, the 
administration deciding whom they wanted to get tax cuts--and they have 
been getting them--adding to the deficit, taking away from our ability 
to critically invest in those things that will allow us to be 
competitive; investments in science and education and changing the way 
we fund health care and doing the other kinds of things we need to do, 
including balancing the budget, to be able to address the costs of 
interest, et cetera.
  So what we are saying is this picture of who receives tax cuts is not 
ours. This is not ours. We reject that. This budget focuses on the 
folks who have not been getting the tax cuts, it focuses on the folks 
who not only have not been getting the tax cuts, but they have been 
getting the wage cuts at the same time.
  The average, the real median household income has declined by almost 
$1,300 in the last 5 years. Folks are working harder, the gas prices 
are going up, the cost of college is going up, health care costs are 
going up, maybe they lose their pension and hope and pray that they 
have a job, their income is going down, and to add insult to injury, 
they have not received the tax cuts that have been offered.
  What we are about is changing that picture. This budget resolution is 
about a new direction, a new set of priorities, focusing on middle-
class families who are working hard every day, businesses who are 
investing in America and want to keep the jobs here. That is what this 
is about. I hope we will reject the Kyl amendment.
  Mr. CONRAD. Can the chair inform us how much time remains on each 
side?
  The PRESIDING OFFICER. There is 6 minutes for the Senator from New 
Hampshire, 7 minutes for the chairman of the Budget Committee.
  The Senator from New Hampshire.
  Mr. GREGG. Madam President, I think it is important to note what this 
amendment does. First off, the chairman has said it is not paid for. 
Well, actually, the Baucus amendment hasn't passed, so you can argue it 
is paid for. If the Baucus amendment does not pass, this amendment 
would have the same funds available to it.
  But that is a specious argument. It is straw dogs because the issue 
is the extension of the tax rates, which we have heard from the other 
side of the aisle are not going to be affected, that they are in favor 
of extending the tax rates.
  Well, if that is the case, then they cannot make the case that the 
tax rate can't be extended, which is the case

[[Page 7010]]

they are making. I mean it is a little inconsistent, to say the least. 
So I think that is inside-the-park baseball but not even good baseball, 
by the way--bad baseball.
  But what is important to remember about these proposals which we have 
in this group is that first it addresses educational funding, tax 
breaks which benefit especially teachers who help out in their 
classrooms--very important.
  It puts the death tax in a better position than what was proposed by 
the Senator from Montana, and it basically takes the language which I 
believe was developed by the Senator from Louisiana, Ms. Landrieu, and 
uses that as the basis for the death tax. It does not go to full 
repeal, as occurs under the present law, in 2011, but sets the ceiling 
much higher and makes it much more reasonable and I believe gives a 
stepped-up basis and capital gains treatment, essentially, to death 
taxes, so that people do not get wiped out when somebody who owns a 
farm dies; if the primary owner dies, the family does not get wiped out 
and have to sell the farm, or a small business does not get wiped out. 
This mostly involves that issue, quite honestly, because high estates 
are not affected by this. We are not talking about the founder of some 
technology company who is worth hundreds of millions or potentially 
billions of dollars avoiding estate taxes--just the opposite. That 
person will still be subject to the estate tax.
  We are talking about setting the threshold high enough so that the 
family farm, the small business is not put out of business by the 
untimely death of an individual. You know, why should somebody be taxed 
for getting hit by a car? It makes no sense at all, but we try to 
straighten that out.
  The most important element of this proposal, in my opinion--although 
I am sure others focus on education more than the death tax issue--is 
the fact that it continues the very positive proposals which were put 
in place relative to the formation of capital in this country and, as a 
result, the creation of economic activity and the creation of jobs. The 
dividend rate and the capital gains rate, as opposed to those which are 
in place today, have had a massive impact on creating economic activity 
in our society and as a result have created a huge number of jobs and 
as a result has caused the revenues of the Federal Government to jump 
dramatically.
  The capital gains rate, for example, we have seen come in, and this 
chart shows it, at exceptionally high levels compared to what the 
estimates were going to be, dramatically high levels. We should have 
expected this because this is human nature. What happens is someone has 
an asset they have had significant appreciation in. Boom. What happens 
if they have got to pay a high tax on that asset if they sell it? They 
are not going to sell it, they are going to hold onto the asset. But if 
the tax rate is a fair tax rate, which is what we have in place today, 
then the person sells that asset. That has two very good effects. 
First, it frees up the cash from that event, and the person ends up 
paying taxes, which we would not have otherwise had because the person 
would have held onto the asset. Second, they will take that money and 
they reinvest it in a much more productive way. That is human nature.
  Also, as a result those dollars are being more productively used, 
creating more entrepreneurial activity, so it works well.
  The capital gains rate has produced dramatic increases in revenues. 
So we should keep it in place because it is doing what it is supposed 
to do. It got the economy going, creating jobs. But something which 
people do not focus on is that the cap disproportionately benefits 
senior citizens. If you raise the capital gains rate, you are basically 
raising the taxes on seniors in America because it is seniors who take 
advantage of the capital gains rate, because that, again, is human 
nature and logical.
  Seniors basically are not earning money in the sense they are out 
working daily. Most seniors or many seniors, the majority probably, a 
vast majority are retired, but they have assets. As they take those 
assets and they convert them, they pay capital gains. Those assets are 
usually at a pretty low basis since they were acquired when they were 
young or during their working years. So when you raise the capital 
gains rate, you are focusing a tax rate right on top of the seniors of 
this country. You have launched a torpedo at them. You are going to 
basically say to those seniors: You are going to have less money to use 
in order to make sure that your retired years work the way you expected 
them. Not only does that work for captal gains rate, it also works for 
dividends. The dividend rate is also disproportionately used by senior 
citizens. Well, that is again human nature; it tells you that seniors 
do not have earned income, what they have is dividend income because 
they have invested or their 401(k) has been cashed out or their IRA has 
been cashed out or their defined benefit plan is suddenly getting them 
some revenue. They get dividend income.
  When you raise the dividend income tax rate, you are taxing, again, 
seniors. So it is totally reasonable, from a standpoint of continuing 
strong economic activity and from a standpoint of maintaining a 
reasonable tax burden on Americans, and especially seniors, that we 
continue these tax rates as they are. That is why this is a good 
proposal.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I understand I have 7 minutes remaining?
  The PRESIDING OFFICER. That is correct.
  Mr. CONRAD. Madam President, let me say briefly on this, you can 
extend all the tax breaks that have been described in this amendment if 
you pay for them.
  The problem with the Kyl amendment is he does not pay for it. Over 
$70 billion is not paid for, goes on the deficit, which will drive this 
budget, which now balances in 2012, right out of balance. We will be 
going right back into the deficit ditch. Please, colleagues, let us 
resist this amendment. People could support it if it was paid for, but 
it is not.
  I yield 3 minutes to Senator Schumer.


                 White House Proposal on U.S. Attorneys

  Mr. SCHUMER. Thank you for yielding. I am going to talk a lit bit 
about the U.S. attorneys in response to the comments that have been 
made today from the White House.
  The bottom line is very simple, to paraphrase ``The Godfather'': The 
White House has made us an offer that we cannot accept. We cannot 
accept it very simply because it is no way to get to the truth.
  Mr. Snow said today that the White House wants to get to the truth. 
Well, if they want to get to the truth, what is wrong with testimony 
under oath? Do we not have oaths to ensure that truth is given?
  Karl Rove was mentioned by Mr. Snow himself at one point, who stated 
incorrectly Karl Rove's involvement and then corrected himself. No one 
is saying there was any prevarication there. But with so many 
misstatements that have been out there, so many corrections, doesn't it 
make sense to interview witnesses with a transcript, under oath?
  Because if we do not, we will never get to the bottom of this. We 
Democrats want to resolve this issue quickly. We want to get the facts. 
We want to find out what went wrong--it is clearer and clearer that 
many things did--and correct them and move on.
  But when the President gives an offer that does not allow the truth 
to be gotten--no oaths, no transcript, no public testimony--it does not 
serve the purpose of finding out what happened, resolving it quickly, 
in a fair and nonpartisan way, and then moving on.
  I hope the White House would reconsider its offer, would be willing 
to negotiate--they have stated they have not--and then we can finally 
get to the bottom of the matter.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I wish to thank the Senator from New York. I wish to go 
back, if I can, to the two amendments we will be considering soon, the 
Baucus

[[Page 7011]]

amendment and the Kyl amendment. Let me, if I can, reframe this issue 
for my colleagues.
  The Baucus amendment looked to the $132 billion surplus we had in 
2012, I use that term ``surplus'' advisedly, but that is what our 
budget resolution shows, $132 billion in 2012. Senator Baucus fashioned 
on amendment to extend the middle-class tax cuts, addressed the problem 
of the estate tax going from an exemption of $3.5 million per person 
down to $1 million a person; in other words, going backward, and 
prevents that from occurring, as well as having some additional moneys, 
some $34 billion to be able to improve that package and perhaps provide 
for other measures, education tax credits or others, that the Finance 
Committee might decide.
  It also provides funding for SCHIP, the proposal that will allow 
every child in America to receive health insurance. That amendment 
deserves our support.
  Senator Kyl then comes with an amendment to extend all of the other 
tax cuts, but unfortunately he does not pay for it. He does not have 
any offset. That would drive our budget back into deficit. Please, 
colleagues, let's not do that. Let's not take the country--after all 
this work of getting out of the deficit ditch, which this budget 
resolution does--right back into deficit. To me, it makes no sense. 
That is going in the wrong direction. We could extend all the tax cuts 
mentioned by Senator Kyl if we pay for them, if we provide offsets for 
them.
  I yield the floor.
  THE PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Madam President, I understand at this time we go to 
Senator Cornyn; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. GREGG. I would ask Senator Cornyn to yield me 1 minute.
  Mr. CORNYN. I yield 1 minute.
  Mr. GREGG. What the Senator from North Dakota did was make a very 
good case for the Kyl amendment or a very bad case against the Baucus 
amendment.
  The Baucus amendment was $195 billion, not $132 billion amendment--
$60 billion-plus is deficit spending. The allegation that the Kyl 
amendment, under this present structure, is $70 billion of deficit 
spending matches apples to apples. The two amendments are essentially 
the same in the area of deficit spending, so you cannot argue that one 
is not deficit and one is deficit. It is the opposite. They both have 
the same practical effect on the deficit.
  What the Kyl amendment does, however, is at least extend the tax cuts 
or tax rates that actually create significant economic activity, which 
we have shown through the capital gains rate have generated significant 
revenues to the Treasury. Whereas, although I agree with the Baucus tax 
rates, most of those taxes rates, in fact all of those tax rates, are 
socially driven. They are good social policy, but they do not generate 
economic activity.


                           Amendment No. 511

  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Madam President, I have an amendment and I ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Texas [Mr. Cornyn] proposes an amendment 
     numbered 511.

  Mr. CORNYN. 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 a deficit-neutral reserve fund for the 
   reauthorization of the State Children's Health Insurance Program 
                  (SCHIP) that will cover kids first)

       At the appropriate place insert the following:

     SEC. __. DEFICIT-NEUTRAL RESERVE FUND FOR THE REAUTHORIZATION 
                   OF THE STATE CHILDREN'S HEALTH INSURANCE 
                   PROGRAM (SCHIP) THAT WILL COVER KIDS FIRST.

       In the Senate, if the Committee on Finance reports a bill 
     or joint resolution, if an amendment is offered thereto, or 
     if a conference report is submitted thereon, that--
       (1) reauthorizes and improves the State Children's Health 
     Insurance Program (SCHIP);
       (2) emphasizes providing health insurance to low-income 
     children below 200 percent of the Federal poverty level;
       (3) limits the use of SCHIP funds for coverage of non-
     pregnant adults unless States are covering their low-income 
     children;
       (4) allows parents to cover their children on their own 
     health insurance plan with SCHIP funds;
       (5) increases State flexibility so that States can use 
     innovative strategies to cover kids; and
       (6) improves and strengthens oversight of Medicaid and 
     SCHIP to prevent waste, fraud and abuse,

     then, provided that the Committee is within its allocation as 
     provided under section 302(a) of the Congressional Budget Act 
     of 1974, the Chairman of the Committee on the Budget may 
     revise allocations of new budget authority and outlays, the 
     revenue aggregates, and other appropriate aggregates to 
     reflect such legislation, to the extent that such legislation 
     would not increase the deficit for fiscal year 2007 and for 
     the period of fiscal years 2007 through 2012.

  Mr. CORNYN. Madam President, this amendment establishes a deficit-
neutral reserve fund for the Finance Committee if it reports a bill 
that reauthorizes the State Children's Health Insurance Program, better 
known as SCHIP, but the important distinction is that this bill must 
cover children.
  One might ask: Why in the world would a program known as the State 
Children's Health Insurance Program, why would it be necessary to offer 
an amendment directing the Finance Committee to cover children? That is 
because the current proposal does not limit Federal funding to pay for 
health insurance for children. In fact, it creates a patchwork system 
which allows States to spend money that should go to cover children to 
cover adults and other individuals. While I certainly understand that, 
it leaves many children uncovered.
  The chairman's mark, the base bill that is on the floor, states the 
SCHIP program of the budget is to expand coverage of the estimated 6 
million children eligible but not enrolled in either SCHIP or Medicaid. 
This is a more limited goal than covering every uninsured child, as has 
been stated on the floor as the goal. It assumes $15 billion in new 
SCHIP funding and includes an additional $35 billion in an allegedly 
budget-neutral reserve fund for SCHIP authorization, for a total of $50 
billion for SCHIP reauthorization. This triples the size of the current 
program. There are no offsets outlined in the Democratic budget, and 
they can either be from spending cuts or tax increases.
  The Democratic reserve fund is for passage of legislation that meets 
three conditions. Let me point out the problem. The original purpose of 
the SCHIP program was to provide health insurance coverage for children 
below 200 percent of the Federal poverty level. However, today some 
States have expanded their programs using Federal taxpayer dollars to 
include children up to 350 percent of poverty, not 200 percent and 
lower, but up to 350 percent, which is currently about $70,000 for a 
family of four. States have used this money without covering all their 
children to cover adults, parents, and even childless adults. Nine 
States cover children at 300 percent and above of poverty level. Here 
again, it is not an effort any of us could necessarily criticize in the 
abstract, but to take money that is designed for children at 200 
percent of the poverty level and below and to cover children from 
families with much greater income and to cover adults and other 
individuals who are not part of the SCHIP purpose is off track.
  Twelve States will spend almost $807 million of their SCHIP money on 
more than 671,000 adults this year. The State Children's Health 
Insurance Program will cover 671,000 adults this year. Three States 
have more adults as enrollees than children. This is a matter of false 
advertising by the Federal Government. We have passed legislation, 
which I support, designed to cover low-income children, and the Federal 
Government has authorized a situation where now 671,000 adults are 
being covered, and people not from low-income families but middle-
income families are being covered.
  Here again, I don't begrudge them the coverage, but to take a program 
designed for low-income children and use

[[Page 7012]]

it for a purpose other than advertised is simply not honest, and it is 
not what Congress intended.
  Several States spend half of their SCHIP allotment on adults, so it 
is no surprise that more than one-third of the 14 States experiencing 
shortfalls have expanded coverage to adults. The other problem with the 
underlying SCHIP provision is, with more than 6 million SCHIP and 
Medicaid-eligible children still uninsured, shouldn't States cover the 
intended population before they expand their program? Why in the world 
wouldn't Congress support an effort to cover low-income children before 
we approve the use of that money to cover unintended and nontargeted 
populations? The SCHIP match rate is more generous than Medicaid's 
match rate. The children eligible for Medicaid and SCHIP should be 
covered by their respective programs.
  The other feature in the underlying bill this amendment would correct 
is this underlying provision supports States in their efforts to move 
forward in covering more children, but it has no income level cutoff.
  In other words, the stated objective of Chairman Dingell and Senator 
Clinton to cover children up to 400 percent of poverty level, which 
would translate to an income of $80,000 for a family of three, simply 
represents an unprecedented wealth transfer from the pockets of the 
American taxpayers to these families who should be expected to pay a 
portion of their own health coverage.
  The SCHIP amendment which I offer would instead focus the 
reauthorization of the SCHIP program on its original intent--low-income 
kids--by creating a budget-neutral reserve fund for the passage of this 
legislation. It would reauthorize and improve the State Children's 
Health Insurance Program. It would emphasize providing health insurance 
to low-income children below 200 percent of the Federal poverty level. 
It would limit the use of SCHIP funds for coverage of nonpregnant 
adults unless States are covering their low-income children first. It 
would allow parents to cover their children on their own health 
insurance plan with SCHIP funds. That is an important feature. Some 
parents have no alternative but to basically drop their own health 
insurance for their children in order to get them to be eligible under 
their State SCHIP funds. This would allow parents to cover their 
children on their own health insurance if, in fact, they have health 
insurance, by allowing the additional cost to cover their children to 
be paid from SCHIP funds. It is important flexibility that I would 
think all Members would support.
  It increases State flexibility so States can use innovative 
strategies to cover kids, and it improves and strengthens oversight of 
the Medicaid and SCHIP programs to prevent waste, fraud, and abuse.
  I offered this same amendment in the Budget Committee last week, and 
it was opposed unanimously by my colleagues on the other side of the 
aisle. I think we need to make a clear statement that SCHIP is a 
program for low-income children. Otherwise we ought to call it 
something else. Let's be honest with the American people. Let's not 
take something called the State Children's Health Insurance Program and 
make it a program for adults. That is simply dishonest. I don't think 
it is appropriate. I am concerned that using SCHIP dollars to provide 
coverage for childless adults diverts limited resources from covering 
children first, which is the original purpose of this program, a 
laudable purpose which I support.
  The fact is, more than 10 percent of those enrolled in SCHIP are now 
adults, approximately 639,000, according to the Government 
Accountability Office. These 639,000 adults are from nine States. The 
GAO agrees covering adults is not the point of SCHIP, certainly not 
what Congress said it intended to do. These State coverage expansions 
mean funds are being diverted from the needs of low-income children who 
go uncovered because those States choose to use it for other purposes. 
Adults accounted for an average of 55 percent of enrollees in the 
shortfall States compared to 24 percent in the nonshortfall States.
  Congress needs to make a firm statement that SCHIP is for children. 
If States focused on covering kids, it would have been much easier for 
them to stay within their allotments. This amendment makes clear that 
in the SCHIP program, our priority must be for low-income children.
  In addition, as I noted a moment ago, my amendment would allow States 
to continue to use innovative strategies to cover kids and will improve 
and strengthen the oversight of the SCHIP program to weed out waste, 
fraud, and abuse.
  I hope my colleagues will vote in favor of this amendment. I know the 
ranking member of the Senate Finance Committee, Senator Grassley, wants 
to use a portion of the time we have remaining on the amendment. I 
certainly reserve the remainder of the allotted time for him.
  I thank the Chair and the managers of the bill.
  Mr. GREGG. Will the Senator yield?
  Mr. CORNYN. I am happy to yield to the ranking member of the Budget 
Committee.


                     Amendment No. 466, As Modified

  Mr. GREGG. Madam President, I send a modification of the Sessions 
amendment to the desk.
  The PRESIDING OFFICER. Is there objection to the modification?
  Mr. GREGG. I ask unanimous consent that the amendment be so modified.
  The PRESIDING OFFICER. Without objection, the amendment is so 
modified.
  The amendment, as modified, is as follows:
       At the end of title II, insert the following:

     SEC. __. EXCLUSION OF TAX RELIEF FROM POINTS OF ORDER.

       Sections 201, 202, 203, and 209 of this resolution and 
     sections 302 and 311(a)(2)(B) of the Congressional Budget Act 
     of 1974 shall not apply to a bill, joint resolution, 
     amendment, motion, or conference report that would provide 
     for the extension of the tax relief provided in the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, the Jobs 
     and Growth Tax Relief Reconciliation Act of 2003, and 
     sections 101 and 102 of the Tax Increase Prevention and 
     Reconciliation Act of 2005.


                           Amendment No. 511

  Mr. GREGG. Madam President, I support the amendment of the Senator 
from Texas. He is basically getting at the essence of the SCHIP issue. 
SCHIP has become nomenclature. It has become a motherhood term. It is 
being used as a smokescreen to dramatically expand the amount of money 
we spend as a Federal Government on health care and basically take a 
big bite out of what I would call the nationalization effort in health 
care because it has been expanded well beyond its purpose. Its purpose 
should to be take care of children in need and make sure they have 
proper health insurance. We all agree on that. What the Senator from 
Texas is proposing is to do exactly that, make sure this program is 
directed at children. However, we have seen State after State and some 
of our biggest States use this program for adults and for families up 
to $68,000 of income. That is not about low-income kids being taken 
care of. That is about trying to nationalize the health care system. If 
we are going to spend all this new money on SCHIP--and I think we need 
to spend some additional money on SCHIP--let's make sure it goes where 
it is supposed to go, to needy kids. That is why the amendment of the 
Senator from Texas is such a good amendment.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, the Senator from Texas is retaining his 
time. Perhaps we could modify our previous unanimous consent request so 
we stay on this question until the votes. The Senator has approximately 
15 minutes remaining and we would have 15 minutes on our side to 
discuss it.
  Mr. GREGG. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Madam President, I ask unanimous consent that the votes 
in relation to the following amendments occur beginning at 5 p.m., with 
the votes occurring in the order listed

[[Page 7013]]

and that there be 2 minutes of debate equally divided before each vote; 
and that after the first vote, each succeeding vote be limited to 10 
minutes; that no amendments be in order to any of the amendments 
covered under this agreement: The first amendment being the Baucus 
amendment No. 492; the second amendment being the Kyl amendment No. 
507; the third amendment being the Cornyn amendment No. 477; the fourth 
amendment being the Sessions amendment No. 466, as modified; the fifth 
amendment being the Ensign amendment No. 476; the sixth amendment being 
the Bunning amendment No. 483; and the final amendment being the 
Bingaman amendment No. 486.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I thank the Chair.


                           Amendment No. 511

  Back to the issue of the most recent Cornyn amendment which is on the 
question of SCHIP. Frankly, I have some sympathy for the argument 
advanced by the Senator from Texas. There may be some policy reason to 
have very low-income adults covered with some SCHIP money, but this is 
supposed to be a program directed at children. Whatever the merits of 
the Cornyn amendment, there is a very serious problem with the Cornyn 
amendment that leads me to oppose it, and I ask colleagues to oppose 
it. That is, this isn't the place for the Cornyn amendment.
  The simple fact is, the budget resolution does not determine the 
policy on SCHIP. It has nothing to do with the policy on SCHIP--
nothing, zero. This is a policy question that will be before the 
Finance Committee.
  Let us review what a budget resolution does and does not do. A budget 
resolution gives an instruction to the Finance Committee of how much 
money they need to raise to meet the budget. It tells them how much 
money they have to spend in the various categories under their 
jurisdiction. It does not tell them one word of what the policy is 
related to those fundings. That is not the role of the budget 
resolution. So as well meaning as this amendment is, it has nothing 
whatever to do with the policy determination that is to be made by the 
authorizing committee.
  The Budget Committee is not the committee of jurisdiction. We are not 
the committee that makes these policy judgments. We are not the 
committee that makes these determinations. So this amendment is 
eyewash. As well intended as it is, it simply will have no force and 
effect on the deliberations of the Finance Committee with respect to 
this policy. That is the fact. Sometimes I wish the Budget Committee 
did have that kind of authority and that kind of power, but we simply 
do not.
  So let's be honest with our colleagues. Let's be honest with the 
people who are watching. This amendment will do absolutely nothing 
about the question of who gets covered under SCHIP--nothing, zero. That 
is a determination that will be made by the Finance Committee.
  At this point, Madam President, I recognize the Senator from Michigan 
and ask her, how much time would she like on this amendment?
  Ms. STABENOW. Madam President, 5 minutes.
  Mr. CONRAD. Madam President, I am happy to yield 5 minutes to the 
Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. I thank the chairman.
  Madam President, as a member of both the Budget Committee and Finance 
Committee, I concur with our leader's comments in terms of the 
jurisdiction of the Budget Committee. I look forward, frankly, to this 
debate and working through all the specifics on children's health care 
in the Finance Committee because there are very important issues we 
need to address.
  The spirit of the Cornyn amendment is what we have addressed in this 
budget resolution, which is making sure we have the resources to be 
able to cover every child. Right now, about 6 million children are 
covered. There are another 6 to 7 million children who actually qualify 
for the SCHIP program, for children's health care, but the funds are 
not there. So this budget proposal will allow that to happen.
  Now, in some States--such as my own State of Michigan, where Michigan 
decided on its own to meet its moral obligation to cover children and 
began to reach out creatively using other funds to cover children--when 
they have received the children's health care funds, they have found 
that being creative, using what they were already using, they could 
stretch it a little farther to maybe cover moms and dads or very poor 
adults.
  In the law we passed regarding children's health care, there was a 
waiver provision put in that the administration could use--used by this 
administration and the former administration--to waive the rules to 
allow a little more flexibility, if the States were able to work hard 
and be creative and be able to stretch their dollars.
  That is what has happened in Michigan. I am very proud of the hard 
work that has gone on in Michigan and by our current Governor who is 
very committed to extending health care coverage not only for every 
child but for every person in our State. I hope that is our goal, 
together, for our country. We should not be talking about how we limit 
health care but how we make sure it is available for every individual. 
I believe health care should be a right and not a privilege in the 
greatest country in the world.
  But in our case, we cover an individual making $4,500 a year--$4,500 
a year--certain individuals. So when we get to the Finance Committee 
debate, I hope we are going to keep in there the ability and 
flexibility for States to receive, if approved, waivers that allow them 
to stretch their precious health care dollars a little bit farther.
  This amendment would, in its policy--even though it has no effect 
ultimately, it states we should not allow that flexibility for States, 
we should not allow the ability for States to be creative. It also sets 
a limit of 200 percent above poverty, which may sound--well, it may 
sound as though it is OK, but you are talking about basically two 
individuals in a family each earning the minimum wage. That is about 
hitting that number of 200 percent of poverty. So if you get a minimum 
wage increase or maybe you get a little bit more money, and you still 
do not have health care coverage in your employment.
  Again, we would be saying, through this kind of amendment, they 
should not be able to cover their children with health care, not be 
able to have access, even though they are working hard. The whole point 
of SCHIP is to say to those who are working: If you are working hard 
and in a low-income job, you should be able to know you can receive 
health insurance for your children. If you are working hard, you don't 
have to go to bed at night saying: Please God, don't let the kids get 
sick--which is what happens every single night in America. So I hope we 
reject this amendment. It is not appropriate for the Budget Committee.
  I also look forward to the debate on the policy once we get to the 
Finance Committee. We want to cover every child. The money in this 
budget will allow us to cover those children who are currently eligible 
but not covered. We will cover every child. That is our commitment. 
That is part of the moral document we have put forward in this budget 
resolution. But we also, I believe, need to figure out a way to make 
sure in the process we are not taking away health care coverage from 
anyone in the country.
  Thank you.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Madam President, in a brief response, because I see the 
ranking member of the Finance Committee is here, the chairman of the 
committee has made the case we should not vote for the Cornyn amendment 
because it has policy in it. Well, actually the budget resolution has 
policy in it. In its reserve fund, the budget resolution has three 
specific policy directives relative to SCHIP which is just as specific, 
just as policy driven as the proposals of Senator Cornyn. So either you 
are pure or you are not pure. In this case, both sides are directing 
policy. So I do not think that argument

[[Page 7014]]

has a whole lot of credibility. But the issue here is this: The Cornyn 
amendment tries to focus SCHIP on kids. That is what it should be 
focused on. The problem we have today is that SCHIP is being used as a 
stalking-horse to basically ensure all sorts of people who do not 
qualify in the concept of kids at 200 percent of poverty. You have 
three States where they actually spend more SCHIP money on adults than 
they do on children. You have 12 States that are spending almost $1 
billion annually of SCHIP money on adults. You have nine States where 
they are covering up to 300 percent of poverty. You have other States 
where you are going up to $68,000 of personal income and still 
qualifying people for SCHIP.
  That is not the way SCHIP is supposed to be structured. SCHIP is 
supposed to be structured for kids. The Cornyn amendment gets us back 
to the original purpose of SCHIP, thus giving probably more coverage to 
more kids than the present program or even the expanded program which 
has been put forward by the other side of the aisle.
  Madam President, what is the time situation relative to the Members?
  The PRESIDING OFFICER. The Senator from New Hampshire has 13\1/2\ 
minutes. The Senator from North Dakota has 7\1/2\ minutes.
  Mr. GREGG. Madam President, I yield such time as he may desire to the 
ranking member of the Finance Committee.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Madam President, I appreciate very much that the 
Senator from Texas has offered his amendment. I support it. I supported 
it during the Budget Committee's markup of the legislation that is 
before us right now, and I am happy to support it on the floor.
  This amendment adds a new reserve fund which identifies some very 
important priorities that complement the reserve fund in the 
legislation that has come out of the Budget Committee.
  The reserve fund in the budget stipulates the legislation reported 
out of the Finance Committee must ``maintain coverage for those 
currently enrolled in [the State Children's Health Insurance 
Program].''
  As my colleagues in the Senate know, this current population includes 
children, pregnant women, parents, and childless adults. The cost of 
extending coverage to these populations has been roughly estimated by 
the Congressional Budget Office to require a net increase of budget 
authority of approximately $8 billion.
  The Cornyn amendment would put kids first--after all, wouldn't you 
think that is what the State Children's Health Insurance Program ought 
to do, put children first--prioritizing lower income children and 
limiting the use of State Children's Health Insurance Program funds for 
nonpregnant adults unless States are covering those children.
  We will have to make some very difficult choices when it comes to the 
limited funds available for the SCHIP. The cost of covering children 
who are uninsured but eligible for SCHIP continues to rise.
  According to the Center on Budget and Policy Priorities and their 
analysis--and this was in a recent memo from the Congressional Budget 
Office--it will take $47.5 billion to cover the estimated 6 million 
children who are uninsured but eligible for either SCHIP or the 
Medicaid Program. To quote the center, even this figure is ``too 
low''--those are their words: ``too low''--because it does not include 
the cost of the policies necessary to increase enrollment in Medicaid 
and SCHIP.
  Given the priorities placed on pay-as-you-go and the limited offsets 
available to pay for increased SCHIP spending, it appears some 
priorities have to be set. We are faced with that every day--setting 
priorities, that everybody cannot have everything they want.
  Republicans have taken the position--and I emphasize that position--
we want to prioritize putting kids first. So I support Senator Cornyn's 
emphasis upon this key principle.
  I also agree with the language in the budget that would support 
States in their efforts to move forward in covering more children. 
However, this language can be improved by emphasizing that 
reauthorization should make State flexibility a priority. With State 
flexibility, we can get more bang with the State's money, we can get 
more bang for the Federal dollars going into the program. We found that 
in Medicaid last year when a bipartisan group of Governors came to me, 
when I was chairman of the Finance Committee, and sat down and said: If 
you can give us more flexibility in Medicaid, we can save State tax 
dollars, we can save Federal tax dollars, and we can serve more kids 
who have need--because States know what their local situation is, they 
know better than we do in Washington to get the most bang for the 
taxpayers' dollars. So we can do the same thing for the SCHIP program 
by giving the States greater flexibility.
  Much of the success we have seen relative to the SCHIP program is 
because the Congress gave States the authority to manage the SCHIP 
caseloads, to control costs, and to experiment with innovative 
strategies to increase access to health care.
  This country is so geographically vast, our population is so 
heterogeneous that if you try to make all policy by pouring policy in 
the same mold in Washington, DC, it is not going to fit New York City 
the same way it might fit Des Moines, IA. But we ought to give those 
States in the case of New York, Albany, and in the case of Iowa, Des 
Moines, give those leaders, Governors and State legislatures, some 
leeway so we get more bang for our buck.
  Reauthorization then should build on the State flexibility that was 
already there and should be a key feature of the priorities set in the 
budget.
  Finally, given my zeal for oversight, meaning congressional oversight 
of what our bureaucracy does and how the taxpayers' money is spent, I 
must also commend the Senator from Texas for including, as a priority 
for the SCHIP reauthorization, improving and strengthening the 
oversight of Medicaid and SCHIP to prevent waste, fraud, and abuse. We 
have made improvements to preventing waste, fraud, and abuse, but we 
can certainly do more. We can always do more.
  I commend the Senator for his amendment. It builds on the language 
already in the bill, and I urge my colleagues to vote in favor of it.
  I reserve the balance of the time on our side.
  Mr. CONRAD. Madam President, I am going to be yielding to the Senator 
from New Jersey in a moment on this amendment, but we wish to enter 
into a unanimous consent request for what happens after the votes 
tonight. We have already entered into a unanimous consent request with 
respect to the votes that will occur tonight. After those votes, there 
will be a time for discussion and debate. I ask unanimous consent that 
during that period, Senator Hutchison be allowed to offer an amendment 
on sales and use tax, that Senator Sessions be able to offer an 
amendment relating to the alternative minimum tax, that Senator Durbin 
be permitted to speak, that Senator Sanders be permitted to speak, that 
Senator Lieberman be permitted to introduce and withdraw an amendment 
on war costs, and that Senator Wyden be permitted to speak.
  Perhaps we should go a step further and give an amount of time for 
each. Would the Senator have a thought with respect to wanting to give 
them 10 minutes each?
  Mr. GREGG. Why don't we give them 15 minutes.
  Mr. CONRAD. Continuing, that each of the aforementioned Senators have 
up to 15 minutes, and that they be in the order indicated: Senator 
Hutchison, Senator Sessions, Senator Durbin, Senator Sanders, Senator 
Lieberman, Senator Wyden.
  Mr. GREGG. And, Madam President, that the majority has the right to 
reserve an amendment in response to the Sessions amendment and in 
response to the Hutchison amendment, and that the order of voting on 
any amendments offered this evening as part of this unanimous consent 
would be at the discretion of the chairman and the ranking member of 
the Budget Committee.
  Mr. CONRAD. That is correct.
  The PRESIDING OFFICER. Is there objection?

[[Page 7015]]

  Without objection, it is so ordered.
  Mr. CONRAD. And, when the business of the Senate is concluded today, 
that there be 25 hours left on the budget resolution.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. CONRAD. We thank all colleagues. To revisit, so everybody 
understands what we will then face, after the votes tonight, Senator 
Hutchison will be able to offer an amendment relating to sales and use 
tax, Senator Sessions on the alternative minimum tax; that both of 
those can have a side-by-side Democratic amendment offered tomorrow if 
it is deemed necessary; that Senators Durbin, Sanders, Lieberman, and 
Wyden all be recognized in that order, or if they seek to change the 
order among themselves they are able to do that; that each of them be 
limited to 15 minutes; that there be no further votes after the votes 
that have already been approved; and that at the conclusion of the 
Senate business tonight, there will be 25 hours remaining on the budget 
resolution.
  We thank the excellent staff who have helped us keep track of all 
this through the day, and we thank very much the occupant of the Chair 
as well for her attention and for her effort.
  With that, I recognize the Senator from New Jersey.
  How much time do I have remaining?
  The PRESIDING OFFICER. There is 3 minutes 42 seconds.
  Mr. CONRAD. I yield that time to the Senator from New Jersey.
  Mr. MENENDEZ. Madam President, I thank the distinguished chairman of 
the Budget Committee for yielding, and let me get right to it. Only in 
Washington, with those who have some of the best health care coverage 
in the Nation, would there be a proposal to cut coverage to America's 
neediest children.
  An example of what would happen if this were to be passed: In New 
Jersey alone, more than a half million children depend upon our State's 
successful SCHIP program. Providing less than what is required to keep 
these children safe and healthy isn't only reckless, it is a 
dereliction of our duty here in Congress.
  The President is spending a lot of time this week talking about 
Congress's role and responsibilities. The President had a 
responsibility to send us a budget that took care of children in this 
country, and we have had members of his administration cite the 
successes of what we have done in New Jersey and, therefore, in other 
places in the country.
  Tom Scully, who is the CMS administrator, said:

       Even in tight economic times New Jersey is setting an 
     example of how Federal waivers can help them cut into the 
     numbers of citizens with no health coverage.

  That is what he said on January 31 of 2003.
  If the Cornyn amendment is passed, as many as 30,000 children in New 
Jersey could lose coverage for needed medical service. Worse still, it 
would prevent another 75,000 children in New Jersey from even being 
eligible for the critical health coverage they need. That is not only 
bad policy, it is downright reckless and it is flatout wrong.
  We live in the greatest country in the world, and there is no reason 
our neediest children should go without the medical services they need. 
No child in America should go to sleep at night in pain because they 
don't have the health care coverage they need or, as we saw recently, a 
young boy in Maryland who had a toothache, and it abscessed and it 
ended up getting infected and he died. No child in America should face 
that reality.
  We know the success of covering parents, because when we cover 
parents, we end up covering children. That is not because I say it, but 
look at what the CMS administrator Mark McClellan said last year before 
the Senate Finance Committee. He said:

       Extending coverage to parents and caretaker relatives not 
     only serves to cover additional insured individuals, but it 
     may also increase the likelihood that they will take the 
     steps necessary to enroll their children. Extending coverage 
     to parents and caretakers may also increase the likelihood 
     that their children remain enrolled in SCHIP, and that is our 
     experience.

  That is New Jersey's experience.
  Who are we talking about, not only in New Jersey but across the 
country? We are talking about some of the children in our Nation who 
come from communities that already have great health disparities. Yet 
when we see what SCHIP has done, we have seen those disparities narrow. 
Here is a chart that shows before enrollment in SCHIP what many 
children faced--White, African American, and Latino children--and after 
the enrollment, the percentage of children lacking a regular source of 
care dramatically reduces; dramatically reduces. Now, Latino and 
African-American children in this country will represent over 40 to 45 
percent of all of the Nation's schoolchildren. Would we leave 45 
percent of any capital, human capital in this case, unhealthy, 
uneducated? That is what this amendment seeks to do.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. MENENDEZ. Madam President, we need to defeat the Cornyn 
amendment. We need to keep the reality of where SCHIP is today: 
insuring our children and their families and making sure we are 
preserving that human capital.
  The PRESIDING OFFICER. Who yields time?
  Mr. GREGG. What is the time situation?
  The PRESIDING OFFICER. The Senator has 6 minutes left.
  Mr. GREGG. I yield to the Senator 6 minutes.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. PRYOR. Madam President, I thank the Senator. That is very 
gracious and I appreciate it very much. I wanted to come to the floor 
and say a few words. I will try to keep my remarks to 90 seconds or 2 
minutes, because I know some other Senators wish to say a word.
  First, let me thank my colleagues for working on a package of 
legislation that includes the TRAC Act, making the TRAC Act permanent, 
the tax relief for our soldiers in combat. We know we spotted this 3 
years ago where for some soldiers in combat, when they take their 
combat pay, they lose the ability to get the earned income tax credit, 
the child tax credit. I have had soldiers all around my State and other 
places tell me they appreciate the tax relief, and the last thing they 
need to be worried about is their taxes and getting gypped out of some 
tax relief. So this makes it permanent. Thank you very much.
  Secondly, I have included in this package one of these amendments we 
are going to vote on which is the daycare tax credit. In 2004, there 
were 6.3 million taxpayers who used the child independent tax care 
credit to cover daycare, afterschool care, summer day camp, elder care 
facilities, and this is a tax that helps working families, middle-class 
families, folks who are the bread and butter of our Nation and our 
economy.
  Also, I thank Senator Conrad and Senator Gregg for their great 
leadership on this budget. I know it has been very hard. I know we are 
getting to the time to vote. I want to thank them publicly for their 
leadership.
  I yield the floor.
  Mr. GREGG. Madam President, if I still have time, I yield it back.
  Mr. CONRAD. Madam President, we have a series of votes starting at 5 
o'clock. We have the rest of the evening lined up. I apologize to the 
desk crew who will be here late into the evening once again. I also 
want to thank our staffs--my goodness, they have worked tirelessly--
Mary Naylor of my staff, Scott Gudes, and the staff director for 
Senator Gregg, and all of their assistants who have done a spectacular 
job of helping us to manage this difficult budget resolution.
  Votes are to start at 5 o'clock. Why don't we start now. I think we 
could begin the vote early. Is there a problem with that? I don't think 
that hurts anything, because what that would allow us to do is we have 
agreed there would be 10-minute votes after that. I don't think there 
is any problem with that.
  Does Senator Gregg have any other observations? Maybe one thing we 
need to do is remind our colleagues--this

[[Page 7016]]

may be a very good time to remind colleagues of what it is we are going 
to face tomorrow. Tomorrow we are going to come in and we are going to 
have 25 hours left on this resolution. Then we go to vote-arama. We 
need to finish this by 4 o'clock on Friday. We have a number of our 
colleagues on both sides who have other obligations, so we need to 
finish this. So we are calling on colleagues--and I will speak for 
myself. I am calling on colleagues on our side to please be disciplined 
about the amendments you insist on getting votes on. We have had 
perhaps the most difficult year I can ever remember, because we have 
some of our colleagues on Presidential campaigns, and there have been 
so many other events we have had to break for. It has made it very 
difficult to give colleagues the chance to get the votes they desire. 
We are going to have to ask for continued cooperation to get this done.
  Senator Gregg, do you wish to say anything further?
  Mr. GREGG. I appreciate the Senator's comments. First, I join him in 
thanking the staff. We are about halfway through the timeframe here and 
they are getting tired, but they are doing a great job and we very much 
appreciate all they do; not only our staffs on the committee but 
obviously the staff that operates the Senate itself, who end up being 
here late into the night, and we very much appreciate their help.
  As to amendments, we are going to have a lot of votes on Friday, and 
it is going to be a very extensive day of voting and people need to 
sort of get ready for that.
  At this point I think we ought to start the votes.
  Mr. CONRAD. Madam President, the hour of 5 o'clock having arrived, I 
think it is the appropriate time to start the votes.
  Mr. GREGG. I am not sure the yeas and nays have been ordered on all 
of these amendments.
  Mr. CONRAD. Madam President, I ask for the yeas and nays.
  The PRESIDING OFFICER. The yeas and nays have been requested en bloc.
  Is there a sufficient second?
  There is a sufficient second.
  Mr. GREGG. Madam President, I ask unanimous consent that there be 2 
minutes evenly divided between each amendment.
  The PRESIDING OFFICER. Under the previous order, there is 2 minutes 
equally divided between the votes prior to the vote on the Baucus 
amendment.
  Mr. CONRAD. Madam President, nobody has used time on either side on 
the first amendment; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. CONRAD. Maybe I will take the time because I am advised Senator 
Baucus will not be here until the vote has begun.
  Let me recall for our colleagues that the Baucus amendment is to 
provide for the middle-class tax cuts to also address this anomaly in 
the estate tax, where it goes from $3.5 million per person of exemption 
back down to $1 million. It also contains additional funding for the 
Children's Health Care Program.
  There are other elements to the Baucus amendment, as well, that were 
enumerated by the Senator. I hope very much that our colleagues can 
support the Baucus amendment. It still leaves us with a slight balance 
in 2012 so that we are not back into deficit.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Madam President, claiming the minute on the Republican 
side, the Baucus amendment makes sense, but it does so in the context 
of also justifying the Kyl amendment. Both amendments basically make 
the point that we should extend these tax rates, which have done so 
much to help people and create an economic boom in this country. Both 
amendments are essentially the same, as far as the impact on the 
economy, but the Baucus amendment is about 2\1/2\ times the Kyl 
amendment. Both of them create issues of deficit financing.
  As a practical matter, the Kyl amendment specifically will generate 
economic activity. It creates jobs and, therefore, more revenue to the 
Federal Treasury. If you vote for one, you should vote for the other, 
if you happen to believe we have a tax policy that is making sense in 
this country today and is generating a lot of revenue, which it is.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
492 by the Senator from Montana.
  The yeas and nays have been ordered and the clerk will call the roll.
  The assistant journal clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER (Mr. Obama). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 97, nays 1, as follows:

                      [Rollcall Vote No. 82 Leg.]

                                YEAS--97

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Coburn
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feinstein
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--1

       
     Feingold
       

                             NOT VOTING--2

     Dodd
     Johnson
       
  The amendment (No. 492) was agreed to.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Mr. President, we have six votes that are going to be 
called immediately; 10 minutes plus 5 minutes the roll will be called. 
Everybody should understand that and not run back to their offices. Ten 
minutes, fifteen minutes goes by very quickly. There will be six votes, 
and we have 15 minutes on each one of them.


                           Amendment No. 507

  The PRESIDING OFFICER. There is 2 minutes equally divided prior to 
the next vote. Who yields time?
  Mr. GREGG. Mr. President, could we have a little bit of order? A 
touch, not too much. I don't want to get carried away.
  The PRESIDING OFFICER. The Senate will be in order.
  The Senator from New Hampshire.
  Mr. GREGG. Mr. President, if my colleagues voted for the last 
amendment, they should vote for this amendment. Procedurally, they are 
essentially the same. They are treated the same, they have the same 
impact, for all intents and purposes.
  The last amendment, arguably, would increase the deficit by $60 
billion. This one would increase it by $70 billion. Both amendments are 
focused on continuing the tax policy that we have in place, which is 
doing such a good job of generating jobs. In fact, this amendment 
increases the death tax to 35 percent--it reduces it, doesn't allow it 
to go over 35 percent. It allows the exemption to be applied to estates 
of $5 million; it permanently extends the tuition tax credit; it 
permanently extends the $250 deduction for teachers; it extends the 
tuition tax credit; it extends the capital gains and dividend tax rates 
which are so important to this economy and have had such a positive 
impact on revenues to the Federal Treasury.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, however well intended the Kyl amendment 
is, it

[[Page 7017]]

spends $72.5 billion with no offset. The surplus is gone under the 
amendment we just adopted. The surplus is gone. So the effect of this 
amendment is to take us right back into deficit.
  This amendment blows the budget. This amendment takes us from a 
balance in 2012 right back into deficit.
  My colleagues can extend those tax cuts if they pay for them, if they 
offset them. The Kyl amendment does not pay for them; it does not 
offset them; it takes us back into deficit. It ought to be defeated.
  The PRESIDING OFFICER. Is all time yielded back?
  Mr. GREGG. Do I still have time?
  The PRESIDING OFFICER. The Senator has 6 seconds remaining.
  Mr. GREGG. Six seconds.
  The PRESIDING OFFICER. Go ahead, quick.
  Mr. GREGG. The Senator from North Dakota is wrong. Vote for the Kyl 
amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
507. On this question, the yeas and nays have been ordered. The clerk 
will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 47, nays 51, as follows:

                      [Rollcall Vote No. 83 Leg.]

                                YEAS--47

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

                                NAYS--51

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Dodd
       Johnson
       
  The amendment (No. 507) was rejected.
  Mrs. MURRAY. Mr. President, I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 477

  The PRESIDING OFFICER. There are now 2 minutes equally divided on the 
Cornyn amendment.
  The Senator from Texas.
  Mr. CORNYN. Mr. President, my amendment creates a 60-vote point of 
order against legislation that would increase the income tax rates on 
taxpayers.
  Yesterday, the chairman of the Senate Budget Committee graciously 
indicated his support for this amendment. I hope nothing has changed 
overnight, and so I would hope my colleagues would support this 
taxpayer-friendly amendment.
  Mr. President, I yield back the remainder of my time.
  Mr. CONRAD. Mr. President, I find myself conflicted on this amendment 
in the following way: On the one hand, I don't think it is particularly 
good tax policy to establish points of order on this matter. So as a 
matter of tax policy, I don't think it is a particularly good idea. On 
the other hand, I don't want to leave the impression that this 
resolution contemplates an increase in tax rates because it doesn't.
  So I would say to those on my side, vote your conscience on this 
amendment. It certainly will not do any damage to this resolution if 
this were to pass.
  The PRESIDING OFFICER. The question is on agreeing to the amendment. 
The yeas and nays have been ordered.
  The clerk will call the roll.
  The assistant journal clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 63, nays 35, as follows:

                      [Rollcall Vote No. 84 Leg.]

                                YEAS--63

     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Cantwell
     Casey
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kohl
     Kyl
     Landrieu
     Leahy
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Roberts
     Salazar
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Vitter
     Warner

                                NAYS--35

     Akaka
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cardin
     Carper
     Clinton
     Conrad
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Lautenberg
     Levin
     Lieberman
     Menendez
     Mikulski
     Obama
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Stabenow
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Dodd
     Johnson
       
  The amendment (No. 477) was agreed to.


                     Amendment No. 466, as Modified

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes evenly divided on the Sessions amendment.
  Mr. SESSIONS. Mr. President, just briefly on this next amendment, I 
think it is a defining vote on the question of whether we intend to 
extend the current lower tax rates. The budget resolution that is 
before us has four points of order against tax cuts, but the way it is 
written, it even includes continuing our current income tax rates 
beyond 2010 because that would be defined under this budget as a 
reduction in taxes. This means that this proposed budget resolution 
would require 60 votes to extend the currently existing lower rates 
beyond 2010. I believe that is a mistake. These reduced rates include 
the $1,000 per child tax credit, the 10 percent bracket, the marriage 
penalty, the adoption tax credit, capital gains and estate tax repeal.
  I urge my colleagues, let's not put a burden on our economy and on 
our constituents by allowing these current tax rates that are low now 
to surge upward when they expire at the end of 2010. Do not put a 60-
vote requirement to extend current rates.
  The PRESIDING OFFICER (Ms. Cantwell). The Senator from North Dakota.
  Mr. CONRAD. Madam President, if you want to gut pay-go this is your 
opportunity. This amendment would completely overturn the pay-go 
discipline. The pay-go discipline, as all Members know, says: If you 
are going to have new mandatory spending, you have got to pay for it. 
If you want more tax cuts, you are going to have to offset them.
  This amendment would completely strip all of the points of order that 
exist under the pay-go discipline. This would be a return to deficits 
and debt as far as the eye can see at the worst possible time, just 
before the baby boomers retire.
  This is a critical and defining amendment. I urge my colleagues to 
vote no.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
No. 466, as modified, offered by the Senator from Alabama. The yeas and 
nays have been ordered.

[[Page 7018]]

  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 46, nays 52, as follows:

                      [Rollcall Vote No. 85 Leg.]

                                YEAS--46

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

                                NAYS--52

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Collins
     Conrad
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Dodd
       Johnson
       
  The amendment (No. 466), as modified, was rejected.
  Mr. CONRAD. I move to reconsider the vote and to lay that motion on 
the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 476

  The PRESIDING OFFICER. Under the previous order, there will be 2 
minutes of debate, equally divided, on the Ensign amendment No. 476.
  The Senator from Nevada.
  Mr. ENSIGN. Madam President, this amendment is very simply a Defense 
firewall amendment. We have had these in the past. The chairman of the 
Budget Committee will argue that they did not work very effectively in 
the past. I would disagree. It made it more difficult to take money out 
of Defense and to spend it on other programs.
  Our amendment is a little different. It says if you are going to take 
money out of Defense for social spending programs, then you must do it 
during the budget process. It brings transparency into the budget 
process. In the last several years, folks have taken money out of the 
Defense Department during the appropriations process, put it in other 
social spending, and then during the emergency supplemental process 
they backfill the Defense Department. This has cost our country an 
extra $84 billion over the last 5 years. The problem is the money gets 
built into the baseline, which costs more money and more money and more 
money every year; last year alone it was $40 billion.
  If you want to be fiscally responsible, you should vote for this 
amendment.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President and colleagues, I think this amendment is 
well intended.
  I believe it will actually make the situation worse with these 
defense firewalls. What it means is that supposedly we are walling off 
nondefense money and defense money. But here is what is happening. We 
have had these firewalls in the past. Before we had them, we had three 
medical research earmarks in the defense budget. This is what happened 
after defense firewalls. Here are the number of earmarks in the defense 
budget for medical research. Does anybody believe we are better off 
doing medical research at the Department of the Army rather than at the 
National Institutes of Health? That is what this amendment is about. It 
will be a mistake to adopt this amendment. I urge a ``no'' vote.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
No. 476. The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 47, nays 51, as follows:

                      [Rollcall Vote No. 86 Leg.]

                                YEAS--47

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

                                NAYS--51

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Rockefeller
     Salazar
     Sanders
     Schumer
     Specter
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Dodd
       
     Johnson
  The amendment (No. 476) was rejected.
  Mrs. MURRAY. I move to reconsider the vote.
  Mr. NELSON of Florida. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 483

  The PRESIDING OFFICER. Under the previous order, there will be 2 
minutes evenly divided on the Bunning amendment No. 483.
  Who yields time?
  The Senator from Kentucky.
  Mr. BUNNING. Madam President, this amendment is almost identical to 
the language that was included in the fiscal year 2003 budget 
resolution Chairman Conrad authored. There are many reasons for this 
amendment, but basically the amendment says that just because we have 
been spending the Social Security surplus for decades does not mean we 
should continue to do so. That is why we have made a budget point of 
order against continued spending of it.
  We have dug ourselves into a big ditch. The budget before us just 
keeps on digging. My amendment says: Stop digging. It forces Congress 
to make a plan to protect the Social Security surplus.
  I urge my colleagues to think about the future Social Security 
retirees and support this amendment.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, this is a happy moment. We can all vote 
for this amendment. This is an amendment I offered a number of years 
ago. I wish it would have passed then and been in effect because we 
could have avoided some of the unpleasantness that has followed in 
taking Social Security funds and using them for other purposes.
  There is no reason not to support this amendment tonight to try to 
once again impose the discipline that has been lacking, to prevent 
Social Security funds from being used to pay other bills.
  So I welcome colleagues voting for this amendment.
  The PRESIDING OFFICER. The question is on agreeing to Bunning 
amendment No. 483. The yeas and nays have been ordered. The clerk will 
call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.

[[Page 7019]]

  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 98, nays 0, as follows:

                      [Rollcall Vote No. 87 Leg.]

                                YEAS--98

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Coburn
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Dodd
     Johnson
      
  The amendment (No. 483) was agreed to.


                           Amendment No. 486

  The PRESIDING OFFICER. Under the previous order, there will be 2 
minutes evenly divided on the Bingaman amendment No. 486.
  The Senator from New Mexico.
  Mr. BINGAMAN. Madam President, this amendment is bipartisan. Senator 
Alexander and I and many other Senators are cosponsoring this 
amendment. It is to make room in this budget so we can fund what the 
President has requested in the various agencies that are essential to 
keeping this country competitive.
  It is to allow the provisions of the America COMPETES Act, which 
Senators Reid and McConnell earlier introduced, to actually be funded 
later this year, if we can do that in the appropriations process. I 
yield the remainder of my 1 minute to Senator Alexander and urge all 
colleagues to support the amendment.
  Mr. ALEXANDER. Madam President, I thank the Senator from New Mexico. 
He is precisely correct. This is an amendment to help America keep its 
brain power managed so we can keep our good jobs. It is necessary to 
make room in the budget for the amount of money President Bush 
recommended in connection with legislation that Senator Reid and 
Senator McConnell have introduced.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. ALEXANDER. I urge a ``yes'' vote.
  Mr. CONRAD. Madam President, this is the last vote today. We would 
urge all of our colleagues to vote yea on this bipartisan amendment. I 
think this is one of the most thoughtful amendments that has been 
offered throughout the process. It deserves all of our support.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
486. The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Connecticut (Mr. Dodd) 
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 97, nays 1, as follows:

                      [Rollcall Vote No. 88 Leg.]

                                YEAS--97

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Coburn
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Hagel
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thomas
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--1

       
     Gregg
       

                             NOT VOTING--2

     Dodd
     Johnson
       
  The amendment (No. 486) was agreed to.
  Mr. CONRAD. Madam President, I move to reconsider the vote, and I 
move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER (Mr. CARDIN). Under the previous order, the 
Senator from Texas is recognized.


                           Amendment No. 517

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

       The Senator from Texas [Mrs. Hutchison], for herself, Mr. 
     Cornyn, Ms. Cantwell, and Mr. Enzi, proposes an amendment 
     numbered 517.

  Mrs. HUTCHISON. 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:


                           amendment no. 517

  (Purpose: To provide tax equity for citizens of states which do not 
 have a state income tax by providing for a permanent extension of the 
  state and local sales tax deduction from federal income taxes, now 
                scheduled to expire at the end of 2007)

       On page 3, line 11, decrease the amount by $429,000,000.
       On page 3, line 12, decrease the amount by $2,923,000,000.
       On page 3, line 13, decrease the amount by $3,294,000,000.
       On page 3, line 14, decrease the amount by $3,349,000,000.
       On page 3, line 15, decrease the amount by $3,579,000,000.
       On page 3, line 20, decrease the amount by $429,000,000.
       On page 3, line 21, decrease the amount by $2,923,000,000,
       On page 3, line 22, decrease the amount by $3,294,000,000.
       On page 3, line 23, decrease the amount by $3,349,000,000.
       On page 4, line 1, decrease the amount by $3,579,000,000.
       On page 4, line 6, decrease the amount by $429,000,000.
       On page 4, line 7, decrease the amount by $2,923,000,000.
       On page 4, line 8, decrease the amount by $3,294,000,000.
       On page 4, line 9, decrease the amount by $3,349,000,000.
       On page 4, line 10, decrease the amount by $3,579,000,000.
       On page 4, line 15, decrease the amount by $429,000,000.
       On page 4, line 16, decrease the amount by $2,923,000,000.
       On page 4, line 17, decrease the amount by $3,294,000,000.
       On page 4, line 18, decrease the amount by $3,349,000,000.
       On page 4, line 19, decrease the amount by $3,579,000,000.
       On page 26, line 12, decrease the amount by $429,000,000.
       On page 26, line 13, decrease the amount by $429,000,000.
       On page 26, line 16, decrease the amount by $2,923,000,000.
       On page 26, line 17, decrease the amount by $2,923,000,000.
       On page 26, line 20, decrease the amount by $3,294,000,000.
       On page 26, line 21, decrease the amount by $3,294,000,000.
       On page 26, line 24, decrease the amount by $3,349,000,000.
       On page 26, line 25, decrease the amount by $3,349,000,000.
       On page 27, line 3, decrease the amount by $3,579,000,000.
       On page 27, line 4, decrease the amount by $3,579,000,000.

  Mrs. HUTCHISON. Mr. President, my amendment is cosponsored by Senator 
Cornyn, Senator Cantwell, and Senator Enzi. This is an amendment that

[[Page 7020]]

also has sponsors of bills to legislatively produce the same result: 
Senators Alexander, Ensign, Cornyn, Enzi, Corker, Martinez, Stevens, 
Thune, Bill Nelson, Cantwell, Murray, and Reid. This is an amendment 
that would extend the sales tax deduction in Federal income taxes for 
the period of this budget. This would perpetuate the law that is today 
but which expires at the end of this year. It is fully offset with the 
920 budget function allowances. It would cost $13 billion over the 5-
year period, and this account will absorb that loss.
  My amendment provides for the extension of the sales tax deduction 
for States that do not have an income tax. It is an issue of fairness. 
We have fought for this since 1986, until 2004, when we corrected the 
inequity. I hope we will be able to correct this inequity on a 
permanent basis.
  State and local governments have various options for raising 
revenues. Some levy income taxes, some use sales taxes, and some do 
both. Citizens of States that levy income taxes have long been able to 
offset some of what they pay by deducting their State income tax on 
their Federal tax returns. In essence, we are not making people pay 
taxes on their taxes, which is fair.
  Before 1986, all taxpayers had that capability, whether they were 
taxed with sales taxes or income taxes. From 1986 until 2004, the 
residents of States that didn't have a State income tax but had a sales 
tax were not allowed to deduct their State's revenue mechanism, thereby 
penalizing them because of their State's choice to collect revenues 
through sales taxes.
  Eight States--Washington, Nevada, Wyoming, South Dakota, Alaska, 
Florida, Tennessee, and Texas--have been penalized in those years for 
exercising their independence in choosing their method of collecting 
taxes. It was unfair.
  Congress rectified this unequal treatment when we passed the America 
Jobs Creation Act of 2004, providing taxpayers with the option of using 
the sales tax for their deduction or the income tax. If someone lives 
in an income tax State, they can also choose the sales tax instead of 
their income tax deduction, so it is a benefit for every taxpayer in 
America to have this option. But it especially affects these eight 
States that have no option, without the ability to deduct their sales 
taxes. Why should they have to pay taxes on their taxes, when people 
who pay income taxes do not? Of course, they should not.
  A family of four in Texas that itemizes will save $310 a year in 
Federal income taxes, on average. This deduction, which we extended 
through this year, 2007, will expire if we don't provide for this 
extension in the budget.
  Sales tax deductibility is not only an issue of fundamental tax 
fairness but is also an economic stimulus. It can create jobs in the 
States, where lowering taxes does make a difference in the investments 
businesses make, which does create new jobs. Fifty-five million 
Americans live in States which do not have income taxes but which have 
hefty sales taxes. Last Congress, three-fourths of this body voted 
overwhelmingly to make the sales tax deduction permanent.
  My amendment is fully paid for through reductions in waste, fraud, 
and abuse. I urge my colleagues to support this amendment so we can 
have equity for all of our citizens and options for all of our citizens 
to choose which of the State and local taxes they would prefer to 
deduct.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, if I may inquire of the Senator, for 
clarification purposes on her amendment, the amendment, as I understand 
it, on sales tax deductibility--what is the cost of that amendment?
  Mrs. HUTCHISON. It is $13 billion over 5 years.
  Mr. CONRAD. As I understand it, the Senator funds it out of section 
920.
  Mrs. HUTCHISON. That is correct.
  Mr. CONRAD. Would it be out of the mandatory side of 920 or the 
discretionary side?
  Mrs. HUTCHISON. The discretionary side.
  Mr. CONRAD. Let me say to colleagues that while I have great sympathy 
for the purposes of the Senator's amendment, the funding source gives 
me substantial heartburn. Let me explain why, if I may. The 
discretionary side would include things such as law enforcement and 
veterans. We already have, out of section 920, between $7.5 billion and 
$8 billion taken from that pot. The problem with taking another $13 
billion is it goes into an area where we don't have the resources in 
terms of this magnitude.
  Let me say why that is the case. The President just sent up a message 
identifying $7.5 billion in this area that could be cut. Congress, in a 
recent legislative enactment, took out $6 billion. So we can probably 
do some more out of 920 but, honestly, to take that additional amount 
out of 920 is going to have a real impact on these discretionary 
accounts that it affects--veterans, law enforcement, parks, and all the 
rest.
  So I am going to be compelled to resist this amendment, not because I 
don't favor the basic objective the Senator is trying to accomplish, 
which is entirely reasonable, but the pay-for presents a problem to 
this budget. That would take us well over $20 billion out of section 
920, and I don't think there are sufficient resources there to 
accommodate that amount.
  I want to give colleagues a heads up, and perhaps overnight we can 
find some other way. Perhaps we can work together and see if there is 
another way to fund it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I appreciate what the distinguished 
chairman of the committee has said. Let me say three things: First, I 
would be happy to work with the chairman to find another offset that 
would be acceptable, because I certainly want it to be offset, and I 
think the basic fairness of treating every taxpayer in America fairly 
is one we should absolutely adhere to. I cannot imagine that we would 
go forward next year and put eight States at such a disadvantage. So I 
want to work with the chairman.
  The second point is it doesn't have to be discretionary. The reason I 
said discretionary--and it is not in the amendment that it would be 
discretionary, and perhaps we can work in another area of spending that 
would be acceptable. The reason I chose discretionary is my third 
point, which is the OMB rating analysis--the PART assessment--working 
with that PART assessment, Senator Allard said there was $88 billion in 
program spending that was rated as ``ineffective'' over the next 5-year 
period. So I thought the $88 billion provided plenty of leeway for 
programs that were not fully operational to use what they have in the 
budget.
  I don't think anyone would take from the veterans account, of course, 
because we have increased the veterans amount to make sure that 
veterans' health care is fully covered. I am the ranking member of the 
Veterans Appropriations Committee and I added $1.5 billion in emergency 
funding last year to assure that the veterans accounts would be fully 
funded. In the rating analysis of OMB, there are other funds that 
cannot fully utilize their line items and, therefore, I think there 
would be leeway in this discretionary account.
  I would be pleased to work with the chairman. I hope we can provide 
for this in the budget, because I think we have to treat every American 
taxpayer fairly.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.


                           Campaign Financing

  Mr. DURBIN. Mr. President, imagine a President coming before a joint 
session of Congress and using his bully pulpit to call for a 
fundamental change

[[Page 7021]]

in the way we fund political campaigns in America. Imagine a President 
saying we need to buy back our democracy by replacing special-interest-
funded elections with publicly funded elections.
  As hard as it may be to believe, that happened. An American President 
did say that--100 years ago. His name was Teddy Roosevelt, and his call 
for public financing of campaigns was the cornerstone of his 1907 State 
of the Union Address.
  I know the Senate moves slowly, but a century is long enough to wait. 
Congress can pass all the lobbying and ethics reforms we want, but we 
won't get to the heart of the problem when it comes to the confidence 
of the American public until we address the issue of campaign 
financing. Special interest money and influence will always find new 
loopholes, until we change this political system fundamentally.
  Just yesterday, Senator Specter and I introduced a plan to do that. 
It is called the Fair Elections Now Act. Our bill will create a pool of 
public, accountable funds that qualified Senate candidates can use to 
fund their campaigns in place of special interest dollars and dollars 
from wealthy donors. The program we propose is strictly voluntary, and 
it is consistent with our Constitution.
  For years, I have always resisted the idea of public financing of 
political campaigns. I used to have this kind of quick response when 
people asked me about public financing. It was a pretty good one. I 
used to say I don't want a dime of Federal taxpayer dollars going to 
some racist such as David Duke running for office. It was a pretty good 
response, but frankly, as I reflect on it now, it ignores the obvious. 
For every miscreant like David Duke, there are thousands of good men 
and women in both political parties who were forced into a system that 
is fundamentally corrupting.
  The stakes right now are too high in America not to change. A lot of 
people in America on both sides of the fence have a sneaky feeling that 
our democracy is in real trouble. No wonder. Look around at all the 
scandal and suspicion, the so-called ``culture of corruption.'' Take a 
good look at the political money chase that consumes more of our time 
every year. That is time a Senator and a Member of Congress doesn't 
have to devote to being a Senator. We can use that time talking to 
people we represent, people who might not have $2,000, $3,000, $4,000 
to give to us but people who are even more important than those donors. 
That is time we could use to study and try to solve some of the big 
challenges facing this country, such as our reliance on foreign oil.
  There are many good, honest people in politics, and this Senate is 
guided by the best of intentions, but we are stuck in a terrible, 
corrupting system.
  Take a look, if you will, at the cost of running Senate campaigns. 
This chart is an indication of what we are up against. This is the 
average spent by candidates in the 10 most expensive Senate races 
between 2002 and 2006. Mind you, this is the average of the 10 most 
expensive races. Go back to 2002, and you see the number is somewhere 
short of $20 million. Now go to 2004 and the number is up to $25 
million. Now come to 2006 and the number happens to be $34 million. 
That is $34 million on average spent by the 10 most expensive Senate 
races by both candidates--$34 million, the average amount.
  The cost of running for the Senate is out of control. To think that 
the cost of running a Senate race between 2002 and 2006 in the 10 most 
expensive races has more than doubled tells us this is unsustainable.
  Let me show this chart as well. It is a little hard to read because 
the charts are smaller. Here is another figure that is hard to imagine. 
It takes a mountain of money to lose a Senate campaign today. On 
average, to run and lose a campaign for the Senate costs $7 million. 
That is to lose. That figure, too, has doubled since 2002. Who knows 
what it is going to cost in 2008.
  These figures are the averages spent by winners and losers for the 
Senate in each of these years, and one can see from these charts what 
is happening. Losers, $7 million to lose a Senate race; those running 
and winning, $12 million.
  Then take a look at the total amount spent in Senate races between 
2002 and 2006. We have now broken through the $500 million barrier. We 
are on our way to spending in total for about 33 races every election 
$1 billion. We are on our way there. There is no doubt we are going to 
hit that and soon. That is the reality of what it means to be elected 
to this important body.
  The costs increase dramatically with every election. I am up for 
reelection in 2008. Candidates, if they are honest with you, will tell 
you they spend too many waking moments worrying about raising money, 
getting on the telephone, setting up fundraisers, traveling around the 
country, where good people--I thank them for helping me--are asked to 
give contributions. It becomes a consuming passion because you 
understand you are going to need that money to be reelected.
  Mr. President, do you know why I am raising money? I am raising money 
to create a trust fund in Illinois for television stations. That is 
right. I am begging money from everybody I can find in order to buy 
television time next year. I need millions of dollars because the cost 
of television is soaring.
  Take a look at the amount spent on political TV advertising. To give 
you a notion, political ad spending in millions of dollars, starting in 
2002, $995 million; 2004, $1.6 billion; 2006, $1.7 billion; and 2008, I 
can't even guess where that figure is going to go.
  Does anyone think our democracy is stronger and healthier because of 
this explosion in drive-by political TV ads? Have you ever met a voter 
who said: You know what the problem is with political campaigns? They 
are just too darn short. We need longer campaigns; we need to see more 
of your ads. I have never heard that. But I have heard the opposite. I 
have heard people beg for mercy: Are you going to have another week of 
those television commercials going?
  The candidates hate raising the money for it, the people hate 
watching it, but the TV stations love it.
  I visit TV stations in my State when it gets close to election time, 
and I meet with the managers. I met with one in downstate Illinois in 
this last election cycle. Nice fellow. I have seen him in Washington a 
lot. He runs a nice little station downstate. He had this big smile on 
his face.
  I said: Things going OK here?
  Yes, they sure are.
  I said: Lots of political ads?
  He said: Senator, I am the luckiest guy in southern Illinois. My TV 
station plays into Missouri. You know what is going on. We may not have 
a big Senate race in Illinois, but in Missouri, there is a big red hot 
contest between an incumbent Senator and a challenger, and they are 
buying every single minute I will sell them. To be honest with you, I 
have no time to sell to other advertisers because these political 
candidates are here.
  Senators are spending more and more time each year when they are up 
for reelection creating these trust funds for wealthy broadcasting 
corporations instead of doing the work the voters sent us here to do. 
This is not good for our democracy. Our democracy cannot afford to let 
this system continue.
  The plan Senator Specter and I have introduced is simple and 
constitutional. In order to receive Fair Election funds, candidates 
first have to prove they are real candidates. It isn't enough to think 
you are going to run; you have to have some support. People have to 
believe you are a real candidate. You prove that by, as a candidate, 
collecting a minimum number of small contributions.
  What does it mean? You have to be a fundraiser, and in my State of 
Illinois, it would mean you would have to have 11,500 $5 contributions. 
I think that a person who is not a serious candidate would have a tough 
time raising 11,500 contributions in a State such as Illinois, but it 
is worth the effort because if you can raise that to prove you are a 
viable candidate, you can qualify for these funds to run your election 
campaign.
  What happens if you are running against a millionaire or a 
billionaire? And believe me, a lot of political parties spend time 
searching for these so-called self-funders, people who pay for

[[Page 7022]]

their own campaigns. Or what if you get caught in the crosshairs of 
some shadowy attack group that has decided they are going to take you 
on by running ads against you? In that case, the candidate who has 
agreed to be part of the Fair Elections financing can receive 
additional funds to level the playing field. All candidates who 
voluntarily agree to abide by Fair Elections rules will receive 
vouchers for free TV time and discounts on additional TV-radio time.
  That is a major way in which our plan will help slow the explosive 
growth of campaign spending. The only thing the Fair Elections 
candidates cannot do is accept private, special interest or big-donor 
funds. With the exception of those 11,500 contributions of $5, you are 
not in the fundraising business. Maybe a few startup funds, but by and 
large, the qualifying $5 contributions is the end of your campaign 
fundraising.
  This is not a naive, idealistic, over-the-Moon theory. Some of the 
programs are already working in Maine and Arizona. They were enacted by 
public referenda. They went to the voters of those two States and said: 
Do you want a shorter, cleaner, and fairer campaign? And the voters 
said ``yes.''
  They were enacted by public referenda, and they have been sustained 
through election cycles because they are producing shorter and better 
campaigns. They are producing better debates in place of a terrible 
avalanche of political ads that we see almost everywhere. Fair 
Elections in Maine and Arizona are helping those States pass the kinds 
of reforms Americans want, such as affordable health care.
  Fair Elections are bringing new faces and new ideas into politics. 
They are helping level the playing field between incumbents and 
challengers because we see, under this system, the incumbent Senator 
doesn't get any more money than the challenger. They get the same 
amount of money, fair play.
  Some may wonder why Senator Specter and I would support a system that 
weakens the incumbent advantage. The answer is simple: We believe that 
America needs a system that rewards candidates with the best ideas and 
principles, not just the person who is the most talented in raising 
special interest money.
  Supporters of the current system who don't want to change say the 
public will never support Fair Elections. They are wrong. Take a look 
at these polling results when it comes to the idea of public financing 
of elections. Support is increasing for the idea of public financing in 
Fair Elections: Seventy-four percent of all voters support public 
financing in Fair Elections; 80 percent of Democrats, 65 percent of 
Republicans, and 78 percent of Independents.
  This is an idea whose time has clearly come. These are the results of 
a national survey conducted for Common Cause and a group called Public 
Campaign. Three-quarters of Americans--Republicans and Democrats and 
Independents--support Fair Elections and public financing. It cuts 
across party lines, regional lines, and gender. Public financing will 
only cost us a fraction of what the current system costs. Make no 
mistake, if you are listening to this and saying: Why in the world 
would we want any tax dollars to go to campaigns, let them pay for it 
themselves, the harsh reality is America pays for the way we fund our 
campaigns.
  We are sustained on both sides of the aisle. Unless you are a self-
funding millionaire, we are sustained by special interest groups and 
wealthy donors.
  I ask for those contributions because I am not a wealthy person. I do 
my best to come and vote my conscience, but the fact is, there is 
always a suspicion that when I cast a vote, it is because I received a 
contribution.
  How much will it cost? About $1.4 billion a year, $2.8 billion per 
election cycle. About as much as we spend in 1 week on the war in Iraq 
is the amount it would cost us to publicly fund all House and Senate 
campaigns.
  People who say the public shouldn't have to pay for elections miss 
the point. We are already paying for them in the hidden ways that favor 
incumbents and special interests. We pay when special interests are 
allowed to literally write their own bills. We pay every time a line is 
slipped into a bill anonymously, a big bill, behind closed doors giving 
some well-connected corporation tens of millions of dollars in tax 
breaks.
  Fair Elections aren't just better than what we have now, ultimately 
they are less expensive to the taxpayers.
  It has been a century since Teddy Roosevelt challenged Congress to 
get to the heart of the problem and get the special interest money out 
of the public elections 100 years ago. The American people do 
understand what is at stake. They understand our democracy is in 
trouble because special interests and big-donor money is choking the 
system and preventing us from facing up to the big challenges of our 
time.
  I wish to say for the record what I said on the floor before in the 
midst of corruption and scandals: I want to make it clear, the 
overwhelming majority of men and women serving in Congress in both the 
House and Senate, those serving today and those I have served with over 
the years, are honest, good people trying to do the best in public 
service.
  I am not suggesting otherwise, but the way we finance our campaigns 
is unfortunate, forcing many of us into compromising situations which 
are becoming increasingly difficult.
  The American people are ready for Fair Elections. Fair Elections are 
already at work in several States. After a century, it is time for the 
Senate to accept President Teddy Roosevelt's challenge: Buy back our 
democracy from big donors and special interests and make Fair Elections 
the law of the land.
  Mr. President, how much time do I have remaining under the previous 
order?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DURBIN. I thank the Presiding Officer. I see another Senator on 
the floor, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont is recognized.
  Mr. SANDERS. Mr. President, let me begin by thanking Chairman Kent 
Conrad and his staff for the very hard work they have done in crafting 
the important budget resolution that is before us. I know of their work 
because I am a member of that committee and have seen how much effort 
it has taken.
  Mr. President, as you know, a budget is more than a long list of 
numbers and this budget certainly has many numbers and it adds up to a 
huge sum of money. But after all is said and done, a budget is a 
statement about our values, about our priorities, and what we as a 
nation stand for. That is what a budget is about. In my view, the time 
is long overdue for the Congress in its budget to get its priorities 
right, and by that I mean to begin to stand up for the vast majority of 
our people--the middle class, the working families of this country--
rather than just the large multinational corporations and the 
wealthiest people in our Nation who year after year have had their way 
on budget initiatives.
  Mr. President, when we analyze the merits of a Federal budget, we 
have to begin by taking a very serious look at the economic reality 
which faces the American people. In other words, is the budget we are 
working on now reflective of the needs of our people? Is that what we 
are doing?
  On many occasions, members of the Bush administration have come 
before the Budget Committee, of which I am a member, and they have 
given us their view of how our economy is doing. I am astounded each 
and every time by their worldly view with regard to the budget. We have 
heard members of the administration telling us how wonderful the 
economy is doing, how marvelous it is, and how the economy is booming. 
I sit there, and I think millions of Americans sit there, and they 
begin to scratch their heads and they say: What world are these people 
living in?
  I know that in my own State of Vermont, when we do town meetings, we 
always talk about the economy; how well the middle class is doing. I 
always ask people: How do you think the middle class is doing right 
now--doing well, not so well? With very few exceptions, people tell me 
that the middle

[[Page 7023]]

class in this country, in the State of Vermont, in their own lives, 
that people are struggling economically to keep their heads above 
water. I find it hard to understand how people from the Bush 
administration can come forward and tell us just how great the economy 
is doing. I really wonder what world they are living in.
  In my view, and I think the facts substantiate my view, the economic 
reality facing the vast majority of our working people is that the 
middle class is shrinking, that people today all over our country are 
working longer hours for lower wages.
  When I was a kid growing up, the expectation was that one person in a 
family--in those days, almost always the man--could work 40 hours a 
week and earn enough money to pay the bills--one person, 40 hours a 
week. How many middle-class families do we know today where one person 
is working 40 hours a week? The answer is, likely not very many. Most 
of the middle-class families we know are seeing husbands working very 
long hours, wives working very long hours, and on occasion kids working 
to help save some money for college. In fact, at the end of the day, 
what we have to understand is that the American worker today is working 
longer hours than the people of any other industrialized country. We 
surpassed the Japanese a few years ago.
  We also have to understand, when we talk about a shrinking middle 
class, that many millions of American workers today are working longer 
hours for lower wages than used to be the case. In Vermont, and 
throughout this country, in fact, parents are wondering why, despite a 
huge increase in technology, despite huge growth in worker 
productivity, there is a strong likelihood that for the first time in 
modern American history our children will have a lower standard of 
living than we do. The American dream has always been about parents 
working hard with the hope that their kids, the next generation, will 
do better than they have done. That was the case with my parents and in 
the case of millions of families in this country.
  Unfortunately, now we are in a situation unique in modern history 
where, unless we turn this economy around, what we will see is our 
children having a lower standard of living than we do.
  I wonder how the Bush administration can tell us how great the 
economy is doing when more than 5 million Americans have slipped into 
poverty since the President has been in office, including over 1 
million children. That is not a booming economy.
  How can the economy be doing well when median income for working-age 
families has declined for 5 years in a row and when the personal 
savings rate in this country now is below zero, something which has not 
happened since the Great Depression?
  How can our economy be doing well when almost 7 million Americans 
have lost their health insurance since President Bush has been in 
office and when, according to the U.S. Department of Agriculture, 35 
million Americans struggled to put food on the table last year and 
hunger in America is increasing? If hunger is increasing, that, to my 
mind, does not sound like a booming economy.
  How can people talk about our economy doing so well when college 
students are graduating with about $20,000 in debt and some 400,000 
qualified high school students don't go to college because they can't 
afford it? We all talk about education, education, education. Hundreds 
of thousands of young people cannot afford to go to college.
  How can our economy be doing great when home foreclosures have 
skyrocketed to the highest level in nearly four decades, according to 
the Mortgage Bankers Association, and when we have lost over 3 million 
good-paying manufacturing jobs since President Bush has been in office?
  How can our economy be doing so great when 3 million fewer American 
workers have pension coverage today than when President Bush took 
office, and half of private sector American workers have no pension 
coverage whatsoever?
  When the President of the United States and his administration tell 
us the economy is doing great, well, they are partially right. While 
the economy is not doing well for the middle class or working families 
of our country, it is doing very well for the wealthiest people in 
America. That is the truth.
  Today, the wealthiest people in our country are becoming much 
wealthier. In fact, they have not had it so good since the 1920s. That 
is the reality. The middle class is shrinking, poverty is increasing, 
the people at the top have never had it so good since the 1920s, and we 
have, as a nation, the dubious distinction of now having, by far, the 
widest gap between the rich and the poor of any major country on earth.
  Today, the upper 1 percent of families in America have not had it so 
good since the 1920s. According to Forbes Magazine, the collective net 
worth of the wealthiest 400 Americans increased by $120 billion last 
year to $1.25 trillion. The 400 wealthiest Americans are now worth 
$1.25 trillion at the same time that hunger in America is increasing 
and 5 million more of our citizens have slipped into poverty.
  I have given this broad overview of the economy in order to place the 
discussion of our budget in what I think is a sensible context; that 
is, if the wealthiest people in America are becoming wealthier while 
the middle class is shrinking and poverty is increasing, what the 
budget should be about is responding to that reality. That is the 
reality to which the budget should be responding.
  The President of the United States, in his budget proposal, told us 
what he thought. He said in his budget that, despite the growing health 
care crisis in our country, he was going to cut Medicare and Medicaid 
by $280 billion over the next decade and that he was going to 
inadequately fund the Children's Health Insurance Program. Today, the 
United States is the only nation in the industrialized world that does 
not guarantee health care to all its people. We have millions and 
millions of children who have no health insurance, and this President 
refuses to adequately fund the health insurance program for children.
  Despite the reality that we have 23,000 wounded coming home from Iraq 
and tens of thousands more who will be coming home with post-traumatic 
stress disorder or traumatic brain injury, the President, in his 
budget, once again inadequately funded the needs of our veterans, as he 
has done year after year. In fact, since President Bush has been in 
office, an estimated 1 million veterans have been denied access to 
health services at the VA.
  Despite a horrendous crisis in childcare access and affordability for 
working families, so that all over this country working people are 
desperately trying to locate quality, affordable childcare while they 
are at work, the President, in his budget, reduced the number of 
children receiving childcare assistance by 300,000 and he cut funding 
for the Head Start Program.
  Despite millions of homeowners paying outrageously high property 
taxes, the President has, in his budget, further retreated from the 
Federal commitment to special education and he has cut funding for that 
program. This will result in a lowering of the quality of education for 
all of our children, including those with disabilities, and an increase 
in property taxes. This is a very serious problem in my State of 
Vermont, where towns are divided every March when they go over the 
budget.
  People understand the needs of the schools. They understand the high 
cost of mainstreaming kids with disabilities. Yet people cannot afford 
higher and higher property taxes. We as a Congress have to fully fund 
special education and keep the commitment we have made to school 
districts all over this country. Yet the President, in his budget, cuts 
funding for special education.
  Interestingly enough, while cutting programs for the middle class and 
working families of our country, while inadequately funding the needs 
of our veterans, of our children, and of our senior citizens, the 
President has reached the conclusion in his budget that we do have 
enough money as a government to provide enormous tax breaks to the 
wealthiest people in our society--$739 billion in tax cuts for

[[Page 7024]]

households earning more than $1 million per year over the next decade. 
We can't fund the needs of our kids, the President wants to eliminate a 
wonderful nutrition program for low-income seniors, we can't fund 
special education, we don't have enough money to put into sustainable 
energy, we can't take care of our veterans--we just don't have enough 
money--but somehow the President did manage to find in his budget $739 
billion in tax cuts for households earning more than $1 million per 
year over the next decade.
  Part of the President's budget calls for a complete elimination of 
the estate tax, a tax which now applies only to the wealthiest three-
tenths of 1 percent of our population. The elimination of this tax 
would provide an estimated $1 trillion in tax breaks for millionaires 
and billionaires between 2012 to 2021. One, just one multibillionaire 
family, the Walton family, which owns Wal-Mart, would receive an 
estimated $32 billion in tax relief--for one family. But we just don't 
have the money to take care of hundreds of thousands of veterans or our 
children or our seniors. Now, that may make sense to somebody, but that 
is not my sense of what moral values are about.
  While the budget resolution, introduced by Chairman Kent Conrad, 
which we are debating now is far from perfect, it is much more 
responsive to the needs of ordinary Americans than the President's. 
Instead of cutting back on the educational needs of this country, this 
budget resolution provides over $6 billion more than the President's 
request for education, including significant increases for Pell grants, 
Head Start, title I, and special education.
  Instead of cutting back on health care, this budget resolution 
provides an increase of $2.8 billion over the President's request for 
health care, including strong funding for a program that I think is 
enormously important for rural America and that is Community Health 
Centers and the National Health Service. Instead of cutting back or 
inadequately funding the needs of our veterans, this budget resolution 
provides over $3 billion in increases over the President's budget for 
our Nation's veterans--one of the priorities that I regard most 
important as a member of the Committee on Veterans' Affairs.
  But I think over the long run we can and must do much better in 
establishing our budget priorities than this budget does. This budget 
is much better than President Bush's budget, but in my view we have a 
long way to go to create a budget which responds to the needs of 
ordinary Americans.
  As an example of where I think we should be going as a nation in 
terms of our budget, last week I introduced the National Priorities Act 
which would expand the middle class, reduce the gap between the rich 
and the poor, and lower property taxes all over America as well as 
reduce the level of poverty. The basic premise of this legislation is 
pretty simple: We raise $130 billion in new revenue by rescinding the 
tax breaks that President Bush gave to the most wealthy 1 percent.
  I know a lot of my colleagues do not agree with me, but I think that 
at a time when we have a $8.5 trillion national debt, at a time when 
the middle class is being squeezed, at a time when the wealthiest 
people in our country have never had it so good, I believe that it is 
time to rescind the Bush tax breaks that have been given to the 
wealthiest 1 percent.
  What we also do is ask the Pentagon to take a hard look at their 
budget and cut out the waste, the fraud, the unnecessary weapons 
systems that currently exist. When you do that, you end up raising $130 
billion of new revenue. We propose that $30 billion go to deficit 
reduction and we propose the other $100 billion go to address the 
longtime unmet needs of the middle class and working families of this 
country.
  If as a nation we are serious about addressing the long neglected 
needs of the working people of America and creating a more just 
society, we have to change our national priorities. The wealthiest 
people in this country are doing just fine. They are doing really well. 
It is time we pay attention to working families, to the middle class, 
to the people who are struggling.
  I appreciate very much the hard work that Senator Conrad has done and 
I applaud his efforts. In the coming days I will be offering several 
amendments that I think will make the budget bill a stronger bill. One 
of the amendments is pretty simple. I hear a whole lot on the floor of 
the Senate about the need for deficit reduction, and I share that 
concern. The fact that we have a $8.5 trillion national debt should be 
of concern to every Member of the Senate and every Member of the House. 
So our proposal is going to be a pretty simple one--very simple.
  What we are going to propose is that we rescind all of the tax breaks 
given to people who earn $100 million or more--a tiny fraction of 1 
percent--and that we use those savings for deficit reduction. That is 
it. Pretty simple. If you are in favor of deficit reduction, I hope you 
will support that amendment.
  There is another amendment that we will also be offering. We have not 
worked out all the details but again what this amendment would do is 
rescind tax breaks for upper income people and use all of those savings 
to start the process of fully funding special education. All over 
America, people are paying higher and higher property taxes. It is 
certainly true in Vermont; it is certainly true in many States. The 
question is, Do we continue to maintain tax breaks for the most wealthy 
people in this country while property taxes are soaring? I say no. I 
say we lower property taxes, provide quality education for our kids 
including the kids with disabilities, and we do that by rescinding tax 
breaks for the wealthiest people in this country.
  I think we are making some progress in terms of the budget, the 
budget before us today, far better than what the President presented to 
Congress. But we still have a long way to go. I ask my colleagues to 
support amendments which will strengthen the middle class and working 
families of our country.
  I yield the floor.
  Mr. AKAKA. Mr. President, before I address the proposed funding for 
VA in the budget resolution for fiscal year 2008, I applaud Chairman 
Conrad and his colleagues on the Budget Committee for their hard work 
on this resolution. The measure before us today clearly reflects the 
right priorities and directions for our Nation.
  For a number of years, I have made the case for the President to 
include funds for VA health care as part of the war supplemental 
packages he has submitted to Congress, and every year, my colleagues 
and I fought to get those funds included in the budget resolution to no 
avail.
  The pending budget resolution finally recognizes that caring for 
returning service members and veterans is part of the cost of war and 
in turn proposes to fund VA health care appropriately for this effort.
  Right now, a great deal of attention is being paid to the needs of 
our men and women in uniform--attention that Chairman Conrad, myself, 
and other Members of this Chamber have been talking about for quite 
some time. I am proud to stand with Chairman Conrad in support of our 
service members and veterans.
  One of the harshest realities of the wars in Iraq and Afghanistan is 
the number of service members who have sustained complex and multiple 
injuries in combat.
  In stark contrast to past conflicts, significant improvements in 
battlefield medicine have enabled very seriously wounded service 
members to survive their injuries. Subsequently, these men and women 
are coming home with extraordinarily complex health care needs.
  We know that right now, there have been 1,882 identified and 
registered cases of service members who have suffered from traumatic 
brain injuries, or TBI, alone. This does not include those who have 
suffered from a milder form of this injury and may not even be aware of 
it. While TBI is becoming the signature wound of the current conflicts, 
many of these soldiers also have been rendered blind or lost a limb as 
a result of their injuries and the numbers of those who are coming back 
with serious and multiple wounds continues to grow.

[[Page 7025]]

  In recognition of the emerging medical and rehabilitative needs of 
veterans with traumatic brain and other injuries, Congress directed VA 
to establish specialized centers for rehabilitative care. VA's four 
lead Polytrauma Rehabilitation Centers are essential to meeting the 
needs of the most severely injured veterans and their families.
  In the budget before us today, Chairman Conrad and his colleagues 
have provided over $300 million specifically for meeting the needs of 
these veterans and service members who are in need of the comprehensive 
health care and rehabilitative services VA delivers through their 
Polytrauma Centers.
  This level of funding will enable VA to conduct assessments and 
screenings of troops for traumatic brain injury, provide veterans with 
intensive comprehensive TBI/polytrauma rehabilitation, and most 
importantly, support intensive case management for veterans with TBI 
and other injuries when they return to their communities and continue 
the rehabilitation process.
  Recent reports by the VA inspector general and others have 
illustrated that case management is a key element in the process of 
assisting these veterans achieve the fullest possible recoveries. 
Funding VA so that it can provide the continuum of care needed by the 
most severely injured service members is imperative if we are to truly 
fulfill our obligation to take care of our troops and veterans.
  I am also very pleased that the budget resolution before us is making 
a long-overdue investment in mental health care.
  Studies published in some of the most prestigious journals have found 
that a third of those seeking VA care are coming for mental health 
concerns, including PTSD, anxiety, depression, and substance abuse. We 
do not know the full magnitude of this need, as many returning service 
members have yet to seek care from VA.
  As chairman of the Veterans' Affairs Committee, my goal is to make 
sure that VA is doing everything possible to guarantee that each and 
every veteran who needs mental health care--whether in North Dakota, 
Vermont, or Hawaii--can receive that care.
  I remind my colleagues that so much of the time, battle wounds 
manifest themselves as invisible wounds--wounds which cannot be seen 
but are every bit as devastating as physical wounds. PTSD affects not 
only a veteran's mental status, it affects his or her physical well-
being as well. It impacts the veteran's relationships, his or her 
ability to work, and to interact in society. VA must catch readjustment 
issues early before they turn into full-blown PTSD, and this budget 
resolution would enable VA to take a serious approach towards making 
this happen.
  When we talk about the mental health needs of veterans, we cannot 
deny the reality that substance abuse is prevalent among many veterans. 
We know that many veterans with PTSD turn to drugs or alcohol in order 
to self-medicate. Yet the administration does not seem to want to be in 
the business of helping veterans with substance abuse problems. VA used 
to provide an intensive month-long program to treat substance abuse. 
Today, most VA substance abuse programs run for 2 weeks--not nearly 
enough time to put a veteran truly on the road to recovery. Again, this 
budget resolution provides funds for comprehensive inpatient substance 
abuse care. This is a very real investment in VA mental health care.
  On the benefits side, the current claims inventory and the time it 
takes to process a claim is unacceptable. Veterans deserve a timely and 
accurate response to their claims. It is obvious that Chairman Conrad 
agrees, as this budget resolution takes a major step toward responding 
to this very real problem by providing appropriate funding for VA to 
use to employ additional claims adjudicators.
  There are 30,000 more claims pending right now than last year this 
time. This constitutes an 8 percent increase. As the veterans 
population continues to age and new veterans come home from Iraq and 
Afghanistan, this trend of increased claims will continue. Given that 
it takes nearly 2 years for a new VA employee to start fully 
contributing to the bottom line, now is the time for new staff to be 
hired and trained to help reduce this caseload.
  Just 2 weeks ago, the Committee on Veterans' Affairs held a hearing 
on the VA claims adjudication process. During the hearing, VA witnesses 
testified to the nearly 400,000 ratings claims inventory and the 175 
days it takes to process a claim for benefits. We must insist that VA 
have no more than 250,000 claims in the pipeline at once, and that it 
take not more than 125 days to adjudicate a claim. VA clearly needs 
additional resources to hire the employees needed to adjudicate claims 
in a timely manner, which this budget resolution certainly provides.
  Mr. President, I am very pleased with the investment in veterans 
programs that is made in this budget resolution. I again commend 
Chairman Conrad and the Budget Committee for sending the right message 
to our Nation's veterans--that we are honoring our commitment to them 
by making a real investment into their care. I urge my colleagues to 
support swift passage of the resolution before us today.

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