[Congressional Record (Bound Edition), Volume 153 (2007), Part 8]
[Senate]
[Pages 11744-11769]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 
                                  2008

  Mr. CONRAD. Mr. President, I ask unanimous consent that the Senate 
proceed to the House message to accompany S. Con. Res. 21, the budget 
resolution; provided further that the motion to disagree to the House 
amendment be agreed to, the motion to agree to the request of the House 
for a conference be agreed to, and the motion to authorize the Chair to 
appoint conferees be agreed to; provided further that prior to the 
appointment of conferees, the following motions to instruct conferees 
be in order and that no amendments be in order to the motions: No. 1, 
Senator Kyl, relating to the estate tax; No. 2, Senator Gregg, relating 
to the extension of certain tax cuts; No. 3, Senator Conrad, 
alternative to Senator Gregg's extension of certain tax cuts; No. 4, 
Senator Cornyn, relating to the point of order on increasing tax rates; 
No. 5, Senator DeMint, relating to the increase of taxes; and No. 6, 
Senator Stabenow, relating to energy.
  I further ask consent that each motion be limited to 60 minutes 
equally divided in the usual form, that there be an additional 1 hour 
of general debate equally divided between the chairman and ranking 
member; further, that following the use or yielding back of time on 
each motion, the motion be set aside and that the votes occur in a 
stacked sequence this evening, Wednesday evening, beginning at 7:30 
p.m., with no intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, I thank the ranking member for his 
courtesy in working out this matter so we can complete action on the 
naming of conferees today. I think we have done this in a way that will 
give all Senators a right to express themselves on issues that are 
before the conference.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I thank the chairman of the committee for 
his cooperation. Obviously, he wants to get to conference. He wants to 
complete the conference on the budget. Although we disagree with the 
budget that was passed here--and I am sure we will disagree with the 
final product that is produced, regrettably--I think it is important 
the process go forward. It is not our intention to be dilatory, to try 
to slow this process down. That certainly is something we could do, but 
we certainly have no intention of doing that. Rather, we just want to 
be able to have a fair opportunity to make the points which we think 
are important relative to the budget.
  So I appreciate the chance to work with the Senator and the 
chairman's willingness to work with us to reach an accommodation that 
seems to be constructive, which is constructive, and which will 
hopefully move the process along.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I ask unanimous consent that when the 
items are considered for a vote, there be 2 minutes equally divided 
before each vote, and that after the first vote, the votes be limited 
in duration to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Presiding Officer laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the House insist upon its amendment to the 
     resolution (S. Con. Res. 21) entitled ``Concurrent resolution 
     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'', and ask a conference with the Senate on the 
     disagreeing votes of the two Houses thereon.

  The PRESIDING OFFICER. The Senate disagrees to the House amendment, 
agrees to the conference requested by the House, and authorizes the 
Chair to appoint conferees.
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, it would now be in order for the Senator 
from Arizona to proceed with his motion. Again, I want to thank all 
Senators. These things are difficult. They are always last-minute 
considerations. But I think we have worked out a reasonable 
accommodation.
  I thank the Presiding Officer and again thank the ranking member, and 
I believe now Senator Kyl's motion is in order. I also thank Senator 
Kyl for his patience as we worked through some of these procedural 
hurdles that cropped up at the last minute.
  I say to Senator Kyl, we thank you for your patience.
  The PRESIDING OFFICER. The patient Senator from Arizona.
  Mr. KYL. Thank you, Mr. President. I compliment both the chairman of 
the Budget Committee and the ranking member, who both have to have the 
patience of Job to work with all of their colleagues--all of them who 
have a little different idea of how things should proceed. I appreciate 
the comments.


                      motion to instruct conferees

  Mr. President, I send a motion to instruct conferees to the desk and 
ask for its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. Kyl] moves that the conferees 
     on the part of the Senate on the disagreeing votes of the two 
     Houses on the concurrent resolution S. Con. Res. 21 (the 
     concurrent resolution on the budget for fiscal year 2008) be 
     instructed to insist that the final conference report include 
     the Senate position to provide for a reduction in revenues, 
     sufficient to accommodate legislation to provide for 
     permanent death tax relief, with a top marginal rate of no 
     higher than 35%, a lower rate for smaller estates, and with a 
     meaningful exemption that shields smaller estates from having 
     to file estate tax returns, and to permanently extend other 
     family tax relief, so that American families, including 
     farmers and small business owners, can continue to enjoy 
     higher after-tax levels of income, increasing standards of 
     living, and a growing economy, as contained in the 
     recommended levels and amounts of Title I of S. Con. Res. 21, 
     as passed by the Senate.

  Mr. KYL. Mr. President, let me take a few moments to discuss what 
this motion to instruct conferees embodies.
  The subject is the death tax, the tax which requires millions of 
American families and small businesses to spend millions of dollars 
preparing against the possibility that they will have to pay very large 
amounts of money to the Federal Government upon the death of the person 
in the family who is responsible for that small business or who owns 
the property.
  For a long time, there has been a bipartisan understanding that this 
death tax is not a good thing. The Gallup poll and other polls 
consistently show that at least 60 percent of the American people think 
it is an unfair tax, that we should not be taking money from people at 
the time of death. They have already paid income taxes on it, 
frequently capital gains and dividends

[[Page 11745]]

taxes, and yet again they are taxed at the time of death on an amount 
of asset that remains.
  But just as pernicious as that tax is the planning, and the expensive 
planning, that has to go into trying to prepare for the possibility 
that the tax will be imposed--if you have a very large estate, frankly, 
trying to avoid having to pay a large amount of taxes into that estate 
because that frequently means you have to sell the small business, the 
farm, in order to liquidate assets to pay the tax.
  This is not a theoretical proposition. A good friend of mine from 
Phoenix, AZ, who was one of the great contributors to eleemosynary 
concerns in Phoenix--especially the Girls and Boys Clubs; he has one 
named after him--moved from New York City to Phoenix and with another 
person started a printing company. Years later, they had over 200 
employees. They were a great printing company in Phoenix. When Jerry 
died, his family could not afford the death tax liability because most 
of the money in the business was in the equipment. In that business, 
you have to constantly get new equipment to stay up with your 
competitors. They took out a small amount each year in salaries, but 
the rest of it was tied up in the business. So he did not have the 
liquidity to pay the substantial death tax that would be required. The 
business was sold.
  Interestingly enough, as to the argument that we have a death tax to 
prevent the concentration of wealth, it was sold to a big corporation. 
By the way, corporations do not pay death taxes. Also, this corporation 
has not contributed, as far as I know, a nickel to any of the great 
charity causes in Phoenix that Jerry contributed to every single year. 
It was really a shame when he died. More than the head of that 
household passed away at that time.
  What we are trying to do is to permanently reform the death tax. Now, 
in the past we have tried to repeal it. What this motion to instruct 
conferees does is embodies concepts that have been agreed to by both 
Democrats and Republicans to reform the death tax so that most people 
do not have to worry about it, they just do not have to go to the 
lawyers and the accountants, the estate planners, they do not have to 
pay money for insurance to get around it because they know the way we 
have constructed it, they are not going to have to pay it. It is still 
there for the very large estates, but most people would be exempted 
from it.
  Specifically, the motion to instruct conferees would call on Senate 
conferees to insist that the final budget resolution provide for a 
reduction in revenues relative to the baseline sufficient to allow 
Congress to approve meaningful death tax relief, defined as follows: A 
top marginal rate of no higher than 35 percent with a lower rate for 
smaller estates, and an exemption level that is sufficient to shield 
smaller estates from having to file a death tax return. While the 
motion does not specify that amount, an exemption of $5 million per 
estate indexed for inflation is what is contemplated.
  As I said, I think repeal of the death tax is the best option. I have 
been trying to find some agreement on reform since we haven't been able 
to get the votes for repeal. It is a nightmare for families now, and 
that is why I want to see if we can find a bipartisan way to do that 
this year. America's small business owners, farmers, and ranchers 
deserve this kind of certainty now.
  I might say, this might be a bonanza for insurance companies, but I 
think they have plenty of other ways to offer products to us. There is 
plenty to insure against. They can still make a very comfortable living 
without putting us through the burden to invest without insurance to 
avoid paying much of the death tax. This concept, by the way, would be 
sufficient to accommodate the death tax reform similar to the proposal 
introduced by the senior Senator from Louisiana last year and which was 
endorsed by the junior Senator from Arkansas on his Web site.
  I might say I have worked with other Members of the majority party 
now, and I thought last year we were very close to having an agreement 
that might have been achieved in a bipartisan way. In particular, the 
Landrieu bill provides for a $5 million exemption indexed for 
inflation, which is great, a family business carve-out, a top rate of 
35 percent, as I mentioned, and it recaptures the benefit of the $5 
million exemption for estates valued at over $100 million.
  The motion to instruct does not specify any revenue offsets. We don't 
believe extensions of existing law should require that. Indeed, this 
would be a retreat from existing tax law. It would be less generous to 
taxpayers, and none of our provisions last year contemplated an offset. 
We don't offset extensions of existing mandatory spending, and we don't 
think this extension of tax relief should be offset either.
  Some have said we should freeze the 2009 law in place. That provides 
for a $3.5 million exemption and a gift tax exemption that would be 
separate, a 45-percent rate, but a 45-percent rate means the Government 
takes almost half your property above the exempted amount, and that is 
frankly not acceptable to most small businesses or farmers. Forty-five 
percent is a rate most Americans deem to be unfair. So what we would 
suggest is a proposal that would be able to accommodate no higher than 
the 35-percent rate.
  Now, a couple of final points here. We all know budget resolutions 
don't dictate policy of the Finance Committee. It would be my intention 
to work with the Senators whom I have mentioned here, in addition to 
Senator Lincoln, who worked very hard on this the last couple of years, 
and others, to craft an estate tax reform proposal that would provide 
for this $5 million exempted amount indexed for inflation, a lower rate 
for the smallest estates, and it provides for a top marginal death tax 
that is no higher than 35 percent. I would love to see it lower than 
that. The Joint Tax Committee tells us anecdotally that a rate any 
higher than 35 percent would drive families into aggressive tax 
planning to avoid the tax. That is what we are trying to avoid here, 
the extra expense of planning. I might add that the last study done 
that I know of determined that the amount spent on trying to avoid the 
payment of the death tax each year is almost exactly the same amount 
that is collected by the U.S. Government. So in effect, we have a 
double tax here. People are paying maybe $30 billion, roughly, in these 
taxes to the Government, and spending another $30 billion to try to 
avoid paying the tax. That is $30 billion that could be going to much 
more productive activities than paying lawyers, accountants, and 
insurance folks.
  I conclude by saying it is important to provide the lowest rate for 
the smallest estates, because we don't want to have to have them go to 
the trouble of trying to protect their assets against the payment of 
the tax. We could accommodate that through a high exempted amount and a 
very low rate. That means they simply wouldn't have the incentive to go 
pay the money to the accountants and the lawyers.
  There is much more I could say about this. Right now I know the 
distinguished chairman of the committee might have something to say.
  I am happy to reserve the balance of the time on this side, subject 
to the ranking member's concurrence with that.
  Mr. CONRAD. Mr. President, I again thank the Senator from Arizona for 
his motion to instruct which he has offered. I ask our colleagues to 
resist this motion to instruct. I ask our colleagues to resist it on 
two grounds. No. 1, we have already provided for estate tax reform in 
the budget resolution that passed the Senate. I will do everything I 
can, as chairman of the Senate delegation and chairman of the 
conference, to uphold the Senate position, which is to reform the 
estate tax.
  The motion of the Senator from Arizona is not paid for. It will blow 
a hole in the budget. We are trying very hard to balance this budget by 
2012. Our budget and what will come back from conference does balance 
by 2012. But if we adopt the Senator's amendment, we will not balance.
  Let me say what the budget resolution that passed the Senate did. All 
of

[[Page 11746]]

us know, first, there is no death tax. It is good language, but it is 
not accurate. There is no death tax. Nobody pays a specific tax on 
death in America. We do have an estate tax on larger estates. In fact, 
in 2009, only two-tenths of 1 percent of estates will pay any tax. That 
means 99.8 percent of estates will pay zero. So this talk about a death 
tax--I am reminded of a colleague of ours who was in Missouri and was 
stopped by a baggage handler and he told him: You have to stop this 
death tax. He said: My family is so worried about that death tax. That 
gentlemen wasn't going to pay any death tax. Mr. President, 99.8 
percent of Americans are going to pay no death tax, because there is no 
death tax. There is an estate tax on larger estates. Right now, it 
applies to estates of over $4 million a couple. Under $4 million, you 
pay nothing. It is going up. In 2009, the it will be $7 million a 
couple who will be exempt. So in 2007, the year we are in now, there is 
a $4 million exemption per family. You pay nothing if you have an 
estate of less than $4 million. In 2008, it is $4 million. In 2009, it 
goes to $7 million. In 2010, there is no estate tax. Then in 2011, it 
goes back to $2 million a couple. That makes no sense. It goes 
backward. It goes from a $7 million exemption in 2009 to no estate tax 
in 2010. In 2011, it goes back to $2 million per couple. We don't 
permit that in this budget resolution. We stay at the $7 million 
exemption per couple, index it for inflation, so as values go up, the 
estate tax exemption will go up. We have covered this out of the 
resources of the budget so we are able to balance the budget by 2012.
  Now, the Senator from Arizona is absolutely well-intended. He has 
been very persistent on this. I give him high marks for that. He is 
absolutely dedicated to this cause. I give him high marks for that. The 
problem is he doesn't pay for it. Unfortunately, what he would do is 
throw the budget out of balance in 2012. I think that is a mistake.
  In the budget resolution we have passed, beyond providing for a $7 
million exemption indexed for inflation, $7 million for couples, 
anybody who has an estate of $7 million or less will pay zero, will pay 
no estate tax, which means, again, 99.8 percent of estates in our 
country will pay zero, nothing, not a penny. We have paid for it. In 
addition, we have provided a reserve fund that says if you want to go 
further, you can if you pay for it. The difference, the big difference 
we have is the Senator from Arizona doesn't want to pay for it. He 
wants to put it on the charge card. He wants to stack it on the debt. 
He wants to shove it off on our kids, let them pay. No. That shouldn't 
be the way we go. We have stacked up enough debt during this 
administration. This administration has added $3 trillion to the 
national debt, and if they have their way over the next 5 years, they 
are going to stack another $3 trillion on the debt.
  Where are they getting the money from? They are taking it from Social 
Security. That is what they are doing. They have already taken over $1 
trillion of Social Security money and used it to pay other bills, and 
they are getting ready to take another $1 trillion of Social Security 
money and use it to pay other bills. If you were in any other 
organization and you tried to take the retirement funds of your 
employees and use it to pay operating expenses, 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 to 
the big house, because that is the violation of Federal law. What the 
Senator from Arizona is doing by refusing to pay is he is going to take 
the money from Social Security. He is going to take Social Security 
money and use it to pay other bills. I think that is a mistake.
  We have provided for fundamental estate tax reform in the budget. We 
ought to continue to support that, but we paid for it. Let's not go 
back to the bad old days of doing things around here and not paying for 
them.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. KYL. Mr. President, let me make three quick comments and then I 
would like the ranking member to respond as well.
  It is true the budget already provides for some form of death tax 
relief. The problem is that form is a 45-percent rate--45 percent. 
Almost half of your estate would be paid to the Federal Government. I 
want a show of hands for everybody who believes that is fair.
  Let the Record show one person in the Chamber raised his hand.
  Second, the idea of the chart which the chairman pointed out showing 
the irrational treatment of the death tax, I totally agree with that. 
It is irrational, and there is a reason why it is irrational: because 
Democrats would not agree to cause the death tax relief to be 
permanent. All they would do is agree to the budget window, which at 
the time was a 10-year budget window. After that, it is done. That is 
why you have this crazy system where we have a declining rate. In the 
year 2010 it goes away, and in the year 2011 it comes right back again. 
We are all for making it rational by making it permanent. All in favor 
of that, raise your hands. The problem is, we can't get 60 Senators to 
vote for that, which is why we are stuck with this irrational system.
  Finally, the most irrational thing of all, the idea--and this is an 
odd concept if you stop to think about it. The Government takes 
citizens' money in taxes, and then if we decide to let people keep more 
of their hard-earned money, they have to pay for that. We decide you 
should be able to keep more of your money because you know how to spend 
it better than Washington, but this odd concept on the other side of 
the aisle is: We can't let people keep more of their own money unless 
they ``pay for it.'' Pay who for it? Pay Washington for it. In effect, 
we are going to raise your taxes in some other way to make up for the 
relief in taxes we are providing here. That is what the American people 
are stuck with under the Democratic budget's idea of a good time, of 
what is fair. That is not good policy, and it is not fair. When we 
decide it is good policy to let the American people keep more of their 
hard-earned money, they shouldn't have to ``pay Washington an 
equivalent amount in some other kind of taxes.''
  We wish to instruct conferees to pass a budget that can accommodate 
real relief from the death tax. I think the way we have laid this out 
is the best way to provide that kind of relief, as evidenced by the 
fact that several of our colleagues on the other side of the aisle have 
joined with us in proposing precisely that.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, let me correct one matter of history here. 
The Senator from Arizona says this bizarre circumstance with the estate 
tax ending in 2010 and then coming back in 2011 with lower exemption 
amounts is the fault of the Democrats. Whoa, whoa, whoa, whoa. That is 
a whopper. That is a double whopper. As the Senator knows, we weren't 
in charge when that tax policy was put in place. Our friends on the 
other side were in charge. They controlled the Senate, they controlled 
the House, they controlled the White House. They wrote this tax policy. 
Why? They did it because they wanted to put more tax cuts into the bill 
than they could afford, so they played an old Washington game and an 
old Washington trick.
  They sunsetted their tax provision at the end of the period to reduce 
its cost. They are the ones who constructed this monstrosity. It is 
their responsibility, and we are fixing it. We are fixing it in this 
budget resolution and we are paying for it. That is a fundamental 
American value.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. KYL. Mr. President, I have one last comment regarding the 
``whopper,'' as the Senator put it. It is absolutely true that 
Republicans were in charge when we passed the lower tax rates for 
Americans to help Americans out. We had 55 votes at the top amount; to 
make tax policy permanent, we needed 60. We could not get enough of our 
Democratic friends--not even six

[[Page 11747]]

or seven of them--to join us to make the tax policy permanent; we could 
not get 60 votes so we could eliminate that irrational system.
  So it wasn't a ``whopper'' that I told; it was the truth. Republicans 
were in charge. If we had about seven more votes, we could have had a 
rational tax system rather than the one we have today.
  Mr. CONRAD. Mr. President, look, let's be absolutely direct with 
those who are watching and with our colleagues. Democrats did not 
construct this estate tax charade that takes us up to a $7 million 
exemption in 2009 and then goes to no estate tax in 2010 and comes back 
in 2011 with a $2 million exemption. That was a construction totally 
and completely of our friends on the other side of the aisle.
  The Senator says we did not support the tax cuts that were 
disproportionately extended to the wealthiest among us and that plunged 
us into debt. He is absolutely right, we did not. Unfortunately, it has 
proven to be extraordinarily expensive to this country. We will pay for 
this for a very long time because the debt of the country exploded as a 
result of that policy.
  Look, we supported tax reductions; we supported a more modest package 
of tax reductions--about half as much as they passed--and reserved the 
rest of the money to strengthening Social Security, getting us back 
into a situation where we weren't raiding the Social Security piggy 
bank around here to pay other bills. I am proud of that. We did the 
right thing.
  I am happy to yield 5 minutes to the Senator from Florida.
  Mr. GREGG. Mr. President, is this a morning business speech?
  Mr. CONRAD. Does the Senator wish to talk on the estate tax matter?
  Mr. NELSON of Florida. Both.
  Mr. GREGG. I am going to be here for a while, so we can let the 
Senator from Florida go ahead.
  Mr. CONRAD. I thank the Senator from New Hampshire for his courtesy.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. NELSON of Florida. Mr. President, we have a saying in the South: 
being between the devil and the deep blue sea. That somewhat 
illustrates the position this Senator is in regarding the estate tax, 
for this Senator has been a sponsor of the elimination of the estate 
tax for the last 7 years. The problem--as I have conferred with 
colleagues here, including the Senator from North Dakota, as well as 
colleagues on the other side--is finding the 60 votes out of 100 
Senators in order to be able to pass some form of estate tax relief.
  The fact is we have Senators who are all over the lot. There are some 
Senators who don't want to have any estate tax relief, and there are 
others on the opposite side of the spectrum who think there should be a 
total abolition of the estate tax and nothing short of that is any 
good.
  Well, the truth is, if we had been able to eliminate the estate tax 
back in 2001, when the Federal Government had a healthy surplus, we 
would not be facing what we are today, which is trying to eliminate the 
estate tax, or part of it, when we have a drastic shortage of revenue, 
the consequences of which keep running up the red ink of the Federal 
Government and continued deficit financing. Of course, you know who is 
buying our debt: the banks in China and Japan.
  So earlier this year, when we crafted a compromise, with Senator 
Baucus in the lead, having a $3.5 million exemption and lowering the 
estate tax on that above $3.5 million per person, or a $7 million 
exemption for a couple, lowering that tax rate from 55 to 45, that 
seemed to be the compromise by which we could get the 60 votes.
  I ask the chairman of the committee to confirm that what this Senator 
is saying is correct--having been able to get that 60 votes, then if we 
go off onto something else, what is going to happen is that those of us 
who want some relief for the family farms and the family businesses are 
not going to be able to make that stick. You cannot have it all. This 
Senator's attitude is to get something if you cannot have it all. I ask 
the chairman, the Senator from North Dakota, if the reasoning this 
Senator has laid out in the compromise that was crafted, to give some 
estate tax relief, if that is correct?
  Mr. CONRAD. The Senator is entirely correct. As a valuable and valued 
member of the Senate Budget Committee, he knows, with great precision, 
how difficult it was to put this package together. He also knows if we 
go the route of Senator Kyl, we will jeopardize the middle-class tax 
relief that is in this resolution. We provided full relief for the 
marriage penalty. We provided full relief for the 10-percent bracket. 
We provided full relief for the child tax credit.
  If Senator Kyl's amendment is adopted, one of two things will happen: 
It will reduce the funds available for the middle-class tax relief to 
transfer the money to the wealthiest among us or it will stick it on 
the debt. There are only two possibilities. I think it would be 
unfortunate to do either. I think it would be a mistake to reduce the 
middle-class tax relief in our budget resolution. I think it would be a 
mistake to reduce the child tax credit. I think it would be a mistake 
to reduce the cut in income taxes that are provided for by the 10-
percent bracket. I think it would be a mistake to reduce the marriage 
penalty relief that is here in order to stack more benefits on the 
estate tax or to put it on the charge card and add it to the debt.
  Mr. NELSON of Florida. Mr. President, I will conclude with this 
thought: Naturally, the vote that this Senator will cast on Senator 
Kyl's motion to instruct conferees is a very uncomfortable one because, 
for this Senator, if I had my druthers, would I want the estate tax 
lowered? The answer to that is yes. I have been a sponsor of 
eliminating the estate tax. But the question is: What is the doable 
deal? What is the deal that will avoid this ridiculous outcome that is 
going to occur in 2010, when the estate tax will go away completely in 
one year and the next year come roaring back--back to its original 
position in the law back in 2000? That is the compromise we have 
crafted that is in the budget resolution.
  I want anybody who is within earshot to understand the position of 
this Senator in supporting the budget resolution.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the following 
remarks of Mr. Nelson of Florida be moved so as to not interrupt the 
flow of debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Florida is recognized.
  (The remarks of Mr. Nelson of Florida are printed in today's Record 
under ``Morning Business.'')
  The PRESIDING OFFICER. The Republican leader is recognized.


                              Immigration

  Mr. McCONNELL. Mr. President, based on comments we have heard from 
some of our colleagues on the other side over the last 2 days, there is 
some genuine concern that the bipartisan immigration compromise that 
Members and staff have been working on so diligently over the last 2 
months might be brushed aside in favor of last year's unsuccessful 
bill. I strongly urge all of our colleagues to reconsider this 
approach, if, indeed, it is the one they plan to take.
  This exercise needs to be a bipartisan one or it will not--it will 
not--succeed. That is an indisputable fact. Any effort to move 
legislation on this issue that isn't the result of an ongoing 
bipartisan discussion would be a clear signal from the Democrats they 
are not yet serious about immigration reform.
  So I urge my colleagues on both sides of the aisle to stay at the 
table. Let this bipartisan working group finish its work so we can 
achieve immigration reform this year. Scrapping their work now will 
only end in frustration and defeat for both sides.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I thank the Republican leader for reminding 
us how we should be approaching the immigration issue, which is in a 
rational way.
  I wish to respond to a few comments that have been said, and then I 
want to offer the motion to instruct, which I

[[Page 11748]]

have reserved in the order that has been entered into, and then yield 
to the Senator from South Dakota for his comments, and then, obviously, 
the Senator from North Dakota, I presume, will want to respond, if that 
is acceptable to the Senator from North Dakota as the procedure.
  To begin with, there has been a lot of references to what is going on 
in the area of tax policy and what the implications are, both relative 
to the death tax--and I did find it ironic that the Senator from North 
Dakota said it wasn't a death tax. Well, the only way you can pay it is 
if you are dead, or the only way your relatives can pay it. That is the 
only way this kicks in is to be hit by a truck. I think ``death tax'' 
is a fairly reasonable explanation of what it is.
  Regarding the issue of the tax cuts which are obviously at the 
essence of much of the debate relative to this budget, this chart 
reflects the underlying question of what these tax cuts have 
accomplished. The Senator from North Dakota correctly reflects the fact 
that revenues fell off as the tax cuts originally were put in place. 
That is correct. Why did they fall off? They fell off because we were 
coming out of the largest bubble in the history of organized cultures, 
an economic bubble, where the Internet bubble of the nineties exploded 
on us, caused a significant contraction in the economy, which obviously 
caused a contraction in revenues. That was coupled with the attacks of 
9/11, which disrupted the economy to a degree that our economy has 
never been disrupted, except for the Great Depression and probably 
World War II. So those two events created a huge retardation of 
revenue.
  It was actually quite fortunate in the middle of that disruption, and 
a little bit prior to that, we had put in tax cuts during President 
Bush's first term which would stimulate the economy. As a result of 
those tax cuts going into place--yes, initially there was a revenue 
reduction, but that revenue reduction was in large part due to the 
bubble burst and the 9/11 contraction in the economy.
  Since that time, we have seen those tax cuts energize an economic 
recovery which has truly been historic and extraordinary, and it has 
done a great deal for our country from the standpoint of creating jobs, 
which is the bottom line most important thing we can do but also 
generating revenue to the Federal Government.
  We have now had 3 years of the largest growth in revenue in the 
history of our country, the largest growth, year after year. We are 
seeing revenues explode literally at the Federal level. They went up 11 
percent in 2005 and 18 percent in 2006. They are projected to grow 18 
percent in 2007. These growth rates are truly extraordinary. And 
revenues not only have grown year to year in an extraordinary way, but 
they have grown in a relationship to the overall historic burden of 
revenues paid by the American people to the Federal Government.
  Historically, the American people have paid 18.2 percent of the gross 
national product to the Federal Government. That is represented by the 
blue line on the chart. We are actually well above that now so that we 
are seeing a rate of income to the Federal Government of about 18.6 
percent of GDP. That means we are actually generating more revenues to 
the Federal Government than we have on average generated to the Federal 
Government.
  We have a tax law in place which is doing a number of things. It is 
generating huge revenues, and it is generating revenues that exceed 
what has been the historical norm for this Nation, and it is a tax law 
which is creating jobs and causing the economy to expand.
  We have now had 22 straight quarters of economic expansion as a 
result of tax cuts, and we have had 44 consecutive months of expansion 
in jobs, 7.8 million jobs created. Those are massive expansions, people 
getting work.
  In addition, two of the essential elements of this tax cut, the 
capital gains and dividends rates, have actually generated a huge 
explosion of economic activity in this country because they have 
unlocked, in the instance of the capital gains area, funds which have 
been locked up for years in relatively unproductive assets have now 
been sold, the revenue has been turned over, and people have 
reinvested, entrepreneurs and risk takers, in items that have created 
more return, which has had two effects: It has created more jobs and 
more revenue to the Federal Government.
  The tax cuts have been good for this country from the standpoint of 
creating jobs, from the standpoint of economic growth, and from the 
standpoint of revenues to the Federal Government. Yes, one can look at 
this period from 2001 to 2003 and say revenues dropped. Yes, they did, 
but I would argue that was a function of the bursting of the internet 
bubble and 9/11 more than the tax cuts. But if you look at the most 
recent period, one cannot argue with the fact that we are seeing an 
explosion in revenues to the Federal Treasury, which has dramatically, 
in addition to the other two things, caused economic growth, jobs 
creation, the revenues, and has dramatically reduced the deficit of the 
Federal Government. In fact, we projected the deficit of the Federal 
Government. It was projected 3 years ago that it would be somewhere in 
the $350 billion range. It looks as if it is going to be under $200 
billion, and significantly under $200 billion. And on a $3 trillion 
budget, you are basically talking a deficit number, which is really 
getting well under what has been the historic deficit of the Federal 
Government and, more importantly, had we not had the Katrina 
catastrophe where we had to spend over $150 billion approximately on 
that, and were we not at war, a war which we did not ask for when we 
were attacked on 9/11, we would be in surplus, significantly in 
surplus.
  These tax cuts have been good for this economy. They have been good 
for the country. They have been good for employment. They have been 
good for economic growth. They certainly have been good for the Federal 
Treasury.
  On the specific issue of the death tax, which is the motion which is 
pending, the motion by Senator Kyl, I think the point Senator Kyl makes 
is the one on which people should focus, which is what his proposal 
says is, we are going to put in place a compromise proposal on the 
death tax which was, ironically, a compromise proposed from the other 
side of the aisle. I think it was the senior Senator from Louisiana, 
Ms. Landrieu, who basically came up with this idea, which is we would 
have a higher rate for bigger estates, 35 percent, and for little 
estates, small businesses, farmers, ranchers, we would have a lower 
rate, and you would have an exemption of I believe about $5 million.
  This proposal makes a lot of sense. There is no reason why it should 
be a taxable event to die. A taxable event should involve economic 
activity. It should be you went out, made some money, and as a result 
you got taxed.
  But the way the death tax works is, the taxable event is that you, 
unfortunately, die. You end up getting hit by a truck, fall off your 
motorcycle, you get some serious disease, and as a result, your family 
gets hit with a tax bill. In many instances, if you are a small 
businessperson or you are running a farm or some other thing that 
involves one person and is the essence of the whole operation, that 
death is a huge, traumatic economic event, to say nothing, obviously, 
of the personal trauma that is involved. But that is a huge, traumatic 
event, if somebody runs a restaurant and he is the cook, the bottle 
washer, and maitre d', or runs a gas station, runs a small business or 
a farm; that person is usually the key person. When they die, that 
business is in extreme distress usually. That distress should not be 
multiplied and dramatically increased by having the tax man come in and 
say: I'm sorry, we are going to take half the value of your business, 
which is the way the law works now.
  So this proposal, which was a compromise worked out among a variety 
of people around here, and actually the essence of it was put forth by 
the Senator from Louisiana, makes a lot of sense. So what Senator Kyl 
has said is let's do it. Let's put it in the budget.

[[Page 11749]]

  The argument is, that is going to increase the deficit. That is a 
fairly specious argument because it is the essence of that argument: If 
you let people keep their own money, you are making a mistake. The 
Federal Government should take the money and then they should have to 
pay money to get their money back. They should have to pay more in 
taxes. It makes no sense at all.
  In addition, let's remember this proposal of the Democratic budget, 
as it left the Senate, had over a $700 billion tax increase in it. As 
it left the House, it has over a $900 billion tax increase in it. That 
is on the American people. What Senator Kyl is suggesting is you take a 
very small percentage of that huge tax increase that is in this budget 
and use it to basically put in place proper procedures and policies 
relative to the death tax.


                      Motion to Instruct Conferees

  And that brings me to my motion to instruct. I ask unanimous consent 
that the pending motion be set aside and that my motion be ordered.
  Mr. CONRAD. Reserving the right to object, one thing we have to do is 
make sure we have the time figured out because we have an hour on the 
Kyl matter. I will want some time to respond to the Senator's comments, 
and Senator Thune wants to apparently talk about the Senator's motion. 
So we would be reserving our time on the Kyl motion while we go next to 
the Senator's motion?
  Mr. GREGG. That is fine to me, or yield it back and use the time 
altogether.
  Mr. CONRAD. It will all wash out. Let's do that.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the motion.
  The legislative clerk read as follows:

       The Senator from New Hampshire (Mr. Gregg) moves that the 
     conferees on the part of the Senate on the disagreeing votes 
     of the two Houses on the concurrent resolution S. Con. Res. 
     21 (the concurrent resolution on the budget for fiscal year 
     2008) be instructed to reject the House amendment that 
     assumes a $916 billion tax increase, the largest tax increase 
     in U.S. history, and insist that the final conference report 
     include in the recommend levels and amounts in Title I of S. 
     Con. Res. 21, reductions in revenues commensurate with 
     extending the existing tax policy:
       $1,000 child tax credit;
       marriage penalty relief;
       10% income tax bracket--so those earning $15,000 or less 
     continue to benefit from low tax rate;
       lower marginal rates for American families and small 
     businesses (15%, 25%, 28%, 33%, and 35%);
       Earned Income Tax Credit relief for military families;
       adoption tax credit;
       dependent care tax credit;
       college tuition deduction;
       deduction for student loan interest;
       $2,000 Coverdell Ed. IRA;
       15% rate on capital gains and dividends; and death tax 
     repeal.

  Mr. GREGG. Mr. President, I will speak quickly to this because I know 
the Senator from South Dakota has been courteous and is waiting, and I 
know he wants to speak to it. So I will highlight a little and then 
come back to the substance of it.
  The essence of this motion is that the $916 billion tax increase, the 
largest tax increase in history, which is in the House budget, be 
rejected; that the $700-plus billion tax increase in the Senate 
budget--again, that would be the largest tax increase in history were 
the House not outbidding us--be rejected; and that instead we extend a 
series of tax breaks which are already in place and which are very 
beneficial to the American people, including the $1,000 child credit, 
the marriage penalty relief, the 10-percent income tax bracket, the 
lower marginal rates for American families and small businesses, the 
earned-income tax credit for military families, the adoption tax 
credit, the dependent care tax credit, the college tuition deduction, 
the deduction for student loan interest, a $2,000 Coverdell education 
IRA, the 15-percent rate on capital gains and dividends, and 
essentially the Kyl death tax proposal. That is what this instruction 
would do.
  I would ask that, instead of increasing taxes by the largest amount 
in history on the American people, we continue tax policies which have 
produced this huge economic expansion.
  I yield to the Senator from South Dakota for his comments.
  Mr. THUNE. Mr. President, I wish to thank the Senator from New 
Hampshire for yielding and also to just elaborate on some of the things 
he talked about with regard to his motion. I congratulate him on 
offering this motion to instruct because I believe it gets at the heart 
of this issue, which is whether we are going to continue this economic 
expansion, the job growth that has come with it, the explosion in 
Government revenues associated with the tax relief that was enacted in 
2001 and 2003 or whether we are going to go down the opposite path and 
increase taxes by, as he said, the largest amount in American history.
  Now, up until this last year, this budget we are talking about today, 
the largest tax increase in American history happened in 1993. That was 
$293 billion in increased taxes that was put through the Congress in 
that year. What has been proposed this year, through the budget process 
in the other body, in the House of Representatives, was a $916 billion 
tax increase, and, as the Senator from New Hampshire has noted, here in 
the Senate it is a $700 billion tax increase.
  The only question really before us is whether this conference 
committee which is going to meet is going to adopt the House version, 
which is triple the largest tax increase in American history, or adopt 
the Senate version, which is double the largest tax increase in 
American history. Either way, whether we adopt the Senate-passed budget 
or the House-passed budget, we will be adopting the largest tax 
increase in American history--if we adopt the House version, three 
times the largest tax increase in history and, if we adopt the Senate 
version, more than two times the largest tax increase in American 
history.
  So the gentleman from New Hampshire, the Senator who has proposed a 
motion that would instruct the conferees who will be meeting, the 
Senate conferees who will be meeting with the House conferees to work 
out and reconcile the differences between these two budget 
resolutions--one, as I said, is the House, which is triple the largest 
tax increase, or the Senate version, which is double--his motion would 
essentially instruct the Senate conferees to go into that conference 
with a position that doesn't accept the House tax increase or the 
Senate tax increase; rather, it allows these existing tax cuts to stay 
in law--in other words, not to allow them to expire.
  I have a chart here which illustrates a little bit about what I am 
speaking of today, and this chart essentially shows what is included in 
that $900 billion tax increase. As I said earlier, the Senate, in its 
budget resolution, adopted a position that restored about $180 billion 
of the tax relief that would expire under the House-adopted budget 
resolution. As we can see, this is the amount taxes will go up if this 
budget is adopted. This is the amount the Senate said we will put back 
with the Senate budget resolution here, which our colleagues on the 
other side were able to get through the Senate. It puts back $180 
billion.
  I will give the House credit because the House voted yesterday on a 
motion to instruct their conferees to adopt the Senate language. That 
makes sense because I think they heard what a lot of people said when 
they went home and met with their constituents; that is, we don't want 
to see the largest tax increase in American history. We don't want 
another $900 billion in taxes imposed on the American economy at a time 
when the economy is growing and expanding and creating jobs.
  Just look at the last few years here: 7\1/2\ million new jobs, 
unemployment at 4.5, 4.6 percent, the lowest historical average in the 
last three decades, 21 consecutive quarters of economic growth.
  This is the counterintuitive part about this because, as was pointed 
out back in 2001 and 2003 when these tax cuts were being debated, if we 
reduce taxes the revenues are going to go down. Well, in fact, the 
opposite has happened. What has happened is what has happened 
throughout the course of

[[Page 11750]]

history--under the Harding administration in the 1920s, the Kennedy 
administration in the 1960s, the Reagan administration in the 1980s, 
and now currently; that is, when you reduce marginal income tax rates, 
capital gains income rates, what happens? People take their 
realizations, they pay their taxes, they reinvest, and you get not less 
Government revenue but more Government revenue--in this case, 
dramatically more Government revenue.
  Between 2004 and this year, we have seen Government revenues increase 
by $300 billion; that is, revenue coming into the Federal Treasury 
between 2004 and 2005 was up almost 15 percent, 14.7 percent; between 
2005 and 2006, around 13 percent; and in this current fiscal year, the 
first 7 months of this current fiscal year, Government revenues are up 
11.3 percent over last year. In fact, in the month of April, we have 
$70 billion more Government revenue than April a year ago.
  These tax cuts are working not only to stimulate the economy and to 
create jobs but, as I said before, miraculously, to generate more 
Government revenue. We have $300 billion more Government revenue coming 
in as a result of reducing taxes, which again proves the historical 
fact that when you reduce marginal income tax rates and capital gains 
tax rates on the American people, they take their realizations, they 
pay taxes, they invest, they create more jobs, the economy continues to 
expand, and you get not less Government revenue but more Government 
revenue.
  So I think what is happening here in the Senate is an attempt to 
provide a fig leaf of cover when it comes to this issue of taxes. The 
problem with that is this particular cover is a cover not for the 
taxpayers in this country, it is perhaps a cover for the tax raisers in 
this country. It is a small cover, however, because if you take $180 
billion of tax relief that is restored under the budget resolution 
adopted here in the Senate, you can cover some of this stuff.
  What they propose is that we are going to put back some of the 
marriage penalty that would come back into play under the House-passed 
version, and we are going to restore some of the 10-percent tax rate--
the lowest tax rate, which applies to people making $15,000 and less--
and we are going to provide some death tax relief. We will lower the 
top death tax rate from 55 percent to 45 percent. Well, what does that 
do? What do you do, then, about the alternative minimum tax, which is 
going to hit 20 million additional taxpayers if this budget is adopted? 
What about the child tax credit, which under the Democratic plan is 
slashed from $1,000 back to $500? What about lower tax rates throughout 
the rest of the rate schedule? Even if you fix, as they attempt to do 
with this small amount of tax relief, the 10-percent tax bracket, the 
lowest tax bracket, you still have tax increases in every other tax 
rate on the schedule. In fact, those who are paying 25 percent taxes 
are now going to go up to 28 percent. Those who were paying at the 28-
percent rate currently will see their tax rate going up to 31 percent. 
Those paying at the 33-percent rate are going to see their tax rates go 
up to 36 percent. Those fortunate few paying at the 35-percent rate, 
the highest marginal tax rate today, are going to see their tax rates 
go up to 39.6 percent.
  My point is, you can provide a fig leaf to say that we are doing 
something to allow for some of these tax cuts, this tax relief which 
has benefited our economy and the American people into the foreseeable 
future, but what about the rest of all these tax breaks that are going 
to expire, which means the largest tax increase in American history?
  If we look at what the motion of the Senator from New Hampshire does, 
it says we want to extend these tax breaks to include the deduction for 
student loan interest. There are a lot of working families trying to 
put their kids through college who are taking advantage of that tax 
break.
  How about the earned-income tax credit, which is helping a lot of our 
military families, many of them serving in Iraq and Afghanistan?
  As I said before, the child tax credit is being slashed from $1,000 
down to $500, essentially cutting in half the amount of credit a 
working family can get for their children when they file their tax 
returns. That was something which was put in place to help working 
families.
  I can go right down the list. Let's take senior citizens' dividend 
income--currently taxed at the capital gains rate of 15 percent, but 
under this proposal it goes up to 39 percent. We have a lot of seniors 
in this country who have invested and now have dividend income, capital 
gains income. Their capital gains income rates are going to go up as 
well. If they have capital gains income they are going to show, that 
will go up from 15 percent to 20 percent.
  My point very simply is that if you pay taxes in America today, the 
prescription in this budget resolution which was adopted here by the 
Senate, put forward by our colleagues on the other side and the one 
adopted by the House, has one prescription: higher taxes. Every working 
American who pays taxes today is going to see their tax bill go up. In 
fact, in my State of South Dakota, which I will use as an example, the 
average tax increase on a working family in South Dakota would be 
$2,596 under this budget, with 2,840 jobs being lost and $262 million 
lost in our economy. That is in my State of South Dakota, and probably, 
if you take any other State, you would find the numbers to be 
dramatically higher in terms of job loss, in terms of the loss to the 
local economy and the impact it is going to have on taxpayers.
  Again, just in an attempt to summarize what I am saying here, the 
Democrats have attempted, in the form of a fig leaf, to provide some 
amount of tax relief cover in this budget. What they do not tell us is 
that the amount of tax relief does nothing to cover the increase in 
taxes that will occur under this budget. They take about $180 billion 
off the table and say to the American people: Keep that. But they are 
still going to be raising taxes by over $700 billion, even if the 
Senate version of this budget resolution is adopted in conference. If 
the House version ends up being adopted, it will be over a $900 billion 
tax increase--the largest tax increase in American history by three 
times in the House, over two times in the Senate.
  Again, if you take this amount, this fig leaf, and you say: We are 
going to put the 10-percent rate back, we are going to do something to 
provide some marriage penalty relief because we think married couples 
ought not to be penalized for being married, which I happen to agree 
with, and that was part of the tax relief passed in 2001 and 2003, and 
I think they realize that is a popular piece of tax relief, so they are 
going to attempt to restore some of these things--that still doesn't do 
anything about capital gains and dividends, which will hit seniors, or 
anything about R&D tax credits or the per-child tax credit or anything 
on the rate structure, the rates which go from 25 percent up to 28, 
from 28 to 31, from 33 to 36, and from 35 to 39.6. Every rate on the 
rate schedule is going up under this particular proposal.
  So I am here today to support the motion of the Senator from New 
Hampshire to instruct the conferees as they go into conference between 
the House and the Senate to leave these tax cuts alone. Don't allow 
them to expire. Don't permit the largest tax increase in American 
history at a time when the economy is growing and expanding and 
creating jobs and we are seeing not less Government revenue but 
dramatically more Government revenue, to the tune of a $300 billion 
increase in Government revenues just in the past 3 years alone.
  These tax cuts are working. They are having their desired effect. 
They are accomplishing what was intended in the first place when this 
Congress, in its wisdom, enacted these tax cuts in 2001 and 2003. It 
would be a shame to take a fig leaf and try to say to the American 
people, to the taxpayers of this country, that we are going to provide 
a little bit of cover for the tax raisers here in the Congress, but we 
aren't going to do anything to provide cover for the American taxpayer, 
those people who are going to pay higher rates in all these areas if 
this budget is

[[Page 11751]]

passed and if the conference report comes back either with the Senate 
version or the House version, both of which increase taxes, it is just 
a question of by how much.
  So I hope we can adopt and get the votes necessary to pass the motion 
of the Senator from New Hampshire to instruct our conferees to allow 
these tax cuts to stay in place. Don't allow them to expire, don't 
raise taxes, don't do something that would harm our economy and the 
jobs being created by passing the largest tax increase in American 
history.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, this is the most amusing chart that has 
been presented in the Senate this year. The biggest block of the 
Senator's chart is about alternative minimum tax relief. He is talking 
about the Gregg amendment. Read the Gregg amendment. There is no 
mention of alternative minimum tax relief. That chart--I am glad he is 
taking it down because it is a complete concoction. It has no relevance 
to anything that is being suggested here.
  The Senator says the biggest tax increase in history--not true. There 
is no tax increase in the proposal before us. Here are the facts.
  The President, when he produced his budget, said, through his agency 
of Office of Management and Budget, an agency he completely controls, 
that his budget would produce $14.826 trillion of revenue over the next 
5 years. That is what the President said his budget would do. What does 
the budget I have presented do, according to the Congressional Budget 
Office? It produces $14.827 trillion of revenue. That is $1 billion of 
difference on an almost $15 trillion base. And they are talking about 
the biggest tax increase ever? Come on.
  It is a great speech. It is the same speech the Republicans have 
delivered for 20 years. They are so used to it, they keep giving it. It 
doesn't matter what the facts are or what the budget is before us. 
There is no big tax increase that is in this budget. In fact, there is 
no tax increase that is contained in this budget.
  I don't know what the Republicans are going to say next year when 
there has been no tax increase, after all these speeches about the 
biggest tax increase in history. What are they going to say? I can 
hardly wait until next year. I am looking forward to that.
  There is a little more revenue in our plan. As I say, the President 
said his budget would produce $14.826 trillion of revenue. The CBO says 
ours will produce $14.827 trillion. That is virtually no difference.
  On a straight CBO score, apples-to-apples comparison, there is a 2-
percent difference between our budget and the President's budget. Our 
friends on the other side come here with no budget--none. They have no 
budget for the country this year. Amazingly enough, they had no budget 
last year. They never agreed on a budget. They never agreed on a budget 
the year before. So they come here complaining about a budget that 
actually will exercise some discipline. It is pretty easy to be here 
with no budget, but of course they produced no budget when they 
controlled everything. They controlled the House of Representatives, 
they controlled the Senate, they controlled the White House--no budget. 
It is no wonder the debt is up, up, and away.
  According to a CBO analysis of the two budgets, the President's 
budget and our budget, there is a 2-percent difference in revenue.
  How could you get 2 percent more revenue with no tax increase? That 
is a good question. That is a fair question. I submit it is pretty easy 
to do. First, we have a tax gap in this country that the Internal 
Revenue Service says in 2001 was $345 billion. Today that tax gap, I 
believe, is in the range of $400 billion a year. That is the difference 
between what is owed and what is paid.
  To collect taxes that are already owed is not a tax increase. That is 
simply insisting everybody pay what they legitimately owe. That is the 
first place we ought to look. Now $400 billion a year times 5 years of 
this budget is $2 trillion. We would only need 15 percent of that to 
get the revenue that is called for in this budget with no tax increase.
  But it does not stop there, because the Permanent Subcommittee on 
Investigations says we are losing another $100 billion a year to 
offshore tax havens. I have showed this building before. This building 
is in the Cayman Islands. It is a five-story building. This building is 
the home to 12,748 companies that say they are doing business out of 
this building. That is the most efficient building in the world. Are 
they really doing business out of this little building? Twelve thousand 
companies? No. They are engaged in an enormous tax dodge out of this 
building. We ought to shut that down. That is $100 billion a year, 
according to the Permanent Subcommittee on Investigations.
  It does not stop there. Here is what the Permanent Subcommittee said:

       Experts have estimated that the total loss to the Treasury 
     from offshore tax evasion alone approaches $100 billion per 
     year, including $40 to $70 billion from individuals and 
     another $30 billion from corporations engaged in offshore tax 
     evasion.

  If our friends on the other side of the aisle want to protect these 
abusive tax havens, let them do it. Let's see what the American people 
say about that. Let's see what the American people think about having 
wealthy individuals and wealthy corporations avoiding what they 
legitimately owe in this country by going off to these tax havens and 
claiming they are doing business out of this five-story building down 
in the Cayman Islands--12,700 companies--come on.
  It doesn't end there. I say go onto the Internet. If you wonder 
whether this thing is real on tax havens, enter in ``offshore tax 
planning,'' Google it, and what do you get? You get 1,260,000 hits. 
What do you find out there? Here is my favorite:

       Live worldwide on a luxury yacht, tax free.

  That is what our friends over here are defending.

       Live worldwide on a luxury yacht, tax free . . . Live tax 
     free and worldwide on a luxury yacht . . . Moving offshore 
     living tax free just got easier . . . Live tax free and 
     worldwide on a luxury yacht--exciting stuff.

  Indeed it is. It is costing us $100 billion a year, and it doesn't 
end there. We have these other scams that are going on.
  I guess this is my favorite. This is a sewer system. It is a sewer 
system in Europe. What does that have to do with the budget? It turns 
out it has a lot to do with the budget. Why? Because we have now 
learned through an investigation that wealthy investors, corporations 
in the United States, have bought European sewer systems and are 
depreciating them on the books in the United States to reduce their tax 
obligation here and then leasing them back to the countries that paid 
for them in the first place.
  This assertion that there is a big tax increase here is mumbo jumbo. 
There is no tax increase here.
  Yes, we do have modestly more revenue, 2 percent more--although in 
the President's estimates we have virtually no change in revenue. But 
let's take the CBO numbers we use here in Congress. We have 2 percent 
more revenue. We say let's go after the tax gap, let's go after these 
tax havens, let's go after these abusive tax shelters.
  My colleague from New Hampshire talked about the explosion of tax 
revenue, but he didn't tell the whole story. He didn't go back to when 
this story started, in 2000, because here is the whole story. The 
revenue of the United States back in 2000 was just over $2 trillion for 
the year. Then we had big tax cuts put in place in 2001 and revenue 
went down. Revenue went down the next year. Revenue went down the next 
year. Revenue stayed down in 2004--which is the fifth this year. 
Revenue stayed down in 2005.
  Only in 2006, 6 years later, did we get back to the real revenue base 
we had all the way back in 2000. Is it any wonder the debt of the 
country exploded? Is it any wonder?
  When they talk about the extraordinary economic performance of this 
administration, that is not the record I see. Let's compare it to the 
previous

[[Page 11752]]

administration. The previous administration, in the first 75 months, 
produced 18.7 million new jobs. This administration in the same period 
of time: 5.2 million, less than one-third the job creation of the 
previous administration in the same period.
  But it doesn't end there. If you compare this economic recovery to 
the nine recoveries since World War II, here is what you see. On job 
creation, the dotted red line is the average of all of the recoveries, 
the major recoveries since World War II. That is the dotted red line, 
job creation.
  The black line is this recovery. It is lagging 7 million private 
sector jobs compared to the average recovery since World War II. That 
is job creation.
  On business investment, again the dotted red line is the average of 
the nine largest recoveries since World War II. The black line is this 
recovery. In every one of these you see the same pattern: This recovery 
is tepid compared to every one of the other major recoveries since 
World War II.
  Here on business investment we are 69 percent below the average 
recovery.
  It doesn't end there. If you look at revenues, revenues lag by $127 
billion, the average of the nine major recoveries since World War II.
  If you look at real median household income--why is it our friends on 
the other side talk about how good things are, yet the significant 
majority of the American people say things aren't so good? The big 
reason is people at the top, all of us, we have done very well. The 
people at the top in this society--and, of course, there are many who 
are far above us who have done really well. But you know the majority 
of people in this country have not done really well. Their position has 
stagnated. For many of our countrymen, their position has dropped. And 
this shows it.
  Here is real median household income from 2000--it was $47,599--to 
today, it is $46,326. That is why people, when they are asked, say they 
don't see this economy performing in the splendid fashion described by 
our friends on the other side.
  It has been splendid for the top 1 percent in this country. The top 1 
percent has seen an explosion of their income. They have also enjoyed a 
disproportionate share of the tax cuts granted by our friends on the 
other side. That is what has happened.
  Ms. STABENOW. Will the Senator yield for a question?
  Mr. CONRAD. I am happy to yield.
  Ms. STABENOW. Mr. President, I first thank our esteemed budget 
chairman for raising what is so important in the context of this 
debate. I thank him for raising the chart that actually shows the 
majority of Americans are not seeing their incomes go up. They are 
seeing them go down.
  As the chairman knows, we have lost 3 million manufacturing jobs in 
the last few years under this administration--3 million good-paying 
jobs with health care and with pensions. The reality is that, in 
listening to the debate with my colleagues on the other side, I don't 
know what they are describing. They certainly are not describing what 
is happening to the majority of Americans.
  I did also want to thank the chairman for bringing up a building in 
the Cayman Islands he has shown us a number of times, a picture of a 
five-story building where there are over 12,000, I believe, different 
businesses that have filed that they are part of that building. In the 
Finance Committee, I used the chairman's chart and asked--I don't know 
if the chairman will remember this, but in the Finance Committee I 
actually asked the IRS and the Treasury if they had sent anybody down 
to look at that building. Has anybody walked through that building?
  We have seen our distinguished leader on Budget point out a specific 
address, a specific address where we know there are not 12,748 
different companies in that building. Yet, Mr. Chairman, to your 
knowledge, has anybody taken any legal action on this even now? You 
have raised this time and again.
  This is the way we ought to be focusing on what happens on taxes. But 
the majority of people see their incomes going down, and what do we 
see? Ships, yachts where people can go offshore to live to avoid paying 
their taxes and avoid contributing to the war and the economy and 
schools and roads and everything that is important to us.
  Then you have a building. I don't know if the chairman would want to 
speak to this. Has there, to the Senator's knowledge, been any action 
taken on this building and what is happening with over 12,748 
companies?
  Mr. CONRAD. Well, the Senator asked the witnesses before the 
committee. They seemed totally flummoxed by the question. It was pretty 
amazing. Here we have this building in the Cayman Islands, this five-
story building. We have got 12,748 companies that claim it as their 
home.
  Now, why did they do that? They do it because the Cayman Islands has 
no taxes. So guess what they do. They have subsidiaries in the United 
States that report no earnings in the United States. Then they sell to 
a subsidiary in the Cayman islands at a reduced price, and they show 
their profits in the Cayman Islands.
  When I was tax commissioner, I found this kind of tax abuse going on 
repeatedly. It was quite amazing. This was 20 years ago that companies 
were engaged in this kind of activity. It has absolutely exploded. That 
is what the Permanent Subcommittee on Investigations is telling us, 
that we are losing $100 billion a year to this kind of scam. Of course, 
the abusive tax shelters are on top of that. The tax gap, the 
difference between what is owed and what is paid, is on top of that.
  But when you ask the relevant officials: Have you audited these 
companies to see if they really are doing business out of this 
building? Well, you got sort of--they were sort of in a trance. They 
had no answer.
  I would say let's go after these people who are not paying what they 
owe legitimately and fairly in this country.
  Ms. STABENOW. Well, I just want to thank the chairman again. I am 
very proud of this budget because it focuses on hard-working, middle-
class families, people I represent in Michigan who will get the tax 
cuts in this budget. It addresses the kind of things we are talking 
about here. I am not interested in a tax policy that rewards this kind 
of tax evasion or folks moving offshore in their yacht to avoid being 
part of America and contributing to our way of life. I just want to 
thank the chairman.
  Mr. CONRAD. Let me make one other point, if I can, that is with 
reference to the Gregg amendment. I will provide an alternative that 
insists on the tax relief that is provided in the budget resolution and 
asks our Senate conferees to fight for the tax relief that is provided. 
The tax relief that is in the budget resolution that passed the Senate 
provides for every dime required to extend the middle-class tax cuts, 
the 10-percent tax bracket, the child credit, the marriage penalty 
relief. Every dime of those middle-class tax cuts is provided for in 
the resolution that passed the Senate.
  In addition, we provided for reform of the estate tax, to have $7 
million a couple exempt from any estate tax. We index it for inflation. 
That will exempt 99.8 percent of the estates in America from paying any 
estate tax.
  In addition, we provided for extension of the adoption tax credit, 
the dependent care tax credit, the treatment of combat pay for purposes 
of the earned-income tax credit. In addition, we insist that the Senate 
conferees support section 303 of the Senate resolution that provides 
for additional tax relief, including extensions of expiring provisions 
and refundable tax relief provided that such relief would not increase 
the deficit over the period of the total fiscal years 2007 to 2012.
  In other words, we provide for all of the middle-class tax relief. We 
provide for estate tax reform. We provide for the appropriate treatment 
of combat pay. We provide for the dependent care tax credit, the 
adoption tax credit. And we say: You can have other tax relief if you 
pay for it. There is an interesting idea. Start paying for things 
around here.
  The difference between my amendment and the amendment of the Senator 
from New Hampshire is he puts another $250 billion on the charge card,

[[Page 11753]]

adds to the debt, sticks it on our kids. We say: No, let's start paying 
for things. That is the difference. We insist on the Senate position 
that any additional revenues meet these tax policies that are achieved 
by closing the tax gap, shutting down abusive tax shelters, addressing 
offshore tax havens, and without raising taxes. That is the resolution 
that passed this body. That is the resolution that is before the 
conference committee. It does not raise taxes by one thin dime.


                      Motion to Instruct Conferees

  Mr. President, I call up my motion.
  The PRESIDING OFFICER. The clerk will report the motion.
  The legislative clerk read as follows:

       The Senator from North Dakota [Mr. Conrad] moves that the 
     managers on the part of the Senate at the conference on the 
     disagreeing votes of the two houses on the House amendment to 
     the 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) be 
     instructed to--
       (A) insist on the Senate amendment with regard to to 
     relief, which cuts taxes in the resolution by $180 billion to 
     provide for extension of the child tax credit, marriage 
     penalty relief, and ten-percent bracket; reform of the estate 
     tax to protect small businesses and family farms; extension 
     of the adoption tax credit, dependent care tax credit, 
     treatment of combat pay for purposes of EITC; and other tax 
     relief;
       (B) insist on Section 303 of the Senate resolution that 
     provides for tax relief, including extensions of expiring tax 
     relief and refundable tax relief, provided that such 
     legislation would not increase the deficit over the total of 
     the period of fiscal years 2007-2012; and
       (C) insist on the Senate position that any additional 
     revenues to meet these tax policies are achieved by closing 
     the tax gap, shutting down abusive tax shelters, addressing 
     offshore tax havens, and without raising taxes.

  Mr. CONRAD. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, I have referred to this as the Wizard of Oz 
budget because there is someone behind the curtain somewhere on the 
other side of the aisle who is going to pay for all of those proposals 
they have put into the budget. No matter how you do the numbers, it 
works out that this budget has in it, as proposed by the Democratic 
Party, the largest tax increase in the history of the country.
  It is interesting that the Senator from North Dakota continues to 
bring forward the chart that says his tax revenues are about the same 
as the administration's, failing to mention--well, he did mention it, 
he just did not highlight it--that he is using one accounting scheme to 
get to one number, and another one to get to the other.
  But when you do compare apples to apples and oranges to oranges, you 
realize that under CBO scoring the difference is very significant 
between the two. Under OMB scoring the difference is significant 
between the two.
  The fact is, there is a dramatic increase in taxes in both packages. 
In the Democratic package, if you score it consistently the difference 
is about $300 billion if you do not take into effect the AMT. So you 
have got a $300 billion tax increase in this bill.
  Now, if it were not there, why would they have cut taxes to begin 
with as their first amendment? Their first amendment was a $180 billion 
revenue reduction. They were at the House number of $900 billion in new 
taxes. They cut that by $180 billion, which the Senator from South 
Dakota has ably laid out in his chart with his fig leaf, that $180 
billion was their first amendment out of the box.
  They obviously needed that amendment to reduce the tax burden which 
they had in their budget. Yet they claim they don't have a higher tax 
burden in their budget. Totally inconsistent on its face. Not 
defensible. If they were at the House number, which they were when they 
originally proposed the budget, they had a $900 billion tax increase. 
They are now at the new number, which is a $700 billion tax increase. 
If you take out the AMT number, they are at a $300 billion tax 
increase.
  If it looks like a duck and walks like a duck, talks like a duck, it 
is a duck. This is a tax increase. This budget has a major tax 
increase. It is incredible to me that they can argue they do not have a 
tax increase and then oppose my motion, which basically says do not 
increase taxes. If they are not increasing taxes, they did not have to 
oppose my motion. They should be supporting it on its face. So the 
inconsistency is palpable. Palpable.
  Then the idea that they are going to cover this $300 billion of new 
taxes, plus the AMT, of an extra $500 billion out of one building in 
the Grand Caymans--oh, yeah, that is where it is. That is where all of 
the money is. They are going to get $1 trillion dollars of new taxes 
out of this building.
  Granted, we all accept the fact that there is obviously something 
wrong, when you have 12,000 companies filed there, and they are in a 
tax haven. But to represent that they can generate this type of revenue 
by closing tax loopholes on overseas tax activity is absurd on its 
face; or that they can collect this from unpaid taxes is absurd on its 
face.
  The Commissioner of the IRS came to us, the Commissioner. He said the 
most they can collect over what they are already collecting over the 
next 5 years is about $20 to $30 billion of unpaid obligated taxes. 
They have obviously put in place, they believe, a very robust effort to 
try to collect unpaid obligated taxes.
  They think the incremental increase they can get, no matter how much 
more money it gave them, would be $20 to $30 billion, not $300 billion, 
not $700 billion. That was the testimony before the committee.
  The Senator, the former chairman and present ranking member of the 
Finance Committee, came down and spoke at length about the effort to 
close overseas loopholes and what they have been able to recover. Yes, 
there may be more dollars there, but there is nothing in the realm of 
$300 billion, $700 billion, which is what this tax bill--what this tax 
bill, which is what you should call this budget; it is a tax bill--
proposes.
  No, this is a budget which has in it a huge tax increase. That is 
simply the way it is. If it did not, people would not be opposing my 
motion. They would be accepting it, taking it, because it is a 
reasonable motion. My motion continues tax cuts for the child credit, 
for the marriage penalty, 10 percent bracket, the lower marginal rates 
for Americans and small business, earned-income tax credit, relief for 
military families, adoption tax credit, dependent care tax credit, 
college tuition deduction, deductions for student loans, $2,000 
Coverdell IRAs, 15 percent capital gains and dividend rate, and the 
Kyl-Landrieu death tax reform.
  It is a very reasoned approach. It is what we should be doing. We 
should not be raising taxes on the American people. Now, the argument 
is that raising taxes won't have an effect on the economy; that passing 
this budget, if it were put in full operation, will not have an effect 
on the economy. Of course, it will. It will have a dramatic effect on 
the economy.
  You cannot put $700 billion of new taxes on this economy and not 
expect this economy to adjust rather dramatically to a slowdown as a 
result. You cannot ask people who are entrepreneurs, who are taking 
risks, who are creating jobs, you cannot say to them: We are going to 
raise your capital gains rate up to 30 percent. We are going to raise 
your dividends rate, potentially, up to 39 percent. You cannot say that 
to them and not expect there to be a reaction in the marketplace.
  People are going to stop taking risks. One thing we have learned in 
this economy is, if you give people a fair tax system, one where they 
are taxed at a rate that is reasonable, they will go out and take 
risks. That is the great genius of the American economy.
  But, if you give them a tax rate which is unreasonable, they are 
going to take action to avoid that tax rate, which will mean 
ineffective use of dollars, inefficient use of capital. It will also 
mean a lot more people thinking of ways like going to the Cayman 
Islands to try to avoid taxes.
  The practical effect of that is you slow the economy, you contract 
the

[[Page 11754]]

economy. This proposal will do that. This proposal increases spending 
over the period of 5 years by, I think it is $147 billion.
  They have to pay for that, so they raise taxes. It is the old 
approach. I don't know why it is denied by the other side of the aisle. 
Why don't they simply admit they like to spend money; they like to take 
tax dollars and spend money? That is what they are going to do, take 
people's taxes and spend on it their priorities. Our philosophy is, let 
people keep their money and they get to spend it on their priorities. 
They usually do a better job. It is more efficient. They create more 
jobs, and they create more economic activity. I thought the chart of 
the Senator from South Dakota was one of the better ones we have seen. 
It was a pretty good example of what the problem is. I call it the 
Wizard of Oz budget, where there is somebody behind a curtain who will 
pay for this. He calls it a fig leaf.
  Mr. THUNE. Will the Senator yield for a question?
  Mr. GREGG. I am many happy to yield.
  Mr. THUNE. I understand my colleague from North Dakota. We both come 
from an area of the country where we have a lot of hard-working, plain-
spoken people. They get this. If you have a bunch of tax cuts that are 
in law today and you allow them to expire, which is what this budget 
does, that constitutes a tax increase. People in my part of the country 
get that. If you are not trying to hide something, why would you put a 
fig leaf on it? The amendment offered to the budget by our colleagues 
on the other side said: We will take the more popular things, and we 
will allow those tax cuts to be extended, which to me and those I 
represent very simply implies that the ones you aren't extending are 
going to expire, which constitutes a tax increase. We can talk about 
whether that is $300 billion or whether, if you include the AMT, it is 
$700 billion. But the fact is, the House budget resolution allows the 
tax cuts to expire to the tune of $916 billion. The Senate said: We are 
going to put a fig leaf on that, and we are going to allow $180 billion 
in tax relief, which to me implies they understand exactly what they 
are doing. They are trying to hide this tax increase by putting a fig 
leaf on it.
  To the people in my State and the people of New Hampshire and the 
people of North Dakota, this is a very simple thing. They get this. 
They understand what they tried to accomplish when this was debated in 
the Senate during the debate on the budget resolution was simply to put 
a fig leaf on this to offer up some tax cuts, some tax relief, and they 
wouldn't have had to do that, if they weren't raising taxes by $916 
billion. It is pretty straightforward.
  The motion of the Senator from New Hampshire is very straightforward. 
All it says is: Let's allow these tax cuts to be extended because they 
have created jobs, 7.5 million new jobs, 21 consecutive quarters of 
economic growth, 4.5-percent unemployment rate, and $300 billion in 
additional Government revenue over the past 3 years. Government 
revenues have not gone down. They have gone up. We have not less 
Government revenue; we have more as a result. Why would you fix 
something that is not broken? That is something people in the part of 
the country I represented understand clearly. If you are allowing tax 
cuts to expire, if you are not extending them, you are raising taxes.
  Mr. GREGG. That was an excellent question. I appreciated that.
  Mr. THUNE. I am not sure it was a question.
  Mr. GREGG. Why would you fix it, if it is not broken?
  Mr. CONRAD. Under the rules, it has to be a question. We will permit 
a very generous reading of the rules.
  Mr. GREGG. I wished to comment on a couple other points. We went 
through this when we debated the budget and the Senator from North 
Dakota used his charts and I responded with an occasional chart, not 
quite as many. But I think it is important to make these points in a 
couple of areas.
  He says there is a 2-percent difference now between his tax revenues 
and the President's tax revenues over the 5 years. When he brought the 
budget out, it was 3 percent; 3 percent came out to $\1/2\ trillion. He 
is at the 2 percent number now because he has factored in the fact that 
they reduced taxes or they at least allowed some of the tax extenders 
to go forward with the Baucus amendment which, basically, by accepting 
that amendment as a first amendment, the Senator from North Dakota made 
our argument for us, which was that they were raising taxes. That 2 
percent would translate into about $300 billion today, a lot of money. 
If you decide you are going to create a chart and you use small enough 
incrementals, you can end up with those two lines being together, but 
$300 billion is big-time dollars. That is the American taxpayer having 
to pay a lot of money in order to cover new spending under the 
Democratic proposal.
  In addition, this whole issue of economic expansion, the Senator from 
North Dakota pooh-poohs the last few years of economic expansion. He 
says it is not that good compared to the Clinton years. Nearly eight 
million jobs is a lot of jobs; 22 continuous quarters of economic 
growth is a lot of economic growth. Equally important, is the fact that 
we now have a revenue stream which exceeds the national average. Let's 
put that chart up there again because that is one of the most important 
charts we have. We have a revenue stream which exceeds the historic 
average of what we generate for revenues to the Federal Government. 
That is a critical issue and a critical point. We have a tax law which 
has actually gotten lower rates in a lot of areas for working families, 
for families with children, for people who have dividend income and 
take capital gains and, thus, take risk. By the way, senior citizens 
who are on fixed incomes are by far the biggest receivers as a group of 
dividend income. When you start raising the rate on dividend taxes, you 
are hitting seniors who are on a fixed income.
  The fact is, with these lower rates, which we put in place, we are 
generating revenues to the Federal Government today--we have been for 
the last 3 years--which dramatically exceed the amount of revenues 
which have historically been generated to the Federal Government. As a 
result, the deficit is coming down precipitously. We will be in 
balance. I said Humpty Dumpty could balance the budget by 2011. In 
fact, under CBO's scoring, the budget goes into a dramatic surplus by 
2011. They don't take into account a couple of major issues, but it 
doesn't matter. The fact is, you can get to balance because revenues 
are coming in dramatically. Why are they coming in dramatically? 
Because we have a tax law that works today. What does the other side 
want to do with that? They want to throw it out. They want to go back 
to the old ways, when you just significantly increase the taxes on 
productive America, on working Americans, on Americans who 
unfortunately die and run small businesses and their families get wiped 
out. Why does the other side of the aisle want to do that? Why does the 
other side of the aisle want to say to a family who has a death, who 
runs a small restaurant or a small farm or small business: We are going 
to put you out of business; we are going to hit you with a 45-percent 
tax rate? That makes no sense at all. Why not agree to the Kyl motion 
which was a balanced approach, worked out by both sides of the aisle, a 
fair, bipartisan approach? Why not be willing to extend the capital 
gains and dividends rate which has generated so much revenue, so much 
economic activity?
  In fact, capital gains has actually been a net winner for us. By 
reducing rates, we have now generated significantly more income from 
capital gains taxes than we did when the rates were higher. Why is 
that? It is called human nature. If you own an asset, a stock, a bond, 
a piece of real estate, and you know you are going to be taxed at 25 
percent or maybe 30 percent, the odds of your selling that asset and 
realizing the gains are pretty slim. Maybe you are figuring, I will 
hold onto it. But when that tax rate went down to 15 percent, there was 
an immediate incentive for Americans to go out and sell

[[Page 11755]]

those locked-up assets. What was the effect of that? The first effect 
was they got cash, which they then reinvested in something that was 
much more efficient. They put their capital into a better working 
situation so they created more economic activity. It is human nature 
that they would go out and invest to try to earn more money, which 
means they are basically investing in taking maybe more risk or 
creating more opportunity for jobs.
  In addition, they generated a huge windfall to the Federal Government 
which we are continuing to receive because those assets which were not 
going to get sold under the higher tax rates were getting sold. We were 
getting the revenues. The proceeds were being reinvested, and that 
generated more jobs, more economic activity, which generated additional 
revenues. That is why we have seen this dramatic increase in Federal 
revenues. In fact, the vast majority of the Federal revenue that we 
have seen jump has been a function of capital gains revenue. That is 
where most of this new revenue comes from. Yet the other side doesn't 
want to extend the rates on capital gains, doesn't want to extend the 
rates on dividends. They want to kill that goose that has been laying 
significant revenues for the Federal Government and giving people an 
incentive to be productive and helping senior citizens who are on a 
fixed income meet the challenges of living on a fixed income.
  It makes no sense to me that they would oppose this amendment, if 
their argument is they have no tax increases in their budget. The only 
way you can oppose my motion is if you do have tax increases in your 
budget because the only way my motion has any impact is to address tax 
increases. So if you didn't have any tax increases in your budget, you 
would have to support my motion. If that is their position, that there 
are no tax increases in their budget, then my motion should be a 
nonevent and should be supported. But it appears they do have tax 
increases in their budget because they are opposing my motion. In fact, 
if we go back to the chart that shows the actual calculation of tax 
increases, the 3 percent chart or the apples to apples, it is true. 
There is a $300 billion tax increase over and above the AMT, even after 
the Baucus language, and there is, in addition, an issue of where that 
$300 billion is going to come from. The concept that it is going to 
come out of a building in the Grand Caymens or from uncollected taxes 
is not valid in the face of the testimony before our committee and the 
history of our attempts to try to close those, to address those two 
issues.
  No more than 10 percent of that tax increase could possibly be gained 
out of those two accounts. The rest will have to come out of working 
Americans who today are benefitting from the tax cuts which are in 
place and using those tax cuts to significantly expand this economy 
and, as a result, generate significantly more revenues to the Federal 
Treasury.
  That is obviously why I put this motion forward. The Senator has put 
forward his alternative, which is responded to by the summary I have 
given of mine and speaks to the fact that his third paragraph, which is 
you are going to get the money from the tax gap and abusive tax 
shelters is not credible in the face of the facts and the situation. 
Although we certainly want to get as much as we can from those two 
accounts, we are not going to get anywhere near what is proposed, 
nowhere near the $300 billion. Of course, he held up my motion. He 
said: It doesn't address the AMT to the Senator from South Dakota. I 
would note that his also does not address the AMT. At least we are 
consistent on that point.
  It is my understanding that Senator Cornyn is going to be back in 10 
minutes to offer his motion.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Obama). The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I have enjoyed this presentation so much. 
It is perhaps the most creative presentation I have heard on the Senate 
floor. The Senator wonders why we aren't going along with the policies 
of this administration. Here is why. Here is what our friends on the 
other side never want to talk about. You will never hear this word 
leave their lips--debt. They don't want to talk about debt because that 
is what they have been running up. They have run up the debt of the 
country by $3 trillion in 5 years. If their policy is followed, they 
will run it up another $3 trillion, doubling the debt and doing it all 
before the baby boomers retire, putting us in a deep hole.
  Here is the record. The debt at the end of the first year of this 
administration stood at $5.8 trillion, the gross debt of the United 
States, $5.8 trillion.
  At the end of this year, the gross debt of the United States is going 
to be up to $9 trillion because of the policies that our friends on the 
other side put in place. But you will never hear them talk about that 
part of the record. You will never hear them talk about where it is 
headed if we continue with their policies. They are going to add 
another $3 trillion. You will never hear my colleague say the motion he 
has presented will cost another $250 billion that is not paid for--not 
a dime of it. He will not tell you that our budget balances in 2012, 
but if we adopt his motion, it will not because he does not want to 
have to be under the constraints of making things add up.
  I admit, it is tough. It is very hard to actually balance the budget. 
But our friends have not even had a budget for the last 2 years for the 
United States of America. Hard to believe, isn't it? They had been in 
charge of everything, and they didn't have a budget.
  Mr. GREGG. Will the Senator yield for a clarification?
  I will acknowledge there was no budget last year. But 2 years ago, 
there was a budget, if you recall, and it actually had a reconciliation 
instruction in it--a very significant instruction.
  Mr. CONRAD. Yes, 3 of the last 5 years there has been no budget.
  Mr. GREGG. I want the Senator to be correct. Was the third year the 
year you were in charge when we did not have a budget?
  Mr. CONRAD. No. That was when we had split responsibility and could 
never reach agreement because we would not go along with running up the 
debt. I am proud that we would not go along with it. No, we insisted on 
having budgets that actually balance, which is a novel idea around 
here.
  Let me show what the results have been of the fiscal policy that our 
friends on the other side have engaged in.
  I have pictured on this chart all the other Presidents of the United 
States--all 42 of them--because it took all these Presidents pictured 
224 years to run up $1 trillion of debt held by foreign countries, and 
this President has exceeded them. This President, alone, in 6 years, 
has exceeded all the foreign debt run up by the previous 42 Presidents 
over 224 years.
  Now, this is a fiscal record they are proud of? I would not be proud 
of that. What is the result of this? The result of this is, we owe the 
Japanese over $600 billion. We now owe the Chinese over $400 billion. 
We owe the United Kingdom over $100 billion. We owe the oil-exporting 
countries over $100 billion. We owe the Caribbean banking centers over 
$60 billion. That is their record. Their record is plunging this 
country into deeper and deeper debt.
  Now, let's go back to this question of taxes. I have heard over and 
over from the other side that somehow I have compared apples to oranges 
in the OMB scoring and the CBO scoring of the revenue of our proposals. 
Let me say this to you. I think it is relevant because the President 
said about his budget--nobody else's claim; it is his statement about 
his budget--that it would raise $14.826 trillion over the next 5 years. 
Do you know what my budget will raise over the 5 years? Virtually the 
identical amount: $14.827 trillion.
  Now, my friends on the other side say there is going to be an 
economic calamity because I am raising virtually the identical amount 
the President called for. I do not think so. Was the President calling 
for an amount of revenue that would derail the economy? Was he? I do 
not think the other side would make that assertion. But the

[[Page 11756]]

President's own statement about what his budget would raise said it was 
going to raise $14.826 trillion over the next 5 years. My budget raises 
$14.827 trillion.
  The one thing I probably should do is reduce our revenue by $1 
billion. Then we would have absolutely the same amount of revenue the 
President said his budget would raise. Now, the point the Senator makes 
that has validity is that if you use Congressional Budget Office 
scoring on both, there is a 2-percent difference. I have 2 percent more 
revenue. Why? Because I actually want to balance the budget. The 
President's budget does not balance. Mine does. We have 2 percent more 
revenue, although according to the President's estimates, we have 
almost identical revenue streams over the 5 years.
  But under CBO scoring, we have 2 percent more revenue. I say, without 
hesitation, we can raise that amount of revenue with no tax increase. 
Why? Let's do the math. The tax gap--that is the difference between 
what is owed and what is paid--the tax gap is roughly $2 trillion over 
5 years.
  Then we have the tax havens. The Permanent Subcommittee on 
Investigations said we are losing $100 billion a year there. So $100 
billion times the 5 years of this budget is another $500 billion. That 
is $2.5 trillion of revenue that is out there that could be recovered 
with no tax increase--none--$2.5 trillion. We would only need about 10 
percent of that in my budget--about 10 percent--and you would have all 
the revenue you need to balance and to provide the middle-class tax 
relief and to provide the estate tax reform and to provide the increase 
to veterans health care that so desperately is needed and to provide 
the kind of investment in education that is critical to secure our 
future and to provide for law enforcement.
  The President's budget cuts the COPS on the street program by over 90 
percent. Why would we do that? Why would we cut the COPS Program 94 
percent? We do not agree with that.
  We also think that veterans, who have served so gallantly and at such 
great personal cost, deserve to have the promise kept to them about 
their health care. Our budget does that. You can do this without any 
tax increase--none.
  The Senator from New Hampshire says: Well, the Revenue Commissioner 
says he can only recapture $20 billion of the $2 trillion that is out 
there. What is that percentage?
  Mr. GREGG. Will the Senator yield for a question?
  Mr. CONRAD. It is 1 percent. We have a Revenue Commissioner who 
acknowledges you have $2 trillion out there that is not being 
collected. He says he can collect 1 percent of it. I would say, we 
better get a new Revenue Commissioner. In fact, the Revenue 
Commissioner is leaving. Maybe we can get a Revenue Commissioner who 
can do better than 1 percent. We ought to get a Revenue Commissioner 
who can do better than 1 percent. But that is one factor.
  The tax havens: $100 billion a year that is leaking out the backdoor 
because of these tax havens. That is not acceptable. We ought to close 
that door. If we closed that door, if we shut it halfway, we would 
provide for the revenue here.
  There are no tax increases in the budget--none. In fact, there is 
dramatic tax relief. Of course, the reason we left AMT out of my motion 
is because AMT relief is in our budget. We do not have to put it in my 
motion. It is in our budget. We provide for 2 years of AMT relief. The 
President provided for only 1.
  If you were going to apply the same argument to the President's 
budget that they are applying to my budget, here is what you would 
find. You would find the President has a big tax increase in his 
budget. If you apply their same logic to the President's budget, what 
you find is the President has a $500 billion tax increase in his 
budget. He has 1 year of AMT tax relief, which means he does not have 
any for the 4 following years. That would constitute a tax increase of 
$328 billion. By our friend's logic, that means the President has a 
$328 billion tax increase in the alternative minimum tax.
  For the tax extenders, it is the same way. It provides for just 1 
year. So you have $104 billion in the succeeding 4 years he does not 
provide for. Under their logic, that is a tax increase.
  His health tax proposal is another $52 billion.
  If you add it all up, the President has, according to their logic, a 
$500 billion tax increase. Do you know what the Secretary of the 
Treasury said when we confronted him with this? He said: That is the 
law. That is the law. I guess I could give that same flip answer here. 
I do not do that. Instead, I provide in the budget that we would 
provide for the middle-class tax relief, we would provide for estate 
tax reform, and we would pay for it so we can balance this budget and 
stop the explosion of debt in this country. That is exactly what we 
should do.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, to respond quickly, we have been over this 
ground many times in our discussions, but I do think it is important to 
reinforce the differences.
  First off, I ask unanimous consent to have printed in the Record the 
letter from Director Portman which reflects the fact that CBO scores 
the administration revenues significantly different than what is used 
as a chart by the Senator from North Dakota and reflects the fact there 
is a $300 billion increase in the proposal of the Senator from North 
Dakota.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Executive Office of the President,Office of Management 
           and Budget,
                                   Washington, DC, March 16, 2007.
     Hon. Judd Gregg,
     U.S. Senate,
     Washington, DC.
       Dear Judd: You asked for a comparison of the revenue levels 
     in the Senate-reported budget resolution and the President's 
     Budget under the Administration's economic and technical 
     assumptions.
       The Senate-reported budget resolution uses the 
     Congressional Budget Office's (CBO) economic and technical 
     assumptions and makes a policy assumption that tax relief 
     enacted in 2001 and 2003--the child credit, marriage penalty 
     relief, the 10 percent bracket, and other tax relief--ends in 
     2010, unless offset by other tax increases. In addition, the 
     resolution does not reflect the impact of other revenue 
     proposals contained in the President's Budget. With these 
     assumptions, the Administration has developed an estimate of 
     the revenue levels in the Senate-reported budget resolution.
       The table below compares the revenue levels in the 
     President's Budget to the Senate-reported budget resolution 
     based on the Administration's and CBO's economic and 
     technical assumptions. While the resolution also includes 22 
     ``reserve funds,'' a procedure that allows revenues to be 
     increased above the levels set forth in the resolution for 
     higher spending, the estimates below do not include higher 
     revenue levels that could result from these reserve funds.

      COMPARISON OF PRESIDENT'S BUDGET & SENATE-REPORTED RESOLUTION
                   [FY 2008-2012; revenue in billions]
------------------------------------------------------------------------
                                             Administration      CBO
------------------------------------------------------------------------
President's Budget.........................         14,826        14,568
 
    End 2001/2003 tax relief...............           +374          +392
    Drop other Administration revenue                 +225           +43
     proposals.............................
    Other changes..........................  ..............           +4
                                            ----------------------------
        Subtotal...........................           +599          +439
                                            ============================
Senate-reported budget resolution..........         15,425        15,007
------------------------------------------------------------------------

       Please let me know if you have any additional questions.
           Sincerely,
                                                      Rob Portman.

  Mr. GREGG. He holds up the wall of debt chart. Let me hold up the 
wall of taxes chart which the Senator from North Dakota is showing in 
his budget. He is basically proposing dramatic increases in the tax 
burden on the American people. He claims it is going to come from this 
Grand Cayman building and that the Commissioner of Revenue is not doing 
his job in collecting the funds that are owed and obligated.
  But the fact is, the Commissioner has aggressively pursued this. We 
have given him more money. He will continue to aggressively pursue 
this. Yes, there is more that can be collected, but the numbers are 
nowhere near what the Senator from North Dakota has represented they 
might be.

[[Page 11757]]


  Mr. CONRAD. Mr. President, will the Senator yield on this chart?
  Mr. GREGG. Not right now.
  Mr. CONRAD. The Senator does not want to be able to answer questions 
on this chart?
  Mr. GREGG. I will answer questions in a second.
  Mr. CONRAD. I would look forward to the opportunity to ask a question 
about that chart.
  Mr. GREGG. Well, let me finish my statement on the points which I am 
making; which is that the Grand Cayman building is not going to pay for 
the tax increases in the Senator's budget.
  Now, the Senator says he has a 2-percent increase in the tax burden. 
Two percent translates into about $300 billion. That has to come from 
somewhere. Do you know why that tax increase is in this budget? Because 
he spends the money. He spends that money.
  In all the numbers that are being thrown out here on the floor, all 
the different ideas, all the different arguments about OMB and CBO and 
this and that and this and that and Grand Cayman buildings, the bottom 
line is that the budget of the Senator and the Democratic Party 
increases spending. In the discretionary accounts, the Democrats' 
budget is about $145 billion above the President's request over the 5 
years. It increases mandatory spending by nearly $460 billion. It 
increases taxes, above the AMT issue, by about $300 billion over 5 
years. It does not extend those tax cuts and rates which have generated 
the huge explosion in revenue for this Government; specifically, things 
such as the dividend and capital gains tax rates and the rates that 
assist working Americans. So it is not necessarily--if it did extend 
those rates, you would think there wouldn't be so much resistance to my 
motion. You can't make the argument that you are not raising taxes on 
Americans and then oppose my motion, which essentially says: Don't 
raise taxes on Americans. That is the bottom-line inconsistency of the 
Senator from North Dakota's arguments when you get beyond all the 
numbers.
  I will yield to the Senator from Iowa, but the Senator from North 
Dakota had a question, and I look forward to his question. Remember, it 
has to be a question.
  Mr. CONRAD. Mr. President, I am ready with a question. I say to the 
Senator, I look at this ``Building a Wall of Taxes'' and the numbers 
don't match the visual. The Senator's chart shows under our budget that 
taxes would be 18.6 percent of GDP in 2007 and 18.8 percent of GDP in 
2012, and it shows visually this huge increase in taxes. By his own 
chart, there is almost no difference. I would ask the Senator, how can 
it be that the Senator shows a chart that makes it look as though there 
is some big increase in taxes, when by the Senator's own designations, 
it is 18.6 percent of GDP in 2007 and 18.8 percent in 2012?
  Mr. GREGG. Well, because--
  Mr. CONRAD. How does this chart accurately depict the change?
  Mr. GREGG. Because the tax burden is going up in the billions on the 
side there, the x-axis. Does my colleague see that on the side? It is 
the amount of tax in billions--the actual taxes you are taking from 
people, the tax burden, that is the problem.
  Look at it this way: If you are taking $2.5 billion from people today 
and then at the end of your budget you are taking $3.15 billion from 
people, that is all coming out of those tax numbers.
  Mr. CONRAD. But as the Senator's chart demonstrates, if you adjust 
that for inflation, what your GDP figure does, there is virtually no 
difference in tax burden--virtually none. There is 18.6 percent in GDP 
tax burden in 2007 and 18.8 percent in 2012.
  Mr. GREGG. Mr. President, if I may reclaim my time, the Senator has 
made my argument for me. My motion should not be opposed because my 
motion would accomplish what the Senator wishes, which is to maintain a 
reasoned tax law in this country and a tax burden on the American 
people which would be consistent. If you oppose my motion, you are 
saying you have to raise taxes. By definition you do.
  Mr. CONRAD. Mr. President.
  Mr. GREGG. I reclaim my time, Mr. President. As much as I would like 
to hear from the Senator from North Dakota, I have told the Senator 
from Iowa I would grant him some time.
  Mr. CONRAD. But the Senator can't hand off the floor. This Senator 
enjoys the first right of recognition, Mr. President.
  Mr. GREGG. But I have the floor.
  Mr. CONRAD. If the Senator is yielding, at that point I will ask for 
recognition to respond. The Senator cannot hand off recognition, as the 
Senator knows, under the rules of the Senate.
  Mr. GREGG. Well, I believe I control the time.
  Mr. CONRAD. The Senator cannot hand off recognition from himself to 
another Senator. That violates the rules of the Senate.
  The PRESIDING OFFICER. The Senator can only yield time. He cannot 
hand off the floor.
  Mr. GREGG. Well, I believe the Senator from Iowa had a question.
  The PRESIDING OFFICER. The Senator from New Hampshire controls the 
time.
  Mr. GREGG. I believe the Senator from Iowa had a question. I heard 
him say he wanted me to yield for a question.
  The PRESIDING OFFICER. The Senator may yield for a question.
  Mr. GREGG. I am sure the Senator from North Dakota has some succinct 
comment he wants to make before we turn to the Senator from Iowa.
  Mr. CONRAD. I thank the Senator.
  The good thing is we debate strenuously, but we do it in good humor 
and we like and respect each other. I might say I even extend that to 
the Senator from Iowa, the esteemed ranking member of the Finance 
Committee, whom I have grown fond of.
  Let me say this: We don't have any tax increase in our proposal. The 
reason we resist the motion of the Senator from New Hampshire is 
because we would have a budget that would not be in balance. Our budget 
is in balance by 2012; with his motion it would not be. He has $250 
billion of tax expenditures not paid for. In our budget, we provide for 
the middle-class tax cuts, we provide for estate tax reform, and we say 
if you want to have additional tax cuts, you can have them, but you 
have to pay for them.
  I thank the Senator for his courtesy.
  Mr. GREGG. I yield to the Senator from Iowa such time as he may 
consume.
  The PRESIDING OFFICER. The Senator from New Hampshire controls 1 
minute on this motion.
  Mr. GRASSLEY. I can only speak for 1 minute? Is that what you are 
saying? There is no point in my speaking if I only have 1 minute.
  The PRESIDING OFFICER. The Senator also has 30 minutes of general 
time.
  Mr. GREGG. I yield to the Senator from Iowa as much time as he may 
consume.
  Mr. CONRAD. Mr. President, let me say to my colleague, I know Senator 
Gregg has another matter he has to attend to, and I have time 
remaining. We will try to be fair and work things out so people don't 
get shut out.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I speak in favor of the motion by the 
Senator from New Hampshire, the ranking member of the Budget Committee, 
to make sure we continue existing tax policy throughout the period of 
time of this budget resolution.
  Considering the issue of taxes and this budget, press reports have 
indicated we may be in the ninth inning of this budget season. The 
President sent his budget to Capitol Hill 3 months ago. The Senate 
Budget Committee marked up a budget resolution. It passed the Senate. 
That resolution lays out the Democratic leadership's fiscal priorities 
for the next 5 years. As everyone knows, the American people spoke last 
November and as a result of that election, we have a new Democratic 
majority in both Houses of Congress. So for the first time in 12 years, 
Democrats have the privilege, but also the responsibility, for our 
budget.
  The Senate spoke very clearly in support of some tax relief. The 
voice came

[[Page 11758]]

in the form of Senator Baucus and his amendment. My friend, the 
chairman of the Finance Committee, secured $180 billion to prevent part 
of the big tax increase that will go into effect January 1, 2011. 
Although the Baucus amendment only provides 44 percent of the tax 
relief room that is actually needed to keep existing tax policy in 
place so there is no tax increase, it is, in fact, far superior, 
though, to the position on the same issue by the other body, because 
the House position is zero tax relief. That is right: zero tax relief. 
What does zero tax relief mean? It means a total tax increase of $936 
billion over 5 years. That, in fact, is the largest tax increase in 
history, and it is a tax increase that will occur automatically without 
a vote of Congress. Of course, it is inconceivable that people say: 
Well, we aren't responsible for a tax increase. If you like the tax 
policy we have today and you don't do anything to stop it, and you 
automatically have a tax increase, then the people who let it 
automatically happen are responsible for increasing taxes--the biggest 
tax increase in the history of the country.
  That tax increase means real dollars out of the wallets of real 
middle-income families. I have a chart here. The chart shows a wall of 
tax increases. The chart shows a family of four at $40,000 a year 
average income--the national average--will face a tax increase of 
$2,052. Now, for a lot of my rich liberal friends, that may not seem 
like a lot of money, but for a hard-working family of four in my State 
of Iowa, a $2,052 increase in taxes without even a vote of the Congress 
happening on January 1, 2011 is a lot of money, and it matters. That is 
why that wall of tax increases ought to be clear to everybody, and we 
ought to do everything we can to bring down that wall.
  As a senior Republican member of the Budget Committee, I have not 
been consulted on the budget by our chairman, but I have made my views 
clear to our distinguished chairman. What I know about the budget I 
have learned from press reports. If those reports are true, I would 
encourage the chairman and the Senate leadership to stand strong for 
the Senate position, which is taking care of some of the tax increase 
that would have taken place--44 percent of it--not as good as it ought 
to be, but it is surely better than the other body.
  Press reports indicate that the Democratic Budget Committee chairmen 
are working on a compromise that would condition the tax relief on a 
surplus. That is, the Baucus amendment would be subject to a trigger.
  Now, what is a trigger? Well, I have another chart. This chart deals 
with perhaps the most famous trigger. The chart shows, as my colleagues 
can see, Trigger, the cowboy actor Roy Rogers' horse. You can see from 
the chart that Trigger is a pretty impressive looking horse. We would 
definitely like to have such a Trigger on my farm to help with the 
chores, and I am sure my grandkids would enjoy a ride with Trigger were 
he stabled on my farm. He is a beautiful horse.
  As western movie buffs know, Trigger is no longer with us. Trigger is 
stuffed and on display at the Roy Rogers-Dale Evans Museum in Branson, 
MO. Although Trigger was an impressive looking horse, this trigger 
device the Democrat leadership is looking at is far from impressive. 
The trigger notion is something that has a long history with Democratic 
leadership. Back in 1996, as an example, the Clinton administration and 
the Democratic leadership argued for a trigger for the $500 per-child 
tax credit and other family tax relief issues. They took this position 
after President Clinton had vetoed the bill containing the family tax 
relief proposals. If the Clinton administration and the Democratic 
leadership had prevailed, millions of American families would have 
received the $500 per-child tax credit perhaps in 1999 through 2001--
only in those years. If President Clinton and the Democratic leadership 
had won and the trigger were in place, then millions of families would 
have lost the child tax credit in the years 2002 until now. So why 
would anybody in Congress want to be so antifamily and put in a trigger 
policy, as the practice was at that time, that would deny families with 
children the child tax credit? It doesn't make sense, but that is the 
way triggers work.
  The same dynamic occurred in 2001. With surpluses, the Democratic 
leadership opposed broad-based, bipartisan tax relief, including a 
doubling of the $500 per-child tax credit. One of the ideas the 
Democratic leadership flirted with at that time was the trigger. There 
were a few Republicans attracted to the idea as well, I have to 
confess.
  The trigger was debated somewhat, but it was never found to be 
workable. It wasn't workable. So if it wasn't workable 6 years ago, why 
are they bringing it out of the attic now for consideration? Because a 
trigger is a complicated matter. It could be suggested that the 
mechanics of a broad-based tax trigger are a little bit like 
trigonometry. Trigonometry is a division of mathematics that deals with 
triangles. It is simple on its face, but you can see from this 
textbook, it can become pretty complicated pretty easily. Look at this. 
That is complicated.
  Interweaving the complexities and uncertainties of triggered tax 
relief with the vast American economy could lead to a new term. That 
new term would be ``trigonomics.'' As much as folks complain about the 
uncertainty and complexity of the tax policy, I don't think the 
Democratic negotiators should want us to take us to the land of 
trigonomics.
  To some degree, the current law sunset of 2001 and 2003 is a de facto 
trigger. If you look at those in opposition to permanence of the 
bipartisan tax relief, you will find that it is, with very few 
exceptions, the same folks who like triggers.
  The tax system is a very complex, very pervasive force in our 
society.
  It affects real Americans, all Americans, and it affects all economic 
activity. So creating conditional tax relief through a trigger 
mechanism would destabilize an already unwieldy tax system. How are 
families, how are businesses, how are investors supposed to plan their 
affairs with a trigger hanging over their current tax law rules that 
keeps taxes low? Think about that. What would we be doing to the hard-
working American taxpayers?
  Now, as an aside, those taxpayers, by the way, are sending record 
amounts of revenue to the Treasury Department. This very day, it is 
reported in the Wall Street Journal that more taxes came in in April 
than we have ever had in the history of our country--because the 
bipartisan tax relief plans of 2001 and 2003 are growing the economy. 
They are the goose that laid the golden egg, for 3 years in a row, 
bringing in massive amounts of revenue into our Federal Treasury, to a 
point where, by the end of this fiscal year, the annual deficit will be 
less than 1 percent of gross national product. When you are dealing 
with a $13 trillion economy, 1 percent up or down is about as good as 
you can do 12 months ahead in planning a budget and tax policies for 
this great country of ours. So the American taxpayer is doing his or 
her part to reduce the deficit.
  I ask unanimous consent to have printed in the Record a couple of 
articles from the BNA Daily Report for Executives, one dated May 3, 
2007, another dated May 7, 2007.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          [From the Daily Report for Executives, May 3, 2007]

Robust Revenues Lead Treasury To Drop Three-Year, Consider Buying Debt 
                                 Again

       The U.S. Treasury Department said May 2 it was scrapping 
     sales of the three-year note and that it has discussed with 
     Wall Street representatives the issue of debt buybacks, a 
     finance management tool last seen when the government was in 
     surplus, as tax collections continue to come in at a healthy 
     pace.
       ``As you all know, receipts have been strong and largely 
     consistent with our forecasts. Based on this and other 
     factors, we're announcing this morning our decision to 
     discontinue the issuance of the three-year note,'' Anthony 
     Ryan, Treasury assistant secretary for financial markets, 
     said at the department's quarterly press briefing. The change 
     will allow Treasury to ensure auctions of remaining issues 
     are large enough to attract active bidding, help balance its 
     portfolio of debt and ``manage the improving fiscal 
     outlook,'' Ryan said.
       The three-year note was revived in May 2003 after being 
     discontinued previously

[[Page 11759]]

     when the government began posting surpluses from 1998 through 
     2001.


                       Talks With Advisory Panel

       The discussion of debt buybacks was held with the 
     Treasury's Borrowing Advisory Committee, a panel of private 
     sector representatives from the securities industry. Treasury 
     officials meet quarterly with the group to receive input on 
     issues facing Treasury's debt managers, who aim to sell U.S. 
     Treasuries to finance government borrowing at the lowest 
     possible cost over time.
       Treasury had asked the TBAC to address ``what practices 
     Treasury and market participants should consider in a 
     significantly improving fiscal or surplus environment, given 
     volatility in budget forecasts and the Administration's long-
     term plan to balance the budget,'' according to minutes of 
     the meeting released by Treasury.
       Ryan called the talks ``an initial discussion'' that did 
     not signal any decisions and intended merely to broach the 
     issue.
       ``We asked this question in an attempt to continue to be 
     proactive and forward-looking,'' he said. ``Given some of the 
     volatility associated with our projections, it can't hurt to 
     be prepared.''


                         Recent Swings Volatile

       Budget swings over the past decade have been particularly 
     volatile. In 1997, a Democratic White House and a Republican 
     Congress reached agreement on a 5-year plan to bring the 
     budget into balance. Thanks in large part to surging capital 
     gains revenues, balance was reached in 1998.
       On the other hand, few analysts expected the sharp drop-off 
     in revenues that followed the relatively light 2001 recession 
     and the enactment of President Bush's tax cut plan. Revenues 
     have surprised on the upside in recent years, and that trend 
     is expected to continue this year, according to analysts 
     watching the early data on April tax returns, which bring in 
     a sizeable chunk of the government's overall annual revenue.
       A Treasury chart prepared for the TBAC showed the possible 
     range of borrowing outcomes if historic ranges of forecast 
     error, either positive or negative, occurred. If the 
     surprises kept to the positive side, the chart showed a 
     potential need for a large paydown of debt as soon as 2010.
       Asked if that implied a budget surplus in 2010, 2 years 
     ahead of what Congress and the White House have targeted for 
     a surplus, Matthew Abbott, deputy assistant secretary for 
     federal finance, said, ``What the chart illustrates is that 
     it's possible. Not that it's expected, but that's possible.''


                `Premature' to Discuss Earlier Surpluses

       A Wall Street economist also warned that reaching surplus 
     ahead of 2012 was unlikely, given uncertainty about what the 
     government will do about the Alternative Minimum Tax as well 
     as the temporary tax cuts that expire in 2010.
       ``I think it would be premature to think about buybacks 
     because of expected budget surpluses,'' said Michael Moran, 
     chief economist with Daiwa Securities. However, he said 
     buybacks could be used instead as a tool to affect the 
     maturity of outstanding debt, a factor that influences 
     interest costs.
       Moran also said the ``excellent inflows in April'' on the 
     tax side were likely to lead him to revise downward his 
     deficit forecast from $175 billion in 2007.


                        Hoyer Hopeful on Budget

       Democrats in Congress are continuing to work on hammering 
     out the framework for a budget resolution that can pass both 
     chambers of Congress and reach balance in 2012. With an 
     informal deadline of May 15 for completing action on the 
     budget, the House has yet to name members of a conference 
     committee for its side.
       Majority Leader Steny Hoyer (D-Md.) remained optimistic, 
     telling reporters May 2, ``We want to move ahead on the 
     budget. The answer to your question is I'm hopeful we'll move 
     the budget in the next couple of weeks, that we think that's 
     important to do.''
       A House Democratic aide said conferees may not be named in 
     the April 30 week, as had been expected, but could instead be 
     named early in the May 7 week. ``We can see our way to get 
     there'' to a resolution, the aide told BNA.
                                  ____


          [From the Daily Report for Executives, May 7, 2007]

CBO Lowers Projection of 2007 Deficit To $150-$200 Billion Range on Tax 
                                Receipts

       The Congressional Budget Office said May 4 that the 
     projected 2007 federal budget deficit could come in much 
     lower than had been expected at the beginning of the year, 
     possibly as low as $150 billion, based on continued strength 
     in tax revenues.
       ``Revenues have risen by about 11 percent compared with 
     receipts in the same period of 2006, only slightly more than 
     CBO anticipated when it prepared its most recent budget 
     estimates in March; outlays have grown by only 3 percent,'' 
     the CBO said in its projection issued ahead of the monthly 
     financial statement to be released by the Treasury Department 
     on May 10.
       ``CBO now expects that the government will end 2007 with a 
     deficit of between $150 billion and $200 billion, assuming 
     enactment of pending supplemental appropriations,'' the 
     agency said.
       In March, the agency had projected about a $214 billion 
     deficit, assuming an Iraq war supplemental is passed by 
     Congress. In 2006, the deficit totaled $248.2 billion.


                      Further Receipt Growth Seen

       Healthy tax revenues were cited May 2 by Treasury 
     Department officials in their decision to eliminate sales of 
     the three-year note from their regular auctions of government 
     debt (85 DER EE-2, 05/3/07). Treasury officials also 
     disclosed they had discussed the issue of debt buybacks with 
     an advisory committee made up of private sector experts. 
     While debt buybacks were seen when the government last ran a 
     surplus, Treasury officials said the discussions with the 
     panel were only made in an effort to be forward-looking and 
     proactive.
       Prior to the CBO release, Rob Portman, director of the 
     White House's Office of Management and Budget, said the 
     budget was benefiting from a healthy economy.
       ``Solid economic growth is pushing Federal tax receipts up, 
     and will drive the deficit down even faster as we move toward 
     balance,'' he said in a statement.
       ``We've just seen a record-breaking April tax collection, 
     and the outlook is for further growth in tax receipts. That's 
     good news for our federal budget, and underscores the need 
     for making the pro-growth tax relief permanent and having 
     spending restraint in place.''


                   Lawmakers Aim for Balance in 2012

       On Capitol Hill, lawmakers are struggling to close the 
     differences between House- and Senate-passed versions of the 
     2008 budget blueprint. Democrats have said they are aiming 
     for a budget that can pass both chambers of Congress by May 
     15 and reach balance by 2012. However, negotiators have been 
     stuck on several issues, including whether to allow room for 
     extending some temporary tax cuts.
       In its report, the CBO said it expected the government to 
     post a $176 billion surplus in April, well above the $119 
     billion surplus seen in April 2006. Because of the mid-month 
     deadline for individual tax payments, April is a crucial 
     month for government revenues. If the April projection is 
     correct, the year-to-date deficit will be about $83 billion, 
     or about $101 billion less than in the first seven months of 
     fiscal 2006, the said.
       CBO said receipts from individual income taxes were up by 
     about $105 billion, or 17.5 percent, through April compared 
     with the same period in the previous year, while payroll 
     taxes were up by $27 billion, or 5.5 percent in the same time 
     frame.
       ``About 85 percent of the growth in total receipts through 
     April occurred in receipts from individual income and payroll 
     taxes, the two largest sources of revenues,'' the agency 
     said. It noted, however, that some nonwithheld receipts 
     appeared to be booked earlier by Treasury in 2007 than in 
     2006, shifting some receipts from May to April. If that 
     factor is adjusted for, the agency said, overall receipts 
     would have been up by closer to 9 percent, ``only slightly 
     more'' than CBO had projected in March.

  Mr. GRASSLEY. So then why trigger tax increases when the current law 
tax levels are bringing plenty of revenue into the Federal Treasury? 
Why would you want to mess with a policy that is bringing in what would 
now have to add up to $750 billion more than what we anticipated would 
be coming into the Federal Treasury from that tax policy when we 
adopted it? And in the process, we would be punishing the American 
taxpayers, who are already working hard and paying additional revenue 
at a lower level of taxation, as we passed it in 2001 and 2003.
  The biggest problem I have with a trigger is that it creates yet 
another budget process bias for higher Federal spending. If Congress 
decides to spend more than planned, the trigger gives the American 
taxpayer the shaft. Spending taxpayers' money then trumps future 
promised tax relief if a trigger is in place. The American taxpayer 
need look no further than the budget resolution conference report that 
we are debating now to see triggered future tax relief's futility.
  After winning the November elections by claiming to enforce fiscal 
discipline, Democrats have done three things with the budget in 
conference: One, they have guaranteed new spending of at least $205 
billion over the budget baseline. Secondly, with multiple reserve 
funds, they have set up many arenas of new spending and new taxes. 
Thirdly, for the first time in 6 years--I emphasize this--with a new 
majority in Congress, a tax hike on virtually every American taxpayer 
is built into the budget in future years. Now, did the American people 
know this was how the term ``fiscal discipline'' would be defined after 
the votes were counted last November? Higher taxes and higher spending. 
Did the American people vote for this definition of ``fiscal 
discipline'' after the

[[Page 11760]]

last election? My guess is the answer is the American taxpayers didn't 
think ``fiscal discipline'' meant higher taxes and higher spending.
  If fiscal discipline were the real goal of the new Democratic 
leadership, they would employ a trigger, then, on the new spending they 
baked into this budget cake. How about that. The new spending in this 
budget would only be triggered if the Federal budget were in surplus. 
Do I have any takers among the Democratic budget negotiators on that 
issue?
  Before the Democratic leadership rolls out its budget, I challenge 
them to show a proposal with a single dollar of spending restraint 
dedicated to deficit reduction. It is a challenge I have issued for 
several years since bipartisan tax relief has been attacked on fiscal 
discipline grounds. My challenge has not been met. If you go back a 
decade, you will not find a proposal for spending restraint from the 
Democratic leadership. Check the record. You won't find anything on the 
spending side of the ledger.
  The use of a trigger is more evidence of this obsession with higher 
taxes and more spending. Instead of accepting the Baucus amendment, 
which is supported by a strong bipartisan vote in both bodies because 
it passed here with only one dissenting vote and it had more than two-
thirds on a motion to instruct in the House of Representatives--so 
instead of accepting the Baucus amendment, which is supported strongly 
by bipartisan votes in both Houses, the Democratic negotiators are 
taking a different path, ignoring the overwhelming votes of both the 
Senate and the House. They want to use a trigger as cover. The trigger 
will mean that future Democratic spending proposals will gut future tax 
relief, thereby guaranteeing a tax increase on virtually every American 
taxpayer, without even a vote of the people, because it is 
automatically going to happen.
  I don't think it is too late. I suggest that if the Democratic 
budgeteers want to talk the talk of fiscal discipline, then walk the 
walk of fiscal discipline, apply the trigger to spending, but apply it 
to the $205 billion in brandnew spending. Don't build a wall of tax 
relief on the American people; build a wall of fiscal discipline 
against runaway Federal spending. In other words, we will tear down 
that wall of tax increases that are automatically going to happen.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Cantwell). The Senator from North Dakota 
is recognized.
  Mr. CONRAD. Madam President, it is hard to debate the Senator from 
Iowa, the ranking member of the Finance Committee, because he has been 
a really good colleague and he has strong feelings about these issues. 
In many of these matters, I find myself in agreement with him.
  I want to say to those who are listening that we don't believe there 
is any tax increase in our proposal. We believe there is significant 
fiscal discipline because we are balancing the budget by 2012. There 
has been no balancing of budgets around here during the 6 years of this 
administration. They have run up record deficits. They have run up 
record debt. It is not a matter of speculation, what they have done.
  If you look at the record of this administration on debt, it is just 
as clear as it can be. This is what happened on their watch. They have 
been in control of everything--the House, the Senate, and the White 
House.
  This is what has happened. They took the debt of the United States 
from $5.8 trillion at the end of the President's first year--we don't 
hold him responsible for the first year because he was operating under 
the previous administration's budget. But look at what he is 
responsible for. He has taken this gross debt of the United States from 
$5.8 trillion to $9 trillion, and if his fiscal policies are pursued 
the next 5 years, he will have taken the debt to $12 trillion. He will 
have more than doubled the debt of the United States.
  One of the major consequences of that is, increasingly, this funding 
is from abroad. We are dependent upon the kindness of strangers. It 
took 42 Presidents 224 years to run up a trillion dollars of debt held 
by foreigners. This President, in just 6 years, has more than doubled 
that amount. Now, that is a fiscal train wreck, and this administration 
is responsible, along with his party in the House and the Senate. It is 
undeniable. They controlled things here, not the Democrats. It wasn't 
the Democrats who ran up this debt, it was the Republicans.
  I don't like to be partisan, but the fact is, when I hear the other 
side claim that we are going to do something, they have already done 
it. It is not a matter of projection or of conjecture; it is a matter 
of fact. That is the debt they have run up. We are left to try to clean 
up the mess.
  How do you clean up the mess? You spend less money. That is what we 
have tried to do here. We have controlled spending. We have a chart 
that shows this. Here is the spending under the budget resolution. We 
go from 20.5 percent of GDP in 2008 down to 18.8 percent of GDP in 
2012. It is by having spending discipline that we get this budget 
moving in the right direction and we are able to balance the budget by 
2012 and we are able to stop this dramatic expansion of the debt.
  Here is what happens. Under our resolution, the debt, as a percentage 
of the GDP--which economists say is the best way to measure it--goes 
down each and every year after 2009. Finally, we get the debt going 
down instead of jumping up. That is what we should do. That is what is 
so defective about the Gregg motion. If it is adopted, the budget will 
not balance in 2012 because he has $250 billion of tax expenditures not 
paid for. So he is, once again, going to return to the bad old days of 
borrow and spend, borrow and spend, borrow and spend.
  Look, the spending on their watch has gone up dramatically. The 
revenue, as I have shown before, stagnated. All their revenue charts on 
which they talk about revenue increasing have one big problem: They 
only show the revenue from 2004 to now. They don't show the revenue in 
the previous years. Here is a chart here. Spending has gone up, and 
revenue has been stagnant. Look at all their charts. They only show the 
revenue from 2004. They want you to forget about these years. Yes, if 
you look at 2004, revenue has gone up since then. But go back to 2000. 
Quite a different picture emerges when you give people the whole story, 
when you give them all the years, not just a few of the years. No, no, 
no, give them all the years, tell them all the story, give them all the 
facts. Then you see something quite different.
  We are just getting back now to the real revenue level we had 6 years 
ago. Yet spending under our friends has gone up more than 40 percent. 
The result has been to explode the debt of the United States.
  We are going in a different direction. We are going to balance this 
budget, but not if the motion of the Senator from New Hampshire is 
adopted. Then there will be no balance. Then we will be right back in 
the same old deficit-and-debt ditch that we have been in for 6 years.
  Let's climb out of that ditch. Let's stop it. If we are going to have 
spending on this war, let's pay for it. If we are going to spend money, 
as we should, to take care of our Nation's veterans, let's pay for it. 
If we are going to have educational initiatives to assure that America 
remains the dominant force in the world, let's pay for it. If we are 
going to insure children in this country so that every child has health 
insurance, and we should, let's pay for it. That is what our budget is 
about. It is about the values of the American people.
  I can tell my colleagues, in my State, they believe if you are going 
to spend money, you ought to cover the spending and not just put it on 
the charge card.
  I thank the Chair and yield the floor. My colleague is here, and I 
understand there is some time left on the Republican side. I recommend 
we use that, and then if Senator Cornyn comes, if we are out of time, I 
will extend time to him so he has time to present his motion.
  The PRESIDING OFFICER. The Senator from Wyoming.

[[Page 11761]]


  Mr. ENZI. Madam President, I thank the Senator from North Dakota. I 
always appreciate his ability to find charts and give excellent 
explanations. We both have degrees from the George Washington 
University. My speech will not be nearly as adequate as his because I 
just have an undergraduate degree, whereas he has a graduate degree. I 
am sure that is where they covered the chartmaking. I usually don't use 
very many charts.
  Mr. CONRAD. Madam President, I would be glad to lend some to the 
Senator.
  Mr. ENZI. I don't think the ones the Senator has have quite the spin 
on them that I prefer. That is what we do during this process of the 
budget. I am always fascinated with the budget process anyway because 
the President sends us a bunch of suggestions on how we ought to spend 
money. I know the people back in Wyoming think that is the way it is 
all going to come out.
  In Wyoming, we have just one process, and it is called the budget 
process. It is really the appropriations process. When the budget is 
done, balanced, and the money is spent, they think that is the point we 
are at right now instead of just suggestions from the President. We all 
know that Senators are going to change, and we are the ones in charge 
of making those changes. They really don't understand that the federal 
budget process puts in place some constraints on spending, some areas 
of spending, and some suggestions on spending that the Appropriations 
Committee may or may not pay any attention to anyway. But discipline 
can come from this part of the process.
  I commend everybody on the Budget Committee for all the diligence 
they put in to covering a variety of issues. There is some good debate 
we have over issues, where we are, where things were, and where things 
are going.
  I do note when the President came into office, he had no idea that 
September 11 was going to happen or that Katrina was going to happen. 
Both of those events put major dents in the budget.
  There was also a little recession that was happening about the time 
he took office, which is one of the reasons there is a dip in revenue. 
We tried to figure out how to reverse that dip in revenue. If we have 
more revenue, unfortunately, we do more spending. It really is spending 
that is the problem.
  It would be fascinating to see how the Democratic side of the aisle 
deals with that situation. I have noticed quite a change in rhetoric. 
People at one time were talking about No Child Left Behind, how it had 
a tin-cup budget. I hear those same people now saying: Yes, No Child 
Left Behind has to have a few targeted resources to make a difference. 
That is quite a bit different wording, and when you are in charge of 
spending it, it hits a little bit different than when you are on the 
criticism side of the spending. I am sure those in charge will 
appreciate that as time goes by.
  I wish to address the way the Democrats balance the budget, though. 
This budget, as it is showing coming down to a more balanced position 
and even a little faster than what the President showed, does that 
because of the way the taxes are handled.
  Without dealing with taxes at all, taxes for Americans will go up. 
There needs to be an extension of certain tax provisions or taxes will 
go up. When taxes go up, will that increase revenue? I don't think so. 
That is one of the problems with which we have to deal with.
  We found that with the tax cuts, revenue has gone up, and it has gone 
up in excess of what was projected. That means the American people are 
excited over the ability to spend their own money for what they want to 
spend it on, and the spending of their money also results in additional 
taxes.
  I have a chart that shows the projections--they are in blue--and the 
actual revenue. The growth in revenue is in red. In 2004, they 
projected a 2-percent increase and came in at 5.5 percent; 2005, 9.4 
percent, came in at 14.6 percent; 2006, 7.3 percent, came in at 11.7 
percent; 2007, the projection is 5.2 percent; to date it is 11.3 
percent.
  I am sure somebody else has mentioned this article earlier today, but 
the Wall Street Journal has an editorial titled ``April Revenue 
Shower.'' It says:

       Here's the ``surge'' you aren't reading about: the 
     continuing flood of tax revenue into the Federal Treasury. 
     Tax receipts for April were $70 billion above the same month 
     in 2006, and April 24 marked the single biggest day of tax 
     collections in U.S. history, at $48.7 billion, according to 
     the latest Treasury report.

  It goes on and explains that the IRS did process more returns than 
usual this year. Does that mean more people are paying taxes? Let me 
put up another chart. The tax cuts also resulted in additional jobs. 
The employment expanded for 44 consecutive months, generating 7.8 
million jobs. People who have jobs pay taxes. More returns, more people 
working. I think that is one of our goals. We would like to have more 
people working, and we would like to have people who are working make 
more money. Then, of course, we would like them to keep a bigger 
percentage of the money they earn to spend the way they think it ought 
to be spent.
  I mentioned there is more money coming in than what we had expected, 
than what was projected. That does affect the deficit. The more money 
we get beyond what was expected is a reduction in deficit, unless we 
spend it.
  There are more ways of figuring out how to spend money around here 
than there are ways to save money. The President has had a number of 
proposals for different programs that have been evaluated. There is a 
process by which we do expect different programs and agencies to set 
their own goals, and then to report how they did on their own goals. 
The White House followed up on that process to see how they did on the 
report and how they did on their own goals and found 160 programs that 
were not doing what they said they would do. That is according to their 
own goals. He asked us to eliminate those programs.
  We kind of did four. Now ``kind of did'' means they are still in 
existence, and they are flat lined. It doesn't mean we eliminated what 
was being spent on them because every program in the Federal Government 
has a constituency. Every time, even in the President's suggested 
budget, that he shows cutting an agency, all of us in this body have 
dozens of people come to our office to show how important that program 
is to them personally. A lot of them are the ones who work in that 
program. They have a job in that program, and if the program 
disappeared, they would have to get a job somewhere else. So they are 
definitely involved in the program and concerned with the program and 
feel the need to sell the program.
  I have had experience with some of those programs in Wyoming. When 
the President says in his budget he is going to cut a program, they 
gang up on us at home, too. One of the programs dealt with children's 
preschool education. The moms and the kids showed up, and they visited 
with me a little bit. I asked them what they would be losing if the 
program went away. The answer was their daytime babysitting service.
  The program in question was designed for an hour or two a week in 
conjunction with the parent, not with the parent absent from the 
program. It is a little bit of instruction on parenting education, as 
well as child education, preschool education. This is how the goals get 
a little skewed. They serve a purpose; it just doesn't happen to be the 
purpose we are funding. Probably the other purpose could be funded with 
a lot less money than with the requirements we have for education.
  It is the spending that gets us into problems. The way we are going 
to balance the budget under the Democratic budget proposal, of course, 
is to allow decreases we have had in effect because they have a limited 
amount of time in place. It allows them to go up. For instance, there 
will be an increase in taxes of 33 percent for families earning less 
than $15,000. It cuts the child tax credit in half to $500. It cuts the 
standard deduction by $1,700 for married couples. It puts that marriage 
penalty back into effect.
  For a family of four with $50,000 in earnings, the tax bill for a 
family of four with $50,000 in earnings would see

[[Page 11762]]

their taxes go up 132 percent to $3,675 in 2011 if the President's tax 
relief is not made permanent. Those taxes will reduce take-home pay by 
more than 6 percent.
  Let's talk about a single parent with two children and about $30,000 
in earnings. The tax bill for a single parent with two children and 
$30,000 in earnings will see their taxes go up by 67 percent in 2011 if 
the President's tax relief is not made permanent. Those taxes will 
reduce take-home pay by more than 4 percent.
  So a family of four with $50,000 in earnings, their take-home pay is 
reduced by 6 percent. A single parent with two children with $30,000 in 
earnings, their take-home pay will be reduced by more than 4 percent.
  What about the average family? What are they going to forego if the 
current tax policy is not extended? Some of the tax cuts have not been 
extended to 2011.
  I am also distressed with the way the scoring happens on taxes versus 
spending because there is a lot of assumption built into the process. 
If they were corporate assumptions, the directors of the corporation 
would be in a lot of trouble.
  For the average family under the current tax policy, if it is not 
extended, they might have to forego $3,347. That could be spent on 
groceries, or a year's worth of home heating oil and electricity. It 
would be $2,927 or almost 2 years of gasoline for two cars, $3,196, and 
that was before last week's increases, and, yes, we need to be 
concerned about that issue. There are some policies that we can do that 
will make a difference in that situation.
  It will also mean more than a year's worth of health spending, which 
is $2,574 for the average family. Again, there needs to be some things 
done in the health area. Most of those cost money and those will add to 
the deficit too.
  So it will be interesting to see how everyone gets around to 
balancing the budget in whatever number of years we talk about because 
all the spending happens in the next year. We are working on the 2008 
spending right now, but we are spending the 2007 budget that went into 
effect last October and extends until this October. So there are some 
timelines that get into this that make it a little confusing.
  It is wrong to balance the budget by increasing taxes on middle 
America, who is feeling the squeeze. The burden is placed onto low-
income people. So I hope we will not balance the budget by eliminating 
the tax relief that has been put in place by the Republicans, which 
increased the number of jobs and brought the revenues back up.
  I yield the floor, and I 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. Madam 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. Madam President, I am told Senator Cornyn is on his way, 
but I would ask my colleague, Senator Stabenow, if she would like to 
take a few minutes at this time to address her motion and then if we 
could have an agreement that when Senator Cornyn comes, we could 
interrupt your presentation at a reasonable point in time and then go 
to the Cornyn motion.
  That is the order, but I think it would be unwise for us to waste any 
time here, given the fact we are very close to out of time. Would that 
be acceptable?
  Ms. STABENOW. Yes.
  Mr. CONRAD. Why don't we do that, and I thank Senator Stabenow very 
much for allowing us to proceed in that manner.


                      Motion to Instruct Conferees

  Ms. STABENOW. Madam President, I rise to offer a motion to instruct 
conferees to include section 307 of the Senate-passed budget resolution 
in the conference report.
  The PRESIDING OFFICER. The clerk will report the motion.
  The legislative clerk read as follows:

       The Senator from Michigan [Ms. Stabenow] moves to instruct 
     conferees on S. Con Res. 21, the concurrent resolution on the 
     budget for fiscal year 2008, to insist on including in the 
     conference report the Deficit-Neutral Reserve Fund for Energy 
     Legislation in Section 307 of S. Con. Res. 21 as it passed 
     the Senate which would provide for legislation to reduce our 
     Nation's dependence on foreign sources of energy and lower 
     gas prices.

  Ms. STABENOW. Madam President, this provision will clear the way for 
the Senate to pass legislation that will ultimately lower gas prices. 
This is an issue right now of great concern, I know, to people 
throughout Michigan and throughout the country, as we see prices going 
up and up and up. This provision does that by putting into place a 
reserve fund that will reduce our Nation's dependence on foreign 
sources of energy and expand production and use of alternative fuels 
and alternative fuel vehicles.
  This is a very important part of the budget resolution, and I wish to 
commend the chairman for putting aside a reserve fund so we can create 
revenues to do a number of things that will create energy independence 
and that will create competition, frankly, for the oil companies in 
this country so we can lower gas prices.
  Today, in Michigan, the average price of a gallon of gas is $3.15, 
and it goes up as high as $3.24. I know it is going to go up and up. We 
are constantly hearing, of course, it is not arbitrary, that it is all 
based on competition. Yet I will bet you that right before Memorial 
Day, in Michigan--a great tourism State, and people want to have an 
opportunity to travel and see our Great Lakes--the prices are going to 
continue to go up even further. This summer, again because we are a 
great tourism State, prices are going to go up, and they will go down 
when it is not a peak season for driving. We all know that this is a 
serious issue, and, frankly, it affects every single family in their 
wallet or in their pocketbook.
  A couple years ago, I offered, successfully, a provision in the 
Energy bill that required the Federal Trade Commission to do a study, 
an investigation into whether there was price gouging. They came back 
basically and said there wasn't and that they didn't have the authority 
because we didn't define what price gouging was. I am pleased to say 
that as a result of our presiding officer and her legislation, we can 
address what is happening as it relates to the definition of price 
gouging, which anyone in Michigan can tell you what it is, and also to 
be able to give the authority to the FTC to do something about it.
  I see my colleague on the floor whom I basically jumped ahead of, so 
I think if he is ready, I will turn it over to him and will later 
proceed to talking about gas prices and how we are going to bring them 
down and how the budget resolution lends itself to that.
  I yield to my colleague from Texas.
  The PRESIDING OFFICER. The Senator from Texas is recognized.


                      Motion to Instruct Conferees

  Mr. CORNYN. Madam President, I send a motion to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the motion.
  The legislative clerk read as follows:

       The Senator from Texas [Mr. Cornyn] moves that the 
     conferees on the part of the Senate on the disagreeing votes 
     of the two Houses on the concurrent resolution S. Con. Res. 
     21 (the concurrent resolution on the budget for fiscal year 
     2008) be instructed to insist that the final conference 
     report include the supermajority point of order against 
     consideration of any bill, resolution, amendment, amendment 
     between Houses, motion, or conference report that includes a 
     Federal income tax rate increase, in order to protect the 
     pocketbooks of working and middle-class families, college 
     students, seniors, farmers, small business owners and 
     entrepreneurs, and to promote the elimination of government 
     waste, fraud, and abuse to reduce the deficit and offset new 
     spending, as contained in section 210 of S. Con. Res. 21, as 
     passed by the Senate.

  Mr. CORNYN. Madam President, this motion to instruct conferees should 
sound familiar to my colleagues. This actually was an amendment to the 
budget resolution that received 63 affirmative votes in a bipartisan 
show of support for what I believe is a commonsense provision. This 
provision says that before we raise income taxes, we need to have a 60-
vote point of order to do that.

[[Page 11763]]

  This made so much sense that my colleague, the distinguished chairman 
of the Budget Committee, said he would be willing to accept the 
amendment by voice vote, although we went ahead and had a vote. I 
thought the vote was necessary to demonstrate, and did demonstrate, the 
broad bipartisan support for this amendment. This amendment, which was 
section 210 of the Senate-passed budget, creates a 60-vote budget point 
of order against any legislation that raises income taxes on taxpayers, 
including, of course, hard-working, middle-class families, college 
students, entrepreneurs, and you name it.
  As I pointed out, this was a bipartisan vote, which is an insurance 
policy of sorts so that Congress can look and make sure any increase in 
income taxes is justified and that it would require a vote of 60 
Senators to overcome the budget point of order before proceeding. The 
reason I thought this was a good idea in the first place is that before 
we look at raising taxes on hard-working American taxpayers, we ought 
to look at ways to eliminate Government waste, fraud, and abuse.
  We all know the power to tax is the power to destroy, and, indeed, it 
is a powerful tool at Congress's disposal but one we ought to use 
advisedly. This point of order puts in place a safeguard that will 
protect the pocketbooks of all of us.
  Some, though, are now advocating that we pull the rug out from under 
our economy and roll back the kind of tax relief and low taxes--
progrowth policies--that have resulted in an incredible blossoming and 
blooming of the American economy. The last thing we should do would be 
to throw a wet blanket over this kind of economic growth that has 
created so much prosperity, so much opportunity, and so many new jobs 
over the last few years.
  The progrowth tax relief has helped this economy grow and 
particularly in the small business sector, which has created a lot of 
jobs. We should view this as a matter of great pride because it is one 
of the good things that this Congress has done in the last 4 years. 
These progrowth tax policies are working. As a matter of fact, we have 
some charts that demonstrate 22 straight quarters of growth and almost 
7.9 million new jobs. That is nothing to be sneezed at. There have been 
almost 7.9 million new jobs over the past 44 consecutive months, with 
22 quarters of growth.
  As we move forward, the last thing we should consider doing is 
reversing the policies that have helped bring about America's booming 
economy, which has reduced the deficit by producing more money for the 
Federal Treasury and also put more money in the pockets of hard-working 
American taxpayers.
  As a matter of fact, I think we ought to take a further step and make 
these tax relief provisions, which are set to expire unless we fail to 
act, I think we ought to make them permanent. If we don't, we will not 
only jeopardize future economic growth but also the financial well-
being of millions of Americans, all of whom will face higher tax bills 
unless we act.
  Not making this tax relief permanent will result in a tax increase 
for every American taxpayer. For example, a family of four, with two 
children, making $50,000 in annual income would see an increase of 
$2,092 in their tax bill or a 132-percent increase.
  This point of order will not hinder our efforts to close down illegal 
tax shelters or close perceived loopholes in the IRS Code, a concern 
that I know the chairman expressed. In the colloquy we had when the 
amendment was passed, I think I was able to satisfy him that we would 
still be able to do what we both agree needs to be done but not see a 
tax increase on American taxpayers virtually assured.
  The point of order covers the tax tables contained in the 1040 form 
the IRS sends to taxpayers every year. It will not hinder efforts to 
overhaul the IRS Code. I support efforts to overhaul the IRS Code by 
making it fairer, flatter, and simpler. Any tax simplification and 
reform efforts will need bipartisan support in the Senate, so I ask my 
colleagues to support my motion to instruct the conferees to include 
the point of order against raising income taxes on hard-working 
taxpayers through the budget conference committee.
  I might add, in closing, I have had conversations with the 
distinguished chairman of the Budget Committee. I know he has concerns 
as a result of conversations he has had with the Parliamentarian. There 
has been some suggestion that to include this provision in the 
conference report would render the conference report unprivileged. I 
believe there was demonstration of broad bipartisan support for this 
provision, which enjoyed a 63-to-35 vote on the Senate floor. While I 
certainly understand the budget chairman's desire to maintain a special 
privileged status for the budget resolution, I think in this case it 
would be warranted.
  Including this provision will act as an insurance policy against 
undesirable and unnecessary tax increases, especially until such time 
as we do our dead level best to reduce the waste, fraud, and abuse 
that, unfortunately, is present in Government today and to try to save 
money there before we begin raising taxes. It is particularly important 
because we have this silent tax increase that is, unfortunately, 
included in this framework that will now occur if we do nothing. This 
will be the only tax increase I am aware of that will actually happen 
if we fail to act, but that is what, unfortunately, we are on course to 
do with this budget resolution.
  So I would respectfully ask my colleagues to support the motion to 
instruct conferees on this matter.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Madam President, let me first thank my colleague for his 
service on the Budget Committee. He has been a valuable member there. 
We do not always agree, but he has been a very constructive member of 
the Budget Committee. He comes with a point of view and he does his 
homework. All of us appreciate that, I and the other members of the 
committee. I thank the Senator from Texas.
  Let me say it would be fine with me that we adopt this motion because 
there is no contemplation in this budget resolution of a tax rate 
increase. There just is not. I want to make that clear.
  We do have a problem. I want to be very direct with colleagues. This 
motion will not survive the conference committee. It will not. It has 
nothing to do with its merits. It has to do with the procedural 
ramifications of bringing this back from the conference. We have been 
informed by the Parliamentarian, if the conference agreement reflects 
this motion, the budget resolution would be in danger of losing its 
privileged status on the floor. That would be a very serious matter for 
all of us. That would be a serious matter for this institution.
  We have a hard enough time getting a budget. If it were to lose its 
privileged status on the floor, I suggest to my colleague, we would 
never reach conclusion on a budget. That is in none of our interests. 
It is not in the interests of the country, it is not in the interests 
of the Senate, it is not in the interests of the House.
  I regret that is the reality we confront, but it is. I don't want 
anybody to be under any misapprehension about that. It is fine with me 
if we adopt that as an instruction to the conferees because it reflects 
the will of the Senate. We voted very clearly: 63 votes, as the Senator 
has indicated.
  I say to my colleagues, there is absolutely no intention in this 
budget of increasing tax rates, which is what the Senator is trying to 
guard against. But I do have to emphasize if we were to bring it back 
from conference, we have been informed that would put at risk the 
privileged nature of the budget resolution, and we simply cannot do 
that. If we did that, we truly will never agree on a budget here.
  Does the Senator seek more time?
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. CORNYN. Madam President, if I can respond briefly to the 
distinguished chairman of the Budget Committee, I appreciate his 
willingness to take this motion to instruct because he

[[Page 11764]]

said it will not survive; it will not see the light of day; it is going 
to be killed in the dark recesses of the conference committee room.
  Mr. CONRAD. Even in the lighted room.
  Mr. CORNYN. So it is a very strange process we are engaged in here. I 
respect the distinguished chairman, but I remind him, at the time we 
voted on this, to quote him, the distinguished chairman of the Budget 
Committee said, ``It certainly will not do any damage to this 
resolution if it were to pass.''
  I understand there was a subsequent conversation with the 
Parliamentarian that raised this issue. But I suggest in most 
proceedings that I am familiar with, there is some notion of waiver, 
that you have a responsibility to speak early, rather than to create a 
false impression that we are going to do something here to keep taxes 
low, to create a 60-vote budget point of order, rather than lay low and 
then raise an issue late in the game that could have been raised and 
addressed earlier.
  None of that is to impute any bad faith to the distinguished chairman 
of the Budget Committee. It is just to say this is a very strange 
process, one I think the American people, anybody who happens to be 
listening or watching, would say: This must be a Washington, DC 
phenomenon where we suspend reality, we accept amendments by a 
bipartisan vote and now a motion to instruct, only to ignore them even 
though they represent the will of the Senate. I think that does not 
enhance the image of the Senate or the Congress in the eyes of the 
American people. The fact is, if we do raise taxes, it will be like a 
wet blanket on the American economy.
  I want to allude briefly to an article that was in the Wall Street 
Journal today that I think demonstrates my point. It is entitled 
``April Revenue Shower.'' It says:

       Tax receipts for April were $70 billion above the same 
     month in 2006, and April 24 marked the single biggest day of 
     tax collections in U.S. history, at $48.7 billion.

  It is the low taxes and the progrowth policies that this Federal 
Government has embraced since roughly August of 2003 which has 
generated the economic activity which has resulted in a windfall to the 
Treasury. As a matter of fact, this article goes on to say:

       The deficit this year could tumble to $150 billion, or an 
     economically trivial 1 percent of GDP.

  That is the kind of benefit--one of the kinds of benefits--I think 
low taxes have produced. I think it would be a crying shame to raise 
taxes and jeopardize job growth and economic development in this 
country.
  I understand what the Senator says, that he doesn't intend that there 
is going to be a tax increase, but we have seen proposals for dramatic 
increases in spending. The money has to come from somewhere. We have 
adopted a pay-as-you-go provision which has a built-in bias against tax 
cuts because it says before you can have a tax cut, you are going to 
have to have some way to balance it out, a revenue raiser, which means 
in the end we are going to see a dramatic increase in taxes, whether--
and I take him at his word that is not his intention. But we are on a 
dangerous course to seeing a huge tax increase, perhaps one of the 
biggest in our Nation's history. That, I believe, is against the best 
interests of the American people in this big economy.
  I accept what the Senator has to say. He is willing to accept my 
motion to instruct, but it will not be to any effect. It will be 
ignored. I guess that is the way it is. But I think the American 
people, and particularly the hard-working taxpayers, are the losers. I 
think that is a shame.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, let me say to the Senator, I know he 
doesn't intend to impugn my motives. I hope that impression hasn't been 
left, because I operated in absolute good faith in the committee. I 
told him his motion would do no harm because there was no intention of 
increasing rates in this budget resolution. There truly is not.
  I only learned subsequent to that that there was a procedural 
problem. As soon as I learned, I think the Senator will acknowledge, I 
came to him on the floor, some weeks ago, and told him of what we had 
learned and urged him to send his staff to the Parliamentarian to 
verify that what I was saying was in fact the case. I have been in 
communication with him subsequent to that, to confirm that he had heard 
the same thing. In fact, he told me that on the floor late this 
afternoon.
  I regret that I told him it would do no harm. I absolutely believed 
that was the case when I told the Senator that. It was only 
subsequently that I learned from my staff that the Parliamentarian 
advised us of that. I should have known it. In the back of my mind I 
was worried about the Budget Committee overstepping its bounds.
  It is very important for people to understand, we tell the Finance 
Committee how much money to raise. We do not have the authority to tell 
them how. Unfortunately, the motion of the Senator crosses that line.
  We tell the Appropriations Committee how much money they have to 
spend. We do not have the authority to tell them how to spend it. If we 
exceed our authority, there are consequences.
  I must say I was concerned at the time of the Senator's amendment in 
the committee that maybe we were crossing that line, and in fact it 
turns out we were. That is the fact of the matter. That is what we 
confront here. I say to the Senator, I hope he would acknowledge I have 
tried to communicate with him, as soon as I knew it, that these are the 
facts we confront.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. I said it once and I will say it again. The distinguished 
chairman of the Budget Committee, I am confident, is shooting as 
straight as he could possibly do with me. I do not question his motive 
or his actions. I express my profound regret that an amendment that 
reflects the will of 63 Senators, that is bipartisan, and one that is 
so important to maintaining the prosperity of this Nation and relieving 
the burden on hard-working American taxpayers will not see the light of 
day in this budget resolution. I am expressing my regret to him. But he 
has been nothing but straight to me.
  Mr. CONRAD. Madam President, I thank the Senator very much for that. 
I say I have so many regrets, as we go through this budget process, 
that we do not have authority that one might assume the Budget 
Committee does. But we simply do not. We are in this role of telling 
the Finance Committee how much money to raise, but we cannot tell them 
how to do it. We tell the appropriators how much money they spend, but 
we do not have the authority, as much as we might like it, to tell them 
how to spend it. If we cross that line, there are real consequences.
  In any event, I very much appreciate the Senator from Texas.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Madam President, I express my support for the efforts of 
the Senator from Texas. I understand the parliamentary situation. It 
has been ruled that if his amendment were accepted and finds it way 
through the entire process--it is going be accepted, but if it were to 
come back, it would put in jeopardy the privileged status of the budget 
and that is obviously not appropriate.
  But the fact is this amendment highlights an essential point. Even 
though it may not come back, it is important that we be on record as 
having supported it, as the 63 people did, and as we will be when we 
adopt this amendment in this motion to instruct, because it makes the 
statement, which the Senator from North Dakota has agreed with, that 
rates should not be increased.
  Unfortunately, the structure of this budget, in my humble opinion, 
militates toward increasing rates. I do not see how it does anything 
else in the final analysis. That, of course, is why I have offered my 
own motion to instruct here, so the rates will not be increased, or at 
least we will have that statement.
  But I think the Senator from Texas has hit the nub of the issue, 
which is we should not be increasing tax rates

[[Page 11765]]

on the American people. No matter what the structure of this budget is 
when it comes back, even if it doesn't have this language, there will 
be a pretty clear statement by this Senate that rates should not be 
increased, and should at some point down the road there be a bill 
brought to the floor, which will be, I am afraid, reflective of the 
priorities of this budget, which does increase rates--or fails to 
maintain the rates which are presently in place and thus in the 
alternative is increasing rates--we can turn to the excellent amendment 
of the Senator from Texas and say that was not the position of this 
Senate. The position of the Senate was that would not happen.
  I think his amendment, even if it may not return from conference 
because of the effect it would have on the privileged status of the 
budget resolution, is still a very effective statement and one that 
needs to be made.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Madam President, would it be appropriate at this moment 
to take the motion of the Senator?
  Madam President, could we then consider the Cornyn motion on a voice 
vote?
  The PRESIDING OFFICER. If all time is yielded back, the question will 
be put on the motion.
  Mr. CONRAD. We yield back our time on this side.
  Mr. CORNYN. We likewise yield back our time on this motion.
  The PRESIDING OFFICER. If all time is yielded back, the question is 
on agreeing to the motion.
  Ms. STABENOW. Madam President, I have a question. The yielding back 
is time on this motion only?
  Mr. CONRAD. Yes. We would not be yielding the good Senator's time.
  Ms. STABENOW. I thank the Senator.
  The PRESIDING OFFICER. If all time is yielded back, the question is 
on agreeing to the motion.
  The motion was agreed to.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. I would ask if we could have a report on the time 
remaining on the motion of the Senator from Michigan.
  The PRESIDING OFFICER. The sponsor of the motion has 27 minutes 
remaining, and the opposition has 30 minutes remaining.
  Mr. CONRAD. We have a problem. We have less time left than time 
allocated because the vote has been set at 7:30. So we will try to be 
reasonable so that both sides have a fair shot at the remaining time.
  Madam President, I ask unanimous consent that on the motion of the 
Senator from Michigan, we divide the remaining time 15 minutes apiece 
before the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Michigan.
  Ms. STABENOW. Madam President, first, following the debate we have 
just been engaged in, let me say that I am very proud of this budget 
resolution because we are not only not raising taxes, but we are 
focused on lowering taxes, tax cuts for the middle class. That is what 
I am most proud of in this budget. Our budget is focused on middle-
class families, what families need who are feeling the crunch at every 
turn right now in their lives. So we specifically focus on tax cuts for 
middle-class families.
  We also focus on what I want to talk about now as it relates to the 
motion to instruct; that is, an energy reserve fund that puts in place 
a set of policies and allows us to move forward to lower gas prices. I 
mean, ultimately, that is what it is about. Let's get off of foreign 
oil. Let's become energy independent. Let's focus on alternatives.
  We have a whole range of things we can and should do together, but 
the bottom line is what people are asking me about right now in 
Michigan is why in the world gas prices today are $3.15 per gallon on 
average. They ask it in the context of another very important question; 
that is, since this President, President Bush, has taken office, gas 
prices in my State have increased by $1.75 per gallon--$1.75 per 
gallon, an increase of 123 percent. This is according to the Federal 
Highway Administration. Right now in Michigan, families, businesses, 
farmers will spend $789 million more this month than they did in 
January of 2001. That is according to the Department of Energy motor 
gasoline consumption, price, and expenditures.
  Now, what is happening, though? What is wrong with this picture? 
While I have been seeing my constituents, and I know the Chair shares 
this concern, that while we see these prices going up, what has 
happened on the other side with the oil companies? Well, last year, 
ExxonMobil had $39.5 billion in profits, the largest annual corporate 
profit in U.S. history, the largest corporate profit in U.S. history, 
while the people in my State--the farmer planting in the fields, the 
businesspeople who are doing their jobs, the families, the folks going 
back and forth to work, taking the kids to childcare, the students 
trying to go back and forth to school--saw their gas prices go up.
  In fact, they will go up higher right before Memorial Day. I will bet 
you they are going to go up higher in a beautiful State like Michigan, 
where we want everyone to come in and swim in our Great Lakes and boat 
and fish and enjoy what is beautiful about Michigan. When the tourism 
season comes--you can count it on your watch--gas prices are going to 
go up.
  We hear all about how there is competition when, in fact, we know 
there is not competition. When you are driving down the road, this gas 
station says one thing and the one on the other side says the same 
thing.
  Now, this has to stop. We are seeing, not only last year--I am 
speaking about ExxonMobil, but let me just say there are others. 
Chevron had an 18-percent increase in the first quarter this year--an 
18-percent increase. But we are seeing with Exxon that they kicked off 
a 10-percent rise in profits, the best ever first quarter, ever, in net 
profit. To put it another way, with Exxon, their take-home pay equals 
$1,080 every time the second hand ticks on your clock--every second, 
$1,080--while the folks in Michigan today are paying $3.15. If you 
happen to be up north, it is $3.24. This is not right. I know you agree 
with this. This is not right.
  There are a number of things we need to do about it. In the short 
run, we need to make sure the Federal Trade Commission has the 
authority--and understands that we expect them to use it--to define 
price gouging.
  Now, in the Energy bill that passed in 2005, a requirement that I 
offered was put into the Energy bill that the FTC had to investigate 
price gouging. They came back and said they did not have the authority, 
we had not defined what it was. They made some general statements that 
really did not reflect what was going on. So now I am very pleased that 
Senator Cantwell from Washington State and others have introduced 
legislation that will clearly define what price gouging is, although I 
have to say, after years and years of witnessing it, if it walks like a 
duck and quacks like a duck, I think most people in Michigan, anyway, 
would call it a duck. So we find ourselves in a situation where the FTC 
says they do not have the authority or the definitions to use. So we 
want to give them that. We want to give them that in the short run to 
make sure they can address what is clearly an unfair situation.
  Families are seeing increases on all sides, not just gas prices; it 
is the cost of college; it is the costs that relate to health care in 
my State. In fact, I should just remind folks that when we hear about 
all of the rosy pictures in the last 6 years, we have lost 3 million 
manufacturing jobs since this President has taken office--3 million. 
Those were good-paying jobs with health care and pensions, and those 
families now, those workers, are out working other kinds of jobs. Maybe 
it is two jobs now to try to make up that salary or maybe it is three 
jobs. They are paying more for health care, if they have it, and 
worrying about whether they will have their pension.
  So that is the backdrop to what I see now happening as it relates to 
gas prices. One more time, people see those prices going up as they are 
trying to get to work, as they are trying to take

[[Page 11766]]

care of their families. This motion to instruct focuses on the fact 
that we have put aside a reserve fund that gives us the opportunity to 
address it throughout the budget.
  In addition to the fact that we have legislation to stop price 
gouging right away, and that is very important, I am very pleased our 
majority is focused on going after those who are price gouging and 
bringing down gas prices, but we also know we have to look more long 
term.
  There is some wonderful work being done in the Senate by our Energy 
Committee, Environment Committee, and Finance and Agriculture 
Committees as it relates to the farm bill and what can be done with 
alternative fuels, and so on. We are committed to that as well. The 
structure of this budget allows us to be able to do those things 
without procedural motions and hoops getting in the way to stop us from 
going forward. We all know we need to invest more in ethanol and 
cellulosic ethanol and biodiesel. We want to be able to say: Buy your 
fuel from Middle America, not the Middle East. That is what I am 
hoping. I know we are committed to doing that.
  We also know there is much we can do to together, and, in fact, there 
are many exiting things that are already happening. I am very proud of 
our American domestic auto companies that are moving very aggressively. 
In less than 5 years, we expect that our alternative-fuel vehicles will 
constitute more than 50 percent of the vehicles that are being 
produced. That is very positive. I commend them for that.
  GM has installed displacement-on-demand technology where the 
cylinders shut off when not needed, consuming less fuel. 
DaimlerChrysler has taken the lead on clean diesel and biodiesel. There 
is excellent work being done in Michigan. Next Energy and other 
critical research organizations are doing excellent work that would 
deliver 20 percent to 40 percent more fuel efficiency than conventional 
automobiles. The Ford Escape hybrid and the work that is being done 
through hybrids is very significant. Our plug-in hybrids, technology we 
see being worked on that relates to plug-in electric vehicles, and so 
on, that is so important. I am excited about the Volt by GM, which will 
be configured in a way that it will be able to run on electricity, 
gasoline, E85, or biodiesel. The work goes on on hydrogen and other 
kinds of things.
  But we know that in the end, in addition to focusing on these long-
term strategies which are very significant, very important to the 
environment, to address climate change, to address energy independence, 
we have an issue right now we have to address; that is, the fact that 
we continue to see, quarter by quarter, record profits by the oil 
companies because of the lack of competition. We are seeing, quarter by 
quarter, increases that end up with those increases and profits, that 
do not cause them to lower prices for people. They are making more 
dollars. They do not lower the price. The price goes up as the profits 
go up.
  More and more of our families, our workers, our businesses are 
feeling squeezed on all sides. We have to make sure the FTC has the 
ability to call price gouging for what it is, that it is defined and 
they are given the authority to do something about it.
  The American people, unfortunately, are forced to be in a situation 
right now of choosing between stations and pumps where the prices look 
awfully much the same. We need to create more competition. We are going 
to do that in the long run. We are going to create competition in the 
short run. We need to start putting consumers first, our consumers 
first. That is what we do in this budget.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Casey.) The Senator from New Hampshire.
  Mr. GREGG. Mr. President, how much time remains?
  The PRESIDING OFFICER. The sponsor has 3 minutes 4 seconds; the 
Senator from New Hampshire has 14 minutes 30 seconds.
  The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, let me say that we expect to accept this 
amendment. The issue of energy and its cost in this country is a pretty 
complex issue. It is not simple. There is no magic wand to resolve it. 
Obviously, the things which the Senator mentioned--alternative-fuel 
cars, lowering consumption, renewables--these are all a big part of the 
energy resolution. But it is a complex matrix.
  One of the essences of it, which was not mentioned, is supply. The 
fact is that the world demand for energy has increased dramatically, 
especially as China and Southeast Asian countries have begun to have 
very robust economies. The demand for the supply is such that the price 
of oil has increased dramatically.
  We in this country are going to have to accept the fact that we are 
going to have to look for other sources of energy. I regret that in the 
past domestic supply has been curtailed. For example, the opportunity 
to get supply from the northwest slope of Alaska or the opportunity to 
search for potential supply States which are willing to accept having 
oil exploration off their coasts--all of these opportunities to get 
more supply are being resisted, especially from the other side of the 
aisle. Yet this has to be part of the equation of how we resolve the 
energy issue. There is more than one element to the formula of 
resolution.
  The bottom line is that we should do everything we can to get off of 
our dependance, as much as possible, on foreign sources of oil. We find 
ourselves purchasing oil from countries which have antipathy toward us 
and which create problems for us.
  It would be good if we could supply the oil domestically or at least 
within the Western Hemisphere and not have to go beyond the Western 
Hemisphere in the manner we do. Another proposal is to get ethanol 
brought to the east coast out of Brazil. There is a 24-percent tariff 
on that ethanol. The last time we tried to repeal that tariff, it was 
opposed, opposed on both sides of the aisle but especially from the 
other side of the aisle. So there are a lot of different elements to 
the matrix of how we resolve the energy problem. I certainly am able to 
support the Senator's motion, but I don't think the answer is simply 
one or two items. It is a long list of items.
  On the underlying bill, there is still this fundamental issue, which 
is going to be raised by three of the motions that were offered, of the 
effect on revenues and tax policy on the American wage earner of this 
budget. There has been a lot of representation, a lot of numbers thrown 
out. The bottom line is pretty simple. Beginning in the year 2010, a 
number of tax rates which benefit Americans who create jobs and take 
risks and especially benefit senior citizens who live on fixed incomes, 
benefit people who have gone out and been entrepreneurs and created 
jobs, benefit people who have fixed incomes because they are living off 
of dividends to a large degree and they are retired, a number of these 
rate structures are going to expire, and the cost to those people who 
benefit from that rate structure is going to go up dramatically. Of 
course, it is always characterized by the other side that this is just 
a benefit to the wealthy. It is not.
  More than 75 percent of those who claim dividend and capital gains 
income earn less than $100,000. Yet under this budget, their taxes will 
double on those dividends and capital gains income. Thirty percent of 
tax-paying seniors claim capital gains income, and more than 50 percent 
of tax-paying seniors claim dividends income. Almost all those seniors 
are living on a fixed income. They are not extremely wealthy. They just 
happen to be at a point in their life where they are cashing in their 
assets in order to live. They have capital gains as a result. They sell 
their home. They sell their stock. Yet under this budget, their taxes 
are going to double on those items. In fact, dividend income accounts 
for 11 percent of the total income of seniors who earn less than 
$30,000 and 14 percent of the earnings of those who earn $30 to 
$50,000. For moderate-income seniors, they are dependent on a dividend 
in many instances.

[[Page 11767]]

  That is not unusual. Our society encourages people to invest in the 
stock market. Even though we have heard about the gloomy economic 
situation in this country, while we have added 7.4 million jobs and 
have had 22 quarters of recovery and we have had tax revenues exceeding 
historic levels, the stock market is now at a historic high and 
continues to go up. Obviously, some people don't think it is all that 
gloomy. The fact is, a lot of seniors throughout their earning career 
invest, either through an IRA account or a pension account. They invest 
in assets which are now subject to the benefit of a capital gains and 
dividends rate, which is very helpful to them in making ends meet 
because it is a fair rate. Yet those people's taxes are going to go up 
under this budget.
  Fifteen million seniors would see their taxes increased if the 
current tax policy is not extended. This budget makes no room for the 
extension of the capital gains or dividend tax rate. That is an 
important point to remember. Equally important is the underlying 
philosophical difference. There is a belief on the other side that the 
Government should be able to take more money out of people's pockets 
and decide how to spend it. That is why the discretionary spending in 
this budget is significantly over the President's level, $18 billion in 
the first year of the budget. It is why there is no effort in this 
budget at all to discipline entitlement spending, which is clearly the 
most serious issue we face as an economy and as a society after the 
threat of Islamic terrorism, the problem of confronting the baby boom 
generation and the demands it will put on our society economically, to 
say nothing of the social change of having the largest retired 
population in the history of the country.
  There is no attempt at all to get into that issue of how we are going 
to handle this fiscal meltdown we are facing if we don't address the 
impending retirement of the baby boom generation.
  Those philosophical differences are very large. What we have tried to 
do through the motion to instruct is to highlight those differences, 
the fact that we believe these tax rates which benefit so many 
Americans should be extended, that we do not believe the spending 
should be increased well above the proposal of the President--and the 
President was rather generous, to say the least, in his increase in 
discretionary spending.
  We also believe there should be an effort made to address expansion 
of entitlement spending, which is going to be a function of the 
retirement of the baby boom generation, and the fact that will simply 
overwhelm our capacity to support those programs in their present form, 
and our children and our children's children will be put in a position 
of having to pay so much in increased costs for the burden of the 
Government that they will be unable to benefit from the good life we 
have benefited from. They will have trouble sending their children to 
college, buying their first home, doing the discretionary things people 
want to be able to do with discretionary money because most of that 
discretionary money will have to be used to support the entitlement 
programs to support the retired baby boom generation which will double 
the number of people retired in this country. None of that is addressed 
in this budget. We think that is a failure that is unfortunate.
  These are some of the concerns that remain at this time. However, I 
would be happy to ask unanimous consent that the motion of the Senator 
from Michigan be accepted and that the time remaining be divided 
between myself and the Senator from North Dakota so he can get some 
more time to respond to my comments which I am sure he will want to do.
  The PRESIDING OFFICER. Is all time yielded back on this particular 
motion to instruct?
  If so, the question is agreeing to the Stabenow motion.
  The motion was agreed to.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. GREGG. Did we also agree that the time between now and 7:30 would 
be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, let me indicate, on the motion just 
adopted, the strategy in the reserve fund is not just one item, as the 
Senator referenced, but involves all of these things--expanding 
production and use of alternative fuels and alternative-fuel vehicles 
to promote renewable energy development, to improve electricity 
transmission, to encourage responsible development of domestic oil and 
natural gas resources, and to reward conservation and efficiency. There 
is a production component of what is in the reserve fund. I want to 
emphasize that and thank the Senator from Michigan for her constructive 
proposal.
  I also want to take a moment to respond to a number of points made by 
my colleague from New Hampshire. Once again, there is no tax increase 
in this proposal. The fact is, what the President said his budget would 
produce in revenue is virtually identical to what is in this budget. In 
fact, there is virtually no difference between what the President said 
his budget would produce in revenue over the 5 years. He said his 
budget would produce $14.826 trillion of revenue. My budget produces 
$14.827 trillion of revenue, virtually no change. If you look at a CBO 
basis, there is a 2-percent difference. We believe that can be easily 
accommodated with no tax increase by going after the tax gap, by going 
after abusive tax havens and fraudulent tax shelters.
  When the Senator asserts there is no long-term savings, that is not 
accurate. We have $15 billion of Medicare savings, and we have a 
reserve fund on health information technology and other health savings. 
Just on health information technology, the Rand Corporation estimates 
that if that were employed, we would save $81 billion a year. We also 
have another health care reserve fund that relates to looking at best 
practices around the country so that we can ensure savings in the 
health care accounts in that way and many other proposals to address 
the long-term fundamental imbalances we have.
  We all understand the only way those long-term entitlement challenges 
are going to be fully addressed is in a bipartisan approach outside a 
5-year budget resolution because those are much longer term challenges.
  How much time do we have on this side?
  The PRESIDING OFFICER. The Senator has 30 seconds.
  Mr. CONRAD. Mr. President, I thank all my colleagues for 
participating in this debate. These instructions to the conferees will 
have attention paid to them, and we will do our level best to bring 
back a budget that will reflect the will of this body.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. How much time do I have?
  The PRESIDING OFFICER. The Senator has 3 minutes 25 seconds.
  Mr. GREGG. Mr. President, of course, there is a lot of back and 
forth. So many numbers are thrown out, nobody can keep up. The $15 
billion in Medicare savings is a nice number. The only problem is, it 
is coupled with about $30 billion of new spending in the SCHIP program 
and, as a result, it is a net loss. So the long-term savings are not 
there. In fact, they are a long-term cost. Of course, the health care 
proposals, if they score, that would be great, but they don't score. So 
when you throw out a number of $81 billion, you are throwing out a 
number that CBO won't support. If it did support it, we would 
immediately capture those funds and use them constructively to reduce 
the deficit or to give people a tax benefit. As a practical matter, 
they don't score so the number is not relevant.
  I want to speak quickly to the Senator's response to my motion. My 
motion says: These tax reductions which are very important, which 
address issues which are important to the American people and which are 
not covered by the proposal which we have before us, unfortunately, 
need to be continued. These tax reductions cover

[[Page 11768]]

the $1,000 child credit, the marriage penalty, the 10-percent income 
tax bracket, all of which the Senator has said are going to be picked 
up by the Baucus amendment--maybe, maybe not--the lower marginal rates, 
definitely not. The earned-income tax credit relief for military 
families does not appear to be in here. The adoption tax credit is not 
in here. The dependent care tax credit is not in here. The college 
tuition deduction for student loan interest for $2,000, Coverdale IRA, 
and the 15-percent rate on capital gains and dividends, which as I just 
went through, is very critical to seniors and to the economy generally 
and has been a huge revenue windfall for us as a government, and 
adjusting the death tax so that it properly reflects fairness to small 
businessmen and farmers, those are not in here.
  All of those are not in the proposal of the Senator from North 
Dakota.
  In addition, there is the operative language of the Senator's 
proposal which essentially is the fig leaf or the Wizard of Oz approach 
which says we are going to get this money from somewhere--we really 
don't know where, the tax gap or some building in the Cayman Islands--
when, in fact, the practical effect is, you are going to have to raise 
taxes on the American people to accomplish what the Senator from North 
Dakota is proposing with his motion.
  That is why I will be opposing this. I suspect some of my colleagues 
will support it because obviously the Baucus language makes sense, 
although it doesn't go far enough.
  In light of that, I guess the time is probably used up, isn't it?
  The PRESIDING OFFICER. It is.
  The Senator from North Dakota has 10 seconds.
  Mr. CONRAD. Mr. President, I would like to correct the record and 
indicate the motion I have offered, and which supports the underlying 
resolution, does contain the adoption tax credit, does include the 
dependent care tax credit, does include the $1,000 child tax credit, 
the marriage penalty relief, the 10-percent income tax bracket and 
estate tax reform. So it is all in there.
  Mr. GREGG. Mr. President, how much time do I have remaining? I don't 
have 10 seconds? I could fit everything into it.
  Mr. President, I ask unanimous consent that the motions be voted in 
the following order and that the provisions relating to debate--I guess 
this is something you ask, I say to the Senator. It was just handed to 
me. You ask that.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank my colleague. I thank him for his 
good humor and for working through this as we have proceeded to be 
ready to vote.
  Mr. President, I ask unanimous consent that the motions be voted in 
the following order and that the provisions relating to debate time and 
vote time limitation remain in effect: the Kyl motion to instruct 
regarding estate tax, the Conrad motion to instruct regarding certain 
tax cuts, the Gregg motion to instruct regarding certain tax cuts.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, when I indicated that the vote time 
limitation remain in effect, I think we should probably send that 
signal to our colleagues. There will be 2 minutes equally divided on 
each of the motions, and after the first vote, the next two votes will 
be 10-minute votes.
  Mr. GREGG. Mr. President, I ask unanimous consent that it be in order 
to ask for the yeas and nays on the Kyl motion and all the other 
motions.
  Mr. CONRAD. All three motions?
  Mr. GREGG. All three motions.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I ask for the yeas and nays on all the 
motions.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on the motion to instruct conferees 
offered by the Senator from Arizona, Mr. Kyl.
  The Senator from North Dakota.
  Mr. CONRAD. Mr. President, we have in the resolution estate tax 
reform. Mr. President, $3.5 million a person, $7 million a couple is 
completely exempt from any estate taxation. That will exempt 99.8 
percent of the estates, and it is paid for. The Kyl motion is not paid 
for, would blow a hole in the deficit, would take us back to a failure 
to balance the budget.
  I hope our colleagues will support what is in the resolution, what 
passed the Senate and which does reform the estate tax but does so in a 
fiscally responsible way.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, the Kyl motion is a bipartisan proposal, or 
at least it was. Actually, the original language came from the Senator 
from Louisiana. It basically sets a rate of 35 percent--the proposal of 
the Senator from North Dakota sets a top rate of 45 percent--it sets 
that rate on estates, and on small estates and small businesses it sets 
a lower rate. It exempts estates of $5 million or less. It is an 
extremely reasonable approach to the death tax.
  People should not be taxed because they die, to begin with. But if we 
are going to tax them, let's not put them out of business. Let's allow 
families with small businesses to survive. That is what the Kyl motion 
does.
  The PRESIDING OFFICER. Is all time yielded back on the motion?
  If so, the question is on agreeing to the Kyl motion to instruct 
conferees. 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 South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Idaho (Mr. Crapo), the Senator from Arizona (Mr. McCain), the 
Senator from Louisiana (Mr. Vitter).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 54, nays 41, as follows:

                      [Rollcall Vote No. 159 Leg.]

                                YEAS--54

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

                                NAYS--41

     Akaka
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Lautenberg
     Levin
     Lieberman
     McCaskill
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Obama
     Reed
     Reid
     Salazar
     Sanders
     Schumer
     Stabenow
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--5

     Crapo
     Johnson
     McCain
     Rockefeller
     Vitter
  The motion was agreed to.
  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes equally divided on the motion to instruct offered by the 
Senator from North Dakota, Mr. Conrad.
  Mr. CONRAD. Mr. President, if I could prevail on colleagues to be 
quiet for 1 more minute. They can speak on my colleague's time.
  I ask colleagues to support this motion. It says to the conferees: 
Let's insist on those provisions that are in the budget resolution to 
provide for extension of the $1,000 child tax credit, the marriage 
penalty relief, the 10-percent bracket, the reform of the estate tax to

[[Page 11769]]

protect small business and family farms, the extension of the adoption 
tax credit, the dependent care tax credit, and the treatment of combat 
pay for EITC purposes.
  It also insists on section 303 which provides for tax relief, 
including extensions of other expiring tax provisions if they are 
offset.
  This is a tax relief amendment. I hope my colleagues will support 
commonsense tax relief for middle-income taxpayers and for basic estate 
tax reform.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, this amendment is essentially a cover 
amendment, and it is to cover up the fact that it is the Wizard of Oz 
at work on the Democratic budget, and it doesn't work. If you spread 
pixie dust over this by Tinker Bell, it still wouldn't fly. The fact 
is, you cannot produce these funds in the manner in which the Senator 
from North Dakota has suggested by some building in the Cayman Islands 
and other proposals.
  If you want to extend the tax cuts and you want to be concerned about 
the middle-income American who is benefiting from those tax cuts, you 
should vote for the next motion to instruct.
  The PRESIDING OFFICER. The question is on agreeing to the Conrad 
motion to instruct.
  The yeas and nays are ordered.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Idaho (Mr. Crapo), the Senator from Arizona (Mr. McCain), and the 
Senator from Louisiana (Mr. Vitter).
  The PRESIDING OFFICER (Mr. Salazar). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 51, nays 44, as follows:

                      [Rollcall Vote No. 160 Leg.]

                                YEAS--51

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Coleman
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     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
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Webb
     Whitehouse
     Wyden

                                NAYS--44

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

                             NOT VOTING--5

     Crapo
     Johnson
     McCain
     Rockefeller
     Vitter
  The motion was agreed to.
  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided on the motion to instruct offered by 
the Senator from New Hampshire, Mr. Gregg.
  The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, this motion is the opportunity to speak out 
on behalf of seniors, working Americans, families, and children in this 
country. If you believe the tax rates should stay in place, which 
include the $1,000 child tax credit, marriage penalty relief, the 10-
percent income tax bracket, the lower marginal rates for working 
American families and small businesses, the earned income tax credit 
for military families, the adoption tax credit, independent care tax 
credit, the college tuition deduction, the deduction for student loan 
and interest, the $2,000 Coverdell----
  The PRESIDING OFFICER. The Senate will be in order.
  Mr. GREGG. Mr. President, the next two are important--the 15-percent 
capital gains dividend rate, which helps seniors and people on fixed 
income and gives our economy a boost, and revenues to the Federal 
Government a boost, and the death tax, structured along the lines of 
what Senator Kyl's motion put forward--if you believe in those 
proposals, you will want to vote for this motion to instruct the 
conferees.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, if you like debt, this is your amendment. 
This will add $250 billion to the debt. If you don't want to balance 
the budget in 2012, vote for this amendment, because we have a balanced 
budget in 2012 now. If you pass this amendment now, we will not.
  The Senator says it is like the Kyl amendment on the estate tax. No, 
it is not. He preserved part of the estate tax for those at the very 
highest income level. This eliminates the estate tax.
  Please, we have made so many strides to balance the budget by 2012. 
Let's not have another unbalanced budget, one that adds to the debt.
  The PRESIDING OFFICER. The question is on agreeing to the Gregg 
motion to instruct. 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 South Dakota (Mr. 
Johnson) and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  Mr. LOTT. The following Senators are necessarily absent: the Senator 
from Idaho (Mr. Crapo), the Senator from Arizona (Mr. McCain), and the 
Senator from Louisiana (Mr. Vitter).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 44, nays 51, as follows:

                      [Rollcall Vote No. 161 Leg.]

                                YEAS--44

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

                                NAYS--51

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Conrad
     Dodd
     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
     Salazar
     Sanders
     Schumer
     Snowe
     Stabenow
     Tester
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--5

     Crapo
     Johnson
     McCain
     Rockefeller
     Vitter
  The motion was rejected.
  The PRESIDING OFFICER. Under the previous order, the Chair appoints 
Mr. Conrad, Mrs. Murray, Mr. Wyden, Mr. Gregg, and Mr. Domenici 
conferees on the part of the Senate.

                          ____________________